MEDIA METRIX INC, 424B4, 1999-10-26

MEDIA METRIX INC
424B4, 1999-10-26
BUSINESS SERVICES, NEC

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Filed Pursuant to Rule 424(b)(4)
Registration Statement No. 333-88751

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PROSPECTUS

OCTOBER 26, 1999

[LOGO]

3,000,000 SHARES OF COMMON STOCK
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MEDIA METRIX, INC.: THE OFFERING:
- - We provide Internet audience - We are offering 1,500,000 shares
measurement and advertising of our common stock, and the
tracking products and services. selling stockholders identified
- - Media Metrix, Inc. in this prospectus are offering
250 Park Avenue South, 7th Floor 1,500,000 shares of our common
New York, New York 10003 stock.
(212) 515-8700 - The underwriters have an option
SYMBOL & MARKET: to purchase an additional 233,582
- - MMXI/Nasdaq National Market shares from Media Metrix and
LAST REPORTED SALE PRICE: 216,418 shares from selling
- - $51.13 stockholders to cover
over-allotments.
- We plan to use the proceeds from
this offering for international
expansion, new product
development and for
general corporate purposes,
including
working capital.
- Closing: October 29, 1999

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Per Share Total
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Public offering price: $ 50.50 $151,500,000
Underwriting fees: 2.53 7,590,000
Proceeds to Media Metrix: 47.97 71,955,000
Proceeds to selling stockholders: 47.97 71,955,000
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THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 7.
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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. NOR HAVE THEY MADE, NOR WILL THEY MAKE, ANY
DETERMINATION AS TO WHETHER ANYONE SHOULD BUY THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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DONALDSON, LUFKIN & JENRETTE
ROBERTSON STEPHENS THOMAS WEISEL PARTNERS LLC

FIRST UNION SECURITIES, INC.

SUNTRUST EQUITABLE SECURITIES

DLJDIRECT INC.

E*OFFERING
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TABLE OF CONTENTS
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Page
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Prospectus Summary.................. 3
Risk Factors........................ 7
Use of Proceeds..................... 20
Price Range of Common Stock......... 20
Dividend Policy..................... 20
Capitalization...................... 21
Dilution............................ 22
Selected Financial Data............. 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................... 24
Business............................ 36

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Page
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Management.......................... 50
Certain Relationships and Related
Transactions...................... 57
Principal and Selling
Stockholders...................... 60
Description of Capital Stock........ 65
Shares Eligible for Future Sale..... 68
Underwriting........................ 70
Legal Matters....................... 72
Experts............................. 72
Where You Can Find Additional
Information....................... 73
Index to Financial Statements....... F-1
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PROSPECTUS SUMMARY

THE INFORMATION BELOW IS ONLY A SUMMARY OF MORE DETAILED INFORMATION
INCLUDED IN OTHER SECTIONS OF THIS PROSPECTUS. THE OTHER INFORMATION IS
IMPORTANT, SO PLEASE READ THIS ENTIRE PROSPECTUS CAREFULLY. UNLESS STATED
OTHERWISE, THE INFORMATION CONTAINED IN THIS PROSPECTUS ASSUMES THAT THE
UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED.

MEDIA METRIX

OUR BUSINESS

We collect data by measuring Internet usage from a representative sample, or
panel, of personal computer users with our proprietary tracking technology. We
maintain a large panel of Internet users reporting Internet usage at work and at
home, as well as the usage of proprietary on-line services. Our audience
measurement methodology has been developed from our background in marketing and
media research, particularly our experience with recruiting and operating
panels. Each panelist is required to fill out a detailed questionnaire to
provide background demographic information. Our proprietary tracking technology
collects data from the panelist's personal computer and transmits these data to
our office for processing. The data are then used to construct several
databases, which we use to provide our products and services.

We have been at the forefront of the development and coordination of
technology and standards needed to facilitate advertising and transactions
between companies doing business over the Internet. Our customers include
Amazon.com, America Online, Beyond.com, Buena Vista/Disney, eBay, Everen
Securities, Fidelity, IBM, Infoseek, Interpublic Group, Microsoft, Omnicom, Time
Warner, XOOM.com and Yahoo!/GeoCities. The quality and depth of our customer
base and our customer renewal rate of over 95% reflect our position as a widely
accepted Internet audience measurement service.

On October 8, 1999, we acquired AdRelevance, Inc. This acquisition enables
us to provide Internet advertising measurement and advertising tracking services
to our customers. The acquisition was structured as a stock-for-stock
transaction valued at approximately $59.4 million. In addition, we may issue
additional shares of our common stock having a value of approximately
$6.6 million if AdRelevance achieves certain post-closing goals. AdRelevance
will operate as our wholly owned subsidiary.

OUR MARKET OPPORTUNITY

Advertising is a critical revenue stream for providers of Internet content
and services. As Web sites and on-line content providers seek to increase
advertising revenues, and as on-line advertisers seek to determine where they
should spend their marketing dollars, demand is growing for reliable statistics
and standardized methods to evaluate Internet usage. As a result, a standard for
Internet audience measurement must emerge which will:

- measure a large and representative sample of Internet users;

- track activity on the entire Internet, not just the Web, so that key
properties like America Online and other proprietary on-line services and
technologies are included;

- measure the Internet audience both at work and at home, because Internet
usage differs in these two environments; and

- be unbiased and independent from advertisers and content providers.

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OUR STRATEGY

Our goal is to become the accepted standard for Internet audience
measurement. We intend to achieve this goal through the following strategies:

- continue our industry leadership;

- develop products to accelerate e-commerce growth;

- expand and increase penetration of our client base;

- expand internationally; and

- develop new products and services.

OUR HISTORY

Our business was originally conducted as a division within The NPD Group,
Inc., a leading marketing research firm. In March 1996, NPD formed PC Meter, a
Delaware limited partnership, to conduct our business. In March 1997, we
reorganized into a Delaware corporation and began using the trade name Media
Metrix in our business. In November 1998, we merged with RelevantKnowledge,
Inc., our leading competitor. In May 1999, we completed an initial public
offering of our common stock. In October 1999, we acquired AdRelevance. NPD, our
largest stockholder, will own approximately 21% of our common stock following
this offering.

Although our revenues have continued to grow, we have a history of operating
losses and negative cash flow. In addition, the market for Internet audience
measurement services is new and rapidly evolving, and we expect competition in
this market to intensify in the future.

Our principal executive offices are located at 250 Park Avenue South, 7th
Floor, New York, New York 10003, and our telephone number is (212) 515-8700.

Media Metrix, PC Meter, RelevantKnowledge, e-Trends, The Power of Relevant
Knowledge, MyMetrix, AdRelevance and the Media Metrix logo are our trademarks.
Any other trademark, trade name or service mark of any other company appearing
in this prospectus belongs to its holder.

RECENT DEVELOPMENTS

On October 14, 1999, we reported revenues of $5.5 million for the three
months ended September 30, 1999, a 29.1% increase as compared to the three
months ended June 30, 1999 revenues of $4.3 million and a 268.2% increase as
compared to revenues of $1.5 million for the three months ended September 30,
1998.

Net loss applicable to common stockholders was $2.6 million, or $0.15 per
share for the three months ended September 30, 1999, as compared to
$2.6 million, or $0.16 per share for the three months ended June 30, 1999. Net
loss applicable to common stockholders was $1.0 million, or $0.16 per share for
the three months ended September 30, 1998.

For the nine months ended September 30, 1999, our revenues were
$12.9 million, an increase of 223.5% over the revenues for the nine months ended
September 30, 1998. Net loss applicable to common stockholders for the nine
months ended September 30, 1999 was $7.7 million as compared to $2.9 million for
the nine months ended September 30, 1998. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Recent Developments."

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THE OFFERING

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Common stock offered by Media Metrix......... 1,500,000 shares

Common stock offered by selling
stockholders............................... 1,500,000 shares

Common stock to be outstanding after
the offering............................... 18,802,448 shares

Use of proceeds.............................. We intend to use the net proceeds we receive
from this offering to fund international
expansion, new product development and for
general corporate purposes, including working
capital. We will not receive any of the
proceeds from the sale of the shares of our
common stock being offered by the selling
stockholders.

Nasdaq National Market Symbol................ MMXI
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The outstanding share information is based on our shares outstanding as of
June 30, 1999. This information excludes:

- 528,639 shares of common stock subject to options granted under our 1998
Equity Incentive Plan and outstanding as of June 30, 1999 at a weighted
average exercise price of $8.63 per share;

- 483,786 shares of common stock subject to options granted under our
earlier Stock Option Plan and outstanding as of June 30, 1999 at a
weighted average exercise price of $0.82 per share;

- 789,681 additional shares of common stock reserved for issuance under our
1998 Equity Incentive Plan; and

- 697,678 shares of our common stock issued in connection with our
acquisition of AdRelevance; 77,520 shares of our common stock which may be
issuable if AdRelevance achieves certain post-closing goals; 223,566
shares of our common stock subject to options and warrants assumed in
connection with the AdRelevance acquisition; and an additional 24,841
shares of our common stock which may be issuable under these options and
warrants if AdRelevance achieves certain post-closing goals.

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

The following table summarizes the statement of operations data for our
business and our predecessor businesses. The pro forma data give effect to:

- our merger with RelevantKnowledge as if it took place on January 1, 1998;
and

- our acquisition of AdRelevance as if it took place on October 12, 1998,
the date of AdRelevance's inception, with respect to the pro forma year
ended December 31, 1998, and on January 1, 1999 with respect to the pro
forma six months ended June 30, 1999.

For a more detailed explanation of these financial data, see "Selected Financial
Data" and our financial statements located elsewhere in this prospectus.

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PERIOD FROM
INCEPTION YEAR ENDED PRO FORMA SIX MONTHS ENDED PRO FORMA
THROUGH DECEMBER 31, YEAR ENDED JUNE 30, SIX MONTHS
DECEMBER 31, ------------------------------- DECEMBER 31, -------------------- ENDED JUNE 30,
1995 1996 1997 1998 1998 1998 1999 1999
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STATEMENT OF OPERATIONS
DATA:
Revenues.................. $ -- $ 1,033 $ 3,188 $ 6,331 $ 8,145 $ 2,505 $ 7,435 $ 7,435
Gross profit (loss)....... (140) (711) (275) 2,210 1,145 904 3,597 3,597
Loss from operations...... (372) (3,376) (4,679) (7,223) (26,547) (1,737) (5,362) (21,832)
Net loss applicable to
common stockholders..... (372) (3,376) (4,874) (7,472) (26,699) (1,842) (5,060) (21,531)

Basic and diluted net loss
per common share
applicable to common
stockholders............ $ (0.06) $ (0.52) $ (0.75) $ (0.98) $ (2.43) $ (0.28) $ (0.35) $ (1.41)

Shares used in calculating
basic and diluted net
loss per common share
applicable to common
stockholders............ 6,523 6,523 6,523 7,619 11,006 6,523 14,584 15,281
</TABLE>

The pro forma balance sheet data give effect to our acquisition of
AdRelevance. The pro forma as adjusted balance sheet data give further effect to
our sale of 1,500,000 shares of common stock in this offering at the public
offering price of $50.50 per share, after deducting the underwriting discount
and estimated offering expenses, and the application of our net proceeds from
the offering.

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AS OF JUNE 30, 1999
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PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
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BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities........................... $ 46,837 $ 47,054 $ 118,509
Working capital............................................................ 43,122 43,277 114,732
Total assets............................................................... 55,742 108,506 179,961
Total stockholders' equity................................................. 48,505 101,105 172,560
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RISK FACTORS

BEFORE YOU INVEST IN OUR COMMON STOCK, YOU SHOULD BE AWARE OF VARIOUS RISKS,
INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD CAREFULLY CONSIDER THESE RISK
FACTORS, TOGETHER WITH ALL OF THE OTHER INFORMATION INCLUDED IN THIS PROSPECTUS,
BEFORE YOU DECIDE WHETHER TO PURCHASE SHARES OF OUR COMMON STOCK. ANY OR ALL OF
THESE RISKS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, RESULTS OF
OPERATIONS OR FINANCIAL CONDITION. THE RISKS SET OUT BELOW MAY NOT BE
EXHAUSTIVE. KEEP THESE RISK FACTORS IN MIND WHEN YOU READ FORWARD-LOOKING
STATEMENTS ELSEWHERE IN THIS PROSPECTUS. THESE ARE STATEMENTS THAT RELATE TO OUR
EXPECTATIONS FOR FUTURE EVENTS AND TIME PERIODS. GENERALLY, THE WORDS
"ANTICIPATE," "EXPECT," "INTEND" AND SIMILAR EXPRESSIONS IDENTIFY
FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES, AND FUTURE EVENTS AND CIRCUMSTANCES COULD DIFFER SIGNIFICANTLY
FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS.

WE DO NOT HAVE A LONG OPERATING HISTORY.

We began our operations as a division of NPD in October 1995. We have only
operated as an entity independent of NPD since March 31, 1996. Our operating
history is therefore limited.

You must consider the risks and difficulties frequently encountered by
early-stage companies in new and rapidly evolving markets. Some of these risks
and uncertainties relate to our ability to:

- anticipate and adapt to our evolving market;

- implement sales and marketing initiatives;

- enhance the Media Metrix brand;

- attract, retain and motivate qualified personnel;

- respond to actions taken by our competitors;

- effectively manage our growth by building a solid base of operations and
technology; and

- integrate acquired businesses, consumer panels, technologies and services.

We cannot assure you that we will be successful in addressing these risks
and uncertainties. Our failure to do so could have a material adverse effect on
our business, results of operations and financial condition.

WE HAVE A HISTORY OF OPERATING LOSSES AND NEGATIVE CASH FLOW.

Our ability to generate significant revenues is uncertain. Although our
revenues have continued to grow, we are not yet profitable. We incurred losses
from operations of $3.4 million in 1996, $4.7 million in 1997, $7.2 million in
1998 and $5.4 million in the six months ended June 30, 1999. We expect our
operating and net losses to continue. If the merger with RelevantKnowledge had
taken place on January 1, 1998 and our acquisition of AdRelevance had taken
place on its date of inception, October 12, 1998, our pro forma loss from
operations for 1998 would have been $26.5 million. If our acquisition of
AdRelevance had taken place on January 1, 1999, our pro forma loss from
operations for the six months ended June 30, 1999 would have been $21.8 million.
Our ability to generate profits in the future will depend on a number of
factors, including:

- maintaining and enhancing our position as the leading Internet audience
measurement service;

- keeping our costs in line with our budget;

- retaining our existing customers;

- increasing our sales to existing customers;

- obtaining new customers;

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- increasing business and consumer acceptance of the Internet as a source of
information and as a place to buy and sell goods and services;

- the growth of advertising and e-commerce on the Internet;

- regulation of the Internet by Federal or local governments;

- the health of the general economy; and

- economic conditions that uniquely affect the Internet.

We intend to invest heavily in our technologies, additional products and
services and international expansion. As a result, we will need to achieve
significant revenue increases to achieve and maintain profitability. Although
our revenues and the number of our clients have continued to increase, we may
not be able to continue to grow and to expand our business. The number of
clients or the number of products and services for which our clients subscribe
may grow more slowly than we anticipate or may decrease in the future. Even if
we become profitable, we may not sustain or increase our profits on a quarterly
or annual basis in the future.

THE INTERNET AUDIENCE MEASUREMENT INDUSTRY IS NEW AND RAPIDLY EVOLVING.

To date, no Internet audience measurement service has been adopted as the
universally accepted standard. Our existing and potential customers may
challenge or refuse to accept our audience measurement reports. Our customers
may be dissatisfied with our methodology for measuring Internet audiences or may
feel that our panel is not representative of Internet users. Furthermore,
another Internet audience measurement service may be adopted as the industry
standard. As a result, our customers may turn to alternative services provided
by current or potential competitors.

WE DEPEND ON CONTINUED GROWTH IN USE OF THE INTERNET.

Our business would be adversely affected if Internet usage for the exchange
of information and for commerce does not continue to grow rapidly. Internet
usage may be inhibited for a number of reasons, including:

- inadequate network infrastructure;

- security concerns;

- inconsistent quality of service; or

- lack of availability of cost-effective, high-speed service.

Even if Internet usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth. As a result, its performance
and reliability may decline. In addition, Web sites and proprietary on-line
services have experienced interruptions in their service as a result of outages
and other delays occurring throughout their infrastructure. If these outages or
delays frequently occur in the future, Internet usage as a medium for the
exchange of information and for commerce could grow more slowly or decline.

THE ACCEPTANCE AND EFFECTIVENESS OF INTERNET ADVERTISING IS UNPROVEN.

Our future success will depend on an increase in the use of the Internet as
an advertising medium. The Internet advertising market is new and rapidly
evolving. It cannot yet be compared with the traditional advertising market to
gauge its effectiveness. As a result, there is significant uncertainty about the
demand and market acceptance for Internet advertising. Many of our current or
potential customers have little or no experience using the Internet for
advertising purposes. The adoption of Internet advertising, particularly by
entities that have historically relied on traditional media for advertising,
requires the acceptance of a new way of conducting business. These companies may
find Internet advertising to be less effective for promoting their products and
services as compared to traditional

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advertising. In addition, most current and potential Web publisher customers
have little or no experience in generating revenues from the sale of advertising
space on their Web sites. We cannot assure you that the market for Internet
advertising will continue to emerge or will become sustainable. If the market
for Internet advertising fails to develop or develops more slowly than we
expect, then our business, results of operations and financial condition could
be materially and adversely affected.

OUR OPERATING RESULTS MAY FLUCTUATE FROM QUARTER TO QUARTER.

Our operating results have varied from quarter to quarter. Our operating
results may continue to vary as a result of a variety of factors. These factors
include:

- our ability to retain our current clients;

- our ability to sell additional products and services to current clients;

- our ability to attract new clients;

- our ability to maintain customer satisfaction;

- the announcement or introduction of new products and services by us or our
competitors;

- price competition;

- our ability to upgrade and to develop our systems and infrastructure to
accommodate our growth;

- our ability to attract new personnel;

- the timing, cost and availability of advertising in traditional media;

- the impact of possible acquisitions both on our operations and on our
reported operating results due to associated accounting charges;

- technical difficulties or service interruptions;

- the amount and timing of costs relating to changes in the size or
composition of our panel; and

- the amount and timing of operating costs and capital expenditures relating
to expansion of our business, including our planned international
expansion.

Many of these factors are beyond our control. We cannot assure you that our
revenues will increase in proportion to the increase in advertising on the
Internet, or at all. In addition, we cannot assure you that advertising on the
Internet will continue to grow at forecasted levels, or at all. A substantial
portion of our current and future costs are fixed. If our revenues fall short of
expectations, we may not be able to adjust our fixed expenses to compensate for
this shortfall on a timely basis. Further, as a strategy for remaining
competitive, we may have to make certain pricing, service or marketing decisions
that could have a material adverse effect on our business, results of operations
and financial condition.

Due to these factors, period-to-period comparisons of our revenues and
operating results are not necessarily meaningful. Therefore, you should not rely
on these comparisons as indicators of our future performance. We also cannot
assure you that we will be able to:

- sustain the rates of revenue growth we have experienced in the past;

- improve our operating results; or

- sustain our profitability on a quarterly basis.

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In addition, our operating results in future periods may be below the
expectations of securities analysts and investors. If that occurs, the market
price of our common stock could be materially and adversely affected.

WE OPERATE IN HIGHLY COMPETITIVE MARKETS.

The market for Internet audience measurement services is new and rapidly
evolving. We expect competition in this market to intensify in the future. In
March 1999, NetRatings and Nielsen Media Research introduced a new Web site
ratings service, Nielsen//NetRatings, that competes directly with many aspects
of our services. Nielsen Media Research is the leading provider of television
audience measurement services. In September 1999, NetRatings also entered into a
joint venture with ACNielsen Corp. to develop and maintain audience measurement
panels and to market Nielsen//NetRatings' products and services in international
markets. ACNielsen is the leading provider of market research, information and
analysis to consumer products and services industries and is a provider of
television audience measurement services outside the United States and Canada.
Both Nielsen Media Research and ACNielsen have significantly more financial and
other resources than do we. In light of these events, Nielsen//NetRatings has
become a significant competitor.

We face competition internationally from NetValue, a French company which
has announced that it will soon begin providing audience measurement services in
Europe.

We also compete indirectly with operators of site-centric and other
consumer-centric measurement systems. Site-centric measurement systems measure
audience visits at a specific Web site by monitoring the Web site's server.
Consumer-centric systems measure the market either in a manner similar to us or
qualitatively through on-line and telephonic interviews.

In addition, we may face competition from individual Web sites that develop
an independent method of measuring their own audience or from other companies
that develop alternative audience measurement technologies to those already
provided by us.

Competitive pressures could have a material adverse effect on our business,
results of operations and financial condition. We believe that the principal
competitive factors in our market are:

- creating representative consumer and business panels; and

- providing audience measurement services for the entire Internet, including
the Web and proprietary on-line services.

Some of our competitors have:

- longer operating histories;

- larger customer bases;

- greater brand recognition in similar businesses; and

- significantly greater financial, marketing, technical and other resources.

In addition, some of our competitors may be able to:

- devote greater resources to marketing and promotional campaigns;

- adopt more aggressive pricing policies; and

- devote substantially more resources to technology and systems development.

Increased competition may result in reduced operating margins, loss of
market share and diminished value in our services, as well as different pricing,
service or marketing decisions. We cannot assure you that we will be able to
compete successfully against current and future competitors.

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WE FACE MANY CHALLENGES IN CONNECTION WITH OUR PLANNED INTERNATIONAL EXPANSION.

Our current strategy includes expansion of our services to measure Internet
audiences outside of the United States. Our expansion into international markets
will require management attention and resources. The international markets for
audience measurement services have historically been extremely localized and
difficult to penetrate. The costs of establishing and maintaining panels in
foreign countries will be substantial. We cannot assure you that we will be able
to develop new products and services based on data obtained in those markets. We
cannot assure you that we will be successful in marketing our products and
services to clients in markets outside the United States. In addition, our
international operations will be subject to a number of inherent risks,
including:

- the impact of recessions in economies outside the United States;

- changes in regulatory requirements;

- reduced protection for intellectual property rights in some countries;

- potentially adverse tax consequences;

- economic and political instability; and

- fluctuations in currency exchange rates.

These risks may have a material adverse effect on our business, results of
operations or financial condition.

WE WILL DEPEND ON STRATEGIC RELATIONSHIPS IN INTERNATIONAL MARKETS.

The success of our international expansion will depend on our ability to:

- recruit and maintain at-home and at-work panels that are representative of
a geographic area;

- control costs and effectively manage foreign operations; and

- effectively market and sell any new products or services.

These challenges require skills and expertise in foreign countries that we
do not currently have. We believe that our success in penetrating markets
outside of the United States will depend on our ability to develop and to
maintain strategic relationships with local audience measurement or marketing
research companies. This may become increasingly difficult as competition in the
international markets increases. If we do not succeed in attracting or retaining
strategic partners in markets outside the United States, our business, financial
condition and results of operations could be materially adversely affected.

OUR MARKET IS SUBJECT TO RAPID CHANGE.

Our market is characterized by:

- rapidly changing technology;

- evolving industry standards;

- introductions and enhancements of competitive products and services; and

- changing customer demands.

Accordingly, our future success depends on our ability to:

- adapt to rapidly changing technologies;

- adapt our services to evolving industry standards; and

- improve the features, reliability and timeliness of our product and
service offerings in response to competitive product and service offerings
and evolving demands of the marketplace.

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We cannot assure you that we will succeed in addressing these issues. In
addition, the widespread adoption of new Internet networking technologies or
other technological changes could require us to expend substantial amounts of
capital to change our services or infrastructure. These changes may also involve
new technologies that may not be measurable by our current methods.

OUR COSTS MAY INCREASE IF THE SIZE OR COMPOSITION OF OUR PANEL CHANGES.

A significant portion of our costs consists of the expense of recruiting and
maintaining our panel and collecting and processing data generated by the panel.
We may, in the future, need to change the size or composition of our panel. As a
result, our expenses for recruiting and maintaining our panel may increase. Our
international expansion will also increase our panel related costs. This could
have a material adverse effect on our business, results of operations and
financial condition.

WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE OUR INTERNAL GROWTH.

We are currently experiencing a period of rapid expansion. We anticipate
that future expansion will be necessary in order to accommodate our needs and to
take advantage of new opportunities in the market for audience measurement
services on the Internet. In order to succeed, we will need to attract and hire
additional technical and management personnel. As a result, we expect to add key
personnel in the near future to manage our expected growth. We also will need to
expand our technical, finance, administrative and operations staff. We cannot
assure you that current and planned personnel, systems, procedures and controls
will be adequate to support our future operations. We may not be able to hire
and retain our personnel. We also may not be able to exploit existing and
potential strategic relationships and market opportunities. If we fail to
effectively manage our internal growth, our business, results of operations and
financial condition could be materially adversely affected.

WE DEPEND ON RENEWALS OF OUR SUBSCRIPTION BASED SERVICES.

We have historically derived substantially all of our revenues from
subscriptions for our syndicated products. In our limited history, high renewal
rates have formed a foundation for our revenue growth. However, we cannot assure
you we will continue to experience high renewal rates. Our subscription renewal
rates may also decline as a result of a consolidation in our customer base or if
a significant number of our customers cease operations. If our renewal rate
percentage declines, it could have a material adverse effect on our business,
results of operations and financial condition.

WE MUST FURTHER DEVELOP OUR BRAND NAME.

We believe that maintaining and strengthening the Media Metrix brand is an
important aspect of our business. Our brand name is critical in our efforts to
attract clients. We believe that the importance of brand recognition will
increase due to the increasing number of competitors entering the market for
Internet audience measurement. Our ability to promote and position the Media
Metrix brand depends largely on:

- the success of our marketing efforts;

- our ability to provide our customers with high quality products; and

- our ability to secure rights to our brand name in the major markets in
which we will be active.

To promote the Media Metrix brand in response to competitive pressures, we
may find it necessary to increase our marketing budget or otherwise increase our
financial commitment to creating and maintaining brand loyalty among our
clients. Our use of the brand name "Media Metrix" in Europe has been challenged
by Mediametrie, S.A., a French company which measures audiences of various
media. Rather than engage in a protracted dispute, we have elected to have our
European joint venture conduct business under the name "MMXI Europe."
Mediametrie has also challenged our use of the domain name "mediametrix.com." If
we fail to promote and maintain our brand, or incur excessive

12
<PAGE>
expenses attempting to promote and maintain our brand, our business, results of
operations and financial condition will be materially adversely affected.

WE MAY ENCOUNTER RISKS ASSOCIATED WITH NEW PRODUCT DEVELOPMENT.

Our future success depends in part on our ability to offer new products and
services on a timely and cost-effective basis. In order to gain market
acceptance, our new products and services must address:

- specific industries and businesses;

- changes in client requirements; and

- changes in technologies.

The process of developing and launching new products or services is
inherently risky and costly. Moreover, we cannot assure you that once launched,
our products and services will be accepted by our customers.

OUR SYSTEMS MAY FAIL.

Our success depends on the efficient and uninterrupted operation of our
computer and communications systems. Some personal computers, servers and
portions of our network are provided to us by NPD under a management services
agreement. NPD also provides us with the use of mini-computers that we use to
process data received from panelists. We have begun to migrate our systems to
our own independent network. We expect to complete this process by the second
quarter of 2000. Any failure of the current or the new networks could impede the
processing of data, customer orders and day-to-day management of our business.
This could have a material adverse effect on our business, results of operations
and financial condition.

Our systems and operations are vulnerable to damage or interruption from:

- telecommunication failures;

- power loss;

- fires;

- floods;

- physical and electronic break-ins;

- sabotage; and

- intentional acts of vandalism and similar events.

We do not presently have fully redundant systems. Despite any precautions we
take, a natural disaster or other unanticipated problems which lead to the
corruption or loss of data at the NPD facility or our own facilities could
result in interruptions in the services we provide. In addition, our databases
are growing rapidly, and the systems currently in place may not be sufficient to
handle any further expansion. This could lead to systems failure or to a
corruption of our data and could have a material adverse effect on our business,
results of operations and financial condition.

WE DEPEND ON OUR KEY PERSONNEL.

Our future success depends on the continued services and on the performance
of our senior management and other key employees, in particular the services of
Tod Johnson, our Chief Executive Officer. Mr. Johnson also serves as the Chief
Executive Officer of NPD. Mr. Johnson has spent a substantial portion of his
time on our matters and we anticipate that he will continue to do so. However,
he will not be able to devote all of his time to our affairs. As a result,
Mr. Johnson's other responsibilities could divert his attention from our
affairs.

13
<PAGE>
Our performance depends on our ability to retain and to motivate our key
employees. The loss of the services of any of our key employees could have a
material adverse effect on our business, results of operations and financial
condition. We do not have long-term employment agreements with any of our key
personnel. We do not maintain any "key person" life insurance policies. In
addition, we are likely to need to recruit additional senior management
personnel as our business grows, particularly in the international arena. Our
future success depends on our ability to hire and to retain highly skilled
personnel. Competition for these candidates is intense. We cannot assure you
that we will be able to successfully attract, integrate or retain sufficiently
qualified personnel. Our inability to retain and attract the necessary personnel
could have a material adverse effect on our business, results of operations and
financial condition.

ADRELEVANCE'S SERVICES MAY NOT BE SUCCESSFUL, AND WE MAY FAIL TO SUCCESSFULLY
INTEGRATE ADRELEVANCE.

We recently acquired AdRelevance. AdRelevance only began operations in late
1998. AdRelevance's services were first commercially launched in September 1999.
Our future success in the advertising tracking business depends on the
acceptance of these services. We cannot be sure that these services will be
widely accepted in the marketplace. In addition, AdRelevance relies on public
Internet sites to gather advertising data. Those sites might cease to be
available or may charge licensing or other fees for access. We may not be able
to obtain an alternative or cost-effective source for these data.

In addition, our success will depend, in part, on our ability to fully
integrate the operations and management of AdRelevance. A successful integration
requires, among other things, the integration of AdRelevance's services into
ours and the coordination of their research and development, sales and marketing
and financial reporting efforts with ours. We cannot assure you that we will
accomplish the integration smoothly or successfully. We cannot assure you that
we will realize the anticipated benefits of the AdRelevance acquisition. The
success of the integration will require the dedication of management and other
personnel resources which may temporarily distract their attention from our
day-to-day business.

WE MAY FAIL TO INTEGRATE FUTURE ACQUISITIONS.

If appropriate opportunities present themselves, we intend to acquire other
complementary businesses, technologies, services or products. We currently have
no understandings or agreements relating to any acquisition. We cannot assure
you that we will be able to complete future acquisitions successfully or to
integrate an acquired entity with our current business. An acquisition may
result in unforeseen operating difficulties and expenditures. They may also
require significant management attention that would otherwise be available for
ongoing development of our business. Moreover, we cannot assure you that the
anticipated benefits of any acquisition will be realized. We may:

- issue additional equity securities which would dilute stockholders;

- incur debt;

- incur contingent liabilities; and

- incur amortization expenses related to goodwill and other intangible
assets.

WE DEPEND ON THE NPD GROUP, INC.

We were originally formed as a division of NPD. Throughout our development,
we have relied on services and financing provided to us by NPD. When we became
an independent operating entity, we entered into a management services
agreement, license agreement and services agreement with NPD. These agreements
allow us to continue to use some of NPD's software and services on an as-needed
basis. Under the management services agreement, NPD provides us with managerial
services. Under the license agreement, we license some of NPD's technologies
necessary for the operation of our

14
<PAGE>
services. The services agreement provides for payment of a license fee by NPD
for access to information collected from our panel.

NPD may be able to exert influence over our business and affairs due to
these arrangements. Also, the loss of the services provided by NPD under the
management services agreement or the loss of the license of computer software
under the license agreement could have a material adverse effect on our
business, financial condition and results of operations. See "Certain
Transactions--Transactions with Directors and Executive Officers."

WE MAY NOT BE ABLE TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS.

We regard the protection of our patents, copyrights, service marks,
trademarks and trade secrets as important to our future success. We rely on a
combination of patent, copyright, trademark, service mark and trade secret laws
and contractual restrictions to establish and protect our proprietary rights. We
have entered into confidentiality and invention assignment agreements with our
employees and contractors, and nondisclosure agreements with parties we do
business with in order to limit access to and disclosure of our proprietary
information. We cannot assure you that these contractual arrangements or the
other steps we have taken will be sufficient to protect our intellectual
property from infringement or misappropriation. Moreover, others may
independently develop similar or superior technologies.

We seek to obtain the issuance of patents and the registration of our
trademarks and service marks in the United States and in selected other
countries. We cannot assure you that patents or trademark registrations will be
issued with respect to pending or future applications or that our patents and
trademarks will be upheld as valid. Effective patent, trademark, service mark,
copyright and trade secret protection may not be available in every country in
which our services are offered.

Third parties may claim that our technologies infringe upon their
proprietary rights. We expect that the number of infringement claims in our
market will increase as the number of services and competitors in our industry
grows. These claims, whether meritorious or not, could:

- be time-consuming;

- result in costly litigation; or

- require us to enter into royalty or licensing agreements.

Royalty or licensing agreements might not be available on terms we find
acceptable or at all. As a result, any such claim could have a material adverse
effect upon our business, results of operations and financial condition.

Our use of the brand name "Media Metrix" in Europe has been challenged by
Mediametrie, S.A., a French company which measures audiences of various media.
Mediametrie has also challenged our use of the domain name "mediametrix.com." We
cannot be sure that we will not continue to have disputes with Mediametrie, S.A.
or others regarding the use of our name internationally. We cannot assure you
that we will be successful in reaching a settlement on terms acceptable to us
nor can we predict the outcome of the dispute.

WE RELY ON TECHNOLOGY LICENSED FROM NPD AND OTHERS.

We rely on technologies that we license from third parties, like NPD. NPD
licenses to us some key software products and database technologies. We cannot
assure you that these licenses will not infringe on the proprietary rights of
others. We also cannot assure you that these third-party technology licenses
will continue to be available to us on commercially reasonable terms, if at all.
As a result, we may need to obtain substitute technology of lower quality or
performance standards or at greater cost. This could materially adversely affect
our business, results of operations and financial condition.

15
<PAGE>
WE MAY BE EXPOSED TO POSSIBLE LIABILITY FOR SUPPLYING INACCURATE INFORMATION TO
OUR CUSTOMERS.

We may face liability for information that we supply to customers if the
information is inaccurate. The information in our databases, like that in any
database, may contain inaccuracies that our customers may not accept. Any
dissatisfaction by our customers with our measurement methodologies or databases
would have a material adverse effect on our ability to attract new customers and
retain existing customers. Our customer contracts generally provide that each
customer must indemnify us for any damages arising from the use of data, reports
or analyses by the customer or the performance of any consulting, analytic or
other services by us. However, we cannot be certain our contract provisions
provide sufficient protection. Any liabilities which we may incur because of
irregularities or inaccuracies in the data we supply to our customers could
materially adversely affect our business, results of operations and financial
condition.

OUR PROPRIETARY RIGHTS MAY BE ADVERSELY AFFECTED BY OUR STRATEGIC PARTNERS.

We expect to license some of our proprietary rights to strategic partners in
the course of our planned international expansion. While we will attempt to
ensure that the quality of our service is maintained by our strategic partners,
we cannot assure you that they will not take actions that might materially
adversely affect the value of our proprietary rights or reputation. This could
have a material adverse effect on our business, results of operations and
financial condition.

WE FACE RISKS RELATED TO STORAGE OF PERSONAL INFORMATION ABOUT OUR PANELISTS.

We do not attempt to capture information regarding our panelists' banking,
credit card or password data. This information, however, may come into our
possession. Our panel data are released only in an aggregated format or in a
form not identifiable on an individual basis. However, if someone penetrates our
network security or otherwise misappropriates sensitive data about our
panelists, we could be subject to liability. These liabilities could include
claims for unauthorized purchases with credit card information, impersonation or
other similar fraud claims. They could also include claims for other misuses of
personal information, like for unauthorized marketing purposes. These claims
could result in litigation and could have a material adverse effect on our
business, results of operations and financial condition.

WE FACE RISKS OF INDUSTRY INITIATIVES.

Several key industry organizations, including the Internet Advertising
Bureau, the Media Ratings Council, the Advertising Research Foundation and FAST
Forward, have begun initiatives focusing on appropriate standards for Internet
audience measurement. Our products and services may ultimately not comply with
recommended industry guidelines if we determine that compliance would not be
economically feasible or otherwise not consistent with our business strategy. To
the extent that our measurement approach diverges from the course of action
recommended by some or all of these trade groups, our business, results of
operations and financial condition could be materially and adversely affected.

