ZD INC, S-1/A, 1998-04-24

ZD INC
S-1/A, 1998-04-24
PERIODICALS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1998
REGISTRATION NO. 333-46493

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 3
TO
FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
ZD INC.*

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
DELAWARE 2721 13-3987754
<S> <C> <C>
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

ONE PARK AVENUE
NEW YORK, NEW YORK 10016
(212) 503-3500

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
TIMOTHY C. O'BRIEN
ZIFF-DAVIS INC.
ONE PARK AVENUE
NEW YORK, NEW YORK 10016
(212) 503-3500

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:
<TABLE>
<CAPTION>
STEPHEN A. GRANT, ESQ. JEFFREY SMALL, ESQ.
<S> <C>
SULLIVAN & CROMWELL DAVIS POLK & WARDWELL
125 BROAD STREET 450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10017
</TABLE>

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

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(o) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If the delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. [_]
---------------

CALCULATION OF REGISTRATION FEE

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<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AMOUNT PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS TO BE OFFERING PRICE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $.01 par value.... 29,770,000 $17 $506,090,000 $149,297(3)
</TABLE>

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

(1) Includes shares (including shares subject to the U.S. Underwriters'
overallotment option) that (i) are to be offered and sold in the United
States, and (ii) are to be offered outside the United States but that
may be resold from time to time in the United States during the
distribution. Also includes 100,000 shares to be sold to, and resold by,
an affiliate of the Company after the Offering.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) promulgated under the Securities Act of 1933. A
portion of the proposed maximum aggregate offering price represents
shares that are to be offered outside of the United States but that may
be resold from time to time in the United States.

(3) A fee of $135,700 was previously paid in connection with the filing of
this Registration Statement on February 18, 1998. The remaining fee of
$13,597 is paid herewith.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------
* Upon closing of the Offering, ZD Inc. will be renamed Ziff-Davis Inc. and
Ziff-Davis Inc. will be renamed ZD Inc.

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

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

PROSPECTUS (Subject to Completion)

Issued April 24, 1998 25,800,000 Shares

Ziff-Davis Inc.

COMMON STOCK
----------
ALL OF THE 25,800,000 SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING SOLD BY
THE COMPANY. OF THE 25,800,000 SHARES OF COMMON STOCK BEING OFFERED HEREBY,
20,640,000 SHARES ARE BEING OFFERED INITIALLY IN THE UNITED STATES AND
CANADA BY THE U.S. UNDERWRITERS AND 5,160,000 SHARES ARE BEING OFFERED
INITIALLY OUTSIDE THE UNITED STATES AND CANADA BY THE INTERNATIONAL
UNDERWRITERS. SEE "UNDERWRITERS." PRIOR TO THE OFFERING, THERE HAS
BEEN NO PUBLIC MARKET FOR COMMON STOCK OF THE COMPANY. IT IS
CURRENTLY ANTICIPATED THAT THE INITIAL PUBLIC OFFERING PRICE WILL
BE BETWEEN $14.00 AND $17.00 PER SHARE. SEE "UNDERWRITERS" FOR A
DISCUSSION OF THE FACTORS TO BE CONSIDERED IN DETERMINING THE
INITIAL PUBLIC OFFERING PRICE.
----------
CONCURRENTLY WITH THE OFFERING BEING MADE HEREBY, THE COMPANY IS OFFERING, BY
MEANS OF A SEPARATE PROSPECTUS, $250 MILLION AGGREGATE PRINCIPAL AMOUNT OF
ITS % SENIOR SUBORDINATED NOTES DUE 2008 (THE "NOTES OFFERING" AND,
TOGETHER WITH THE OFFERING, THE "OFFERINGS"). THE CONSUMMATION OF
EACH OF THE OFFERINGS IS CONDITIONED UPON, AND WILL OCCUR
SIMULTANEOUSLY WITH, THE CONSUMMATION OF THE OTHER. SEE "USE OF
PROCEEDS."
----------
UPON COMPLETION OF THE OFFERINGS, AFFILIATES OF THE COMPANY WILL RETAIN
APPROXIMATELY 74.2% OF THE OUTSTANDING VOTING POWER OF THE COMPANY. SEE
"PRINCIPAL STOCKHOLDERS."
----------

ALL THE NET PROCEEDS WILL BE PAID TO AFFILIATES OF THE COMPANY. SEE "USE OF
PROCEEDS."
----------

THE COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK

EXCHANGE UNDER THE SYMBOL "ZD," SUBJECT TO OFFICIAL NOTICE OF ISSUANCE.
----------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------

PRICE $ A SHARE

----------

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
-------- -------------- -----------
<S> <C> <C> <C>
Per Share................................... $ $ $
Total(3).................................... $ $ $
</TABLE>
- -----
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriters."

(2) Before deducting expenses payable by the Company, estimated at
$ .
(3) The Company has granted to the U.S. Underwriters an option, exercisable
within 30 days of the date hereof, to purchase up to an aggregate of
3,870,000 additional Shares of Common Stock at the Price to Public less
Underwriting Discounts and Commissions, for the purpose of covering
over-allotments, if any. If the U.S. Underwriters exercise such option
in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriters."
----------
The Shares of Common Stock are offered, subject to prior sale, when, as and
if accepted by the Underwriters named herein and subject to approval of certain
legal matters by Davis Polk & Wardwell, counsel for the Underwriters. It is
expected that delivery of the Shares will be made on or about , 1998 at
the office of Morgan Stanley & Co. Incorporated, New York, NY against payment
therefor in immediately available funds.
----------
MORGAN STANLEY DEAN WITTER
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
DONALDSON, LUFKIN & JENRETTE
Securities Corporation

, 1998
<PAGE>

[ART]

Artwork includes: (i) general comments relating to the Company and the
industry; (ii) descriptions of each of the Company's platforms; and (iii)
logos of the Company and each of the Company's 50 brands.

Text included within the artwork is as follows:

COVER PAGE:

The impact of computing and the Internet is a phenomenon that will define
this era.

The number of personal computers in use worldwide is now over 300 million
and use of the Internet has reached over 68 million U.S. adults.

Ziff-Davis is dedicated to bringing together the makers and users of
technology in a productive exchange.

We believe in technology.

SPREAD:

For companies targeting the technology marketplace, Ziff-Davis provides
integrated marketing programs across all of its platforms.

ZD PUBLISHING

Ziff-Davis' U.S. and international publications, including joint ventures
and over 50 licensed publications, total more than 80 publications worldwide.
PC Magazine, PC Week and Computer Shopper magazines are the top three computer
magazines in the U.S., as measured by total revenue.

ZD COMDEX & FORUMS

Ziff-Davis produces over 50 trade shows and conferences around the world.
COMDEX/Fall is the largest trade show in the U.S. as measured by total
revenue, total exhibit space and number of attendees.

ZD INTERNET

ZDNet.com, Ziff-Davis' computing Web site, was ranked as the leading Web
site in 1997 in the category of news, information and entertainment, as
measured by visitors per month. ZDNet has over one million registered users
and over 2.5 million e-mail recipients per month.

ZD EDUCATION

Ziff-Davis publishes computer training products and over 50 newsletters and
provides training through ZDUniversity, its Web based educational program.

ZD MARKET RESEARCH

Ziff-Davis develops, analyzes and compiles information on computer
technology issues and assists clients in identifying and targeting their
customers by tracking current activity and market share in the business, home
and reseller channels.

ZD TELEVISION

ZDTV, a 24 hour cable television channel and integrated Web site to be
launched by an affiliate, will target viewers interested in computers,
technology and the Internet.

BACK PAGE:

Ziff-Davis reaches makers and users of technology in over 100 countries.

believe in technology
<PAGE>

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE COMMON STOCK OFFERED HEREBY, NOR DOES
IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY
CIRCUMSTANCE IMPLY THAT THE INFORMATION IS CORRECT AS OF ANY DATE SUBSEQUENT
TO THE DATE HEREOF.

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

UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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

FOR INVESTORS OUTSIDE THE UNITED STATES: NO ACTION HAS BEEN OR WILL BE TAKEN
IN ANY JURISDICTION BY THE COMPANY OR BY AN UNDERWRITER THAT WOULD PERMIT A
PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS
PROSPECTUS IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED,
OTHER THAN IN THE UNITED STATES. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS
COMES ARE REQUIRED BY THE COMPANY AND THE UNDERWRITERS TO INFORM THEMSELVES
ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THE OFFERING OF THE COMMON STOCK
AND THE DISTRIBUTION OF THIS PROSPECTUS.

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

The Company's logo and certain of the titles and logos of the Company's
publications, products and services referenced herein are trademarks of the
Company. Each trade name, trademark or service mark of any other company
appearing in this Prospectus is the property of its holder.

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

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 5
Risk Factors.............................................................. 12
The Company............................................................... 18
The Reorganization........................................................ 20
Use of Proceeds........................................................... 21
Capitalization............................................................ 22
Dividend Policy........................................................... 22
Dilution.................................................................. 23
Selected Historical Combined Financial and Other Data..................... 24
Unaudited Pro Forma Combined Financial Information........................ 25
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 30
Industry.................................................................. 39
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Business.................................................................. 41
Management................................................................ 57
Certain Transactions...................................................... 65
Principal Stockholders.................................................... 68
Description of Capital Stock.............................................. 69
Shares Eligible for Future Sale........................................... 73
Description of Certain Indebtedness....................................... 75
Certain United States Tax Consequences to Non-U.S. Holders of Common
Stock.................................................................... 77
Underwriters.............................................................. 79
Legal Matters............................................................. 82
Experts................................................................... 83
Additional Information.................................................... 83
Index to Financial Statements............................................. F-1
</TABLE>

3
<PAGE>

This Prospectus includes statistical data regarding the publishing, trade
show and Internet sectors which was obtained from industry publications,
including reports generated by ActivMedia, Advertising Age, AdScope, Audit
Bureau of Circulations, BPA International, Computer Intelligence, CMR,
Cowles/Simba Information, Electronic Advertising and Marketplace Report,
FIND/SVP, Inc., IMS, International Communications Research, Jupiter Ad Spend,
MediaMetrix, Trade Show Week and U.S. Industry and Trade Outlook 1998. These
industry publications generally indicate that the information contained
therein has been obtained from sources believed to be reliable, but that the
accuracy and completeness of such information is not guaranteed. The Company
has not independently verified such data. The Company has not sought the
consent of any of these organizations to refer to their reports herein.

4
<PAGE>

PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified in
its entirety by reference to, the more detailed information and financial
statements, including the notes thereto, appearing elsewhere in this
Prospectus. Unless otherwise indicated, the information in this Prospectus (i)
assumes no exercise of the over-allotment option and (ii) gives effect to the
transactions described herein under the heading "The Reorganization." Unless
the context otherwise requires, references in this Prospectus to "Ziff-Davis"
or the "Company" are to the Company and its consolidated subsidiaries after
giving effect to the transactions described herein under the heading "The
Reorganization" and their respective predecessors. Unless the context otherwise
requires, references in this Prospectus to "Softbank" refer to SOFTBANK Corp.,
a Japanese corporation, and its affiliates. See "The Company--Relationship with
Softbank" and "The Reorganization."

Upon closing of the Offering, the Company will assume the name Ziff-Davis
Inc. and the operating subsidiary with the same name will be renamed ZD Inc.
Unless the context otherwise requires, references in this Prospectus to "ZDI"
refer to the operating corporation and its subsidiaries, including (i) Ziff-
Davis Publishing Company prior to its acquisition by Softbank in February 1996
and (ii) operations owned by MAC Inc. but managed by ZDI and to be acquired by
the Company in the Reorganization. Such operations owned by MAC Inc. consist of
certain international consumer and Internet publications, international trade
shows and the ZDNet business (the "MAC Assets"). See "The Reorganization" and
"Business."

THE COMPANY

The Company's PC Magazine, PC Week and Computer Shopper magazines are the top
three computer magazines in the U.S. and are among the top 25 U.S. magazines,
each as measured by total revenue in 1996 (the latest year for which data is
available). The Company also produces the world's most important trade shows
serving vendors, resellers, buyers and users of computer technology, including
COMDEX/Fall, the largest trade show in the U.S. The Company's ZDNet.com Web
site ("ZDNet") is the leading computing content site and ranked the number one
Web site in 1997 in the category of news, information and entertainment, as
measured by visitors per month.

In 1997, the Company produced over 50 trade shows and conferences worldwide
with over two million estimated attendees. The Company's COMDEX/Fall event is
the number one ranked trade show for all industries in the U.S. as measured by
total revenue, total exhibit space and number of attendees.

The Company's other media and marketing platforms include online content,
market research, education and the publication of computer-related newsletters
and training manuals and materials. In addition, the Company has an option to
acquire an interest in ZDTV: Your Computer Channel ("ZDTV"), the first 24-hour
cable television channel and integrated Web site focused exclusively on
computers, technology and the Internet, which is expected to be launched in the
first half of 1998.

5
<PAGE>

The Company had total revenue of $1.154 billion for 1997. The Company's
revenue is primarily derived from advertising sales, which represented 51.9% of
total revenue in 1997. The second largest component of the Company's revenue is
derived from trade shows and conferences, which accounted for 23.5% of total
revenue in 1997. Circulation revenue, comprised of subscription and newsstand
single copy sales, generated 13.1% of the Company's revenue in 1997 and other
revenue components, including online content, market research and revenue
derived from joint ventures and licenses, contributed 11.5% in 1997. The
Company had a net loss of $71.2 million for 1997 and expects the net loss for
the first quarter of 1998 to increase by 15-20% as compared with the first
quarter of 1997. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

BUSINESS AND OPERATING STRATEGY

The Company's objective is to be the preferred marketing partner to
technology vendors and service providers seeking to reach primary decision-
makers involved in the specification and purchase of their products and
services. Major elements of the Company's strategy include:

.Maintain Focus on the Computer and Internet Technology Markets

.Develop the Most Comprehensive, Objective and Authoritative Content

.Build Upon Brand Strength of Existing Media Properties

.Continue to Leverage Multiple Media Marketing Platforms

.Expand Leadership on the Internet

.Launch New Products and Services

.Expand Global Reach

Although none of the proceeds of the Offerings will be paid to the Company,
the Company expects to fund its business and operating strategy from internally
generated cash flow from operations, which are estimated to be sufficient to
fund investments and the repayment of indebtedness. As a result of certain
large non-cash charges, the Company's earnings for the year ended December 31,
1997 were insufficient to cover fixed charges by $74.5 million and, on a pro
forma basis, by $6.8 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

6
<PAGE>

RELATIONSHIP WITH SOFTBANK

Upon the completion of the Reorganization described below, SOFTBANK Corp., a
Japanese corporation publicly-traded on the Tokyo Stock Exchange First Section
(together with its affiliates, "Softbank"), will own approximately 74.2% of the
outstanding shares of Common Stock (71.4% if the U.S. Underwriters' over-
allotment is exercised in full). The Company and Softbank have entered into
certain agreements governing various interim and ongoing relationships between
Softbank and the Company. Softbank also has given the Company an undertaking
not to expand certain operations outside Japan in competition with the Company
without the prior approval of the Company's management directors after
consulting with the Company's independent directors. This undertaking would not
preclude investments by investment funds managed by Softbank. The Company has
undertaken not to compete with Softbank in Japan without the prior approval of
SOFTBANK Corp.'s Board of Directors and has agreed to afford Softbank the
continuing right to license all of the Company's products and services in
Japan. See "Risk Factors--Control by Principal Stockholders and Potential
Conflicts of Interest," "The Company--Relationship with Softbank" and "Certain
Transactions."

The following table presents Softbank's total historical investment in and
return on investment from the Company as well as the value of its investment at
the assumed initial offering price (calculated based on the midpoint of the
range set forth on the cover page). See also "Dilution."

<TABLE>
<CAPTION>
(DOLLARS
IN
THOUSANDS,
EXCEPT PER
SHARE
DATA)
----------
<S> <C>
Historical investment in the Company....................... $3,040,201(1)
Total return on investment................................. 471,966(2)
Pro forma total return on investment....................... 2,003,278(3)
Percentage of Company held after the Offerings............. 74.2%
Value of investment after the Offerings.................... 1,150,100(4)
</TABLE>
- --------
(1) Total investment includes $492,560 in equity and $2,547,641 in debt.
(2) Total return includes $8,000 in dividends, $355,096 in interest and
$108,870 in debt principal repayments.
(3) Pro forma total return includes total return as described above in (2) plus
the repayment of intercompany indebtedness totaling $1,531,312 in
connection with the Reorganization.
(4) Assumes an initial public offering price of $15.50 per share and a holding
of 74.2 million shares of Common Stock by Softbank.

7
<PAGE>

THE REORGANIZATION

The Company is an indirect subsidiary of SOFTBANK Corp., which, as of
December 31, 1997, was 50.2% owned by Mr. Masayoshi Son, its President,
including 43.4% directly held by his 99% owned holding company, MAC Inc., a
Japanese corporation ("MAC"), and SOFTBANK Corp.'s largest shareholder. Prior
to the Offerings, the Company's businesses were conducted through various
indirect subsidiaries of SOFTBANK Corp. The Company's publishing business was
principally conducted through Ziff-Davis Inc. ("ZDI") and its trade show
business was principally conducted through ZD COMDEX and Forums Inc. ("ZDCF").
The MAC Assets were managed by ZDI and ZDCF, but were owned by MAC.
Concurrently with the Offerings, the Company will consummate a Reorganization
(as described under "The Reorganization") pursuant to which: (i) all of the
stock of ZDI and ZDCF will be contributed to the Company by Softbank in
exchange for 74.2% of the Company's Common Stock; (ii) the Company will
complete the purchase of the MAC Assets; (iii) the Company will issue and sell
the Common Stock and the Notes pursuant to the Offerings; (iv) the Company will
enter into a credit facility with a group of financial institutions (the
"Credit Facility") and borrow $1.25 billion thereunder; and (v) approximately
$928 million of the Company's obligations to Softbank will be converted to
equity and the Company will repay approximately $1.531 billion of obligations
to Softbank. The Company has obtained a commitment letter from The Bank of New
York, Morgan Stanley Senior Funding, DLJ Capital Funding and The Chase
Manhattan Bank to provide such Credit Facility. All of the transactions
comprising the Reorganization will be deemed to occur simultaneously. See "Risk
Factors--Risks Relating to the Reorganization," and "--Absence of History as a
Stand-Alone Company; Limited Relevance of Historical Financial Information,"
"The Reorganization" and "Unaudited Pro Forma Combined Financial Information."

8
<PAGE>

THE OFFERING

Common Stock offered:
<TABLE>
<S> <C>
U.S. Offering...............20,640,000.shares
International Offering.......5,160,000 shares
-----------------
Total.................... 25,800,000 shares
=================
</TABLE>

Common Stock to be
outstanding after the 100,000,000 shares(1)
Offering...................

Notes Offering..............
Concurrently with the Offering being made hereby,
the Company is offering, by means of a separate
prospectus, $250 million aggregate principal
amount of its % Senior Subordinated Notes due
2008 (the "Notes"). The consummation of the
Offering being made hereby and the Notes Offering
is conditioned upon, and will occur
simultaneously with, the consummation of the
other.

Use of Proceeds............. The net proceeds from the Offerings, together
with the amounts drawn under the Credit Facility,
will be used to complete the purchase of the MAC
Assets and repay intercompany indebtedness. See
"Use of Proceeds."

NYSE symbol................. "ZD"

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

(1) Does not include 10,000,000 shares of Common Stock reserved for issuance
under the Company's Incentive Compensation, Employee Stock Purchase and
Non-Employee Directors Stock Option Plans. See "Management--Compensation of
Directors" and "--Stock Plans."

RISK FACTORS

Prospective investors should consider carefully the information contained
under "Risk Factors," as well as the other information and data included in
this Prospectus for certain considerations relevant to evaluating an investment
in the shares of Common Stock offered hereby.

9
<PAGE>

SUMMARY HISTORICAL COMBINED FINANCIAL AND OTHER DATA

The following table presents Summary Historical Combined Financial and Other
Data for ZDI and ZDCF as of December 31, 1997 and for the three years then
ended which were derived from the audited combined financial statements of ZDI
and ZDCF included elsewhere in this Prospectus. COMDEX was acquired by Softbank
on April 1, 1995 and ZDI was acquired by Softbank on February 29, 1996; the
Summary Historical Combined Financial and Other Data includes the results of
COMDEX and ZDI from such dates. See "The Reorganization." The following table
also presents pro forma combined financial data of ZDI and ZDCF giving effect
to the transactions described under the heading "The Reorganization" as if they
had occurred as of January 1, 1997, in the case of the statement of operations
data, and as of December 31, 1997, in the case of the balance sheet data. The
pro forma financial data does not purport to be indicative of the results that
actually would have been obtained had the Reorganization been completed as of
such dates and is not intended to be a projection of the future results of
operations or financial position of ZDI and ZDCF. The following information
should be read in conjunction with "Use of Proceeds," "Capitalization,"
"Selected Historical Combined Financial and Other Data," "Unaudited Pro Forma
Combined Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Presentation of Financial
Information," and the Combined Financial Statements of ZDI and ZDCF, including
the notes thereto, included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
PRO FORMA
1995 1996 1997 1997(1)
-------- ---------- ---------- -----------
(DOLLARS IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue, net.................... $202,729 $ 955,139 $1,153,761 $ 1,153,761
Depreciation and amortization... 24,305 139,736 154,940 156,940
Income from operations.......... 62,675 87,181 109,232 109,232
Interest expense, net........... 44,005 120,646 190,445 122,730
Income/(loss) before income
taxes.......................... 22,869 (27,124) (72,491) (4,776)
Net income/(loss)(2)............ 10,945 (52,081) (71,179) (7,915)
Pro forma basic loss per
share(2)....................... (.08)
Pro forma diluted loss per
share(2)....................... (.08)
Pro forma weighted average
shares outstanding(2).......... 100,000,000
OTHER DATA:
EBITDA(3)....................... $ 91,179 $ 233,258 $ 272,894 $ 274,894
Capital expenditures............ 3,367 22,365 30,196 --
Net cash provided (used) by
operating activities........... 26,168 61,543 (3,364) --
Net cash used by investing
activities..................... (817,887) (2,147,188) (44,196) --
Net cash provided by financing
activities..................... 815,408 2,087,652 47,946 --
Ratio of earnings to fixed
charges(4)..................... 1.5x -- -- --
<CAPTION>
AS OF DECEMBER 31,
1997
-----------------------
ACTUAL PRO FORMA
---------- -----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........................... $ 30,301 $ 30,301
Total assets........................................ 3,546,646 3,532,834
Total long-term obligations......................... 2,408,240 1,586,539
Stockholders' equity................................ 126,130 1,441,165
</TABLE>

10
<PAGE>

- --------
(1) Due to the subjectivity inherent in the assumptions concerning the timing
and nature of the uses of cash generated by the pro forma adjustments, cash
flows from operating, investing and financing activities are not presented
in the pro forma data.
(2) No historical earnings per share or share data are presented as the Company
does not consider such data meaningful. Upon closing of the Offering, 100
million shares of common stock will be outstanding and pro forma earnings
per share data gives effect to these shares as if they were outstanding on
January 1, 1997.
(3) "EBITDA" is defined as income before provision for income taxes, interest
expense, depreciation and amortization. EBITDA is not intended to represent
cash flows from operations and should not be considered as an alternative
to net income as an indicator of the Company's operating performance or to
cash flows as a measure of liquidity. The Company believes that EBITDA is a
standard measure commonly reported and widely used by analysts, investors
and other interested parties in the publishing and media industries.
(4) For purposes of the computations, earnings before fixed charges consist of
income/(loss) before income taxes adjusted for equity earnings (loss), as
appropriate, plus fixed charges. Fixed charges are defined as interest
expense plus that portion of rental expense which is deemed to be
representative of the interest factor. For the years ended December 31,
1996, 1997 and Pro Forma 1997 earnings were insufficient to cover fixed
charges by $26,598, $74,520 and $6,805, respectively.

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

For information relating to the three months ended March 31, 1998, see page
33 in "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

SEE THE TABLE ON PAGE 32 IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" FOR A PRESENTATION OF THE
COMBINED RESULTS AS IF ZDI HAD BEEN ACQUIRED ON JANUARY 1, 1995. THE COMPANY
BELIEVES THIS INFORMATION IS IMPORTANT IN EVALUATING ITS HISTORICAL RESULTS OF
OPERATIONS.

11
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves various
risks. Prior to investing in the Common Stock being offered hereby,
prospective investors should consider carefully the factors set forth below,
together with the other information set forth in this Prospectus. Certain
information contained in this section and elsewhere in this Prospectus
contains forward-looking statements which involve risks and uncertainties. The
Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors set forth in
this section and elsewhere in this Prospectus.

RISKS RELATING TO THE REORGANIZATION

The Company is a newly organized Delaware corporation, incorporated on
February 4, 1998 in contemplation of the Reorganization. As part of the
Reorganization, the Company has acquired and will acquire the MAC Assets for
approximately $370 million. Although the Company believes that the purchase
price does not exceed fair market value, such arrangements are not the result
of an arm's length negotiation between unrelated parties, and there can be no
assurance that the Company would not have been able to obtain better terms
from unrelated parties. See "The Reorganization," "Unaudited Pro Forma
Combined Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Certain Transactions."

ABSENCE OF HISTORY AS A STAND-ALONE COMPANY; LIMITED RELEVANCE OF HISTORICAL
FINANCIAL INFORMATION

The Company has never operated as a stand-alone company. Until October 1997,
the ZDI and the ZDCF businesses were managed as separate Softbank
subsidiaries. The Company's future operating results will depend in part on
its ability to integrate these businesses and manage the combined enterprise.
In addition, although the Company will be a subsidiary of Softbank following
the Offerings, Softbank will be under no obligation to provide assistance to
the Company or any of its subsidiaries.

The financial information of ZDI and ZDCF included herein does not reflect
what the actual results of operations, financial position and cash flows of
the Company would have been had the Company existed and the Reorganization
been completed prior to the periods presented, nor is it necessarily
indicative of the results of operations, financial position and cash flows of
the Company in the future. The financial statements also include the MAC
Assets which are being transferred to the Company pursuant to the
Reorganization. See "Unaudited Pro Forma Combined Financial Information,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Presentation of Financial Information" and "Certain Transactions."

CONTROL BY PRINCIPAL STOCKHOLDERS AND POTENTIAL CONFLICTS OF INTEREST

Upon the completion of the Reorganization, Softbank will own approximately
74.2% of the outstanding shares of Common Stock of the Company (71.4% if the
U.S. Underwriters' over-allotment option is exercised in full). As a result,
Softbank will be in a position to direct the election of all members of the
Board of Directors of the Company and to control even those actions that
require the approval of two-thirds or more of the voting share capital of the
Company, including amendments to the Company's Certificate of Incorporation
and any business combinations. Such concentration of ownership would also have
the effect of preventing a change in control of the Company that might
otherwise be beneficial to stockholders. Section 141 of the Delaware General
Corporation Law, however, imposes upon directors a fiduciary duty to
shareholders.

The Company and Softbank have entered into certain agreements governing
various interim and ongoing relationships between Softbank and the Company,
including certain licensing and management agreements relating to
publications, trade shows, ZDTV and ZDNet. In addition, Softbank has given the
Company an undertaking that, as long as it owns 40% of the voting stock of the
Company and can elect a majority of the Board of Directors, it will not expand
operations involving (x) publishing information on computing and Internet-
related technology through the media of print, CD-ROM/DVD, Internet and
television, or (y) producing trade shows, conferences, exhibitions and similar
events primarily related to computing and Internet-related technology outside
Japan in competition with the Company without the prior approval of the
Company's management

12
<PAGE>

directors after consulting with the Company's independent directors. This
undertaking does not preclude investments by investment funds managed by
Softbank. Softbank manages certain venture capital funds which invest in,
among other things, computer and Internet-related companies. These funds may
be able to co-invest with the Company or compete with the Company with respect
to new investments. Softbank may develop new funds in the future, which funds
may compete with the Company for investment opportunities. The Company has
undertaken not to compete with Softbank in Japan without the prior approval of
SOFTBANK Corp.'s Board of Directors and has agreed to afford Softbank the
continuing right to license all of the Company's products and services in
Japan. Such arrangements and undertaking are not the result of an arm's length
negotiation between unrelated parties. See "--New Product Risks," "The
Company--Relationship with Softbank," "Certain Transactions," "Principal
Stockholders" and "Description of Capital Stock."

SIGNIFICANT DEBT OBLIGATIONS

At December 31, 1997, on a pro forma basis after giving effect to the
Reorganization described under "Unaudited Pro Forma Combined Financial
Information," the Company's total debt was approximately $1.594 billion, its
total stockholders' equity was approximately $1.441 billion, its earnings were
insufficient to cover fixed charges by $6.8 million and its total debt was
52.5% of total capitalization. The Company's indebtedness is substantial in
relation to its stockholders' equity. The degree to which the Company is
leveraged could have important consequences to holders of Common Stock
because: (i) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions or general
corporate purposes may be impaired; (ii) the funds available to the Company
for its operations may be reduced if a substantial portion of the Company's
cash flow from operations is dedicated to the payment of principal and
interest on its indebtedness; and (iii) the Company's ability to incur
additional debt may be impaired because the Credit Facility and the Notes
contain financial and other restrictive covenants, including those relating to
the incurrence of additional indebtedness, the creation of liens, the payment
of dividends and sales of assets. See "Description of Certain Indebtedness."
The indebtedness of the Company requires a substantial portion of the
Company's cash flow to be dedicated to the payment of principal and interest
on indebtedness, thereby reducing funds available for capital expenditures and
future business opportunities. In addition, the Company's indebtedness could
increase the Company's vulnerability to adverse general economic conditions
(including increases in interest rates) and could impair the Company's ability
to take advantage of significant business opportunities that may arise.

DEPENDENCE ON DEMAND FOR ADVERTISING

A significant portion of the Company's total revenue in 1997 (51.9%) was
derived from advertising sales. Should a general economic downturn or a
recession in the United States occur in the future, the Company's advertisers
may reduce their advertising budgets. In addition, technology product
advertisers may be affected by factors such as pricing pressures and new
product launches. Furthermore, there can be no assurance that technology
product advertisers will maintain current levels of advertising in special
interest magazines and events as opposed to general interest media such as
newspapers, television and Internet sites. Any material decline in the demand
for advertising by technology product advertisers could have an adverse effect
on the Company's financial condition and results of operations.

IMPORTANCE OF CERTAIN PUBLICATIONS AND TRADE SHOWS

Certain of the Company's publications have represented a significant portion
of the Company's historic revenue, and the Company expects that such
publications will continue to do so in the future. The Company's business
publications, which include such titles as PC Magazine, Computer Shopper and
PC Week, accounted for 65.3% of the Company's publishing revenue in 1997.
Although the Company believes it has a diversified portfolio of special-
interest publications and is not dependent on any single publication, a
significant decline in the performance of any of these publications could have
an adverse effect on the Company's financial condition and results of
operations. See "Business--Print Publishing--Sources of Print Publishing
Revenue."

Certain of the Company's trade shows and conferences have represented a
significant portion of the Company's historic revenue, and the Company expects
that such trade shows and conferences will continue to

13
<PAGE>

do so in the future. COMDEX/Fall accounted for 34.0% of the Company's trade
show and conference revenue in 1997. Although the Company believes it has a
diversified portfolio of trade shows worldwide, a significant decline in the
performance of COMDEX/Fall could have an adverse effect on the Company's
financial condition and results of operations. See "Business--Trade Shows and
Conferences--Sources of Trade Show and Conference Revenue."

SEASONALITY OF REVENUE; FLUCTUATIONS IN REVENUE FROM PERIOD TO PERIOD;
ANTICIPATED LOSS FOR FIRST QUARTER OF 1998

The Company's business is seasonal, with revenue typically reaching its
highest level during the fourth quarter of each calendar year, largely due to
the timing of its single largest trade show event, COMDEX/Fall, and the
increase in publishing revenue in the fourth quarter due to increased consumer
buying activity during the holiday season. In 1997, 35.0% of the Company's
revenue was generated during the fourth quarter, with the first, second and
third quarters accounting for 19.5%, 26.1% and 19.4% of revenue, respectively.
In addition, the Company may experience fluctuations in revenue from period to
period based on levels of marketing expenditure by the Company's advertising
customers and by competition among computer technology marketers. Many of the
Company's large customers concentrate their advertising expenditures around
major new product launches. Marketing expenditure by technology companies can
also be affected by factors affecting the computer industry generally,
including changes in end user demand, pricing pressures and inventory
surpluses. Furthermore, the Company's results are affected by the number and
timing of new product launches and the timing of events. The launch of new
publications, trade shows and services are funded with cash flow from
operations and are expensed as incurred. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview" and "--
Seasonality."

For the first quarter of 1998, the Company will report a loss from
operations of $24 million as compared with a loss from operations of $15.6
million for the first quarter of 1997. There are several factors influencing
the lower operating results for the first quarter of 1998, including lower
advertising revenue in the Company's business publications as a result of
factors affecting the computer technology industry generally (substantially
offset by revenue from trade shows which were not held in the comparable
period of the prior year) and certain one-time costs occurring in the first
quarter of 1998. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Three Months Ended March 31, 1998
Compared With Three Months Ended March 31, 1997 (unaudited)."

HISTORICAL NET LOSSES

The Company had net losses of $52.1 million and $71.2 million for the twelve
months ended December 31, 1996 and 1997, respectively. On a pro forma as
adjusted basis giving effect to the Reorganization, the Company had a net loss
of $7.9 million, or $(.08) per share, for the twelve months ended December 31,
1997. See "Unaudited Pro Forma Combined Financial Information." There can be
no assurance that the Company will report net income in the future.

NEW PRODUCT RISKS

The Company's future success will depend in part on its ability to monitor
rapidly changing technologies and market trends and offer new publications,
trade shows and services that address the needs of specific target audiences.
The process of internally researching and developing, launching, acquiring
acceptance and establishing profitability for a new publication, trade show or
service, or assimilating and marketing an acquired publication, trade show or
service, can be risky and costly. There can be no assurance that the Company's
efforts to introduce new or assimilate acquired publications, trade shows or
services will be successful or profitable. In addition to its publications,
trade shows and services, the Company is a leading provider of Internet
content about computing services, primarily through its ZDNet online service.
The Internet is still in the relatively early stages of development;
therefore, there can be no assurance that the Company's Internet services will
remain competitive. Costs related to the development of new products are
expensed as incurred and, accordingly, the Company's profitability from year
to year may be adversely affected by the number and timing of new product
launches. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

14
<PAGE>

option exercisable through December 31, 1998 to purchase all of MAC's interest
in ZDTV for an amount equal to MAC's investment plus 10% per annum for the
period of its investment. The Company does not intend to exercise the option
unless ZDTV has secured sufficient cable carriage. This may include entering
into a joint venture or other co-ownership arrangement. The Company is
currently funding ZDTV's operations on behalf of MAC through unsecured
advances which, for approved levels of expenditure, are to be reimbursed by
MAC. ZDTV's cash requirements are expected to be approximately $54 million in
1998. There can be no assurance that MAC will continue to approve and
reimburse the Company for expenditures or that the Company will exercise its
option. If the Company exercises its option, there can be no assurance that
ZDTV will ultimately obtain sufficient cable carriage and commercial
acceptance to be profitable. See "The Company--Relationship with Softbank" and
"Certain Transactions."