THERE ARE RISKS ASSOCIATED WITH YEAR 2000 COMPLIANCE.

Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code field and cannot reliably
distinguish dates beginning on January 1, 2000 from dates prior to the year
2000. Many companies' software and computer systems may need to be upgraded or
replaced in order to correctly process dates beginning in 2000.

We rely on equipment and software provided by third parties that may not be
year 2000 compliant. The failure of third-party equipment or software to
properly process dates for the year 2000 and any failure by these third parties
to resolve any year 2000 issues could cause us to incur unanticipated expenses.
These expenses could have a material adverse effect on our business, results of
operations

16
<PAGE>
and financial condition. Finally, to the extent that year 2000 issues have a
negative impact on consumers and undermine the public's faith in the Internet as
a medium for the exchange of information and commerce, growth of the Internet
could slow. As a result, our business, results of operations and financial
condition could be materially adversely affected.

In addition, we collect our panel data from a diverse group of individual
personal computer users who use a variety of computer hardware and software that
may not be year 2000 compliant. As a result, we may encounter difficulties in
gathering and accurately measuring data from our panel. In addition, it is
possible that data collected from some of these users may contain inaccuracies
resulting from year 2000 issues. These difficulties could have a material
adverse effect on our business, results of operations and financial condition.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Year 2000 Compliance."

WE FACE RISKS ASSOCIATED WITH POTENTIAL GOVERNMENTAL REGULATION.

We are currently not subject to direct federal, state or local regulation or
laws or regulations applicable to the Internet, other than regulations
applicable to businesses generally. However, due to the increasing popularity
and use of the Internet, it is possible that a number of laws and regulations
may be adopted covering:

- user privacy;

- freedom of expression;

- pricing;

- content;

- quality of products and services;

- taxation;

- advertising;

- intellectual property rights; and

- information security.

The nature and effect of any proposed legislation or regulation cannot be
fully determined. These could have a material adverse effect on our business,
results of operations and financial condition.

The adoption of any such legislation could also dampen the growth in use of
the Internet generally and decrease its acceptance as a communications,
commercial and advertising medium. Any legislation which could have any adverse
effect on the growth of the Internet could decrease the demand for our services
and could have a material adverse effect on our business, results of operations
and financial condition.

THERE MAY BE LIMITS IMPOSED ON USES OF PERSONAL INFORMATION GATHERED USING THE
INTERNET.

Several states have proposed legislation that would limit the uses of
personal user information gathered using the Internet. These regulations have
required proprietary on-line service and Web site owners to establish privacy
policies. The Federal Trade Commission has also recently settled a proceeding
with one on-line service regarding the manner in which personal information is
collected from users and provided to third parties. Also, the European Union
recently enacted its own privacy regulations that may result in limits on the
collection and use of user information. Because all of our panelists consent to
the retrieval of their personal data, to date these regulations and proceedings
have not impacted our operations. However, we may become subject to claims
arising from the information collected or used by AdRelevance in generating data
for advertising tracking services.

17
<PAGE>
Changes to existing laws or the passage of new laws intended to address
these issues could, among other effects:

- create uncertainty in the marketplace that could reduce demand for our
services;

- limit our ability to collect and to use data from our panels;

- increase the cost of doing business as a result of litigation costs or
increased service delivery costs;

- decrease the efficacy of Internet advertising; or

- in some other manner have a material adverse effect on our business,
results of operations and financial condition.

WE FACE UNCERTAINTY ABOUT ADDITIONAL FINANCING FOR OUR FUTURE CAPITAL NEEDS.

If we are unable to increase our revenues as anticipated, we will need to
raise additional funds. We may need additional financing sooner if we:

- decide to expand faster than planned;

- develop new or enhanced services or products ahead of schedule;

- need to respond to competitive pressures; or

- need to acquire complementary products, businesses or technologies.

If we raise additional funds through the sale of equity or convertible debt
securities, your percentage ownership will be reduced. In addition, these
transactions may dilute the value of the stock outstanding. We may have to issue
securities that may have rights, preferences and privileges senior to our common
stock. We cannot assure you that we will be able to raise additional funds on
terms favorable to us or at all. If future financing is not available or is not
available on acceptable terms, we may not be able to fund our future needs. This
could have a material adverse effect on our business, results of operations and
financial condition.

WE MAY SUFFER AN INTERRUPTION IN OUR BUSINESS.

Our business interruption insurance may not be adequate to compensate us
fully for losses that may occur as a result of an interruption in our business.
Our business, results of operations and financial condition could be materially
and adversely affected if we are unable to conduct our business for an extended
period of time for any reason.

OUR PRINCIPAL STOCKHOLDERS, EXECUTIVE OFFICERS AND DIRECTORS HAVE SUBSTANTIAL
CONTROL OVER OUR AFFAIRS.

Our executive officers and directors and entities affiliated with them will,
in the aggregate, beneficially own approximately 35% of our common stock
following this offering. In particular, NPD, which is controlled by Tod Johnson,
our Chairman and Chief Executive Officer, will own approximately 21% of our
outstanding common stock. These stockholders acting together will have the
ability to exert substantial influence over all matters requiring approval by
our stockholders. These matters include the election and removal of directors
and any merger, consolidation or sale of all or substantially all of our assets.
In addition, they may dictate the management of our business and affairs. This
concentration of ownership could have the effect of delaying, deferring or
preventing a change in control, or impeding a merger or consolidation, takeover
or other business combination.

THERE MAY BE AN ADVERSE EFFECT ON THE MARKET PRICE OF OUR STOCK AS A RESULT OF
SHARES BEING AVAILABLE FOR SALE IN THE FUTURE.

Sales of a substantial amount of our common stock in the public market, or
the perception that these sales may occur, could adversely affect the market
price of our common stock prevailing from time to time. This could also impair
our ability to raise additional capital through the sale of our equity

18
<PAGE>
securities. On November 3, 1999, "lock-up" agreements applying to 13,110,670
shares executed in connection with our initial public offering expire. In
connection with this offering, stockholders, including all of our officers and
directors, entered into lock-up agreements expiring 90 days from the date of
this prospectus covering an aggregate of approximately 8,900,000 shares of our
common stock. Also, in connection with this offering, stockholders entered into
lock-up agreements expiring 30 days from the date of this prospectus covering an
aggregate of approximately 2,000,000 shares of our common stock. See "Shares
Eligible for Future Sale." The remainder of shares subject to the initial public
offering lockup will be available for sale into the public market after
November 3, 1999.

Following the expiration of the lock-up agreements related to this offering,
we expect to file a shelf registration statement to register the sale of up to
approximately 12,300,000 shares of our common stock. See "Description of Capital
Stock--Registration Rights."

THERE MAY BE VOLATILITY IN OUR STOCK PRICE.

Our common stock, which is quoted on the Nasdaq National Market, has
experienced significant price and volume fluctuations. These fluctuations are
likely to continue in the future. The market price of our common stock may
decline below the price of the shares sold in this offering. The market prices
of the securities of Internet-related companies have been especially volatile.
Some companies that have had volatile market prices for their securities have
been subject to securities class action suits filed against them. If a suit were
to be filed against us, regardless of the outcome, it could result in
substantial costs and a diversion of our management's attention and resources.
This could have a material adverse effect on our business, results of operations
and financial condition.

MANAGEMENT HAS BROAD DISCRETION AS TO THE USE OF PROCEEDS WE RECEIVE FROM THIS
OFFERING.

Our management will have broad discretion with respect to the use of
proceeds we receive from this offering. Most of the proceeds we receive from
this offering will be used for expenses of the business and general working
capital. You will be relying on the judgment of our management about these uses.
See "Use of Proceeds."

EFFECTS OF ANTI-TAKEOVER PROVISIONS COULD INHIBIT THE ACQUISITION OF MEDIA
METRIX.

Some of the provisions of our certificate of incorporation, bylaws and
Delaware law could, together or separately:

- discourage potential acquisitions proposals;

- delay or prevent a change in control; and

- limit the price that investors might be willing to pay in the future for
shares of our common stock.

In particular, our board of directors may issue up to 5,000,000 shares of
preferred stock with rights and privileges that might be senior to our common
stock, without the consent of the holders of the common stock. Our certificate
of incorporation and bylaws will provide, among other things, that our board of
directors will be divided into three classes which will serve staggered three
year terms, that stockholders may not take actions by written consent and that
special meetings of stockholders may only be called by our board of directors or
our Chairman. We are also subject to Section 203 of the Delaware General
Corporation Law which generally prohibits a Delaware corporation from engaging
in any of a broad range of business combinations with any interested stockholder
for a period of three years following the date on which the stockholder became
an interested stockholder.

19
<PAGE>
USE OF PROCEEDS

The net proceeds from the sale of the 1,500,000 shares of common stock
offered by us will be approximately $71.5 million, after deducting underwriting
discounts and commissions and other estimated offering expenses. We will not
receive any of the proceeds from the sale of the shares of our common stock
being offered by the selling stockholders in this prospectus. If the
underwriters' over-allotment option is exercised in full, our net proceeds will
be approximately $82.7 million.

The net proceeds received by us will be used to make additional investments
in our international expansion efforts, develop new products and for general
corporate purposes, including working capital. We may also use a portion of the
net proceeds, currently intended for general corporate purposes, to acquire or
to invest in complementary businesses, technologies, products or services. We
have no present plans or commitments and we are not currently engaged in any
negotiations with respect to such transactions. Our management will retain broad
discretion in the allocation of the net proceeds of this offering.

Pending such uses, we intend to invest the net proceeds in short-term,
investment grade, interest-bearing securities.

PRICE RANGE OF COMMON STOCK

Our common stock has been listed on the Nasdaq National Market since May 7,
1999 under the symbol "MMXI." The following table sets forth the high and low
closing sale prices on the Nasdaq National Market for our common stock for the
calendar periods indicated.

<TABLE>
<CAPTION>
PRICE RANGE
OF COMMON STOCK
--------------------
HIGH LOW
<S> <C> <C>
YEAR ENDING DECEMBER 31, 1999:
Second Quarter (from May 7)......................................... $ 56.625 $ 32.000
Third Quarter....................................................... $ 69.875 $ 34.250
Fourth Quarter (through October 25)................................. $ 65.875 $ 48.250
</TABLE>

On October 25, 1999, the last reported sale price of our common stock on the
Nasdaq National Market was $51.13 per share. As of September 30, 1999, there
were 206 holders of record of our common stock.

DIVIDEND POLICY

We have never declared nor paid any cash dividends on our common stock. We
currently anticipate that we will retain any future earnings for the development
and operations of our business. Accordingly, we do not anticipate paying cash
dividends on our capital stock in the foreseeable future.

20
<PAGE>
CAPITALIZATION

The following table sets forth our capitalization as of June 30, 1999:

- on an actual basis;

- on a pro forma basis to reflect our acquisition of AdRelevance; and

- on a pro forma basis as adjusted to reflect our acquisition of AdRelevance
and our sale of the shares of common stock in this offering at the public
offering price of $50.50 per share and the application of the net proceeds
as described under the section "Use of Proceeds."

You should read the following table with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the financial statements
and notes included elsewhere in this prospectus.
<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
------------------------------------
<S> <C> <C> <C>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt, including current portion............... $ 291 $ 390 $ 390
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares
authorized and none issued and outstanding, actual,
pro forma and pro forma as adjusted; -- -- --
Common stock, $.01 par value, 60,000,000 shares
authorized; 17,302,448 shares issued and
outstanding, actual; 18,000,126 shares issued and
outstanding, pro forma; 19,500,126 shares issued and
outstanding, pro forma as adjusted.................. 173 180 195
Additional paid-in capital............................ 70,757 130,150 201,590
Accumulated other comprehensive loss.................. (27) (27) (27)
Accumulated deficit................................... (21,154) (27,954) (27,954)
Deferred compensation................................. (1,244) (1,244) (1,244)
---------- --------- ---------
Total stockholders' equity.............................. 48,505 101,105 172,560
---------- --------- ---------
Total capitalization................................ $ 48,796 $ 101,495 $ 172,950
========== ========= =========
</TABLE>

The outstanding share information is based on our shares outstanding as of
June 30, 1999. This information excludes:

- 528,639 shares of common stock subject to options granted under our 1998
Equity Incentive Plan and outstanding as of June 30, 1999 at a weighted
average exercise price of $8.63 per share;

- 483,786 shares of common stock subject to options granted under our
earlier Stock Option Plan and outstanding as of June 30, 1999 at a
weighted average exercise price of $0.82 per share;

- 789,681 additional shares of common stock reserved for issuance under our
1998 Equity Incentive Plan; and

- 77,520 shares of our common stock which may be issuable if AdRelevance
achieves certain post-closing goals; 223,566 shares of our common stock
subject to options and warrants assumed in connection with the AdRelevance
acquisition; and an additional 24,841 shares of our common stock which may
be issuable under these options and warrants if AdRelevance achieves
certain post-closing goals.

21
<PAGE>
DILUTION

Our pro forma net tangible book value as of June 30, 1999, was approximately
$44.5 million, or $2.47 per share of common stock. Pro forma net tangible book
value per share is equal to our tangible net assets, less total liabilities,
divided by the pro forma number of shares of common stock outstanding as of
June 30, 1999, after giving effect to the issuance of 697,678 shares of common
stock in connection with our acquisition of AdRelevance. Pro forma net tangible
book value dilution per share to new investors represents the difference between
the amount per share paid by purchasers of shares of common stock in this
offering and the pro forma net tangible book value per share of common stock
immediately after completion of this offering. After giving effect to the sale
of 1,500,000 shares at the public offering price of $50.50 per share and the
application of the net proceeds from this offering, our pro forma net tangible
adjusted book value at June 30, 1999 would have been approximately
$115.9 million, or $5.95 per share of common stock. This amount represents an
immediate increase in pro forma net tangible book value of $3.48 per share to
existing stockholders and an immediate dilution in pro forma net tangible book
value of $44.55 per share to new investors. The following table illustrates this
per share dilution:

<TABLE>
<S> <C> <C>
Assumed public offering price per share...................................... $ 50.50

Pro forma net tangible book value per share at June 30, 1999............... $ 2.47

Increase in pro forma net tangible book value per share attributable to new
investors purchasing shares in the offering.............................. 3.48
---------

Pro forma net tangible book value per share after the offering............... 5.95
---------

Dilution per share to new investors purchasing shares in the offering........ $ 44.55
=========
</TABLE>

22
<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected financial data set forth below as of December 31, 1996, 1997
and 1998 have been derived from our financial statements, which have been
audited by Ernst & Young LLP, independent auditors, whose report for the three
years ended December 31, 1998 is included elsewhere in this prospectus. The
statement of operations for the period ended December 31, 1995 and for the six
months ended June 30, 1998 and 1999 and the balance sheet as of June 30, 1999
are unaudited and, in our opinion, include all adjustments, consisting of only
normal recurring adjustments, necessary for a fair presentation of the
information. The financial statements for the period from inception to
December 31, 1995 are based on operations of PC Meter, our predecessor, while it
was still a division of NPD. The financial statements for the year ended
December 31, 1996 are those of PC Meter and include three months of operations
during which PC Meter was a division of NPD. The financial statements for the
year ended December 31, 1998 include the results of operations of
RelevantKnowledge from the date of the merger on November 5, 1998. The pro forma
statement of operations data for the year ended December 31, 1998 give effect to
our merger with RelevantKnowledge as if it had taken place on January 1, 1998
and our acquisition of AdRelevance as if it had taken place on October 12, 1998.
The pro forma statement of operations data for the six months ended June 30,
1999 give effect to our acquisition of AdRelevance if it had taken place on
January 1, 1999. The pro forma balance sheet data as of June 30, 1999 reflect
the pro forma effect of our acquisition of AdRevelance as if the acquisition
took place on June 30, 1999. The results of operations for the six months ended
June 30, 1999 are not necessarily indicative of results to be expected for any
future period. You should read the selected financial data set forth below with
the financial statements and related notes and with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," which are included
elsewhere in this prospectus.
<TABLE>
<CAPTION>
PERIOD FROM SIX MONTHS ENDED
INCEPTION YEAR ENDED PRO FORMA
THROUGH DECEMBER 31, YEAR ENDED JUNE 30,
DECEMBER 31, ------------------------------------- DECEMBER 31, --------------------
1995 1996 1997 1998 1998 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................ $ -- $ 1,033 $ 3,188 $ 6,331 $ 8,145 $ 2,505 $ 7,435
Costs of revenues............... 140 1,744 3,463 4,121 7,000 1,601 3,838
--------- --------- --------- --------- --------- --------- ---------
Gross profit (loss)............. (140) (711) (275) 2,210 1,145 904 3,597
Operating expenses:
Research and development...... 86 588 866 1,382 2,177 508 1,673
Sales and marketing........... 45 929 2,022 2,888 4,516 1,287 3,147
General and administrative.... 101 1,148 1,516 2,715 4,765 846 2,337
Amortization of deferred
compensation and other
stock-based compensation.... -- -- -- 369 1,339 -- 305
Amortization of intangibles... -- -- -- 479 6,495 -- 1,497
Acquired in-process research
and development............. -- -- -- 1,600 8,400 -- --
--------- --------- --------- --------- --------- --------- ---------
Total operating expenses.... 232 2,665 4,404 9,433 27,692 2,641 8,959
--------- --------- --------- --------- --------- --------- ---------
Loss from operations............ (372) (3,376) (4,679) (7,223) (26,547) (1,737) (5,362)
Interest income, net of interest
expense....................... -- -- 95 65 161 49 411
--------- --------- --------- --------- --------- --------- ---------
Net loss........................ (372) (3,376) (4,584) (7,158) (26,386) (1,688) (4,951)
Preferred stock dividends....... -- -- (290) (314) (314) (154) (109)
--------- --------- --------- --------- --------- --------- ---------
Net loss applicable to common
stockholders.................. $ (372) $ (3,376) $ (4,874) $ (7,472) $ (26,699) $ (1,842) $ (5,060)
========= ========= ========= ========= ========= ========= =========
Basic and diluted net loss per
common share applicable to
common stockholders........... $ (0.06) $ (0.52) $ (0.75) $ (0.98) $ (2.43) $ (0.28) $ (0.35)
========= ========= ========= ========= ========= ========= =========
Shares used in calculating basic
and diluted net loss per
common share applicable to
common stockholders........... 6,523 6,523 6,523 7,619 11,006 6,523 14,584

PRO FORMA
SIX MONTHS
ENDED JUNE,
1999
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................ $ 7,435
Costs of revenues............... 3,838
---------
Gross profit (loss)............. 3,597
Operating expenses:
Research and development...... 2,048
Sales and marketing........... 3,215
General and administrative.... 2,669
Amortization of deferred
compensation and other
stock-based compensation.... 504
Amortization of intangibles... 10,193
Acquired in-process research
and development............. 6,800
---------
Total operating expenses.... 25,429
---------
Loss from operations............ (21,832)
Interest income, net of interest
expense....................... 410
---------
Net loss........................ (21,422)
Preferred stock dividends....... (109)
---------
Net loss applicable to common
stockholders.................. $ (21,531)
=========
Basic and diluted net loss per
common share applicable to
common stockholders........... $ (1.41)
=========
Shares used in calculating basic
and diluted net loss per
common share applicable to
common stockholders........... 15,281
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF JUNE 30, 1999
------------------------------- ----------------------
1996 1997 1998 ACTUAL PRO FORMA
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities................ $ 583 $ 1,869 $ 8,012 $ 46,837 $ 47,054
Working capital (deficit)....................................... (2,478) (47) 1,057 43,122 43,277
Total assets.................................................... 1,213 2,787 16,060 55,742 108,506
Due to NPD...................................................... 2,782 1,284 4,706 557 557
Preferred stocks................................................ -- 8,366 4,680 -- --
Total stockholders' equity (deficit)............................ (2,478) (8,274) 2,622 48,505 101,105
</TABLE>

23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

YOU SHOULD READ THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS WITH THE FINANCIAL STATEMENTS AND THE NOTES TO THE
FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION
CONTAINS FORWARD-LOOKING STATEMENTS BASED ON OUR CURRENT EXPECTATIONS,
ASSUMPTIONS, ESTIMATES AND PROJECTIONS. THESE FORWARD-LOOKING STATEMENTS INVOLVE
RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
AS MORE FULLY DESCRIBED IN THE "RISK FACTORS" SECTION AND ELSEWHERE IN THIS
PROSPECTUS. WE UNDERTAKE NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING
STATEMENTS FOR ANY REASON, EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER
EVENTS OCCUR IN THE FUTURE.

OVERVIEW

We provide Internet audience measurement products and services to leading
Internet advertisers and advertising agencies, Internet properties, technology
companies and financial institutions. We have been at the forefront of the
development and coordination of technology and standards needed to facilitate
advertising and transactions between companies doing business over the Internet.
The quality and depth of our customer base and our customer renewal rate of over
95% reflect our position as a widely accepted Internet audience measurement
service.

Our business was originally conducted as a division within NPD, a leading
marketing research firm. Prior to March 1996, we were engaged primarily in
product research and development. In March 1996, PC Meter, L.P., was formed to
further commercialize our Internet audience measurement business in an entity
separate from NPD, although NPD continued to provide PC Meter with
administrative and support services and technology licenses. By July 1996, we
increased the size of our panel to over 10,000 individuals and significantly
increased our product offerings. In April 1997, PC Meter was merged into Media
Metrix and we raised approximately $4.0 million in a private placement to fund
the expansion of our business. The assets and liabilities and related revenues
and expenses of PC Meter have been reflected in our financial statements at
their historical book values. See "Certain Transactions--Formation by NPD" and
the financial statements and related notes thereto.

In November 1998, we merged with RelevantKnowledge, our leading competitor.
After giving effect to the merger, the former stockholders of RelevantKnowledge
were issued 3,890,825 shares of Media Metrix common stock. See Note 4 of notes
to our financial statements. Following the merger, we increased our panel size
and began to integrate the best technological features from each company into
our systems and processes. Due to the combination, in the fourth quarter of 1998
we had considerable expenses due to costs incurred by operating two distinct
panels, production systems and administrative infrastructures. In connection
with the merger, we acquired $6.4 million of intangibles, which will be
amortized over periods varying from one to three years.

On October 8, 1999, we acquired AdRelevance. The acquisition was structured
as a stock-for-stock transaction valued at approximately $59.4 million. In
addition, we may issue additional shares of our common stock and options and
warrants having a value of approximately $6.6 million, based on the closing
price of our common stock on October 4, 1999, if AdRelevance achieves certain
post-closing goals. In connection with our acquisition of AdRelevance, we will
recognize approximately $52.2 million of intangibles, which will be amortized
over a three-year period. Also, a non-recurring in-process research and
development cost estimated to be $6.8 million will be expensed in the fourth
quarter of 1999.

In connection with the formation of our European joint venture, MMXI Europe
B.V., we granted to each of GfK and IPSOS an option, subject to certain
conditions, to exchange their shares of MMXI Europe for shares of our common
stock at any time commencing on May 7, 2000 through May 7, 2005. The aggregate
maximum number of shares of our common stock that we may be required to issue in

24
<PAGE>
exchange for the shares of MMXI Europe will equal the then U.S. dollar
equivalent of [EURO]3,825,000 divided by $21.25. On October 6, 1999,
[EURO]3,825,000 equalled approximately $4.1 million. If GfK or IPSOS exercises
its option to convert its shares in MMXI Europe into shares of our common stock,
we will need to record additional goodwill in an amount equal to the difference
between the then fair market value of the shares of our common stock multiplied
by the number of shares we issue and the net book value of MMXI Europe
attributable to GfK and IPSOS.

Our revenues are derived from our measurement products and services. Our
product offerings include both syndicated products and customized products. We
sell our syndicated products on an annual subscription basis. We typically bill
our syndicated clients, in advance, for the next three months of products. Since
1997, syndicated products have accounted for approximately 90% of our revenues,
while customized products and services have accounted for approximately 10%. Our
combined customer base increased from approximately 100 customers at the end of
1997 to more than 420 as of June 30, 1999. Of the 75 customers subscribing under
annual contracts for our syndicated products and services at the end of 1997,
over 95% remained customers at the end of 1998. With this high customer
retention rate, we have a growing base of recurring revenues from our syndicated
products and services.

We recognize revenues for the syndicated products and services over the term
of the related contract as services are provided. Revenues for customized
products and services are recognized in the period in which the product or
service is delivered.

Our business model is based on creating multiple products and services from
our core panel-based market research, technologies and databases. The core panel
of 50,000 individuals under continuous measurement has been established over the
past three years. We recruit individuals to become members of our panel through
random direct mail and telephone solicitations. We incur costs in connection
with recruiting and retaining members of our panel. These costs are expensed in
the year incurred. Our rate of expense growth, other than panel and production,
is primarily driven by increases in headcount and sales and marketing
expenditures.

We have incurred significant losses from operations since our inception. We
incurred losses from operations of $3.4 million in 1996, $4.7 million in 1997,
$7.2 million in 1998 and $5.4 million in the six months ended June 30, 1999. If
the merger with RelevantKnowledge had taken place on January 1, 1998 and the
acquisition of AdRelevance had occurred on October 12, 1998, its date of
inception, our pro forma loss from operations for 1998 would have been
$26.5 million. This pro forma loss from operations includes $6.5 million of
amortization of intangibles and $8.4 million of acquired in-process research and
development. If our acquisition of AdRelevance had taken place on January 1,
1999, our pro forma loss from operations for the six months ended June 30, 1999
would have been $21.8 million. As of June 30, 1999, we had an accumulated
deficit of $21.2 million. As of December 31, 1998, we had an outstanding payable
to NPD for $4.7 million under the management services agreement, $4.1 million of
which was paid in January 1999. As of June 30, 1999, we had an outstanding
payable to NPD for $557,000. Charges from NPD have decreased in 1999 as we have
taken on the direct management of our own payroll and computer systems.

We expect that we will incur significant expenses in the future associated
with our planned international expansion, particularly costs associated with
recruiting and maintaining panels in a number of countries. We plan on
continuing to hire personnel to manage our current and anticipated international
operations and on entering into joint ventures with local partners. In addition,
we intend to invest heavily in further development and improvement of our
technologies and development of additional products and services.

25
<PAGE>
RESULTS OF OPERATIONS

The following table sets forth our results of operations expressed as a
percentage of revenues:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------- --------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
Revenues..................................................... 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Costs of revenues............................................ 168.9 108.6 65.1 63.9 51.6
--------- --------- --------- --------- ---------
Gross profit (loss).......................................... (68.9) (8.6) 34.9 36.1 48.4
Operating expenses:
Research and development................................... 56.9 27.2 21.8 20.3 22.5
Sales and marketing........................................ 90.0 63.4 45.6 51.3 42.3
General and administrative................................. 111.1 47.6 42.9 33.8 31.4
Amortization of deferred compensation...................... -- -- 5.8 -- 4.1
Amortization of intangibles................................ -- -- 7.6 -- 20.2
Acquired in-process research and development............... -- -- 25.3 -- --
--------- --------- --------- --------- ---------
Total operating expenses..................................... 258.0 138.2 149.0 105.4 120.5
--------- --------- --------- --------- ---------
Loss from operations......................................... (326.9) (146.8) (114.1) (69.3) (72.1)
Interest income, net......................................... -- 3.0 1.0 1.9 5.5
--------- --------- --------- --------- ---------
Net loss..................................................... (326.9)% (143.8)% (113.1)% (67.4)% (66.6)%
========= ========= ========= ========= =========
</TABLE>

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

REVENUES. Revenues increased 196.9% from $2.5 million for the six months
ended June 30, 1998 to $7.4 million for the six months ended June 30, 1999.
Sales of syndicated audience measurement products and services accounted for
approximately 90% of revenues for each of the six months ended June 30, 1998 and
1999. Sales of customized products and services accounted for the remaining
revenues. The increase in revenues was due primarily to a substantial increase
in the number of our customers, including customers acquired in connection with
the RelevantKnowledge merger, and an increase in the amount of products and
services sold to our customers. No single customer accounted for more than 10%
of revenues during either of the six months ended June 30, 1998 and 1999.

COSTS OF REVENUES. Costs of revenues consist primarily of costs associated
with the recruitment and maintenance of the panel, data collection and
production costs. Panel and data collection costs include costs associated with
mailing and printing, incentives, help desk and associated personnel. Production
costs include computer usage charges, printing, report distribution costs and
personnel costs. Gross profit was $904,000 for the six months ended June 30,
1998, or 36.1% of revenues. Gross profit was $3.6 million for the six months
ended June 30, 1999, or 48.4% of revenues. The increase in gross profit as a
percentage of revenues for the six months ended June 30, 1999 over the prior
period was due to an increase in revenues, without a commensurate increase in
costs.

RESEARCH AND DEVELOPMENT. Research and development costs consist primarily
of personnel and other related costs attributable to the development of new
products and services. All research and development costs have been expensed as
incurred. Research and development costs were $508,000 for the six months ended
June 30, 1998, or 20.3% of revenues. Research and development costs were $1.7
million for the six months ended June 30, 1999, or 22.5% of revenues. The
increase in research and development costs as a percentage of revenues for the
six months ended June 30, 1999 was due primarily to increases in research and
development personnel and consulting costs.

SALES AND MARKETING. Sales and marketing costs consist of personnel,
commissions, travel and entertainment expenses, public relations costs, trade
show expenses, seminars and marketing materials. Sales and marketing costs were
$1.3 million for the six months ended June 30, 1998, or 51.3% of

26
<PAGE>
revenues. Sales and marketing costs were $3.1 million for the six months ended
June 30, 1999, or 42.3% of revenues. The increase in absolute dollars was due
primarily to the increase in sales and marketing personnel, including the
addition of personnel in connection with the RelevantKnowledge merger, and
additional marketing costs. The decrease in sales and marketing costs as a
percentage of revenues was due primarily to revenues increasing at a greater
rate.

GENERAL AND ADMINISTRATIVE. General and administrative costs consist
primarily of personnel, lease payments for our facilities, telephone and
utilities and professional services fees. General and administrative costs were
$846,000 for the six months ended June 30, 1998, or 33.8% of revenues. General
and administrative costs were $2.3 million for the six months ended June 30,
1999, or 31.4% of revenues. The increase in absolute dollars was due to the
expenses associated with becoming a public company and increased personnel and
expansion of our office facilities, including the addition of personnel and
office facilities in connection with the RelevantKnowledge merger. The decrease
in general and administrative costs as a percentage of revenues was due
primarily to revenues increasing at a greater rate. We anticipate that our
general and administrative costs will increase as a result of expenses
associated with becoming a public company.

AMORTIZATION OF DEFERRED COMPENSATION. Deferred compensation of $305,000
for the six months ended June 30, 1999 represents a non-cash compensation
expense recorded in connection with stock options granted in December 1998.

AMORTIZATION OF INTANGIBLES. Amortization charges of $1.5 million for the
six months ended June 30, 1999 represent the amortization of RelevantKnowledge's
panel and amortization of other intangibles acquired in our merger with
RelevantKnowledge.

LOSS FROM OPERATIONS. Our loss from operations was $1.7 million for the six
months ended June 30, 1998, or 69.3% of revenues. Loss from operations was
$5.4 million for the six months ended June 30, 1999, or 72.1% of revenues. Loss
from operations in terms of absolute dollars was higher in the six months ended
June 30, 1999 due to the continued expansion of our business, the merger with
RelevantKnowledge and amortization of intangibles. The increase in loss from
operations as a percentage of revenues was due to the amortization of
intangibles for the six months ended June 30, 1999 offset by an increase in
revenues relative to the increases in costs of revenues and operating costs.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1998

REVENUES. Revenues increased 98.6% from $3.2 million for the year ended
December 31, 1997 to $6.3 million for the year ended December 31, 1998. Sales of
syndicated audience measurement products and services accounted for
approximately 90% of revenues for each of the years ended December 31, 1997 and
1998. Sales of customized products and services accounted for the remaining
revenues. The increase in revenues was due primarily to a substantial increase
in the number of our customers and an increase in the amount of products and
services sold to our customers, and, to a lesser extent, the revenues associated
with RelevantKnowledge's business for the period from November 5, 1998 to the
end of the year. No single customer accounted for more than 10% of revenues
during the year ended December 31, 1998. One customer accounted for
approximately 19% of revenues for the year ended December 31, 1997.

COSTS OF REVENUES. Gross loss was $275,000 for the year ended December 31,
1997, or 8.6% of revenues. Gross profit was $2.2 million for the year ended
December 31, 1998, or 34.9% of revenues. The increase in gross profit for the
year ended December 31, 1998 over the prior period was due to an increase in
sales, including sales attributable to RelevantKnowledge's business for the
period from November 5, 1998 to the end of the year, without a commensurate
increase in costs. The increase in gross profit was partially offset by the
costs associated with operating two panels following the RelevantKnowledge
merger.

27
<PAGE>
RESEARCH AND DEVELOPMENT. Research and development costs were $866,000 for
the year ended December 31, 1997, or 27.2% of revenues. Research and development
costs were $1.4 million for the year ended December 31, 1998, or 21.8% of
revenues. The increase in absolute dollars was due primarily to increases in
research and development personnel, including the addition of personnel in
connection with the RelevantKnowledge merger. The decrease in research and
development costs as a percentage of revenues was due to revenues increasing at
a greater rate.

SALES AND MARKETING. Sales and marketing costs were $2.0 million for the
year ended December 31, 1997, or 63.4% of revenues. Sales and marketing costs
were $2.9 million for the year ended December 31, 1998, or 45.6% of revenues.
The increase in absolute dollars was due primarily to the increase in sales and
marketing personnel, including the addition of personnel in connection with the
RelevantKnowledge merger. The decrease in sales and marketing costs as a
percentage of revenues was due primarily to revenues increasing at a greater
rate.

GENERAL AND ADMINISTRATIVE. General and administrative costs were
$1.5 million for the year ended December 31, 1997, or 47.6% of revenues. General
and administrative costs were $3.1 million for the year ended December 31, 1998,
or 48.7% of revenues. The increase in absolute dollars was due to the expenses
associated with increased personnel, expansion of our office facilities,
expenses incurred after the merger with RelevantKnowledge and a non-cash
compensation expense recorded in connection with stock options. The decrease in
general and administrative costs as a percentage of revenues was due primarily
to revenues increasing at a greater rate.

AMORTIZATION OF INTANGIBLES. Amortization charges of $479,000 represent two
months of the amortization of RelevantKnowledge's panel, which is being
amortized over 12 months and other intangibles acquired in our merger with
RelevantKnowledge which are being amortized over three years.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT. In connection with our merger
with RelevantKnowledge, we expensed $1.6 million of acquired in-process research
and development for the year ended December 31, 1998. Acquired in-process
research and development represents the value attributed to three technologies
in development at the time of the merger.

LOSS FROM OPERATIONS. Our loss from operations was $4.7 million for the
year ended December 31, 1997, or 146.8% of revenues. Loss from operations was
$7.2 million for the year ended December 31, 1998, or 114.1% of revenues. Loss
from operations was higher in 1998 due to the continued expansion of our
business, the inclusion of two months of RelevantKnowledge losses and
amortization of acquired intangibles. Loss from operations in 1998 included a
$1.6 million write-off of acquired in-process research and development. The
decrease in loss from operations as a percentage of revenues was due primarily
to an increase in sales relative to the increases in costs of revenues and
operating costs.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1997

REVENUES. Revenues increased 208.7% from $1.0 million for the year ended
December 31, 1996 to $3.2 million for the year ended December 31, 1997. Sales of
syndicated audience measurement products and services accounted for
approximately 90% of revenues for the years ended December 31, 1996 and 1997.
Sales of customized products and services accounted for most of the remaining
revenues. The increase in revenues was due primarily to a substantial increase
in the number of our customers and an increase in the amount of services sold to
our customers. One customer accounted for approximately 19% of revenues for the
year ended December 31, 1997. No single customer accounted for more than 10% of
revenues during the year ended December 31, 1996.

COSTS OF REVENUES. Gross loss was $711,000 for the year ended December 31,
1996, or 68.9% of revenues. Gross loss was $275,000 for the year ended
December 31, 1997, or 8.6% of revenues. Costs of revenues increased
substantially in 1997 due to costs associated with panel expansion. The decrease

28
<PAGE>
in the costs of revenues as a percentage of revenues was due primarily to
revenues increasing at a greater rate.

RESEARCH AND DEVELOPMENT. Research and development costs were $588,000 for
the year ended December 31, 1996, or 56.9% of revenues. Research and development
costs were $866,000 for the year ended December 31, 1997, or 27.2% of revenues.
The decrease in research and development costs as a percentage of revenues was
due to revenues increasing at a greater rate.