RISKS ASSOCIATED WITH FLUCTUATIONS IN PAPER AND POSTAGE COSTS

The Company's principal raw material is paper. Paper costs constitute a
significant expense, accounting for 15.2% of the Company's total U.S. print
publishing operating expenses in 1997. Paper prices have been volatile over
the past several years, initially rising in 1994, rising more significantly in
1995 and 1996 and declining in 1997. Management anticipates paper prices will
increase in 1998. The Company does not use forward contracts and most of its
paper supply contracts, which are generally for a two to three year renewable
term, provide for price adjustments to reflect changing market prices.
Accordingly, significant increases in paper prices could adversely affect the
Company's future results of operations.

Postage for magazine distribution is also a significant expense for the
Company, accounting for 11.3% of the Company's total U.S. print publishing
operating expenses in 1997. Postage costs increase periodically and can be
expected to increase in the future. The United States Postal Service has
recently announced a 5.4% increase for commercial magazine rates, which is
expected to become effective in 1998. The Company may not be able to recover,
in whole or in part, paper or postage cost increases. Accordingly, significant
cost increases could have an adverse effect on the Company's financial
condition or results of operations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business--Print
Publishing--Paper and Printing."

COMPETITION

The Company faces significant competition with respect to its print
publications, trade shows and conferences and other technology information
services. In its publishing business, the Company principally competes for
advertising and circulation revenue with publishers of other computer
technology publications and also faces broad competition from media companies
that produce general interest magazines, newspapers and online content.
Overall competitive factors include product positioning, editorial quality,
circulation, price and customer service. Competition for advertising dollars
is primarily based on advertising rates, the nature and scope of readership,
reader response to advertisers' products and services and the effectiveness of
sales teams. In its trade show and conference business, the Company competes
with other producers of trade shows and conferences for exhibition space,
exhibitors and attendees, primarily on the basis of the quality of the
conference, its content and organizational efficiency. If the Company is
unable to compete effectively for advertisers, readers, exhibitors and/or
attendees, its financial condition and results of operations could be
adversely affected. See "Business--Competition."

CONSOLIDATION OF PRINCIPAL VENDORS; SIGNIFICANT SUPPLIER

The Company's principal vendors include paper suppliers, printers,
fulfillment houses and national newsstand distributors. Each of these
industries is currently experiencing consolidation among their principal
participants. Such consolidation may result in: (i) decreased competition,
which may lead to increased prices; (ii) interruptions and delays in services
provided by such vendors; and (iii) greater dependence on certain vendors.
Such factors could adversely affect the Company's results of operations. One
printing company

15
<PAGE>

accounted for approximately 50% of the Company's total print publishing
manufacturing expenditures in 1997 for its U.S.-based publications. While the
Company believes there are adequate alternatives available, an interruption or
delay in service from, or the loss of, this printer could have an adverse
effect on the Company. See "Business--Print Publishing--Paper and Printing."

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

One component of the Company's growth strategy is to further expand into
international markets. There are certain risks inherent in doing business in
international markets, such as the uncertainty of product acceptance by
different cultures, the risks of divergent business expectations or
difficulties in establishing joint ventures with foreign partners,
difficulties in staffing and managing multinational operations, currency
fluctuations, state-imposed restrictions on the repatriation of funds and
potentially adverse tax consequences. There can be no assurance that one or
more of such factors will not have an adverse effect on the Company's future
international operations and, consequently, on the Company's financial
condition and results of operations. See "Business --Print Publishing--
International Publications" and "--Trade Shows and Conferences."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company expects to have 100 million
shares of Common Stock outstanding (approximately 103.9 million shares if the
U.S. Underwriters' over-allotment option is exercised in full), of which the
25.8 million shares offered hereby and that portion of 100,000 shares which
SOFTBANK Kingston Inc. intends to sell concurrently with the Offering pursuant
to the Registration Statement of which this Prospectus forms a part will be
freely tradeable without restriction by persons other than "affiliates" of the
Company. The remaining shares of Common Stock will be deemed "restricted"
securities within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and as such may not be sold in the absence of registration
under the Securities Act or an exemption therefrom, including the exemption
contained in Rule 144 under the Securities Act. The Company and Softbank have
entered into a registration rights agreement in connection with the Offering
which provides Softbank with the right to require the Company to register any
or all of the Common Stock held by Softbank in a public offering pursuant to
the Securities Act and the right to "piggyback" or include Softbank's Common
Stock in any registration of Common Stock made by the Company. No prediction
can be made as to the effect, if any, that future sales of shares of Common
Stock, or the availability of such shares for future sales, will have on the
market price of the shares of Common Stock prevailing from time to time. Sales
of substantial amounts of Common Stock, or the perception that such sales
could occur, could adversely affect prevailing market prices for the Common
Stock, and such a reduction in the market price of the Common Stock could
impair the ability of the Company to raise additional capital through future
public offerings of its equity securities. See "Shares Eligible for Future
Sale."

DIVIDEND POLICY; HOLDING COMPANY STRUCTURE

The Company currently intends to retain earnings to finance its operations,
fund future growth and reduce indebtedness and does not anticipate paying
dividends in the foreseeable future. In addition, as a holding company, the
Company's major assets will initially be the shares it holds in its
subsidiaries. Therefore, the Company's ability to pay future dividends and
distributions, if any, to holders of the Common Stock is dependent upon the
receipt of dividends or other payments from its subsidiaries. See "Dividend
Policy."

SUBSTANTIAL AND IMMEDIATE DILUTION

The initial public offering price of the Common Stock will be higher than
the book value per share of Common Stock. Accordingly, purchasers in the
Offering will suffer a substantial and immediate dilution of $31.39 in the net
tangible book value per share of Common Stock from the initial public offering
price. See "Dilution."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Company's
Common Stock, and there can be no assurance that an active public market for
the Company's Common Stock will develop or be sustained after

16
<PAGE>

the Offering. The initial public offering price will be determined by
negotiation between the Company and the representatives of the Underwriters
based upon several factors. See "Underwriters" for a discussion of the factors
to be considered in determining the initial public offering price. The trading
price of the Company's Common Stock could be subject to wide fluctuations in
response to quarterly variations in operating results, expectations of
securities analysts, announcements of new publications or technological
innovations by the Company or its competitors, changes in financial estimates
by securities analysts, the operating and stock price performance of other
companies that investors may deem comparable to the Company and other events
or factors. In addition, the stock market in general has experienced extreme
volatility that often has been unrelated to the operating performance of
particular companies which are traded on the market. These broad market and
industry fluctuations may adversely affect the trading price of the Company's
Common Stock, regardless of the Company's actual operating performance.

CERTAIN ANTI-TAKEOVER EFFECTS

Certain provisions of the Company's Certificate of Incorporation and By-Laws
may inhibit changes in control of the Company not approved by the Board of
Directors. The Company will also be afforded the protections of Section 203 of
the Delaware General Corporation Law, which could have similar effects. See
"Description of Capital Stock."

17
<PAGE>

THE COMPANY

The Company believes it is the world's preeminent integrated media and
marketing company focused on computing and Internet-related technology, with
principal platforms in print publishing, trade shows and conferences, online
content, market research and education. The Company's 28 primary U.S. and
international titles, including its joint ventures, and over 50 licensed
publications, total more than 80 publications distributed worldwide, with a
combined circulation of more than eight million primary readers. The Company's
predecessor was founded in 1927 and pioneered the development of special-
interest magazines, including Car and Driver, Popular Photography, Stereo
Review, Boating, Skiing and Modern Bride. The Company also produces the
world's most important trade shows related to computer technology, with over
two million estimated attendees at over 50 trade shows and conferences
worldwide in 1997. The Company's COMDEX/Fall event is the number one ranked
trade show for all industries in the U.S. as measured by total revenue, total
exhibit space and number of attendees. The Company's ZDNet.com Web site is the
leading computing content site and ranked the number one Web site in 1997 in
the category of news, information and entertainment, as measured by visitors
per month. The Company's other media and marketing platforms include market
research, education and the publication of computer-related newsletters,
training manuals and materials.

The Company's principal executive offices are located at One Park Avenue,
New York, New York 10016 and its telephone number is (212) 503-3500.

RELATIONSHIP WITH SOFTBANK

The Company is an indirect subsidiary of SOFTBANK Corp., which, as of
December 31, 1997, was 50.2% owned by Mr. Masayoshi Son, its President,
including 43.4% directly held by his 99% owned holding company, MAC. Softbank
is a leading provider of information and distribution services as
infrastructure for the digital information industry. Softbank is Japan's
leading distributor of computer software as well as a leading publisher of
Japanese computer technology publications. It also is an 80% owner of Kingston
Technology Company ("Kingston"), one of the world's largest independent
providers of computer memory modules; a founder and co-owner of Japan Sky
Broadcasting Co., Ltd. ("JSkyB"), a digital satellite broadcasting venture in
Japan; a shareholder, directly or through its investment fund affiliates, in
over 50 network and computer-related venture businesses in the digital
information industry; and a 29.4% owner of Yahoo! Inc.

Upon the completion of the Reorganization, Softbank will own approximately
74.2% of the outstanding shares of Common Stock (71.4% if the U.S.
Underwriters' overallotment is exercised in full). The Company and Softbank
have entered into certain agreements governing various interim and ongoing
relationships between Softbank and the Company, including certain licensing
and management agreements relating to publications, trade shows, ZDTV and
ZDNet. See "Certain Transactions."

In addition, Softbank has given the Company an undertaking that, as long as
it owns 40% of the voting stock of the Company and can elect a majority of the
Board of Directors, it will not expand operations involving (x) publishing
information on computing and Internet-related technology through the media of
print, CD-ROM/DVD, Internet and television, or (y) producing trade shows,
conferences, exhibitions and similar events primarily related to computing and
Internet-related technology outside Japan in competition with the Company
without the prior approval of the Company's management directors after
consulting with the Company's independent directors.

This undertaking does not preclude investments by investment funds managed
by Softbank. Softbank manages certain venture capital funds which invest in,
among other things, computer and Internet-related companies. These funds may
be able to co-invest with the Company or compete with the Company with respect
to new investments. Softbank may develop new funds in the future, which funds
may compete with the Company for investment opportunities. The Company has
undertaken not to compete with Softbank in Japan without the prior approval of
SOFTBANK Corp.'s Board of Directors and has agreed to afford Softbank the
continuing right to license all of the Company's products and services in
Japan. See "Risk Factors--Control by Principal Stockholders and Potential
Conflicts of Interest" and "Certain Transactions."

18
<PAGE>

In order to expand its media platforms, the Company has entered into a
license and services agreement with MAC to develop ZDTV, a 24-hour cable
television channel and integrated Web site focused exclusively on computers,
technology and the Internet. ZDTV is indirectly owned by MAC, but as part of
this license and services agreement MAC has granted the Company an option
exercisable through December 31, 1998 to purchase all of MAC's interest in
ZDTV for an amount equal to MAC's investment plus 10% per annum for the period
of its investment. Pursuant to the license and services agreement, the Company
has agreed to fund ZDTV's operations on behalf of MAC through unsecured
advances which, for approved levels of expenditure, are to be reimbursed by
MAC. Such advances bear interest at the 30-day LIBOR rate plus .50%. ZDTV's
cash requirements are expected to be approximately $54 million in 1998. The
Company's cumulative advances in respect of ZDTV, which totaled $14.4 million
net of $10.1 million in repayments through December 31, 1997, will be repaid
concurrently with the Reorganization. The Company has not yet determined
whether it will exercise its option to purchase MAC's interest in ZDTV. Any
such purchase will depend upon securing sufficient cable carriage, which may
include entering into a joint venture or other co-ownership arrangement,
including an arrangement with a third party cable system operator which will
provide carriage and also assume a portion of the ongoing cash requirements on
terms that are acceptable to the Company. ZDTV is not included in the
Company's results of operations. See "Certain Transactions."

19
<PAGE>

THE REORGANIZATION

The businesses to be conducted by the Company were acquired in a series of
acquisitions and internal reorganizations undertaken by Softbank. See "The
Company--Relationship with Softbank." The Company's principal business
operations are as follows:

(i) the computer technology publishing operations of Ziff-Davis
Publishing Company ("ZD Pubco"), which Softbank acquired in February 1996
for $1.8 billion in cash and subsequently renamed Ziff-Davis Inc.;

(ii) the COMDEX computer-related trade show operations ("COMDEX"), which
Softbank acquired in April 1995 for $803 million in cash and renamed
SOFTBANK COMDEX Inc. ("SB COMDEX"); and

(iii) the computer and network-related trade show operations of Ziff-
Davis Exposition and Conference Company ("ZD Expos"), which Softbank
acquired in December 1994 for $127 million in cash and subsequently renamed
SOFTBANK Forums Inc. ("SB Forums").

Concurrently with the ZD Pubco and ZD Expos acquisitions described above,
MAC purchased certain operations and assets of these companies for $302
million and $75 million, respectively. The MAC Assets consist of certain
international consumer and Internet publications, international trade shows
and the ZDNet business, most of which were still under development. The MAC
Assets and related operations have been managed by ZDI and ZDCF since their
acquisition by MAC. As part of the Reorganization discussed below, the MAC
Assets, except for those that have been discontinued, have been or will be
acquired by the Company at a purchase price that does not exceed fair market
value, based on an independent appraisal. A portion of the MAC Assets was
acquired by the Company on October 31, 1997 for $100 million, and the balance
will be sold to the Company concurrently with the Offerings. See "Use of
Proceeds."

In October 1997, Softbank decided to combine the businesses of ZDI, SB
COMDEX and SB Forums. SB Forums and SB COMDEX were merged as of December 31,
1997, with the surviving corporation named ZDCF. In order to complete the
combination and establish the Company as a separate public company,
concurrently with the sale of the Company's Common Stock offered hereby, ZDI
and ZDCF will be contributed to the Company in exchange for 74.2% of the
Company's Common Stock, and approximately $928 million of the Company's
obligations to Softbank will be converted to equity at the initial public
offering price. The amount of intercompany indebtedness to be converted to
equity is comprised of the obligations due to Softbank as of December 31,
1997, except those repaid with borrowings under the Credit Facility and the
proceeds of the Notes Offering and a $94.2 million note which matures on
February 20, 2009. Assuming an initial public offering price of $15.50 per
share, the value of the capitalized intercompany indebtedness would have been
equivalent to 59.8 million shares of Common Stock. In addition, the Company
will receive approximately $10 million of fixed assets from Kingston in
exchange for $10 million of shares of the Company's Common Stock (valued at
the initial public offering price), which assets will be subsequently leased
back to Kingston.

As part of the Reorganization, the Company will: (i) issue 25.8 million
shares of its Common Stock in the Offering; (ii) sell $250 million aggregate
principal amount of its % Senior Subordinated Notes due 2008 in the Notes
Offering; and (iii) enter into the $1.35 billion Credit Facility and borrow
$1.25 billion thereunder. The Company will use the net proceeds from the
Offerings and the Credit Facility to (i) pay $270 million to MAC, representing
the purchase price for the remaining MAC Assets, and (ii) repay approximately
$1.589 billion of obligations to Softbank (including the Company's liability
to Softbank with respect to the $100 million purchase price for the initial
portion of the MAC Assets, net of the approximately $42 million of balances
due from MAC in connection with funding for the MAC Assets and ZDTV through
December 31, 1997), which payment will eliminate all except $94.2 million of
the remaining intercompany indebtedness as of December 31, 1997. The Company
has obtained a commitment letter from The Bank of New York, Morgan Stanley
Senior Funding, DLJ Capital Funding and The Chase Manhattan Bank to provide
such Credit Facility.

Unless the context otherwise indicates, references herein to the
"Reorganization" include all of the transactions described above. The
Offerings will be conditioned upon the completion of all such transactions
comprising the Reorganization, which shall be deemed to occur simultaneously.

20
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Common Stock and the
Notes are estimated to be $377.5 million ($434.5 million if the U.S.
Underwriters' over-allotment option is exercised in full) and $241.3 million,
respectively, after deducting underwriting discounts and commissions and
estimated offering expenses payable by the Company. The Company intends to use
the proceeds from the Offerings and approximately $1.25 billion in borrowings
under the Credit Facility, to fund the approximately $270 million purchase
price of the balance of the MAC Assets (see "Risk Factors--Risks Relating to
the Reorganization") and repay approximately $1.589 billion of intercompany
obligations.

The following table summarizes the foregoing estimated sources and uses of
funds:

<TABLE>
<CAPTION>
AMOUNT
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Sources:
Common Stock Offering.................................. $ 400,000
Notes Offering......................................... 250,000
Borrowings under Credit Facility....................... 1,250,000
----------
Total sources........................................ $1,900,000
==========
Uses:
Net payments to affiliates(1).......................... $1,588,625
Offering expenses and debt issuance costs(2)........... 41,375
Purchase balance of MAC Assets......................... 270,000
----------
Total uses........................................... $1,900,000
==========
</TABLE>
- --------
(1) Net payments to affiliates include the following:

<TABLE>
<S> <C>
(i)Repayment of notes payable to affiliates:
7.8% notes maturing March 31, 2011......................... $1,080,000
8.0% notes maturing February 28, 2010...................... 375,027
8.0% notes maturing March 31, 2010......................... 74,772
8.0% notes maturing January 1, 2007........................ 1,513
(ii) Repayment of obligations to Softbank for the October 31,
1997 purchase of certain MAC Assets..................... 100,000
(iii) Receipt from MAC of amounts due with respect to
funding the development and operations of the MAC (42,687)
Assets and ZDTV through December 31, 1997 ............ ----------
$1,588,625
==========
</TABLE>
(2) Includes $22,500 in expenses related to the issuance of Common Stock and
$18,875 of debt issuance costs.

21
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1997: (i) on a combined basis for ZDI and ZDCF; (ii) on a pro
forma basis after giving effect to the contribution of ZDI and ZDCF to the
Company, conversion of approximately $928 million of intercompany obligations
to equity and the Kingston sale-leaseback; and (iii) on a pro forma basis as
adjusted to give effect to the Offerings and the remaining debt refinancing.
See "The Reorganization." This table should be read in conjunction with
"Selected Historical Combined Financial and Other Data," "Unaudited Pro Forma
Combined Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Presentation of Financial
Information" and the Combined Financial Statements of ZDI and ZDCF.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
-----------------------------------
ACTUAL PRO FORMA
COMBINED PRO FORMA AS ADJUSTED
---------- ---------- -----------
(DOLLARS IN THOUSANDS, EXCEPT
SHARE DATA)
<S> <C> <C> <C>
Debt:
Credit Facility.......................... $ -- $ -- $1,250,000
Notes.................................... -- -- 250,000
Notes payable to affiliates, including
current portion......................... 2,534,030 1,625,543 94,231
---------- ---------- ----------
Total debt........................... 2,534,030 1,625,543 1,594,231
Stockholders' equity:
Common Stock, $.01 par value, 1,000
shares authorized, 200 shares issued and
outstanding; Pro Forma: par value $.01
per share; 120,000,000 shares autho-
rized; 100,000,000
shares issued and outstanding........... $ -- $ -- $ 1,000
Additional paid-in-capital............... 248,330 1,185,865 1,562,365
Accumulated deficit...................... (119,429) (119,429) (119,429)
Deferred compensation.................... (996) (996) (996)
Cumulative translation adjustment........ (1,775) (1,775) (1,775)
---------- ---------- ----------
Total stockholders' equity............. 126,130 1,063,665 1,441,165
---------- ---------- ----------
Total capitalization................. $2,660,160 $2,689,208 $3,035,396
========== ========== ==========
</TABLE>

DIVIDEND POLICY

The Company currently intends to retain all of its earnings following the
Offering in order to finance its operations, repay indebtedness and fund
future growth and, accordingly, does not expect to pay any dividends for the
foreseeable future. The Board of Directors will review this dividend policy
from time to time in light of the conditions then existing, including the
Company's financial condition, results of operations, capital requirements,
restrictions, if any, contained in financing or other agreements binding upon
the Company, and such other factors as the Board of Directors deems relevant.
The Credit Facility and provisions of the Notes contain certain limitations on
the payment of dividends. See "Risk Factors--Dividend Policy; Holding Company
Structure" and "Description of Certain Indebtedness--Notes" and "--Credit
Facility."

22
<PAGE>

DILUTION

As of December 31, 1997 the pro forma net tangible book value of the Company
was a deficit of $1.97 billion or $26.50 per share of Common Stock. Pro forma
net tangible book value per share is determined by dividing the tangible net
worth of the Company (total assets less intangible assets and total
liabilities) by the aggregate number of shares of Common Stock outstanding,
assuming the Reorganization had taken place on January 1, 1997. After giving
effect to the sale of the 25.8 million shares of Common Stock offered hereby
(at an assumed initial offering price of $15.50 per share, the mid point of
the range set forth on the cover page of this Prospectus) and the application
of the net proceeds therefrom, pro forma net tangible book value of the
Company as of December 31, 1997 would have been a deficit of approximately
$1.59 billion, or $15.89 per share. This represents an immediate increase in
pro forma net tangible book value of $10.61 per share to Softbank, the current
stockholder of ZDI and ZDCF, and an immediate dilution in pro forma net
tangible book value of $31.39 per share to purchasers of Common Stock in the
Offering. The following table illustrates the per share dilution in pro forma
net tangible book value to new investors:

<TABLE>
<S> <C> <C>
Initial public offering price per share................... $15.50
Pro forma net tangible book value per share at December
31, 1997................................................. (26.50)
Increase in pro forma net tangible book value per share 10.61
attributable to purchasers in the Offering............... ------
Pro forma net tangible book value per share after the (15.89)
Offering................................................. ------
Dilution in pro forma net tangible book value per share to $31.39
purchasers of Common Stock in the Offering (1)........... ======
</TABLE>
- --------
(1) Dilution is determined by subtracting pro forma net tangible book value
per share after the Offering from the initial public offering price per
share.

The following table summarizes, on a pro forma basis, as of December 31,
1997, the number of shares of Common Stock purchased from the Company, the
total consideration paid (or to be paid) and the average price per share paid
(or to be paid) by the Company's existing stockholder and by new investors
purchasing shares of Common Stock in the Offering, based on an assumed initial
public offering price of $15.50 per share, before deducting estimated offering
expenses and underwriting discounts and commissions.

<TABLE>
<CAPTION>
TOTAL
SHARES PURCHASED CONSIDERATION
------------------- ------------------ AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- ------- ---------- ------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Softbank.................. 74,200,000 74.2% $1,114,051 73.6% $15.01
Purchasers of Common Stock
in the Offering.......... 25,800,000 25.8 400,000 26.4 15.50
----------- ----- ---------- -----
Total................... 100,000,000 100.0% $1,514,051 100.0% $15.14
=========== ===== ========== =====
</TABLE>

The foregoing calculations exclude an aggregate of: (i) 5,254,700 shares of
Common Stock issuable upon the exercise of options granted under the Company's
Incentive Compensation Plan; and (ii) 4,745,300 additional shares of Common
Stock reserved for grants of additional options under the Company's Incentive
Compensation, Employee Stock Purchase and Non-Employee Director Stock Option
Plans. See "Management--Compensation of Directors" and "--Stock Plans."

23
<PAGE>

SELECTED HISTORICAL COMBINED FINANCIAL AND OTHER DATA

The Selected Historical Combined Financial and Other Data (i) of ZDI as of
and for the year ended December 31, 1995 and for the period January 1, 1996 to
February 28, 1996 and (ii) of ZDI and ZDCF as of and for the years ended
December 31, 1995 and 1996 and 1997 were derived from their respective
historical financial statements. Such financial statements, audited by
independent accountants, are included elsewhere herein. The historical
financial data of ZDI as of and for the years ended December 31, 1994 and 1993
is derived from ZDI's accounting records and has not been audited. The
following information should be read in conjunction with "Use of Proceeds,"
"Capitalization," "Unaudited Pro Forma Combined Financial Information,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Presentation of Financial Information," the Combined Financial
Statements of ZDI and ZDCF and the Historical Consolidated Financial
Statements of ZDI, as of and for the year ended December 31, 1995 and for the
period January 1, 1996 to February 28, 1996.

<TABLE>
<CAPTION>
ZDI AND
ZDI(1) ZDCF COMBINED
-------------------------------------------- -------------------------------
YEAR ENDED TWO-MONTH YEAR ENDED
DECEMBER 31, PERIOD ENDED DECEMBER 31,
------------------------------ FEBRUARY 28, -------------------------------
1993 1994 1995 1996 1995(2) 1996(3) 1997
-------- ---------- --------- ------------ --------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenue, net............ $649,452 $ 711,379 $ 768,995 $ 125,465 $ 202,729 $ 955,139 $1,153,761
Depreciation and amorti-
zation................. 38,228 34,208 91,546 15,137 24,305 139,736 154,940
Income from operations.. 29,481 80,723 55,750 7,270 62,675 87,181 109,232
Interest expense, net... 14,035 17,887 92,609 14,030 44,005 120,646 190,445
Income/(loss) before in-
come taxes............. 13,700 77,650 (40,250) (6,995) 22,869 (27,124) (72,491)
Net income/(loss)(4)(5). 13,700 77,650 (26,002) (4,547) 10,945 (52,081) (71,179)
OTHER DATA:
Capital expenditures.... $ 16,141 $ 15,119 $ 14,163 $ 552 $ 3,367 $ 22,365 $ 30,196
Ratio of earnings to
fixed charges(6)....... 1.7 4.1 -- -- 1.5 -- --
BALANCE SHEET DATA (AT
PERIOD END):
Cash and cash equiva-
lents.................. $ 36,300 $1,066,606 $ 10,083 $ 13,669 $ 27,908 $ 29,915 $ 30,301
Total assets............ 308,267 2,751,525 1,623,906 1,619,905 1,090,981 3,584,173 3,546,646
Total long-term obliga-
tions.................. 353,507 1,034,000 964,153 964,153 575,450 2,522,252 2,408,240
Stockholders' equity
(deficit).............. (214,355) 391,275 365,150 360,717 397,881 447,756 126,130
</TABLE>
- --------
(1) Historical Combined Financial and Other Data of ZDI has been presented for
all periods prior to its acquisition by Softbank on February 29, 1996 as
it represents the Company's principal operations.
(2) Reflects operations of SB Forums for the year and COMDEX from the date of
acquisition by Softbank on April 1, 1995.
(3) Reflects operations of SB Forums and COMDEX for the year and ZDI from the
date of acquisition by Softbank on February 29, 1996.
(4) For the years ended December 31, 1993 and 1994, the operations of ZDI were
conducted through various partnerships. Accordingly, no income taxes have
been provided.
(5) No historical earnings per share or share data are presented as the
Company does not consider such data meaningful.
(6) For purposes of the computations, earnings before fixed charges consist of
income/(loss) before income taxes adjusted for equity earnings/losses as
appropriate, plus fixed charges. Fixed charges are defined as interest
expense plus that portion of rental expense which is deemed to be
representative of the interest factor. For the year ended December 31,
1995 and the two-month period ended February 28, 1996, ZDI's earnings were
insufficient to cover fixed charges by $36,859 and $6,760, respectively.
For the years ended December 31, 1996 and 1997, ZDI and ZDCF's earnings
were insufficient to cover fixed charges by $26,598 and $74,520,
respectively.

For information relating to the three months ended March 31, 1998, see page
33 in "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

24
<PAGE>

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following Unaudited Pro Forma Combined Financial Information (the "Pro
Forma Financial Information") is based on the historical combined financial
statements of ZDI and ZDCF and has been prepared to illustrate the effects of
the Reorganization and the other transactions described below.

The Unaudited Pro Forma Combined Statement of Operations for the year ended
December 31, 1997 gives effect to the Reorganization as if it had occurred as
of January 1, 1997. The Unaudited Pro Forma Combined Balance Sheet as of
December 31, 1997 has been prepared as if the Reorganization had occurred on
that date. See "The Reorganization."

The Pro Forma Financial Information is not necessarily indicative of the
actual results of operations or financial position of the Company at December
31, 1997 and does not purport to represent the Company's results of operations
for future periods or its future financial position.

The Pro Forma Financial Information should be read in conjunction with the
Historical Combined Financial Statements of ZDI and ZDCF and notes thereto
which are included elsewhere in this Prospectus. In management's opinion, the
Pro Forma Financial Information includes all adjustments necessary to reflect
the effects of the Reorganization and other transactions described below.

25
<PAGE>

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AT DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA
COMBINED FOR CAPITAL ADJUSTMENTS PRO FORMA
ACTUAL CONTRIBUTIONS PRO FORMA FOR REFINANCINGS AS ADJUSTED
---------- ------------- ---------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equiva-
lents................ $ 30,301 $ $ 30,301 $ $ 30,301
Accounts receivable,
net.................. 221,310 221,310 221,310
Inventories........... 17,853 17,853 17,853
Prepaid expenses and
other current assets. 37,900 37,900 37,900
Due from affiliates... 131,290 131,290 (42,687)(e) 88,603
Deferred taxes........ 8,794 8,794 8,794
---------- -------- ---------- ---------- ----------
Total current as-
sets............... 447,448 447,448 (42,687) 404,761
Property and equipment,
net.................... 53,536 10,000 (a) 63,536 63,536
Intangible assets, net.. 3,030,333 3,030,333 3,030,333
Other assets............ 15,329 15,329 18,875 (f) 34,204
---------- -------- ---------- ---------- ----------
Total assets........ $3,546,646 $ 10,000 $3,556,646 $ (23,812) $3,532,834
========== ======== ========== ========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable...... $ 55,468 $ $ 55,468 $ $ 55,468
Accrued expenses...... 80,094 80,094 80,094
Unearned income, net.. 154,682 154,682 154,682
Due to affiliates and
management........... 398,332 (19,048)(b) 379,284 (370,000)(g) 9,284
Current portion of
notes payable to
affiliates........... 125,790 125,790 (118,098)(h) 7,692
Other current
liabilities.......... 4,222 4,222 4,222
---------- -------- ---------- ---------- ----------
Total current lia-
bilities........... 818,588 (19,048) 799,540 (488,098) 311,442
Notes payable to affili-
ates................... 2,408,240 (908,487)(c) 1,499,753 1,413,214 (h) 86,539
Long-term debt.......... -- -- 1,500,000 (i) 1,500,000
Deferred taxes.......... 180,117 180,117 180,117
Other liabilities....... 13,571 13,571 13,571
---------- -------- ---------- ---------- ----------
Total liabilities... 3,420,516 (927,535) 2,492,981 (401,312) 2,091,669
---------- -------- ---------- ---------- ----------
Stockholders' equity:
Preferred stock(1).... -- -- --
Common stock(2)....... -- -- 1,000 (j) 1,000
Additional paid-in
capital.............. 248,330 937,535 (d) 1,185,865 376,500 (j) 1,562,365
Retained earnings
(deficit)............ (119,429) (119,429) (119,429)
Deferred compensation. (996) (996) (996)
Cumulative translation
adjustment........... (1,775) (1,775) (1,775)
---------- -------- ---------- ---------- ----------
Total stockholders'
equity............. 126,130 937,535 1,063,665 377,500 1,441,165
---------- -------- ---------- ---------- ----------
Total liabilities
and stockholders'
equity............. $3,546,646 $ 10,000 $3,556,646 $ (23,812) $3,532,834
========== ======== ========== ========== ==========
</TABLE>
- --------
(1) Actual: par value $.01 per share, no shares issued and outstanding; Pro
Forma: 10,000,000 shares authorized, no shares issued and outstanding.

(2) Actual: par value $.01 per share, 1,000 shares authorized, 200 shares
issued and outstanding; Pro Forma: par value $.01 per share, 120,000,000
shares authorized, 100,000,000 shares issued and outstanding.

26
<PAGE>

NOTES TO THE UNAUDITED PRO FORMA COMBINED BALANCE SHEET

a. Reflects the transfer of approximately $10,000 of fixed assets from
Kingston in exchange for 645,161 shares of the Company's Common Stock.

b. Reflects the capitalization of amounts due to Softbank in connection with
the conversion of $927,535 of intercompany obligations.

c. Reflects the capitalization of notes payable to affiliates in connection
with the conversion of $927,535 of intercompany obligations.

d. Reflects the impact on stockholders' equity of the following:

<TABLE>
<C> <S> <C>
(i) Capitalization of amounts due to Softbank................ $ 19,048
(ii) Exchange of Common Stock for Kingston's fixed assets..... 10,000
(iii) Capitalization of notes payable to affiliates............ 908,487
--------
$937,535
========
</TABLE>

e. Represents the settlement of balances due from MAC with respect to funding
the operations and development of the MAC Assets and ZDTV.

f. Represents debt issuance costs incurred in connection with the Notes
Offering and Credit Facility.

g. Represents the payment of $100 million due to Softbank and $270 million due
to MAC for the purchase of the MAC Assets.

h. Represents the repayment of the current portion and long-term portion of
notes payable to affiliates of $118,098 and $1,413,214, respectively.

i. Represents initial borrowings under the Credit Facility of $1,250,000 and
the proceeds from the Notes Offering of $250,000.

j. Represents the issuance of 25.8 million shares of the Company's Common
Stock at an assumed initial offering price of $15.50 per share, net of
offering costs of $22,500. Assumes no exercise of the Underwriters' over-
allotment option.

27
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ADJUSTMENTS ADJUSTMENTS
COMBINED FOR CAPITAL FOR PRO FORMA
ACTUAL CONTRIBUTION PRO FORMA REFINANCINGS AS ADJUSTED
---------- ------------ ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Revenue, net............ $1,153,761 $ $1,153,761 $ $ 1,153,761
---------- ---------- -----------
Cost of production...... 325,245 325,245 325,245
Selling, general and
administrative
expenses............... 564,344 (2,000)(a) 562,344 562,344
Depreciation of property
and equipment.......... 30,379 2,000 (b) 32,379 32,379
Amortization of intangi-
ble assets............. 124,561 124,561 124,561
---------- ---------- -----------
Income from operations.. 109,232 109,232 109,232
Interest expense, net... (190,445) 59,052 (c) (131,393) 8,663 (e) (122,730)
Other non-operating in-
come, net.............. 8,722 8,722 8,722
---------- ------- ---------- ------- -----------
Loss before income tax-
es..................... (72,491) 59,052 (13,439) 8,663 (4,776)
Provision (benefit) for
income taxes........... (1,312) 899 (d) (413) 3,552 (f) 3,139
---------- ------- ---------- ------- -----------
Net loss................ $ (71,179) $58,153 $ (13,026) $(5,111) $ (7,915)
========== ======= ========== ======= ===========
Pro forma basic loss per
share.................. (.08)(g)
===========
Pro forma diluted loss
per share.............. (.08)(g)
===========
Pro forma weighted
average shares
outstanding............ 100,000,000(g)
</TABLE>

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

For information relating to the three months ended March 31, 1998, see page
33 in "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

28
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

a. Represents the rental income generated by leasing back to Kingston the
fixed assets received from Kingston.

b. Represents an increase in depreciation expense associated with the fixed
assets received from Kingston.

c. Represents the reduction of interest expense resulting from the
capitalization of $908,487 of notes payable to affiliates; such notes bore
interest at an average rate of 6.5% per annum.

d. Represents the impact of the following adjustments:

<TABLE>
<C> <S> <C>
(i) Tax impact of reduced interest expense totalling
$59,052 from the capitalization of $908,487 of notes
payable to affiliates, at an effective tax rate of
41%................................................... $ 24,211
(ii) Tax benefit relating to losses generated by the MAC
Assets which would have been available to the Company
had the MAC Assets been purchased on January 1, 1997.
These benefits will not be available to the Company
following the Offering................................ (23,312)
---------
$ 899
=========

e. Represents the impact of the following adjustments:

(i) Reduction of interest expense from the repayment of
notes payable to affiliates from the proceeds of the
Offerings and the initial borrowings under the Credit
Facility.............................................. $(122,272)
(ii) Increase in interest expense related to the Notes at
an assumed interest rate of 8.00%..................... 20,000
(iii) Increase in interest expense related to the Credit
Facility at an assumed interest rate of 7.25%......... 90,625
(iv) Amortization of deferred financing costs using the
interest method....................................... 2,984
---------
$ (8,663)
=========
</TABLE>

f. Represents the income tax effect of the adjustments described in note (e)
above at an effective tax rate of 41%.

g. Pro forma basic loss per share and pro forma weighted average number of
common shares outstanding includes 100,000,000 shares of Common Stock
assumed to be outstanding upon consummation of the Reorganization. Pro
forma diluted loss per share excludes 5,254,700 Common Stock equivalents
assumed to be outstanding upon consummation of the Reorganization as
inclusion of such Common Stock equivalents would be antidilutive.

29
<PAGE>

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

OVERVIEW

The Company operates in two business segments: (i) publishing and (ii) trade
shows and conferences. The Company believes it is the world's preeminent
integrated media and marketing company focused on computing and Internet-
related technology, with principal platforms in print publishing, trade shows
and conferences, online content, market research and education. The Company's
28 primary U.S. and international titles, including its joint ventures, and
over 50 licensed publications, total more than 80 publications distributed
worldwide, with a combined circulation of more than eight million primary
readers. The Company also produces the world's most important trade shows
related to computer technology, with over two million estimated attendees at
over 50 trade shows and conferences worldwide in 1997. The Company's
COMDEX/Fall event is the number one ranked trade show for all industries in
the U.S. as measured by total revenue, total exhibit space and number of
attendees. The Company's ZDNet.com Web site is the leading computing content
site and ranked the number one Web site in 1997 in the category of news,
information and entertainment, as measured by visitors per month. The
Company's other media and marketing platforms include market research,
education and the publication of computer-related newsletters, training
manuals and materials.

The Company had net revenue of $1.154 billion for 1997. A substantial
portion of the Company's revenue is derived from the sale of advertising,
which in 1997 accounted for 51.9% of total revenue. No single advertiser has
comprised more than 3% of the Company's advertising revenue during any of the
last three years. However, the Company's top 20 advertisers accounted for
32.1% of total advertising revenue for 1997.

In the publishing segment, the Company's principal sources of revenue are
advertising (67.3% of 1997 total publishing revenue), circulation (17.4%) and
other (15.3%). Circulation comprises both paid subscriptions (10.8%) and
newsstand sales (6.6%) while other includes educational and training materials
(5.4%) and market research studies (6.2%) with the balance primarily
consisting of royalties, reprints and other miscellaneous sales. In the trade
shows and conferences segment, revenue is derived from two principal sources:
sale of exhibit space (64.8% of 1997 total segment revenue) and attendee
conference and seminar fees (14.9%). Unlike many trade show producers, the
Company derives a significant portion of its trade show revenue from other
sources (20.3%), including advertising in show-related publications,
billboards, banners, fees from managing customer-sponsored events and other
show-related activities. The Company believes these other sources will
continue to be an important growth area, particularly for its content-focused
events.

In the publishing business, the principal components of the Company's
production costs are raw materials, printing and distribution, which
represented 34.6%, 37.5% and 26.7%, respectively, of total 1997 publishing
production expenses. The Company's principal raw material is paper. Paper
supply and prices are subject to volatility and may be significantly affected
by many factors, including market and economic conditions. See "Risk Factors--
Risks Associated with Fluctuations in Paper and Postage Costs" and "--
Inflation and Change in Paper Prices." The principal components of production
costs within the trade shows and conferences business are the costs of renting
and preparing the facilities to hold the events (33.6%), direct mail and the
related costs for promotion of the events (33.2%) and program development and
presentation costs (11.3%).

The other principal operating costs for the Company are selling, general and
administrative expenses, including editorial costs. Included in these costs
are salaries, sales commissions and benefits (49.8%) along with marketing and
promotion expenses related to advertising and circulation (18.8%).

The Company's revenue and profitability are influenced by a number of
external factors, including the volume of new technology product
introductions, the amount and allocation of marketing expenditure by the
Company's clients, the extent to which sellers elect to advertise using print
and online media or participate in trade shows and conferences, changes in
paper prices, availability of appropriate venues for its largest trade shows
and conferences and competition among computer technology marketers (including
print publishers, producers of trade shows and providers of other technology
information services). Accordingly, the Company may experience fluctuations in
revenue from period to period. Many of the Company's large customers

30
<PAGE>

concentrate their advertising expenditures around major new product launches.
Marketing expenditures by technology companies can also be affected by factors
affecting the computer industry generally, including pricing pressures and
temporary surpluses of inventory. Revenue and profitability are also
influenced by product mix and the timing and frequency of the Company's new
product launches and launches in new markets, as well as by acquisitions. New
publications generally require several years to achieve profitability and upon
achieving initial profitability, often have lower margins than more
established publications. The launch of new publications, trade shows and
services are funded with cash flow from operations and are expensed as
incurred. Accordingly, the Company's revenue from year to year may be affected
by the number and timing of new product launches. If the Company concludes
that a new publication, trade show or service will not achieve certain
milestones with regard to revenues, profitability and cash flow within a
reasonable period of time, management may discontinue such publication, trade
show or service or merge it into another existing publication, trade show or
service. See "Risk Factors--New Product Risks."

Historically, the financing requirements of the Company have been funded
through intercompany loans and advances, totaling $2.5 billion at December 31,
1997, of which $126 million was current. As a result of the Reorganization,
the Company's intercompany debt owed to Softbank will be reduced to $94.2
million. Such indebtedness bears interest at 9.9% and matures in February
2009. Concurrently with the Offering, the Company intends to issue and sell
$250 million aggregate principal amount of Notes and will enter into the $1.35
billion Credit Facility and borrow $1.25 billion thereunder. See "--Liquidity
and Capital Resources."

PRESENTATION OF FINANCIAL INFORMATION

ZD Inc. was incorporated on February 4, 1998. Concurrent with the completion
of the Offerings, all of the common stock of ZDI and ZDCF, the Company's
principal operating subsidiaries, will be contributed to the Company.

These subsidiaries were acquired in a series of acquisitions and internal
reorganizations undertaken by the Company's principal stockholder, Softbank.
In December 1994, Softbank acquired SB Forums for $127 million in cash. The
acquisition was accounted for using the purchase method of accounting and
accordingly, the results of operations of SB Forums are included in the
Combined Financial Statements of ZDI and ZDCF for 1995, 1996 and 1997.

In April 1995, SOFTBANK acquired SB COMDEX for $803 million in cash, plus
transaction costs. The acquisition was accounted for using the purchase method
of accounting and accordingly, SB COMDEX's results are included in the
Combined Financial Statements since the date of acquisition. As of December
31, 1997, SB Forums and SB COMDEX were merged, with the surviving corporation
named ZD Comdex and Forums (ZDCF).

In February 1996, Softbank acquired Ziff-Davis Publishing Company
(subsequently renamed Ziff-Davis Inc.) for $1.8 billion in cash. The
acquisition of ZDI has been accounted for using the purchase method of
accounting and accordingly, the results of ZDI are included in the Combined
Financial Statements since the date of acquisition. ZDI's results of
operations for periods prior to the date of acquisition are set forth in the
ZDI Financial Statements included elsewhere in this Prospectus.

In connection with the acquisition of SB Forums and ZDI described above,
MAC, Softbank's largest shareholder, purchased certain operations and assets
of these companies for $75 million and $302 million, respectively. The MAC
Assets consist of certain international publications, consumer and Internet
publications, international trade shows and the ZDNet business, most of which
were still under development. As part of the Reorganization, the MAC Assets,
except for those which have been discontinued, have been or will be sold to
the Company. The acquisition of the MAC Assets has been accounted for in a
manner similar to a pooling of interests and is reflected in the Combined
Financial Statements of ZDI and ZDCF for all periods presented.

Due to the acquisition of ZDI on February 29, 1996 and the resulting
revaluation of assets and liabilities and the change in the Company's capital
structure, the historical financial statements of ZDI and ZDCF are not
directly comparable. The table below presents the Company's pro forma results
for 1996 and 1995 as if ZDI and ZDCF had been under common control since
January 1, 1995. The results of SB COMDEX are included since

31
<PAGE>

April 1, 1995. The combined results for 1995 and 1996 were derived by
combining the statement of operations for ZDI for the year ended December 31,
1995 and for the period January 1, 1996 to February 28, 1996 with the combined
statement of operations for ZDI and ZDCF for the years ended 1995 and 1996. In
addition, the purchase accounting adjustments related to the 1996 acquisition
of ZDI have been reflected as of January 1, 1995 resulting in pro forma
amortization, interest and income tax provision adjustments. Such adjustments
are further described in note (a) to the table set forth below under "--
Results of Operations." No pro forma adjustments have been made related to the
acquisition of SB COMDEX as such adjustments are not material. Although such
combination is not in accordance with generally accepted accounting
principles, management believes the combined statements present the most
meaningful basis of comparison. Intercompany transactions for those periods
were immaterial. The financial information presented herein may not
necessarily reflect the results of operations which would have occurred had
the Company been a stand-alone entity.

RESULTS OF OPERATIONS

The table below presents the combined results as if ZDI had been acquired on
January 1, 1995.

<TABLE>
<CAPTION>
ZDI AND ZDCF
YEAR ENDED DECEMBER 31,
----------------------------------
PRO FORMA
---------------------- ACTUAL
1995 1996 1997
---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Revenue, net:
Publishing............................... $ 768,995 $ 815,720 $ 866,233
Trade shows and conferences.............. 202,729 264,884 287,528
---------- ---------- ----------
971,724 1,080,604 1,153,761
---------- ---------- ----------
Cost of production:
Publishing............................... 193,646 215,271 225,712
Trade shows and conferences.............. 68,810 87,373 99,533
---------- ---------- ----------
262,456 302,644 325,245
Selling, general and administrative ex-
penses.................................... 474,992 528,636 564,344
Depreciation and amortization(a)........... 154,163 161,259 154,940
---------- ---------- ----------
Income from operations..................... 80,113 88,065 109,232
Interest expense, net(a)................... (133,130) (135,500) (190,445)
Other non-operating income................. 808 6,106 8,722
---------- ---------- ----------
Loss before income taxes................... (52,209) (41,329) (72,491)
Provision (benefit) for income taxes....... 9,607 25,682 (1,312)
---------- ---------- ----------
Net loss(a)................................ $ (61,816) $ (67,011) $ (71,179)
========== ========== ==========
OTHER DATA:
EBITDA(b).................................. $ 235,084 $ 255,430 $ 272,894
Cash and cash equivalents, end of year..... 37,991 29,915 30,301
Net cash provided (used) by operating ac-
tivities.................................. 63,231 65,681 (3,364)
Net cash used by investing activities...... (2,889,426) (66,856) (44,196)
Net cash from financing activities......... 1,793,361 6,768 47,946
</TABLE>
- --------
(a) The acquisition of ZDI on February 29, 1996 gave rise to different bases
of accounting for the period after the acquisition versus the period prior
to the acquisition. This is primarily due to a purchase price which
exceeded the book value of the assets acquired, financed by a higher level
of both debt and equity as compared to the pre-acquisition capital
structure. The amounts indicated above assume that the acquisition of ZDI
took place on January 1, 1995; therefore, depreciation and amortization,
interest expense and net loss have been increased (decreased) by
approximately $6,386, $824 and $10,383, respectively, for 1996 and
$38,312, $(3,484) and $46,759, respectively, for 1995.
(b) "EBITDA" is defined as income before provision for income taxes, interest
expense, depreciation and amortization. EBITDA is not intended to
represent cash flows from operations and should not be considered as an
alternative to net income as an indicator of the Company's operating
performance or to cash flows as a measure of liquidity. The Company
believes that EBITDA is a standard measure commonly reported and widely
used by analysts, investors and other interested parties in the publishing
and media industries.

32
<PAGE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997 (UNAUDITED)

For the first quarter of 1998, the Company will report revenue of $228.1
million compared to $224.9 million for the first quarter of 1997. Revenue from
publishing operations will decline approximately 4.1% primarily due to the
absence of $12.8 million of revenue from Macuser and MacWeek magazines, which
were transferred in October 1997 to a 50/50 joint venture with another
publishing company and are no longer consolidated in the Company's results.
The publishing segment will also report lower advertising revenue from its
business publications principally as a result of factors affecting the
computer technology industry generally, including slowing demand for computer
products, fewer new product launches, pricing pressures, vendor market share
shifts and excess PC inventories in distribution channels. This decline will
be largely offset by increased advertising sales in the Company's Internet
business and consumer publications. More than offsetting the decline in
publishing revenue will be an increase of 77% in revenue from the Company's
tradeshows and conferences operations, primarily the result of earlier
production of two events in the first quarter of 1998 that had been held in
the second quarter of 1997.

The Company will report a loss from operations of $24 million for the first
quarter of 1998 as compared with a loss from operations of $15.6 million for
the first quarter of 1997. Reported EBITDA for the first quarter of 1998 will
be $15.1 million as compared to $25.5 million for the comparable period of
1997. The unfavorable variances are primarily due to the lower level of
advertising in business publications, which have higher profit margins than
consumer publications or the Internet business, coupled with approximately
$3.8 million of one-time costs for office relocations and $1.4 million of
expenses incurred in launching two new publications.

As indicated below under "Seasonality," the first quarter accounted for
approximately 19.4% and 19.5% of the Company's revenue in 1996 on a pro forma
basis and 1997, respectively, and approximately 12.0% and 9.4% of the
Company's EBITDA for the respective years.

YEAR ENDED DECEMBER 31, 1997 COMPARED WITH PRO FORMA YEAR ENDED DECEMBER 31,
1996

Revenue

Revenue increased by $73.2 million or 6.8% from $1,080.6 million in 1996 to
$1,153.8 million in 1997.

Revenue from publishing grew by $50.5 million or 6.2% from $815.7 million to
$866.2 million. Approximately $22 million was due to inclusion of a full year
of results for the electronic gaming publications acquired in mid-1996 and two
publications launched in late 1996. Revenue from Internet services increased
$13.5 million or 71.9% due to higher advertising volume attributable to the
Company's growing presence on the Internet. Increases in advertising rates,
generally ranging between 3% and 10%, and a 5.1% increase in advertising pages
contributed $11.5 million. Revenue from international operations, which
generated 10.2% of the segment's revenue, decreased by $6.6 million due to the
strengthening of the U.S. dollar relative to the major European currencies.
Continued growth from new educational product launches and sales of market
research studies accounted for the balance of the revenue growth.

Revenue from trade shows and conferences increased $22.6 million or 8.5%
from $264.9 million to $287.5 million. Approximately $15 million of the
increase was due to 11 new trade show launches, including revenue from
ancillary show-related sources. The balance of revenue growth was due to
higher exhibitor rates charged at the major events, partly offset by a decline
in revenue from COMDEX/Spring and certain U.K. events.

Cost of production

Production costs increased $22.6 million or 7.5% from $302.6 million to
$325.2 million.

Publishing production costs increased $10.4 million or 4.8% from $215.3
million in 1996 to $225.7 million. Costs related to new launches and volume-
related growth increased approximately $20 million but were partly offset by
approximately $10 million of lower paper costs.

The costs of producing trade shows and conferences increased $12.2 million
or 14.0% from $87.3 million to $99.5 million primarily as a result of costs
related to new events launched in 1997.

33
<PAGE>

Selling, general and administrative expenses

Selling, general and administrative expenses increased $35.7 million or 6.8%
from $528.6 million to $564.3 million. The increase was due to the addition of
employees to support base business volume growth and launches of new products
and services. Results included a one-time $6.0 million charge for the
consolidation and restructuring of the trade shows and conferences business
which was announced in the fourth quarter of 1997. Costs for the publishing
segment rose 4.2% while those for the trade shows and conferences segment rose
22.1% due to the number of new launches and the one-time restructuring charge.

Depreciation and amortization

Total depreciation and amortization decreased $6.3 million to $154.9 million
in 1997. The reduction in depreciation and amortization expense was a result
of certain assets being fully depreciated in 1996.

Interest expense, net

Net interest expense increased $54.9 million or 40.5% to $190.4 million in
1997 due to interest on an additional $900 million of intercompany
indebtedness to Softbank incurred to finance a return of capital.

Other non-operating income, net

Other non-operating income/expense primarily reflects the Company's equity
share of earnings and losses from joint ventures and fees earned from
management of trade shows and conferences not produced by the Company. Income
increased $2.6 million from $6.1 million in 1996 to $8.7 million or 42.6%
reflecting growth in fees from managed events and reduced losses from joint
ventures.

Income Taxes

The 1997 combined income tax benefit of $1.3 million compares to a pro forma
income tax provision of $25.7 million in 1996. The improvement in the tax
provision is due to a higher pre-tax loss giving rise to a tax benefit. The
difference between the 1997 and 1996 effective tax rates and the federal
statutory tax rate of 35.0% is primarily due to non-recognition of tax losses
generated by the MAC Assets ($56.9 million and $77.2 million in 1997 and 1996,
respectively), non-deductible goodwill amortization ($10.2 million and $8.6
million, respectively) and state and local income taxes. In addition, the 1996
tax provision increased approximately $3.2 million as a result of pro forma
adjustments related to the ZDI acquisition.

Net loss

As a result of the changes described above, net loss for the period
increased $4.2 million or 6.2% from $67.0 million to $71.2 million.

EBITDA

EBITDA for 1997 was $272.9 million, an increase of $17.5 million or 6.8%
from the $255.4 million generated in 1996. The increase was due to higher
revenue and management fee income, net of higher production costs and selling,
general and administrative expenses. The ratio of EBITDA to revenue remained
relatively constant at 23.7% for 1997 compared to the 1996 margin of 23.6%.
Excluding the one-time charge related to the consolidation and restructuring
of the trade shows and conferences business, the 1997 ratio would have been
24.2%.

PRO FORMA YEAR ENDED DECEMBER 31, 1996 COMPARED WITH PRO FORMA YEAR ENDED
DECEMBER 31, 1995

Revenue

Revenue increased by $108.9 million or 11.2% from $971.7 million in 1995 to
$1,080.6 million in 1996.

Revenue from publishing grew by $46.7 million or 6.1% from $769.0 million to
$815.7 million. Higher overall advertising rates combined with a 12.4% growth
in advertising pages contributed 47.5% of the revenue increase while the mid-
1996 acquisition of several electronic gaming publications accounted for 28.5%
of the increase. New educational product launches and growth in sales of
market research studies accounted for the balance of revenue growth. Internet
revenue was slightly below the prior year due to the transition from a
business based on membership and subscription fees to one which is supported
primarily by advertising.

34
<PAGE>

Revenue from trade shows and conferences increased $62.2 million or 30.7%
from $202.7 million to $264.9 million. The launch of new international trade
shows accounted for 36.7% of the growth while the introduction of customized
events contributed 19.8%. The balance of the increase was due to growth in
exhibitor square footage and rates at the Company's major U.S. shows.

Cost of production

Production costs increased $40.2 million or 15.3% from $262.4 million to
$302.6 million.

Publishing production costs increased $21.6 million or 11.2% from $193.7
million to $215.3 million, primarily due to volume-related growth and higher
paper costs. Approximately 31.5% of the increase was attributed to costs for
the magazines acquired mid-year while increased frequencies on certain
publications and a full year of costs for publications launched in late 1995
accounted for 18.1% of the increase.

The costs of producing trade shows and conferences increased $18.6 million
or 27.0% from $68.8 million to $87.4 million. The increase was driven by the
cost of new product launches as well as higher direct marketing and facility-
related fees for the major U.S. events.

Selling, general and administrative expenses

Selling, general and administrative expenses rose $53.6 million or 11.3%
from $475.0 million to $528.6 million. This increase reflects the addition of
employees to support growth in the base business along with the launches of
new products and services. Costs for the publishing segment rose 5.8% while
those for the trade shows and conferences segment rose 61.6%, reflecting a
higher level of new launches and the absence of COMDEX related expenses for
the first three months of 1995 (COMDEX was acquired April 1, 1995).

Depreciation and amortization

Total depreciation and amortization of $161.3 million increased $7.1 million
from $154.2 million in 1995 primarily due to the inclusion of a full year's
depreciation and amortization relating to SB COMDEX, which was acquired April
1, 1995.

Interest expense, net

Net interest expense increased $2.4 million or 1.8% on a pro forma basis due
to higher average debt levels in 1996.

Other non-operating income, net

Income increased to $6.1 million compared to $.8 million in 1995 due to the
growth in fees from managed events along with reduced losses from joint
ventures.

Income Taxes

The combined income tax provision of $25.7 million compares to an income tax
provision of $9.6 million in 1995. The unfavorable variance in income taxes
and the difference in the 1996 and 1995 effective tax rates from the federal
statutory tax rate of 35% is primarily attributable to non-recognition of tax
losses generated by the MAC Assets ($77.2 million in 1996) and non-deductible
goodwill amortization ($8.6 million in 1996). In addition, the tax effects of
the 1996 and 1995 pro forma adjustments relating to the ZDI acquisition were a
$3.2 million and $11.9 million increase in tax provision, respectively.

Net Loss

As a result of the changes described above, net loss for the period
increased $5.2 million or 8.4% from $61.8 million to $67.0 million.

35
<PAGE>

EBITDA

EBITDA for 1996 was $255.4 million, an increase of $20.3 million or 8.7%
from the $235.1 million generated in 1995. The increase was due to higher
revenue and management fee income, net of higher production costs and selling,
general and administrative expenses. The cost of new product launches caused
the growth rate of expenses to exceed the revenue growth rate and, as a
result, the ratio of EBITDA to revenue of 23.6% decreased slightly from 24.2%
for 1995.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the financing requirements of the Company have been funded
through intercompany loans and advances.

As a result of the Reorganization, the Company's intercompany debt owed to
Softbank will be reduced to $94.2 million. Such indebtedness bears interest at
9.9% and matures in February 2009. Concurrently with the Offering, the Company
intends to issue and sell $250 million aggregate principal amount of Notes. In
addition, the Company will enter into the $1.35 billion Credit Facility, and
borrow $1.25 billion thereunder, to provide additional funds for the repayment
of intercompany debt to Softbank and to provide for the Company's working
capital requirements. The Credit Facility will consist of a $700 million
reducing revolving credit facility (with $600 million drawn at closing) and a
$650 million term loan, both of which will mature in March 2005. There will be
no scheduled reductions in the revolving credit commitment or amortization
under the term loan until September 2000. The Company has obtained a
commitment letter from The Bank of New York, Morgan Stanley Senior Funding,
DLJ Capital Funding and The Chase Manhattan Bank to provide such Credit
Facility. The consummation of each of the Offerings and the borrowings under
the Credit Facility are conditioned upon, and will occur simultaneously with,
the consummation of the others.

Cash and cash equivalents were $30.3 million and $29.9 million at December
31, 1997 and 1996, respectively. The balance increased $.4 million due to the
factors discussed below:

Cash (used) provided by operating activities was $(3.4) million and $65.7
million for the years ended December 31, 1997 and 1996, respectively. The
decrease from 1996 to 1997 was the result of higher interest expense and final
payment of long-term incentives to management established in connection with
the sale of ZDI in 1994.

For the year ended December 31, 1997, the Company used $44.2 million in cash
for investing activities, principally $30.2 million in capital expenditures.
The majority of these expenditures were for computer equipment and leasehold
improvements. The Company believes that future capital expenditures associated
with new office space will be approximately $35 million in 1998 and $25
million in 1999 (net of tenant improvement credits). Cash used for investing
activities on a pro forma basis for 1996 was $66.8 million principally due to
capital expenditures of $22 million and the acquisition of Sendai Publishing
Group for $28 million.

For the year ended December 31, 1997, the Company generated $47.9 million in
cash from financing activities, principally $66.6 million of capital
contributed by MAC to fund the operating losses of the MAC Assets, net of a
$21.4 million repayment of intercompany indebtedness. Pro forma cash flow from
financing activities for the year 1996 was $6.8 million, primarily from
capital contributions of $14.8 million from Softbank offset by a dividend of
$8.0 million.

The Company believes that, based on its current level of operations and
anticipated growth, the Company's ability to generate cash, together with
other available sources of funds including available cash on hand at December
31, 1997, of $30.3 million, will be adequate over the next 12 months to make
required payments of principal and interest on the Company's indebtedness, to
fund anticipated capital expenditures and future working capital requirements.
However, actual capital requirements may change, particularly as a result of
any acquisitions the Company may pursue. The ability of the Company to meet
its debt service obligations and reduce its total debt will depend upon the
future performance of the Company.

36
<PAGE>

The Company has entered into a license and services agreement with MAC to
develop ZDTV. ZDTV is indirectly owned by MAC, but as part of this license and
services agreement MAC has granted the Company an option exercisable through
December 31, 1998 to purchase all of MAC's interest in ZDTV for an amount
equal to MAC's investment plus 10% per annum for the period of its investment.
Pursuant to the license and services agreement, the Company has agreed to fund
ZDTV's operations on behalf of MAC through unsecured advances which, for
approved levels of expenditure, are to be reimbursed by MAC. Such advances
bear interest at the 30-day LIBOR rate plus .50%. ZDTV's cash requirements are
expected to be approximately $54 million in 1998. The Company's cumulative
advances in respect of ZDTV, which totaled $14.4 million net of $10.1 million
in repayments through December 31, 1997, will be repaid concurrently with the
Reorganization. The Company has not yet determined whether it will exercise
its option to purchase MAC's interest in ZDTV. Any such purchase will depend
upon securing sufficient cable carriage, which may include entering into a
joint venture or other co-ownership arrangement, including an arrangement with
a third party cable system operator which will provide carriage and also
assume a portion of the ongoing cash requirements on terms that are acceptable
to the Company. ZDTV is not included in the Company's results of operations.
In the event that the Company acquires a controlling interest in ZDTV from
MAC, such acquisition would be accounted for as a pooling transaction; in the
event that the Company acquires a non-controlling interest, such acquisition
would be accounted for under the equity method. See "Certain Transactions."

SEASONALITY

Historically, the Company's business has been seasonal as a significant
portion of the trade shows and conferences segment revenue has occurred in the
second and fourth quarters. In addition, the Company's publishing segment has
generated higher revenue in the second and fourth quarters. The following
table sets forth certain unaudited quarterly combined statements of operations
data for each of the eight quarters in the period ended December 31, 1997. In
the opinion of the Company's management, this unaudited information has been
prepared on a basis consistent with the audited Combined Financial Statements
of ZDI and ZDCF appearing elsewhere in this Prospectus (with the exception of
the March 31, 1996 data which has been prepared on the basis described in
Presentation of Financial Information above) and includes all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the information set forth therein when read in conjunction with the Combined
Financial Statements and related notes thereto. The operating results for any
quarter are not necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
QUARTERS ENDED
(DOLLARS IN THOUSANDS)
-----------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1996 1996 1996 1996 1997 1997 1997 1997
--------- -------- ------------- ------------ --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue, net:
Publishing............. $189,984 $197,121 $195,731 $232,884 $209,564 $219,195 $199,745 $237,729
Tradeshows and confer-
ences................. 19,661 69,047 53,631 122,545 15,321 82,135 24,227 165,845
-------- -------- -------- -------- -------- -------- -------- --------
Total Revenue........... 209,645 266,168 249,362 355,429 224,885 301,330 223,972 403,574
Percentage of total
year.................. 19.4% 24.6% 23.1% 32.9% 19.5% 26.1% 19.4% 35.0%
Cost of production...... 55,818 76,456 73,568 96,802 61,526 92,986 62,716 108,017
Selling, general and
administrative
expenses............... 122,730 122,846 133,035 150,025 139,980 143,243 143,131 137,990
Depreciation and amorti-
zation................. 35,284 41,692 41,793 42,490 38,966 39,032 39,699 37,243
Income (loss) from oper-
ations................. (4,187) 25,174 966 66,112 (15,587) 26,069 (21,574) 120,324
Income (loss) before
taxes.................. (28,139) (14,260) (30,556) 31,626 (60,145) (17,715) (66,937) 72,306
Net income (loss)....... (34,559) (20,680) (36,977) 25,205 (59,817) (17,387) (66,609) 72,634
EBITDA.................. 30,752 67,823 45,828 111,027 25,534 68,216 20,486 158,658
Percentage of total
year.................. 12.0% 26.6% 17.9% 43.5% 9.4% 25.0% 7.5% 58.1%
</TABLE>

INFLATION AND CHANGES IN PAPER PRICES

The Company continually assesses the impact of inflation and changes in
paper prices. The Company generally enters into contracts for the purchase of
paper which adjust the price on a quarterly basis. Paper prices

37
<PAGE>

began to rise in 1994, rose significantly in 1995 and 1996 then decreased in
1997. Management expects paper prices to increase again in 1998. The Company
will continue to monitor the impact of inflation and paper prices and will
consider these matters in setting its pricing policies.

The Company frequently reviews its purchasing and manufacturing processes
for opportunities to reduce costs and mitigate the impact of paper price and
postage rate increases (such as purchasing lighter-grade paper stock or, when
paper prices are at cyclical lows, increasing paper inventory or entering into
longer term contracts with suppliers). However, the Company has not entered,
and does not currently plan to enter, into long-term forward price or option
contracts for paper. See "Risk Factors--Risks Associated with Fluctuations in
Paper and Postage Costs" and "Business--Print Publishing--Paper and Printing."

YEAR 2000 ISSUES

The Company uses a number of computer software programs and operating
systems, including applications for its internal electronic communications
network and for various administrative and billing functions. The Company has
assessed the scope of the Company's risks related to problems these computer
systems may have in processing date information related to the year 2000 and
believes such risks are not significant.

The Company has identified all of its significant internal software
applications which contain source codes that may be unable to appropriately
interpret the year 2000 and has already begun to modify or replace those
applications. The estimated costs to modify or replace these applications are
not material to the Company.

In addition, the Company has inquired of its vendors and business partners
about their progress in identifying and addressing problems related to the
year 2000. All major vendors with whom the Company exchanges electronic
information or on whose internal software applications the Company may be
dependent, have committed to the Company that plans are in place to be
compliant before processing of information related to calendar year 2000 would
be required. Although no assurance can be given that all of these third party
systems will be year 2000 compliant, the Company believes that risk is not
significant.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS No. 130, "Reporting Comprehensive Income," issued in June 1997, will
require the Company to disclose, in financial statement format, all non-owner
changes in equity. Such changes include, for example, cumulative foreign
currency translation adjustments, certain minimum pension liabilities and
unrealized gains and losses on securities available for sale. This statement
is effective for fiscal years beginning after December 15, 1997 and requires
presentation of prior period financial statements for comparability purposes.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," issued in June 1997, establishes standards for reporting
information about operating segments in annual financial statements and
interim financial reports. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
Generally, financial information is required to be reported on the basis that
is used internally for evaluating segment performance and deciding how to
allocate resources to segments.

SFAS No. 132, "Employer's Disclosure about Pensions and Other Postretirement
Benefits," is effective for the year ended December 31, 1998. This statement
revises the disclosure requirements for employers' pension and other retiree
benefits.

The Company expects to adopt the above statements beginning with its 1998
financial statements.

FORWARD-LOOKING STATEMENTS

"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other sections of this Prospectus contain forward-looking
statements which are subject to various risks and uncertainties. Actual
results could differ materially from those discussed herein. Important factors
that could cause or contribute to such differences include those discussed
under "Risk Factors" as well as those discussed elsewhere in this Prospectus.

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<PAGE>

INDUSTRY

Technology is widely recognized as one of the largest and fastest growing
sectors of the United States economy. The market for technology goods and
services is undergoing rapid expansion, largely fueled by: (i) increased
integration of computers into the workplace and home; (ii) shortened product
life cycles; and (iii) increased use of the Internet. The demand for computer
technology to enhance productivity as well as the increasing number of
applications in the areas of education, entertainment and communications has
dramatically increased the number of computers in use. The number of personal
computers in use worldwide has doubled from 150 million in 1995 to over 300
million in 1997, significantly broadening the consumer and business markets
for computer technology. In addition, rapid technological advances have
shortened product life cycles; for example, the estimated marketable product
life of a PC has decreased from five years in 1981 to less than six months
today. The Internet has also become a widely accepted information tool as
demonstrated by the proliferation of users, with 68 million adults in the U.S.
having used the Internet by year-end 1997, up from just five million in 1994,
and the sharp increase in the number of commercial Web sites worldwide, from
30,000 in 1995 to approximately 400,000 in 1997.

For buyers and users of computer technology products, these factors have
increased the demand for objective, up-to-date information and analysis. For
sellers of such products, these factors have increased their need to
communicate a wide range of information regarding their products and services,
from advertising designed to increase sales to education designed to improve
end-user satisfaction and build brand loyalty. Computer technology-focused
media enable sellers to communicate their message effectively by targeting a
focused customer base. As a result of the broadening of the consumer base, as
well as the favorable demographics of this base, computer technology
publications and other media are becoming increasingly attractive as a
platform for consumer product advertising.

COMPUTER TECHNOLOGY PRINT PUBLICATIONS MARKET

In 1996, advertising revenue in computer-oriented print publications
totalled $1.3 billion. In 1997, advertising revenue in computer-oriented
publications grew by 11.2% while the advertising market as a whole grew by
8.3% in the first ten months (the latest period for which data is available)
as compared to the same period in the prior year. Growth in advertising and
circulation revenue for computer-oriented publications has outpaced the
publishing industry in general, growing 10.4% a year from 1994 to 1997, versus
6.3% a year for all periodicals.

COMPUTER TECHNOLOGY TRADE SHOWS

A trade show can be described as a face-to-face version of a print
publication. Trade show attendees, like readers of print publications, are
presented with product advertisements in the form of exhibits and "editorial"
content in the form of conferences and other ancillary forums. Producers of
trade shows and conferences generate revenue from exhibit space sales,
advertising and conference and general attendance fees. Trade shows and
conferences allow sellers to conduct a large volume of face-to-face sales
presentations to qualified buyers in a short period of time. Professional
attendees include hardware and software manufacturers and developers, sales
and distribution personnel and large volume end-users. Industry leaders such
as Microsoft Corporation, Intel Corporation and Cisco Systems, Inc. have
consistently used these events to promote the launch of important products in
order to reach top-ranking decision-makers in the computer technology
industry.

Trade shows are becoming an increasingly important part of the marketing
strategy for information technology vendors. A recent study noted that
companies consider trade shows one of the most effective mediums for
generating and closing sales, second only to direct selling. Exhibit space
revenues from North American computer-product trade shows were approximately
$573 million in 1997. In 1997, exhibit square footage rose 28% at such shows,
the number of exhibiting firms increased 20% and attendance rose 28%.