SALES AND MARKETING. Sales and marketing costs were $929,000 for the year
ended December 31, 1996, or 90.0% of revenues. Sales and marketing costs were
$2.0 million for the year ended December 31, 1997, or 63.4% of revenues. The
increase in absolute dollars was due primarily to the increase in sales and
marketing personnel and expansion of marketing efforts. The decrease in sales
and marketing costs as a percentage of revenues was due primarily to revenues
increasing at a greater rate.

GENERAL AND ADMINISTRATIVE. General and administrative costs were
$1.1 million for the year ended December 31, 1996, or 111.1% of revenues.
General and administrative costs were $1.5 million for the year ended
December 31, 1997, or 47.6% of revenues. The increase in absolute dollars was
due primarily to the expenses associated with increased personnel and associated
expansion of our infrastructure. The decrease in general and administrative
costs as a percentage of revenues was due primarily to revenues increasing at a
greater rate.

LOSS FROM OPERATIONS. Our loss from operations was $3.4 million for the
year ended December 31, 1996, or 326.9% of revenues. Loss from operations was
$4.7 million for the year ended December 31, 1997, or 146.8% of revenues. The
decrease in the loss from operations as a percentage of revenues was due
primarily to the large increase in revenues relative to the increases in costs
of revenues and operating costs.

29
<PAGE>
QUARTERLY RESULTS OF OPERATIONS

The following is a table of our unaudited quarterly statement of operations
data for each of the periods indicated. This information is unaudited, but in
our opinion, has been prepared substantially on the same basis as our audited
financial statements, which are included elsewhere in this prospectus. All
necessary adjustments, consisting only of normal recurring adjustments, have
been included in these amounts to present fairly the unaudited quarterly results
of operations. You should read these quarterly data in conjunction with our
audited financial statements. You should not view the results of operations for
any period as an indication of the results of operations for any future period.
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1998 1998 1998 1998 1999 1999

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues................................... $ 1,160 $ 1,345 $ 1,493 $ 2,333 $ 3,178 $ 4,257
Costs of revenues.......................... 800 801 885 1,635 1,720 2,118
--------- --------- --------- --------- --------- ---------
Gross profit............................... 360 544 608 698 1,458 2,139
Operating expenses:
Research and development................. 248 260 274 600 681 992
Sales and marketing...................... 575 711 664 938 1,334 1,813
General and administrative............... 434 412 633 1,236 1,049 1,288
Amortization of deferred compensation.... -- -- -- 369 108 197
Amortization of intangibles.............. -- -- -- 479 749 748
Acquired in-process research and
development............................ -- -- -- 1,600 -- --
--------- --------- --------- --------- --------- ---------
Total operating expenses................... 1,257 1,383 1,571 5,222 3,921 5,038
--------- --------- --------- --------- --------- ---------
Loss from operations....................... (897) (839) (963) (4,524) (2,463) (2,899)
Interest income, net of interest expense... 45 4 7 9 79 332
--------- --------- --------- --------- --------- ---------
Net loss................................... $ (852) $ (835) $ (956) $ (4,515) $ (2,384) $ (2,567)
========= ========= ========= ========= ========= =========
</TABLE>

<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1998 1998 1998 1998 1999 1999
Revenues.................................... 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Costs of revenues........................... 69.0 59.6 59.3 70.1 54.1 49.8
--------- --------- --------- --------- --------- ---------
Gross profit................................ 31.0 40.4 40.7 29.9 45.9 50.2
Operating expenses:
Research and development.................. 21.4 19.3 18.3 25.7 21.4 23.3
Sales and marketing....................... 49.6 52.9 44.5 40.2 42.0 42.6
General and administrative................ 37.4 30.6 42.4 53.0 33.0 30.2
Amortization of deferred compensation..... -- -- -- 15.8 3.4 4.6
Amortization of intangibles............... -- -- -- 20.5 23.6 17.6
Acquired in-process research and
development............................. -- -- -- 68.6 -- --
--------- --------- --------- --------- --------- ---------
Total operating expenses.................... 108.4 102.8 105.2 223.8 123.4 118.3
--------- --------- --------- --------- --------- ---------
Loss from operations........................ (77.4) (62.4) (64.5) (193.9) (77.5) (68.1)
Interest income, net of interest expense.... 3.9 0.3 0.5 0.4 2.5 7.8
--------- --------- --------- --------- --------- ---------
Net loss.................................... (73.5)% (62.1)% (64.0)% (193.5)% (75.0)% (60.3)%
========= ========= ========= ========= ========= =========
</TABLE>

30
<PAGE>
Our revenues have increased in all periods presented as a result of the
continuous expansion of our customer base, the sale of additional products and
services to our existing customers and the release of new products and services.
Results for the three months ended December 31, 1998, March 31, 1999 and
June 30, 1999 reflect the merger with RelevantKnowledge and, therefore, are not
comparable to prior periods. The results for those three periods include
amortization of intangibles and the write-off of acquired in-process research
and development in association with the merger, a non-cash compensation expense
recorded in connection with stock options and expenses due to costs incurred by
operating two distinct panels, production systems and infrastructures.

Our results of operations may fluctuate significantly in the future as a
result of a variety of factors, many of which are beyond our control. See "Risk
Factors--Our Operating Results May Fluctuate From Quarter to Quarter."

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through an
initial investment and loan by NPD, the private placement of equity securities,
RelevantKnowledge's cash on hand at the time of the merger, the net proceeds of
our initial public offering of common stock and cash from operations. In
April 1997, we completed a $4.0 million private placement of our equity
securities. On November 4, 1998, some of our warrant holders exercised warrants
and acquired common stock for an aggregate purchase price of $1.5 million. On
January 4, 1999, we issued to an existing stockholder common stock for an
aggregate of $2.0 million, which had been received by December 31, 1998. On
May 12, 1999, we completed our initial public offering and received net proceeds
of approximately $49.4 million.

Net cash used in operating activities was $342,000 for the year ended
December 31, 1996, $4.8 million for the year ended December 31, 1997, $411,000
for the year ended December 31, 1998 and $6.4 million for the six months ended
June 30, 1999. For each of these periods, net cash used in operating activities
was substantially impacted by the amount owed to NPD. In the year ended
December 31, 1998, the amounts owed to NPD increased by $3.4 million and, for
the six months ended June 30, 1999, the amount decreased by $4.1 million.

Net cash provided by (used in) investing activities was zero for the year
ended December 31, 1996, $(135,000) for the year ended December 31, 1997,
$3.1 million for the year ended December 31, 1998 and $(11.0) million for the
six months ended June 30, 1999. Cash provided by investing activities for the
year ended December 31, 1998 resulted primarily from the acquisition of
$3.2 million of cash in the RelevantKnowledge transaction. Cash used in
investing activities was primarily from the acquisition of $10.5 million of
marketable securities with the proceeds from the initial public offering.

Net cash provided by financing activities was $925,000 for the year ended
December 31, 1996, $6.2 million for the year ended December 31, 1997,
$3.5 million for the year ended December 31, 1998 and $45.8 million for the six
months ended June 30, 1999. Cash provided by financing activities for the year
ended December 31, 1998 resulted from the $1.5 million proceeds from the
exercise of warrants and the receipt of $2.0 million on December 31, 1998
relating to the sale of common stock in January 1999. Cash provided by financing
activities for the six months ended June 30, 1999 was primarily due to the
proceeds received from our initial public offering.

As of June 30, 1999, we had $36.4 million of cash and cash equivalents and
$10.5 million of marketable securities. As of June 30, 1999, our principal
commitments consisted of accrued obligations under our agreements with NPD in
the amount of $557,000. We expect to invest at least an additional $10 million
over the next several years in our international operations.

Although we have no material commitments for capital expenditures,
management anticipates that we will experience an increase in our capital
expenditures and lease commitments consistent with our

31
<PAGE>
anticipated growth in operations, infrastructure and personnel, including in
connection with the anticipated separation of our systems from those of NPD. We
currently anticipate that we will continue to experience growth in our operating
expenses for the foreseeable future and that operating expenses will be a
material use of our cash resources. Although we expect to use net cash in our
business for the foreseeable future, we believe that the net proceeds of this
offering, together with our existing cash and cash equivalents and short-term
investments, will be sufficient to meet our anticipated cash needs for working
capital and capital expenditures for at least the next 18 months.

YEAR 2000 COMPLIANCE

STATE OF READINESS

We rely on NPD's computer and communications networks for collecting and
processing much of our data. NPD has advised us that it has completed a
comprehensive review of its products, information systems and critical suppliers
for year 2000 compliance and has reported that its computer and communications
networks are year 2000 compliant.

We have conducted tests of our meter, as well as our internal programs, and
to date we have not found significant year 2000 issues within our meter or our
systems or services. We will continue to periodically test our systems to ensure
our computers and communications networks remain year 2000 compliant. We have
installed new billing, accounting and administrative systems that are fully
operational and have been represented to be fully year 2000 compliant.

Our assessment plan consists of:

- quality assurance testing of our proprietary software, including our
metering technology;

- contacting third-party vendors and licensors of material hardware,
software and services that are both directly and indirectly related to the
collection and processing of the data received from panelists;

- contacting vendors of material non-IT systems;

- assessment of repair or replacement requirements;

- repair or replacement;

- implementation; and

- creation of contingency plans in the event of year 2000 failures.

COSTS

To date, we have not incurred any material expenditures in connection with
identifying or evaluating year 2000 compliance issues. Most of our expenses have
related to, and are expected to continue to relate to, the operating costs
associated with time spent by employees in the evaluation process and year 2000
compliance matters generally. At this time, we do not anticipate that we will
incur significant operating expenses or be required to invest heavily in
computer systems improvements to be year 2000 compliant. However, significant
uncertainty exists concerning the potential costs and effects associated with
year 2000 compliance. If expenses relating to year 2000 compliance are higher
than anticipated, it could have a material adverse effect on our business,
results of operations and financial condition.

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<PAGE>
RISKS

We are not currently aware of any year 2000 compliance problems relating to
our meter or our data collection and retrieval systems that would have a
material adverse effect on our business, results of operations and financial
condition, other than those that are currently being corrected. However, we
cannot assure you that we will not discover year 2000 compliance problems in the
meter or the data retrieval and collection systems that will require substantial
expenditures to correct. In addition, there can be no assurance that third-party
software, hardware or services incorporated into our systems will not need to be
revised or replaced, all of which could be time consuming and expensive. Our
failure to fix the meter or to fix or replace third-party software, hardware or
services on a timely basis could result in lost revenues, increased operating
costs, the loss of customers and other business interruptions, any of which
could have a material adverse effect on our business, results of operations and
financial condition. Moreover, the failure to adequately address year 2000
compliance issues in our meter and our operating systems could result in claims
of mismanagement, misrepresentation or breach of contract and related
litigation, which could be costly and time-consuming to defend.

In addition, we can not assure you that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside of our control will be year 2000 compliant. The failure by such entities
to be year 2000 compliant could result in a systemic failure beyond our control,
such as a prolonged Internet, telecommunications or electrical failure, which
could also prevent us from receiving data from our panelists, processing the
data and providing reports to our clients, which would have a material adverse
effect on our business, results of operations and financial condition.

WORST CASE SCENARIO

We believe that our worst case scenario would be a complete failure of the
metering software installed on our panelists' computers due to year 2000
complications. This would lead to a loss of data for the time period during
which the failure is not remedied. Lack of data could prevent us from issuing
our reports for the period during which the failure is not remedied. We will
continue to monitor this and any other potential problem areas.

CONTINGENCY PLAN

We have developed a contingency plan based on the results of our evaluation
of our year 2000 readiness. This plan includes:

- preparing staff to be on call during critical times;

- preparing for communication of problems with employees and business
partners;

- monitoring external factors affecting our systems;

- designating and testing alternative communications;

- identifying alternative sources for key services and products; and

- tracking critical events and coordinating media relations.

Our contingency plan includes scheduled drills and rehearsals for a variety
of situations and response scenarios.

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<PAGE>
RECENT DEVELOPMENTS

On October 14, 1999, we announced financial results for the three months
ended September 30, 1999. We reported revenues of $5.5 million for the three
months ended September 30, 1999, a 29.1% increase as compared to the three
months ended June 30, 1999 revenues of $4.3 million and a 268.2% increase as
compared to $1.5 million of revenues for the three months ended September 30,
1998.

The net loss applicable to common stockholders for the three months ended
September 30, 1999 was $2.6 million, or $0.15 per share, compared to
$2.6 million, or $0.16 per share for the three months ended June 30, 1999. The
net loss applicable to common stockholders for the three months ended
September 30, 1998 was $1.0 million, or $0.16 per share. Weighted average shares
outstanding for the three months ended September 30, 1999 were approximately
17,371,000.

For the nine months ended September 30, 1999 our revenues were
$12.9 million, an increase of 223.5% over our revenues for the nine months ended
September 30, 1998. The net loss applicable to common stockholders for the nine
months ended September 30, 1999 was $7.7 million, or $0.50 per share, compared
to $2.9 million, or $0.44 per share for the nine months ended September 30,
1998.

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<PAGE>
The following condensed financial statements reflect our financial results
for the third quarter ended September 30, 1999.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED, IN THOUSANDS EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1998 1999 1998 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues.................................................................. $ 1,493 $ 5,496 $ 3,997 $ 12,931
Costs of revenues......................................................... 885 2,961 2,486 6,800
--------- --------- --------- ---------
Gross profit.............................................................. 608 2,535 1,511 6,131
Operating expenses:
Research and development................................................ 274 1,353 782 3,026
Sales and marketing..................................................... 664 2,229 1,950 5,376
General and administration.............................................. 633 1,694 1,479 4,031
Amortization of deferred compensation and other stock-based
compensation.......................................................... -- 554 -- 858
Amortization of intangibles............................................. -- 748 -- 2,246
--------- --------- --------- ---------
Total operating expenses.................................................. 1,571 6,578 4,211 15,537
--------- --------- --------- ---------
Loss from operations...................................................... (963) (4,043) (2,700) (9,406)
Minority interest......................................................... -- (806) -- (806)
Interest income, net...................................................... (7) (608) (56) (1,019)
--------- --------- --------- ---------

Net loss.................................................................. (956) (2,629) (2,644) (7,581)
Preferred stock dividends................................................. 79 -- 233 109
--------- --------- --------- ---------
Net loss applicable to common stockholders................................ $ (1,035) $ (2,629) $ (2,877) $ (7,690)
========= ========= ========= =========
Weighted average shares outstanding....................................... 6,523 17,371 6,523 15,533
========= ========= ========= =========
Net loss per share applicable to common stockholders...................... $ (0.16) $ (0.15) $ (0.44) $ (0.50)
========= ========= ========= =========
</TABLE>

CONDENSED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31, 1998 SEPTEMBER 30, 1999
----------------- ------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................................ $ 8,012 $ 45,736
Accounts receivable, net................................................. 1,371 2,699
Prepaid expenses and other............................................... 207 1,015
--------- ----------
Total current assets....................................................... 9,590 49,450
Property and equipment, net................................................ 650 1,878
Intangibles, net........................................................... 5,736 3,691
Other assets............................................................... 84 209
--------- ----------
Total assets............................................................... $ 16,060 $ 55,228
========= ==========
Current liabilities:
Accounts payable and accrued liabilities................................. $ 7,015 $ 5,562
Advance billings......................................................... 1,391 2,812
Other current liabilities................................................ 127 193
--------- ----------
Total current liabilities.................................................. 8,533 8,567
Long-term debt............................................................. 225 224
Redeemable preferred stock................................................. 4,680 --
Total stockholders' equity................................................. 2,622 46,437
--------- ----------
Total liabilities and stockholders' equity................................. $ 16,060 $ 55,228
========= ==========
</TABLE>

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<PAGE>
BUSINESS

INTRODUCTION

We provide Internet audience measurement products and services to leading
Internet advertisers and advertising agencies, Internet properties, technology
companies and financial institutions. We measure usage of the entire Internet,
including its largest segments, the World Wide Web and proprietary on-line
services like America Online. Our products and services enable the continued
growth and development of the Internet by providing third-party audience
measurement data that our customers rely on to make critical business decisions.
We collect these data by measuring Internet usage from a representative sample,
or panel, of personal computer users with our proprietary tracking technology.
We maintain a large panel of Internet users reporting Internet usage both at
work and at home, as well as the usage of proprietary on-line services. In
addition, our acquisition of AdRelevance enables us to provide Internet
advertising measurement and advertising tracking services to our customers.

We have been at the forefront of the development and coordination of
technology and standards needed to facilitate advertising and transactions
between companies doing business over the Internet. The quality and depth of our
customer base and our customer renewal rate of over 95% reflect our position as
a widely accepted Internet audience measurement service.

INDUSTRY BACKGROUND

GROWTH OF THE INTERNET

The Internet has emerged as a global medium that allows millions of people
worldwide to obtain information, communicate and conduct business
electronically. The largest segments of the Internet are the Web and proprietary
on-line services, like America Online. International Data Corporation, or IDC,
estimates that the number of Web users worldwide will grow from approximately
142 million in 1998 to approximately 500 million by the end of 2003.
Additionally, America Online, the largest on-line service provider, had
approximately 18 million service subscribers at the end of September 1999. The
continued growth in Internet usage will be driven by:

- the large and growing number of personal computers installed in homes and
offices;

- easier, faster, more reliable and less expensive access to the Internet;

- the availability of more and better content on the Internet;

- the increased use of the Internet to buy and sell products and services;

- improvements in network infrastructure;

- the increasing ability to access the Internet with devices like
televisions and telephones; and

- the increasing familiarity and acceptance of the Internet by businesses
and consumers.

GROWTH OF INTERNET ADVERTISING AND ELECTRONIC COMMERCE

The unique interactive nature of the Internet has led to its rapid emergence
as a compelling vehicle for advertisers. The Internet offers advertisers the
ability to target:

- people with specific sets of interests;

- users with desirable demographic characteristics; and

- populations within specific regions, localities or countries.

The Internet also gives marketers the potential to:

- establish dialogues and individual relationships with customers;

- receive direct feedback on their advertising;

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<PAGE>
- quickly and cost-effectively adapt their advertising to respond to
customer feedback; and

- reach broad, global audiences.

According to Forrester Research, Internet advertising spending worldwide is
expected to increase dramatically over the next five years, as illustrated by
the following chart:

WORLDWIDE INTERNET ADVERTISING SPENDING
($ IN MILLIONS)

<TABLE>
<CAPTION>
1999 2000 2001 2002 2003 2004
<S> <C> <C> <C> <C> <C> <C>
North America.............. $ 2,831 $ 5,410 $ 8,773 $ 12,740 $ 17,482 $ 22,389
Europe..................... 286 621 1,217 2,169 3,589 5,480
Asia/Pacific............... 166 346 691 1,235 2,070 3,322
Latin America.............. 51 121 259 517 949 1,647
Other...................... 2 4 8 14 23 237
--------- --------- --------- --------- --------- ---------
Total...................... $ 3,336 $ 6,502 $ 10,948 $ 16,675 $ 24,113 $ 33,075
========= ========= ========= ========= ========= =========
</TABLE>

The growing adoption of the Internet also represents an enormous opportunity
for marketers to conduct commerce over the Internet. This is commonly referred
to as e-commerce. E-commerce can be fast, inexpensive and convenient. A growing
number of users have transacted business over the Internet, including trading
securities, buying goods, purchasing airline tickets and paying bills. As
business and consumer acceptance of e-commerce grows, advertisers and direct
marketers are increasingly using the Internet to locate customers, advertise and
facilitate transactions. According to IDC, e-commerce is expected to increase
dramatically over the next four years, as illustrated by the following chart:

WORLDWIDE E-COMMERCE REVENUES (WEB ONLY)
($ IN MILLIONS)

<TABLE>
<CAPTION>
1999 2000 2001 2002 2003
<S> <C> <C> <C> <C> <C>
E-commerce revenues.......................... $ 111,359 $ 217,806 $ 398,122 $ 733,631 $1,317,733
</TABLE>

The growth in Internet advertising spending will ultimately depend on the
ability of advertisers to plan their advertising expenditures by using reliable
data that demonstrate audience size and the value of Internet advertisement
placement. Timely audience measurement data have emerged as "must have"
information. This information enables the buying and selling of advertising and
sponsorship support. Additionally, reliable Internet audience measurement data
are key drivers of the e-commerce industry because they enable Internet
marketers to analyze consumer behavior and focus their Internet investments.

THE NEED FOR A MEASUREMENT STANDARD

Traditional media - including television, radio and print - are largely
supported by advertising spending. One of the principal elements that drives the
growth of advertising in all media is the availability of audience measurement
data, or ratings. In each medium, a single standard of audience measurement has
emerged. For over 40 years, Nielsen's estimates of televison audience size and
composition have served as the standard for audience measurement of national and
local television advertising. Arbitron serves as the radio audience measurement
standard, and MRI serves as the magazine readership measurement standard. These
third-party standards provide a uniform basis of measurement which advertisers,
media companies, advertising agencies and the financial community rely on to
make critical business decisions.

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<PAGE>
Given the widespread availability of essentially free information on the
Internet, it has been difficult for Web sites and proprietary on-line services
to induce people to pay for on-line content. Advertising is a critical revenue
stream for providers of on-line content and services. As Web sites and on-line
content providers seek to increase advertising revenues, and as on-line
advertisers seek to determine where they should spend their advertisement
dollars, demand is growing for reliable statistics and standardized methods to
evaluate Internet usage. As a result, a standard for Internet audience
measurement must emerge, which will:

- measure a large and representative sample of Internet users;

- track activity on the entire Internet, not just the Web, so that key
properties like America Online and other proprietary on-line services and
technologies are included;

- measure the Internet audience both at work and at home, because Internet
usage differs in these two environments; and

- be unbiased and independent from advertisers and content providers.

As in traditional media, an independent standard of audience measurement
must be adopted by advertisers and marketers on the Internet. In traditional
media, this standard may vary from country to country because goods and services
are generally marketed on a national basis. However, on the Internet, customers
will demand a worldwide standard because the Internet is a truly global
marketplace. A significant business opportunity exists for the company that
provides this standard.

THE MEDIA METRIX SOLUTION - SETTING THE STANDARD

We provide products and services that are critical to the continued growth
and development of the Internet. We provide a third-party audience measurement
standard that our customers use as a basis for making effective business
decisions. We have been at the forefront of the development and coordination of
technology and standards needed to facilitate advertising and transactions
between companies doing business over the Internet. Our customers include
leading Internet advertisers and advertising agencies, Internet properties,
leading technology companies and financial institutions.

We have become a widely accepted Internet audience measurement service
because of the following:

WE PROVIDE COMPREHENSIVE AUDIENCE MEASUREMENT. We are able to measure the
entire Internet audience, including people who use the Web and proprietary
on-line services, like America Online. We maintain a large panel of Internet
users reporting Internet usage at work and at home.

WE DELIVER ACKNOWLEDGED EXPERTISE IN MARKETING AND MEDIA RESEARCH. The
members of our management team are leaders in the field of Internet audience
measurement and share a vast repository of knowledge in panel-based research,
media research, media research technology, television and print media and in
various fields of marketing research. As a result, we have extensive expertise
in the development and management of representative consumer and business panels
to collect data. This is a complicated process that is performed effectively by
only a limited number of marketing research companies. Panel recruitment must be
managed carefully in order to construct a panel broad enough to provide
sufficient sample size and varied enough to provide meaningful data on different
population segments. Our management team's experience in the art of managing
panels results largely from its experience at NPD, a U.S.-based marketing
research firm and a provider of panel-based marketing information.

WE MEET THE NEEDS OF AN INFLUENTIAL CUSTOMER BASE. Our success is due in
part to our large base of established client companies, including leading new
and traditional media companies, advertising agencies, technology companies,
e-commerce marketers and financial institutions. These customers are responsible
for a significant percentage of total Internet advertising revenues. As a
result, their views

38
<PAGE>
influence the developing standards for Internet audience measurement. These
customers rely on our data to make effective business decisions. We work with
our customers and key trade associations to gain critical insights into evolving
markets and to remain at the forefront of ongoing changes in the industry. This
allows us to continue to effectively meet our customers' needs.

WE DEMONSTRATE TECHNOLOGICAL LEADERSHIP. We collect data through our
proprietary metering system, or meter, which is contained in a software
application installed on a panelist's personal computer. The meter monitors all
communications between the computer's operating system and the software
applications and hardware that the operating system controls and monitors. By
measuring these communications, we become aware of all activities taking place
on the computer, which we believe positions us to measure any new digital media
that may emerge. Our metering technology produces data on Internet usage,
on-line service usage and hardware and software applications usage. Once data
are collected, we construct dynamic databases from which we produce our reports.

WE PROVIDE BROAD PRODUCT OFFERINGS AND DELIVERY OPTIONS. We offer a broad
range of comprehensive, reliable and timely audience measurement products and
services. Our product offerings include both syndicated products and customized
products. Syndicated products are standardized products that appeal to a broad
range of customers. Customized products are tailored to meet individual customer
needs. We continually expand our services in anticipation of our customers'
needs and the changes and growth of the industry we serve. We offer our
customers a variety of options for delivery of our reports, including via the
Web, e-mail, computer disk and hard copy reports.

STRATEGY

Our goal is to become the accepted standard for Internet audience
measurement. We intend to achieve this goal through the following strategies:

CONTINUE OUR INDUSTRY LEADERSHIP. We expect to continue our history of
innovation as the pioneer of Internet audience measurement. We plan to continue
to develop our market-leading technology and leverage our panel and databases to
develop broader and more in-depth products and services. We plan to remain at
the forefront of change in the industry by continuing to work closely with our
customers and by actively working with key trade associations and non-profit
organizations to establish standards for Internet audience measurement.

DEVELOP PRODUCTS TO ACCELERATE E-COMMERCE GROWTH. We believe that the
success and growth of e-commerce, like Internet advertising, will be driven
largely by the availability of comprehensive and reliable quantitative and
qualitative data. These data must provide key statistics for the evaluation of
e-commerce businesses and business strategies. We have developed, and are
working with our clients to continue to develop, products that enable our
clients to target Internet users most likely to engage in e-commerce by
providing behavioral and demographic data on people who purchase products,
actively shop, or merely click on to a particular e-commerce site. Products and
services that we currently offer in this segment include Q-Metrix, our service
dealing with on-line shopping behavior. These products and services also include
our syndicated on-line shopping report and our shopping referral reports. In
addition, with our acquisition of AdRelevance, we will be able to increase the
depth of our e-commerce product offerings by tracking data on advertising
spending; placement; and creative and competitive on-line advertising market
share.

EXPAND AND INCREASE PENETRATION OF OUR CLIENT BASE. We will continue to add
new customers, build on our successful client retention strategy and further
expand our existing customer relationships by offering products and services
that are valuable to our customers. We have historically retained substantially
all of our client base from year to year. Of our customers under contract at the
end of 1997, over 95% remained customers at the end of 1998. We anticipate
expanding our client base as Internet advertising spending and e-commerce
transactions increase and as more Internet related businesses and advertisers
require audience measurement data.

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<PAGE>
EXPAND INTERNATIONALLY. Unlike most media, which are delivered to a
national or local market, the Internet is the first medium that is regularly
delivered to a worldwide audience. For this reason, integrated, worldwide
audience measurement will be critical for advertisers to understand whom they
are reaching and for media properties to be able to effectively sell their
available advertising inventory. Additionally, over the next five years,
Internet advertising spending growth rates worldwide are projected to exceed
spending growth rates in the United States alone. We are responding to the
demands of our customers to obtain reliable Internet audience measurement data
in key non-U.S. markets. To capitalize on this trend, we intend to leverage our
proprietary panel, technology and brand recognition to become a worldwide
provider of Internet audience measurement services. We have expanded our
operations into Europe, Australia and Canada, and we intend to continue
expanding our presence in the international marketplace in conjunction with
local strategic partners who are leaders in panel-based marketing and media
research.

DEVELOP NEW PRODUCTS AND SERVICES. In addition to e-commerce related
products, we intend to continue to develop new products and services to meet the
growing needs of our customer base. As of September 30, 1999, we employed 25
people in research and development. We intend to expend significant additional
resources, including a portion of the proceeds from this offering, to expand our
new product development efforts. We are developing products that will offer
qualitative data measurement and expanded local market coverage. We are also
developing additional products and services based on our ability to gather
real-time data. We also intend to increase sales of customized products and
services to present and future clients. In addition, we intend to leverage the
capabilities of our patented metering method by creating and developing new
products based on a database that contains information on each panelist's
system's hardware configuration and software usage.

PRODUCTS AND SERVICES

We provide our customers with a broad array of Internet audience measurement
products and services; innovative advertising measurement and tracking services;
and technology usage measurement reports. These products and services are
described below.

INTERNET AUDIENCE MEASUREMENT PRODUCTS AND SERVICES. Our principal audience
measurement products and services are derived from data collected from our panel
and stored in our core databases, which we use to produce the following:

- syndicated Internet audience measurement reports and services;

- custom Internet audience measurement reports and services; and

- e-commerce measurement reports and services.

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<PAGE>
SYNDICATED PRODUCTS. We provide syndicated Internet audience measurement
products and services as our core business. Our key syndicated products consist
of:

<TABLE>
<CAPTION>
PRODUCT DESCRIPTION
<S> <C>
THE WEB REPORT...................... Our flagship syndicated audience measurement product contains the following
two components:
- THE KEY MEASURES REPORT: provides measures for all reportable Web sites,
categorized within major sectors. Key measures include:
- unique visitors;
- the percentage of the total Web audience in a month that could be reached
via each reported Web site, commonly referred to as reach;
- average usage days per user;
- average unique Web pages visited per day and per month;
- age and gender composition; and
- demographic composition.
- THE TREND REPORT: provides information on trends within the sectors in
the Key Measures Report for a six-month period. One section of the Trend
Report includes trends over a three-month period for key measures. Another
section provides an alphabetical listing of over 10,000 measured Web sites
and properties and the reach trends for each during the relevant six-month
period.

THE DIGITAL MEDIA REPORT............ Provides measurement of audience usage of proprietary on-line services like
America Online, push technology like PointCast that delivers pre-defined
content to users and other proprietary services like Juno, as well as all
information collected in the Web Report. Allows for the comparison of all
digital media. Measures reported include:
- unique visitors;
- reach;
- usage days per person;
- minutes per usage day and per month; and
- age and gender composition.

THE LOCAL MARKET REPORT............. Tracks national and local market reach, demonstrating how national and
local Web sites perform within each of 38 top local markets. Data are
compiled on a monthly basis.

Q-METRIX............................ Provides information linking our "metered" Internet usage behavior to
consumer media habits, product and service usage, lifestyle characteristics
and demographics. Key subject areas covered include:

- television, radio and newspaper habits;
- Internet shopping behavior;
- banking and credit card activity;
- electronic products purchased and owned;
- lifestyle experiences;
- automotive and travel patterns; and
- hobbies and sports.
</TABLE>

41
<PAGE>
<TABLE>
<CAPTION>
PRODUCT DESCRIPTION
<S> <C>
THE AD NETWORK REPORT............... Details reach, frequency and demographic information across ad sales
networks and other ad-supported networks like DoubleClick, 24/7 Media,
Flycast, LinkExchange and AdSmart. The measures reported include the full
network reach and reach of those Web pages where ads have been served.

LIFEGRAPHICS........................ Provides behavioral data for lifestyles and purchase tendencies of Web
users.

WEEKLY FLASH........................ Tracks web site performance on a weekly basis.
</TABLE>

CUSTOMIZED SERVICES, REPORTS AND ANALYSES. We leverage our vast database of
information on Internet usage and technology usage to provide clients with a
broad range of special services, reports and analyses, including the following:

<TABLE>
<CAPTION>
PRODUCT DESCRIPTION
<S> <C>

INDUSTRY SECTOR/VERTICAL MARKET
REPORTS........................... Report in-depth information on Web site performance within a specific
industry sector or vertical market.

RETENTION ANALYSES.................. Report the percentage of audience that visits a Web site during a
particular month and returns during following months.

USAGE REPORTS....................... Segment Web and Web site traffic into heavy, medium and light usage groups
and compare behavior, usage pattern and demographics.

SITE CONTENT REPORTS................ Analyze specific user-defined content areas, or channels, within a Web site
and report on all items in the Key Measures Report.

PERSONAL CLICKSTREAM REPORTS........ Report actual click-by-click, page level behavior of a sample of users
within a particular Web site as well as their behavior across the entire
Web.

TRAFFIC REFERRAL REPORTS............ Report a summary of Web sites that users visit just prior to visiting a
particular Web site and indicate where they go after exiting the site.

SITE INTERACTION REPORTS............ Quantify the degree to which a Web site shares audience with other Web
sites and properties, detailing exclusive and duplicated audience share.
</TABLE>

E-COMMERCE MEASUREMENT SERVICES. We derive e-commerce measurement products
and services using the same database we use for our audience measurement
products and services. Our key products consist of:

<TABLE>
<CAPTION>
PRODUCT DESCRIPTION
<S> <C>
SYNDICATED ON-LINE SHOPPING
REPORT............................ Tracks on-line shopping activities across more than 100 Internet sites
within 18 categories, as well as the AOL Shopping Channel. Key measures
include:
- engaged shoppers, defined in general as users who spend more than three
minutes on a Web site;
- engaged shoppers relative to each Web site's unique visitor count;
- share of engaged shoppers by Web site;
- repeat shop count; and
- site-specific demographic profiles by key shopping measures.

SHOPPER REFERRAL REPORTS............ Reports on the sites that are delivering engaged shopper site traffic to
other sites.
</TABLE>

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<PAGE>
ADVERTISING MEASUREMENT PRODUCTS. We offer advertising measurement products
and services through our AdRelevance subsidiary. AdRelevance specializes in the
automated retrieval and analysis of on-line advertising, providing advertisers,
agencies and publishers with marketing intelligence that tells them where, when,
how and how much their competitors are marketing and advertising on the
Internet. AdRelevance tracks competitive on-line advertising and advertiser data
for eight broadly defined categories including automotive, computer hardware,
computer software, telecommunications, financial services, travel, eRetailing
and ePublishing. The data are reported via a Web-based computer interface system
featuring the following data points:

<TABLE>
<S> <C>
- Report data by:

-- advertiser: company, product, class or customizable group;
-- Web location: genre, Web site, sub-site or customizable group;
-- creative: message type (brand, promotion, price, etc.), technology or size; and
-- time period: most recent week, month or customizable time period.

- Measures:

-- impressions;
-- spending (based on rate card); and
-- unique advertisements.

- Formats:

-- pie chart;
-- bar chart;
-- line chart; and
-- download raw data into Excel spreadsheets.
</TABLE>

TECHNOLOGY USAGE MEASUREMENT REPORTS. Our meter captures data on all
software applications used each time a panelist logs onto his or her computer.
The meter also captures data on all hardware configurations and software
availability on the user's computer. We use these data to compile reports on
technology usage for companies that develop and market hardware and software
applications and for Web sites that seek to understand the technical
specifications of their visitors' computer systems.

<TABLE>
<CAPTION>
PRODUCT DESCRIPTION
<S> <C>
HARDSCAN REPORT HardScan, SoftScan and SoftUsage Reports provide details on hardware
SOFTSCAN REPORT ownership, peripheral ownership, branding information, installed
SOFTUSAGE REPORT applications and system software, including Internet browsers, and use of
LINKAGE REPORTS software applications categorized by Software Publishers' Association
US CONSUMER PC REPORT segments. The analyses in the Linkage Reports and the US Consumer PC Report
provide a unique look at the relationships between hardware, software,
media, ownership and usage.
</TABLE>

INTERNATIONAL OPERATIONS

We believe that the ability to offer Internet audience measurement data for
non-U.S. markets will be a critical element in the Internet audience measurement
market. Having established our business model in the United States, we have
begun our international expansion efforts. In September 1999, we entered into a
joint venture with two of the leading European media research and market
information services companies, GfK AG (based in Germany) and IPSOS S.A. (based
in France), to form MMXI Europe B.V. Pursuant to our agreement with GfK and
IPSOS, we initially own 54.8%, GfK owns 19.9% and IPSOS owns 25.3% of MMXI
Europe. Under the umbrella of MMXI Europe, we are in the

43
<PAGE>
process of forming subsidiaries in each of the United Kingdom, France and
Germany. In conjunction with our joint venture partners, we have begun to
recruit panelists in each of these countries. Since June 1999, we have recruited
approximately 6,200 panelists in these three countries, and anticipate that we
will have 3,000 panelists in each country by the end of the fourth quarter of
1999. We began collecting audience data on Internet usage in each of these
markets in June 1999. We have entered into a technology agreement under which we
have contributed our technology to MMXI Europe for use in Europe, excluding
Sweden, Denmark, Norway and Finland. Along with GfK and IPSOS, we will also
provide certain management services to MMXI Europe and each subsidiary of MMXI
Europe.