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<PAGE>

ONLINE AND OTHER TECHNOLOGY INFORMATION SERVICES

The proliferation of Web sites and the growing number of users combine to
make the Internet an increasingly significant advertising and brand-building
vehicle. The Internet enables marketers to deliver targeted messages as a
result of the ability to track consumer behavior and immediately convert
advertising responses into commercial transactions. The advertising-based
business model for online services, which is similar to print and television
media, involves the payment to Internet content and service providers of
advertising fees based primarily on the demographics and purchasing habits of
the audience and on the number and positioning of advertisements delivered.
The market for advertising on the Internet was approximately $597 million in
1997, a 152.6% increase from 1996. The computer technology industry has been
one of the leading advertisers on the Internet, comprising 35% of all
advertising dollars for the twelve months ended September 30, 1997. Web sites
focused on computing content provide yet another forum for sellers of computer
technology to deliver targeted product information and advertising to a
premium customer base. The Company expects that the Internet market, like the
publications market, will continue to broaden and gain appeal as a platform
for consumer product advertising as well.

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<PAGE>

BUSINESS

The Company's PC Magazine, PC Week and Computer Shopper magazines are the
top three computer magazines in the U.S. and are among the top 25 U.S.
magazines, each as measured by total revenue in 1996 (the latest year for
which data is available). The Company also produces the world's most important
trade shows serving vendors, resellers, buyers and users of computer
technology, including COMDEX/Fall, the largest trade show in the U.S. in 1997.
The Company's ZDNet.com Web site is the leading computing content site and
ranked the number one Web site in 1997 in the category of news, information
and entertainment, as measured by visitors per month.

The Company's 28 primary U.S. and international titles, including its joint
ventures, and over 50 licensed publications, total more than 80 publications
distributed worldwide, with a combined circulation of over eight million
primary readers. In 1997, Ziff-Davis was the largest technology publisher in
the U.S. in terms of total magazine revenue. In that same year, Ziff-Davis
accounted for 36.8% of all advertising and circulation dollars spent in
computer periodicals, with at least 50% more total magazine revenue than its
closest competitor. The Company's publications include PC Magazine, the
largest circulation computer magazine in the world, Computer Shopper, the
leading magazine targeted at direct buyers of computers (along with its Web-
based companion, Netbuyer), Computer Life, a monthly magazine for home
computing enthusiasts, and Family PC, a magazine specifically targeted to
households with children. ZD Labs, its computer testing facility, enables the
Company to provide reliable and authoritative product evaluations to a
sophisticated audience of brand-specifiers and decision-makers in both the
business and consumer markets. The preeminence of the Company's publications
among readers and advertisers is based on its comprehensive market and product
coverage, the quality of its editorial content and the influence of its
readership.

The Company's other media and marketing platforms include online content,
market research, education and the publication of computer-related newsletters
and training manuals. In addition, the Company and MAC have developed ZDTV,
the first 24-hour cable television channel and integrated Web site focused
exclusively on computers, technology and the Internet, which is expected to be
launched in the first half of 1998. The Company has an option to purchase ZDTV
from MAC on or before December 31, 1998. See "--Television."

The Company developed certain international consumer and Internet
publications, international trade shows and the ZDNet business under the
ownership of MAC. As a result of the Reorganization, these businesses have
been or will be purchased from MAC. See "The Reorganization."

The Company's Ziff-Davis Media Network integrates the Company's marketing
activities into one cohesive resource for its largest customers. Originally
established to provide discounts for advertisers buying across two or more
magazine titles, the Media Network has been expanded to allow marketers to
reach their various target buyers through any combination of the Company's
media and marketing platforms.

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<PAGE>

1997. Circulation revenue, comprised of subscription and newsstand single copy
sales, generated 13.1% of the Company's revenue in 1997 and other revenue
components, including online content, market research and revenue derived from
joint ventures and licenses, contributed 11.5% in 1997.

BUSINESS AND OPERATING STRATEGY

Maintain Focus on the Computer and Internet Technology Markets. The Company
believes that its singular focus on the computer and Internet-related
technology markets provides it with substantial growth opportunities as well
as the ability to broaden its expertise in attracting both audiences and
advertisers.

Develop the Most Comprehensive, Objective and Authoritative Content. The
Company strives to produce the most comprehensive, objective and authoritative
editorial content in order to attract category brand-specifiers and decision-
makers to its media platforms. The ability to provide focused audiences with
their specific information needs attracts the leading advertisers and
exhibitors to the Company's products and services.

Build Upon Brand Strength of Existing Media Properties. The Company will
pursue continued growth from its core portfolio of leading brands, such as PC
Magazine, PC Week, COMDEX and ZDNet, by seeking to expand its market share of
audiences and advertisers and enhancing the quality and accessibility of the
content it produces and marketing services it provides. In addition, the
Company will continue to extend its existing brands into other platforms to
offer multiple media presentations of its content.

Continue to Leverage Multiple Media Marketing Platforms. The Company
believes that the scope and depth of its products and services across multiple
media platforms and geographic territories creates growth opportunities
exceeding those that such businesses could achieve independently. Such
opportunities include the leveraging of strong relationships with accounts in
one media platform into other platforms, cross-marketing Ziff-Davis products
and services to the audiences of its different platforms and packaging
integrated marketing products across all platforms for large advertisers. The
Company believes that its ability to offer clients multiple platform marketing
solutions gives it a competitive advantage over single platform providers.

Expand Leadership on the Internet. The Company intends to use its already
significant presence on the Internet and broad experience in publishing to
continue to reach new audiences and increase advertising revenue. In addition,
the Company believes that the large existing audience for ZDNet and its
affiliated sites, together with its publishing experience, gives it a
competitive advantage in identifying, acquiring and developing new products
and services.

Launch New Products and Services. The Company believes that rapid advances
in technology create additional growth opportunities for the launch of new
products and the expansion of its audiences and advertising base. The Company
seeks to be the first to identify new audiences and develop products and
services which respond to their informational needs. Management believes that
the scope of its operations and its experience in launching new products
across multiple media platforms and geographic regions reduce the risks
typically associated with these activities and enable it to more readily
achieve market acceptance for new products and services as compared to other
media companies.

Expand Global Reach. The Company intends to leverage its widely recognized
brands and its experience in multinational operations to expand further into
key overseas markets, focusing on those markets which have size and growth
characteristics that will support its strategy of cross-media operations.
Management intends to further expand internationally through the launch
overseas of proven U.S. properties, joint ventures and licensing arrangements
with local operating partners and through selective acquisitions.

The Company expects to fund its business and operating strategy from
internally generated cash flow from operations, which are estimated to be
sufficient to fund investments as well as the repayment of indebtedness. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

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<PAGE>

PRINT PUBLISHING

The Company is a leading computer-related magazine publisher, with 28
primary U.S. and international titles, including its joint ventures, and over
50 licensed publications, totaling more than 80 publications distributed
worldwide. In 1997, the Company's publications had combined circulation of
over eight million primary readers worldwide. Approximately 62% of the
Company's total revenue in 1997 was attributable to its print publishing
business. Each of the Company's magazines is designed to appeal to a target
audience of sophisticated customers in the business and consumer markets by
providing high-quality editorial content, often supported by independent
laboratory-based product testing. The Company seeks to maintain and increase
its revenue by introducing current advertisers to new titles, by attracting
new advertisers targeted at the Company's readership and by developing new
reader and advertising categories. Each of the Company's primary publications
has established its own Web site as a complementary delivery platform.

The Company believes its preeminent position in the computer publishing
market is based upon its leading brands in key categories, its ability to
successfully develop new brands for emerging product categories, its strength
in circulation and its ability to expand internationally. Ziff-Davis seeks to
produce the highest quality editorial content; it employs top editors and
columnists supported by laboratory-testing facilities that produce widely
acknowledged authoritative benchmarks for determining product quality. See "--
Editorial, Laboratory Testing and Benchmark Software." In addition to its
leading publications targeted at brand-specifiers and other industry
professionals, the Company has successfully introduced new publications
targeted at emerging sectors, including the consumer market (Family PC,
Computer Life and Computer Gaming World), technology lifestyle (Yahoo!
Internet Life) and Internet professionals (Internet Computing and Inter@ctive
Week). The Company's newsstand strategy focuses on developing strong
relationships with a key distributor and large retail accounts. In order to
offer clients coverage of broad international markets, the Company has adopted
a licensing strategy designed to maximize global reach and maintain content
quality in international publications while reducing cost of entry into new
markets. Depending on the characteristics of a particular market, the Company
may choose to own an international publication, enter into a master license
covering one or more titles, or enter into a joint venture if an attractive
local partner can be identified.

The Company's PC Magazine, PC Week and Computer Shopper magazines are the
top three computer magazines in the U.S. and are among the top 25 U.S.
magazines, each as measured by total revenue in 1996 (the latest year for
which data is available). In 1997, Ziff-Davis was the largest technology
publisher in the U.S. in terms of total magazine revenue. In that same year,
Ziff-Davis accounted for 36.8% of all advertising and circulation dollars
spent in computer periodicals, with at least 50% more total magazine revenue
than its closest competitor. In recent years, advertisements in the Company's
publications have expanded beyond those for computer technology products to
include consumer product advertising, reflecting the desirable demographics of
the Company's readership, as well as the expanding readership of computer
technology publications to a broader consumer market.

The Company's publications include paid-circulation magazines, which
generate revenue from newsstand sales, subscriptions and advertising, and
controlled-circulation publications, which are distributed free of charge to
qualified information technology professionals and generate revenue
principally from the sale of advertising. In addition, the readership of
controlled-circulation publications provides valuable demographic information
to the Company. Most of the current Ziff-Davis publications are either monthly
magazines providing comparative, laboratory-based product reviews or news
weeklies providing product and industry news and analysis; however, the
Company also serves the developing market for lifestyle and entertainment
publications focusing on technology.

The Company's U.S. publications have a total circulation of over six million
primary readers, and the Company had a worldwide circulation of over eight
million primary readers. Its six paid-circulation business magazines
(including one joint venture) accounted for 47.2% of the total paid-
circulation of all computer technology business magazines in the U.S. in 1997.
In 1997, PC Magazine's circulation was greater than that of Business Week,
Fortune or Forbes. With respect to newsstand sales, a critical measure of
magazine vitality, in the first six months of 1997 Ziff-Davis accounted for
47.5% of all computer magazine copies sold, and on average Computer Shopper
had greater newsstand sales than Business Week, Fortune and Forbes combined.

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The following table sets forth information relating to the Company's primary
publications for 1997.

<TABLE>
<CAPTION>
CIRCULATION
--------------------
PUBLICATION 1997
FIRST FREQUENCY ADVERTISING
PUBLICATION ISSUE TYPE AMOUNT(1) (PER YEAR) PAGES(2)
----------- ----- ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
U.S. BUSINESS
PC Magazine........... 1981 Paid 1,176,351 22x 6,261
PC Computing.......... 1988 Paid 1,008,615 12x 2,821
Computer Shopper...... 1979 Paid 561,308 12x 8,590
PC Week............... 1983 Controlled 300,105 51x 7,033
Windows Sources(3)(4). 1993 Paid 400,738 12x 2,108
Internet
Computing(3)(5)...... 1996 Paid 340,579 12x 948
Inter@ctive Week(3)... 1994 Controlled 101,510 45x 1,840
Macworld(6)........... 1985 Paid 671,391 12x 1,734
MacWeek(6)............ 1987 Controlled 97,502 48x 2,593
Sm@rt Reseller(3)..... 1998 Controlled 60,000(7) 12x N/A
U.S. CONSUMER
Computer Life(3)(8)... 1994 Paid 453,078 12x 1,268
Electronic Gaming
Monthly.............. 1988 Paid 358,198 12x 1,221
Yahoo! Internet
Life(3).............. 1995 Paid 325,771 12x 491
Computer Gaming
World(3)............. 1981 Paid 230,772 12x 2,320
EGM/2/................ 1988 Paid 126,310 12x 216
Official U.S.
PlayStation
Magazine(9).......... 1995 Paid 100,000(10) 12x 463
Family PC(3)(11)...... 1994 Paid 382,925 12x 1,343
INTERNATIONAL(3)
PC Professionell
(German)............. 1991 Paid 178,246 12x 1,461
PC Direkt (German).... 1992 Paid 139,229 12x 814
Internet Professionell
(German)............. 1997 Paid 26,665 12x 134
PC Magazine (UK)...... 1992 Paid 130,264 12x 3,054
PC Direct (UK)........ 1992 Paid 124,165 12x 7,432
PC Gaming World (UK).. 1997 Paid 40,385 12x 304
PC Expert (French).... 1992 Paid 98,816 12x 1,203
PC Direct (French).... 1992 Paid 83,097 12x 1,335
PC Week
(China)(12)(13)...... 1996 Controlled 50,000 51x 2,638
PC Computing
(China)(12).......... 1994 Paid 45,580 12x 360
PC Magazine
(China)(12).......... 1994 Paid 45,899 12x 678
</TABLE>
- --------
(1) Based on circulation information provided by the Company to the Audit
Bureau of Circulation for paid publications and BPA International for
controlled publications for the six month period ended December 31, 1997
other than French publications, which are based on information provided
to the Office de la Justication de la Diffusion for the year ended
December 31, 1997, German publications, which are based on information
provided to Informationgemeinschaft zur Feststellungder Verbreiterung Von
Webetragern e.v. for the quarter ended December 31, 1997 and Chinese
publications, which are based on information provided to BPA
International for paid publications for the six month period ended
December 31, 1997.
(2) As reported by AdScope for the year ended December 31, 1997 for domestic
publications and based on Company data for international publications.
(3) Properties which have been or will be acquired from MAC.

(4) To be reformulated and converted into a controlled circulation
publication in the second half of 1998.

(5) Formerly ZD Internet Magazine.

(6) Joint venture with International Data Group, Inc.

(7) 60,000 target rate base for 1998.

(8) To be combined with Equip in the second half of 1998 and called Equip.

(9) Formerly P.S.X.

(10) 100,000 target rate base for 1998.

(11) Joint venture with an affiliate of The Walt Disney Company.

(12) Venture with Richina Media Holdings and other local agencies in China.

(13) Circulation numbers and advertising pages are based on Company data.

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<PAGE>

ZIFF-DAVIS MEDIA NETWORK

EDITORIAL, LABORATORY TESTING AND BENCHMARK SOFTWARE

The Company has invested heavily in its editorial staff and in training and
technology to develop the high level of technical expertise required to
provide quality content on computer technology. It employs over 450 editorial
personnel worldwide, including award-winning editors and experts in their
fields. The Company believes that it provides its consumers with the most
reliable, objective and focused product evaluations and industry news. Because
of the quality and reputation of Ziff-Davis laboratory tests, the Company's
publications are widely regarded as a reliable source of objective product
evaluations. The Company's influence over computer purchasing carries with it
the responsibility to maintain the highest standards of fairness and
objectivity in its product reviews. To ensure this impartiality, Ziff-Davis
has instituted policies governing separation of editorial functions from
advertising sales functions and restricting trading in securities of
technology-related companies by its journalists.

The Company is committed to laboratory-based product testing as an integral
part of its editorial mission. In 1997, the Company spent over $10 million in
laboratory testing. Testers from many of the Company's different publications
work with the ZD Labs staff to provide comprehensive, objective test results
that can assist readers and users of Ziff-Davis publications and other
content-based services in making buying decisions. In addition to the core ZD
Labs staff, Ziff-Davis publications such as PC Magazine, PC Week, Computer
Shopper and PC Computing maintain their own staff and/or testing space at ZD
Labs as well as at their own locations. The ZD Labs testing facility provides
space for testing hundreds of products and systems. One of its newest
facilities is an Internet/Intranet lab dedicated to testing Web servers and
other Internet products. In its domestic lab facilities, the Company employs
120 technicians, enabling it to test thousands of products each year and
conduct large-scale tests that effectively simulate corporate installations.
The Company believes ZD Labs gives it a competitive advantage in terms of
staffing, equipment and access to the technology necessary to evaluate
products.

ZD Labs produces the core, publicly available and widely distributed
benchmark software that Ziff-Davis publications use worldwide to measure the
performance of PCs, Macintosh systems and servers. The Company's benchmarks
have become industry standards among major buyers of computer and Internet-
related technology.

SOURCES OF PRINT PUBLISHING REVENUE

Advertising Sales. The Company's advertising strategy for its publishing
business is based on helping customers maximize the return on their
advertising investment. Advertising sales accounted for 78.4% of the Company's
total print publishing revenue for 1997. Ziff-Davis has historically invested
in comprehensive research to better understand the computer technology market
and the positions of its different publications. The Ziff-Davis sales
philosophy is to encourage its sales force to adopt the role of marketing
consultant, using Ziff-Davis market research tools, such as the Company's
InternetTrack and BrandTrack services, to provide clients with information on
overall industry trends as opposed to more limited sales presentations
focusing on individual publications. As of December 31, 1997, Ziff-Davis
employed over 250 salespeople, sales managers and sales executives and over
325 sales support staff in its publishing segment to provide customer service,
research, promotional support and value-added programs for advertisers.

Circulation. Ziff-Davis maintains centralized circulation operations which
enable the Company to capitalize on its successful strategies and practices
across all publications on a timely basis. The Company strives

45
<PAGE>

to increase its readership by building relationships with distributors,
retailers and subscribers. Revenue from circulation of the Company's paid-
circulation magazines accounted for 18.4% of the Company's total print
publishing revenue in 1997. This was comprised of subscription sales (10.1% of
total revenue in 1997 and 10.5% in 1996) and newsstand sales (8.1% in each of
1997 and 1996). The Company's publications have a total circulation of over
eight million primary readers worldwide.

The Company's newsstand strategy focuses on developing strong relationships
with a key distributor and large retail accounts. Ziff-Davis recently entered
into a newsstand distribution arrangement in the U.S. with Warner Publishers
Services ("Warner"), a division of Time Warner Inc., which covers the
Company's entire line of paid-circulation magazines. As of January 1998, the
Company became Warner's principal supplier of computer technology
publications. In addition, the Company has preferred distribution arrangements
with large retailers including WalMart, Barnes & Noble, Staples and Office
Max. These arrangements include special magazine displays featuring Ziff-Davis
brand products which increase the prominence of the Company's publications and
strengthen its brand identity. With respect to newsstand sales, a critical
measure of magazine vitality, Ziff-Davis publications accounted for 47.5% of
all computer magazine copies sold in the first six months of 1997.

The Company's subscription strategy is to maintain a highly focused
readership in order to provide the most effective affinity between advertisers
and readers. The Company believes that this strategy increases subscriber
loyalty and renewal rates and allows the Company to provide advertisers with
access to a precisely focused target audience. The Company's six paid-
circulation business magazines (including one joint venture) accounted for
47.2% of the total paid circulation of all computer technology business
magazines in the U.S. in 1996.

Licensing and Joint Ventures. The Company has adopted a licensing strategy
designed to maximize global reach and maintain content quality in
international publications while reducing the cost of entry into new markets.
In markets where the Company believes that the opportunity is significant
relative to the cost of entry, the Company may operate through wholly-owned
publishing companies. Through subsidiaries, the Company currently has
publishing operations in France, the United Kingdom and Germany. In other
markets, the Company has opted to enter into licensing arrangements with local
publishing companies, and currently has over 50 licensed publications
worldwide. The Company's licenses are generally three to five year agreements
that provide for a minimum annual royalty against a percentage of revenue. The
Company also operates through a number of joint venture companies with
partners, including joint ventures with International Data Group, Inc. ("IDG")
and an affiliate of The Walt Disney Company ("Disney") in the U.S. and a
venture with Richina Media Holdings and other local agencies in China. The
Company is currently negotiating with an affiliate of Disney to buy its
interest in the Family PC joint venture.

U.S. PUBLICATIONS

Business Magazines. In the U.S. market, the Company publishes ten computer
publications directed to business buyers, including six paid-circulation
magazines and four controlled-circulation weeklies or bi-weeklies. Each
publication produces authoritative, independent guidance that the Company
believes is generally considered to be the primary product resource in its
market segment. Two of these titles, Macworld and MacWeek, are dedicated to
the Apple Macintosh market and are published by Mac Publishing L.L.C., a joint
venture between the Company and IDG.

PC Magazine provides corporate buyers of computer technology with
comprehensive laboratory-based comparative reviews of PC hardware, software
and networking products, with a focus on technical specifications. With a
paid circulation of more than 1.18 million, PC Magazine is the largest
circulation computer magazine in the world, accounting for 35.4% of all
computer advertising revenue in directly competitive U.S. publications in
1997. PC Magazine has expanded its editorial material into other media,
including a Web publication, PC Magazine Online, and a CD ROM-based
multimedia companion magazine, PC Magazine Extra, which has a paid
circulation of over 75,000. PC Magazine also produces two newsstand-only
specials: Your New PC, which supplies buying advice for less sophisticated
computer buyers, and InternetUser, which focuses on reviews of Internet
products.

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<PAGE>

PC Computing provides business users with results-oriented reviews of
computer products, with a focus on productivity and usability. A monthly
publication, it is one of only three computer magazines to have reached a
circulation of over one million readers. PC Computing recently launched
Equip, a quarterly newsstand publication that provides frequent buyers of
consumer electronic products with recommendations on digital electronic
products such as digital phones, DVD players, digital satellite dishes and
camcorders.

Computer Shopper provides readers who buy computer products directly from
manufacturers with buying advice, product evaluations, and technology
coverage, including information on the availability, pricing,
specifications and configurations of thousands of computer products. With a
newsstand circulation of approximately 300,000 in 1997 (the largest
newsstand sales of any computer publication), this monthly publication
sells more pages of advertising than any other computer magazine. Its
interactive Web-based companion, Netbuyer, is one of the leading Web sites
devoted to computer retailing.

PC Week provides enterprise product buyers and information technology
professionals at large corporate computing sites with timely information on
products, companies and general industry news. With a controlled
circulation of over 340,000 distributed to over 180,000 sites, it is the
leading computer weekly. Its online companion, PC Week Online, contains
such innovative features as PC Week Radio.

Windows Sources provides computer professionals responsible for
implementing computing standards within their organizations with detailed
reviews of important Windows 95 and Windows NT products. With an increasing
focus on Windows NT as a critical computing platform, this monthly
publication reached a paid circulation of more than 400,000 in 1997.
Windows Sources will be reformulated in the second half of 1998 and
converted into a controlled circulation magazine.

Internet Computing provides key buyers of Internet and Intranet products
(primarily Web site designers and developers and IS/Intranet managers) with
product buying information, analysis of new technologies and techniques and
tips for creating Web sites. Internet Computing is published monthly and
reached a paid circulation of more than 340,000 in 1997.

Inter@ctive Week provides Internet and telecommunications professionals
with information on relevant business and technology issues, including
products, events, services, strategies, alliances and key players. With a
controlled circulation of over 100,000, Inter@ctive Week became one of the
leading publications for the digital communications technology industry in
less than three years.

Sm@rt Reseller, a bi-weekly launched in January 1998, provides value-
added resellers, system integrators, distributors, Web developers and
Internet service providers with in-depth news and analysis on business and
technology. Sm@rt Reseller currently targets a controlled circulation of
60,000.

Macworld provides Macintosh buyers with comparative, laboratory-based
product evaluations, reviews and information about Macintosh products,
supported by a product testing facility which the Company believes is the
most advanced in the Macintosh industry. Macworld has a qualified
circulation of over 650,000.

MacWeek is targeted at volume buyers of, and purchase influencers for,
Macintosh products at large sites in business, government and education, as
well as buyers at mid-level and smaller businesses, and delivers
information on Macintosh technology, industry trends, news, analysis and
new products. The only weekly Macintosh newspaper, MacWeek had a controlled
circulation of approximately 100,000 recipients in 1997 at nearly 56,000
work locations.

Consumer Magazines. The Company publishes seven magazines that serve the
rapidly growing consumer market and which are dedicated to meeting the varying
needs of computer enthusiasts and net surfers, family buyers and gamers. One
of these titles, Family PC, is published under a joint venture between the
Company and an affiliate of Disney.

Computer Life provides home computing enthusiasts with products, ideas
and techniques designed to help its readers further enrich their personal
computing experience and better integrate computing into all areas of their
lives. Computer Life is a monthly publication with a circulation of over
450,000. Computer Life will be combined with Equip in the second half of
1998 and will be called Equip.

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<PAGE>

Electronic Gaming Monthly offers video game enthusiasts news, information
and product reviews about the latest games on ten different game systems.
Written by video gamers for video gamers, this monthly publication has a
primary circulation of more than 350,000. EGM/2/, a companion publication
to Electronic Gaming Monthly with a circulation of more than 125,000,
offers in-depth strategies, exclusive tips and tricks and comprehensive
maps and walk-throughs of the latest games.

Yahoo! Internet Life is the world's leading Internet consumer magazine.
Yahoo! Internet Life reaches a paid circulation of more than 325,000
readers. It is designed to be an entertaining and authoritative print and
online guide to the Internet, targeting an influential, affluent and early-
adopting group of readers. The Company has an exclusive license from Yahoo!
Inc. to use Yahoo! in the title of a print magazine.

Computer Gaming World provides computer game enthusiasts with results-
oriented gaming information. Computer Gaming World serves more than 230,000
game enthusiasts and is both the oldest and one of the largest computer
game publications.

Official U.S. PlayStation Magazine assists Sony PlayStation users in
getting the most out of their PlayStation game consoles by providing up-to-
date news, interviews and insights. This publication has a rate base of
100,000 PlayStation game fans.

Family PC is specifically targeted to households with children. Written
by parents for parents in plain English, its purpose is to help its paid
circulation of 380,000 select the right computers and software for their
families and ensure that they get the most rewarding, productive and
educational experiences from them. It is currently published under a joint
venture with an affiliate of Disney. The Company is currently negotiating
with an affiliate of Disney to buy its interest in Family PC.

INTERNATIONAL PUBLICATIONS

The Company publishes in the United Kingdom PC Magazine, PC Direct and PC
Gaming World and has announced plans to publish IT Week; in Germany PC
Professionell, PC Direkt and Internet Professionell; in France PC Expert and
PC Direct; and in the People's Republic of China PC Week, PC Computing and PC
Magazine through a venture with Richina Media Holdings and local agencies in
China.

PC Magazine (U.K.), PC Expert, PC Professionell, and PC Magazine (China) are
equivalents of PC Magazine (U.S.) adapted to their individual markets.
Similarly, PC Direct (U.K.), PC Direct (France), and PC Direkt are intended to
be equivalents of the Company's U.S. publication, Computer Shopper. Internet
Professionell is based on Internet Computing, while IT Week will be aimed at
information technology professionals and will include material from
Interactive Week, ZDNet News and other U.S. publications in addition to local
content.

PAPER AND PRINTING

Ziff-Davis maintains strong relationships with its paper suppliers and
printing companies. The Company uses five main paper suppliers for the
majority of its printing needs. In general, paper supply contracts are two to
three year agreements, with quarterly pricing adjustments, and are renewable
on a staggered basis. Most agreements contain pricing clauses that seek to
ensure the most competitive pricing on a quarter to quarter basis. The
Company's main paper suppliers for its U.S. publications are Bowater,
Champion, Consolidated, Fraser and UPM, which provided 12%, 33%, 15%, 12% and
12%, respectively, of the Company's paper supply in 1997 as measured by
tonnage. Printing companies that the Company has relationships with include
R.R. Donnelley, Brown, Quadgraphics and Quebecor. Approximately 50% of the
Company's total printing expenditures for its U.S. publications are with R.R.
Donnelley, which has a number of alternative printing sites. Printing
contracts are generally two to three year agreements.

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TRADE SHOWS AND CONFERENCES

The Company is the leading producer of trade shows, conferences and
customized marketing and educational programs for the computer industry in the
U.S. Approximately 25% of the Company's total revenue in 1997 was attributable
to its trade show and conference business which includes the industry-wide
COMDEX events, other trade shows and conferences focused on specific segments
of the computer technology industry, and customized events designed to meet
the marketing needs of specific clients. In 1997, the Company produced over 50
trade shows and conferences, 18 of which were held in North America.

The COMDEX/Fall event has been held for 18 years and is the number one
ranked trade show for all industries in the U.S. as measured by total revenue,
total exhibit space and number of attendees. In 1997, the Company estimates
that over two million people attended Company trade shows and conferences
worldwide. In addition to COMDEX/Fall, held annually in Las Vegas, the Company
produces 18 other COMDEX events in 13 countries.

"NetWorld+Interop" ("N+I") and "Seybold Seminars" are segment-focused
Company trade shows. In 1997, nine such shows were held in six countries. The
N+I trade shows focus on the networking/interconnectivity segment of the
computer industry, while the Seybold Seminars focus on publishing and graphic
communications. In addition, the Company will produce the following segment-
focused trade shows in 1998: (i) WINDOWS WORLD in conjunction with Microsoft
Corporation; (ii) EXPO COMM, servicing the worldwide telecommunications
industry; (iii) CommUnity, for the emerging corporate integrated data, voice
and video segments; (iv) COMDEX/Enterprise, focusing on solutions for the
large corporate information technology infrastructures; (v) Java Internet
Business Expo, sponsored by Sun Microsystems, Inc. and focusing on the full
range of Java technology for information technology professionals; (vi)
Service and Support Expo, focusing on technology for help desk and information
technology support services; and (vii) Learning Technology, focusing on
applying technology to education and training. The Company's customized
conferences are designed to meet the marketing needs of a specific client. For
example, the Company produced the Java One series of conferences for Sun
Microsystems, Inc. which were designed to introduce Java software to the
developer community.

Attendees at the Company's trade shows and conferences cover a wide range of
participants from the computer industry, including manufacturers,
distributors, dealers, retailers, value-added and other resellers and large
corporate end-users. Each event includes an extensive conference program,
which provides a forum for the exchange and dissemination of information
germane to the particular event's focus. In addition, each event has one or
more "keynote" sessions with speakers drawn from computer industry leaders.
The Company estimates that in 1997 over 5,000 companies participated as
exhibitors in its trade shows and conferences and over 8,000 industry experts,
analysts and consultants spoke at its conference programs.

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<PAGE>

The following table sets forth information relating to the Company's
principal trade shows and conferences, including joint ventures, for 1997.
Substantially all of the Company's international COMDEX events are joint
ventures and substantially all N+I events are owned by the Company.

<TABLE>
<CAPTION>
1997 ACTUAL
-------------------------------------
TOTAL NET ESTIMATED
LAUNCH SQUARE TOTAL TOTAL
YEAR FOOTAGE EXHIBITORS ATTENDEES
------ --------- ---------- ---------
<S> <C> <C> <C> <C>
EVENT
NORTH AMERICA
COMDEX/Fall.............................. 1979 1,362,400 1,750 200,000
COMDEX/Spring, WINDOWS WORLD & EXPO COMM
USA..................................... 1981 267,900 615 100,000
COMDEX/Canada incl. WINDOWS WORLD
and Connected Computing................. 1992 164,200 401 59,000
COMDEX/PacRim............................ 1995 79,000 239 33,000
COMDEX/Quebec............................ 1996 47,900 162 28,000
COMDEX/Miami & EXPO COMM Miami........... 1996 85,300 339 23,000
NetWorld+Interop & CommUnity Las Vegas... 1986 407,400 662 56,000
NetWorld+Interop & CommUnity Atlanta..... 1992 366,681 620 44,000
Seybold San Francisco Publishing......... 1986 141,900 315 38,000
Seybold Seminars East (New York)(1)...... 1982 107,000 271 23,000
Windows NT Intranet Solutions (WINTIS)
San Francisco........................... 1993 53,400 275 23,000
INTERNATIONAL
COMDEX/SUCESU-SP Brazil.................. 1992 358,900 455 128,000
COMDEX/Rio............................... 1994 105,400 214 90,000
COMDEX & WINDOWS WORLD Mexico(2)......... 1993 90,100 240 48,000
COMDEX/INFOCOM & WINDOWS WORLD Argentina. 1997 94,200 192 38,000
COMDEX IT France......................... 1997 180,800 466 50,000
COMDEX & Object World UK(2).............. 1996 52,020 209 21,000
COMDEX/Japan & Object World Tokyo(3)..... 1996 114,600 222 80,000
COMDEX/China............................. 1996 59,900 157 82,000
COMDEX/Korea............................. 1997 90,200 150 45,000
COMDEX/Asia at Singapore Informatics..... 1995 57,500 146 40,000
COMDEX/IT INDIA.......................... 1996 144,300 253 60,000
NetWorld+Interop Paris................... 1992 163,267 350 38,000
NetWorld+Interop Tokyo(3)................ 1993 187,600 287 91,000
Seybold Seminars Tokyo(3)................ 1996 24,600 53 28,000
Windows NT Intranet Solutions Japan(3)... 1994 77,500 176 46,000
</TABLE>
- --------
(1) Properties which have been or will be acquired from MAC.
(2) These international COMDEX events are wholly-owned by the Company.
(3) Trade shows in Japan are owned by Softbank and managed by the Company.

50
<PAGE>

SOURCES OF TRADE SHOW AND CONFERENCE REVENUE

In 1997, exhibitor space fees accounted for 64.8% of the Company's total
trade show and conference revenue. The Company believes most trade show
producers receive virtually all of their revenue from the sale of exhibitor
space fees. The Company has actively sought to increase its revenue from other
sources, including attendee fees, which accounted for 35.2% of all trade show
and conference revenue in 1997.

At each trade show, all exhibitors pay the same price per square foot of
booth space, regardless of the exhibit hall they select or the location or
size of their booth within a given hall. Typically, a majority of each trade
show's exhibitors commit to booth space during that year's show for the next
year's show. The Company encourages this commitment through a booth selection
procedure that grants priority based upon a seniority system. Annual renewal
is required for exhibitors to maintain their seniority. Exhibitors pay for
space in two or three installments, the last of which is usually due six
months prior to the upcoming event.

In 1997, attendee fees accounted for 14.9% of the Company's trade show and
conference revenue, primarily from N+I and Seybold events. Most COMDEX
attendees come as the invited guests of exhibiting companies. The Company
provides exhibiting companies with a supply of complimentary admission
tickets, which are generally given to customers and key prospects. This helps
exhibitors ensure that their best customers and prospects will attend.

The Company's trade show and conference advertising revenue is derived
principally from five products: (i) a daily newspaper distributed during the
show; (ii) the Program Exhibits Guide; (iii) the Preview, a newspaper
published and distributed to pre-registrants and certain prior year attendees
in advance of the show; (iv) advertising billboards and banners; and (v)
ancillary exhibitor logo products which are sold to exhibitors to increase
booth traffic and name recognition.

The Company also maintains a continuously updated database containing the
names and certain demographic information on its over two million attendees.
This database is rented to direct mail users on a fee-per-use basis.

COMDEX

COMDEX trade shows cover a broad range of new technologies at every stage in
their development and evolution--from introduction to commercial maturity.
Many of the most significant computer product launches over the past 18 years
occurred at COMDEX, including the launch of the IBM PC, Lotus 1-2-3, Windows
3.1 and DVD.