In September 1999, we entered into a letter of intent with AMR Interactive
Pty. Ltd., a leading new media market research firm based in Australia, to
create Media Metrix in Australia and New Zealand. Media Metrix in Australia and
New Zealand will provide the first third-party, meter-based Internet and digital
media audience measurement products and services for Australia and New Zealand.
The joint venture in Australia will be 51.0% owned by us. Panel recruitment has
begun, and we expect that Media Metrix in Australia will have approximately
2,000 panelists by the end of the fourth quarter. We intend to leverage the
presence of AMR in other Pacific Rim countries to expand our services to the
Asian markets.

Our licensee, the SIFO Group, is already measuring Internet audiences in
Sweden, under a license entered into in 1998 covering Sweden, Norway and
Finland. In addition, a Kanji version of our meter has been beta tested, and we
are currently evaluating our options in Japan.

In October 1999, we entered into a memorandum of understanding with ComQUEST
Research, Inc., to launch a service in Canada. ComQUEST is a wholly owned
subsidiary of BBM Bureau of Measurement, an industry co-operative owned by
Canadian broadcasters, advertisers and advertising agencies.

CUSTOMERS

We currently have over 500 customers who use our data for many purposes like
planning, buying and selling advertising; developing e-commerce strategies;
understanding consumer behavior; gaining competitive market intelligence; and
analyzing investment decisions. Our customers are typically leaders in their
respective fields, and include the following:

<TABLE>
<CAPTION>
CLIENT SECTOR TYPICAL CLIENTS
<S> <C>

Media Organizations................. All of the top 20 Internet properties, including America Online, Buena
Vista/Disney, Excite@Home, Infoseek, Lycos, Time Warner, ZDNet, CNET,
AltaVista, XOOM.com, About.com and Yahoo!/ GeoCities

Advertising Agencies................ Interpublic Group, J. Walter Thompson, Modem Media . Poppe Tyson, Omnicom
and Young & Rubicam

Advertisers and Marketers........... Amazon.com, CDnow, eBay, British Airways, Nabisco, Sotheby's and General
Motors

Technology Companies................ AT&T, Compaq, GTE, Hewlett-Packard, IBM and Microsoft

Financial Community................. Fidelity, Goldman Sachs and Morgan Stanley Dean Witter
</TABLE>

We typically enter into 12-month or longer subscription contracts with our
customers, some of whom are covered by multi-client master contracts with parent
corporations, like Time Warner and Buena Vista/Disney, to provide standard,
syndicated products and services or customized reports and analyses. It is
typical for our customers initially to purchase one of our standard products and
to upgrade over time. Of our customers under contract at the end of 1997, over
95% remained customers at the end of 1998.

44
<PAGE>
MARKETING AND SALES

A critical element of all of our marketing efforts is to build awareness of
the Media Metrix brand. Our Internet audience measurement data receive extensive
publicity due to press reporting of Internet activity which either references or
is based on our data. Other publicity is generated through public relations
activity and public speaking engagements by our executive officers.

We sell and market our products through our direct sales force, which was
comprised of 26 sales representatives as of September 30, 1999. A portion of our
sales force is dedicated to servicing and maintaining current clients. The
remainder is dedicated to developing new clients. Our sales force operates out
of our New York, San Francisco and Atlanta offices. Sales representatives
receive a base salary and are eligible for commissions based on revenues and
sales goals.

AUDIENCE MEASUREMENT METHODOLOGY

Our methodology has been developed from our background in panel recruitment
and management and includes our proprietary measurement technology. Key elements
of our methodology include:

PANELS AND DATA COLLECTION. Our panel is a representative sample of
personal computer users, including at-home and at-work users. We recruit panels
by random direct mail and telephone solicitation, both of which are standard
recruitment methods in marketing research. Our panel currently consists of over
50,000 individuals under continuous measurement. In connection with our panel
recruitment process, each panelist is required to fill out a detailed
questionnaire to provide background demographic information. The questionnaire
provides information such as age, gender, household income, geographic region,
level of education, size of household and job classification of the panelists.

Our proprietary metering system, or meter, is a software application
installed on a panelist's personal computer. It monitors activity of the
personal computer's operating system and browser. The meter passively records
what users do on their personal computers on a second-by-second basis,
including:

- the start and stop time of each activity;

- which application is being used;

- detailed usage activity for proprietary on-line services; and

- page-by-page viewing on the Internet.

We collect the data we need for our products and services without any
agreement or arrangement with operators of Web sites or operators of proprietary
on-line services like America Online. Because we measure our panelists' computer
usage and not activity at a particular Web site or proprietary service, no
agreements with the operators of Web sites or on-line services are necessary.

Once the meter has collected the data from the panelist's personal computer,
data are transmitted to our offices for processing either via disk or via
automatic transfer over the Web. We began introducing a new version of our
metering software in August 1999. The new meter captures additional details of
Internet usage to accurately report audience behavior of emerging media such as
streaming audio and video. This version also provides real time transmission of
data on usage. We also collect data via questionnaires distributed through
direct mail and over the Web. We utilize our own software to collect information
on hardware configurations and software installations of our panelists.

The statistical quality of the information that we collect is a function of
minimizing both sampling error and measurement error. Sampling error is a
function of the size and quality of the sample. Measurement error is a function
of the scope of the universe under measurement. We minimize sampling error by
maintaining a large panel. We minimize measurement error by measuring all
Internet

45
<PAGE>
usage, including the Web, proprietary on-line services like America Online and
all other activity on our panelists' personal computers.

DATA ANALYSIS AND REPORT GENERATION AND DELIVERY. Data retrieved from the
meter are transmitted or downloaded to file servers and then combined with those
of all the other panelists. The data are then used to construct several
databases, which we use to provide our reports. We deliver our reports in one or
more of the following formats: via proprietary Web-based delivery systems;
e-mail; computer disk or hard copy.

ADVERTISEMENT MEASUREMENT METHODOLOGY

Our AdRelevance technology systematically searches commercial sites on the
Web and captures detailed data about advertising banners, promotions,
sponsorships, text links and rich media 24 hours a day. This intelligent agent
technology searches over 2,000 Web sites and sub-sites daily and evaluates 40
million page views monthly to provide in-depth advertising tracking information.
Once captured, the data are warehoused, classified and statistically analyzed.

By using the AdRelevance technology, our customers can query the AdRelevance
database and generate Web-based reports on demand. This enables customers to
monitor competitors' marketing activities, plan more effective on-line campaigns
and evaluate campaigns in real time. Customers can gain access to up-to-date
intelligence about their competitors' on-line marketing communications programs,
enabling them to quickly and easily compare and report information by a wide
range of criteria including advertiser, product, message, type, industry,
location, technology and creative content.

OPERATIONS AND TECHNOLOGY

We have built our primary data collection, retrieval and processing system
based on systems and software developed by NPD. Our system has been designed
around industry standard data architectures. Backup procedures are built into
the processing environment in order to reduce downtime in the event of outages
or catastrophic occurrences. Our hardware systems are hosted at our Uniondale,
New York facility, our Atlanta, Georgia facility, NPD's Port Washington, New
York facility, and at two offsite professionally-managed computer centers in
Atlanta, Georgia and Santa Clara, California. We outsource the operation of much
of our technical infrastructure to NPD.

As of September 30, 1999, we had 25 employees dedicated to research and
development. We incurred research and development expenses of $588,000 in 1996,
$865,000 in 1997, $1.4 million in 1998 and $1.7 million in the six months ended
June 30, 1999. We anticipate that we will continue to devote significant
resources to product development and the development of delivery technology in
the future as we add new reports and databases.

INTELLECTUAL PROPERTY

We regard the protection of our patents, copyrights, service marks,
trademarks and trade secrets as important to our future success and rely on a
combination of patent, copyright, trademark, service mark and trade secret laws
and contractual restrictions to establish and protect our proprietary rights. We
require all employees and contractors to enter into confidentiality and
invention assignment agreements, and we enter into nondisclosure agreements with
third-parties with whom we do business in order to limit access to and
disclosure of our proprietary information. We cannot assure you that these
contractual arrangements or the other steps we have taken or will take in the
future will be sufficient to protect our technology from infringement or
misappropriation or to deter independent development of similar or superior
technologies by others.

46
<PAGE>
We seek to obtain the issuance of patents and the registration of our
trademarks and service marks in the United States and in selected other
countries. Effective patent, trademark, service mark, copyright and trade secret
protection may not be available in every country in which our products and
services are or will be made available. We also expect to license proprietary
rights such as patents, trademarks or copyrighted material to strategic partners
in the course of our planned international expansion. While we will attempt to
ensure that the quality of our service is maintained by such licensees, we
cannot assure you that such licensees will not take actions that might
materially adversely affect the value of our proprietary rights or reputation,
which could have a material adverse effect on our business, results of
operations and financial condition.

We also rely on certain technologies that we license from third parties,
like NPD, which licenses to us key software products and database technology. We
cannot assure you that these third-party technology licenses will not infringe
the proprietary rights of others or will continue to be available to us on
commercially reasonable terms, if at all. The loss of such technology could
require us to obtain substitute technology of lower quality or performance
standards or at greater cost, which could materially adversely affect our
business, results of operations and financial condition.

We have been issued a patent in the United States with regard to our meter
methodology. We also have patent applications pending in the European Patent
office and in Australia, Brazil, Canada, Japan, Mexico, Norway and the United
States.

We have also applied for a patent in the United States and other foreign
jurisdictions on the methodology for monitoring of remote data access on a
public computer network which comprises the former RelevantKnowledge meter. This
application is currently pending.

In connection with our federal trademark application for the name "Media
Metrix," a third party has filed an opposition to our application. Additionally,
our use of the brand name "Media Metrix" in Europe has been challenged by
Mediametrie, S.A., a French company which measures audiences of various media.
Rather than engage in a protracted dispute, we have elected to have our European
joint venture conduct business under the name "MMXI Europe." Mediametrie has
also challenged our use of the domain name "mediametrix.com."

To date, we have not been notified that our technologies infringe the
proprietary rights of third parties. We cannot assure you that others will not
claim that we have infringed proprietary rights with respect to past, current or
future technologies. We expect that the number of infringement claims in our
market will increase as the number of services and competitors in our industry
grows. Any of those claims, whether meritorious or not, could be time-consuming,
result in costly litigation or require us to enter into royalty or licensing
agreements. Royalty or licensing agreements might not be available on terms we
find acceptable or at all. As a result, any such claim could have a material
adverse effect upon our business, results of operations and financial condition.

COMPETITION

The market for measurement services for Internet technologies is new,
rapidly evolving and competitive. We expect that competition will intensify in
the future. We compete with other providers of Internet audience measurement
services, which are considered either consumer-centric measurement services or
site-centric measurement services. Consumer-centric services track usage among a
sample of users to provide an account of overall Internet usage behavior.
Site-centric services measure activity at a single web site and provide
measurement of activity at a particular Web site. We are a consumer-centric
service and compete directly with other consumer-centric measurement services
and indirectly with operators of site-centric measurement systems.

In March 1999, NetRatings and Nielsen Media Research introduced a new Web
site ratings service, Nielsen//NetRatings, that competes directly with many
aspects of our services. Nielsen Media

47
<PAGE>
Research is the leading provider of television audience measurement services. In
September 1999, NetRatings also entered into a joint venture with ACNielsen
Corp. to develop and maintain audience measurement panels and to market
Nielsen//NetRatings' products and services in international markets. ACNielsen
is the leading provider of market research, information and analysis to consumer
products and services industries and is a provider of television audience
measurement services outside the United States and Canada. Both Nielsen Media
Research and ACNielsen have significantly more financial and other resources
than do we. In light of these events, Nielsen//NetRatings has become a
significant competitor. Other potential competitors include PC Data, a marketing
research firm that provides research on personal computer software and hardware
sales, and @Plan, a consumer-centric, qualitative measurement service.

We face competition internationally from NetValue, a French company which
has announced that it will soon begin providing audience measurement services in
Europe.

In addition, we may face competition from individual Web sites that may
develop new and independent methods of measuring their own audience. We also
face competition from other companies that develop alternative audience
measurement technologies to those already provided by us or our current
competitors. Competitive pressures created by any one of these companies, or by
our competitors collectively, could have a material adverse effect on our
business, results of operations and financial condition.

We believe that the principal competitive factors in our market are the
ability to:

- create high-quality, timely and reliable consumer and business panels of a
sufficient size and representative nature to provide the necessary data;

- provide measurement services of proprietary on-line services and
Internet-related activity as well as measuring Web activity; and

- establish credibility and provide a trusted independent source of data.

Some of our competitors and potential competitors have longer operating
histories, larger customer bases and greater brand recognition in other
businesses and significantly greater financial, marketing, technical and other
resources than we do. We also face competition in the area of development of
representative consumer and business panels to provide data. In addition, other
measurement services may be acquired by, receive investments from or enter into
other commercial relationships with larger, well-established and well-financed
companies as use of the Internet increases. Therefore, certain of our
competitors with other revenue sources may be able to devote greater resources
to marketing and promotional campaigns, adopt more aggressive pricing policies
and devote substantially more resources to technology and systems development
than we can. Increased competition may result in reduced operating margins, loss
of market share and diminished value in our services. We cannot assure you that
we will be able to compete successfully against current and future competitors.
Further, as a strategic response to changes in the competitive environment, we
may, from time to time, make certain pricing, service or marketing decisions or
acquisitions that could have a material adverse effect on our business, results
of operations and financial condition. New technologies and the expansion of
existing technologies may also increase the competitive pressures on us by
enabling our competitors to offer a lower-cost service.

EMPLOYEES

As of September 30, 1999, we had 115 employees, with:

- 25 in research and development;

- 27 in operations;

48
<PAGE>
- 46 in sales, marketing and client service; and

- 17 in management, administration and finance.

Our employees are not covered by a collective bargaining agreement. We have
never experienced an employment-related work stoppage and consider our employee
relations to be good.

PROPERTIES

Currently, our operations and research and development facility is located
in Uniondale, New York, which is leased to us by NPD under the terms of a
management services agreement. See "Certain Transactions--Management Services
Agreement." In addition, we lease office space in Atlanta, Georgia, San
Francisco, California, and New York, New York. We also sublease additional
office space at another location in New York, New York.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

49
<PAGE>
MANAGEMENT

OUR EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of Media Metrix, and their ages and
positions, are:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Tod Johnson............................ 55 Chairman of the Board, Chief Executive Officer and Director

Mary Ann Packo......................... 44 President and Chief Operating Officer

Steve Coffey........................... 43 Executive Vice President

Thomas A. Lynch........................ 39 Chief Financial Officer, Secretary and Treasurer

Doug McFarland......................... 49 Senior Vice President, Sales

Jim D'Arcangelo........................ 37 Senior Vice President, Marketing and Business Development

Andrew A. Fessel....................... 46 Senior Vice President, Audience Measurement Services

Will Hodgman........................... 39 President and Chief Executive Officer of AdRelevance

Jeffrey C. Levy(1)..................... 36 Director and Vice Chairman

Michael C. Brooks(2)................... 54 Director

Stig Kry(2)............................ 70 Director

William W. Helman(1)................... 41 Director

James Mortensen(1)(2).................. 73 Director
</TABLE>

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

(1) Compensation committee member.

(2) Audit committee member.

TOD JOHNSON has been our Chairman of the Board and Chief Executive Officer
since March 1997 and has been involved in managing our business since our
inception as a division of NPD and then as PC Meter. He is the principal
shareholder of NPD and has served as the Chairman and Chief Executive Officer of
NPD since 1971. He has also served as Chairman of the Advertising Research
Foundation and was the Founding Co-Chairman of the Council for Marketing and
Opinion Research. Mr. Johnson earned a B.S. and an M.S. from Carnegie Mellon
University.

MARY ANN PACKO has been our President and Chief Operating Officer since
March 1997. She has been involved in managing our business since July 1996. She
served as Executive Director of IPSOS-NFO Europe, Paris, from July 1995 to July
1996 and as Vice President of New Ventures with NFO Worldwide from July 1994 to
July 1995. Prior to July 1994, Ms. Packo was the President of the Custom
Services Division of NPD Canada. Ms. Packo co-founded and was President of
National Yellow Pages Monitor and has served on the Board of Directors of the
Internet Advertising Bureau. Ms. Packo received her B.S. from Miami University,
Oxford, Ohio.

STEVE COFFEY has been our Executive Vice President since 1997 and has been
involved in managing our business since our inception as a division of NPD and
then as PC Meter. Mr. Coffey also headed the Advanced Research and Development
team at NPD from October 1994 to January 1996, where he founded and launched PC
Meter. Mr. Coffey received an M.S. from Columbia Business School.

THOMAS A. LYNCH has been our Chief Financial Officer since March 1997 and
has been involved in managing our business since our inception as a division of
NPD and then as PC Meter. He also served as Senior Vice President and Chief
Financial Officer of NPD from May 1995 to November 1998. Prior to joining NPD,
Mr. Lynch was a partner at KPMG Corporate Finance in Tokyo, Japan, from 1992 to

50
<PAGE>
May 1995. Mr. Lynch earned a Bachelors of Commerce degree from University
College Dublin, Ireland and an M.B.A. from the London Business School, England.

DOUG MCFARLAND has been our Senior Vice President, Sales, since February
1997. From July 1994 until joining us, Mr. McFarland was an executive vice
president with FreeMark Communications. From February 1992 until July 1994, Mr.
McFarland was a senior vice president of Next Century Media. Prior to that time,
he held various positions at Arbitron, including vice president-sales and
marketing. Mr. McFarland received his B.A. from Emory and Henry College and an
M.A. from Virginia Tech.

JIM D'ARCANGELO has been our Senior Vice President, Marketing and Business
Development, since March 1999. Prior to joining us, Mr. D'Arcangelo had been
Group President of NFO AD:IMPACT--Telecommunications, a research company, since
1997. Prior to that, he had been Vice President, then Executive Vice President
and Partner, with The Kelsey Group, a privately held interactive services
consulting firm, since 1994. Mr. D'Arcangelo holds a B.A. from Princeton
University, an M.S. in Marketing and Sales from John Hopkins University and an
M.B.A. from George Washington University, and he is a doctoral candidate at
George Washington University.

ANDREW A. FESSEL has been our Senior Vice President, Audience Management
Services, since September 1999. Prior to joining us, Mr. Fessel had been
Director of Database and Marketing for Microsoft Corp.'s MSN worldwide Web usage
and analysis team since September 1997. Prior to joining Microsoft, Mr. Fessel
had been executive in charge of research and marketing development for
Dreamworks SKG's studio operation launch team in Universal City, California
since 1995. Prior to joining Dreamworks, Mr. Fessel had been Senior Vice
President of research and marketing for Fox Broadcasting Company since 1985. Mr.
Fessel holds a Bachelor of Fine Arts degree from the New York University
Institute of Film & Television and an M.B.A. from New York University.

WILL HODGMAN has been President of AdRelevance since its inception in 1998.
Prior to that time, Mr. Hodgman had been General Manager of USWEB/CKS's
northwest operation from 1997 to 1998. Prior to that, Mr. Hodgman had been a
Senior Vice President of McCann-Erickson from 1994 to 1998. Mr. Hodgman holds a
B.A. from Williams College.

JEFFREY C. LEVY has been a director and Vice Chairman since November 1998.
Mr. Levy co-founded RelevantKnowledge with Timothy F. S. Cobb and served as its
Chief Executive Officer from November 1996 to November 1998. He served as legal
counsel at Turner Broadcasting System, Inc. from January 1995 to November 1996.
From July 1992 to January 1995, he was an associate at the law firm of Dow,
Lohnes & Albertson. Mr. Levy holds an A.B. from Harvard College and a J.D. from
Harvard Law School.

MICHAEL C. BROOKS has been a director since November 1998. He was a director
of RelevantKnowledge prior to the merger. He has been a general partner of J.H.
Whitney & Co., a venture capital fund and one of our stockholders, since 1984.
He is also a director of SunGard Data Systems, Inc., Pegasus
Communications, Inc., USinternetworking, Inc., homestore.com, VitaminShoppe.com
and several other private companies. Mr. Brooks holds a B.A. from Yale College
and an M.B.A. from Harvard Business School.

STIG KRY has been a director since March 1997. He has been employed by Kurt
Salmon Associates, Inc., a management consulting firm, since 1958, holding
various positions, including Chief Executive from 1975 to 1987 and his current
position as Chairman Emeritus since 1993. He is a director of Guilford
Mills, Inc. and Osh Kosh B'Gosh, Inc. as well as several private companies.
Mr. Kry is a member of NPD's Board of Advisors. Mr. Kry holds a degree in
textile engineering from NKI, Skolan, Stockholm, Sweden.

WILLIAM W. HELMAN has been a director since April 1997. He has been a
general partner of Greylock IX Limited Partnership, a venture capital fund and
one of our stockholders, since 1997 and

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<PAGE>
associated with Greylock since 1984. He is also a director of Millennium
Pharmaceuticals, Inc., a pharmaceutical company, Vertex Pharmaceuticals, Inc., a
pharmaceutical company, and various privately held companies. Mr. Helman holds
an A.B. from Dartmouth College and an M.B.A. from Harvard Business School.

JAMES MORTENSEN has been a director since March 1997. Mr. Mortensen has been
a private consultant since 1982. He was employed by Young & Rubicam Inc. from
1957 to 1982 where he held various positions, including Chief Financial Officer,
Vice Chairman and Chair of the Executive Committee. Mr. Mortensen is a member of
NPD's Board of Advisors. Mr. Mortensen attended Denver University.

Our board is divided into three classes, denominated Class I, Class II and
Class III. Members of each class hold office for three-year terms which are
staggered. At each annual meeting of our stockholders starting with the meeting
in 2000, the successors to the directors whose terms expire at that meeting will
be elected to serve for a three-year period following their election or until a
successor has been duly elected and qualified. Messrs. Levy and Mortensen are
Class I directors whose terms expire at the 2000 annual meeting of stockholders.
Messrs. Brooks and Kry are Class II directors whose terms expire at the 2001
annual meeting of stockholders. Messrs. Johnson and Helman are Class III
directors whose terms expire at the 2002 annual meeting. The expiration of a
director's term is subject in all cases to the election and qualification of his
successor or his earlier death, removal or resignation. Our officers are
appointed to serve at the discretion of the board.

The board has established an audit committee and a compensation committee.
The audit committee reviews our annual audit and meets with our independent
auditors to review our internal controls and financial management practices. The
compensation committee recommends to the board the compensation for our key
employees.

DIRECTOR COMPENSATION

In the past, non-employee, non-stockholder directors have received cash
compensation of $6,000 per year and options to purchase our common stock
received from both NPD and Media Metrix. See "Principal Stockholders." The
compensation committee of our board is in the process of formulating a policy
for compensation for non-employee directors. We expect that we will issue
options to our non-employee directors prior to the end of 1999.

EXECUTIVE COMPENSATION

The following table sets forth information concerning all cash and non-cash
compensation awarded to, earned by or paid to our Chief Executive Officer and
our next four most highly compensated executive officers for services rendered
to us during the fiscal years ended December 31, 1998, 1997 and 1996.

52
<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION --------------------------
------------------------------------ SECURITIES
OTHER UNDERLYING ALL
NAME AND PRINCIPAL ANNUAL OPTIONS/ OTHER
POSITION YEAR SALARY BONUS COMPENSATION SARS COMPENSATION
<S> <C> <C> <C> <C> <C> <C>
Tod Johnson.................................. 1998 -- -- $ 62,000(1) -- --
Chief Executive Officer and 1997 -- -- 62,000(1) -- --
Chairman of the Board (1) 1996 -- -- -- -- --

Mary Ann Packo............................... 1998 $ 157,500 $ 59,000 -- 43,715 --
President and Chief 1997 153,000 35,000 -- 26,092 --
Operating Officer 1996(2) 62,500 51,000 -- 66,534 --

Steve Coffey................................. 1998 145,000 54,500 -- 43,715 --
Executive Vice President 1997 130,000 35,000 -- 26,092 --
1996 120,000 47,000 -- 66,534 --

Thomas A. Lynch.............................. 1998 -- -- $ 36,000(1) 39,366 --
Chief Financial Officer (1) 1997 -- -- 36,000(1) 2,174 --
1996 -- -- -- -- --

Doug McFarland............................... 1998 154,500 42,000 -- 30,555 --
Senior Vice President, Sales 1997 150,000 30,000 -- 36,963 --
1996 -- -- -- -- --
</TABLE>

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

(1) Compensation for Mr. Johnson's services as Chief Executive Officer and
Mr. Lynch's services as Chief Financial Officer in 1998 was paid under our
management services agreement with NPD. NPD was reimbursed $62,000 for Mr.
Johnson's services in each of the years 1997 and 1998. NPD was reimbursed
$36,000 for Mr. Lynch's services in each of the years 1997 and 1998. We will
continue to pay for Mr. Johnson's services pursuant to an amended and
restated management services agreement at the rate of $15,000 per month. See
"Certain Transactions--Transactions with Officers and Directors--Management
Services Agreement." Mr. Lynch's salary was paid by NPD through December
1998. For 1999, Mr. Lynch is being paid at the rate of $165,000 per annum.

(2) Ms. Packo joined us in July 1996.

STOCK OPTIONS

The following table sets forth summary information concerning individual
grants of stock options made during the year ended December 31, 1998 to each of
our executive officers named in the Summary Compensation Table.

53
<PAGE>
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SHARES OPTIONS EXERCISE DEEMED VALUE PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE PER SHARE ON FOR OPTION TERM (3)
OPTIONS EMPLOYEES IN PRICE PER DATE ----------------------
GRANTED 1998 SHARE (1) OF GRANT (2) EXPIRATION DATE 0% 5%
<S> <C> <C> <C> <C> <C> <C> <C>
Tod Johnson................. -- -- -- -- -- -- --

Mary Ann Packo.............. 21,743 11.7% $ 2.30 $ 2.30 July 22, 2008 -- $ 31,450
21,972 2.39 10.29 December 3, 2008 $ 173,579 315,767

Steve Coffey................ 21,743 11.7 2.30 2.30 July 22, 2008 -- 31,450
21,972 2.39 10.29 December 3, 2008 173,579 315,767

Thomas A. Lynch............. 17,394 10.5 2.30 2.30 July 22, 2008 -- 25,160
21,972 2.39 10.29 December 3, 2008 173,579 315,767

Doug McFarland.............. 19,569 8.2 2.30 2.30 July 22, 2008 -- 28,306
10,986 2.39 10.29 December 3, 2008 86,789 157,883

10%
<S> <C>
Tod Johnson................. --
Mary Ann Packo.............. $ 79,701
533,911
Steve Coffey................ 79,701
533,911
Thomas A. Lynch............. 63,760
533,911
Doug McFarland.............. 71,732
266,956
</TABLE>

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

(1) The exercise prices represent our board's estimate of the fair market value
of the common stock on the grant date. The board considered many factors in
establishing such prices, including our financial condition and operating
results, an independent valuation and the market for Internet-related
stocks.

(2) The deemed value on the date of grant of the options granted on December 3,
1998 was determined after the date of grant solely for financial accounting
purposes.

(3) These amounts represent assumed rates of appreciation in the price of our
common stock during the terms of the options in accordance with rates
specified in applicable federal securities regulations. The 0%, 5% and 10%
assumed annual rates of compounded stock price appreciation do not represent
our estimate or projection of our future common stock prices. Each option
listed in the table has a 10-year term. Actual gains, if any, on stock
option exercises will depend on the future price of the common stock. There
is no representation that the rates of appreciation reflected in this table
will be achieved.

The following table sets forth at December 31, 1998 the number of options
and the value of unexercised options held by each of the executive officers
named in the Summary Compensation Table:

AGGREGATED YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
SUBJECT TO UNEXERCISED IN-THE-MONEY
OPTIONS AT YEAR END OPTIONS AT YEAR END (1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Tod Johnson............................................... -- -- -- --

Mary Ann Packo............................................ 49,574 86,767 $ 831,356 $ 1,362,615

Steve Coffey.............................................. 49,574 86,767 831,356 1,362,615

Thomas A. Lynch (2)....................................... 435 88,235 7,295 1,396,236

Doug McFarland............................................ 7,393 60,125 123,981 944,058
</TABLE>

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

(1) The dollar values have been calculated by determining the difference between
the fair market value of the securities underlying the options at
December 31, 1998 and the exercise prices of the options. Solely for
purposes of determining the value of options at December 31, 1998, we have
assumed that the fair market value of shares of common stock issuable upon
exercise of options

54
<PAGE>
was $17.00 per share, the price at which we sold shares to the public in our
initial public offering, since the common stock was not traded in an
established market on December 31, 1998.

(2) Includes 47,130 shares of our common stock issuable upon the exercise of
options granted pursuant to an NPD plan that gives Mr. Lynch an option to
purchase shares of Media Metrix common stock held by NPD.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

We have established a compensation committee consisting of William W.
Helman, Jeffrey C. Levy and James Mortensen. Until February 1999, matters
concerning executive officer compensation were addressed by the entire board
because we did not have a compensation committee.

EQUITY INCENTIVE PLANS

We adopted our 1998 Equity Incentive Plan in November 1998. Under the 1998
Plan, we may award incentive and non-statutory stock options, stock appreciation
rights, restricted stock, performance stock units and other stock units which
are valued by reference to the value of our common stock. We also maintain the
Media Metrix Stock Option Plan which provides for the award of up to 519,222
shares of our common stock in the form of incentive stock options and
non-statutory stock options. The 1998 Plan and the Media Metrix Plan are
hereinafter referred to collectively as the equity plans.

In February 1999, the board adopted an amendment to the 1998 Plan to
increase the number of shares of our common stock available for awards under the
1998 Plan from 732,400 to 1,318,320.

As of September 30, 1999, options to purchase an aggregate of 1,364,452
shares of common stock were outstanding under the equity plans, and an aggregate
of 362,831 shares of common stock are authorized but have not yet been granted
as awards under the equity plans. Also, we intend to issue options to purchase
150,000 shares of common stock to former AdRelevance shareholders. We do not
intend to issue any more options under the Media Metrix Plan.

Our officers, employees, non-employee directors and consultants are eligible
to participate in the equity plans. The compensation committee administers the
equity plans and determines, subject to the provisions of the equity plans, who
shall receive awards, the types of awards to be made, and the terms and
conditions of each award. Options that are intended to qualify as incentive
stock options under the equity plans may not be exercisable for more than
10 years after the date the option is granted and may not be granted at an
exercise price less than the fair market value of our common stock at the time
the option is granted. In the case of incentive stock options granted to holders
of more than 10% of our common stock, the options may not be granted at an
exercise price less than 110% of the fair market value of our common stock at
the time the options are granted.

The 1998 Plan provides that all outstanding awards shall become immediately
exercisable on the day prior to the consummation of any merger or consolidation
in which we are not the surviving corporation or which results in the
acquisition of substantially all our outstanding shares by a single person or
entity or by a group of persons and/or entities acting in concert, or in the
event of the sale or transfer of substantially all of our assets. The number of
shares subject to each award shall be adjusted upon the occurrence of a stock
split or recapitalization of our common stock.

The board may amend, modify or terminate any outstanding award under the
equity plans with the participant's consent, except consent shall not be
required if the board determines that such action will not materially and
adversely affect the participant. The board may amend, suspend or terminate
either of the equity plans, or any part of such plans, at any time.

On June 22, 1999, we filed a registration statement on Form S-8 with the
Commission pursuant to which we registered 1,970,610 shares of common stock
issued or issuable upon the exercise of options granted under the Media Metrix
Stock Option Plan, the 1998 Plan and other non-plan option grants.

55
<PAGE>
This registration statement became immediately effective upon filing. The
possible sale of a significant number of such shares by the holders thereof may
have an adverse effect on the price of our common stock.

Also, following the expiration of the lock-up agreements related to this
offering, we intend to file a registration statement on Form S-8 with the
Commission to register the offer and sale of shares on exercise of options to
purchase up to 246,845 shares of our common stock received by former AdRelevance
shareholders who owned options to purchase AdRelevance stock.

56
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FORMATION BY NPD

Prior to April 14, 1997, the business currently conducted by Media Metrix
was operated as PC Meter. NPD originally held 100,000 Class A Limited
Partnership Units and 79,000 Class B Limited Partnership Units of PC Meter. The
1995 Scott Johnson Trust and The 1995 Stacey Johnson Trust each held 19,323.5
Class B Limited Partnership Units of PC Meter. In addition, PC Meter was
indebted to NPD in the amount of approximately $4.0 million which PC Meter used
for working capital purposes. On April 14, 1997, PC Meter was merged with and
into Media Metrix. Immediately prior to the merger, NPD purchased an additional
338,767.7324 Class A Limited Partnership Units for a purchase price of
$3.2 million. Under the terms of the merger between Media Metrix and PC Meter,
each Class A Limited Partnership Unit was exchanged for 0.09446 shares of our
redeemable preferred stock for a total of 41,446 shares. The redeemable
preferred stock was redeemed in connection with our intial public offering. Each
Class B Limited Partnership Unit was exchanged for 12.75 shares of our common
stock. NPD currently holds 4,380,559 shares of common stock. Tod Johnson, our
Chairman and Chief Executive Officer, is the controlling stockholder of NPD.
After the merger, we repaid the indebtedness owed to NPD by PC Meter.

PRIVATE PLACEMENTS OF SECURITIES

On April 14, 1997 we issued:

- warrants to purchase 377,642 shares of common stock at an exercise price
of $2.88 per share to Veronis Suhler & Associates;

- 495,603 shares of Series A Preferred Stock convertible into 2,155,176
shares of common stock, at an effective purchase price per share of common
stock of $1.86; and

- warrants to purchase 159,640 shares of Series B Preferred Stock at an
exercise price of $12.53 per share.

Of the securities issued, and after giving effect to the conversion of our
convertible preferred stock on November 4, 1998, Greylock IX Limited Partnership
purchased 1,030,743 shares of our common stock for an aggregate of $1,331,997.
Warrants to purchase 119,713 shares of Series B Preferred Stock were exercised
on November 4, 1998 and such shares of Series B Preferred Stock were converted
into 520,590 shares of common stock on the same date. Warrants to purchase
39,926 shares of Series B Preferred Stock were converted into warrants to
purchase 173,629 shares of common stock at an exercise price of $2.88 per share.
Greylock received warrants to purchase 104,175 shares of our common stock. All
of these warrants were exercised on March 31, 1999.

On November 5, 1998, RelevantKnowledge merged into Media Metrix. We issued
an aggregate of 3,890,825 shares of common stock, or 0.3111 shares of common
stock for each outstanding share of common stock and preferred stock of
RelevantKnowledge. We also replaced 1,160,290 warrants to purchase shares of
RelevantKnowledge common stock with a weighted average exercise price of $2.31
with warrants to purchase 360,907 shares of our common stock with a weighted
average exercise price of $1.38. We also issued 46,775 options to purchase our
common stock to the employees of RelevantKnowledge who became our employees
after the merger. Jeffrey C. Levy, one of our directors and our Vice Chairman,
and Whitney Equity Partners, L.P. both received shares of our common stock in
the merger.

On October 8, 1999, we acquired AdRelevance. We issued an aggregate of
697,678 shares of our common stock in connection with this acquisition. If
AdRelevance achieves certain post-closing goals, we will be obligated to issue
an additional 77,520 shares of our common stock. Also, in connection with this
acquisition, we agreed to assume options and warrants that enable the holders to
purchase an

57
<PAGE>
aggregate of 223,566 shares of our common stock. If AdRelevance achieves certain
post-closing goals, we will be obligated to issue an aggregate of 24,841
additional shares under these options and warrants.

TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

MANAGEMENT SERVICES AGREEMENT

With the formation of PC Meter on March 31, 1996, PC Meter entered into a
management services agreement with NPD and Tod Johnson. NPD and Mr. Johnson
agreed to provide services related to PC Meter's business to the extent PC Meter
wished to use such services. We succeeded to that agreement when we merged with
PC Meter. The agreement was amended and restated on April 14, 1997 in connection
with the private placement of our Series A Preferred Stock and warrants to
purchase Series B Preferred Stock. We entered into a new management services
agreement with NPD and Mr. Johnson on September 30, 1998, in anticipation of our
merger with RelevantKnowledge, on substantially the same terms as the prior
management services agreement. Services which NPD agreed to provide, if needed,
include:

- the support of the operation and administration of our panel, including
recruitment, operation and compensation of the panel;

- access to panelists in NPD's panels;

- data capture and editing of data;

- data base structuring and storage of data;

- processing of reports and client support;

- provision of systems support and development as necessary;

- provision of computer time, storage and printing as reasonably necessary
in connection with the provision of the services specified in the
preceding items;

- support in connection with client service and sales;

- office space and facilities within NPD leased facilities; and

- the provision of NPD's hardware ownership survey.