COMDEX/Fall is a five-day trade show held annually in November in Las Vegas.
In 1997 COMDEX/Fall had over 1,750 exhibiting companies occupying more than
1,350,000 net square feet of exhibit space and more than 200,000 attendees.
COMDEX/Spring, which was launched in 1981, is a smaller version of the fall
event. In 1997, it was held in Atlanta and had more than 600 exhibiting
companies and over 100,000 attendees. In April 1998, COMDEX/Spring will be
held in Chicago. For the last six years, the Company, in cooperation with
Microsoft Corporation, has produced a WINDOWS WORLD trade show concurrently
with COMDEX/Spring.

In 1993, the Company began launching additional COMDEX events in order to
capitalize on the international recognition of the COMDEX brand name. The 1998
schedule includes other COMDEX events in Miami, Toronto, Vancouver, Montreal,
Mexico City, Monterrey (Mexico), Buenos Aires, Sao Paulo, Rio de Janeiro,
London, Paris, Tokyo, Seoul, New Delhi, Beijing, Singapore and Cairo.

NETWORLD + INTEROP

N+I is the largest of the Company's segment-focused trade shows and is the
leading show for professionals in the rapidly growing field of computer
networking. N+I places strong emphasis on the quality of its conference
programs and, in recent years, has become a leading educational forum for the
Internet and enterprise computing

51
<PAGE>

communities. The largest N+I event is held annually in Las Vegas in May. Each
N+I trade show features InteropNet, a live, multi-platform network that
interconnects exhibitors to one another and to the Internet. In 1997, the N+I
Las Vegas event had over 600 exhibiting companies occupying more than 400,000
net square feet of exhibit space and more than 55,000 attendees. The N+I
Atlanta event, held in October each year, is only slightly smaller in all
categories. The 1998 schedule of N+I events includes seven shows in six
countries.

SEYBOLD SEMINARS

The Company's Seybold Seminars are segment-focused trade shows and are a
leading information and education provider for traditional and new media
publishing industries. These shows focus on the latest technologies and
products, design tools and desktop applications. The largest of the Seybold
series is held annually each September in San Francisco. In 1997, this Seybold
show had over 300 exhibiting companies occupying more than 140,000 net square
feet of exhibit space and more than 38,000 attendees. Other Seybold events are
held in New York and Tokyo.

OTHER EVENTS

The Company also produces EXPO COMM, a series of worldwide trade shows
focusing on the telecommunications, wireless and telephony segments of the
information technology marketplace. The Company purchased a 50% interest in
the series from EXPO COMM's founder, E.J. Krause & Associates, Inc., in 1996.
EXPO COMM events are held in Chicago, Moscow, Beijing, Buenos Aires, Sao
Paulo, Mexico City, Monterrey (Mexico) and Tokyo. WINDOWS WORLD trade shows
are held in cooperation with Microsoft Corporation concurrently with the
Company's COMDEX events in Chicago, Mexico City and Toronto. These events
showcase the latest Windows-based applications and solutions.

The Company also produces Learning Technology trade shows for professionals
focused on learning and helping others to learn to use technology, held in
Atlanta and Los Angeles, and Object World trade shows focused on the
commercial and practical aspects of applying object technology and distributed
computing in today's business environment, held in San Francisco, Boston,
London, Frankfurt and Tokyo.

INTERNET

The Company maintains a number of Web sites related to its publications,
trade shows and conferences and other media platforms. The Company's ZDNet.com
Web site is the leading computing content site and the number one Web site in
the category of news, information and entertainment, in each case as measured
by visitors per month in 1997, ranking it higher than Web sites produced by
Time Warner Inc. (Pathfinder.com), Disney (Disney.com) and ESPN
(Sportzone.com). The Company estimates that the ZDNet Web site serves more
than 100 million pages each month to more than five million visitors. It has
over one million registered users and over 2.5 million e-mail recipients per
month. ZDNet has successfully attracted new audiences in addition to
established computer enthusiasts, as is evidenced by the fact that 64% of
ZDNet users do not regularly read any computer technology publications. ZDNet
seeks to be the most comprehensive site for quality content about computing.

ZDNet has its own staff of over 100 editors, designers and technology
experts who create and develop a wide range of content, including current and
in-depth news, product reviews, investor information, shareware library,
online shopping, training, forums and chat areas. ZDNet coordinates and
collaborates on content development with the Company's other publications and
businesses and is fully integrated with the Company's individual Web sites.
ZDNet includes Netbuyer, a leading Web site devoted to computer retailing.
Softbank is a majority owner of Gamespot, a leading Web site for gaming
information, including reviews, demo downloads and other content. Softbank's
interest in Gamespot will be contributed to the Company concurrently with the
Reorganization. Over 80% of the content on ZDNet is original, with the
remainder supplied by the Company's print publications.

52
<PAGE>

The Company has a number of arrangements with leading Web sites and product
manufacturers to increase traffic and thereby advertising revenue to ZDNet.
ZDNet is the preferred computer and technology content-provider for leading
Internet sites and products, including Yahoo!, Excite, MSNBC and Pointcast, as
well as for leading Internet service providers such as Mindspring and AT&T's
World Net, each of which provides a direct link to ZDNet. ZDNet also has
arrangements with original equipment manufacturers, such as Compaq Computer
Corp. and Gateway 2000, Inc., whereby ZDNet is an automatic bookmark in the
Web browsers included on such computers.

The Company distributes localized versions of ZDNet in Germany as ZDNet
Deutschland, in France as ZDNet France and in the United Kingdom as ZDNet UK.
Localized versions of ZDNet are also distributed by licensees in Italy,
Russia, Japan, China, Taiwan, Australia and Latin America.

TELEVISION

In order to expand its media platforms, the Company has entered into a
license and services agreement with MAC to develop ZDTV, which is expected to
be launched in the first half of 1998. ZDTV will be the first 24-hour cable
television channel and integrated Web site focused exclusively on computers,
technology and the Internet. ZDTV will target a wide range of viewers,
including computer and technology enthusiasts, computer gaming enthusiasts,
business people, teens, families and other viewers with a sustained interest
in computers, technology and the Internet. Programs are expected to include
educational features, product evaluations, gaming tips and strategies, current
events and other entertainment. ZDTV will also feature live interactive
programming allowing viewers to participate through simultaneous Web
programming on ZDTV.com.

ZDTV is indirectly owned by MAC, but as part of the license and services
agreement, MAC has granted the Company an option exercisable through December
31, 1998 to purchase all of MAC's interest in ZDTV for an amount equal to
MAC's investment plus 10.0% per annum for the period of its investment.
Pursuant to the licence and services agreement, the Company has agreed to fund
ZDTV's operations on behalf of MAC through unsecured advances which, for
approved levels of expenditure, are to be reimbursed by MAC. Such advances
bear interest at the 30-day LIBOR rate plus .50%. ZDTV's cash requirements are
expected to be approximately $54 million in 1998. The Company's cumulative
advances in respect of ZDTV, which totaled approximately $14.4 million net of
$10.1 million in repayments through December 31, 1997, will be repaid
concurrently with the Reorganization. The Company has not yet determined
whether it will exercise its option to purchase MAC's interest in ZDTV. Any
such purchase will depend upon access to sufficient cable carriage, which may
include entering into a joint venture or other co-ownership arrangement,
including an arrangement with a third party cable system operator which will
provide carriage and also assume a portion of the ongoing cash requirements on
terms that are acceptable to the Company. ZDTV is not included in the
Company's results of operations. See "Certain Transactions."

ZD Television Productions, which is also indirectly owned by MAC, creates
customized programming for ZDTV and third parties. The Company's option to
purchase ZDTV from MAC also includes the option to purchase ZD Television
Productions. Its productions have included the regional Emmy award-winning
"The Site" with MSNBC and "21st Century Home" with Home & Garden Television.
See "Certain Transactions."

EDUCATION

The Company is an independent publisher of computer training products and
services for end-users and advanced technology professionals. Its products and
services include Internet-based training, computer-based training, instructor-
led courseware and customization tools. The Company believes that its
education offerings extend the Company's reach and brand reputation while
permitting the Company to attract and retain customers.

The Company is a source of software-specific newsletters and technology
information, with more than 50 titles, a family of CD-ROM products and an
interactive Web site. Generally published monthly, the titles include time-
saving tips and techniques on products such as Windows 95, Novel NetWare,
Visual Basic, Word, Excel, Microsoft Office, PhotoShop and Windows NT, in
addition to several programming and operating systems journals. The Company's
informational Web site provides instant access to a library of back issues,
reviews, online links and chats with authors.

53
<PAGE>

Through ZD University, an Internet-based educational program, the Company
provided training to more than 37,000 paid subscribers in 1997, an increase of
100% from 1996. The ZD University Web site is closely integrated with ZDNet,
helping to ensure that customers of one service are exposed to other Company
services.

Through the Help Desk Institute and the Support Services Professionals
Association, the Company provides training programs and publications for
hardware and software support service professionals. The Company also
publishes Inside Technology Training, which reaches 40,000 information
technology and training managers, and other software support professionals. In
addition, the Company owns and operates a single-site training center that
specializes in applications, programming and certification training for
Microsoft, Novell and Lotus, and the Training Center Alliance, which provides
qualifying training center customers with enhanced marketing support and
referral capabilities worldwide.

MARKET RESEARCH

The Company's market research division develops, analyzes and compiles a
wide variety of information on computer technology issues ranging from
technical aspects of current usage to trends in decision making. The Computer
Intelligence ("CI") unit focuses on information concerning installed and
planned technology hardware and software purchases, and is a leading source in
North America and Europe of fact-based information concerning hardware and
software needs for the computer and communications industries. CI is an
important part of the Company's effort to be a single source marketing
solution, as it can provide the Company's marketing customers with important
information to identify their target customers. CI's databases are built from
more than 30,000 telephone interviews per month and contain data on installed
and planned computer and communications products and services at over 400,000
business sites in the U.S., Canada and eight European countries, according to
Company estimates. CI assists the Company's clients in identifying and
targeting their customers by tracking current activity and market share in the
business, home and reseller channels. Customers use CI's services to make
important marketing decisions.

The Company also identifies and analyzes trends in the decision making
process for consumers of computer technology. This type of information helps
to identify criteria other than technical product specifications that are used
in product selection. The Company's market research division also consolidates
information obtained in each of the databases maintained by the Company's
other operating divisions, so that each Ziff-Davis division can offer the
Company's clients a wide range of information to meet their marketing needs
across multiple platforms.

The Company publishes Microprocessor Report, a leading technical publication
for the microprocessor industry. It also produces Microprocessor Forum, the
industry's leading conference for the introduction of new high-performance
microprocessors, and PC Tech Forum, events which together attract more than
1,000 paid attendees and provide information on trends and markets.

COMPETITION

The Company competes with a wide range of companies for each of the products
and services it provides. Although such competition is significant and is
likely to increase in the future, the Company believes it has a greater
breadth of product and service offerings than any of its competitors.

The magazine publishing business is highly competitive. The Company faces
broad competition, not only from other technology publishers, but from other
media companies as well, including business, news and general interest
magazine publishers. Other principal computer and technology publishers in the
United States include IDG, CMP Media Inc., The McGraw-Hill Companies and
Imagine Publishing, each of which produces publications that directly compete
with one or more of the Company's publications. The Company also competes with
various computer and technology publishers in the international markets in
which it conducts business. A

54
<PAGE>

publishing company's success depends upon a number of factors, such as
editorial quality, product positioning and price. Competitive factors for
advertising sales include quality of readership, circulation, reader response
and advertising rates. The Company believes its publications effectively
compete in the marketplace on the basis of each of these factors.

The Company also faces competition in its trade show and conference
business, primarily from several significant trade show management companies.
These include Miller Freeman, Mecklermedia Corporation and IDG. The Company
believes its trade shows compete in the marketplace on the basis of quality of
conference content, organizational efficiency, and quality and number of
exhibitors and attendees.

The Internet media business is highly competitive. An increasing number of
companies are developing online content and services for delivery on the World
Wide Web in order to compete for audiences and the advertising dollars that
are currently being directed to the Internet. ZDNet competes with other
technology-related online content sites such as c|net, CMPnet, and IDGnet.

The Company's market research division faces competition from numerous
market research companies, including International Data Corporation, Gartner
Group's Dataquest and IntelliQuest. Database providers such as Information
Resource Group and Dun & Bradstreet provide additional competition.

The Company's education division competes with a variety of education
providers, including vendor-supplied training materials and traditional
classroom-based computer training.

ZDTV is expected to be the first 24-hour cable television channel and
integrated Web site focused on computer technology and the Internet, and as
such it is not expected to face direct competition in the near future. It
will, however, face competition from a variety of general and special interest
television programs. The market for television programming is highly
competitive, with many programming producers competing both for channel
carriage and for advertiser and audience market share.

TRADEMARKS

The Company has developed strong brand awareness for its principal
publications, trade shows and other products and services. Accordingly, the
Company considers its trademarks, copyrights, trade secrets and similar
intellectual property as critical to its success and relies on trademark,
copyright and trade secrets laws, as well as licensing and confidentiality
agreements, to protect its intellectual property rights. The Company generally
registers its material trademarks in the United States and in certain other
key countries in which these trademarks are used. Effective trademark,
copyright and trade secret protection may not be available in every country in
which the Company's publications and services are available.

The Company may be subject to claims of alleged infringement by it or its
licensees of trademarks and other intellectual property rights of third
parties from time to time in the ordinary course of business. The Company does
not believe there are any such legal proceedings or claims that are likely to
have, individually or in the aggregate, a material adverse effect on the
Company's business, financial condition or results of operations.

FACILITIES

The Company's world headquarters are located in New York and the Company has
over 50 editorial, production and sales offices and computer labs in many
other cities in the United States and around the world. The Company's other
principal offices are located in the Boston and San Francisco metropolitan
areas. The Company does not own real property that is material to its business
and leases all but one of its offices from third parties. The Company believes
that its properties, taken as a whole, are in good operating condition and are
suitable and adequate for the Company's current business operations, and that
suitable additional or alternative space, including space available under
lease options, will be available at commercially reasonable terms for future
expansion.

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<PAGE>

EMPLOYEES

As of December 31, 1997, the Company had a total of 3,698 employees. Of
these employees, 1,160 were engaged in U.S. magazine publishing activities,
350 in international publishing activities, 728 in trade shows and
conferences, 197 in Internet-related activities, 414 in education activities,
486 in market research and 363 in central administrative services. None of the
Company's U.S. employees is represented by a labor union. The Company
considers its relationships with its employees to be satisfactory.

LEGAL PROCEEDINGS

The Company has been named as a defendant in an action, filed on April 17,
1998, in the Supreme Court of the State of New York, by minority shareholders
of SOFTBANK Interactive Marketing Inc. ("SIM"), formerly an indirect
subsidiary of Softbank. The complaint alleges, among other things, that SBH,
SIM's majority shareholder, acting with the Company and two of its senior
officers and directors who were directors of SIM (and who are also named as
defendants), had conflicts of interest between SIM and other Softbank
investments (including investments in the Company) and failed to act in the
best interests of SIM and the minority shareholders by taking actions which
benefitted the Company. The complaint states claims based on common law fraud,
breach of fiduciary duty and aiding and abetting theories and seeks in excess
of $200 million in damages. The Company believes that the claims against it
are without merit and intends a vigorous defense.

There are no other legal proceedings to which the Company is a party, other
than ordinary routine litigation incidental to the business of the Company
which is not otherwise material to the business or financial condition of the
Company.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are set forth in the
table below:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Masayoshi Son.................... 40 Director
Yoshitaka Kitao.................. 47 Director
Ronald D. Fisher................. 50 Director
Eric Hippeau..................... 46 Chairman, Chief Executive Officer,
Director
Jason E. Chudnofsky.............. 54 President and Chief Executive
Officer, ZDCF, Director
Timothy C. O'Brien............... 49 Chief Financial Officer, Director
Claude P. Sheer.................. 47 President, ZD Publishing, Director
Robert G. Brown.................. 51 President, ZD Market Intelligence
Terri S. Holbrooke............... 41 President, ZD Brand and Marketing
J. Malcolm Morris................ 55 Senior Vice President, General
Counsel
Daryl R. Otte.................... 36 Senior Vice President, Development
and Planning
Daniel L. Rosensweig............. 36 President, ZD Internet Productions
William A. Rosenthal............. 37 President, ZD Education
Thomas L. Wright................. 38 Vice President, Treasurer
Jonathan D. Lazarus.............. 47 Director
Jerry C.-Y. Yang................. 29 Director
</TABLE>

The Company will nominate for election one additional independent director
as soon as practicable after consummation of the Offerings. See "--Board
Composition."

BIOGRAPHIES OF DIRECTORS AND EXECUTIVE OFFICERS

Masayoshi Son. Masayoshi Son has been President and Chief Executive Officer
of SOFTBANK Corp. since 1981. Mr. Son has been President and Chief Executive
Officer of Mediabank Corporation since 1994 and GeoCities Japan Corporation
since 1997 and was President and Chief Executive Officer of Japan Sky
Broadcasting Co. Ltd. from 1996 to 1998 and SB Networks Corporation from 1997
to 1998. In addition, Mr. Son is currently a Director of each of PASONABANK
Inc. and Yahoo! Japan Corporation and a Representative Director of each of MIC
Inc., Son Kosan Ltd. and MAC.

Yoshitaka Kitao. Yoshitaka Kitao has been Executive Vice President and Chief
Financial Officer of SOFTBANK Corp. since 1995. Mr. Kitao has been President
and Chief Executive Officer of SoftVenture Capital Inc. since 1996, SOFTBANK
Ventures Inc. since 1996 and SOFTBANK Contents Partners Corporation since
1997. Since 1997 Mr. Kitao has been President of Cybercash K.K. and a Director
of Trendmicro Inc. Previously, Mr. Kitao served as Director of Nomura
Wasserstein Perella Co., Ltd. from 1992 to 1993, Managing Director of
Wasserstein Perella & Co., Inc. from 1989 to 1992 and was the General Manager
for The Nomura Securities Co., Ltd.'s Corporate Finance and Services Dept. 3
from 1992 to 1995.

Ronald D. Fisher. Ronald D. Fisher has been the Vice Chairman of SOFTBANK
Holdings Inc. since 1995. From 1990 to 1995, Mr. Fisher was the Chief
Executive Officer of Phoenix Technologies Ltd, a leading developer and
marketer of system software for personal computers. From 1984 through 1989,
Mr. Fisher was the President of Interactive Systems Corporation. His prior
experience includes senior management positions at VisiCorp, TRW and ICL
(USA). In addition to being a Board member of SOFTBANK Corp., Mr. Fisher
serves on the Boards of Phoenix Technologies Ltd, Microtouch Systems Inc. and
Segue Software Inc.

Eric Hippeau. Eric Hippeau has been Chairman and Chief Executive Officer of
ZDI since 1993. He joined ZDI in 1989 as Publisher of PC Magazine, was named
Executive Vice President of ZDI in 1990, and President and Chief Operating
Officer in February 1991. Prior to joining ZDI, Mr. Hippeau held a number of
positions with IDG, including Vice President of computer publications in Latin
America and Publisher of IDG's InfoWorld magazine. Mr. Hippeau is currently a
Director of Yahoo! Inc.

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<PAGE>

Jason E. Chudnofsky. Jason E. Chudnofsky has been President and Chief
Executive Officer of ZDCF since October 1997. From 1988 to 1997, Mr.
Chudnofsky was President of the Trade Show Division of The Interface Group
which was renamed SOFTBANK COMDEX when that division was acquired by Softbank
in 1995. In addition, Mr. Chudnofsky served as President and Chief Executive
Officer of the Sands Expo and Convention Center Division from 1990 to 1995.
Mr. Chudnofsky has over 15 years of experience in the exposition, trade show
and conference industry.

Timothy C. O'Brien. Timothy C. O'Brien has been Vice President and Chief
Financial Officer of ZDI since 1995. From 1985 to 1994, Mr. O'Brien was Chief
Financial Officer of Reed Elsevier Inc. and Reed Publishing USA. From 1992 to
1994, he was also Executive Vice President of Cahners Publishing Company which
he joined in 1980. From 1970 to 1980, Mr. O'Brien was employed by Price
Waterhouse LLP.

Claude P. Sheer. Claude P. Sheer has been President of the ZD Publishing
Division of ZDI since December 1997, having served in 1997 as President of
U.S. Publications of ZDI and in 1996 as President of the Business Media Group.
Since joining ZDI in 1980, Mr. Sheer has served in a number of positions
including Publisher of PC Week and Group Vice President of Controlled
Circulation Publications.

Robert G. Brown. Robert G. Brown has been President of ZD Market
Intelligence since 1993. He joined Ziff-Davis in 1992 as Vice President of
Market Development. Prior to that time, from March 1988 to July 1992,
Mr. Brown was founder and President of R.G. Brown & Associates, a direct
marketing and management consulting company working with computer hardware and
software companies. Mr. Brown was previously President of Quadram, a unit of
Intelligent Systems, L.P., which manufactured and sold peripheral products to
PC users.

Terri S. Holbrooke. Terri S. Holbrooke has been President of ZD Brand &
Market Services since July 1997. From October 1996 to July 1997, Ms. Holbrooke
was Senior Vice President of Marketing for ZDI. From January 1996 to October
1996, Ms. Holbrooke was Vice President of SOFTBANK Exposition and Conference
Company. From 1986 to 1995, Ms. Holbrooke held several executive marketing
positions at Novell Inc., including head of Worldwide Marketing Communications
and Vice President of Strategic Planning.

J. Malcolm Morris. J. Malcolm Morris has been Senior Vice President, General
Counsel of ZDI since January 1998, having previously served as Vice President,
General Counsel since 1990. Mr. Morris joined ZDI in 1980 as Assistant General
Counsel. Prior to joining ZDI, Mr. Morris was engaged in the practice of law
at the New York firm of Cleary, Gottlieb, Steen & Hamilton.

Daryl R. Otte. Daryl R. Otte has been Senior Vice President of Development
and Planning for ZDI since 1997. From 1995 to 1997, Mr. Otte was Vice
President of Planning. From 1989 to 1995, Mr. Otte held various corporate
finance and planning positions at Reed Elsevier Inc., and its predecessors,
including Vice President of Planning, Cahners Publishing Company, and
Assistant to the Chief Financial Officer of Reed Publishing USA.

Daniel L. Rosensweig. Daniel L. Rosensweig has been President of ZD Internet
Productions since 1997, having served in 1996 and 1997 as Executive Vice
President of ZDI's Internet Publishing Group. From 1995 to 1996, Mr.
Rosensweig was Vice President and Publisher of PC Magazine, and, from 1994 to
1995, was Publisher of PC Magazine. Since joining ZDI in 1983, Mr. Rosensweig
held a number of positions, including Associate Publisher positions at
PC Magazine, Computer Shopper and PC Sources.

William A. Rosenthal. William A. Rosenthal has been President of ZD
Education since 1997 having served as President of ZDI's Logical Operations
division in 1996 and 1997. From 1993 to 1996, Mr. Rosenthal was the General
Manager for ZDI's Logical Operations division and from 1987 to 1993 was
Vice President of Sales and Marketing for that division.

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<PAGE>

Thomas L. Wright. Thomas L. Wright has been Treasurer of ZDI since 1995 and
has been Vice President and Treasurer of SOFTBANK Holdings Inc. since 1996.
Prior to joining ZDI, Mr. Wright held various positions from 1986 to 1995 at
Reliance Group Holdings, Inc., most recently as Vice President and Assistant
Treasurer.

Jonathan D. Lazarus. Jonathan D. Lazarus was with Microsoft Corporation from
1985 through 1996, serving most recently as Vice President, Strategic
Relations. Mr. Lazarus serves on the Boards of ELEKOM Corp., Liquid Audio,
NetGravity, Vision Solutions and National Association of Television Program
Executives. Mr. Lazarus is also an advisor to Microsoft Corporation, the
Universal Studios New Media Group and ZDTV.

Jerry C.-Y. Yang. Jerry Yang co-founded Yahoo! Inc. in 1995 and has served
as an officer and a member of the Board of Directors of Yahoo! Inc. since
March 1995. Mr. Yang co-developed Yahoo! Inc. in 1994 while he was working
towards his Ph.D. in electrical engineering at Stanford University.

BOARD COMPOSITION

Following the Offering, the Board of Directors will consist of ten members,
which will include the nine current members of the Board plus one additional
"independent director" (within the meaning of the regulations of the New York
Stock Exchange (the "NYSE")) nominated for election by the Board of Directors.
It is expected that the new director will be elected by the Board within three
months following the closing of the Offering. Directors of the Company are
currently elected annually by its stockholders to serve during the ensuing
year or until their respective successors are duly elected and qualified.
Following the Offering, the Board of Directors will be divided into three
classes each of whose members will serve for a staggered three-year term. Upon
the expiration of the term of a class of directors, directors in such class
will be elected for three-year terms at the annual meeting of stockholders in
the year in which such term expires. See "Description of Capital Stock--
Certain Provisions of the Certificate of Incorporation and By-laws."

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors currently has two committees: an Audit Committee and
a Compensation Committee.

The Audit Committee will be comprised of the independent directors. The
Audit Committee reviews and recommends to the Board, as it deems necessary,
the internal accounting and financial controls for the Company and the
accounting principles and auditing practices and procedures to be employed in
preparation and review of financial statements of the Company. The Audit
Committee makes recommendations to the Board concerning the engagement of
independent public accountants and the scope of the audit to be undertaken by
such accountants. Price Waterhouse LLP presently serves as the independent
accountants of the Company.

The Compensation Committee is currently comprised of Mr. Fisher, who,
following the Offering, will be joined by the two independent directors. The
Committee reviews and, as it deems appropriate, recommends to the Board
policies, practices and procedures relating to the compensation of the
officers and other managerial employees and the establishment and
administration of employee benefit plans. The Committee exercises all
authority under any employee stock option plans of the Company as the
Committee therein specifies (unless the Board resolution appoints any other
committee to exercise such authority), and advises and consults with the
officers of the Company as may be requested regarding managerial personnel
policies. The Committee will have such additional powers and be granted
additional authority as may be conferred upon it from time to time by the
Board.

COMPENSATION OF DIRECTORS

Directors who are not executive officers or employees of the Company or
Softbank will receive an annual retainer of $25,000 for Board of Directors
service and a fee of $2,000 for each meeting of the Board of Directors or any
committee thereof attended.

The Company has adopted the 1998 Non-Employee Directors Stock Option Plan
(the "Non-Employee Directors Plan"). Directors of the Company who are not
employees of the Company or any of its subsidiaries ("Non-Employee Directors")
will automatically participate in the Non-Employee Directors Plan,

59
<PAGE>

Pursuant to the 1998 Non-Employee Directors Plan, each Non-Employee Director
shall receive upon election as a member of the Board an initial grant of stock
options to purchase 15,000 shares of Common Stock; provided, that each Non-
Employee Director who is on the Board of Directors on the date of the Offering
shall receive such initial grant of stock options on the date of the Offering.
Each Non-Employee Director shall automatically receive on each annual meeting
thereafter an annual grant of stock options to purchase 7,500 additional
shares of Common Stock. The terms of each stock option granted to a Non-
Employee Director shall provide that (i) the option price shall be equal to
100% of the fair market value (as defined in the 1998 Incentive Compensation
Plan) of the Common Stock on the date of grant, (ii) such option shall be
exercisable for a period of ten years following the date of grant, and (iii)
such option shall vest and become exercisable in five equal installments
beginning on the first anniversary of the date of grant.

Upon ceasing to be a Non-Employee Director, such option shall terminate
except with respect to any portion of such option then exercisable, which
portion shall remain exercisable for a period of (x) 90 days, if the
termination as Director resulted from any reason other than death, disability
or Cause (as defined in the 1998 Incentive Compensation Plan), or (y) one
year, if the termination resulted from death or disability; provided, that in
the event the termination resulted from a removal for Cause, such option shall
immediately terminate and no longer be exercisable to any extent; provided,
further, that in no event shall any such option remain exercisable past the
remainder of its scheduled ten-year term.

Upon a "change in control" of the Company (as defined in the Non-Employee
Directors Plan), each outstanding option shall fully vest and become
immediately exercisable in full. In addition, the Committee may provide in its
sole discretion that upon a change in control of the Company, each Non-
Employee Director shall be entitled to receive in cancellation of such Non-
Employee Director's outstanding and unexercised stock options, a cash payment
in an amount equal to the difference between the option price of such stock
options and (i) in the event the change of control is the result of a tender
offer or exchange offer for the Common Stock, the final offer price per share
paid for the Common Stock, multiplied by the number of shares of Common Stock
covered by such stock options, or (ii) in the event the change of control is
the result of any other occurrence, the aggregate value of the Common Stock
covered by such stock options, as determined by the Committee at such time.

COMPENSATION OF EXECUTIVE OFFICERS

The table below sets forth the compensation paid to, deferred or accrued for
the benefit of, the Company's Chief Executive Officer and each of the four
other most highly compensated executive officers for services rendered in all
capacities to the Company during the fiscal year ended December 31, 1997.

1997 SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------- ------------------------
NAME AND PRINCIPAL RETIREMENT STOCK ALL OTHER
POSITION SALARY($) BONUS($) PLAN($) OPTIONS(#)(1) COMPENSATION($)(2)
------------------ ---------- --------- ---------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
Eric Hippeau.......... 1,350,000 14,063 16,000 31,000 1,566
Chairman and Chief
Executive Officer
Jason E. Chudnofsky... 800,000 -- (3) 7,385 10,000 20,884
President and Chief
Executive Officer,
ZDCF
Claude P. Sheer....... 457,500 342,656 16,000 9,500 1,566
President, ZD
Publishing
Timothy C. O'Brien.... 462,500 305,850 16,000 7,700 20,806
Chief Financial
Officer
Robert G. Brown....... 382,500 253,151 16,000 3,200 5,949
President, ZD Market
Intelligence
</TABLE>
- --------
(1) Represents options to purchase stock of SOFTBANK Corp.
(2) All Other Compensation does not include certain payments in 1997 for
services rendered in 1994. See Note 9 to the ZDI and ZDCF Combined
Financial Statements and "Certain Transactions."
(3) Does not include bonus of $300,000 paid in 1997 for 1996.

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<PAGE>

STOCK PLANS

Incentive Compensation Plan

General. The Company has adopted a 1998 Incentive Compensation Plan (the
"Plan") to provide long-term incentives for its key employees and enhance
shareholder value. The Plan will be administered by the Compensation Committee
(for purposes herein, the "Committee"), which will (i) select the
participants, determine the type of awards, and the number of shares or share
units subject to awards, and (ii) interpret the Plan and make all other
determinations necessary or advisable for its administration.

All employees and consultants of the Company and its affiliates who have
demonstrated significant management potential or the capacity for contributing
substantially to the successful performance of the Company and its affiliates,
are eligible to be participants in the Plan. Awards may consist of stock
awards, stock options (either incentive stock options within the meaning of
Section 422 of the Internal Revenue Code or nonstatutory stock options), stock
appreciation rights, performance shares (which may be granted as performance
share units) and restricted stock (which may be granted as restricted stock
units).

The Common Stock available for awards under the Plan shall not exceed
8,500,000 shares. In the event of any change in the outstanding shares by
reason of any stock dividend or split, recapitalization, merger or other
corporate change, or any distributions to common shareholders other than
regular cash dividends, the Committee may make such substitution or
adjustment, if any, as it deems to be equitable, as to the number or kind of
shares of Common Stock or other securities issued pursuant to the Plan and to
outstanding awards. Shares subject to an award that expires unexercised, is
forfeited, or terminated, or settled in cash in lieu of Common Stock, and
shares tendered to pay for the exercise of a stock option, shall thereafter
again be available for grant under the Plan.

Each award under the Plan shall be evidenced by an agreement setting forth
the terms and conditions, as determined by the Committee, which apply to such
award. In the sole discretion of the Committee, a participant may be permitted
to defer the receipt of cash or Common Stock otherwise deliverable under any
award.

Stock Options. The Committee shall establish the option price at the time
each stock option is granted, which price shall not be less than 100% of the
fair market value of the Common Stock on the date of grant. Stock options
shall vest and become exercisable at a rate determined by the Committee, and
shall remain exercisable for such period as specified by the Committee. The
award agreements in respect of options that are intended to qualify as
incentive stock options will contain any additional provisions necessary to
comply with the requirements of Section 422 of the Internal Revenue Code. In
no event may any employee receive in any calendar year grants of stock options
with respect to more than 1,000,000 shares of Common Stock.

The option price of each share as to which a stock option is exercised will
be paid in full at the time of such exercise in cash, by tender of shares of
Common Stock owned by the participant valued at fair market value, by a "sale
to cover" broker transaction or other cashless exercise method permitted under
Regulation T of the Federal Reserve Board, or by a combination of cash, shares
of Common Stock and other consideration as the Committee deems appropriate.

Stock Appreciation Rights. Stock appreciation rights ("SARs") may be granted
in tandem with a stock option or unrelated to a stock option. SARs shall vest
and become exercisable at a rate determined by the Committee, and shall remain
exercisable for such period as specified by the Committee. A SAR entitles its
holder to receive from the Company an amount equal to the excess of the fair
market value of a share of Common Stock on the exercise of the SAR over the
fair market value on the date of grant. The Committee may determine in its
sole discretion whether a SAR will be settled in cash, Common Stock or a
combination thereof. In no event may any employee receive in any calendar year
grants of SARs with respect to more than 500,000 shares of Common Stock.

Performance Shares. Performance shares may be granted in the form of actual
shares of Common Stock or share units having a value equal to an identical
number of shares of Common Stock. The performance

61
<PAGE>

conditions and the length of the performance period will be determined by the
Committee but in no event may a performance period be less than one year. The
Committee may determine in its sole discretion whether performance shares
granted in the form of share units shall be paid in cash, Common Stock, or a
combination thereof.

Unless the Committee determines otherwise, awards of performance shares to a
Covered Employee will be subject to performance conditions based on the
achievement by the Company of target levels of items such as consolidated net
income, return on shareholders' equity, return on net assets or share price
performance. For purposes of the 1998 Incentive Compensation Plan, a "Covered
Employee" generally includes any employee that would be a covered employee
within the meaning of Section 162(m) of the Internal Revenue Code, and any
other employee of the Company or its subsidiaries designated by the Committee
in its discretion. The maximum number of performance shares subject to any
award to a Covered Employee is 500,000 for the first 12 months during the
performance period and each 12-month period thereafter.

Restricted Stock. Restricted stock may be granted in the form of actual
shares of Common Stock or share units having a value equal to an identical
number of shares of Common Stock. The employment conditions and the length of
the period for vesting of restricted stock will be established by the
Committee at time of grant, except that each restriction period shall not be
less than twelve months. During the restricted period, shares of restricted
stock may not be sold, assigned, transferred or otherwise disposed of, or
pledged or hypothecated as collateral for a loan or as security for the
performance of any obligation or for any other purpose as the Committee shall
determine. The Committee may determine in its sole discretion whether
restricted stock granted in the form of share units will be paid in cash,
Common Stock or a combination thereof.

Stock awards. In addition to awards of performance shares and restricted
stock, awards of Common Stock may be granted under the Plan in the form of
actual shares of Common Stock. Full ownership of such shares, whether issued
in the form of a certificate or in book entry, including the right to vote and
receive dividends, shall immediately vest in such participant.