In addition to the specific services outlined above, NPD also agreed to
provide administrative and office logistical support, including payroll
management. At this time, NPD no longer provides payroll and panel support
services.

The management services agreement may be terminated by either party with
90 days' prior written notice, except that NPD may not terminate the management
services agreement prior to March 31, 2002. When the management services
agreement is terminated, NPD will provide us with a perpetual, royalty free,
non-forfeitable license of all data and documentation in its possession and
developed during the performance of the services relating to our business. We
have also agreed to provide NPD with a reciprocal license relating to data and
documentation which we generate during the performance of the services relating
to our business.

NPD and Mr. Johnson have also agreed that during the term of the management
services agreement and for a period of two years after its termination, neither
NPD nor Mr. Johnson will enter into the field of audience measurement for
digital on-line media and measurement of usage of computer software and personal
computers, except for investments in publicly traded companies not to exceed 10%
of any company's outstanding capital stock.

As compensation for the services provided by NPD, we pay NPD on a monthly
basis an amount equal to all expenses reasonably incurred by NPD in the
performance of its duties under the management services agreement, plus 105% of
the sum of (1) the amount of NPD's overhead allocable to us

58
<PAGE>
and (2) service charges like computer rent, mail handling and printing and
postage. NPD charged us $6.0 million under the management services agreement in
1998.

NPD was reimbursed $62,000 for Mr. Johnson's services in each of 1997 and
1998. NPD was reimbursed $36,000 for Mr. Lynch's services in each of 1997 and
1998. These amounts represent all compensation to NPD for the services provided
to us by Mr. Johnson and Mr. Lynch in 1997 and 1998. Messrs. Johnson and Lynch
provided services to NPD in addition to those related to Media Metrix and were
compensated for those services. Compensation paid by NPD to Messrs. Johnson and
Lynch exceeded the amounts paid by us to NPD. The amounts charged by NPD for
Mr. Johnson and Mr. Lynch's services to Media Metrix were below the amounts
provided for under the management services agreement. NPD has waived any
additional amounts to which it is entitled under the agreement. See
"Management--Executive Compensation."

On May 12, 1999, we amended and restated the management services agreement
to provide that NPD will be reimbursed $15,000 per month, or $180,000 per year,
for Mr. Johnson's services. As of January 1, 1999, Mr. Lynch became one of our
employees, and we have agreed to pay him an initial yearly base salary of
$165,000.

SERVICES AGREEMENT

We entered into a new services agreement with NPD as of September 30, 1998
which replaced a prior services agreement having substantially similar terms. We
have granted NPD and its affiliates access to our databases for any business
purpose of NPD and its affiliates which is not in direct competition with our
business. We have also granted NPD a non-exclusive licence to use certain
computer software owned by us which is used for Internet audience measurement.
In addition, we have also agreed that we will not license our software to any
one else who will use the software to compete with NPD. Under the terms of the
services agreement, we receive a monthly fee of $2,500 plus expenses. In 1998,
we received an aggregate of $30,000 in fees and no reimbursed expenses. The
services agreement is terminable by mutual consent of the parties or on
120 days' prior written notice by either party.

LICENSE AGREEMENT

We entered into a new license agreement dated as of November 5, 1998 with
NPD which replaced a prior license agreement having substantially similar terms.
NPD has granted to us an exclusive, non-transferable, perpetual, worldwide
license to use some of its computer software solely in connection with the
operation of the our metering system. This software enables us to construct our
databases from the data we collect from our panelists. We pay NPD licensing fees
of $11,000 per month payable quarterly, or $132,000 per year. In 1998, we paid
NPD an aggregate of $132,000 in licensing fees. The license is terminable by NPD
on our breach of the terms of the agreement like failure to pay the license
fees, or bankruptcy.

EMPLOYMENT AGREEMENT

We have entered into an employment agreement with Jeffrey C. Levy, a
director and a Vice Chairman, in connection with our merger with
RelevantKnowledge. His agreement terminates in November 1999. Mr. Levy receives
an annual base salary of $165,000 and is entitled to a bonus for 1998 and 1999
in accordance with our bonus structure generally available for senior
executives, to be determined by the Chief Executive Officer and the non-employee
director nominated by the former stockholders of RelevantKnowledge. The
agreement may be terminated with or without cause by either party. Mr. Levy is
currently a non-executive Vice Chairman.

LOAN TO STOCKHOLDER

In connection with the merger with RelevantKnowledge, NPD loaned $100,000 to
Jeffrey C. Levy pursuant to a secured promissory note. Mr. Levy repaid the note
following the closing of our initial public offering.

59
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of our common stock as of September 30, 1999, after giving effect to
the offering, by: (1) each person known to beneficially own more than 5% of our
common stock; (2) each of our directors; (3) each executive officer named in the
summary compensation table; (4) each selling stockholder; and (5) all executive
officers and directors as a group. All persons listed have sole voting and
investment power with respect to their shares unless otherwise indicated. Unless
indicated otherwise, the address of the beneficial owners is: c/o Media
Metrix, Inc., 250 Park Avenue South, 7th Floor, New York, New York 10003.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock issuable pursuant to
options, to the extent those options are currently exercisable or convertible
within 60 days of September 30, 1999, are treated as outstanding for computing
the percentage of the person holding those securities but are not treated as
outstanding for computing the percentage of any other person. Unless otherwise
noted, each person or group identified possesses sole voting and investment
power with respect to shares, subject to applicable community property laws.
Beneficial ownership percentage is based on 17,457,864 shares of common stock
outstanding as of September 30, 1999 and 19,655,542 shares of common stock
outstanding after completion of this offering after giving effect to the
issuance of 1,500,000 shares of common stock in this offering and the issuance
of 697,678 shares to former AdRelevance shareholders.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO THE OFFERING AFTER THE OFFERING
----------------------- SHARES -----------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
The NPD Group, Inc.(1)............................ 4,380,559 25.1% --(1) 4,180,560(1) 21.3%
Greylock IX Limited Partnership (2)............... 1,242,510 7.1 -- 1,242,510 6.3
The 1995 Scott Johnson Trust (3).................. 1,071,385 6.1 188,043 883,342 4.5
The 1995 Stacey Johnson Trust (4)................. 1,071,385 6.1 188,043 883,342 4.5
Whitney Equity Partners, L.P. (5)................. 937,402 5.4 -- 937,402 4.8
Oak Investment Partners VI, Limited
Partnership (6)................................. 951,466 5.5 -- 951,466 4.8
Oak VI Affiliates Fund, Limited Partnership (6)... 951,466 5.5 -- 951,466 4.8
Venrock Associates II, L.P. (7)................... 940,335 5.4 -- 940,335 4.8
Venrock Associates (7)............................ 940,335 5.4 -- 940,335 4.8
Tod Johnson (8)................................... 4,380,559 25.1 --(1) 4,180,560(1) 21.3
Mary Ann Packo (9)................................ 83,849 * -- 83,849 *
Steve Coffey (10)................................. 83,320 * -- 83,320 *
Thomas A. Lynch (11).............................. 53,479 * -- 53,479 *
Doug McFarland (12)............................... 22,700 * -- 22,700 *
Jim D'Arcangelo (13).............................. 1,000 * -- 1,000 *
Andrew A. Fessel (14)............................. -- * -- -- *
Jeffrey C. Levy (15).............................. 403,201 2.3 100,000 303,201 1.5
Michael Brooks (16)............................... 937,402 5.4 -- 937,402 4.8
Stig Kry (17)..................................... 11,008 * 3,000 8,008 *
William W. Helman (18)............................ 1,242,510 7.1 -- 1,242,510 6.3
James Mortensen (19).............................. 11,008 * 3,000 8,008 *
</TABLE>

60
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO THE OFFERING AFTER THE OFFERING
----------------------- SHARES -----------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
Gilder Gagnon Howe & Co. LLC (20)................. 1,486,180 8.5 -- 1,486,180 7.6
Jann H. Adams..................................... 12,300 * 12,300 -- *
Bayview Investors Ltd............................. 69,687 * 47,140 22,547 *
Timothy F.S. Cobb (21)............................ 403,065 2.3 150,000 253,065 1.3
Eagle Rock Partners, LP (21)...................... 45,000 * 20,000 25,000 *
The Timothy Fitzgerald Steven Cobb 1996 Children's
Trust (21)...................................... 108,889 * 50,000 58,889 *
William Ericson................................... 1,092 * 971 121 *
Farm Neck Partners, LP (15)....................... 253,201 1.5 50,000 203,201 1.0
Friar Tuck Partners............................... 16,524 * 16,000 524 *
Robert B. Friedman................................ 26,176 * 20,000 6,176 *
Keith Grinstein................................... 4,685 * 2,343 2,342 *
Guide Fund II, L.P................................ 56,228 * 49,981 6,247 *
Inland Northwest Investors, L.P................... 18,742 * 16,660 2,082 *
Investment A.B. Bure.............................. 448,244 2.6 248,244 200,000 1.0
Investor International (Cayman) Limited........... 31,729 * 31,729 -- *
Boland T. Jones................................... 122,360 * 45,000 77,360 *
Robert L. Jones, Trustee FBO Robert L. Jones U/A
dtd 2/29/96..................................... 10,683 * 10,683 -- *
Michael Jones..................................... 10,683 * 10,683 -- *
Peter B. Kupferberg............................... 19,040 * 5,000 14,040 *
Linda R. Levy..................................... 16,809 * 10,000 6,809 *
Richard LeFurgy................................... 4,685 * 4,165 520 *
Madrona Investment Group, L.L.C................... 18,742 * 9,371 9,371 *
Charles Gregory Nicholson......................... 16,000 * 8,000 8,000 *
Northwest Venture Partners II, L.P................ 37,485 * 33,320 4,165 *
Redleaf Venture II, L.P........................... 56,228 * 49,981 6,247 *
Roger Briggs Jr. Trust dtd 11/12/90............... 4,855 * 2,500 2,355 *
CNA FBO Craig E. Sherman.......................... 702 * 624 78 *
Elliott and Paula Solomon......................... 12,251 * 4,251 8,000 *
G. Townsend Underhill............................. 17,590 * 17,590 -- *
Julianne Vaio..................................... 3,518 * 3,518 -- *
VLG Investments 1998.............................. 1,811 * 1,610 201 *
Lloyd Whitaker.................................... 12,251 * 12,251 -- *
Employees and advisors of NPD (22)................ 616,360(22) 3.4 199,999(22) 416,361 2.1
All directors and executive officers as a group
(12 people) (23)................................ 7,163,500 40.6 106,000 7,057,500 35.6
</TABLE>

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

* Less than 1.0%

61
<PAGE>
(1) Of the 4,380,559 shares of common stock owned by NPD, 601,838 shares of
common stock are required to be sold to certain present or former employees
or advisors of NPD upon the exercise of options granted by NPD on these
shares pursuant to an NPD benefit plan. These options are fully vested and
exercisable. Certain of these individuals intend to exercise options to
purchase 199,999 shares under the NPD benefit plan and sell these shares in
the offering. These individuals have also granted the underwriters an
option to purchase up to 56,236 shares to cover over-allotments. If the
underwriters exercise the over-allotment option, these individuals intend
to exercise options to purchase additional shares from NPD under the NPD
benefit plan. If the over-allotment option is exercised in full, NPD will
own 4,124,324 shares after this offering. Neither NPD nor Mr. Johnson will
sell any shares in the offering. See footnote 22.

(2) The address of Greylock IX Limited Partnership is One Federal Street,
Boston, Massachusetts 02110.

(3) The address of The 1995 Scott Johnson Trust is c/o Franklin Green, Esq.,
Trustee, Fried, Frank, Harris Shriver & Jacobson, One New York Plaza, New
York, New York 10004-1980. The trust has granted the underwriters an option
to purchase up to 61,957 shares to cover over-allotments. If this option is
exercised in full, the trust will beneficially own 821,385 shares.

(4) The address of The 1995 Stacey Johnson Trust is c/o Franklin Green, Esq.,
Trustee, Fried, Frank, Harris Shriver & Jacobson, One New York Plaza, New
York, New York 10004-1980. The trust has granted the underwriters an option
to purchase up to 61,957 shares to cover over-allotments. If this option is
exercised in full, the trust will beneficially own 821,385 shares.

(5) Consists of 929,625 shares of common stock held by Whitney Equity Partners,
L.P. and 7,777 shares of common stock held by J.H. Whitney & Co. Each
partnership may be deemed to beneficially own each other's shares because
the general partners of each partnership are affiliated. Each partnership
disclaims beneficial ownership of the other's shares. The partnerships'
address is c/o J.H. Whitney & Co., 177 Broad Street, Stamford, Connecticut
06901.

(6) Consists of 929,772 shares of common stock owned by Oak Investment Partners
VI, Limited Partnership and 21,694 shares of common stock owned by Oak VI
Affiliates Fund, Limited Partnership. Each partnership may be deemed to
beneficially own each other's shares because the general partners of each
partnership are affiliated. Each partnership disclaims beneficial ownership
of the other's shares. The partnerships' address is One Gorham Island,
Westport, Connecticut 06880.

(7) Consists of 537,655 shares of common stock owned by Venrock Associates II,
L.P. and 402,680 shares of common stock owned by Venrock Associates. Each
partnership may be deemed to beneficially own each other's shares because
the general partners of each partnership are affiliated. Each partnership
disclaims beneficial ownership of the other's shares. The partnerships'
address is 30 Rockefeller Plaza, Room 5508, New York, New York 10112.

(8) Consists of 4,380,559 shares of common stock owned by NPD of which
Mr. Johnson is the principal stockholder and Chief Executive Officer. As
such, Mr. Johnson may be deemed to be the beneficial owner of such shares.
Of the 4,380,559 shares of common stock owned by NPD, 601,838 shares of
common stock are issuable to present or former employees or advisors of NPD
upon the exercise of options granted on such shares pursuant to an NPD
benefit plan. Certain of these individuals intend to exercise options to
purchase 199,999 shares under the NPD benefit plan and sell these shares in
the offering. These individuals have also granted the underwriters an
option to purchase up to 56,236 shares to cover over-allotments. If the
underwriters exercise the over-allotment option, these individuals intend
to exercise options to purchase additional shares from NPD under the NPD
benefit plan. If the over-allotment option is exercised in full, NPD will
own 4,124,324 shares after this offering. Mr. Johnson will not sell any
shares in the offering personally. See footnote 22. In addition, The 1995
Scott Johnson Trust and The 1995 Stacey Johnson Trust are trusts for the
benefit of family members of Mr. Johnson. Mr. Johnson does not exercise
either voting or dispositive power over the securities held by either trust
and disclaims beneficial ownership of the shares held by the trusts.

(9) Consists of 2,529 shares of common stock and 81,320 shares of common stock
issuable upon the exercise of options. Does not include 105,993 shares of
common stock issuable upon the exercise

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<PAGE>
of options not currently exercisable within 60 days of September 30, 1999.
Ms. Packo has granted the underwriters an option to purchase up to 16,264
shares to cover over-allotments. If this option is exercised in full,
Ms. Packo will beneficially own 67,585 shares after this offering. See
"Management--Stock Options."

(10) Consists of 2,000 shares of common stock and 81,320 shares of common stock
issuable upon the exercise of options. Does not include 105,993 shares of
common stock issuable upon the exercise of options not currently
exercisable within 60 days of September 30, 1999. Mr. Coffey has granted
the underwriters an option to purchase up to 16,264 shares to cover
over-allotments. If the option is exercised in full, Mr. Coffey will
beneficially own 67,056 shares after this offering. See "Management--Stock
Options."

(11) Consists of 2,435 shares of common stock and 51,044 shares of common stock
issuable upon the exercise of options, 47,130 of which were granted
pursuant to the NPD benefit plan and which give Mr. Lynch the right to
purchase shares of our common stock held by NPD. Mr. Lynch has granted the
underwriters an option to purchase up to 10,296 shares to cover
over-allotments. If the option is exercised in full, Mr. Lynch will
beneficially own 43,183 shares after this offering. All of the shares being
offered by Mr. Lynch pursuant to the underwriters' option will be shares
received pursuant to the exercise of the option held by Mr. Lynch to
purchase shares pursuant to the NPD benefit plan. Does not include 102,811
shares of common stock issuable upon the exercise of options not
exercisable within 60 days of September 30, 1999. See "Management--Stock
Options."

(12) Consists of 4,000 shares of common stock and 18,700 shares of common stock
issuable upon the exercise of options. Does not include 105,788 shares of
common stock issuable upon the exercise of options not exercisable within
60 days of September 30, 1999. Mr. McFarland has granted the underwriters
an option to purchase up to 3,740 shares to cover over-allotments. If this
option is exercised in full, Mr. McFarland will beneficially own 18,960
shares after this offering. See "Management--Stock Options."

(13) Consists of 1,000 shares of common stock. Does not include 43,944 shares of
common stock issuable upon the exercise of options not currently
exercisable within 60 days of September 30, 1999.

(14) Does not include 54,000 shares of common stock issuable upon the exercise
of options not currently exercisable within 60 days of September 30, 1999.

(15) Consists of 150,000 shares of common stock owned by Mr. Levy and
253,201 shares of common stock owned by the Farm Neck Partners, L.P., a
family limited partnership with which Mr. Levy is affiliated, which is also
participating as a selling stockholder in this offering. Mr. Levy is
offering 50,000 shares in this offering individually, and Farm Neck
Partners, L.P. is offering 50,000 shares in this offering. Mr. Levy may be
deemed the beneficial owner of the shares held by Farm Neck Partners, L.P.
Mr. Levy disclaims beneficial ownership of the shares held by Farm Neck
Partners, L.P.

(16) Consists of 929,625 shares of common stock owned by Whitney Equity
Partners, L.P. and 7,777 shares of common stock owned by J.H. Whitney & Co.
Mr. Brooks is a managing member of J.H. Whitney Equity Partners, L.L.C.,
the general partner of Whitney Equity Partners, L.P. which possesses
investment and voting power with respect to all shares owned by Whitney
Equity Partners, L.P. Mr. Brooks disclaims beneficial ownership of the
shares of common stock owned by Whitney Equity Partners, L.P. other than
the shares attributable to his proportionate interest. Mr. Brooks is also a
general partner of J. H. Whitney & Co. and a managing member of Whitney
General Partner, L.L.C., which is also a general partner of J.H. Whitney &
Co. which possess investment and voting power with respect to all shares
owned by J.H. Whitney & Co. Mr. Brooks disclaims beneficial ownership of
the shares of common stock owned by J.H. Whitney & Co. other than the
shares attributable to his proportionate interest. See footnote (5) above.
Mr. Brooks' address is c/o J.H. Whitney & Co., 177 Broad Street, Stamford,
Connecticut 06901.

(17) Consists of 11,008 shares issuable upon the exercise of options, 9,703 of
which were granted pursuant to the NPD benefit plan and which give Mr. Kry
the right to purchase shares of our common stock held by NPD. All of the
shares being offered by Mr. Kry in this offering will be

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<PAGE>
shares received pursuant to the exercise of the option held by Mr. Kry to
purchase shares pursuant to the NPD benefit plan. Does not include 14,761
shares of common stock issuable upon the exercise of options not currently
exercisable within 60 days of September 30, 1999.

(18) Consists of 1,242,510 shares of common stock owned by Greylock IX Limited
Partnership. Mr. Helman is a general partner of Greylock and possess
investment and voting power with respect to all such shares. Mr. Helman
disclaims beneficial ownership of the shares of common stock owned by
Greylock other than the shares attributable to his proportionate
partnership interest in that fund. See Footnote (2) above. Mr. Helman's
address is c/o Greylock IX Limited Partnership, One Federal Street, Boston,
Massachusetts 02110.

(19) Consists of 11,008 shares exercisable upon the exercise of options, 9,703
of which were granted pursuant to the NPD benefit plan and which give
Mr. Mortensen the right to purchase shares of our common stock held by NPD.
All of the shares being offered by Mr. Mortensen in this offering will be
shares received pursuant to the exercise of the option held by
Mr. Mortensen to purchase shares pursuant to the NPD benefit plan. Does not
include 14,761 shares of common stock issuable upon the exercise of options
not currently exercisable within 60 days of September 30, 1999.

(20) Gilder Gagnon Howe & Co. LLC may be deemed to beneficially own 1,486,180
shares of our common stock which are held of record by clients of Gilder.
Gilder has sole voting power with respect to 16,750 shares and shared power
to dispose or to direct the disposition of 1,486,180 shares of our common
stock. Information with respect to Gilder has been derived from their
Schedule 13G dated May 31, 1999, as filed with the Commission by Gilder.
Gilder Gagnon Howe & Co. LLC's address is 1775 Broadway, 26th Floor, New
York, New York 10019.

(21) Consists of 205,620 shares of common stock owned by Mr. Cobb, 43,556 shares
of common stock owned by Mr. Cobb's wife, Madelyn Adams Cobb, 108,889
shares of common stock owned by The Timothy Fitzgerald Stephenson Cobb 1996
Children's Trust and 45,000 shares of common stock owned by Eagle Rock
Partners, LP, a family limited partnership with which Mr. Cobb is
affiliated, which is also participating as a selling stockholder in this
offering. Mr. Cobb is offering 80,000 shares in this offering individually,
and The Timothy Fitzgerald Stephenson Cobb 1996 Children's Trust and Eagle
Rock Partners, LP are, in the aggregate, offering 70,000 shares in this
offering. Mr. Cobb may be deemed the beneficial owner of the shares held by
Madelyn Adams Cobb, the Cobb Trust and Eagle Rock Partners. Mr. Cobb
disclaims beneficial ownership of the shares held by Madelyn Adams Cobb,
the Cobb Trust and Eagle Rock Partners.

(22) Consists of individuals who are current or former employees or advisors of
NPD. Under the NPD benefit plan, these individuals hold options granted by
NPD requiring NPD to sell to these individuals shares of common stock
currently owned by NPD. These individuals intend to exercise options
granted under the NPD benefit plan to purchase 199,999 shares and to sell
these shares in the offering. In addition, certain of those individuals
have granted to the underwriters options to purchase up to 56,236 shares to
cover over-allotments. If the underwriters exercise their over-allotment
option, these individuals intend to exercise options granted under the NPD
benefit plan to purchase additional shares from NPD. If the over-allotment
option is exercised in full, these individuals will exercise options to
purchase an additional 56,236 shares and sell these shares in the offering.

(23) Consists of 254,509 shares issuable upon the exercise of options and
warrants to purchase common stock of which 66,536 options were granted
pursuant to the NPD benefit plan which gives the holders of such options
the right to purchase shares of our common stock held by NPD. Does not
include 528,536 shares of common stock issuable upon the exercise of
options not currently exercisable within 60 days of September 30, 1999.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 60,000,000 shares of common stock,
$.01 par value, and 5,000,000 shares of preferred stock, $.01 par value.

As of September 30, 1999, we had 17,457,864 shares of common stock
outstanding held by approximately 206 stockholders of record. Upon the closing
of this offering, and after giving effect to the issuance of 1,500,000 shares of
common stock in this offering and the issuance of 697,678 shares to former
AdRelevance shareholders, there will be 19,655,542 shares of common stock issued
and outstanding and no shares of preferred stock issued and outstanding.

COMMON STOCK

Subject to preferences that may be applicable to any preferred stock
outstanding at the time, holders of our common stock are entitled to receive
dividends at times and in amounts as the board may determine. The holders of our
common stock have one vote for each share they hold on all matters submitted to
a vote of the stockholders. The holders of a majority of the shares of common
stock voted can elect all of the directors nominated for election. The holders
of our common stock are not entitled to preemptive rights and our common stock
is not subject to conversion or redemption. Upon a liquidation, dissolution or
winding-up, we will distribute pro rata to the holders of our common stock our
remaining assets, after payment of liquidation preferences, if any, on any
outstanding shares of preferred stock and payment of claims of creditors. Each
outstanding share of our common stock is, and all shares of our common stock
being purchased in this offering will be, duly and validly issued, fully paid
and nonassessable.

Our common stock is quoted on the Nasdaq National Market under the symbol
"MMXI."

PREFERRED STOCK

We do not have any shares of our preferred stock outstanding. The 5,000,000
authorized shares of preferred stock may by issued in one or more series without
further stockholder action. The board is authorized to determine the terms,
limitations and relative rights and preferences of the preferred stock, to
establish series of preferred stock and to determine the variations among
series. If we issue preferred stock, it could have priority over our common
stock with respect to dividends and to other distributions, including the
distribution of assets upon liquidation. In addition, we may be obligated to
repurchase or redeem it. The board can issue preferred stock without the
approval of the holders of our common stock. The holders of preferred stock may
have voting and conversion rights, including multiple voting rights, which could
adversely affect the rights of the holders of our common stock. We do not have
any present plans to issue any shares of preferred stock.

REGISTRATION RIGHTS

Under an agreement between us and the former shareholders of AdRelevance,
holders of up to 776,760 shares of our common stock are entitled to rights with
respect to registration under the Securities Act. These holders are including
169,026 of these shares in this offering. In addition, we are required to use
commercially reasonable efforts to file a shelf registration to register the
remaining shares within 120 days of the date of this prospectus.

In addition, commencing November 4, 1999, the holders of approximately
11,700,000 shares of our common stock, referred to as registrable securities,
have piggyback registration rights. If we propose to register any of our common
stock under the Securities Act, including registrations on behalf of former
AdRelevance shareholders, the holders of registrable securities may require us
to include all or a portion of their securities in each registration. However,
the managing underwriter, if any, of that offering has the right to limit the
number of registrable securities proposed to be included in that

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<PAGE>
registration. These piggyback registration rights do not apply to registrations
described in the next two paragraphs. Because of former AdRelevance
shareholders' registration rights and the piggyback registration rights
described in this paragraph, we expect to file a shelf registration statement to
register the sale of up to approximately 12,300,000 shares of our common stock
following the expiration of the lock-up agreements related to this offering.

Holders of registrable securities are entitled to additional rights with
respect to the registration of the registrable securities under the Securities
Act commencing on November 4, 1999. If we receive from the holders of more than
25% of the registrable securities a written request to effect a registration
with respect to all or a part of the registrable securities, we must use our
best efforts to effect such a registration. We are only obligated to effect one
of these registrations. The holders of the registrable securities may choose to
sell their securities through an underwriter. However, any underwriter may limit
the number of registrable securities proposed to be included in that
registration.

When we are eligible to use a registration statement on Form S-3 to register
an offering of our securities, holders of more than 10% of the registrable
securities may request that we file a registration statement on Form S-3
covering all or a portion of the registrable securities held by them, provided
that the proceeds from that offering are at least $2.0 million.

We will bear all registration expenses incurred in connection with these
registrations. Each of the holders of registrable securities participating in
any registration would pay their own underwriting discounts, selling commissions
and stock transfer taxes applicable to the sale of their securities.

GfK and IPSOS have registration rights related to the shares of our common
stock they may receive on conversion of their interest in MMXI Europe. See
"Management Discussion and Analysis of Financial Condition and Results of
Operations--Overview."

DELAWARE ANTI-TAKEOVER LAW AND CERTAIN CHARTER PROVISIONS

Under Section 203 of the Delaware General Corporation Law, certain "business
combinations" between a Delaware corporation, whose stock generally is publicly
traded or held of record by more than 2,000 stockholders, and an "interested
stockholder" are prohibited for a three-year period following the date that such
stockholder became an interested stockholder, unless:

- the corporation has elected in its certificate of incorporation or bylaws
not to be governed by the Delaware anti-takeover law (we have not made
such an election);

- the business combination was approved by the board of the corporation
before the other party to the business combination became an interested
stockholder;

- upon consummation of the transaction that made it an interested
stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the commencement of the
transaction (excluding voting stock owned by directors who are also
officers or held in employee stock plans in which the employees do not
have a right to determine confidentially whether to tender or vote stock
held by the plan); or

- the business combination was approved by the board and ratified by 66 2/3%
of the voting stock which the interested stockholder did not own.

The three-year prohibition does not apply to certain business combinations
proposed by an interested stockholder following the announcement or notification
of certain extraordinary transactions involving the corporation and a person who
had not been an interested stockholder during the previous three years or who
became an interested stockholder with the approval of a majority of the
corporation's directors. The term "business combination" is defined generally to
include mergers or consolidations between a Delaware corporation and an
interested stockholder, transactions with an interested stockholder involving
the assets or stock of the corporation or its majority-owned subsidiaries and

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<PAGE>
transactions which increase an interested stockholder's percentage ownership of
stock. The term "interested stockholder" is defined generally as a stockholder
who becomes beneficial owner of 15% or more of a Delaware corporation's voting
stock. Section 203 could have the effect of delaying, deferring or preventing a
change in control of Media Metrix.

In addition, provisions of our certificate of incorporation and bylaws may
have an anti-takeover effect. They may delay, defer or prevent a tender offer or
takeover attempt that a stockholder might consider in its best interest,
including those attempts that might result in a premium over the market price
for the shares held by our stockholders. The following summarizes these
provisions.

CLASSIFIED BOARD OF DIRECTORS

Our board is divided into three classes of directors serving staggered
three-year terms. As a result, approximately one-third of our board will be
elected each year. These provisions, when coupled with the provision of our
certificate of incorporation authorizing the board to fill vacant directorships
or increase the size of the board, may deter a stockholder from removing
incumbent directors and simultaneously gaining control of the board.

STOCKHOLDER ACTION; SPECIAL MEETING OF STOCKHOLDERS

Our certificate of incorporation provides that our stockholders may not take
action by written consent, but only at an annual or special meeting of
stockholders. Our bylaws provide that special meetings of our stockholders may
be called only by the chairman of the board or a majority of the board.

SUPERMAJORITY VOTING PROVISIONS

Our certificate of incorporation provides that the affirmative vote of at
least 66 2/3% of our stockholders is required to amend the provisions of our
certificate and bylaws relating to the classification of the board, stockholder
action by written consent and the calling of special meetings.

AUTHORIZED BUT UNISSUED SHARES

The authorized but unissued shares of common stock and preferred stock are
available for future issuance without stockholder approval, except in certain
instances. We may use these shares for a variety of corporate purposes,
including future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. This could make it more difficult or
discourage an attempt to obtain control of us by means of a proxy contest,
tender offer, merger or otherwise.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

We have entered into indemnification agreements with our current directors
and executive officers. These agreements and provisions of our certificate of
incorporation and bylaws may have the practical effect in some cases of
eliminating our stockholders' ability to collect monetary damages from our
directors. We believe that these contractual agreements and the provisions in
our certificate of incorporation and bylaws are necessary to attract and retain
qualified persons as directors and officers.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is Continental Stock
Transfer and Trust Company.

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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

If our stockholders sell substantial amounts of our common stock, including
shares issued upon the exercise of outstanding options, in the public market
following this offering, the market price of our common stock could fall. These
sales also might make it more difficult for us to sell equity or equity-related
securities in the future and at a time and price that we deem appropriate.

Upon completion of this offering, we will have outstanding an aggregate of
19,655,542 shares of our common stock, based on the number of shares outstanding
as of September 30, 1999. Of these shares, 19,126,890 shares, including
3,000,000 shares sold in this offering, will be freely tradeable without
restriction or further registration under the Securities Act, unless such shares
are or have been purchased by "affiliates," as that term is defined in Rule 144
under the Securities Act, or are subject to lock-up agreements. As of
September 30, 1999, we had approximately 206 holders of our common stock.

LOCK-UP AGREEMENTS

In connection with our initial public offering, stockholders owning
13,110,670 shares of our common stock signed 180-day lock-up agreements. These
lock-up agreements expire on November 3, 1999. In connection with this offering,
stockholders, including all of our officers and directors, entered into lock-up
agreements expiring 90 days from the date of this prospectus covering an
aggregate of approximately 8,900,000 shares of our common stock. Also, in
connection with this offering, stockholders entered into lock-up agreements
expiring 30 days from the date of this prospectus covering an aggregate of
approximately 2,000,000 shares of our common stock. The stockholders signing
these agreements will agree not to transfer or dispose of, directly or
indirectly, any shares of our common stock or any securities convertible into or
exercisable or exchangeable for shares of our common stock, during the lock-up
period. Transfers or dispositions can be made sooner:

- with the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation;

- in the case of gifts or estate planning transfers where the donee signs a
lock-up agreement; or

- in the case of distributions to stockholders or affiliates of the
stockholders where the recipient signs a lock-up agreement.

RULE 144

In general, under Rule 144 as currently in effect, a person who purchased
our common stock in a private placement and has beneficially owned shares of our
common stock for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of:

- 1% of the number of shares of our common stock then outstanding, which
will equal approximately 196,000 shares immediately after this offering;
or

- the average weekly trading volume of our common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to that sale.

Sales under Rule 144 are also subject to manner of sale provisions and
notice requirements and to the availability of current public information about
us.

RULE 144(K)

Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner other than an affiliate, is
entitled to

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<PAGE>
sell those shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.

RULE 701

In general, under Rule 701 of the Securities Act as currently in effect, any
of our employees, consultants or advisors who purchased shares of our common
stock from us in connection with a compensatory stock or option plan or other
written agreement prior to our initial public offering is eligible to resell
those shares in reliance on Rule 144, but without compliance with some of the
restrictions, including the holding period, contained in Rule 144.

REGISTRATION RIGHTS

After this offering, the holders of approximately 12,300,000 shares of our
common stock, or their transferees, will be entitled to certain rights with
respect to the registration of those shares under the Securities Act. See
"Description of Capital Stock--Registration Rights." After this registration,
these shares of our common stock, other than those acquired by our affiliates,
become freely tradeable without restriction under the Securities Act. These
sales could have a material adverse effect on the trading price of our common
stock.

STOCK OPTIONS

As of September 30, 1999, options to purchase 1,364,452 shares of common
stock were issued and outstanding. Upon the expiration of all of the lock-up
agreements executed in connection with this offering, approximately 221,000
shares of common stock will be subject to vested options, based on the number of
options outstanding as of September 30, 1999. On June 22, 1999, we filed a
registration statement on Form S-8 with the Commission pursuant to which we
registered 1,970,610 shares of common stock issued or issuable upon the exercise
of options granted under the Media Metrix Stock Option Plan, the 1998 Plan and
other non-plan option grants. This registration statement became immediately
effective upon filing. Also, in connection with our acquisition of AdRelevance,
we assumed, or may be obligated to assume if AdRelevance achieves certain
post-closing goals, options entitling the holders to purchase up to 246,845
shares of our common stock. Following the expiration of the lock-up agreements
related to this offering, we intend to file a registration statement on Form S-8
with the Commission to register the offer and sale of these shares. The shares
of our common stock sold under the registration statements described in this
paragraph will be, subject to vesting provisions and Rule 144 volume limitations
applicable to our affiliates, available for sale in the open market.

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<PAGE>
UNDERWRITING

Subject to the terms and conditions contained in an underwriting agreement
dated October 25, 1999, the underwriters named below, who are represented by
Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston Robertson
Stephens Inc., Thomas Weisel Partners LLC, First Union Securities, Inc.,
SunTrust Equitable Securities, DLJDIRECT Inc. and E*OFFERING Corp. have
severally agreed to purchase from us and the selling stockholders the number of
shares opposite their names below.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS: OF SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.............. 1,330,000
BancBoston Robertson Stephens Inc................................ 420,000
Thomas Weisel Partners LLC....................................... 770,000
First Union Securities, Inc...................................... 140,000
SunTrust Equitable Securities Inc................................ 140,000
DLJDIRECT Inc. .................................................. 100,000
E*OFFERING Corp.................................................. 100,000
---------
Total........................................................ 3,000,000
=========
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of the shares included in this
offering are subject to approval, including the absence of any material adverse
change in our business and receipt of acceptable certificates, opinions and
letters from us, our counsel and the independent auditors. The underwriters are
obligated to purchase and accept delivery of all the shares, other than those
shares covered by the over-allotment option described below, if they purchase
any of the shares.

The underwriters propose to initially offer some of the shares directly to
the public at the public offering price on the cover page of this prospectus and
some of the shares to certain dealers at the public offering price less a
concession not in excess of $1.52 per share. The underwriters may allow, and
such dealers may re-allow, a concession not in excess of $0.10 per share on
sales to other dealers. After the offering of the shares to the public, the
representatives may change the public offering price and such concessions. The
underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The following table shows the underwriting fees to be paid to the
underwriters by us and the selling stockholders, and the offering expenses to be
paid by us, in connection with this offering. The underwriting fee is equal to
the public offering price per share of common stock less the amount paid by the
underwriters to us, or the selling stockholders as the case may be, per share of
common stock. Offering expenses, all of which we will pay, are expenses incurred
by us in connection with this offering and include filing fees, Nasdaq listing
fees, printing expenses and legal and accounting expenses. The amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares of our common stock.