Change in Control. In the event of a Change in Control (as defined below):
(i) all stock options will be fully vested and exercisable in full (ii) all
SARs which have not been granted in tandem with stock options will become
exercisable in full (iii) the restrictions applicable to all shares of
restricted stock will lapse and such shares will be deemed fully vested and
all restricted stock granted in the form of share units will be paid in cash;
(iv) all performance shares will be deemed to be earned at target level; and
(v) all performance shares granted in the form of share units will be paid in
cash.

For purposes of the Plan, "Change in Control" is generally defined as (i) a
change in the majority of the Board except upon consent of the previous Board;
(ii) certain mergers, consolidations or similar corporate transactions in
which the Company is not the surviving corporation or entity; or (iii) the
shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale of all or substantially all of the
Company's assets; provided, that a Change in Control will not be deemed to
occur under clause (ii) if Softbank, directly or indirectly, is the beneficial
owner of more than 25% of the Company's voting securities or of the voting
securities of any surviving corporation, respectively.

Amendment and Termination. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that (a) no amendment will
be made without stockholder approval (including an increase in the number of
shares reserved for issuance under the Plan) if such approval is necessary to
comply with any applicable law, regulations or stock exchange rule, and (b)
except as otherwise provided under the cashout provisions in the event of a
Change in Control, no amendment will be made that would adversely affect the
rights of a participant under any award previously granted, without such
participant's written consent.

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<PAGE>

Effective Date. The Plan will have a term of ten years from February 13,
1998, subject to earlier termination.

Softbank Executive Stock Option Plans

The SOFTBANK Group Executive Stock Option Plans (the "Softbank Plans")
authorize the grant of options to those officers, directors and key employees
of Softbank as selected by a committee appointed by the Board of Directors of
SOFTBANK Holdings Inc. The Softbank Plans authorize the granting of options to
purchase SOFTBANK Corp. common stock at not less than 100% of the closing
market price on the date the option is granted. As of December 31, 1997,
substantially all options granted become exercisable in various installments
over the first six anniversaries of the date of grant and expire ten years
after the date of grant.

As of December 31, 1997, 966,986 options had been granted under the Softbank
Plans. On January 19, 1998, the exercise price of all options was reset at
4,000 Japanese yen per share, the market price of SOFTBANK Corp.'s common
stock on that date.

Employee Stock Purchase Plan

General. The Company has adopted an employee stock purchase plan (the "Stock
Purchase Plan"). The Stock Purchase Plan is intended to meet the applicable
requirements of Section 423 of the Internal Revenue Code and will be
administered by the Committee.

Option to Purchase. Under the Stock Purchase Plan, all full-time and certain
part-time employees of the Company who meet certain minimum service
requirements will be eligible to purchase shares of Common Stock by means of
payroll deductions. Eligible employees may elect to participate in offering
periods by authorizing after-tax payroll deductions of between 1% and 10% (in
whole percentages) of their base pay for the purchase of shares of Common
Stock. The aggregate maximum number of shares of Common Stock purchasable
under the Stock Purchase Plan is 1,500,000, subject to adjustment by the
Committee in its sole discretion in the event of any increase, reduction or
change or exchange of shares of Common Stock for a different number or kind of
shares or other securities of the Company by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other corporate change, or any distribution to common
shareholders other than cash dividends. Upon the dissolution or liquidation of
the Company, or upon a reorganization, merger or consolidation of the Company
as a result of which the Company is not the surviving corporation, or upon a
sale of substantially all of the Company's assets, or a sale or distribution
of a subsidiary of the Company, any affected participant will thereafter be
entitled to receive, for each share of Common Stock subject to such
participant's option, the cash, securities and/or property which a holder of
one share of Common Stock was entitled to receive upon and at the time of such
transaction.

The price at which shares of Common Stock will be purchased at the end of
each purchase period will be the lesser of (i) 85% of the Fair Market Value of
a share of Common Stock on the first business day of such purchase period or
(ii) 85% of the fair market value on the last business day of each purchase
period. No participating employee will be entitled in any calendar year to
purchase Common Stock having an aggregate fair market value as of the first
business day in any Purchase Period in excess of $25,000.

Amendment and Termination. The Board may at any time terminate or amend the
Plan. No such termination shall adversely affect options previously granted
and no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. No amendment shall be
effective unless approved by the shareholders of the Company if such
shareholder approval of such amendment is required to comply with any law,
regulation or stock exchange rule.

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<PAGE>

EMPLOYMENT AGREEMENTS

Eric Hippeau. The Company has entered into an employment agreement with Mr.
Hippeau, dated as of April 1, 1998, pursuant to which Mr. Hippeau will serve
as the Chairman and Chief Executive Officer of the Company through March 31,
2004. Pursuant to this agreement, Mr. Hippeau will receive an annual base
salary of not less than $900,000 and an annual incentive bonus of not less
than $600,000, as determined by the Compensation Committee assuming the
achievement of performance targets. The Company has granted Mr. Hippeau
options to acquire up to 860,000 shares of Common Stock pursuant to the Plan,
of which 430,000 shares are based upon the achievement of certain performance
targets.

Upon certain terminations of employment, the Company will pay Mr. Hippeau
his base salary plus his average incentive bonus for the preceding two years
for a period ending on the later of the date that is two years after the date
of termination or March 31, 2001. In the event that Mr. Hippeau's employment
is terminated in connection with a "change of control" (as defined), the
Company will pay Mr. Hippeau an amount which, on an after-tax basis, will
equal any excise tax imposed by Section 4999 of the Code as a result of
payments made under the agreement.

Jason Chudnofsky. The Company has entered into an employment agreement with
Mr. Chudnofsky, dated as of April 1, 1998, pursuant to which Mr. Chudnofsky
will serve as the Chairman and Chief Executive Officer of ZDCF through March
31, 2001. Pursuant to this agreement, Mr. Chudnofsky will receive an annual
base salary of not less than $800,000 and an annual incentive bonus of
$300,000, subject to adjustment and assuming the achievement of earnings and
other performance targets, as determined by the board of directors of ZDCF.
The Company has granted Mr. Chudnofsky options to acquire up to 300,000 shares
of Common Stock pursuant to the Plan.

Upon certain terminations of employment, the Company will pay Mr. Chudnofsky
his base salary plus his average incentive bonus for the year of termination
and the preceding two years for a period ending on the later of the date that
is two years after the date of termination or March 31, 2001.

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<PAGE>

CERTAIN TRANSACTIONS

ARRANGEMENTS BETWEEN THE PRINCIPAL STOCKHOLDERS AND THE COMPANY

The Company and Softbank have entered into certain agreements governing
ongoing business relationships between them, including: (i) a master license
agreement for Softbank's producing and distributing Ziff-Davis publications in
Japan; (ii) a license agreement for Softbank's operating ZDNet in Japan; and
(iii) a series of agreements, including a trademark license agreement,
technical assistance agreement and accounting and administrative services
agreement, pursuant to which the Company will manage all ZDCF trade shows and
conferences conducted in Japan, but owned by Softbank. Total revenue earned by
the Company from such trade show and conference agreements will approximate
50% of the pre-tax income generated by such trade shows and conferences.

Softbank has given the Company an undertaking not to expand operations
involving (x) publishing information on computing and Internet-related
technology through the media of print, CD-Rom/DVD, Internet and television, or
(y) producing trade shows, conferences, exhibitions and similar events
primarily related to computing and Internet-related technology outside Japan
in competition with the Company without the prior approval of the Company's
management directors after consulting with the Company's independent
directors. This undertaking does not preclude investments by investment funds
managed by Softbank. Softbank manages certain venture capital funds which
invest in, among other things, computer and Internet-related companies. These
funds may be able to co-invest with the Company or compete with the Company
with respect to new investments. Softbank may develop new funds in the future,
which funds may compete with the Company for investment opportunities. The
Company has undertaken not to compete with Softbank in Japan without the prior
approval of SOFTBANK Corp.'s Board of Directors and to afford Softbank the
continuing right to license all of the Company's products and services in
Japan. See "Risk Factors--Control by Principal Stockholders and Potential
Conflicts of Interest."

The Company and Softbank entered into a Registration Rights Agreement, dated
as of April 1, 1998, in connection with the Offering. The Agreement entitles
Softbank to require the Company to register any or all of the Common Stock
held by it in a public offering pursuant to the Securities Act of 1933, as
amended, as well as to "piggyback" or include its shares of Common Stock in
any registration of Common Stock made by the Company.

CERTAIN RELATED PARTY TRANSACTIONS

The Company is a member of a group of companies affiliated through common
ownership under SOFTBANK Corp. and has various transactions and relationships
with members of the group, including SOFTBANK Corp.'s wholly-owned U.S.
subsidiary, SOFTBANK Holdings Inc. ("SBH"). Because of these relationships, it
is possible that the terms of the various transactions are not those that
would result from an arm's length dealing among unrelated parties.

In December 1994, as part of the acquisition of ZD Expos, MAC purchased a
portion of the trade show assets for $45 million and its parent company, Son
Kosan Ltd., purchased an additional portion for $30 million. Concurrently with
the purchase of assets, SB Forums and Son Kosan Inc. entered into a management
agreement pursuant to which SB Forums agreed to provide management services
with respect to certain Son Kosan operations in Japan, France and Germany. SB
Forums earned approximately $808,000, $1,667,000 and $2,644,000 for such
services for the years ended December 31, 1995, 1996 and 1997 respectively.
Son Kosan's trade show assets were sold to SB Forums for $10 million in
January 1997 and certain of MAC's trade show assets are being contributed to
ZDCF as part of the Reorganization. See "The Reorganization."

In February 1996, as part of the acquisition of ZD Pubco, MAC purchased
certain publishing assets for $302 million in cash. Concurrently with the sale
of assets, ZDI and MAC entered into a management agreement pursuant to which
ZDI agreed to provide management services with respect to the purchased
assets. The

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Company earned approximately $2 million for such services for each of the
years ended December 31, 1996 and 1997, respectively. Of these assets, a
portion was transferred to ZDI for $100 million as of October 31, 1997 and the
balance will be sold to ZDI for $270 million concurrently with the Offering.
See "The Reorganization." The purchase price for the assets sold to ZDI was
not more than fair market value as determined by an independent appraiser.

ZDI and Softbank entered into a series of license and syndication agreements
pursuant to which Softbank was granted the license to publish, or use certain
materials from, PC Week, Computer Shopper, PC Computing, MacWeek, Computer
Gaming World, PC Magazine and Internet Business Advantage. The Company earned
approximately $963,948 and $1,817,986 in connection therewith for the years
ended December 31, 1996 and 1997, respectively. Such agreements are being
combined into the master license agreement described above.

The Company has advanced funds for the account of MAC in managing the MAC
Assets and ZDTV, bearing interest at the 30-day LIBOR rate plus .50%; subject
to periodic reimbursement by MAC. Such advances totalled $8.1 million, $68.2
million and $70.9 million in 1995, 1996 and 1997, respectively. The remaining
outstanding amount as of December 31, 1997 of $42.6 million will be reimbursed
in connection with the Reorganization. See Note 9 to the Notes to the Combined
Financial Statements of ZDI and ZDCF.

During 1996 and 1997, the Company recorded revenues of approximately $.9
million and $2.7 million, respectively, from sales of advertising space and
trade show services to Kingston, an 80%-owned Softbank partnership. These
services were provided under terms consistent with those provided to
unaffiliated customers. See Note 9 of the Notes to the Combined Financial
Statements. Concurrently with the Offering the Company is entering into a
sale-leaseback transaction with Kingston. See "The Reorganization."

In 1997 the Company had an arrangement with SOFTBANK Interactive Marketing
("SIM"), a 65.3%-owned Softbank subsidiary, for providing interactive media
sales. The Company paid SIM approximately $.6 million and $1.8 million in
commissions for the years ended December 31, 1996 and 1997, respectively.
Effective December 31, 1997, SIM was acquired by an unrelated third party and
the Company terminated its representation agreement with SIM. See Note 9 of
the Notes to the Combined Financial Statements of ZDI and ZDCF.

During 1996 and 1997, the Company and Softbank were parties to a joint
venture agreement pursuant to which the Company managed all ZDCF trade shows
and conferences conducted in Japan. The Company earned approximately
$1,727,000 and $1,413,000 for such services for the years ended December 31,
1996 and 1997, respectively.

During 1996 and 1997, the Company incurred $2 million and approximately $1.6
million in advertising expenses with Yahoo! Inc., which is 29.4% owned by
Softbank. Mr. Yang is a co-founder and Chief Yahoo and Mr. Hippeau is a
director of Yahoo! Inc.

During 1995 to 1997, the Company issued notes payable to Softbank in an
aggregate principal amount of $2.5 billion as of December 31, 1997,
principally for indebtedness incurred in the acquisition of ZD Expos, COMDEX
and ZD Pubco. See Note 9 of the Notes to the Combined Financial Statements.

As part of the acquisition of the Company by its former owner in 1994, the
Company agreed to assume certain obligations to management arising out of
prior employment arrangements with Ziff Communications Company. In 1995 and
immediately after the end of the 1996 calendar year, the Company paid under
such arrangements $29,702,469 to Mr. Hippeau, the Company's Chairman and CEO
and a Director of the Company, and $1,014,565 to Mr. Sheer, the President of
ZD Publishing and a Director of the Company. See Note 9 to the Notes to the
Combined Financial Statements of ZDI and ZDCF.

The Company has participated in the U.S. Softbank cash management program,
periodically transferring excess cash to SBH and in turn receiving cash
advances from SBH to fund the Company's short-term working capital
requirements. Under the program, interest is accrued based on the net balance
outstanding at the end of

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each month. Interest income is earned at the 30-day LIBOR rate. Interest
expense is incurred at such rate plus .50%. As of December 31, 1996 and 1997,
such net cash transfers from the Company to SBH amounted to $41.3 million and
$76.5 million, respectively. See Note 9 of the Notes to the Combined Financial
Statements of ZDI and ZDCF.

During 1997, the Company was a guarantor under SBH's $150 million loan
agreement with The Bank of New York, under which $102.5 million was
outstanding as of December 31, 1997, bearing interest at a weighted average
rate of 6.51% per annum. In March, 1998 this agreement was amended and
restated to increase the loan amount to $450 million. Under the amended
agreement, the Company is a guarantor under SBH's $450 million credit facility
with The Bank of New York, as agent, The Bank of New York and Morgan Stanley
Senior Funding, Inc., as lenders, and certain affiliate guarantors. The
agreement governing the credit facility contains certain restrictive covenants
and other provisions which bind the Company, but it does not prevent the
Company from consummating the Offering. Concurrently with the Reorganization,
the Company will repay obligations due to SBH; and it is expected that SBH
will use a portion of such proceeds to prepay the loans under the credit
facility and terminate the commitments thereunder.

SBH and its subsidiary SBH Delaware have agreed to act as guarantors for
payments under the Company's lease for its new headquarters located at 28 East
28th Street, New York, New York. In addition, the various intercompany loans
from SBH Delaware to the Company were subordinated to the lease agreement. In
accordance with the terms of these agreements, these arrangements will
terminate when the Company and SBH meet minimum net worth levels of $850
million and $715 million, respectively, upon completion of the Offerings, at
which time the Company will become the sole guarantor under the lease.

During 1997, the Company entered into an operating lease with GE Capital
Corp. for certain television production equipment that the Company subleased
to ZDTV on similar terms. This arrangement is expected to continue upon
completion of the Offering. The total amount of leased equipment will not
exceed $10 million.

During 1997, the Company participated in a global insurance program
implemented by SBH. Upon completion of the Offering, it is expected that the
Company will remain a part of this program. The total amount of insurance
expenses allocated to the Company for the period from August 1, 1997 to July
30, 1998 does not exceed $1.35 million.

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PRINCIPAL STOCKHOLDERS

The Company is a newly organized Delaware corporation, incorporated on
February 4, 1998, with no stock issued prior to the Reorganization. SBH is a
wholly-owned subsidiary of SOFTBANK Corp. which, as of December 31, 1997, was
50.2% owned by Mr. Masayoshi Son, its President, including 43.4% directly held
by his 99% owned holding company, MAC. Upon completion of the Reorganization,
Softbank will own approximately 74.2% of the outstanding shares of Common Stock
and approximately 25.8% of the outstanding shares of Common Stock will be owned
by the public.

The following table sets forth, as of April 1, 1998, certain information,
after giving effect to the Reorganization, with respect to the beneficial
ownership of the Common Stock (i) by each person or entity which beneficially
owns in excess of five percent of the Common Stock and (ii) all executive
officers and directors of the Company as a group.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENT
BENEFICIAL OWNER COMMON STOCK(1) OF CLASS
- ---------------- ------------------- --------
<S> <C> <C>
SOFTBANK Holdings Inc.(2) ......................... 74,200,000 74.2%
SOFTBANK Corp.(3) ................................. 74,200,000 74.2
MAC Inc.(4)........................................ 74,200,000 74.2
Masayoshi Son(5)................................... 74,200,000 74.2
Officers and directors as a group.................. 74,200,000 74.2
</TABLE>
- --------

(1) Assumes no exercise of the U.S. Underwriters' over-allotment option and
does not include 10 million shares of Common Stock reserved for issuance
under the Company's Incentive Compensation, Non-Employee Directors Option
and Employee Stock Purchase Plans. See "Management--Stock Plans."

(2) Includes shares of Common Stock owned by Kingston which may be deemed
to be beneficially owned by SBH. Such entity's address is 10 Langley Road,
Suite 403, Newton Center, MA 02159.
(3) Reflecting shares of Common Stock owned by SBH, a wholly-owned subsidiary
of SOFTBANK Corp. Such entity's address is c/o SOFTBANK Corp., 24-1
Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103, Japan.
(4) Reflecting shares of Common Stock owned by SBH and indirectly by SOFTBANK
Corp., which is 43.4% owned by MAC. Such entity's address is 1-4-2
Azabudai, Minato-ku, Tokyo (106-0041).
(5) Reflecting shares of Common Stock owned by SBH and indirectly by SOFTBANK
Corp. and MAC, which is 99% directly and indirectly owned by Mr. Son,
SOFTBANK Corp.'s President. Such person's address is c/o SOFTBANK Corp.,
24-1 Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103, Japan.

After giving effect to the Reorganization, Kingston will own shares of
Common Stock, or less than 1% of the class of Common Stock. Concurrently with
the Offering SOFTBANK Kingston Inc., an affiliate of the Company and a wholly-
owned subsidiary of SBH, intends to sell a portion of the shares of Common
Stock of the Company issued to Kingston pursuant to the Registration Statement
of which this Prospectus forms a part. See "The Reorganization" and
"Underwriters."

As a result of its beneficial ownership of Common Stock, Softbank will be
able to influence significantly matters affecting the Company and will be in a
position to direct the election of all members of the Board of Directors and to
control even those actions that require the approval of two-thirds or more of
the voting share capital of the Company, including amendments to the Company's
Certificate of Incorporation and any business combinations. See "Risk Factors--
Control by Principal Stockholders and Potential Conflicts of Interest" and
"Description of Capital Stock--Certain Provisions of the Certificate of
Incorporation and By-laws."

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DESCRIPTION OF CAPITAL STOCK

The following summary of certain provisions of the Company's capital stock
describes all material provisions of, but does not purport to be complete and
is subject to, and qualified in its entirety by, the Company's Certificate of
Incorporation and By-laws, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part and by the
provisions of applicable law. See "Additional Information."

At the time of the Offering, the total amount of authorized capital stock of
the Company will be 130 million shares, consisting of 120 million shares of
Common Stock, par value $.01 per share, and 10 million shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock"). Upon completion of
the Offering, 100 million shares of Common Stock and no shares of Preferred
Stock will be issued and outstanding. As of April 1, 1998, there were no
shares of Common Stock outstanding. The discussion herein describes the
Company's Amended and Restated Certificate of Incorporation (the "Certificate
of Incorporation") and By-laws, as anticipated to be in effect upon
consummation of the Offering, and their effect on the Common Stock.

Prior to the Offering, there has been no public market for the Common Stock.
See "Risk Factors--No Prior Public Market; Possible Volatility of Stock
Price."

COMMON STOCK

The issued and outstanding shares of Common Stock are, and the shares of
Common Stock being offered by the Company will be upon payment therefor,
validly issued, fully paid and nonassessable. The holders of outstanding
shares of Common Stock are entitled to receive dividends out of assets legally
available therefor at such time and in such amounts as the Board of Directors
may from time to time determine. See "Dividend Policy." The shares of Common
Stock are not convertible and the holders thereof have no preemptive or
subscription rights to purchase any securities of the Company. Upon
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to receive pro rata the assets of the Company which are
legally available for distribution, after payment of all debts and other
liabilities. Each outstanding share of Common Stock is entitled to one vote on
all matters submitted to a vote of the stockholders, including election of
directors. There is no cumulative voting. Except as otherwise required by law
or the Certificate of Incorporation, the Common Stock will vote on all matters
submitted to a vote of the stockholders, including election of directors.

PREFERRED STOCK

The Certificate of Incorporation provides that shares of Preferred Stock may
be issued in one or more series from time to time by the Board, and the Board
is expressly authorized to fix by resolution or resolutions the designations
and the powers, preferences and rights, and the qualifications, limitations
and restrictions thereof, of the shares of each series of Preferred Stock,
including without limitation the following: (a) the distinctive serial
designation of such series which shall distinguish it from other series; (b)
the number of shares included in such series; (c) the dividend rate (or method
of determining such rate) payable to the holders of the shares of such series,
any conditions upon which such dividends shall be paid and the date or dates
upon which such dividends shall be payable; (d) whether dividends on the
shares of such series shall be cumulative and, in the case of shares of any
series having cumulative dividend rights, the date or dates or method of
determining the date or dates from which dividends on the shares of such
series shall be cumulative; (e) the amount or amounts which shall be payable
out of the assets of the Company to the holders of the shares of such series
upon voluntary or involuntary liquidation, dissolution or winding up the
Company, and the relative rights of priority, if any, of payment of the shares
of such series; (f) the price or prices at which, the period or periods within
which and the terms and conditions upon which the shares of such series may be
redeemed, in whole or in part, at the option of the Company or at the option
of the holder or holders thereof or upon the happening of a specified event or
events; (g) the obligation, if any, of the Company to purchase or redeem
shares of such series pursuant to a sinking fund or otherwise and the price or
prices at which, the period or periods within which and

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the terms and conditions upon which the shares of such series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation; (h)
whether or not the shares of such series shall be convertible or exchangeable,
at any time or times at the option of the holder or holders thereof or at the
option of the Company or upon the happening of a specified event or events,
into shares of any other class or classes or any other series of the same or
any other class or classes of stock of the Company, and the price or prices or
rate or rates of exchange or conversion and any adjustments applicable
thereto; and (i) whether or not the holders of the shares of such series shall
have voting rights, in addition to the voting rights provided by law, and if
so the terms of such voting rights. Subject to the rights of the holders of
any series of Preferred Stock, the number of authorized shares of any class or
series of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the outstanding shares entitled to vote, irrespective
of the provisions of Section 242(b)(2) of the General Corporation Law of
Delaware or any corresponding provision hereafter enacted.

CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BY-LAWS

Staggered Board of Directors

Following the Offering, the Board of Directors will consist of ten members.
The Certificate of Incorporation provides that the directors of the Company
will be divided into three classes, as nearly equal in number as reasonably
possible, as determined by the Board. The initial term of office of Class I
directors will expire at the first annual meeting of stockholders, the initial
term of office of Class II directors will expire at the second annual meeting
of stockholders and the initial term of office of Class III directors will
expire at the third annual meeting of stockholders, with each class of
directors to hold office until their successors have been duly elected and
qualified. At each annual meeting of stockholders, directors elected to
succeed the directors whose terms expire at such annual meeting shall be
elected to hold office for a term expiring at the annual meeting of
stockholders in the third year following the year of their election and until
their successors have been duly elected and qualified. The classification of
the Board will have the effect of making it more difficult for stockholders to
change the composition of the Board, because only a minority of the directors
are up for election at each annual meeting, and the Board may not be replaced
by vote of the stockholders at any one time.

Number of Directors; Removal; Filling Vacancies

The Certificate of Incorporation provides that the number of members of the
Board of Directors will be fixed from time to time pursuant to the By-laws.
The By-laws provide that the Board will consist of one or more members, the
number of which will be determined from time to time by the Board. The
Certificate of Incorporation and By-laws provide that in the event of any
increase or decrease in the authorized number of directors, (a) each director
then serving as such shall nevertheless continue as a director of the class of
which he is a member until the expiration of his current term, or his earlier
death, retirement, resignation, or removal, and (b) the newly created or
eliminated directorships resulting from such increase or decrease shall be
apportioned by the Board among the three classes of directors so as to
maintain such classes as nearly equal in number as reasonably possible. The
Certificate of Incorporation and By-laws provide that directors may be removed
only for cause except that a director who is also an officer may be removed
upon ceasing to be an officer. The By-laws provide that vacancies, whether
arising through death, retirement, resignation or removal of a director or
through an increase in the authorized number of directors of any class, may
only be filled by a majority vote of the remaining directors of the class in
which such vacancy occurs, or by the sole remaining director of that class if
one such director remains, or by the majority vote of the directors of the
remaining classes if no such director remains, or by stockholders at an annual
meeting of stockholders of the Company. A director elected to fill a vacancy
shall serve for the remainder of the then present term of office of the class
to which he is elected. These provisions would prevent any stockholder from
enlarging the Board and then filling the new directorships with such
stockholder's own nominees.

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No Stockholder Action by Written Consent; Special Meetings

The Certificate of Incorporation and By-laws provide that any action
required or permitted to be taken by the stockholders of the Company must be
duly effected at a duly called annual or special meeting of such holders and
may not be taken by any consent in writing by such holders. The Certificate of
Incorporation and By-laws provide that special meetings of stockholders of the
Company may be called only by the Chairman of the Board or the Board pursuant
to a resolution stating the purpose or purposes thereof, and any power of
stockholders to call a special meeting is specifically denied. No business
other than that stated in the notice shall be transacted at any special
meeting. These provisions will have the effect of delaying consideration of a
stockholder proposal until the next annual meeting unless a special meeting is
called by the Chairman, Vice Chairman, President or the Board for
consideration of such proposal.

Advance Notice for Stockholder Nominations and Proposals of New Business

The By-laws require notice of any proposal to be presented by any
stockholder or of the name of any person to be nominated by any stockholder
for election as a director of the Company at a meeting of stockholders to be
delivered to the Secretary of the Company not less than 60 nor more than 90
days prior to the date of the meeting. Accordingly, failure by a stockholder
to act in compliance with the notice provisions will mean that the stockholder
will not be able to nominate directors or propose new business.

Amendments

The Certificate of Incorporation provides that the affirmative vote of the
holders of at least 80% of the stock entitled to vote generally in the
election of directors, voting together as a single class, or a majority of the
Board is required to amend provisions of the By-laws relating to stockholder
action without a meeting; the calling of special meetings; the number (or
manner of determining the number), election and term of the Company's
directors; the filling of vacancies; and the removal of directors.

CERTAIN PROVISIONS OF DELAWARE LAW

Following the consummation of the Offering, the Company will be subject to
the "Business Combination" provisions of Section 203 of the DGCL. In general,
such provisions prohibit a publicly held Delaware corporation from engaging in
various "business combination" transactions with any "interested stockholder"
for a period of three years after the date of the transaction which the person
became an "interested stockholder," unless: (i) the transaction is approved by
the Board of Directors prior to the date the "interested stockholder" obtained
such status; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an "interested stockholder," the "interested stockholder"
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the
number of shares outstanding those shares owned by (a) persons who are
directors and also officers and (b) employee stock plans in which employee
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer; or
(iii) on or subsequent to such date the "business combination" is approved by
the Board of Directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least 66 2/3% of the outstanding
voting stock which is not owned by the "interested stockholder." A "business
combination" is defined to include mergers, asset sales and other transactions
resulting in financial benefit to a stockholder. In general, an "interested
stockholder" is a Person who, together with affiliates and associates, owns
(or within three years, did own) 15% or more of a corporation's voting stock.
The statute could prohibit or delay mergers or other takeover or change in
control attempts with respect to the Company and, accordingly, may discourage
attempts to acquire the Company.

Section 203 and the provision of the Company's Certificate of Incorporation
and By-laws described above may make it more difficult for a third party to
acquire, or discharge bids for, the Company. Section 203 and these provisions
could have the effect of inhibiting attempts to change the membership of the
Company's Board of Directors.

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LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 102 of the DGCL authorizes a Delaware corporation to include a
provision in its certificate of incorporation limiting or eliminating the
personal liability of its directors to the corporation and its stockholders
for monetary damages for breach of the directors' fiduciary duty of care. The
duty of care requires that, when acting on behalf of the corporation,
directors exercise an informed business judgment based on all material
information reasonably available to them. Absent the limitations authorized by
such provision, directors are accountable to corporations and their
stockholders for monetary damages for conduct constituting gross negligence in
the exercise of their duty of care. Although Section 102 of the DGCL does not
change a director's duty of care, it enables corporations to limit available
relief to equitable remedies such as injunction or rescission. The Company's
Certificate of Incorporation and By-laws include provisions which limit or
eliminate the personal liability of its directors to the fullest extent
permitted by Section 102 of the DGCL. Consequently, a director or officer will
not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for (i) any breach
of the director's duty of loyalty to the Company or its stockholders, (ii)
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) unlawful payments of dividends or unlawful
stock repurchases, redemptions or other distributions and (iv) any transaction
from which the director derived an improper personal benefit.

The Certificate of Incorporation and By-laws provide that the Company will
indemnify to the full extent permitted by law any person made or threatened to
be made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person or
such person's testator or intestate is or was a director, officer or employee
of the Company or serves or served at the request of the Company as a
director, officer or employee. The Certificate of Incorporation and By-laws
provide that expenses, including attorneys' fees, incurred by any such person
in defending any such action, suit or proceeding will be paid or reimbursed by
the Company promptly upon receipt by it of an undertaking of such person to
repay such expenses if it shall ultimately be determined that such person is
not entitled to be indemnified by the Company.
The inclusion of these indemnification provisions in the Company's Certificate
of Incorporation and By-laws is intended to enable the Company to attract
qualified persons to serve as directors and officers who might otherwise be
reluctant to do so.

The directors and officers of the Company are insured under policies of
insurance maintained by the Company, subject to the limits of the policies,
against certain losses arising from any claim made against them by reason of
being or having been such officers or directors. In addition, the limited
liability provisions in the Certificate of Incorporation and the
indemnification provisions in the Certificate of Incorporation and By-laws may
discourage stockholders from bringing a lawsuit against directors for breach
of their fiduciary duty (including breaches resulting from grossly negligent
conduct) and may have the effect of reducing the likelihood of derivative
litigation against directors and officers, even though such an action, if
successful, might otherwise have benefitted the Company and it stockholders.
Furthermore, a stockholder's investment in the Company may be adversely
affected to the extent the Company pays the costs of settlement and damage
awards against directors and officers of the Company pursuant to the
indemnification provisions in the Company's By-laws. The limited liability
provisions in the Certificate of Incorporation will not limit the liability of
directors under federal securities laws.

LISTING

The Common Stock has been approved for listing on the NYSE under the symbol
"ZD," subject to official notice of issuance.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The Bank of New
York.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no market for the Common Stock of the
Company. The Company can make no predictions as to the effect, if any, that
sales of shares or the availability of shares for sale will have on the market
price prevailing from the time. Nevertheless, sales of significant amounts of
Common Stock in the public market, or the perception that such sales may
occur, could adversely affect the prevailing market prices. See "Risk
Factors--Shares Eligible for Future Sale."

Upon completion of the Offering, the Company expects to have 100,000,000
shares of Common Stock outstanding. Of the shares outstanding after the
Offering, the 25,800,000 shares of Common Stock (29,670,000 shares if the U.S.
Underwriters' over-allotment is exercised in full) sold in the Offering and
that portion of 100,000 shares which SOFTBANK Kingston, Inc. intends to sell
concurrently with the Offering pursuant to the Registration Statement of which
this Prospectus forms a part will be freely tradeable without restriction
under the Securities Act, except for any such shares which may be acquired by
an "affiliate" of the Company (an "Affiliate"), which shares will be subject
to the volume limitations of Rule 144. As defined in Rule 144, an Affiliate of
an issuer is a person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
such issuer.

An aggregate of 74,100,000 shares of Common Stock held by existing
stockholders upon completion of the Offering will be "restricted securities"
(as that phrase is defined in Rule 144) and may not be resold in the absence
of registration under the Securities Act or pursuant to exemptions from such
registration, including among others, the exemption provided by Rule 144 under
the Securities Act. One year after the date of this Prospectus, such shares of
Common Stock will be eligible for sale in the public market pursuant to Rule
144, subject to the volume limitations and other restrictions described below.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, if a period of at least one year has elapsed
since the later of the date the "restricted securities" were acquired from the
Company and the date they were acquired from an Affiliate, then the holder of
such restricted securities (including an Affiliate) is entitled to sell a
number of shares within any three-month period that does not exceed the
greater of 1% of the then outstanding shares of the Common Stock
(approximately 1,000,000 shares immediately after the Offering) or the average
weekly reported volume of trading of the Common Stock on the NYSE during the
four calendar weeks preceding such sale. The holder may only sell such shares
through unsolicited brokers' transactions. Sales under Rule 144 are also
subject to certain requirements pertaining to the manner of such sales,
notices of such sales and the availability of current public information
concerning the Company. Affiliates may sell shares not constituting restricted
shares in accordance with the foregoing volume limitations and other
requirements without regard to any holding period. Under Rule 144 (k), if a
period of at least two years has elapsed between the later of the date
restricted securities were acquired from the Company and the date they were
acquired from an Affiliate, as applicable, a holder of such restricted
securities who is not an Affiliate at the time of the sale and has not been an
Affiliate for at least three months prior to the sale would be entitled to
sell the shares immediately without regard to the volume limitations and other
restrictions described above.

Any employee of the Company who purchased his or her shares of Common Stock
or received an option to purchase Common Stock pursuant to a written
compensation plan or contract while the Company was not subject to the
reporting requirements of the U.S. Securities Exchange Act of 1934, as amended
(the "Exchange Act") may be entitled to rely on the resale provisions of Rule
701 under the Securities Act, which permits nonaffiliates to sell their Rule
701 shares without having to comply with the current public information,
holding period, volume limitation or notice provisions of Rule 144 and permits
Affiliates to sell their Rule 701 shares without having to comply with the
holding period provision of Rule 144, in each case beginning 90 days after the
Company became subject to the reporting requirements of the Exchange Act.

The Company and Softbank entered into a Registration Rights Agreement, dated
as of April 1, 1998 (the "Registration Rights Agreement"), in connection with
the Offering. The Registration Rights Agreement provides Softbank with the
right to require the Company to register any or all of the Common Stock held
by it in a public offering pursuant to the Securities Act of 1933, as amended.
Pursuant to the Registration Rights

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<PAGE>

Agreement, Softbank also has the right to "piggyback" or include its Common
Stock in any registration of Common Stock made by the Company.