<TABLE>
<CAPTION>
PAID BY SELLING
PAID BY MEDIA METRIX STOCKHOLDERS
---------------------- ----------------------
NO FULL NO FULL
EXERCISE EXERCISE EXERCISE EXERCISE
<S> <C> <C> <C> <C>
Underwriting fees per share................... $ 2.53 $ 2.53 $ 2.53 $ 2.53
Total underwriting fees....................... 3,795,000 4,385,962 3,795,000 4,342,538
Offering expenses per share................... 0.33 0.29 -- --
Total offering expenses....................... 500,000 500,000 -- --
</TABLE>

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Thomas Weisel Partners LLC, one of the representatives of the underwriters,
was organized and registered as a broker-dealer in December 1998. Since December
1998, Thomas Weisel Partners has been named as a lead or co-manager on 70 filed
public offerings of equity securities, of which 39 have been completed, and has
acted as a syndicate member in an additional 34 public offerings of equity
securities. Thomas Weisel Partners does not have any material relationship with
us or any of our officers, directors or other controlling persons, except with
respect to its contractual relationship with us pursuant to the underwriting
agreement entered into in connection with this offering.

An electronic prospectus is available on the Web site maintained by
DLJDIRECT Inc., a selected dealer and an affiliate of Donaldson, Lufkin &
Jenrette, and on the Web site hosted by E*OFFERING Corp. The underwriters have
agreed to allocate a limited number of shares to them for sale to their
brokerage account holders. E*OFFERING will accept conditional offers to purchase
shares from all of its customers that pass and complete an on-line eligibility
profile. If the demand for shares from the customers of E*OFFERING exceeds the
amount of shares allocated to it, E*OFFERING will use a random allocation
methodology to distribute shares in even lots of 100 shares per customer. Other
than the prospectus in electronic format, the information on these Web sites
relating to this offering is not a part of this prospectus and has not been
approved and/or endorsed by us or any underwriter, and should not be relied on
by prospective investors.

We and the selling stockholders have granted to the underwriters an option,
exercisable for 30 days after the date of this prospectus, to purchase up to
450,000 additional shares at the public offering price on the cover page of this
prospectus minus the underwriting fees. The underwriters may exercise this
option solely to cover over-allotments, if any, made in connection with this
offering. To the extent that the underwriters exercise this option, each
underwriter will become obligated, subject to certain conditions, to purchase a
number of additional shares approximately proportionate to that underwriter's
initial purchase committment.

In the event any selling stockholder fails to sell to the underwriters the
shares the selling stockholder is required to sell in the offering, we will sell
additional shares to the underwriters to make up the shortfall.

We and the selling stockholders have agreed to indemnify the underwriters
against certain civil liabilities, including liabilities under the Securities
Act, or to contribute to payments that the underwriters may be required to make
in respect of any of those liabilities.

In connection with this offering, stockholders, including all of our
officers and directors, entered into lock-up agreements expiring 90 days from
the date of this prospectus covering an aggregate of approximately 8,900,000
shares of our common stock. Also, in connection with this offering, stockholders
entered into lock-up agreements expiring 30 days from the date of this
prospectus covering an aggregate of approximately 2,000,000 shares of our common
stock. The stockholders signing these agreements will agree not to, during the
lock-up period, without the prior written consent of Donaldson, Lufkin &
Jenrette: (1) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of our common stock or any securities convertible into or exercisable
or exchangeable for our common stock; or (2) enter into any swap or other
arrangement that transfer all or a portion of the economic consequences
associated with the ownership of any common stock, regardless of whether any of
the transactions described in clause (1) or (2) is to be settled by the delivery
of common stock, or such other securities, in cash or otherwise. In addition,
during this period, we have agreed not to file any registration statement with
respect to, and each of our executive officers and directors and some of our
stockholders have agreed not to make any demand for, or exercise any right with
respect to, the registration of any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock (other than a
registration statement registering options or shares granted under a stock
option plan) without the prior written consent of Donaldson, Lufkin & Jenrette.

71
<PAGE>
Bayview Investors, Ltd., an entity affiliated with BancBoston Robertson
Stephens Inc., holds 69,687 shares of our common stock. Bayview has indicated
that it intends to sell 47,140 shares in this offering.

In connection with our acquisition of AdRelevance, Donaldson, Lufkin &
Jenrette provided financial advisory services to us for which it received
customary compensation and reimbursement of expenses.

Other than in the United States, no action has been taken by us, the selling
stockholders or the underwriters that would permit a public offering of the
shares of our common stock included in this offering in any jurisdiction where
action for that purpose is required. The shares included in this offering may
not be offered or sold, directly or indirectly, nor may this prospectus or any
other offering material or advertisement in connection with the offer and sale
of any these shares be distributed or published in any jurisdiction, except
under circumstances that will result in compliance with the applicable rules and
regulations of that jurisdiction. Persons who receive this prospectus are
advised to inform themselves about and to observe any restrictions relating to
the offering of our common stock and the distribution of this prospectus. This
prospectus is not an offer to sell or a solicitation of an offer to buy any
shares of our common stock included in this offering in any jurisdiction where
that would not be permitted or legal.

In the event our common stock does not constitute an excepted security under
the provisions of Regulation M promulgated by the Commission, the underwriters
and dealers may engage in passive market making transactions in accordance with
Rule 103. In general, a passive market maker may not bid for or purchase shares
of common stock at a price that exceeds the highest independent bid. In
addition, the net daily purchases made by any passive market maker generally may
not exceed 30% of its average daily trading volume in the common stock during a
specified two-month prior period, or 200 shares, whichever is greater. A passive
market maker must identify passive market making bids as such on the Nasdaq
electronic inter-dealer reporting system. Passive market making may stabilize or
maintain the market price of the common stock above independent market levels.
Underwriters and dealers are not required to engage in passive market making and
may end passive market making activities at any time.

In connection with this offering, certain underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of our
common stock. Specifically, the underwriters may overallot this offering,
creating a syndicate short position. In addition, the underwriters may bid for
and purchase shares of our common stock in the open market to cover syndicate
short positions or to stabilize the price of our common stock. These activities
may stabilize or maintain the market price of our common stock above independent
market levels. The underwriters are not required to engage in these activities
and may end any of these activities at any time.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for Media Metrix by Fulbright & Jaworski L.L.P., New York, New York.
Attorneys at Fulbright & Jaworski L.L.P. own 7,000 shares of our common stock in
the aggregate. Certain legal matters in connection with the offering will be
passed upon for the underwriters by Brobeck, Phleger & Harrison LLP, New York,
New York.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our financial
statements at December 31, 1998 and 1997, and for each of the three years in the
period ended December 31, 1998, as set forth in

72
<PAGE>
their report. We have included our financial statements in the prospectus and
elsewhere in the registration statement in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.

Ernst & Young LLP, independent auditors, also have audited the financial
statements of AdRelevance, Inc. (a development stage company) at December 31,
1998 and for the period from October 12, 1998 (the date of AdRelevance's
inception) to December 31, 1998 as set forth in their report (which contains an
explanatory paragraph describing conditions that raise substantial doubt about
AdRelevance's ability to continue as a going concern as described in Note 1 to
the financial statements). We have included AdRelevance's financial statements
in the prospectus and elsewhere in the registration statement in reliance on
Ernst & Young LLP's report, given on their their authority as experts in
accounting and auditing.

The balance sheets as of October 31, 1998 and December 31, 1997 and the
statements of operations, shareholders' equity and cash flows for the ten months
ended October 31, 1998, for the year ended December 31, 1997 and for the six
week period ended December 31, 1996, of RelevantKnowledge Inc. included in this
prospectus, have been included herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Commission a registration statement on Form S-1 with
respect to the common stock being sold in this offering. This prospectus
constitutes a part of that registration statement. This prospectus does not
contain all of the information set forth in the registration statement and the
exhibits and schedules to the registration statement, because some parts have
been omitted in accordance with rules and regulations of the Commission. For
further information about us and our common stock being sold in this offering,
please refer to the registration statement and the exhibits and schedules filed
as a part of the registration statement. Statements contained in this prospectus
as to the contents of any contract, agreement or any other document referred to
are not necessarily complete; reference is made in each case to the copy of the
contract or document filed as an exhibit to the registration statement. Each
statement is qualified in all respects by reference to the exhibit. A copy of
the registration statement, including exhibits and schedules thereto, may be
inspected without charge and obtained at prescribed rates at the public
reference section of the Commission at its principal offices, located at 450
Fifth Street, N.W., Washington, D.C. 20549, and may be inspected without charge
at the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048, and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. You may obtain information on the
operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The registration statement, including the exhibits and schedules
thereto, is also available at the commission's site on the Web at
http://www.sec.gov.

We intend to furnish our stockholders annual reports containing financial
statements audited by our independent auditors and quarterly reports containing
unaudited financial information.

73
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
MEDIA METRIX, INC.
Report of Independent Auditors............................................................................. F-2
Balance Sheets at December 31, 1997 and 1998 and June 30, 1999 (unaudited)................................. F-3
Statements of Operations for the years ended December 31, 1996, 1997 and 1998 and the six months ended
June 30, 1998 and 1999 (unaudited)....................................................................... F-4
Statements of Stockholders' (Deficit) Equity for the years ended December 31, 1996, 1997 and 1998 and the
six months ended June 30, 1999 (unaudited)............................................................... F-5
Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998 and the six months ended
June 30, 1998 and 1999 (unaudited)....................................................................... F-6
Notes to Financial Statements.............................................................................. F-7

RELEVANTKNOWLEDGE, INC.
Report of Independent Accountants.......................................................................... F-19
Balance Sheets at December 31, 1997 and October 31, 1998................................................... F-20
Statements of Operations for the six weeks ended December 31, 1996, the year ended December 31, 1997 and
the ten months ended October 31, 1998.................................................................... F-21
Statements of Changes in Shareholders' Equity for the six weeks ended December 31, 1996, the year ended
December 31, 1997 and the ten months ended October 31, 1998.............................................. F-22
Statements of Cash Flows for the six weeks ended December 31, 1996, the year ended December 31, 1997 and
the ten months ended October 31, 1998.................................................................... F-23
Notes to Financial Statements.............................................................................. F-24

ADRELEVANCE, INC.
Report of Independent Auditors............................................................................. F-31
Balance Sheets at December 31, 1998 and June 30, 1999 (unaudited),......................................... F-32
Statements of Operations for the period October 12, 1998 (inception) to December 31, 1998, the six months
ended June 30, 1999 (unaudited) and the period October 12, 1998 (inception) to June 30, 1998
(unaudited).............................................................................................. F-33
Statements of Shareholders' Equity (Deficit) for the period from October 12, 1998 (inception) to
December 31, 1998 and the six months ended June 30, 1999 (unaudited)..................................... F-34
Statements of Cash Flows for the period from October 12, 1998 (inception) to December 31, 1998, the six
months ended June 30, 1999 (unaudited) and the period from October 12, 1998 (inception) to June 30, 1998
(unaudited).............................................................................................. F-35
Notes to Financial Statements.............................................................................. F-36

UNAUDITED PRO FORMA BALANCE SHEET AND STATEMENTS OF OPERATIONS
Balance Sheet at June 30, 1999............................................................................. F-43
Statement of Operations for the year ended December 31, 1998............................................... F-44
Statement of Operations for the six months ended June 30, 1999............................................. F-45
Notes to Unaudited Pro Forma Balance Sheet and Statements of Operations.................................... F-46
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Media Metrix, Inc.

We have audited the accompanying balance sheets of Media Metrix, Inc. as of
December 31, 1998 and 1997, and the related statements of operations,
stockholders' (deficit) equity, and cash flows for each of the three years in
the period ended 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 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 Media Metrix, Inc. at
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, New York
February 22, 1999, except

for the first paragraph of
Note 1--Organization
as to which the
date is May 5, 1999

F-2
<PAGE>
MEDIA METRIX, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- JUNE 30,
1997 1998 1999
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................... $1,869,013 $ 8,012,020 $36,382,986
Marketable securities -- -- 10,453,998
Receivables:
Trade, less allowance for doubtful accounts of $100,000 in 1997,
$220,000 in 1998 and $318,000 in 1999............................... 520,886 1,119,905 2,797,790
Expenditures billable to clients...................................... 219,877 250,432 169,695
---------- ----------- -----------
Total receivables....................................................... 740,763 1,370,337 2,967,485
Prepaid expenses and other current assets............................... 38,063 207,333 402,531
---------- ----------- -----------
Total current assets...................................................... 2,647,839 9,589,690 50,207,000

Property and equipment, at cost, net of accumulated depreciation and
amortization of $17,991 in 1997, $75,930 in 1998 and $187,355 in 1999... 116,834 649,790 875,149
Intangibles acquired, net of accumulated amortization of $479,000 in 1998
and $1,976,105 in 1999.................................................. -- 5,736,766 4,439,661
Other assets.............................................................. 22,280 83,774 219,889
---------- ----------- -----------
Total assets.............................................................. $2,786,953 $16,060,020 $55,741,699
========== =========== ===========

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued liabilities................................ $ 881,322 $ 2,308,323 $ 3,426,953
Due to The NPD Group, Inc............................................... 1,284,315 4,705,825 557,360
Advance billings to clients............................................. 529,220 1,391,275 2,961,132
Current portion of long-term debt....................................... -- 127,179 139,471
---------- ----------- -----------
Total current liabilities................................................. 2,694,857 8,532,602 7,084,916

Long-term debt............................................................ -- 225,353 151,463
Redeemable Preferred Stock--$1 par value; 41,446 shares authorized, issued
and outstanding; liquidation and redemption value--$4,679,760 in 1998... 4,366,022 4,679,760 --
Series A Convertible Preferred Stock--$1 par value; 495,603 shares
authorized, issued and outstanding in 1997.............................. 3,999,991 -- --

Commitments and contingencies

Stockholders' (deficit) equity:
Preferred stock, $.01 par value--shares authorized: 4,462,951 in 1997
and 4,958,554 in 1998 and 1999, none issued and outstanding........... -- -- --
Common stock, $.01 par value--60,000,000 shares authorized; shares
issued and outstanding--6,523,330 in 1997, 13,098,808 in 1998 and
17,302,448 in 1999.................................................... 65,233 130,988 173,024
Additional paid-in capital.............................................. 281,656 18,149,203 70,757,192
Common stock issuable................................................... -- 1,999,831 --
Acumulated other comprehensive loss..................................... -- -- (27,382)
Accumulated deficit..................................................... (8,620,806) (16,093,242) (21,153,681))
Deferred compensation................................................... -- (1,564,475) (1,243,833)
---------- ----------- -----------
Total stockholders' (deficit) equity...................................... (8,273,917) 2,622,305 48,505,320
---------- ----------- -----------
Total liabilities and stockholders' (deficit) equity...................... $2,786,953 $16,060,020 $55,741,699
========== =========== ===========
</TABLE>

See accompanying notes.

F-3
<PAGE>
MEDIA METRIX, INC.

STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues........................................... $1,032,629 $3,187,653 $6,330,485 $2,504,542 $7,435,122
Costs of revenues.................................. 1,743,831 3,463,058 4,120,569 1,600,550 3,838,152
---------- ---------- ---------- ---------- ----------
Gross profit (loss)................................ (711,202) (275,405) 2,209,916 903,992 3,596,970
Operating expenses:
Research and development......................... 587,731 865,498 1,382,375 508,133 1,672,939
Sales and marketing.............................. 928,993 2,021,409 2,888,195 1,286,219 3,147,133
General and administrative....................... 1,147,768 1,516,396 2,715,705 846,241 2,337,014
Amortization of deferred compensation............ -- -- 368,550 -- 304,917
Amortization of intangibles...................... -- -- 479,000 -- 1,497,105
Acquired in-process research and development..... -- -- 1,600,000 -- --
---------- ---------- ---------- ---------- ----------
Total operating expenses........................... 2,664,492 4,403,303 9,433,825 2,640,593 8,959,108
---------- ---------- ---------- ---------- ----------
Loss from operations............................... (3,375,694) (4,678,708) (7,223,909) (1,736,601) (5,362,138)
Interest income, net of interest expense of $11,374
in 1998 and $46,240 in 1999...................... -- 94,760 65,211 48,589 410,894
---------- ---------- ---------- ---------- ----------
Net loss........................................... (3,375,694) (4,583,948) (7,158,698) (1,688,012) (4,951,244)
Preferred stock dividends.......................... -- (289,564) (313,738) (154,147) (109,195)
---------- ---------- ---------- ---------- ----------
Net loss applicable to common stockholders......... $(3,375,694) $(4,873,512) $(7,472,436) $(1,842,159) $(5,060,439)
========== ========== ========== ========== ==========
Basic and diluted net loss per share applicable to
common stockholders.............................. $ (.52) $ (.75) $ (.98) $ (.28) $ (.35)
========== ========== ========== ========== ==========
Shares used in the calculation of basic and diluted
net loss per share applicable to common
stockholders..................................... 6,523,330 6,523,330 7,618,511 6,523,330 14,583,630
========== ========== ========== ========== ==========
</TABLE>

See accompanying notes.

F-4
<PAGE>
MEDIA METRIX, INC.

STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY

YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

AND SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED
OWNER'S/ COMMON STOCK ADDITIONAL COMMON OTHER
PARTNERS' -------------------- PAID-IN STOCK COMPREHENSIVE ACCUMULATED DEFERRED
CAPITAL SHARES AMOUNT CAPITAL ISSUABLE LOSS DEFICIT COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January
1, 1996,
representing
accumulated
development costs
contributed....... $ 371,600 -- $ -- $ -- $ -- $ -- $ (371,600) $ --
Additional
contributions by
partners,
including $573,000
of accumulated
development costs
contributed....... 898,000 -- -- -- -- -- -- --
Net loss............ -- -- -- -- -- -- (3,375,694) --
----------- ---------- -------- ----------- ---------- ---------- ------------ ---------
Balance at December
31, 1996.......... 1,269,600 -- -- -- -- -- (3,747,294) --
Purchase of
partnership
interest.......... 3,200,000 -- -- -- -- -- -- --
Exchange of
partners' interest
for 6,522,893
shares of common
stock and 41,446
shares of
Redeemable
Preferred Stock... (4,469,600) 6,522,893 65,229 259,771 -- -- -- --
Contribution of
amounts owed to
The NPD Group,
Inc............... -- -- -- 380,977 -- -- -- --
Sale of common
stock............. -- 437 4 96 -- -- -- --
Costs incurred in
connection with
issuance of Series
A Convertible
Preferred Stock... -- -- -- (359,188) -- -- -- --
Payment of
Redeemable
Preferred Stock
dividends......... -- -- -- -- -- -- (68,142) --
Accrual of
Redeemable
Preferred Stock
dividends......... -- -- -- -- -- -- (221,422) --
Net loss............ -- -- -- -- -- -- (4,583,948) --
----------- ---------- -------- ----------- ---------- ---------- ------------ ---------
Balance at December
31, 1997.......... -- 6,523,330 65,233 281,656 -- -- (8,620,806) --
Conversion of Series
A Convertible
Preferred Stock... -- 2,155,176 21,552 3,978,439 -- -- -- --
Conversion of Series
B Convertible
Preferred Stock... -- 520,590 5,206 1,494,794 -- -- -- --
Issuance of common
stock in
connection with
acquisition....... -- 3,890,825 38,908 10,461,092 -- -- -- --
Exercise of
warrants.......... -- 8,887 89 197 -- -- -- --
Sale of common
stock--194,380
shares issuable... -- -- -- -- 1,999,831 -- -- --
Employee stock
options........... -- -- -- 1,933,025 -- -- -- (1,933,025)
Amortization of
deferred
compensation...... -- -- -- -- -- -- -- 368,550
Accrual of
Redeemable
Preferred Stock
dividends......... -- -- -- -- -- -- (313,738) --
Net loss............ -- -- -- -- -- -- (7,158,698) --
----------- ---------- -------- ----------- ---------- ---------- ------------ ---------
Balance at December
31, 1998.......... -- 13,098,808 130,988 18,149,203 1,999,831 -- (16,093,242) (1,564,475)
Issuance of common
stock issuable
(unaudited)....... -- 194,380 1,944 1,997,887 (1,999,831) -- -- --
Initial public
offering net of
$5,867,500 of
related costs and
expenses
(unaudited)....... -- 3,250,000 32,500 49,350,000 -- -- -- --
Exercise of warrants
and stock options
(unaudited)....... -- 759,260 7,592 1,250,237 -- -- -- --
Amortization of
deferred
compensation
(unaudited)....... -- -- -- -- -- -- -- 304,917
Reversal of deferred
compensation on
options forfeited
(unaudited)....... -- -- -- (15,725) -- -- -- 15,725
Acceleration of
vesting options
(unaudited)....... -- -- -- 25,590 -- -- -- --
Accrual of
Redeemable
Preferred Stock
dividends
(unaudited)....... -- -- -- -- -- -- (109,195) --
Net loss
(unaudited)....... -- -- -- -- -- -- (4,951,244) --
Unrealized losses on
marketable
securities
(unaudited)....... -- -- -- -- -- (27,382) -- --
Total comprehensive
loss (unaudited).. -- -- -- -- -- -- -- --
----------- ---------- -------- ----------- ---------- ---------- ------------ ---------
Balance at June 30,
1999 (unaudited).. $ -- 17,302,448 $173,024 $70,757,192 $ -- $ (27,382) $(21,153,681) ($1,243,833)
=========== ========== ======== =========== ========== ========== ============ =========

TOTAL
STOCKHOLDERS'
(DEFICIT) EQUITY
<S> <C>
Balance at January
1, 1996,
representing
accumulated
development costs
contributed....... $ --
Additional
contributions by
partners,
including $573,000
of accumulated
development costs
contributed....... 898,000
Net loss............ (3,375,694)
-----------
Balance at December
31, 1996.......... (2,477,694)
Purchase of
partnership
interest.......... 3,200,000
Exchange of
partners' interest
for 6,522,893
shares of common
stock and 41,446
shares of
Redeemable
Preferred Stock... (4,144,600)
Contribution of
amounts owed to
The NPD Group,
Inc............... 380,977
Sale of common
stock............. 100
Costs incurred in
connection with
issuance of Series
A Convertible
Preferred Stock... (359,188)
Payment of
Redeemable
Preferred Stock
dividends......... (68,142)
Accrual of
Redeemable
Preferred Stock
dividends......... (221,422)
Net loss............ (4,583,948)
-----------
Balance at December
31, 1997.......... (8,273,917)
Conversion of Series
A Convertible
Preferred Stock... 3,999,991
Conversion of Series
B Convertible
Preferred Stock... 1,500,000
Issuance of common
stock in
connection with
acquisition....... 10,500,000
Exercise of
warrants.......... 286
Sale of common
stock--194,380
shares issuable... 1,999,831
Employee stock
options........... --
Amortization of
deferred
compensation...... 368,550
Accrual of
Redeemable
Preferred Stock
dividends......... (313,738)
Net loss............ (7,158,698)
-----------
Balance at December
31, 1998.......... 2,622,305
Issuance of common
stock issuable
(unaudited)....... --
Initial public
offering net of
$5,867,500 of
related costs and
expenses
(unaudited)....... 49,382,500
Exercise of warrants
and stock options
(unaudited)....... 1,257,829
Amortization of
deferred
compensation
(unaudited)....... 304,917
Reversal of deferred
compensation on
options forfeited
(unaudited)....... --
Acceleration of
vesting options
(unaudited)....... 25,590
Accrual of
Redeemable
Preferred Stock
dividends
(unaudited)....... (109,195)
Net loss
(unaudited)....... (4,951,244)
Unrealized losses on
marketable
securities
(unaudited)....... (27,382)
-----------
Total comprehensive
loss (unaudited).. (4,978,626)
-----------
Balance at June 30,
1999 (unaudited).. $48,505,320
===========
</TABLE>

See accompanying notes.

F-5
<PAGE>
MEDIA METRIX, INC.

STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------- -----------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.......................................... $(3,375,694) $(4,583,948) $(7,158,698) $(1,688,012) $(4,951,244)
Adjustments to reconcile net loss to net cash used
in operating activities:
Contributed development costs................... 573,000 -- -- -- --
Charge for acquired in-process research and
development................................... -- -- 1,600,000 -- --
Loss on disposal of equipment................... -- -- 13,174 -- 8,455
Provision for bad debts......................... -- 100,000 160,600 19,400 98,144
Depreciation and amortization of property and
equipment..................................... -- 17,991 65,969 14,613 120,849
Amortization of intangibles..................... -- -- 479,000 -- 1,497,105
Acceleration of vesting on options.............. -- -- -- -- 25,590
Amortization of deferred compensation........... -- -- 368,550 -- 304,917
Changes in operating assets and liabilities:
Receivables................................... (629,704) (211,059) (427,652) (70,771) (1,695,292)
Prepaid expenses and other current assets..... -- (38,063) (13,625) (13,905) (195,198)
Other assets.................................. -- (22,280) 28,976 -- --
Accounts payable and accrued liabilities...... 88,182 793,140 657,737 (263,169) 918,630
Advance billings to clients................... 220,020 309,200 393,581 91,611 1,569,857
Due to The NPD Group, Inc..................... 2,782,351 (1,117,059) 3,421,510 700,730 (4,148,465)
---------- ---------- ---------- ---------- -----------
Net cash used in operating activities............. (341,845) (4,752,078) (410,878) (1,209,503) (6,446,652)

INVESTING ACTIVITIES
Purchase of marketable securities................. -- -- -- -- (10,481,380)
Cash acquired..................................... -- -- 3,185,112 -- --
Additions to property and equipment............... -- (134,825) (117,489) (13,925) (354,663)
Proceeds from the sale of fixed assets............ -- -- 5,300 -- --
Security deposits................................. -- -- -- -- (136,115)
---------- ---------- ---------- ---------- -----------
Net cash (used in) provided by investing
activities...................................... -- (134,825) 3,072,923 (13,925) (10,972,158)
---------- ---------- ---------- ---------- -----------

FINANCING ACTIVITIES
Proceeds from the exercise of warrants to purchase
Series B Convertible Preferred Stock............ -- -- 1,500,000 -- --
Repayments on long-term debt...................... -- -- (19,155) -- (61,598)
Proceeds from sale of Series A Convertible
Preferred Stock................................. -- 3,999,991 -- -- --
Payment of costs related to sale of Series A
Convertible Preferred Stock..................... -- (359,188) -- -- --
Redemption of redeemable preferred stock.......... -- -- -- -- (4,788,955)
Net proceeds from initial public offering......... -- -- -- -- 49,382,500
Partner contributions............................. 325,000 3,200,000 -- -- --
Proceeds from (repayment of) loan payable to
affiliates...................................... 600,000 (600,000) -- -- --
Proceeds from exercise of warrants and stock
options......................................... -- -- 286 -- 1,257,829
Payment of dividend............................... -- (68,142) -- -- --
Sale of common stock.............................. -- 100 1,999,831 -- --
---------- ---------- ---------- ---------- -----------
Net cash provided by financing activities......... 925,000 6,172,761 3,480,962 -- 45,789,776
---------- ---------- ---------- ---------- -----------
Net increase (decrease) in cash and cash
equivalents..................................... 583,155 1,285,858 6,143,007 (1,223,428) 28,370,966
Cash and cash equivalents at beginning of
period.......................................... -- 583,155 1,869,013 1,869,013 8,012,020
---------- ---------- ---------- ---------- -----------
Cash and cash equivalents at end of period........ $ 583,155 $1,869,013 $8,012,020 $ 645,585 $36,382,986
========== ========== ========== ========== ===========

SUPPLEMENTAL INFORMATION
Interest paid..................................... $ -- $ -- $ 11,374 $ -- $ 30,487
========== ========== ========== ========== ===========
</TABLE>

See accompanying notes.

F-6
<PAGE>
Media Metrix, Inc.

Notes to Financial Statements
December 31, 1998

(Information as of June 30, 1999 and for

the six months ended June 30, 1998 and 1999 is unaudited)

1. DESCRIPTION OF BUSINESS AND ORGANIZATION

DESCRIPTION OF BUSINESS

Media Metrix, Inc., a Delaware Corporation ("Media Metrix"), provides
Internet audience measurement products and services to customers including media
companies, Internet advertisers and advertising agencies, technology companies
and financial institutions.

ORGANIZATION

On October 15, 1998, Media Metrix stockholders approved a 2.96873-for-one
split of the outstanding shares of common stock which was effectuated as a stock
dividend, and on November 2, 1998, Media Metrix filed an amended and restated
certificate of incorporation increasing the number of authorized shares of
common stock from 10,000,000 to 15,000,000. On April 22, 1999, the Board of
Directors approved a 1.4648-for-one split of the outstanding shares of common
stock payable to stockholders of record on May 5, 1999. Also on April 22, 1999,
the Board of Directors and the stockholders approved an increase in the number
of authorized shares of common stock to 60,000,000, which became effective
May 5, 1999. Retroactive effect has been given to these stock splits. All common
share, option and warrant data has been restated to reflect the stock splits.

Media Metrix's business was originally conducted as a division within The
NPD Group, Inc. ("NPD") until March 1996, when PC Meter, L.P., a Delaware
limited partnership, ("PC Meter") (Media Metrix's predecessor) was formed to
conduct Media Metrix's business.

On April 14, 1997, PC Meter was merged into Media Metrix. NPD originally
held 100,000 Class A Limited Partnership Units and 79,000 Class B Limited
Partnership Units of PC Meter. Two family trusts previously established for the
benefit of heirs to the sole shareholder of NPD (the "Family Trusts") each held
19,323.5 Class B Limited Partnership Units. In addition, PC Meter was indebted
to NPD in the amount of $3,951,029. On April 14, 1997, PC Meter was merged with
and into Media Metrix. Immediately prior to the merger, NPD purchased additional
Class A Limited Partnership Units for a purchase price of $3,200,000. Pursuant
to the terms of the Agreement and Plan of Merger between Media Metrix and PC
Meter, the Class A Limited Partnership Units were exchanged for a total of
41,446 shares of Media Metrix Redeemable Preferred Stock. The Class B Limited
Partnership Units were exchanged for a total of 6,522,893 shares of Media Metrix
common stock. Post-merger, Media Metrix repaid the amounts owed to NPD by PC
Meter. Of the amounts owed NPD, $3,570,052 was paid in cash and $380,977 was
forgiven.

The above transactions were accounted for in a manner similar to that of a
"pooling of interests" in that the assets and liabilities and related revenues
and expenses of PC Meter have been reflected in the accompanying financial
statements at their historical book values.

2. SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL STATEMENTS

The financial statements as of June 30, 1999 and for the six months ended
June 30, 1998 and 1999 have been prepared by Media Metrix without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position as of June 30,
1999 and the results of operations and cash flows for the six months ended
June 30, 1998

F-7
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
and 1999 have been made. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or eliminated.

The results of operations for the six months ended June 30, 1999 are not
necessarily indicative of the results to be expected for any future interim
period or for the year ending December 31, 1999.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid investments with a maturity date
of three months or less when purchased. Substantially all cash and cash
equivalents are held in one financial institution at December 31, 1998 and 1997.
Media Metrix's cash is exposed to risk to the extent the balance of the cash
accounts exceeds federally insured limits.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the financial statements and accompanying notes. Actual
results could differ from those estimates.

REVENUE RECOGNITION

Syndicated (recurring) products and services are sold on a subscription
basis. Revenues for such products and services are recognized over the term of
the related contract as products or services are provided. Buyers of syndicated
products and services typically are billed in advance for the next three months.
Billings rendered in advance of products or services being provided are recorded
as "Advance billings to clients" in the accompanying balance sheet.

Revenues for customized (nonrecurring) products and services are recognized
in the period in which the products or services are provided.

PANEL COSTS

Costs of establishing and maintaining a panel (a group of consumers who
furnish marketing data) are expensed in the year incurred and are included in
costs of revenues.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs primarily consist of costs attributable to
the development of new products and are expensed as incurred.

STOCK-BASED COMPENSATION

Media Metrix accounts for its stock-based employee compensation agreements
in accordance with the provisions of Accounting Principles Board Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and complies with the
disclosure provisions of Statement of Financial Accounting Standards No. 123,
ACCOUNTING FOR STOCK BASED COMPENSATION ("SFAS 123").

F-8
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK

Media Metrix's policy is to review a customer's financial condition prior to
extending credit and, generally, collateral is not required. Credit losses are
provided for in the financial statements and have been within management's
expectations. Under the terms of certain contracts with its customers, Media
Metrix receives partial payments as the services are provided. One customer
accounted for approximately 19% of revenues for the year ended December 31,
1997.

DEPRECIATION AND AMORTIZATION

Depreciation is provided over the estimated useful lives (3 to 7 years) of
the assets under the straight-line method. Leasehold improvements are amortized
on a straight-line basis over the shorter of the lease term or the estimated
useful life of the asset.

Intangibles acquired are being amortized by the straight-line method over
one to three years from the date of acquisition (see Note 4).

LONG-LIVED ASSETS

Media Metrix periodically reviews the carrying value of its long-lived
assets in determining the ultimate recoverability of their unamortized values
using future undiscounted cash flow analyses. Such a review has been performed
by management and does not indicate an impairment of such assets.

MARKETABLE SECURITIES

Media Metrix accounts for its investments in accordance with Statement of
Financial Accounting Standard No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." All investments have been classified as
available-for-sale securities as of June 30, 1999. Available-for-sale securities
are stated at fair value, with the unrealized gains and losses reported in other
comprehensive income (loss). Realized gains and losses and declines
other-than-temporary on available-for-sale securities are included in interest
and other income. The cost of securities sold is based on the specific
identification method. Interest and dividends on securities classified as
available-for-sale are included in interest income.

3. BASIC AND DILUTED NET LOSS PER SHARE

Media Metrix computes net loss per share in accordance with the provisions
of Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE
("SFAS 128"), and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under the
provisions of SFAS 128 and SAB 98, basic and diluted net loss per share
applicable to common stockholders is computed by dividing the net loss
applicable to common stockholders for the period by the weighted average number
of common shares outstanding for the period. The calculation of diluted net loss
per share excludes shares of common stock issuable upon exercise of employee
stock options and warrants (see Note 10), and the conversion of preferred stock
(see Note 8) as the effect of such exercises would be antidilutive.

F-9
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

3. BASIC AND DILUTED NET LOSS PER SHARE (CONTINUED)
The following sets forth the computation of basic and diluted net loss per
share:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
Numerator:
Net loss............................ $ (3,375,694) $ (4,583,948) $ (7,158,698) $ (1,688,012) $ (4,951,244)
Preferred stock dividends........... -- (289,564) (313,738) (154,147) (109,195)
------------- ------------- ------------- ------------- -------------
Net loss applicable to common
stockholders...................... $ (3,375,694) $ (4,873,512) $ (7,472,436) $ (1,842,159) $ (5,060,439)
============= ============= ============= ============= =============
Denominator for basic and diluted loss
per share--weighted average
shares.............................. 6,523,330 6,523,330 7,618,511 6,523,330 14,583,630
============= ============= ============= ============= =============
Basic and diluted loss per share
applicable to common stockholders... $ (.52) $ (.75) $ (.98) $ (.28) $ (.35)
============= ============= ============= ============= =============
</TABLE>

4. ACQUISITION

On November 5, 1998, Media Metrix and an unrelated entity,
RelevantKnowledge, Inc. ("RKI") entered into an agreement and plan of
reorganization whereby RKI was merged into Media Metrix. The stockholders of RKI
exchanged all outstanding preferred and common stock of RKI for 3,890,825 newly
issued shares of common stock in Media Metrix. The fair value of the Media
Metrix common stock issued to the previous stockholders and option and warrant
holders of RKI is approximately $10,500,000. The purchase price was allocated as
follows: (i) net operating assets acquired--$3,182,000, including cash of
$3,185,000, (ii) acquired in-process research and development--$1,600,000,
(iii) debt--$372,000, and (iv) intangibles--$6,416,000, including related costs
and expenses of approximately $326,000.

RKI had issued warrants to acquire shares of its common stock in connection
with prior sales of preferred and common stock and convertible secured
promissory notes. Such warrants were exchanged for warrants to purchase 360,907
shares of Media Metrix stock and are immediately exercisable as follows: 266,635
at $0.03 per share (8,887 of which were exercised in 1998 and 14,748 in 1999),
67,097 at $6.43 per share, 12,055 at $0.19 per share, 7,778 at $2.57 per share
and 7,342 at $5.14 per share. The warrants expire between April 2002 and
May 2008. In addition, RKI had issued options to purchase shares of its common
stock to its employees pursuant to a stock option plan. Such options were
exchanged for options to purchase 46,775 shares of Media Metrix common stock at
an exercise price of $2.39 per share. All options are immediately exercisable
and expire from 2006 to 2008.

Acquired in-process research and development represents the value attributed
to three technologies in development using the discounted value (using a 40%
discount rate) of the expected cash flow streams attributed to those items.
Adjustments, were made to the expected cash flow streams to incorporate
obsolescence of the technologies, the risk of similar technologies emerging in
the marketplace, and other factors that may reduce the value realized from the
in-process technologies. The three technologies relate to a data warehousing
application (valued at $800,000), a panel management tool

F-10
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

4. ACQUISITION (CONTINUED)
(valued at $770,000), and an automated tracking system (valued at $30,000). As
of the acquisition date, the aforementioned technologies are 25% to 50% complete
and are expected to be completed in 1999.

The estimates used by Media Metrix in valuing in-process research and
development were based on assumptions management believes to be reasonable but
which are inherently uncertain and unpredictable. Media Metrix's assumptions may
be incomplete or inaccurate, and no assurance can be given that unanticipated
events and circumstances will not occur. Accordingly, actual results may vary
from projected results.

The above acquisition has been accounted for using the purchase method of
accounting and the operations of RKI have been included in the accompanying
financial statements from the date of acquisition.

The following table reflects unaudited pro forma results of operations of
Media Metrix and RKI on the basis that the acquisition had taken place at the
beginning of the year for each of the periods presented:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------
<S> <C> <C>
1997 1998
Revenues...................................................... $ 3,883,000 $ 8,145,000
============== ==============
Net loss...................................................... $ (14,397,000) $ (15,898,000)
============== ==============
Net loss applicable to common stockholders.................... $ (14,686,000) $ (16,211,000)
============== ==============
Basic and diluted net loss per share applicable to common
stockholders................................................ $ (1.41) $ (1.49)
============== ==============
Shares used in the calculation of basic and diluted net loss
per share applicable to common stockholders................. 10,414,204 10,860,906
============== ==============
</TABLE>

In management's opinion, the unaudited pro forma results of operations are
not indicative of the actual results that would have occurred had the
acquisition been consummated on January 1, 1997 or on January 1, 1998 or of
future operations of the combined companies under the management of Media
Metrix.

5. RELATED PARTY TRANSACTIONS

Effective April 1, 1996 and as amended on September 30, 1998, NPD and Media
Metrix entered into a Management Services Agreement whereby NPD, among other
services, provides Media Metrix with computer processing capacity and certain
administrative functions. As compensation for the services, Media Metrix pays
NPD, on a monthly basis, an amount equal to (a) all expenses reasonably incurred
by NPD in performance of its duties under this agreement and (b) 105% of NPD's
overhead allocable to Media Metrix, as defined. The agreement may be terminated
by either party upon 90 days notice, provided NPD may not terminate prior to
March 31, 2002. Such charges pursuant to this agreement during the years ended
December 31, 1996, 1997 and 1998 and the six months ended June 30, 1998 and
1999, amounted to approximately $3,568,000, $5,831,000, $6,023,000, $3,265,000
and $1,374,000, respectively. At December 31, 1997 and 1998 and June 30, 1999,
Media Metrix owed

F-11
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

5. RELATED PARTY TRANSACTIONS (CONTINUED)
approximately $1,284,000, $4,706,000 and $557,000, respectively, to NPD for such
services. During the years ended December 31, 1996, 1997 and 1998 and the six
months ended June 30, 1998 and 1999, weighted average amounts owed by Media
Metrix to NPD were approximately $1,546,000, $1,492,000, $2,565,000, $1,795,000
and $1,509,000, respectively. Such amounts are non-interest bearing.

Media Metrix has entered into a Services Agreement with NPD as of
September 30, 1998. Media Metrix has granted NPD access to its databases for any
business purpose of NPD which is not in direct competition with that of Media
Metrix. Media Metrix has also granted NPD a non-exclusive license to use certain
computer software owned by Media Metrix. Under the terms of the Services
Agreement, Media Metrix will receive a monthly fee of $2,500 plus expenses. The
Services Agreement is terminable by either party with 120 days notice.

Media Metrix has entered into a License Agreement with NPD dated as of
November 5, 1998. NPD has granted to Media Metrix an exclusive, non-transferable
worldwide license to use certain NPD software. The fee is $11,000 per month
payable quarterly.

In December 1996, Media Metrix entered into a short-term loan agreement with
NPD to borrow $600,000 to fund operations. In January 1997, Media Metrix repaid
the entire loan.

6. LONG-TERM DEBT

In connection with the RKI acquisition (see Note 4), Media Metrix assumed
bank borrowings of approximately $372,000. The credit agreement provides for
borrowings up to $1,000,000. The balance outstanding at December 31, 1998 was
$352,532. The note bears interest at a rate of 20.27% per annum and is payable
in monthly principal and interest payments of $15,191.

Annual maturities of long-term debt are as follows:

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at December 31, 1997 and 1998 and
June 30, 1999 consist of:

<TABLE>
<CAPTION>
1997 1998 1999
<S> <C> <C> <C>
Trade accounts payable................................ $ 359,000 $ 1,079,000 $ 1,131,000
Commissions and bonuses............................... 113,000 660,000 1,100,000
Panel costs........................................... 128,000 57,000 204,000
Other................................................. 281,000 512,000 992,000
---------- ------------ ------------
$ 881,000 $ 2,308,000 $ 3,427,000
========== ============ ============
</TABLE>

F-12
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

8. PREFERRED STOCKS

On April 14, 1997, Media Metrix issued: (i) 495,603 shares of its Series A
Convertible Preferred Stock ("Series A") and (ii) warrants to purchase 159,640
shares of its Series B Convertible Preferred Stock ("Series B") at an exercise
price of $12.53 per share through October 14, 1999, for proceeds of $3,999,991
pursuant to a private placement to three investors. Media Metrix incurred
approximately $359,000 of costs related to this private placement and issued an
investment advisor warrants to purchase 377,642 shares of Media Metrix's common
stock at an exercise price of $2.88 per share through October 14, 1999. The
value of such warrants was nominal. The investment advisor exercised warrants to
purchase 245,501 shares of common stock on March 31, 1999.

Immediately prior to the RKI acquisition (see Note 4), the holders of the
Series A converted all issued and outstanding shares into 2,155,176 shares of
Media Metrix common stock. In addition, the holders of warrants to purchase
119,714 shares of Series B, exercised such warrants and immediately converted
the underlying Series B into 520,590 shares of Media Metrix common stock. The
remaining 39,926 warrants to purchase Series B were canceled and exchanged for
warrants to purchase 173,629 shares of Media Metrix common stock at an exercise
price of $2.88 per share. Such warrants were exercised on March 31, 1999. Media
Metrix amended and restated its certificate of incorporation to cancel the
Series A and Series B. Accordingly, at December 31, 1998, Media Metrix has
5,000,000 of authorized shares of undesignated preferred stock of which 41,446
has been designated to the Redeemable Preferred Stock.

At December 31, 1998, NPD owned 41,446 shares or 100% of the authorized,
issued and outstanding shares of Media Metrix's Redeemable Preferred Stock.
Media Metrix repurchased all shares of Redeemable Preferred Stock from NPD with
a portion of the proceeds from its initial public offering (see Note 12).

The principal terms of the Redeemable Preferred Stock are as follows:

- DIVIDENDS

The holder of the Redeemable Preferred Stock is entitled to receive
dividends at 7% per annum and shall accrue from the date of issuance
whether or not declared. During April 1997, Media Metrix paid the holder
of the Redeemable Preferred Stock dividends of approximately $68,000
representing amounts accrued through April 1997. Cumulative but unpaid
dividends on Redeemable Preferred Stock through December 31, 1998 are
approximately $535,000.

- LIQUIDATION PREFERENCE

In the event of liquidation of Media Metrix, the holder of the Redeemable
Preferred Stock is entitled to receive an amount equal to $100 per share
($4,144,600) plus any accrued but unpaid dividends.

- REDEMPTION

Upon the completion of a public offering of Media Metrix's common stock at
a price per share of at least $3.45 and gross proceeds of at least
$15,000,000 or certain other specified events as defined, Media Metrix is
required to purchase the outstanding shares of Redeemable Preferred Stock
at a price of $100 per share plus all accrued and unpaid dividends.

F-13
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

8. PREFERRED STOCKS (CONTINUED)
- VOTING RIGHTS

The holder of the Redeemable Preferred Stock is entitled to 100 votes for
each share held at any meeting of the stockholders of Media Metrix.

9. INCOME TAXES

Since PC Meter was a limited partnership, no provision or benefit for
Federal or state income taxes was provided in the financial statements but the
income or loss was allocated directly to its partners. Beginning on April 14,
1997 when PC Meter was merged into Media Metrix, Media Metrix adopted the
provisions of Statement of Financial Accounting Standards No. 109, ACCOUNTING
FOR INCOME TAXES, in accounting for its income taxes. Accordingly, deferred tax
assets and liabilities are recognized for future tax consequences attributable
to differences between financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered
or settled. Significant components of Media Metrix's deferred tax assets are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
<S> <C> <C>
1997 1998
Deferred tax assets:
Net operating loss carryforwards.............................. $ 900,000 $ 6,400,000
Amounts payable to related party.............................. 437,000 1,882,000
Accounts receivable reserves.................................. 34,000 88,000
------------- -------------
Total deferred tax assets....................................... 1,371,000 8,370,000
Valuation allowance for deferred tax assets..................... (1,371,000) (8,370,000)
------------- -------------
Net deferred taxes.............................................. $ -- $ --
============= =============
</TABLE>

At April 14, 1997, Media Metrix did not have any deferred tax assets or
liabilities and, accordingly, a valuation allowance for deferred tax assets was
not required. At the time of the RKI acquisition, RKI had deferred tax assets of
approximately $4,329,000 with an equal valuation allowance.

As a result of losses from April 14, 1997 through December 31, 1998, Media
Metrix has available net operating loss carryforwards ("NOLs") of approximately
$16,000,000 for Federal income tax purposes that expire in 2012 and 2018.
Included in such amount are RKI pre-acquisition NOLs of approximately
$11,129,000 which expire through 2013. As a result of the RKI acquisition, under
Section 382 of the Internal Revenue Code, utilization of such NOLs will be
limited to approximately $600,000 per year over the next fifteen years. Future
benefits, if any, from the RKI NOLs would first reduce the intangibles acquired
and then income tax expense.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the period in
which the NOLs can be utilized and the temporary differences become deductible.
Since Media

F-14
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

9. INCOME TAXES (CONTINUED)
Metrix has incurred losses since inception, Media Metrix has established a
valuation allowance for deferred tax assets at December 31, 1998.

10. STOCK OPTIONS

In November 1998, Media Metrix adopted the 1998 Equity Incentive Plan (the
"1998 Plan"). Under the 1998 Plan, Media Metrix may award incentive and other
non-statutory stock options, stock appreciation rights, restricted stock and
performance stock units and other stock units which are valued by reference to
the value of the common stock. Media Metrix also maintains the Media Metrix
Stock Option Plan ("Media Metrix Plan") which provides for the award of up to
519,222 shares of common stock in the form of incentive stock options and
non-statutory stock options. In February 1999, the Board of Directors, subject
to stockholder approval, adopted an amendment to increase the number of shares
under the 1998 Plan from 732,400 to 1,318,320.

In October 1998, Media Metrix changed the provisions of all its outstanding
stock options granted prior to such time by removing the requirement of the
occurrence of an initial public offering before such options became exercisable.
This change resulted in a new measurement date. Accordingly, Media Metrix
established, as a separate component of stockholders' equity, deferred
compensation (approximately $724,000) equal to the number of options granted
times the difference in their exercise price and $2.30, the estimated fair value
of the common stock at the time of the new measurement date, and recorded
compensation expense in 1998 of approximately $348,000 representing the portion
of the deferred compensation which vested through December 31, 1998.

On December 3, 1998, Media Metrix issued stock options to employees to
purchase 153,072 shares of common stock at $2.39 per share, which was considered
to be the fair value of the common stock at that time. Soon thereafter, Media
Metrix issued shares at $10.29 per share (see Note 12); accordingly, for
accounting purposes, Media Metrix used such per share value to record an
additional deferred compensation charge of $1,209,000 of which $20,150 was
amortized in December 1998.

F-15
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

10. STOCK OPTIONS (CONTINUED)
The following table summarizes activity in stock options:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
JUNE 30,
1996 1997 1998 1999
-------------------------- -------------------------- -------------------------- ------------

<CAPTION>
SHARES WEIGHTED- SHARES WEIGHTED- SHARES WEIGHTED- SHARES
UNDER AVERAGE UNDER AVERAGE UNDER AVERAGE UNDER
OPTION EXERCISE PRICE OPTION EXERCISE PRICE OPTION EXERCISE PRICE OPTION
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, beginning of
period............. -- $ -- 133,067 $ 0.11 283,093 $ 0.17 696,130
Grants............... 133,067 0.11 150,026 0.23 373,219 1.97 345,575
Exercises............ -- -- -- -- -- -- (14,924)
Forfeitures.......... -- -- -- -- (6,957) 2.30 (14,356)
Options issued in
connection with
acquisition........ -- -- -- -- 46,775 2.39 --
--------- --------- --------- ------------
Balance, end of
period............. 133,067 0.11 283,093 0.17 696,130 1.26 1,012,425
========= ========= ========= ============
Weighted-average fair
value of options
issued during the
period............. $ 0.03 $ 0.06 $ 3.42

<S> <C>

WEIGHTED-
AVERAGE
EXERCISE
PRICE
<S> <C>
Balance, beginning of
period............. $ 1.26
Grants............... 11.94
Exercises............ 0.93
Forfeitures.......... 2.43
Options issued in
connection with
acquisition........ --

Balance, end of
period............. 4.90

Weighted-average fair
value of options
issued during the
period............. $ 2.52
</TABLE>

The following tables summarize information about stock options outstanding
at December 31, 1998 and June 30, 1999:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 JUNE 30, 1999
------------------------------------------ ------------------------------------------
WEIGHTED-AVERAGE WEIGHTED-AVERAGE
EXERCISE OPTIONS OPTIONS REMAINING OPTIONS OPTIONS REMAINING
PRICE OUTSTANDING EXERCISABLE CONTRACTUAL LIFE OUTSTANDING EXERCISABLE CONTRACTUAL LIFE
<S> <C> <C> <C> <C> <C> <C>
$ 0.11........ 133,067 88,711 7.3 years 133,067 88,711 6.8 years
0.23........ 150,026 30,007 8.7 142,198 22,179 8.2
0.35........ 70,665 -- 9.2 67,190 13,374 8.7
2.30........ 142,525 -- 9.6 141,331 -- 9.1
2.39........ 199,847 14,524 9.9 183,264 23,833 9.4
11.26........ -- -- -- 265,275 -- 9.6
12.00........ -- -- -- 45,000 -- 9.8
17.00........ -- -- -- 35,100 -- 9.8
--------- --------- --------- ---------
696,130 133,242 9.0 1,012,425 148,097 8.9
========= ========= ========= =========
</TABLE>

Media Metrix has reserved 3,639,448 and 1,450,461 shares of common stock for
issuance of all options and warrants at December 31, 1998 and June 30, 1999,
respectively.

FAIR VALUE DISCLOSURES

Pro forma information regarding net loss and net loss per share is required
by SFAS 123, which also requires that the information be determined as if Media
Metrix has accounted for its stock options under the fair value method of that
statement. The fair value for these options was estimated using the

F-16
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

10. STOCK OPTIONS (CONTINUED)
minimum value method with the following assumptions: no dividend yield,
weighted-average expected life of the option of 5 years, and risk-free interest
rates of 6.6%, 6.0% and 5.7% for the years ended December 31, 1996, 1997 and
1998, respectively.

Because the determination of fair value of all options granted after such
time as Media Metrix becomes a public entity will include an expected volatility
factor in addition to the factors described above, the results presented below
may not be indicative of future periods.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. Media Metrix's
pro forma financial information is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
<S> <C> <C> <C>
1996 1997 1998
Net loss applicable to common stockholders:
As reported.................................... $ (3,375,694) $ (4,873,512) $ (7,472,436)
============= ============= =============
Pro forma...................................... $ (3,376,754) $ (4,875,943) $ (7,487,969)
============= ============= =============
Net loss applicable to common stockholders per
share:
As reported.................................... $ (.52) $ (.75) $ (.98)
============= ============= =============
Pro forma...................................... $ (.52) $ (.75) $ (.98)
============= ============= =============
</TABLE>

11. LEASE COMMITMENTS

Media Metrix leases office space in New York, California and Georgia. At
December 31, 1998, the future minimum lease payments under noncancellable
operating leases with initial or remaining lease terms in excess of one year are
as follows:

<TABLE>
<S> <C>
Year ending December 31:
1999.............................................................. $ 391,000
2000.............................................................. 223,000
2001.............................................................. 81,000
2002.............................................................. 58,000
2003.............................................................. 5,000
---------
$ 758,000
=========
</TABLE>

Rent expense approximated $39,000, $207,000 and $356,000 for the years ended
December 31, 1996, 1997 and 1998, respectively.

12. CAPITAL TRANSACTIONS

On January 4, 1999, Media Metrix issued to a foreign investor 194,380 shares
of common stock at a purchase price per share of $10.29, for an aggregate
purchase price of approximately $2,000,000,

F-17
<PAGE>
MEDIA METRIX, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999 IS UNAUDITED)

12. CAPITAL TRANSACTIONS (CONTINUED)
pursuant to a stock purchase agreement. Media Metrix had received the proceeds
from this transaction on December 31, 1998 and has recorded "common stock
issuable" in the accompanying balance sheet.

In May 1999, Media Metrix consummated an initial public offering (the "IPO")
of 3,000,000 shares of common stock at a price of $17 per share. The
underwriters in connection with the IPO exercised their over-allotment option to
purchase an additional 250,000 shares from Media Metrix and 200,000 shares from
existing shareholders at a price of $17 per share. The total net proceeds to
Media Metrix amounted to approximately $49,383,000 after deducting the
underwriters' discount and related expenses of $5,867,000.

13. SUBSEQUENT EVENT

On October 8, 1999, Media Metrix acquired all the outstanding shares of
preferred and common stock of AdRelevance, Inc. ("AdRelevance") and outstanding
options and warrants to purchase shares of AdRelevance common stock in exchange
for shares of Media Metrix common stock and options and warrants to purchase
shares of Media Metrix common stock valued at approximately $59.4 million.
Additional consideration is payable upon AdRelevance achieving certain
post-closing goals.

F-18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
RelevantKnowledge, Inc.

In our opinion, the accompanying balance sheets and the related statements
of operations, of changes in shareholders' equity and of cash flows present
fairly, in all material respects, the financial position of
RelevantKnowledge, Inc. at October 31, 1998 and December 31, 1997, and the
results of its operations and its cash flows for the ten month period ended
October 31, 1998, for the year ended December 31, 1997 and for the six week
period ended December 31, 1996, in conformity with generally accepted accounting
principles. 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. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
April 8, 1999

F-19
<PAGE>
RELEVANTKNOWLEDGE, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1997 1998
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents........................................................ $ 998,827 $ 2,963,218
Accounts receivable.............................................................. 213,575 292,038
Unbilled work in progress........................................................ -- 70,484
Other current assets............................................................. 114,009 76,745
------------- --------------
Total current assets....................................................... 1,326,411 3,402,485
Fixed assets, net.................................................................. 749,761 780,884
Other assets....................................................................... 4,983 98,803
------------- --------------
Total assets............................................................... $ 2,081,155 $ 4,282,172
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses............................................ $ 619,552 $ 402,950
Commissions payable.............................................................. -- 292,515
Deferred revenue................................................................. 160,887 468,474
Current portion of long-term debt................................................ -- 123,326
------------- --------------
Total current liabilities.................................................. 780,439 1,287,265
Long-term debt..................................................................... -- 248,361
------------- --------------
Total liabilities.......................................................... 780,439 1,535,626
------------- --------------
Commitments and contingencies

Shareholders' equity
Common stock, no par value; 15,500,000 and 15,000,000 shares authorized at
October 31, 1998 and December 31, 1997, respectively; 3,849,458 and 3,603,570
shares issued and outstanding at October 31, 1998 and December 31, 1997,
respectively................................................................... 210,183 1,317,471
Series A-1 convertible preferred stock; 1,500,000 shares authorized; 1,456,949
issued and outstanding at October 31, 1998 and December 31, 1997,
respectively................................................................... 881,885 881,885
Series B-1 convertible preferred stock; 3,000,000 shares authorized; 2,754,587
shares issued and outstanding at October 31, 1998 and December 31, 1997,
respectively................................................................... 4,223,575 4,221,619
Series B-2 convertible preferred stock; 1,000,000 shares authorized; 858,420
shares issued and outstanding at October 31, 1998 and December 31, 1997,
respectively................................................................... 1,469,497 1,469,497
Series C-1 convertible preferred stock; 3,500,000 shares authorized; 2,713,321
and 0 shares issued and outstanding at October 31, 1998 and December 31 1997,
respectively................................................................... -- 6,686,403
Series C-2 convertible preferred stock; 1,000,000 shares authorized; no shares
issued or outstanding at October 31, 1998 and December 31, 1997,
respectively................................................................... -- --
Accumulated deficit.............................................................. (5,484,424) (11,830,329)
------------- --------------
Total shareholders' equity................................................. 1,300,716 2,746,546
------------- --------------
Total liabilities and shareholders' equity................................. $ 2,081,155 $ 4,282,172
============= ==============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-20
<PAGE>
RELEVANTKNOWLEDGE, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX WEEKS TEN MONTHS
ENDED YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, OCTOBER 31,
1996 1997 1998
<S> <C> <C> <C>
Revenues
Information services............................................... $ -- $ 157,032 $ 1,730,744
Technology licensing and support................................... -- 537,879 83,486
Other income....................................................... -- -- 95,909
---------- ------------- -------------

Total revenues................................................. -- 694,911 1,910,139

Costs of sales....................................................... -- 2,510,621 2,879,037
Sales and marketing.................................................. 8,912 1,433,173 1,623,500
General and administrative........................................... 30,732 1,440,551 2,973,230
Research and development............................................. 103,925 651,421 780,277
---------- ------------- -------------
Total costs and expenses....................................... 143,569 6,035,766 8,256,044
---------- ------------- -------------
Net loss............................................................. $ (143,569) $ (5,340,855) $ (6,345,905)
========== ============= =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-21
<PAGE>
RELEVANTKNOWLEDGE, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK TOTAL
------------------------ ------------------------- ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT SHARES AMOUNT DEFICIT EQUITY
<S> <C> <C> <C> <C> <C> <C>
Balance, November 20, 1996.......... -- -- -- -- -- --
Issuance of common stock.......... 3,500,000 $ 3,500 $ 3,500
Issuance of preferred stock....... 1,181,310 $ 750,000 750,000
Net loss.......................... $ (143,569) (143,569)
---------- ------------ ---------- ------------- -------------- -------------
Balance, December 31, 1996.......... 3,500,000 3,500 1,181,310 750,000 (143,569) 609,931
Issuance of preferred stock, net
of offering costs............... 3,888,646 5,824,957 5,824,957
Exercise of common stock
warrants........................ 103,570 169,998 169,998
Issuance of employee stock
options......................... 36,685 36,685
Net loss.......................... (5,340,855) (5,340,855)
---------- ------------ ---------- ------------- -------------- -------------
Balance, December 31, 1997.......... 3,603,570 210,183 5,069,956 6,574,957 (5,484,424) 1,300,716
Issuance of preferred stock, net
of offering costs............... 2,713,321 6,684,447 6,684,447
Issuance of common stock
warrants........................ 970,740 970,740
Exercise of employee stock
options......................... 245,888 136,548 136,548
Net loss.......................... (6,345,905) (6,345,905)
---------- ------------ ---------- ------------- -------------- -------------
Balance, October 31, 1998........... 3,849,458 $ 1,317,471 7,783,277 $ 13,259,404 $ (11,830,329) $ 2,746,546
========== ============ ========== ============= ============== =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-22
<PAGE>
RELEVANTKNOWLEDGE, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX WEEKS TEN MONTHS
ENDED YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, OCTOBER 31,
1996 1997 1998
<S> <C> <C> <C>
Cash flows from operating activities
Net loss........................................................... $ (143,569) $ (5,340,855) $ (6,345,905)
Adjustments to reconcile net loss to cash used in operating
activities
Depreciation and amortization.................................. 368 103,173 143,589
Expense recorded for issuance of warrants...................... -- -- 970,740
Expense recorded for issuance of employee stock options........ -- 36,685 --
Noncash interest expense....................................... -- -- 33,350
Loss on disposal of fixed assets............................... -- -- 35,048
Change in operating assets and liabilities:
Accounts receivable.......................................... -- (213,575) (78,463)
Unbilled work in progress.................................... -- -- (70,484)
Other current assets......................................... -- (112,977) 4,418
Other assets................................................. (11,768) -- (60,974)
Accounts payable and accrued expenses........................ 96,800 522,752 (216,602)
Commissions payable.......................................... -- -- 292,515
Deferred revenue............................................. -- 160,887 307,587
---------- ------------- -------------
Net cash used in operating activities...................... (58,169) (4,843,910) (4,985,181)
---------- ------------- -------------
Cash flows from investing activities
Proceeds from the sale of fixed assets........................... -- -- 6,500
Purchases of fixed assets........................................ (21,042) (826,507) (216,260)
---------- ------------- -------------
Net cash used in investing activities...................... (21,042) (826,507) (209,760)
---------- ------------- -------------
Cash flows from financing activities
Proceeds from issuance of common and preferred stock, net of
offering costs................................................. 753,500 5,994,955 3,787,645
Proceeds from issuance of convertible secured promissory notes
and attached warrants.......................................... -- -- 3,000,000
Proceeds from long-term debt..................................... -- -- 480,722
Payments on long-term debt....................................... -- -- (109,035)
---------- ------------- -------------
Net cash provided by financing activities.................. 753,500 5,994,955 7,159,332
---------- ------------- -------------
Net increase in cash and cash equivalents.......................... 674,289 324,538 1,964,391
Cash and cash equivalents at beginning of period................... -- 674,289 998,827
---------- ------------- -------------
Cash and cash equivalents at end of period......................... $ 674,289 $ 998,827 $ 2,963,218
========== ============= =============
Supplemental cash flow disclosures
Cash paid for interest............................................. $ -- $ -- $ 58,064
========== ============= =============
Conversion of convertible secured promissory notes to Series C-1
preferred stock.................................................. $ -- $ -- $ 3,000,000
========== ============= =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-23
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

RelevantKnowledge, Inc. (the "Company") provides internet demographics, site
visit statistics, and additional usage-related information. The Company operates
in a single business segment.

CASH AND CASH EQUIVALENTS

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

FIXED ASSETS

Fixed assets are recorded at cost less accumulated depreciation, which is
computed using the straight-line method over the estimated useful lives of the
related assets; generally five to seven years. Upon sale, retirement or other
disposition of these assets, the cost and the related accumulated depreciation
are removed from the respective accounts and any gain or loss on the disposition
is included in operations.

Leasehold improvements are amortized over the lesser of the useful life of
the improvement or the remaining lease term.

INCOME TAXES

The Company accounts for income taxes using the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
Under SFAS 109, deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax basis of assets and
liabilities. Differences between the financial reporting and tax basis of assets
and liabilities at October 31, 1998 and December 31, 1997 are not significant.

The Company has net operating loss carryforwards for Federal income tax
purposes of approximately $11,129,000 and $5,450,000 at October 31, 1998 and
December 31, 1997, respectively, that expire between 2011 and 2018. Such net
operating losses give rise to deferred tax assets of approximately $4,329,000
and $2,100,000 at October 31, 1998 and December 31, 1997, respectively. The
Company has recorded a valuation allowance equal to the amount of the deferred
tax assets at both October 31, 1998 and December 31, 1997, because it is deemed
more likely than not that such assets will not be realized.

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 and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

SOFTWARE DEVELOPMENT COSTS

The Company capitalizes costs related to the development of certain software
products in accordance with SFAS 86 "Accounting For the Costs of Computer
Software to be Sold, Leased, or Otherwise Marketed" which requires
capitalization to begin when technological feasibility has been established

F-24
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
and ends when the product is available for general release to customers.
Software development costs incurred prior to technological feasibility are
considered research and development costs and are expensed as incurred.

During 1998 and 1997, the period between established technological
feasibility and general release has been less than three months, and software
development costs qualifying for capitalization have been insignificant.
Accordingly, the Company has not capitalized any software development costs
during 1998 and 1997.

REVENUE RECOGNITION

Information services revenues are recognized upon delivery of data and
reports ordered by the customer. Revenue arising from agreements which require
monthly reports are recognized over the period for which data are provided.

Technology licensing revenues consist of technology licensing fees and
royalties. Technology licensing fees are recognized upon delivery of the
software and equipment, receipt of a signed agreement, determination that
collectibility is probable and expiration of rights of refund or return. Royalty
revenues are recognized when earned.

The Company enters into certain nonmonetary transactions, in which the
Company provides services to another entity and in return receives services, or
a combination of cash and services, from the other entity. The Company
recognizes revenue and an equal amount of expense based upon the fair value of
the service provided or the service (or combination of service and cash)
received, whichever was more clearly evident.

ADVERTISING EXPENSES

All advertising costs are expensed when incurred. Advertising expenses were
approximately $171,000 and $491,000 for the ten months ended October 31, 1998
and the year ended December 31, 1997, respectively. No advertising expense was
recorded for the six weeks ended December 31, 1996.

STOCK-BASED COMPENSATION

The Company follows Accounting Principles Board Opinion No. 25, ACCOUNTING
FOR STOCK ISSUED TO EMPLOYEES ("APB 25") and related interpretations in
accounting for its employee stock options. In accordance with the provisions of
APB 25, compensation expense is recorded upon issuance of employee stock options
in an amount equal to the excess of the fair value of the Company's stock over
the option price. The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION.

F-25
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. FIXED ASSETS

Fixed assets are comprised of the following as of October 31, 1998 and
December 31, 1997:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1997 1998
<S> <C> <C>
Furniture and fixtures........................................... $ 51,297 $ 57,815
Computer equipment and software.................................. 708,673 874,320
Leasehold improvements........................................... 87,579 84,604
---------- ------------
847,549 1,016,739
Less: accumulated depreciation and amortization.................. 97,788 235,855
---------- ------------
$ 749,761 $ 780,884
========== ============
</TABLE>

3. COMMITMENTS AND CONTINGENCIES

The Company leases office space and equipment under noncancelable operating
lease agreements expiring through 2003. Future minimum lease payments under
operating leases as of October 31, 1998, are as follows:

Rental expense was approximately $299,000, $136,000 and $800 for the ten
months ended October 31, 1998, the year ended December 31, 1997 and the six
weeks ended December 31, 1996, respectively.

Various legal proceedings may arise in the normal course of business.
Management does not believe that there are currently any asserted or unasserted
claims that will have a material adverse effect on the financial position,
results of operations or cash flows of the Company.

4. CONCENTRATION OF CREDIT RISKS

The Company's sales to its largest customer represented approximately 77% of
total revenues for the year ended December 31, 1997.

5. CAPITAL STRUCTURE

COMMON AND PREFERRED STOCK

The Company's Restated Articles of Incorporation authorize the issuance of
up to 25,500,000 shares of $0.001 par value capital stock as of October 31,
1998. Fifteen million five hundred thousand (15,500,000) and fifteen million
(15,000,000) shares have been designated as Common Stock as of October 31, 1998
and December 31, 1997, respectively and ten million (10,000,000) and five
million five

F-26
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. CAPITAL STRUCTURE (CONTINUED)
hundred thousand (5,500,000) shares have been designated as Convertible
Preferred Stock as of October 31, 1998 and December 31, 1997, respectively. The
Convertible Preferred Stock is further designated in five series as follows (as
of October 31, 1998): 1,500,000 shares are Series A-1 Preferred Stock, 3,000,000
shares are Series B-1 Preferred Stock, 1,000,000 shares are Series B-2 Preferred
Stock, 3,500,000 shares are Series C-1 Preferred Stock and 1,000,000 shares are
Series C-2 Preferred Stock. Upon the occurrence of certain events, the holders
of Convertible Preferred Stock are entitled to convert shares of A-1, B-1, B-2,
C-1 and C-2 Preferred Stock to Common Stock on a one-for-one basis.

VOTING RIGHTS

The holders of Preferred Stock are entitled to vote with the holders of
Common Stock as a single class and shall be entitled to one vote for each share
of Common Stock into which the Preferred Stock would be convertible on the
record date set for such vote of stockholders.

DIVIDENDS

Upon the occurrance of certain events, holders of Series B-1, B-2, C-1 and
C-2 Preferred Stock are entitled to receive cumulative dividends. Such dividends
would be recorded based on the original issue price at a rate of 8% per annum
computed on a quarterly basis. Series B-1, B-2, C-1 and C-2 Preferred Stock have
preference over Series A-1 Preferred Stock and Common Stock in the payment of
dividends or the event of liquidation.

After payment of the Series B-1, B-2, C-1 and C-2 Preferred dividends, the
holders of Series A-1 Preferred are entitled to receive noncumulative dividends
at the rate of 10% per annum of the original issuance price when and if declared
by the Board of Directors.

CONVERSION

The Preferred Stock is convertible to Common Stock under a stated formula,
generally one share of common for one share of preferred, at the option of the
stockholder or upon the occurrence of certain events.

CONVERTIBLE SECURED PROMISSORY NOTES

On March 15, 1998, the Company sold Convertible Secured Promissory Notes
("the Notes") in the aggregate principal amount of $3,000,000 to certain holders
of the Company's Common and Convertible Preferred Stock. The notes bore interest
at a rate of 10% per annum. Upon issuance of the Series C-1 Convertible
Preferred Stock in July 1998, the holders of the notes converted all outstanding
principal and accrued interest to Series C-1 Convertible Preferred Stock at the
same price and with the same rights and privileges as the other shares of
Series C-1 Convertible Preferred Stock. The Company issued 1,213,335 Series C-1
shares upon conversion of the Notes.

In conjunction with the sale of the Notes, the Company issued 857,122
warrants to purchase common stock to the holders of the Notes. Each warrant
entitles the warrant holder to purchase one share of the Company's common stock
for $0.01. The warrants may not be exercised until the earlier of January 1,
1999 or the occurrence of certain events, including a consolidation or merger of
the Company. The warrants expire between March 2003 and May 2003.

F-27
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. CAPITAL STRUCTURE (CONTINUED)
In connection with the issuance of these warrants, the Company recognized
interest expense of $677,126, which represents the implicit value of the
warrants (fair value less exercise price).

WARRANTS

The Company has issued warrants to acquire shares of the Company's common
stock in conjunction with sales of Common Stock, Convertible Preferred Stock,
and Convertible Secured Promissory Notes and in exchange for services provided.
At October 31, 1998, 1,160,290 warrants were outstanding. These warrants are
exercisable at the following prices: 857,122 at $0.01 per share, 215,668 at
$2.00 per share, 38,750 at $0.06 per share, 25,000 at $0.80 per share, and
23,750 at $1.60 per share. 303,168 of the warrants were exercisable at
October 31, 1998. The remaining 857,122 are not exercisable until the earlier of
January 1, 1999 or the occurrence of certain events, including a consolidation
or merger of the Company. The warrants expire between April 2002 and May 2008.

6. STOCK OPTION PLAN

The Company has issued options to its employees under the terms of The 1996
Stock Option Plan ("the Plan"). The Plan permits management to grant either
incentive stock options or nonstatutory stock options to purchase shares of the
Company's Common Stock to officers, directors, key employees, and consultants
responsible for the direction and management of the Company. The Plan authorizes
the issuance of options to purchase up to an aggregate of 1,250,000 shares of
Common Stock. Options issued under the Plan vest at rates determined by the
Board of Directors. Vesting rates can not be less than 20% per year under the
terms of the Plan. The maximum term for options issued under the Plan is ten
years. No options were issued during the six weeks ended December 31, 1996. The
following table summarizes the transactions of the Plan for the year ended
December 31, 1997 and the ten months ended October 31, 1998:

<TABLE>
<CAPTION>
1997 1998
----------------------- -----------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
<S> <C> <C> <C> <C>
Outstanding at beginning of year................ 0 $ -- 727,950 $ .442
Granted....................................... 775,950 .446 520,038 .885
Exercised..................................... 0 -- (245,888) .555
Forfeited..................................... (48,000) .060 (353,655) .484
---------- ----------
Outstanding at end of year...................... 727,950 .442 648,445 .653
========== ==========
Options exercisable at year-end................. 0 0
========== ==========
Weighted average fair value of options granted
during the year at the share's fair value..... $ 438,444 $ 109,208
Weighted average fair value of options granted
during the year at above the share's fair
value......................................... 0 0
</TABLE>

F-28
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. STOCK OPTION PLAN (CONTINUED)
The following table summarizes information regarding stock options
outstanding at October 31, 1998:

<TABLE>
<CAPTION>
NUMBER OF OPTIONS WEIGHTED AVERAGE
EXERCISE OUTSTANDING AT REMAINING
PRICE OCTOBER 31, 1998 CONTRACTUAL LIFE
<S> <C> <C>
$0.06................................................... 145,031 8.31 years
0.16................................................... 50,583 8.63 years
0.80................................................... 354,831 9.33 years
1.25................................................... 98,000 9.84 years
</TABLE>

The Company accounts for employee stock options in accordance with the
provisions of APB Opinion 25 and related interpretations.