Notwithstanding the foregoing, in connection with the Offering, each of the
Company and SBH, which owns in aggregate 74.2 million shares of Common Stock,
has agreed that, without the prior written consent of Morgan Stanley & Co.
Incorporated on behalf of the Underwriters, during the period ending 180 days
after the date of the Prospectus, they will not, directly or indirectly, (i)
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, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (whether such shares or any such
securities are then owned by such person or are thereafter acquired directly
from the Company) or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The restrictions described in this paragraph
do not apply to (a) the sale to the Underwriters of the shares of Common Stock
under the Underwriting Agreement, (b) the issuance by the Company of shares of
Common Stock upon the exercise of an option or a warrant or the conversion of
a security outstanding on the date of this Prospectus of which the
Underwriters have been advised in writing, (c) transactions by any person
other than the Company relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the offering of
the shares, (d) the issuance of shares of Common Stock in connection with the
Reorganization, (e) the issuance of shares of Common Stock in connection with
the Company's Employee Stock Purchase Plan or (f) subject to certain
conditions, the sale of the shares of Common Stock issued in exchange for the
Kingston assets. In addition, SBH has agreed that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters,
neither it nor any of its affiliates will, during the period ending 180 days
after the date of the Prospectus, make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.

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<PAGE>

DESCRIPTION OF CERTAIN INDEBTEDNESS

The following summaries of certain material provisions of the Company's
Notes and Credit Facility do not purport to be complete and are subject to,
and qualified in their entirety by, the Company's Indenture (as defined below)
and Credit Facility, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part and by the
provisions of applicable law. See "Additional Information."

NOTES

General

The Notes are to be issued under an Indenture, to be dated as of , 1998
(the "Indenture"), between the Company and The Bank of New York, as trustee
(the "Trustee"). The Notes are general unsecured senior subordinated
obligations of the Company, and will rank on a parity with all other unsecured
and subordinated indebtedness of the Company. The Notes will be subordinated
in right of payment to all senior indebtedness of the Company (including
indebtedness under the Credit Agreement) as well as all other Senior
Indebtedness (as defined in the Indenture).

The Notes will be limited to $250,000,000 aggregate principal amount and
will mature on , 2008. Interest on the Notes will be payable on and
of each year, commencing , 1998 at the rate of % per annum. The
Notes will be redeemable, at the Company's option, in whole or in part, at any
time after , 2003, at redemption prices starting at % of their
principal amount and declining to 100% of their principal amount on or after
, 2006 plus accrued and unpaid interest. In addition, upon a change of
control of the Company, each holder of Notes will have the right to require
the Company to purchase such holder's Notes. The Company will be permitted to
redeem a portion of the Notes following one or more public equity offerings
consummated prior to , 2001.

Covenants

The Indenture contains certain restrictive covenants, including, among
others, the following: (i) a limitation on the ability of the Company and its
Restricted Subsidiaries (as defined in the Indenture) to incur any
indebtedness other than Permitted Indebtedness (as defined in the Indenture)
or to incur senior subordinated indebtedness or certain indebtedness secured
by liens; (ii) a limitation on the ability of the Company and its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment (as
defined in the Indenture), including payment of dividends, prepayment of
subordinated indebtedness and the repurchase of capital stock; (iii) a
limitation on the ability of the Company to suffer to exist certain dividend
and other payment restrictions affecting its Restricted Subsidiaries; (iv) a
limitation on the ability of the Company to sell or to permit any Restricted
Subsidiary to issue or sell capital stock of a Restricted Subsidiary; (v) a
limitation on the ability of the Company and its Restricted Subsidiaries to
consummate certain Asset Sales (as defined in the Indenture) unless certain
conditions are fulfilled; and (vi) limitations on any transaction with
affiliates. Certain of these covenants will terminate if and when the Notes
receive an investment grade rating.

In addition, the Indenture limits the ability of the Company to merge with
or to transfer all or substantially all of its assets to another person.
Except as set forth above, the Indenture does not contain any material
quantitative financial requirements. The Notes provide for acceleration upon
customary events of default.

CREDIT FACILITY

The Company has obtained a commitment letter from The Bank of New York,
Morgan Stanley Senior Funding, DLJ Capital Funding and The Chase Manhattan
Bank to provide a $1.35 billion term Credit Facility. In connection with the
Reorganization, the Company will enter into the Credit Facility and borrow
$1.25 billion thereunder. The Credit Facility will consist of a seven year
$700 million reducing revolving credit facility (with $600 million drawn at
consummation of the Offerings) and a seven year $650 million term loan. The
revolving

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<PAGE>

credit commitments will be reduced and the term loan will be amortized,
beginning in September 2000, by (x) 10% in 2000, in two equal quarterly
installments, (y) 20% in each of 2001, 2002, 2003 and 2004 in four equal
quarterly installments and (z) 10% at final maturity in March 2005. The Credit
Facility will be secured, in part, by a first priority security interest in
capital stock of certain subsidiaries of the Company and will be guaranteed by
all domestic subsidiaries of the Company (in each case, including ZDI and
ZDCF).

The Credit Facility will contain certain customary affirmative and negative
covenants, including covenants (subject to certain exceptions) with respect
to, among other things, the delivery of financial statements and other
information, limitations on dispositions of assets, changes of business and
ownership, mergers or acquisitions, restricted payments, indebtedness, loans
and investments, and transactions with affiliates, negative pledge of assets,
maintenance of adequate and customary insurance coverage, compliance with all
applicable laws and regulations, and restriction on modifications of certain
agreements, charter documents or other material documents without the consent
of the lenders. The Credit Facility will also contain certain financial
covenants.

The failure to satisfy any of the covenants would constitute an Event of
Default under the Credit Facility. The Credit Facility will also include other
customary events of default, including, without limitation, nonpayment,
misrepresentation in a material respect, cross-default to other indebtedness,
bankruptcy, ERISA, judgments and change of control.

The Credit Facility is subject to certain terms and conditions, including
without limitation negotiation, execution and delivery of definitive financing
agreements, in each case containing terms and conditions, representations and
warranties, covenants, indemnifications, events of default and conditions to
lending. There can be no assurance as to when or whether the Credit Facility
will be entered into or as to whether the Credit Facility will contain the
terms and conditions described above, and such may contain terms and
conditions more favorable or less favorable to the Company than set forth
above.

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<PAGE>

CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of the material United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person that, for United States federal income tax purposes, is a
non-resident alien individual, a foreign corporation, a foreign partnership or
an estate or trust, in each case not subject to United States federal income
tax on a net income basis in respect of income or gain from Common Stock (a
"non-U.S. holder"). This discussion does not consider the specific facts and
circumstances that may be relevant to particular holders in light of their
personal circumstances and does not address the treatment of non-U.S. holders
of Common Stock under the laws of any state, local or foreign taxing
jurisdiction. Further, the discussion is based on provisions of the United
States Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations thereunder, and administrative and judicial interpretations
thereof, all as in effect on the date hereof and all of which are subject to
change on a possibly retroactive basis. Each prospective holder is urged to
consult a tax advisor with respect to the United States federal tax
consequences of acquiring, holding and disposing of Common Stock, as well as
any tax consequences that may arise under the laws of any state, local or
foreign taxing jurisdiction.

DIVIDENDS

Dividends paid to a non-U.S. holder of Common Stock will be subject to
withholding of United States federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business
within the United States (and are attributable to a United States permanent
establishment of such holder, if an applicable income tax treaty so requires
as a condition for the non-U.S. holder to be subject to United States income
tax on a net income basis in respect of such dividends). Such "effectively
connected" dividends are subject to tax at rates applicable to United States
citizens, resident aliens and domestic United States corporations, and are not
generally subject to withholding. Any such effectively connected dividends
received by a non-United States corporation may also, under certain
circumstances, be subject to an additional "branch profits tax" at a 30% rate
or such lower rate as may be specified by an applicable income tax treaty.

Under currently effective United States Treasury regulations, dividends paid
to an address in a foreign country are presumed to be paid to a resident of
that country (unless the payor has knowledge to the contrary) for purposes of
the withholding discussed above and, under the current interpretation of
United States Treasury regulations, for purposes of determining the
applicability of a tax treaty rate. Under recently finalized United States
Treasury regulations that will generally be effective for distributions after
December 31, 1999 (the "Final Withholding Regulations"), however, a non-U.S.
holder of Common Stock who wishes to claim the benefit of an applicable treaty
rate would be required to satisfy applicable certification requirements. In
addition, under the Final Withholding Regulations, in the case of Common Stock
held by a foreign partnership, (x) the certification requirement would
generally be applied to the partners of the partnership and (y) the
partnership would be required to provide certain information, including a
United States taxpayer identification number. The Final Withholding
Regulations also provide look-through rules for tiered partnerships.

A non-U.S. holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for
refund with the United States Internal Revenue Service.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to United States federal
income tax in respect of gain recognized on a disposition of Common Stock
except in the following circumstances: (i) the gain is effectively connected
with a trade or business conducted by the non-U.S. holder in the United States
(and is attributable to a permanent establishment maintained in the United
States by such non-U.S. holder if an applicable income tax treaty so requires
as a condition for such non-U.S. holder to be subject to United States
taxation on a net income

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<PAGE>

basis in respect of gain from the sale or other disposition of the Common
Stock); (ii) in the case of a non-U.S. holder who is an individual and holds
the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the sale and certain other
conditions exist; (iii) the Company is or has been a "United States real
property holding corporation" for federal income tax purposes and, in the
event that the Common Stock is considered "regularly traded on an established
securities market," the non-U.S. holder held, directly or indirectly at any
time during the five-year period ending on the date of disposition, more than
5% of the Common Stock (and is not eligible for any treaty exemption); or (iv)
the non-U.S. holder is subject to tax pursuant to certain provisions of the
Code applicable to U.S. expatriates. Effectively connected gains realized by a
corporate non-U.S. Holder may also, under certain circumstances, be subject to
an additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.

The Company believes it is not currently, and does not anticipate becoming,
a "United States real property holding corporation" for federal income tax
purposes.

FEDERAL ESTATE TAXES

Common Stock held by a non-U.S. holder at the time of death will be included
in such holder's gross estate for United States federal estate tax purposes,
unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

Under current law, United States information reporting requirements (other
than reporting of dividend payments for purposes of the withholding tax noted
above) and backup withholding tax generally will not apply to dividends paid
to non-U.S. holders that are either subject to the 30% withholding discussed
above or that are not so subject because an applicable tax treaty reduces such
withholding. Otherwise, backup withholding of United States federal income tax
at a rate of 31% may apply to dividends paid with respect to Common Stock to
holders that are not "exempt recipients" and that fail to provide certain
information (including the holder's United States taxpayer identification
number). Generally, unless the payor of dividends has definite knowledge that
the payee is a United States person, the payor may treat dividend payments to
a payee with a foreign address as exempt from information reporting and backup
withholding. However, under the Final Withholding Regulations, dividend
payments generally will be subject to information reporting and backup
withholding unless applicable certification requirements are satisfied. See
the discussion above with respect to the rules applicable to foreign
partnerships under the Final Withholding Regulations.

In general, United States information reporting and backup withholding
requirements also will not apply to a payment made outside the United States
of the proceeds of a sale of Common Stock through an office outside the United
States of a non-United States broker. However, United States information
reporting (but not backup withholding) requirements will apply to a payment
made outside the United States of the proceeds of a sale of Common Stock
through an office outside the United States of a broker (i) that is a United
States person, (ii) that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, (iii)
that is a "controlled foreign corporation" as to the United States, or (iv)
(effective beginning January 1, 2000) a foreign partnership, if at any time
during its tax year, one or more of its partners are U.S. persons (as defined
in U.S. Treasury regulations) who in the aggregate hold more than 50% of the
income or capital interest in the partnership or if, at any time during its
tax year, such foreign partnership is engaged in a United States trade or
business, unless the broker has documentary evidence in its records that the
holder or beneficial owner is a non-United States person or the holder or
beneficial owner otherwise establishes an exemption. Payment of the proceeds
of the sale of Common Stock to or through a United States office of a broker
is currently subject to both United States backup withholding and information
reporting unless the holder certifies its non-United States status under
penalties of perjury or otherwise establishes an exemption.

A non-United States holder generally may obtain a refund of any excess
amounts withheld under the backup withholding rules by filing the appropriate
claim for refund with the United States Internal Revenue Service.

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<PAGE>

UNDERWRITERS

Under the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof (the "Underwriting Agreement"), the U.S.
Underwriters named below, for whom Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Goldman, Sachs & Co. and Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") are acting as U.S. Representatives, and the International
Underwriters named below for whom Morgan Stanley & Co. International Limited,
Merrill Lynch International, Goldman Sachs International and Donaldson, Lufkin
& Jenrette International are acting as International Representatives, have
severally agreed to purchase, and the Company has agreed to sell to them,
severally, the respective number of shares of Common Stock set forth opposite
the names of such Underwriters below:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
---- ----------
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated.................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................................
Goldman, Sachs & Co. .............................................
Donaldson, Lufkin & Jenrette Securities Corporation...............
----------
Subtotal........................................................ 20,640,000
----------
International Underwriters:
Morgan Stanley & Co. International Limited........................
Merrill Lynch International.......................................
Goldman Sachs International.......................................
Donaldson, Lufkin & Jenrette International........................
----------
Subtotal........................................................ 5,160,000
----------
Total........................................................... 25,800,000
==========
</TABLE>

The U.S. Underwriters and the International Underwriters, and the U.S.
Representatives and the International Representatives, are collectively
referred to as the "Underwriters" and the "Representatives," respectively. The
Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are obligated to
take and pay for all of the shares of Common Stock offered hereby (other than
those covered by the U.S. Underwriters' over-allotment option described below)
if any such shares are taken.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented and agreed that, with certain exceptions: (i)
it is not purchasing any Shares (as defined herein) for the account of anyone
other than a United States or Canadian Person (as defined herein) and (ii) it
has not offered or sold, and will not offer or sell, directly or indirectly,
any Shares or distribute any prospectus relating to the Shares outside the
United States or Canada or to anyone other than a United States or Canadian
Person. Pursuant to the Agreement between U.S. and International Underwriters,
each International Underwriter has represented and agreed that, with certain
exceptions: (i) it is not purchasing any Shares for the account of any United
States or Canadian Person and (ii) it has not offered or sold, and will not
offer or sell, directly or indirectly, any Shares or distribute any prospectus
relating to the Shares in the United States or Canada or to any United States
or Canadian Person. With respect to any Underwriter that is a U.S. Underwriter
and an International Underwriter, the foregoing representations and agreements
(i) made by it in its capacity as a U.S. Underwriter apply only to it in its
capacity as a U.S. Underwriter and (ii) made by it in its capacity as an

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International Underwriter apply only to it in its capacity as an International
Underwriter. The foregoing limitations do not apply to stabilization
transactions or to certain other transactions specified in the Agreement
between U.S. and International Underwriters. As used herein, "United States or
Canadian Person" means any national or resident of the United States or
Canada, or any corporation, pension, profit-sharing or other trust or other
entity organized under the laws of the United States or Canada or of any
political subdivision thereof (other than a branch located outside the United
States and Canada of any United States or Canadian Person), and includes any
United States or Canadian branch of a person who is otherwise not a United
States or Canadian Person. All shares of Common Stock to be purchased by the
Underwriters under the Underwriting Agreement are referred to herein as the
"Shares."

Pursuant to the Agreement between U.S. and International Underwriters, sales
may be made between the U.S. Underwriters and International Underwriters of
any number of Shares as may be mutually agreed. The per share price of any
Shares sold shall be the public offering price set forth on the cover page
hereof, in United States dollars, less an amount not greater than the per
share amount of the concession to dealers set forth below.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented that it has not offered or sold, and has
agreed not to offer or sell, any Shares, directly or indirectly, in any
province or territory of Canada or to, or for the benefit of, any resident of
any province or territory of Canada in contravention of the securities laws
thereof and has represented that any offer or sale of Shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus
in the province or territory of Canada in which such offer or sale is made.
Each U.S. Underwriter has further agreed to send to any dealer who purchases
from it any of the Shares a notice stating in substance that, by purchasing
such Shares, such dealer represents and agrees that it has not offered or
sold, and will not offer or sell, directly or indirectly, any of such Shares
in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of the
securities laws thereof and that any offer or sale of Shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus
in the province or territory of Canada in which such offer or sale is made,
and that such dealer will deliver to any other dealer to whom it sells any of
such Shares a notice containing substantially the same statement as contained
in this sentence.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has represented and agreed that (i) it has not
offered or sold and, prior to the date six months after the closing date for
the sale of the Shares to the International Underwriters, will not offer or
sell, any Shares to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied and will comply
with all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Shares in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by it
in connection with the offering of the Shares to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document
may otherwise lawfully be issued or passed on.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has further represented that it has not offered or
sold, and has agreed not to offer or sell, directly or indirectly, in Japan or
to or for the account of any resident thereof, any of the Shares acquired in
connection with the distribution contemplated hereby, except for offers or
sales to Japanese International Underwriters or dealers and except pursuant to
any exemption from the registration requirements of the Securities and
Exchange Law and otherwise in compliance with applicable provisions of
Japanese law. Each International Underwriter has further agreed to send to any
dealer who purchases from it any of the Shares a notice stating in substance
that, by purchasing such Shares, such dealer represents and agrees that it has
not offered or sold, and will not offer or sell, any of such Shares, directly
or indirectly, in Japan or to or for the account of any resident thereof
except for offers or sales to Japanese International Underwriters or dealers
and except pursuant to any exemption from the registration requirements of the
Securities and Exchange Law and otherwise in compliance with applicable

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<PAGE>

provisions of Japanese law, and that such dealer will send to any other dealer
to whom it sells any of such Shares a notice containing substantially the same
statement as contained in this sentence.

The Underwriters initially propose to offer part of the shares of Common
Stock directly to the public at the public offering price set forth on the
cover page hereof and part to certain dealers at a price that represents a
concession not in excess of $ a share under the public offering
price. Any Underwriter may allow, and such dealers may reallow, a concession
not in excess of $ a share to other Underwriters or to certain
other dealers. After the initial offering of the shares of Common Stock, the
offering price and other selling terms may from time to time be varied by the
Representatives.

The Company has granted to the U.S. Underwriters an option, exercisable for
30 days from the date of this Prospectus, to purchase up to an aggregate of
3,870,000 additional shares of Common Stock at the public offering price set
forth on the cover page hereof, less underwriting discounts and commissions.
The U.S. Underwriters may exercise such option solely for the purpose of
covering over-allotments, if any, made in connection with the offering of the
shares of Common Stock offered hereby. To the extent such option is exercised,
each U.S. Underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional shares of Common
Stock as the number set forth next to such U.S. Underwriter's name in the
preceding table bears to the total number of shares of Common Stock set forth
next to the names of all U.S. Underwriters in the preceding table.

The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "ZD," subject to official notice of issuance. In
order to meet the requirements for listing the Common Stock on the New York
Stock Exchange, the Underwriters have undertaken to meet the New York Stock
Exchange's minimum distribution, issuance and aggregate market value
requirements.

At the request of the Company, the Underwriters have reserved shares of
Common Stock offered hereby for sale, at the initial public offering price, up
to 1,550,000 shares to be issued by the Company and offered hereby for
directors, officers, employees, business associates and related persons of the
Company. The number of shares of Common Stock available for sale to the
general public will be reduced to the extent such individuals purchase such
reserved shares. Any reserved shares which are not so purchased will be
offered by the Underwriters to the general public on the same basis as the
other shares offered hereby.

Each of the Company and SBH has agreed that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters,
during the period ending 180 days after the date of the Prospectus, they will
not, directly or indirectly, (i) 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, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares or any such securities are then owned by such person or
are thereafter acquired directly from the Company) or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The
restrictions described in this paragraph do not apply to (a) the sale to the
Underwriters of the shares of Common Stock under the Underwriting Agreement,
(b) the issuance by the Company of shares of Common Stock upon the exercise of
an option or a warrant or the conversion of a security outstanding on the date
of this Prospectus of which the Underwriters have been advised in writing, (c)
transactions by any person other than the Company relating to shares of Common
Stock or other securities acquired in open market transactions after the
completion of the offering of the Shares, (d) the issuance of shares of Common
Stock in connection with the Reorganization, (e) the issuance of shares of
Common Stock in connection with the Company's Employee Stock Purchase Plan or
(f) subject to certain conditions, the sale of the shares of Common Stock
issued in exchange for the Kingston assets. In addition, SBH has agreed that,
without the prior written consent of Morgan Stanley & Co. Incorporated on
behalf of the Underwriters, neither it nor any of its affiliates will, during
the period ending 180 days after the date of the Prospectus, make any demand
for, or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.

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<PAGE>

The Underwriters have informed the Company that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
Common Stock offered by them.

In order to facilitate the offering of the Common Stock, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price
of the Common Stock. Specifically, the Underwriters may over-allot in
connection with the Offering, creating a short position in the Common Stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the Common Stock, the Underwriters may bid for, and purchase, shares
of Common Stock in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an Underwriter or a dealer for
distributing the Common Stock in the Offering if the syndicate repurchases
previously distributed shares of Common Stock in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the 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.

The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act.

The Underwriters have agreed to reimburse the Company for a portion of the
Company's expenses in connection with the Offering.

Concurrently with the Offering, SOFTBANK Kingston Inc., an affiliate of the
Company and a wholly-owned subsidiary of SBH, intends to sell a portion of the
100,000 shares of Common Stock of the Company issued to Kingston in exchange
for certain assets transferred to the Company which shares are included in the
Registration Statement of which this Prospectus forms a part. SOFTBANK Kingston
Inc. may sell such shares directly to purchasers or to or through underwriters,
brokers/dealers or agents. See "The Reorganization" and "Principal
Stockholders."

Certain of the Underwriters from time to time perform various investment
banking services for the Company and Softbank, for which such Underwriters
receive compensation. Morgan Stanley, Merrill Lynch and DLJ are also acting as
underwriters in connection with the Notes Offering and will receive customary
discounts and commissions in connection therewith. Morgan Stanley Senior
Funding, an affiliate of Morgan Stanley, and DLJ Capital Funding, an affiliate
of DLJ, will each act as an agent and a lender under the Credit Facility and
will receive fees pursuant to the Credit Facility customary to performing such
services. In addition, Morgan Stanley Senior Funding is currently a lender to
SBH under a $450 million revolving credit facility and will receive fees
pursuant to such financing arrangement customary to performing such services.

PRICING OF OFFERING

Prior to the Offering, there has been no public market for the Common Stock.
Consequently, the initial public offering price for the Common Stock will be
determined by negotiations between the Company and the Representatives. Among
the factors to be considered in determining the initial public offering price
will be the Company's record of operations, the Company's current financial
position and future prospects, the experience of its management, the economics
of the industry in general, the general condition of the equity securities
markets, sales, earnings and certain other financial operation information of
the Company in recent periods, the price-earnings ratios, price-sales ratios,
market prices of securities and certain financial and operating information of
companies engaged in activities similar to those of the Company. The estimated
initial public offering price range set forth on the cover page of this
Preliminary Prospectus is subject to change as a result of market conditions
and other factors.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Sullivan & Cromwell, New York, New York, U.S. counsel to the
Company. Stephen A. Grant, a partner of Sullivan & Cromwell, owns 5,350 shares
of common stock of SOFTBANK Corp., which are held in a retirement account.
Certain legal matters will be passed upon for the Underwriters by Davis Polk &
Wardwell, New York, New York.

82
<PAGE>

EXPERTS

The Balance Sheet of ZD Inc. as of March 27, 1998 and the Combined Financial
Statements of Ziff-Davis Inc. and ZD COMDEX and Forums Inc. as of December 31,
1996 and 1997 and for the three years in the period ended December 31, 1997
and the Consolidated Financial Statements of Ziff-Davis Inc. at December 31,
1995 and February 28, 1996 and for the year ended December 31, 1995 and for
the period from January 1, 1996 to February 28, 1996, included in this
Prospectus have been so included in reliance upon the reports of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (together with all
amendments and exhibits, the "Registration Statement") under the Securities
Act, and the rules and regulations promulgated thereunder, with respect to the
Common Stock offered hereby. This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Securities offered hereby, reference is hereby
made to the Registration Statement and to the schedules and exhibits thereto.
The Registration Statement, including the exhibits and schedules thereto, may
be inspected, without charge, and copies may be obtained, at prescribed rates,
at the public reference facilities of the Commission maintained at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Copies of
the Registration Statement may also be inspected, without charge, at the
Commission's regional office at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. In addition, copies of the Registration Statement may be
obtained by mail at prescribed rates, from the Commission's Public Reference
Section at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a Web site (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.

Statements contained in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the document or matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.

Upon completion of the Offering, the Company will become subject to the
information and periodic reporting requirements of the Exchange Act, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the public
reference facilities, regional offices and Web site referred to above.

83
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ZD INC.
Report of independent accountants........................................ F-2
Balance sheet as of March 27, 1998....................................... F-3
Notes to balance sheet................................................... F-4
ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
Report of independent accountants........................................ F-5
Combined balance sheets as of December 31, 1996 and 1997................. F-6
Combined statements of operations for the years ended December 31, 1995,
1996 and 1997........................................................... F-7
Combined statements of cash flows for the years ended December 31, 1995,
1996 and 1997........................................................... F-8
Combined statements of changes in stockholder's equity for the years
ended December 31, 1995, 1996 and 1997.................................. F-9
Notes to combined financial statements................................... F-10
ZDI (ZIFF-DAVIS INC.)
Report of independent accountants........................................ F-28
Consolidated balance sheets as of December 31, 1995 and February 28,
1996.................................................................... F-29
Consolidated statements of operations for the year ended December 31,
1995 and for the period from January 1, 1996 to February 28, 1996....... F-30
Consolidated statements of cash flows for the year ended December 31,
1995 and for the period from January 1, 1996 to February 28, 1996....... F-31
Consolidated statements of changes in stockholder's equity for the year
ended December 31, 1995 and for the period from January 1, 1996 to
February 28, 1996....................................................... F-32
Notes to consolidated financial statements............................... F-33
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
ZD Inc.

In our opinion, the accompanying balance sheet presents fairly, in all
material respects, the financial position of ZD Inc. at March 27, 1998 in
conformity with generally accepted accounting principles. This balance sheet
is the responsibility of the Company's management; our responsibility is to
express an opinion on this balance sheet based on our audit. We conducted our
audit in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about
whether the balance sheet is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the balance sheet, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall balance sheet
presentation. We believe that our audit provides a reasonable basis for the
opinion expressed above.

PRICE WATERHOUSE LLP
New York, NY
March 27, 1998

F-2
<PAGE>

ZD INC.

BALANCE SHEET

<TABLE>
<S> <C>
ASSETS
<CAPTION>
MARCH 27,
1998
---------
<S> <C>
Cash.................................................................. $ --
-----
Total assets.......................................................... $ --
=====
LIABILITIES AND STOCKHOLDERS' EQUITY
Commitments and contingencies (Notes 1 and 2).........................
Stockholders' equity.................................................. $ --
-----
Total liabilities and stockholders' equity............................ $ --
=====
</TABLE>

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

F-3
<PAGE>

ZD INC.

NOTES TO BALANCE SHEET

1. ORGANIZATION

ZD Inc. (the "Company") is a newly formed nonstock corporation incorporated
in the State of Delaware on February 4, 1998. Upon completion of the
reorganization discussed below, the Company will be a majority-owned indirect
subsidiary of SOFTBANK Corp. and affiliates ("Softbank"). The Company's
capital structure after the reorganization will consist of 10,000,000
authorized shares of $.01 par value preferred stock with no shares issued and
outstanding and 120,000,000 authorized shares of $.01 shares of common stock
with 74,200,000 shares issued and outstanding.

The Company was formed to effect the reorganization of ZDI (Ziff-Davis Inc.)
and ZDCF (ZD COMDEX and Forums Inc.), both indirect wholly-owned subsidiaries
of Softbank. The reorganization is expected to be completed in the second
quarter of 1998 and will be accounted for in a manner similar to a pooling of
interests as the Company, ZDI and ZDCF will be companies under common control.

There have been no operations of ZD Inc. as of March 27, 1998, and,
accordingly, statements of ZD Inc.'s operations and cash flows have not been
included herein.

2. FINANCING ARRANGEMENTS

The Company expects to raise approximately $400,000,000 from the initial
public offering of its Common Stock, approximately $250,000,000 in notes, and
approximately $1,250,000,000 of senior bank debt. There can be no assurances
that the expected levels of financing from the Common Stock and Notes
Offerings will be obtained.

The Company has obtained a commitment from a group of banks to enter into a
$1.35 billion Credit Facility. The Credit Facility will consist of a seven-
year $700 million reducing revolving credit facility (with $600 million drawn
at closing) and a seven year $650 million term loan. The revolving credit will
be available for loans, letters of credit, and swing-line loans, subject to a
certain maximum level of borrowing. Reductions in revolving credit commitments
and term loan amortization will occur in equal quarterly amounts beginning
September, 2000 through final maturity in March, 2005. The Credit Agreement
will also provide the Company the ability to increase the revolving credit
portion by $300 million to $1 billion at any time prior to June, 2000 if the
banks agree to increase their commitments.

Loans under both the revolving credit and term loan portions of the Credit
Facility will bear interest at either LIBOR plus an applicable margin or the
Alternate Base Rate plus an applicable margin. The applicable margin will be
based on a pricing grid to be determined by the Company's ratio of total debt
to EBITDA. The Company will also pay a commitment fee on the unused portion of
the revolving credit.

The funds raised will be used to retire substantially all of the existing
notes payable to Softbank and its affiliates of ZDI and ZDCF, and for the
purchase of certain assets from affiliated companies.

3. EMPLOYEE BENEFIT PLANS

1998 Incentive Compensation Plan

The Company adopted the 1998 Incentive Compensation Plan (the "Plan") to
provide long-term incentives for its key employees and enhance shareholder
value. The Plan provides for the issuance of up to 8,500,000 options, stock
appreciation rights, stock awards and other interests in the Company's Common
Stock. On February 13, 1998, the Company granted 5,254,700 options with an
exercise price of $16.00 per share representing the fair value of such options
at that date. Such options vest ratably over five years.

1998 Employee Stock Purchase Plan

The Company adopted the Employee Stock Purchase Plan (the "Stock Purchase
Plan") whereby eligible employees may purchase the Company's Common Stock with
after tax payroll deductions of 1% to 10% of their base pay. The price at
which shares of Common Stock will be purchased is the lesser of 85% of the
fair market value of a share of Common Stock on (i) the first business day of
a purchase period or (ii) the last business day of a purchase period. The
Company has reserved 1,500,000 shares of Common Stock for issuance under the
Stock Purchase Plan.

F-4
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder of Ziff-Davis Inc. and ZD COMDEX and
Forums Inc.

In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, cash flows and changes in stockholder's
equity, present fairly, in all material respects, the financial position of
Ziff-Davis Inc. and ZD COMDEX and Forums Inc. and their subsidiaries (the
"Companies") at December 31, 1997 and 1996, and the results of Ziff-Davis
Inc.'s operations and cash flows for the period from February 29, 1996 to
December 31, 1996 and for the year ended December 31, 1997 and the results of
ZD COMDEX and Forums Inc.'s operations and cash flows for each of the three
years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Companies' 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.

PRICE WATERHOUSE LLP
New York, NY
February 17, 1998

F-5
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 29,915 $ 30,301
Accounts receivable, net............................. 203,863 221,310
Inventories.......................................... 16,804 17,853
Prepaid expenses and other current assets............ 35,190 37,900
Due from affiliates.................................. 77,208 131,290
Deferred taxes....................................... 8,674 8,794
---------- ----------
Total current assets................................... 371,654 447,448
Property and equipment, net............................ 53,561 53,536
Intangible assets, net................................. 3,148,333 3,030,333
Other assets........................................... 10,625 15,329
---------- ----------
Total assets........................................... $3,584,173 $3,546,646
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable..................................... $ 57,105 $ 55,468
Accrued expenses..................................... 79,921 80,094
Unearned income, net................................. 174,876 154,682
Due to affiliates and management..................... 69,416 398,332
Current portion of notes payable to affiliates....... 33,198 125,790
Other current liabilities............................ 3,890 4,222
---------- ----------
Total current liabilities.............................. 418,406 818,588
Notes payable to affiliates............................ 2,522,252 2,408,240
Deferred taxes......................................... 181,309 180,117
Other liabilities...................................... 14,450 13,571
---------- ----------
Total liabilities...................................... 3,136,417 3,420,516
---------- ----------
Commitments and contingencies (Notes 15, 16 and 18)
Stockholder's equity:
Common stock, $.01 par value; 1,000 shares
authorized;
200 shares issued and outstanding................... -- --
Additional paid-in capital........................... 498,818 248,330
Accumulated deficit.................................. (48,250) (119,429)
Deferred compensation................................ (2,448) (996)
Cumulative translation adjustment.................... (364) (1,775)
---------- ----------
Total stockholder's equity............................. 447,756 126,130
---------- ----------
Total liabilities and stockholder's equity............. $3,584,173 $3,546,646
========== ==========
</TABLE>

The accompanying notes are an integral part of the combined financial
statements.

F-6
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------------------------
1995 1996 1997
-------- -------- ----------
<S> <C> <C> <C>
Revenue, net:
Publishing................................... $ -- $690,255 $ 866,233
Trade shows and conferences.................. 202,729 264,884 287,528
-------- -------- ----------
202,729 955,139 1,153,761
-------- -------- ----------
Cost of production:
Publishing................................... -- 184,159 225,712
Trade shows and conferences.................. 68,810 87,373 99,533
-------- -------- ----------
68,810 271,532 325,245
Selling, general and administrative expenses... 46,939 456,690 564,344
Depreciation and amortization of property and
equipment..................................... 1,412 32,303 30,379
Amortization of intangible assets.............. 22,893 107,433 124,561
-------- -------- ----------
Income from operations......................... 62,675 87,181 109,232
Related party interest expense, net............ (44,005) (120,646) (190,445)
Other non-operating income, net................ 4,199 6,341 8,722
-------- -------- ----------
Income (loss) before income taxes.............. 22,869 (27,124) (72,491)
Provision (benefit) for income taxes........... 11,924 24,957 (1,312)
-------- -------- ----------
Net income (loss).............................. $ 10,945 $(52,081) $ (71,179)
======== ======== ==========
</TABLE>

The accompanying notes are an integral part of the combined financial
statements.

F-7
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------------------------
1995 1996 1997
--------- ----------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................... $ 10,945 $ (52,081) $(71,179)
Adjustments to reconcile net income (loss)
to net cash provided (used) by operating
activities:
Depreciation and amortization............. 24,305 139,736 154,940
Income from equity investments............ -- (115) (2,030)
Deferred tax provision (benefit).......... 11,924 24,957 (1,312)
Provision for bad debts, returns and can-
cellations............................... 662 14,475 13,616
Compensation earned on restricted stock... -- 1,080 3,916
Changes in operating assets and liabili-
ties:
Accounts receivable..................... (26,041) (52,561) (32,515)
Inventories............................. -- 7,788 (853)
Accounts payable and accrued expenses... 9,516 12,850 (7,376)
Unearned income......................... (3,153) 1,392 (20,194)
Due to affiliates and management........ (7,460) (29,303) (38,543)
Other, net.............................. 5,470 (6,675) (1,834)
--------- ----------- --------
Net cash provided (used) by operating
activities................................. 26,168 61,543 (3,364)
--------- ----------- --------
Cash flows from investing activities:
Capital expenditures........................ (3,367) (22,365) (30,196)
Acquisitions, net of cash acquired.......... (814,520) (2,124,823) (14,000)
--------- ----------- --------
Net cash used by investing activities....... (817,887) (2,147,188) (44,196)
--------- ----------- --------
Cash flows from financing activities:
Proceeds from notes payable to affiliates... 575,450 1,080,000 10,000
Principal payments on notes payable to af-
filiates................................... (77,450) -- (31,420)
Contributed capital......................... 317,408 1,015,652 69,366
Payment of dividends........................ -- (8,000) --
--------- ----------- --------
Net cash provided by financing activities... 815,408 2,087,652 47,946
--------- ----------- --------
Net increase in cash and cash equivalents... 23,689 2,007 386
Cash and cash equivalents at beginning of
year....................................... 4,219 27,908 29,915
--------- ----------- --------
Cash and cash equivalents at end of year.... $ 27,908 $ 29,915 $ 30,301
========= =========== ========
</TABLE>

The accompanying notes are an integral part of the combined financial
statements.