Had compensation cost for the Company's stock-based compensation plans been
determined on a fair value basis in accordance with the provisions of FASB
Statement 123, the Company's net loss for the six weeks ended December 31, 1996,
the year ended December 31, 1997, and ten months ended October 31, 1998, would
have been as follows:

<TABLE>
<CAPTION>
1996 1997 1998
<S> <C> <C> <C>
Net loss--as reported.............................. $ (143,569) $ (5,340,855) $ (6,345,905)
Net loss--proforma................................. $ (143,569) $ (5,435,880) $ (6,418,405)
</TABLE>

The amount of the pro forma charge has been determined using the minimum
value method as permitted for private companies by FASB Statement 123. For
purposes of the calculation, management used a risk free rate of return of
5.36%, a projected forfeiture rate of 0%, and an expected life of 5.1 years.

7. LONG-TERM DEBT

In December 1997, the Company entered into a credit agreement with Phoenix
Capital under which it may borrow up to $1,000,000. During 1998, the Company
borrowed approximately $480,722 under this agreement. The note bears interest at
a rate of 20.27% and is payable in monthly principal and interest payments of
$15,191. The line of credit is collateralized by substantially all of the
Company's computer equipment.

At October 31, 1998, required principal payments are as follows:

8. SUBSEQUENT EVENT

On November 5, 1998, the Company was acquired by Media Metrix, Inc. in
exchange for common stock of Media Metrix, Inc. The sale of the Company entitled
holders of the Series B-1, B-2, and C-1

F-29
<PAGE>
RELEVANTKNOWLEDGE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. SUBSEQUENT EVENT (CONTINUED)
Preferred Stock to receive cumulative dividends in the form of cash or common
stock. The majority of holders elected to receive their dividends in the form of
common stock. As a result, in November 1998, the Company paid cash of $10,509
and issued 374,424 shares of common stock to holders of Series B-1, B-2, and C-1
Preferred Stock as payment of dividends.

Upon the sale of the Company, holders of options to purchase common stock
were immediately 100% vested in any options outstanding. In November, the
Company issued 480,945 shares in connection with the exercise of stock options.

Also as a result of the sale of the Company, 857,122 warrants issued in
connection with the sale of the convertible secured promissory notes became
exercisable on November 5, 1998.

F-30
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders

AdRelevance, Inc.

We have audited the accompanying balance sheet of AdRelevance, Inc. (a
development stage company) (the Company) as of December 31, 1998, and the
related statements of operations, shareholders' equity (deficit), and cash flows
for the period from October 12, 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 AdRelevance, Inc. (a
development stage company) at December 31, 1998, and the results of its
operations and its cash flows for the period from October 12, 1998 (inception)
to December 31, 1998, in conformity with generally accepted accounting
principles.

As discussed in Note 1 to the financial statements, the Company's recurring net
losses and negative cash flows from operations raise substantial doubt about its
ability to continue as a going concern. Management's plans as to these matters
are also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Ernst & Young LLP

Seattle, Washington
October 5, 1999,

except for paragraphs 3 and 4 of
Note 8, as to which the date is

October 8, 1999

F-31
<PAGE>
ADRELEVANCE, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................................... $ 67,507 $ 217,215
Prepaid expenses and other........................................................ 2,650 35,247
---------- -------------
Total current assets................................................................ 70,157 252,462

Property and equipment.............................................................. 11,369 188,941
Deferred charges and other assets................................................... 21,030 17,639
---------- -------------
Total assets........................................................................ $ 102,556 $ 459,042
========== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses............................................. $ 65,378 $ 64,751
Current portion of capital lease obligations...................................... -- 32,480
Convertible note payable.......................................................... 100,000 --
---------- -------------
Total current liabilities........................................................... 165,378 97,231

Capital lease obligations, less current portion..................................... -- 66,587

Shareholders' equity (deficit):
Series A preferred stock, $.0001 par value:
Authorized shares--860,000
Issued and outstanding shares--798,607
Liquidation preference--$1,724,991.............................................. -- 1,120,466
Common stock, $.0001 par value:
Authorized shares--6,000,000
Issued and outstanding shares--1,780,000........................................ 2,320 664,381
Deferred stock-based compensation................................................. -- (449,546)
Accumulated deficit during development stage...................................... (65,142) (1,040,077)
---------- -------------
Total shareholders' equity (deficit)................................................ (62,822) 295,224
---------- -------------
Total liabilities and shareholders' equity (deficit)................................ $ 102,556 $ 459,042
========== =============
</TABLE>

See accompanying notes.

F-32
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
OCTOBER 12,
OCTOBER 12, 1998 SIX MONTHS 1998
(INCEPTION) TO ENDED (INCEPTION) TO
DECEMBER 31, 1998 JUNE 30, 1999 JUNE 30, 1999
----------------- ------------- ---------------
<S> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
Operating expenses:
Sales and marketing......................................... $ 3,823 $ 68,011 $ 71,834
General and administrative.................................. 46,379 332,030 378,409
Research and development.................................... 14,709 375,081 389,790
Stock-based compensation.................................... -- 199,001 199,001
----------- ----------- -------------
Total operating expenses...................................... 64,911 974,123 1,039,034
Interest expense, net......................................... 231 812 1,043
----------- ----------- -------------
Net loss...................................................... $ (65,142) $ (974,935) $ (1,040,077)
=========== =========== =============
</TABLE>

See accompanying notes.

F-33
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
SERIES A PREFERRED
STOCK COMMON STOCK DEFERRED
-------------------- -------------------- STOCK-BASED ACCUMULATED
SHARES AMOUNT SHARES AMOUNT COMPENSATION DEFICIT TOTAL
--------- --------- --------- --------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock in exchange for
cash ($320) and assets ($2,000)........ -- $ -- 1,780,000 $ 2,320 $ -- $ -- $ 2,320
Net loss............................... -- -- -- -- -- (65,142) (65,142)
--------- --------- --------- --------- --------- ---------- ---------
Balance at December 31, 1998............. -- -- 1,780,000 2,320 -- (65,142) (62,822)
Issuance of preferred stock, net of
issuance cost of $29,528
(unaudited).......................... 798,607 1,120,466 -- -- -- -- 1,120,466
Nonemployee stock-based compensation
(unaudited).......................... -- -- -- 77,816 -- -- 77,816
Fair value of warrants issued in
connection with borrowing
arrangements (unaudited)............. -- -- -- 13,514 -- -- 13,514
Deferred stock-based compensation
(unaudited).......................... -- -- -- 570,731 (570,731) -- --
Amortization of stock-based
compensation (unaudited)............. -- -- -- -- 121,185 -- 121,185
Net loss (unaudited)................... -- -- -- -- -- (974,935) (974,935)
--------- --------- --------- --------- --------- ---------- ---------
Balance at June 30, 1999 (unaudited)..... 798,607 $1,120,466 1,780,000 $ 664,381 $(449,546) $(1,040,077) $ 295,224
========= ========= ========= ========= ========= ========== =========
</TABLE>

See accompanying notes.

F-34
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
OCTOBER 12,
OCTOBER 12, 1998 SIX MONTHS 1998
(INCEPTION) TO ENDED (INCEPTION) TO
DECEMBER 31, 1998 JUNE 30, 1999 JUNE 30, 1999
----------------- ------------- ---------------
<S> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
OPERATING ACTIVITIES
Net loss...................................................... $ (65,142) $ (974,935) $ (1,040,077)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization............................... 61 15,840 15,901
Noncash stock-based compensation............................ 600 199,664 200,264
Changes in operating assets and liabilities:
Prepaid expenses.......................................... (2,650) (32,597) (35,247)
Accounts payable and accrued expenses..................... 65,378 (627) 64,751
Changes in deferred charges and other assets.............. (21,030) 16,242 (4,788)
----------- ----------- -------------
Net cash used in operating activities......................... (22,783) (776,413) (799,196)

INVESTING ACTIVITIES
Purchases of property and equipment........................... (10,030) (84,694) (94,724)

FINANCING ACTIVITIES
Proceeds from issuance of convertible note payable............ 100,000 -- 100,000
Proceeds from issuance of common stock........................ 320 -- 320
Net proceeds from issuance of Series A preferred stock........ -- 1,020,466 1,020,466
Principal payments on capital lease obligations............... -- (9,651) (9,651)
----------- ----------- -------------
Net cash provided by financing activities..................... 100,320 1,010,815 1,111,135
----------- ----------- -------------
Increase in cash and cash equivalents......................... 67,507 149,708 217,215
Cash and cash equivalents at beginning of period.............. -- 67,507 --
----------- ----------- -------------
Cash and cash equivalents at end of period.................... $ 67,507 $ 217,215 $ 217,215
=========== =========== =============

SUPPLEMENTAL CASH FLOW INFORMATION
Issuance of common stock in exchange for computer equipment
and services................................................ $ 2,000 $ -- $ 2,000
Conversion of note payable into shares of Series A preferred
stock....................................................... -- 100,000 100,000
Furniture and equipment acquired through capital lease
obligations................................................. -- 108,718 108,718
</TABLE>

See accompanying notes.

F-35
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND GOING CONCERN

AdRelevance, Inc. (a development stage company) (the "Company"),
incorporated in the State of Washington on October 12, 1998, is engaged in the
development of a proprietary, real-time, competitive advertising service for the
Word Wide Web. The Company is developing an intelligent agent technology that
gathers and classifies online advertising and allows clients to create
customized analytical reports regarding advertising found on the World Wide Web.

The Company has incurred operating losses since its inception and has
limited working capital. The Company has financed its operations to date through
the issuance of equity securities and bank borrowings. Further development and
establishment of the Company's business will require additional equity
financing. The Company believes that equity financing can be obtained from
existing or new investors. However, there can be no assurance that the Company
will be able to obtain such equity financing on acceptable terms, if at all.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

INTERIM FINANCIAL STATEMENTS

The accompanying balance sheet as of June 30, 1999 and the statements of
operations and cash flows for the six months ended June 30, 1999, and for the
period from October 12, 1998 (inception) to June 30, 1999 are unaudited. 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 results of operations and cash flows for the interim periods. Operating
results for the six months ended June 30, 1999 are not necessarily indicative of
the results that may be expected for the year ending December 31, 1999.

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 amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements.
Actual results could differ from those estimates.

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less at the date of purchase to be cash equivalents.

CONCENTRATION OF CREDIT RISK

The Company is subject to concentration of credit risk from its cash
investments. The Company's credit risk is managed through monitoring the
stability of the financial institutions utilized and diversification of its
financial resources.

F-36
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments consist of cash and cash equivalents and capital lease
obligations. The fair value of all financial instruments approximate the
carrying amount based on the current rate offered for similar instruments.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives of the related assets, which range from two to five years.
Leasehold improvements are amortized over the shorter of the lease term or
estimated useful life.

INCOME TAXES

The Company accounts for income taxes under the liability method. Under the
liability method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to be recovered. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amounts
expected to be realized.

STOCK-BASED COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEE (APB No. 25), and related
interpretations, in accounting for employee stock options rather than the
alternative fair value accounting allowed by Statement of Financial Accounting
Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION (SFAS No. 123). APB
No. 25 provides that the compensation expense relative to the Company's employee
stock options is measured based on the intrinsic value of the stock option. SFAS
No. 123 requires companies that continue to follow APB No. 25 to provide a pro
forma disclosure of the impact of applying the fair value method of SFAS
No. 123 (see Note 6). The Company accounts for stock issued to nonemployees in
accordance with the provisions of SFAS No. 123 and the Emerging Issues Task
Force consensus in Issue No. 96-18, ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE
ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN CONJUNCTION WITH SELLING,
GOODS OR SERVICES.

NEW ACCOUNTING PRONOUNCEMENTS

In March 1998, the Accounting Standards Executive Committee issued Statement
of Position (SOP) 98-1, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED
OR OBTAINED FOR INTERNAL USE. SOP 98-1 requires all costs related to the
development of internal use software, other than those incurred during the
application development stage, to be expenses as incurred. Costs incurred during
the application development stage are required to be capitalized and amortized
over the estimated useful life of the software. The Company does not expect that
the adoption of SOP 98-1 will have a material impact on its financial statements
because it has not currently developed software for internal use.

F-37
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, 1998:

<TABLE>
<S> <C>
Computers and equipment............................................ $ 10,789
Furniture and fixtures............................................. 641
---------
11,430
Accumulated depreciation........................................... (61)
---------
$ 11,369
=========
</TABLE>

3. LEASES

The Company leases office space under an operating lease which calls for
fixed rental payments through December 31, 1999. Total rent expense under this
operating lease for the periods ended December 31, 1998 and June 30, 1999 was
$1,574 and $16,790, respectively. Future minimum lease payments under this
agreement are $37,600 for 1999.

4. DEBT

In December 1998, the Company borrowed $100,000 under an unsecured 4.33%
convertible note payable. The note was converted into 69,444 shares of Series A
preferred stock in January 1999 in accordance with the note agreement.

In February 1999, the Company obtained a $100,000 equipment capital lease
line of credit and issued 3,695 Series A warrants at an exercise price of $1.44
per share. The warrants expire after the earlier of seven years after issuance
or three years after the completion of an initial public offering. The value of
the warrants of $5,150 is being amortized over the life of the lease. Under this
36-month agreement, the Company has signed capital leases for various furniture
and equipment.

In March 1999, the Company entered into a financing arrangement with a bank
which provided for a $100,000 line of credit for operating needs. Borrowings
under the line of credit bear interest at the bank's prime rate plus 0.25% and
are collateralized by substantially all nonleased assets of the Company,
including intellectual property. In connection with the establishment of the
line of credit, the Company issued 5,208 Series A warrants at an exercise price
of $1.44 per share. The warrants expire at the earlier of seven years or three
years after the completion of an initial public offering. The value of the
warrants of $8,364 is being amortized over the life of the agreement.

5. INCOME TAXES

At December 31, 1998, the Company had net operating loss carryforwards and
research and development credit carryforwards of $52,104 and $673, respectively.
These carryforwards expire in 2018. Deferred tax assets reflect the tax effects
of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes.
Since the Company's utilization of these deferred tax assets is dependent on
future profits which are

F-38
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

5. INCOME TAXES (CONTINUED)
not assured, a valuation allowance equal to the deferred tax assets has been
provided. Significant components of deferred tax assets as of December 31, 1998
are as follows:

<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforward.................................. $ 17,715
Research and development credit carryforward..................... 673
Other temporary differences...................................... 4,307
---------
Total gross deferred tax assets.................................... 22,695
Less valuation allowance........................................... (22,695)
---------
Net deferred tax asset............................................. $ --
=========
</TABLE>

6. SHAREHOLDERS' EQUITY

PREFERRED STOCK

During January and February 1999, the Company sold 798,607 shares of
Series A preferred stock (Series A) in exchange for gross proceeds of
$1,149,994. Each share of Series A is convertible into one share of common
stock. Automatic conversion shall occur upon consummation of an initial public
offering at a price of not less than $5.76 per share and for a total offering of
not less than $15 million net proceeds, or the date specified by written consent
or agreement of the holders of a majority of the outstanding shares of Series A
stock.

The holders of Series A will be entitled to receive noncumulative dividends
at the rate of $0.115 per share per annum, if and when declared by the Board of
Directors. The holders of Series A stock shall be entitled to participate pro
rata in any dividends paid on the common stock on an as-if-converted basis. In
the event of any liquidation, dissolution, or winding up of the Company, the
holders of Series A shall be entitled to receive, in preference to holders of
common stock, an amount equal to $2.16 per share plus declared but unpaid
dividends if any. Thereafter, all remaining assets shall be distributed among
the holders of Series A and common stock on a pro rata basis (assuming
conversion of all Series A into common stock) until the holders of the Series A
have received an aggregate of $5.76 per share. The holder of each share of
Series A stock shall have the right to the number of votes equal to that number
of shares of common stock issuable upon conversion.

The Company is prohibited from taking certain corporate actions without the
approval of the holders of the majority of outstanding Series A shares. In
conjunction with the sale of Series A, the Company, its founders, and the
Series A investors also entered into an Investors Rights Agreement, Right of
First Refusal and Co-sale Agreement, and a Voting Agreement.

COMMON STOCK

In conjunction with the sale of Series A preferred stock, the Company's
founders and other shareholders granted the Company a right to repurchase
1,720,000 shares of common stock held by them at the original purchase price of
$0.001 per share if their employment or consulting arrangement

F-39
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

6. SHAREHOLDERS' EQUITY (CONTINUED)
terminates under certain circumstances. The Company's right of repurchase lapses
at a variety of rates beginning in October 1998. At December 31, 1998, 1,079,309
(883,643 at June 30, 1999) shares held by these shareholders were subject to
repurchase under these agreements. The restricted stock agreements provide for
adjusted repurchase lapsing schedules in the event of a change of control.

STOCK OPTION PLANS

Under the terms of the 1998 and 1999 Stock Option Plans, the Board of
Directors may grant incentive and nonqualified stock options to employees,
officers, directors, and consultants of the Company. An aggregate of 993,333
shares of common stock were reserved for future issuance. The Company generally
grants stock options with exercise prices equal to the fair market value of
common stock on the date of grant as determined by the Board of Directors.
Options generally vest over a three- or four-year period or by specific terms of
the option agreement.

A summary of stock option activity follows:

<TABLE>
<CAPTION>
OUTSTANDING OPTIONS
----------------------------
<S> <C> <C> <C>
SHARES WEIGHTED-
AVAILABLE NUMBER OF AVERAGE
FOR GRANT SHARES EXERCISE PRICE
---------- --------- ---------
1998 Stock Option Plan introduction...................................... 400,000 -- $ --
Options granted.......................................................... (180,000) 180,000 $ 0.10
---------- ---------
Outstanding at December 31, 1998........................................... 220,000 180,000 $ 0.10
Reduction of shares available under the 1998 Stock Option Plan........... (100,000) -- $ --
1999 Stock Option Plan introduction...................................... 693,333 -- $ --
Options granted.......................................................... (296,000) 296,000 $ 0.13
---------- ---------
Outstanding at June 30, 1999............................................... 517,333 476,000 $ 0.12
========== =========
</TABLE>

The following table summarizes information regarding stock options
outstandingand exercisable as of December 31, 1998:

<TABLE>
<CAPTION>
OUTSTANDING OPTIONS
----------------------
<S> <C> <C> <C>
WEIGHTED-
AVERAGE EXERCISABLE
NUMBER REMAINING NUMBER
EXERCISE OF CONTRACTUAL OF
PRICE SHARES LIFE SHARES
--------- --------- ----------- ---------
$ 0.10 180,000 2.94 years 0
</TABLE>

Under APB No. 25, no compensation expense is recognized when the exercise
price of the Company's employee stock options equals the fair value of the
underlying stock on the date of grant. Deferred stock-based compensation is
recorded for those situations where the exercise price of a stock option was
lower than the deemed fair value for financial reporting purposes of the
underlying common stock. The Company recorded aggregate deferred stock-based
compensation of $570,731 in the six months ended June 30, 1999. The deferred
stock-based compensation is being amortized over the

F-40
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

6. SHAREHOLDERS' EQUITY (CONTINUED)
vesting period of the underlying options. Total amortization of stock-based
compensation recognized was $121,185 in the six months ended June 30, 1999.

Had the stock-based compensation for the Company's Stock Option Plans been
determined based on the minimum value model using the multiple-option approach,
the Company's net loss would have been increased by $37 for the period ended
December 31, 1998. The fair value at each option grant is estimated on the date
of grant using the minimum option pricing model, assuming no expected dividends,
average risk-free interest rate of 5.0%, and average expected life of three
years. Compensation expense recognized in providing pro forma disclosures may
not be representative of the effects on pro forma earnings for future years
because the amounts above include only the amortization of the fair value of
1998 grants.

In 1999, the Company issued options to consultants to acquire 79,500 shares
of common stock at an exercise price of $0.15 per share. The value of the
options will be recognized over the related service period with final valuation
at the completion of the service period. Through June 30, 1999, the Company had
recognized stock-based compensation expense of $77,816 related to these stock
options.

COMMON STOCK RESERVED FOR FUTURE ISSUANCE

The following shares of common stock were reserved at December 31, 1998:

<TABLE>
<S> <C>
1998 Stock Option Plan........................................... 400,000
Series A preferred stock......................................... 860,000
---------
1,260,000
=========
</TABLE>

7. YEAR 2000 DISCLOSURE (UNAUDITED)

The Company recognizes the need to ensure that its operations will not be
adversely impacted by Year 2000 software failures. The Year 2000 (Y2K) problem
is the result of computer programs being written using two digits (rather than
four) to define the applicable year. Programs that have time-sensitive software
may recognize a date using "00" as 1900 rather than 2000, which could result in
miscalculations or system failures. The Company is currently working to address
the potential impact of the Y2K problem. The Company's processes for evaluating
and managing the risks and costs associated with this potential problem are
being managed by internal staff members.

The Company has, to date, determined that significant modification is not
required for its financial reporting and other information technology to be
ready for the year 2000. The Company has not yet determined the impact that a
Y2K failure suffered by vendors, customers, suppliers, or other third-party
service providers would have on the Company, but believes that such a failure
could have a material adverse impact. The Company will continue to evaluate the
status of its Y2K compliance to determine whether a contingency plan for dealing
with such failures is necessary, but no such plan has yet been adopted by the
Company. The Company has not yet determined what the nature and timing of any
such contingency plan would be. As of December 31, 1998, the Company has not
incurred any

F-41
<PAGE>
ADRELEVANCE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JUNE 30, 1999, FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND
FOR
THE PERIOD FROM OCTOBER 12, 1998 (INCEPTION) TO JUNE 30, 1999 IS UNAUDITED)

7. YEAR 2000 DISCLOSURE (UNAUDITED) (CONTINUED)
incremental expenses in relation to the Y2K issue because the technology
platforms designed since inception were implemented to support Y2K compliance.

Based on the information the Company has developed to date, the Company
estimates that costs of addressing potential problems will not have a material
adverse impact on its operations.

8. SUBSEQUENT EVENTS

OFFICE LEASE

In July 1999, the Company entered into an agreement to sublease new office
space for the period September 1, 1999 through February 28, 2001. The agreement
requires total payments of approximately $300,000.

PROMISSORY NOTE

In August 1999, the Company signed a $2 million promissory note with a
maturity date of January 26, 2001. The note carries an interest rate of 7% and
is collateralized by substantially all nonleased assets of the Company,
including intellectual property. Principal and interest on the promissory note
is due and payable commencing on the earlier of the twelve-month anniversary of
the issuance date, payable in six equal monthly installments, or upon change of
ownership of the Company.

STOCK TRANSFER

On October 8, 1999, the Company issued to a consultant 100,000 shares of
common stock as additional compensation for past consulting services. A founder
of the Company contributed 100,000 shares of stock to the Company to facilitate
this stock issuance. The estimated fair value of these shares is $19.34 per
share and in accordance with SEC Staff Accounting Bulletin No. 79, stock-based
compensation expense will be recognized in October 1999 for the value of these
services.

ACQUISITION OF THE COMPANY

On October 8, 1999, the Company entered into an agreement whereby all of the
outstanding stock of the Company was acquired by Media Metrix, Inc. for a
purchase price of approximately $59.4 million and an additional amount which is
contingent upon the Company achieving certain milestones.

F-42
<PAGE>
MEDIA METRIX, INC.

UNAUDITED PRO FORMA BALANCE SHEET

JUNE 30, 1999

<TABLE>
<CAPTION>
HISTORICAL
-------------------------- PRO FORMA
MEDIA METRIX ADRELEVANCE ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
(NOTE 2)
ASSETS
Current assets:
Cash and cash equivalents............................ $ 36,382,986 $ 217,215 $ -- $ 36,600,201
Marketable securities................................ 10,453,998 -- -- 10,453,998
Receivables:
Trade, less allowance for doubtful accounts........ 2,797,790 -- -- 2,797,790
Expenditures billable to clients................... 169,695 -- -- 169,695
------------- --------- ------------- -------------
Total receivables.................................... 2,967,485 -- -- 2,967,485
Prepaid expenses..................................... 402,531 35,247 -- 437,778
------------- --------- ------------- -------------
Total current assets................................... 50,207,000 252,462 -- 50,459,462
Property and equipment, net............................ 875,149 188,941 131,000 1,195,090
Intangibles acquired, net (Note 2)..................... 4,439,661 -- 52,173,776 56,613,437
Other assets........................................... 219,889 17,639 -- 237,528
------------- --------- ------------- -------------
Total assets........................................... $ 55,741,699 $ 459,042 $ 52,304,776 $ 108,505,517
============= ========= ============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable & accrued liabilities............... $ 3,426,953 $ 64,751 $ -- $ 3,491,704
Due to The NPD Group, Inc............................ 557,360 -- -- 557,360
Advance billings to clients.......................... 2,961,132 -- -- 2,961,132
Current portion of capital lease obligations......... -- 32,480 -- 32,480
Current portion of long-term debt.................... 139,471 -- -- 139,471
------------- --------- ------------- -------------
Total current liabilities.............................. 7,084,916 97,231 -- 7,182,147

Long-term debt......................................... 151,463 -- -- 151,463
Capital lease obligations, less current portion........ -- 66,587 -- 66,587

Stockholders' equity:
Preferred stock...................................... -- 1,120,466 (1,120,466) --
Common stock......................................... 173,024 664,381 (657,404) 180,001
Additional paid-in-capital........................... 70,757,192 -- 59,393,023 130,150,215
Accumulated other comprehensive loss................. (27,382) -- -- (27,382)
Accumulated deficit (Note 2)......................... (21,153,681) (1,040,077) (5,759,923) (27,953,681)
Deferred compensation................................ (1,243,833) (449,546) 449,546 (1,243,833)
------------- --------- ------------- -------------
Total stockholders' equity............................. 48,505,320 295,224 52,304,776 101,105,320
------------- --------- ------------- -------------
Total liabilities and stockholders' equity............. $ 55,741,699 $ 459,042 $ 52,304,776 $ 108,505,517
============= ========= ============= =============
</TABLE>

See accompanying notes to unaudited pro forma balance sheet.

F-43
<PAGE>
MEDIA METRIX, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------
<S> <C> <C> <C> <C> <C>
MEDIA RELEVANT PRO FORMA
METRIX KNOWLEDGE ADRELEVANCE ADJUSTMENTS PRO FORMA

<CAPTION>
(NOTE 2)
<S> <C> <C> <C> <C> <C>
Revenues............................. $ 6,330,485 $ 1,814,230 $ -- $ -- $ 8,144,715
Costs of revenues.................... 4,120,569 2,879,037 -- -- 6,999,606
------------- ------------- --------- -------------- --------------
Gross profit......................... 2,209,916 (1,064,807) -- -- 1,145,109
Operating expenses:
Research and development........... 1,382,375 780,277 14,709 -- 2,177,361
Sales and marketing................ 2,888,195 1,623,500 3,823 -- 4,515,518
General and administrative......... 2,715,705 2,002,490 46,379 -- 4,764,574
Amortization of deferred
compensation and other
stock-based compensation......... 368,550 970,740 -- -- 1,339,290
Amortization of intangibles........ 479,000 -- -- 6,015,922 6,494,922
Acquired in-process research and
development...................... 1,600,000 -- -- 6,800,000 8,400,000
------------- ------------- --------- -------------- --------------
Total operating expenses............. 9,433,825 5,377,007 64,911 12,815,922 27,691,665
------------- ------------- --------- -------------- --------------
Loss from operations................. (7,223,909) (6,441,814) (64,911) (12,815,922) (26,546,556)
Interest income, net of interest
expense............................ 65,211 95,909 (231) -- 160,889
------------- ------------- --------- -------------- --------------
Net loss............................. (7,158,698) (6,345,905) (65,142) (12,815,922) (26,385,667)
Preferred stock dividends............ (313,738) -- -- -- (313,738)
------------- ------------- --------- -------------- --------------
Net loss applicable to common
stockholders....................... $ (7,472,436) $ (6,345,905) $ (65,142) $ (12,815,922) $ (26,699,405)
============= ============= ========= ============== ==============
Basic and diluted net loss per share
applicable to common stockholders
(Note 3)........................... $ (0.98) $ (2.43)
============= ==============
Shares used in the calculation of
basic and diluted net loss per
share applicable to common
stockholders (Note 3).............. 7,618,511 11,006,256
============= ==============
</TABLE>

See accompanying notes to unaudited pro forma statement of operations.

F-44
<PAGE>
MEDIA METRIX, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
HISTORICAL
--------------------------
<S> <C> <C> <C> <C>
PRO FORMA
MEDIA ADJUSTMENTS
METRIX ADRELEVANCE (NOTE 2) PRO FORMA
Revenues............................................ $ 7,435,122 $ -- $ -- $ 7,435,122
Costs of revenues................................... 3,838,152 -- -- 3,838,152
------------- --------- -------------- --------------
Gross profit........................................ 3,596,970 -- -- 3,596,970
Operating expenses:
Research and development.......................... 1,672,939 375,081 -- 2,048,020
Sales and marketing............................... 3,147,133 68,011 -- 3,215,144
General and administrative........................ 2,337,014 332,030 -- 2,669,044
Amortization of deferred compensation and other
stock-based compensation........................ 304,917 199,001 -- 503,918
Amortization of intangibles....................... 1,497,105 -- 8,696,000 10,193,105
Acquired in-process research and development...... -- -- 6,800,000 6,800,000
------------- --------- -------------- --------------
Total operating expenses............................ 8,959,108 974,123 15,496,000 25,429,231
------------- --------- -------------- --------------
Loss from operations................................ (5,362,138) (974,123) (15,496,000) (21,832,261)
Interest income, net of interest expense............ 410,894 (812) -- 410,082
------------- --------- -------------- --------------
Net loss............................................ (4,951,244) (974,935) (15,496,000) (21,422,179)
Preferred stock dividends........................... (109,195) -- -- (109,195)
------------- --------- -------------- --------------
Net loss applicable to common stockholders.......... $ (5,060,439) $(974,935) $ (15,496,000) $ (21,531,374)
============= ========= ============== ==============
Basic and diluted net loss per share applicable
to common stockholders (Note 3)................... $ (0.35) $ (1.41)
============= ==============
Shares used in the calculation of basic and diluted
net loss per share applicable to common
stockholders (Note 3)............................. 14,583,630 15,281,308
============= ==============
</TABLE>

See accompanying notes to unaudited pro forma statement of operations.

F-45
<PAGE>
MEDIA METRIX, INC.

NOTES TO UNAUDITED PRO FORMA BALANCE SHEET AND STATEMENTS OF OPERATIONS

JUNE 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
AND SIX MONTHS ENDED JUNE 30, 1999

1. BASIS OF PRESENTATION

The unaudited pro forma balance sheet gives effect to Media Metrix, Inc.'s
("Media Metrix") October 8, 1999 acquisition of AdRelevance, Inc.
("AdRelevance") as if it occurred on June 30, 1999.

The unaudited pro forma statements of operations give effect to Media
Metrix's October 5, 1998 acquisition of RelevantKnowledge, Inc. ("RKI") on
January 1, 1998 and the acquisition of AdRelevance as if occurred on
October 12, 1998 (AdRelevance's inception) and on January 1, 1999. The unaudited
pro forma statement of operations for the year ended December 31, 1998 sets
forth the historical results of operations of Media Metrix for the year ended
December 31, 1998, of RKI for the ten months ended October 31, 1998 and of
AdRelevance for the period from October 12, 1998 (inception) to December 31,
1998. The unaudited pro forma statement of operations for the six months ended
June 30, 1999 sets forth the historical results of operations of Media Metrix
and AdRelevance for the six months ended June 30, 1999. The operations of RKI
for the two months ended December 31, 1998 and the six months ended June 30,
1999 are included in the operations of Media Metrix.

The unaudited pro forma balance sheet and statements of operations have been
prepared by management and should be read in conjunction with the historical
financial statements of Media Metrix, RKI and AdRelevance. These financial
statements do not purport to be indicative of the financial condition and
results of operations that might have occurred if the AdRelevance acquisition
was consummated on June 30, 1999 or on January 1, 1999 or if the AdRelevance and
RKI acquisitions were completed on October 12, 1998 and January 1, 1998,
respectively. Additionally, the unaudited pro forma financial statements do not
purport to be indicative of future results.

Management believes additional synergies and operational improvements, not
reflected in the accompanying unaudited pro forma statements of operations, will
be realized by the combined companies. Such amounts cannot be reasonably
quantified and, therefore, are not reflected in the unaudited pro forma
statements of operations.

2. PRO FORMA ADJUSTMENTS

The pro forma adjustments reflect the additional amortization required for a
full period's amortization of the intangibles acquired and the recording of
acquired in-process research and development expenses.

Total intangibles in connection with the RKI acquisition were approximately
$6,216,000 of which $1,200,000 was allocated to panel costs with a life of
12 months and the balance was allocated to goodwill and various other
intangibles with lives of 3 years. The annual amortization consists of the
following:

<TABLE>
<S> <C>
Panel costs..................................................... $1,200,000
Goodwill and other intangibles.................................. 1,672,000
---------
Total amortization.............................................. $2,872,000
=========
</TABLE>

In connection with the acquisition of AdRelevance, the stockholders of
AdRelevance will exchange all outstanding preferred and common shares of
AdRelevance for 697,678 newly issued shares of Media Metrix and an additional
77,520 shares may be issued upon AdRelevance achieving certain post-closing

F-46
<PAGE>
MEDIA METRIX, INC.

NOTES TO UNAUDITED PRO FORMA BALANCE SHEET AND STATEMENTS OF OPERATIONS
(CONTINUED)

JUNE 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
AND SIX MONTHS ENDED JUNE 30, 1999

goals. Additionally, holders of options and warrants to purchase shares of
AdRelevance common stock exchanged such options and warrants for options and
warrants to purchase 223,566 shares of Media Metrix common stock and an
additional 24,841 options and warrants may be issued upon AdRelevance achieving
certain post-closing goals. The fair value of the shares of Media Metrix common
stock, options and warrants issued to the previous stockholders and option and
warrant holders of AdRelevance is approximately $59,400,000. The purchase price
was allocated based on preliminary estimates as follows: (i) net operating
assets acquired--$426,000, (ii) acquired in-process research and
development--$6,800,000, and (iii) intangibles--$52,174,000. Total intangibles
acquired have an estimated life of 3 years. Accordingly, the estimated annual
amortization charge will be approximately $17,391,000.

If Media Metrix issues the additional shares of common stock, options and
warrants upon AdRelevance achieving certain post-closing goals, additional
goodwill of approximately $6,600,000 (based on the October 8, 1999 value of
Media Metrix's common stock) would be recorded which would result in additional
amortization of intangibles.

3. NET LOSS PER SHARE APPLICABLE TO COMMON STOCKHOLDERS

Pro forma net loss per share applicable to common stockholders adjusts the
weighted average shares outstanding for Media Metrix's historical financial
statements for (i) the shares issued to RKI stockholders as if such shares were
outstanding for the entire year ended December 31, 1998 and (ii) the shares
issued to AdRelevance stockholders as if such shares were outstanding from
October 12, 1998 (date of AdRelevance inception) for purposes of the year ended
December 31, 1998 and if such shares were outstanding for the entire six months
ended June 30, 1999.

F-47
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

OCTOBER 26, 1999

[LOGO]

3,000,000 SHARES OF COMMON STOCK

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

P R O S P E C T U S
-------------------

DONALDSON, LUFKIN & JENRETTE

ROBERTSON STEPHENS

THOMAS WEISEL PARTNERS LLC

FIRST UNION SECURITIES, INC.

SUNTRUST EQUITABLE SECURITIES

DLJDIRECT INC.

E*OFFERING
- ------------------------------------------------------------

We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in the prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of Media Metrix
have not changed since the date hereof.
- --------------------------------------------------------------------------------