F-8
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
ZDI ZDCF ADDITIONAL RETAINED CUMULATIVE TOTAL
------------- ------------- PAID-IN EARNINGS DEFERRED TRANSLATION STOCKHOLDER'S
SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT) COMPENSATION ADJUSTMENT EQUITY
------ ------ ------ ------ ---------- --------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1995................... -- $ -- 100 $ -- $ 62,178 $ 886 $ -- $ -- $ 63,064
Capital contribution
from Softbank.......... 317,408 317,408
Net income.............. 10,945 10,945
Foreign currency
translation adjustment. 111 111
--- ------ --- ------ ---------- --------- ------ ------- ----------
Balance at December 31,
1995................... -- -- 100 -- 379,586 11,831 -- 111 391,528
Acquisition of Ziff-
Davis Inc.............. 100 1,014,178 1,014,178
Return of capital ...... (899,948) (899,948)
Capital contribution.... 1,474 1,474
Dividend paid .......... (8,000) (8,000)
Shares contributed to
restricted stock plan.. 3,528 (3,528) --
Compensation earned on
restricted stock....... 1,080 1,080
Net loss................ (52,081) (52,081)
Foreign currency
translation adjustment. (475) (475)
--- ------ --- ------ ---------- --------- ------ ------- ----------
Balance at December 31,
1996................... 100 -- 100 -- 498,818 (48,250) (2,448) (364) 447,756
Return of capital ...... (381,434) (381,434)
Capital contribution ... 128,482 128,482
Shares contributed to
restricted stock plan.. 2,464 (2,464) --
Compensation earned on
restricted stock....... 3,916 3,916
Net loss................ (71,179) (71,179)
Foreign currency
translation adjustment. (1,411) (1,411)
--- ------ --- ------ ---------- --------- ------ ------- ----------
Balance at December 31,
1997................... 100 $ -- 100 $ -- $ 248,330 $(119,429) $ (996) $(1,775) $ 126,130
=== ====== === ====== ========== ========= ====== ======= ==========
</TABLE>

The accompanying notes are an integral part of the combined financial
statements.

F-9
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

1. THE COMPANIES AND BASIS OF PRESENTATION

The combined financial statements include the accounts of ZDI (Ziff-Davis
Inc.) and ZDCF (ZD COMDEX and Forums, Inc.) and their subsidiaries and
predecessor companies (collectively the "Companies"). The Companies are
wholly-owned indirect subsidiaries of SOFTBANK Corp. ("Softbank"), a Japanese
corporation which, as of December 31, 1997, was 50.2% owned by Mr. Son, its
President, including 43.4% directly owned by his wholly-owned holding company,
MAC Inc. ( "MAC"), also a Japanese corporation.

As further described below, the combined financial statements include the
accounts of COMDEX (formerly Softbank COMDEX, Inc.) and ZDI as of their
respective acquisition dates and Forums (formerly Softbank Forums Inc.) for
all periods presented. Effective December 31, 1997, COMDEX and Forums merged
and the surviving company was renamed ZD COMDEX and Forums Inc.

The Companies operate in two business segments: (i) publishing and (ii)
trade shows and conferences.

Publishing

The publishing segment is engaged in publishing magazines, journals,
newsletters, electronic information products, training manuals and providing
market research about the computer industry. The publishing segment's
principal operations are in the United States and Europe, although it also
licenses or syndicates its editorial content to over 50 other publications
distributed worldwide.

Trade shows and conferences

The trade shows and conferences segment is engaged in the organization,
production and management of trade shows, conferences and seminars for the
computer industry. The trade shows and conferences segment's principal
operations are in the United States and to a lesser extent in Europe and Asia.

Acquisition of ZDI (formerly Ziff-Davis Publishing Company and Ziff-Davis
Holdings Corp.)

In February 1996, Softbank acquired the stock of Ziff-Davis Holdings Corp.
("Holdings") for an aggregate purchase price of approximately $1,800,000, plus
transaction costs. Concurrent with the acquisition, in a separate agreement,
MAC Inc., directly or through wholly-owned affiliates, acquired certain of the
assets and assumed certain of the liabilities of ZDI (the "MAC Assets") for an
aggregate purchase price of approximately $302,000.

The acquisitions of ZDI by the Companies and the MAC Assets by MAC Inc. have
been accounted for as of February 29, 1996 using the purchase method of
accounting. The excess of the purchase price over the fair value of the assets
acquired and liabilities assumed was $1,922,000 and $285,000, respectively.

Subsequent to the acquisition, Holdings and ZDI were merged with ZDI being
the surviving corporation.

F-10
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

Unaudited summarized pro forma financial information

The following unaudited summarized pro forma financial information presents
the results of operations of the Companies as if the acquisition of ZDI had
taken place on January 1, 1995:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------------
1995 1996
-------- ----------
<S> <C> <C>
Revenue, net........................................... $971,724 $1,080,604
======== ==========
Income from operations................................. $ 80,113 $ 88,065
======== ==========
Net loss............................................... $(61,816) $ (67,011)
======== ==========
</TABLE>

The pro forma results include amortization of intangible assets and interest
expense on debt assumed issued to finance the purchase. The pro forma results
are not necessarily indicative of what actually would have occurred if the
acquisition had been completed as of the beginning of the year, nor are they
necessarily indicative of future combined results.

Purchase of MAC Assets

In 1997, ZDI agreed to purchase certain of the MAC Assets for $370,000. The
acquisition will be effected in two tranches; the first of which closed on
October 31, 1997 and the second, which is subject to the successful completion
of an initial public offering of ZD Inc.'s Common Stock (refer to Note 18) or
upon a similar significant external financing. At December 31, 1997, ZDI has
accrued the $370,000 purchase price which has been recorded as a return of
capital.

The acquisitions from MAC described above have been accounted for in a
manner similar to a pooling of interests as all entities involved are under
common control. Accordingly, the accompanying combined financial statements
include the results of operations of the MAC Assets from February 29, 1996.
Throughout these financial statements any reference to ZDI and ZDCF or the
Companies includes ZDI, ZDCF and the MAC Assets from February 29, 1996.

Acquisition of Sendai

On May 8, 1996, ZDI acquired substantially all of the assets and liabilities
of Sendai Publishing Group, Inc., a publisher and distributor of magazines,
books, products and computer services related to the electronic gaming
industry, for approximately $27,500, plus transaction costs. The acquisition
was accounted for as a purchase and accordingly, Sendai's results are included
in the combined financial statements since the date of acquisition. The excess
of the purchase price over assets acquired approximated $33,378. The
operations of Sendai did not have a material effect on the combined results of
operations for the year ended December 31, 1996.

Acquisition of COMDEX

Effective April 1, 1995, Softbank acquired the assets of the COMDEX trade
show business, now part of ZDCF, for approximately $803,000, plus transaction
costs. The acquisition has been accounted for as of April 1, 1995 using the
purchase method of accounting and accordingly COMDEX's results are included in
the combined financial statements since the date of acquisition. The excess of
the purchase price over the fair value of the assets acquired and liabilities
assumed was $849,000.

F-11
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination

The combined financial statements include the accounts of ZDI and ZDCF
including, as discussed above, the MAC Assets. All significant transactions
between these entities have been eliminated in combination.

Investments in companies in which ownership interests range from 20 to 50
percent and the Companies have the ability to exercise significant influence
over the operating and financial policies of such companies are accounted for
under the equity method.

Parent Company Financing

As described in Note 18, Softbank announced a Reorganization and a financing
plan which includes a recapitalization of the Companies' debt and equity
structures. Prior to the consummation of the recapitalization transactions,
the Companies are dependent on funding from Softbank. At December 31, 1997,
the Companies had current liabilities which exceeded current assets by
$371,140. To the extent that the Companies are unable to fund their current
obligations as they become due from their operating cash flows, Softbank has
committed to provide additional financing or to restructure existing loan
arrangements at least through February 1999.

Cash and cash equivalents

The Companies consider all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

Concentration of credit risk

The Companies place its temporary cash investments with high credit quality
financial institutions. At times, such investments may be in excess of
federally insured limits. The Companies have not experienced losses in such
accounts.

The Companies' advertisers and exhibitors include principally customers who
represent a variety of technology companies in the United States and other
countries. The Companies extend credit to their customers and distributors and
historically have not experienced significant losses relating to receivables
from individual customers or groups of customers.

Property and equipment

Property and equipment have been recorded at cost or their estimated fair
value at the date of acquisition. Depreciation is computed using the straight-
line method over the estimated useful lives of the assets which range from
three to thirty years. Leasehold improvements are amortized using the
straight-line method over the service life of the improvement or the life of
the related lease, whichever is shorter. Maintenance and repair costs are
charged to expense as incurred.

Inventories

Inventories, which consist principally of paper, are stated at the lower of
cost or market. Cost is determined on a first-in, first-out basis.

Intangible assets

Intangible assets consist principally of advertising lists, exhibitor
relationships, trademarks and trade names, and goodwill. Amortization of these
assets is computed on a straight-line basis over their estimated useful lives.
Identifiable

F-12
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

intangible assets are amortized over a period of 2 to 40 years and goodwill,
which represents the excess of the purchase price over the estimated fair
values of net assets acquired, is amortized over a period of 5 to 40 years
(refer to Note 5). The Companies assess the recoverability of their intangible
assets whenever adverse events or changes in circumstances indicate that
expected future cash flows (undiscounted and without interest charges) may not
be sufficient to support the carrying amount of intangible assets. If
undiscounted cash flows are not sufficient to support the recorded assets, an
impairment is recognized to reduce the carrying value of the intangibles to
estimated recoverable values. The Companies have not experienced any
impairment of its intangible assets.

Revenue recognition

Advertising revenue for the Companies' publications, less agency
commissions, is recognized as income in the month that the related
publications are sent to subscribers or become available for sale at
newsstands.

Circulation revenue consists of both subscription revenue and single copy
newsstand sales. Subscription revenue, less estimated cancellations, is
deferred and recognized as income in the month that the related publications
are sent to subscribers. Newsstand sales, less estimated returns, are
recognized in the month that the related publications become available for
sale at newsstands.

Payments received in advance of trade shows, conferences and seminars are
initially reported on the balance sheet as deferred revenue and are recognized
as income when the events take place.

Revenue generated by market research is recognized when the service is
provided.

On-line revenue, predominantly advertising, is recognized evenly over the
period of the related advertising contract which corresponds to the period of
time the advertising is displayed.

Operating costs and expenses

Cost of production includes the direct costs of producing magazines,
newsletters and training materials, primarily paper, printing and
distribution, and the direct costs associated with organizing, producing and
managing trade shows, seminars, conferences and expositions. Selling, general
and administrative costs include subscriber acquisition costs which are
expensed as incurred. Editorial and product development costs are expensed as
incurred. Product development costs include the cost of artwork, graphics,
prepress, plates and photography for new products.

Foreign currency

The effect of translating foreign currency financial statements into U.S.
dollars is included in the cumulative translation adjustments account in
stockholder's equity. Gains and losses on foreign currency transactions, which
are not significant to operations, have been included in selling, general and
administrative expenses. The Companies have not historically entered into
forward currency contracts.

Other non-operating income

Other non-operating income includes management fee income and the Companies'
equity share of income or loss from joint ventures.

Income taxes

The Companies use the asset and liability approach for financial accounting
and reporting of deferred taxes.

F-13
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

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 reported in the financial statements.
Actual results may differ from these estimates.

Fair value of financial instruments

All current assets and liabilities are carried at cost, which approximates
fair value because of the short-term maturity of those instruments. The
recorded amounts of the Companies' long-term debt payable to affiliates also
approximate fair value based upon the current rates available to the Companies
for debt with similar remaining maturities.

Stock-based compensation

The Companies have elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees," to account for stock options.
Effective January 1, 1996, the Companies adopted the disclosure-only
provisions of Statement of Financial Accounting Standard ("SFAS") No. 123,
"Accounting for Stock-Based Compensation."

Earnings per share

Historical earnings per share data have been omitted on the basis that they
are not meaningful due to the insignificant number of shares outstanding.

New Accounting Pronouncements

SFAS No. 130, "Reporting Comprehensive Income," issued in June 1997, will
require the Companies to disclose, in financial statement format, all non-
owner changes in equity. Such changes include, for example, cumulative foreign
currency translation adjustments and unrealized gains and losses on securities
available for sale. This statement is effective for fiscal years beginning
after December 15, 1997 and requires presentation of prior period financial
statements for comparability purposes.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," issued in June 1997, establishes standards for reporting
information about operating segments in annual financial statements and
interim financial reports. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
Generally, financial information will be required to be reported on the basis
that is used internally for evaluating segment performance and deciding how to
allocate resources to segments.

SFAS No. 132, "Employer's Disclosure about Pensions and Other Post-
Retirement Benefits," is effective for the year ended December 31, 1998. This
standard revises the disclosure requirements for employers' pension and other
retiree benefits.

The Companies expect to adopt the above statements beginning with their 1998
financial statements.

3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
-------- --------
<S> <C> <C>
Accounts receivable..................................... $284,829 $309,565
Allowance for doubtful accounts, returns and
cancellations.......................................... (80,966) (88,255)
-------- --------
$203,863 $221,310
======== ========
</TABLE>

F-14
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
-------- --------
<S> <C> <C>
Computers and equipment.................................. $ 30,513 $ 50,170
Leasehold improvements................................... 38,439 40,033
Furniture and fixtures................................... 18,402 17,619
-------- --------
87,354 107,822
Accumulated depreciation and amortization................ (33,793) (54,286)
-------- --------
$ 53,561 $ 53,536
======== ========
</TABLE>

5. INTANGIBLE ASSETS, NET

Intangible assets, net, consist of the following:

<TABLE>
<CAPTION>
RANGE OF DECEMBER 31,
USEFUL LIVES ----------------------
(YEARS) 1996 1997
------------ ---------- ----------
<S> <C> <C> <C>
Advertising lists....................... 7-34 $ 888,100 $ 888,100
Exhibitor relationships ................ 4-27 154,070 154,070
Trademarks/trade names.................. 30-40 735,595 735,595
License agreements...................... 6-14 11,212 11,212
Subscriber lists........................ 3-10 51,475 51,475
Other................................... 2-20 57,599 57,599
Goodwill................................ 5-40 1,380,993 1,387,556
---------- ----------
3,279,044 3,285,607
Accumulated amortization................ (130,711) (255,274)
---------- ----------
$3,148,333 $3,030,333
========== ==========
</TABLE>

Intangible assets primarily relate to the acquisitions of ZDI, COMDEX and
the MAC Assets. As discussed in Note 1, the acquisitions were accounted for
under the purchase method of accounting. As such, purchase price was allocated
to tangible and identifiable intangible assets with the remaining amount being
allocated to goodwill.

Advertising lists, exhibitor relationships and subscriber lists were
recorded at their estimated fair value as determined by an income approach.
Trademarks/trade names were recorded at their estimated fair value using a
relief from royalty approach.

All intangible assets are being amortized using the straight-line method
over their estimated useful lives, up to 40 years. In determining the
estimated useful lives, the Companies considered their competitive position in
the markets in which they operate, the historical attrition rates of
advertisers, subscribers and exhibitors, legal and contractual obligations,
and other factors.

Recoverability of goodwill and intangible assets is assessed at a minimum on
an annual basis. Impairments would be recognized in operating results if a
permanent diminution in value were to occur based upon an undiscounted cash
flow analysis.

F-15
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

6. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1997
------- -------
<S> <C> <C>
Payroll and related employee benefits....................... $24,978 $29,112
Accrued interest-related party.............................. 4,449 6,226
Other taxes payable......................................... 6,310 2,822
Other....................................................... 44,184 41,934
------- -------
$79,921 $80,094
======= =======
</TABLE>

7. UNEARNED INCOME

Unearned income consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
-------- --------
<S> <C> <C>
Unexpired subscriptions.................................. $100,387 $ 82,167
Prepaid conference fees.................................. 91,776 80,706
Reserve for cancellations................................ (17,287) (8,191)
-------- --------
$174,876 $154,682
======== ========
</TABLE>

8. INCOME TAXES

The Companies have been included in consolidated U.S. federal income tax
returns filed by Softbank, except for operations relating to the MAC Assets
(described in Note 1), which were assets of a separate taxpayer. The tax
expense reflected in the combined statements of operations and tax liabilities
reflected in the combined balance sheet have been prepared on a separate
return basis as though the Companies filed stand-alone income tax returns. No
tax benefit has been recorded for the losses related to the MAC Assets, as
such losses are not available to the Companies.

The Companies and Softbank do not have a tax sharing agreement. Therefore,
no intercompany tax payments have been made and no related intercompany
receivable or payable has been recorded.

Income (loss) before income taxes is attributable to the following
jurisdictions:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
United States.................................. $ 25,094 $(22,095) $(74,638)
Foreign........................................ (2,225) (5,029) 2,147
-------- -------- --------
Total........................................ $ 22,869 $(27,124) $(72,491)
======== ======== ========
</TABLE>

Components of the provision (benefit) for income taxes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1996 1997
------- ------- -------
<S> <C> <C> <C>
U.S. federal income taxes:
Current............................................ $ -- $ -- $ --
Deferred........................................... 9,240 19,338 (1,017)
State and local income taxes:
Current............................................ -- -- --
Deferred........................................... 2,684 5,619 (295)
Foreign income taxes................................. -- -- --
------- ------- -------
Total provision (benefit) for income taxes....... $11,924 $24,957 $(1,312)
======= ======= =======
</TABLE>

F-16
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

A reconciliation of the U.S. federal statutory tax rate to the Companies'
effective tax rate on income (loss) before income taxes is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996 1997
---- ------ -----
<S> <C> <C> <C>
Federal tax rate....................................... 35.0% 35.0% 35.0%
State and local taxes (net of federal tax benefit)..... 6.0 6.0 6.0
Non-recognition of combined losses of MAC Assets....... 9.9 (116.6) (32.2)
Amortization of non-deductible goodwill................ 1.0 (13.1) (5.8)
Other.................................................. 0.2 (3.3) (1.2)
---- ------ -----
Effective tax rate..................................... 52.1% (92.0)% 1.8%
==== ====== =====
</TABLE>

The effective tax rate differs from the federal statutory tax rate primarily
as a result of the Companies' inability to deduct losses of the MAC Assets
prior to the effective date of the purchase. The amortization of nondeductible
goodwill resulted primarily from the stock acquisition of 100% of the stock of
ZDI in 1996.

Following is a summary of the components of the deferred tax accounts at
December 31, 1996 and December 31, 1997:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1997
--------- ---------
<S> <C> <C>
Current deferred tax assets and (liabilities):
Allowance for bad debts............................. $ 8,825 $ 8,750
Other............................................... (151) 44
--------- ---------
Current deferred net tax assets................... 8,674 8,794
--------- ---------
Noncurrent deferred tax assets and (liabilities):
Basis difference in intangible assets............... (273,375) (288,286)
Net operating loss and other carryforwards.......... 129,798 133,314
Other............................................... 11,603 13,711
--------- ---------
Noncurrent deferred tax liabilities............... (131,974) (141,261)
Valuation allowance................................... (49,335) (38,856)
--------- ---------
Net noncurrent deferred tax liabilities........... (181,309) (180,117)
--------- ---------
Net deferred tax liabilities.......................... $(172,635) $(171,323)
========= =========
</TABLE>

As of December 31, 1996 and 1997 the Companies had total deferred tax assets
of $100,891 and $116,963, respectively, and total deferred tax liabilities of
$273,526 and $288,286, respectively. The December 31, 1996 and December 31,
1997 net deferred tax assets are reduced by a valuation allowance of $49,335
and $38,856, respectively, primarily relating to tax benefits of foreign net
operating loss carryforwards which are not expected to be realized. The
decrease in the valuation allowance in 1997 is primarily related to the
expiration of foreign net operating loss carryforwards. No deferred tax asset
has been established for the losses associated with the MAC Assets, which will
not be available to the Companies as a deduction.

The Companies have U.S. and foreign net operating loss carryforwards of
approximately $286,322, which will begin to expire in 1998. The Companies'
utilization of certain net operating loss carryforwards, of approximately
$122,549, is subject to limitations, due to the change of ownership resulting
from the Softbank

F-17
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

acquisition of the ZDI stock on February 29, 1996. Management believes that
such limitations will not significantly affect the Companies' ability to
recognize the deferred tax assets relating to the carryforward. Accordingly,
no valuation allowance to reduce the deferred tax asset relating to the
carryforward has been established. In addition, the Companies have alternative
minimum tax credit carryforwards of $385 which may be carried forward
indefinitely until used.

The Companies' foreign subsidiaries have no undistributed earnings for
remittance to the U.S. and, therefore, no U.S. or foreign tax provision on
remittances has been recorded.

9. DUE TO AFFILIATES AND MANAGEMENT

The Companies are members of a group of companies affiliated through common
ownership with Softbank and has various transactions and relationships with
members of the group. Because of these relationships, it is possible that the
terms of those transactions are not the same as those that would result from
transactions among unrelated parties.

Receivables/payables

Receivables from affiliates consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------- --------
<S> <C> <C>
Receivable from:
MAC and subsidiaries...................................... $ 7,140 $ 42,687
Softbank.................................................. 67,451 84,365
Other affiliates.......................................... 2,617 4,238
------- --------
$77,208 $131,290
======= ========
</TABLE>

Payables to management and affiliates consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------- --------
<S> <C> <C>
Payable to:
Management................................................ $29,834 $ --
MAC and subsidiaries...................................... -- 270,000
Softbank.................................................. 39,582 126,371
Other affiliates.......................................... -- 1,961
------- --------
$69,416 $398,332
======= ========
</TABLE>

See Note 18 for a discussion of the Companies' plan to restructure their
debt and equity structures.

As part of the 1996 acquisition of ZDI, the Companies agreed to assume
certain obligations to management arising out of prior employment arrangements
with previous owners. In January 1997, the Companies paid all amounts due,
including accrued interest, through the payment date.

Periodically, the Companies transfer excess cash to Softbank for cash
management purposes and in turn receive cash advances from Softbank to fund
the Companies' short-term working capital requirements. Interest is accrued
based on the net balance outstanding at the end of each month. Interest income
is earned at the 30-day LIBOR rate for the applicable month. Interest expense
is incurred at the 30-day LIBOR rate plus 0.5%.

F-18
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

Other affiliated arrangements

During the years ended December 31, 1996 and 1997, the Companies incurred
$2,000 and $1,631, advertising expense with Yahoo!, Inc. (Yahoo!), an
affiliated company. No advertising expense with Yahoo! was incurred in 1995.

The Companies sell advertising space and exhibition services to Kingston
Technology Company ("Kingston"), an affiliated company. During the years ended
December 31, 1995, 1996 and 1997, the Companies recorded revenues of $0, $882
and $2,667, respectively, from sales to Kingston. These services were provided
under terms consistent with those provided to unaffiliated customers.

ZDCF has entered into an agreement to manage certain trade shows and
expositions owned by Softbank and its affiliates, whereby ZDCF earns
management and licensing fees. The fees earned by ZDCF for the years ended
December 31, 1995, 1996 and 1997 were $1,979, $3,394 and $4,057, respectively.

In 1996 and 1997, the Companies had an arrangement with SOFTBANK Interactive
Marketing ("SIM"), an affiliated company, for the provision of interactive
media sales. The Companies paid commissions to SIM of $600 and $1,800 during
the years ended December 31, 1996 and 1997, respectively. Effective December
31, 1997, SIM was acquired by an unrelated third party. Management believes
that the sale of SIM by Softbank will have no material impact on the
Companies.

The Companies have an arrangement with SOFTBANK Services, an affiliated
company, whereby the Companies are charged for administrative services
provided plus a management fee. For the years ended December 31, 1995, 1996
and 1997, the Companies incurred services fees of $0, $359 and $1,259,
respectively, in relation to this agreement.

ZDI has entered into certain licensing agreements with Softbank for the
publishing and distribution of Japanese language editions of certain
publications. The fees earned by ZDI for the years ended December 31, 1996 and
1997 were approximately $964 and $1,818, respectively, in each year.

The Companies have entered into a license and services agreement with MAC to
develop ZDTV: Your Computer Channel. ZDTV is owned by MAC, but as part of this
license and services agreement MAC has granted the Companies an option
exercisable through December 31, 1998 to purchase all of MAC's interest in
ZDTV for an amount equal to MAC's investment plus 10% per annum. The Companies
are currently funding ZDTV's operations on behalf of MAC through unsecured
advances which, for approved levels of expenditure, are to be reimbursed by
MAC. Such advances bear interest at the 30-day LIBOR rate plus .50%. The
Companies' cumulative advances, which totaled $14.4 million net of $10.1
million in repayments through December 31, 1997, will be repaid concurrently
with the Reorganization (See Note 18). The Companies have not yet determined
whether they will exercise the option to purchase MAC's interest in ZDTV. Any
such purchase will depend upon access to sufficient cable carriage, which may
include entering into a joint venture or other co-ownership arrangement,
including an arrangement with a third party cable system operator which will
provide carriage and also assume a portion of the ongoing cash requirements on
terms that are acceptable to the Companies. ZDTV is not included in the
Companies' financial statements.

If the Companies were to acquire a controlling interest in ZDTV from MAC,
such acquisition would be accounted for as a pooling transaction; if the
Companies were to acquire a non-controlling interest, such acquisition would
be accounted for under the equity method.

ZDI has entered into operating leases for television production equipment
and has sublet such equipment to ZDTV, an affiliated company. The terms of the
subleases are substantially identical to the terms of the leases which provide
for annual lease payments totaling approximately $610 through 2003.

F-19
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

Notes payable to affiliates

The Company's long-term debt is payable to Softbank and consists of the
following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Notes payable to affiliate(1)........................ $1,080,000 $1,080,000
Notes payable to affiliate(2)........................ 900,000 900,000
Notes payable to affiliate(3)........................ 398,000 375,027
Note payable to affiliate(4)......................... 100,000 94,231
Note payable to affiliate(5)......................... 77,450 74,772
Note payable to affiliate(6)......................... -- 10,000
---------- ----------
Total.............................................. 2,555,450 2,534,030
Less--Current portion................................ (33,198) (125,790)
---------- ----------
$2,522,252 $2,408,240
========== ==========
</TABLE>
- --------
(1) Principal and interest payments are due in 53 consecutive quarterly
installments on the last business day of each calendar quarter beginning
March 31, 1998 through March 31, 2011. The notes bear interest at a rate
of 7.8% per annum.
(2) These notes mature on December 31, 2001 and bear an interest rate of 6.5%
per annum, payable on the last business day of each quarter beginning
March 31, 1997.
(3) Notes mature on February 28, 2010. The notes bear interest at a rate of
8.0% per annum.
(4) Notes mature on February 28, 2009. The notes bear interest at 9.9% per
annum.
(5) Note is payable in 52 equal quarterly installments commencing March 31,
1997. The note bears interest at a rate of 8.0% per annum.
(6) Note is payable on January 1, 2007. The note bears interest at a rate of
8.0% per annum.

Scheduled principal payments due on long-term debt outstanding at December
31, 1997 are as follows:

<TABLE>
<S> <C>
1998.............................................................. $ 125,790
1999.............................................................. 125,790
2000.............................................................. 125,790
2001.............................................................. 1,025,790
2002.............................................................. 125,790
Thereafter........................................................ 1,005,080
----------
Total........................................................... $2,534,030
==========
</TABLE>

See Note 18 for a discussion of the Companies' plan to restructure its debt
and equity structures.

Guarantee of Softbank's U.S. debt

In April 1996, Softbank signed a line of credit agreement totaling $50,000
with an independent lender for which the Companies, along with certain other
Softbank affiliates, are guarantors. In January 1997 and October 1997, this
line of credit was increased to $75,000 and $150,000, respectively. At
December 31, 1997, $102,500 was outstanding under the line of credit.

Return of capital and dividends

On December 15, 1996, the Companies declared a return of capital of
approximately $900,000 paid through the issuance of a note payable to a
subsidiary of Softbank and a cash dividend of $8,000 to Softbank. In 1997, the
Companies recorded a return of capital of $381,434 in connection with the
purchase price of companies under common control.

F-20
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

10. EMPLOYEE STOCK COMPENSATION PLANS

Executive stock option plan

The SOFTBANK 1996 and 1997 Executive Stock Option Plans provide for the
granting of nonqualified stock options to purchase the common stock of
Softbank to officers, directors and key employees of the Companies. Under the
plans, options have been granted at exercise prices equal to the closing
market price in Japan's public equities market (market price denominated in
Japanese yen) on the date of grant. As of December 31, 1997, substantially all
options granted become exercisable in various installments over the first six
anniversaries of the date of grant and expire ten years after the date of
grant.

Information relating to stock options during 1995, 1996 and 1997 is as
follows:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
NUMBER OPTION PRICE
OF SHARES PER SHARE(1)
--------- ----------------
<S> <C> <C>
Shares outstanding under options at December
31, 1995 -- --
Granted........................................ 739,493(2) $87.15
Exercised...................................... -- --
Forfeited...................................... 12,740(2) 87.15
-------
Shares outstanding under options at December
31, 1996...................................... 726,753 87.15
Granted........................................ 386,363 61.40
Exercised...................................... -- --
Forfeited...................................... 146,130 78.88
-------
Shares outstanding under options at December
31, 1997...................................... 966,986 $78.11
=======
Shares exercisable
At December 31, 1996......................... -- --
At December 31, 1997 (price range $44.26-
$87.15)..................................... 107,630 $82.06
</TABLE>
- --------
(1) The exercise price of the stock options is set in Japanese yen. The
exercise prices as shown above have been converted to U.S. dollars based
upon the exchange rate as of the date of grant for the respective options.
(2) Adjusted for a 1.4:1 stock split during 1996 and a 1.3:1 stock split
during 1997.

As permitted by SFAS 123, the Companies have chosen to continue to account
for stock options in accordance with the provisions of APB 25 and,
accordingly, no compensation expense related to stock option grants was
recorded in 1996 or 1997. Pro forma information regarding net income is
required by SFAS 123 and has been determined as if the Companies had accounted
for stock options under the fair value method. The fair value of the option
grants was estimated at the date of grant using the Black Scholes option-
pricing model with the following assumptions for 1996 and 1997:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Risk-free interest rate.................................... 5.89% 6.35%
Dividend yield............................................. 0.26% 0.22%
Volatility factor.......................................... 54.03% 51.35%
Expected life.............................................. 6 years 6 years
</TABLE>

The weighted average fair value of options granted in 1996 and 1997 was
$64.30 and $34.05, respectively. For purposes of the pro forma disclosures,
the estimated fair value of the options is amortized to expense over

F-21
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

the options' vesting period. Had compensation cost for the stock option plans
been determined based upon the fair value at the grant date for awards during
1996 and 1997, consistent with the provisions of SFAS 123, the Companies' net
loss would have been increased by approximately $3,100 and $4,200,
respectively. On January 23, 1998, the exercise price of all of the shares
outstanding under option agreements were reset to an exercise price equal to
the closing market price on Japan's Tokyo Stock Exchange First Section at that
date. In conjunction with the repricing, those options previously exercisable
on December 31, 1997 may now be exercised only after July 19, 1998. Repricing
of the stock options will not result in compensation expense to the Companies.

Other stock compensation plans

During 1996 and 1997, the Company granted 45,760 and 61,940 shares of common
stock of Softbank, respectively, (adjusted for two 1.4:1 stock splits during
1996 and a 1.3:1 stock split during 1997) to certain key employees, subject to
restrictions as to continuous employment which expire over a three to five-
year period from the date of grant. The granting of the shares to the
Companies' employees has been recorded as additional paid-in capital offset by
a reduction to stockholder's equity as deferred compensation. Such amounts
were recorded at the fair value, as established by market price of the shares
on the date of grant. The unearned compensation is being amortized ratably
over the restricted periods. During 1996, restrictions on 13,790 shares
expired, 2,160 shares were forfeited and $1,080 was charged to expense related
to the restricted stock awards. During 1997, restrictions on 75,210 shares
expired, 2,150 shares were forfeited and $3,916 was charged to expense related
to these restricted stock awards.

11. EMPLOYEE BENEFIT PLANS

Pension plan

Certain employees of ZDCF who have met eligibility requirements are covered
by a noncontributory defined benefit pension plan. The benefits are based on
years of service and average compensation at the time of retirement. The
Companies' funding policy is to contribute amounts sufficient to meet the
minimum funding requirements as set forth in the Employee Retirement Income
Security Act of 1974 ("ERISA"). Contributions to the plan are determined in
accordance with the projected unit credit cost method. Plan assets consist of
U.S. equity securities, high grade corporate bonds and commercial paper, and
U.S. treasury notes.

The weighted average assumed discount rate of 7% and rate of increase in
future compensation levels of 6% was used in the determination of the
actuarial present value of the projected benefit obligation at December 31,
1996 and 1997. The weighted average expected long-term rate of return on plan
assets at December 31, 1996 and 1997 was 7%.

Net periodic pension cost includes the following components:

<TABLE>
<CAPTION>
1995 1996 1997
----- ------ -----
<S> <C> <C> <C>
Service cost........................................... $ 472 $ 700 $ 391
Interest cost.......................................... 363 472 456
Expected return on plan assets......................... (172) (300) (445)
Amortization of transition obligation.................. 149 199 75
----- ------ -----
Net periodic pension cost.............................. $ 812 $1,071 $ 477
===== ====== =====
</TABLE>

F-22
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

The following table sets forth the funded status and amounts recognized in
the balance sheet:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation............................... $ 4,132 $ 5,721
======= =======
Accumulated benefit obligations......................... 4,224 5,721
======= =======
Projected benefit obligations............................. 7,967 5,721
Plan assets at fair value................................. (4,467) (6,004)
------- -------
Projected benefit obligation in excess (less than) of plan
assets................................................... 3,500 (283)
Unrecognized net transition asset (liability)............. (2,297) 1,279
------- -------
Pension liability included in balance sheet............... $ 1,203 $ 996
======= =======
</TABLE>

During 1997, the Companies decided to terminate the defined benefit pension
plan and pursuant to this decision, all accrued benefits became fully vested
as of August 31, 1997. The above amounts reflect the effects of such
termination. All accrued plan obligations will be settled during 1998. There
was no significant gain or loss recognized in connection with the termination.
Any gain or loss associated with the plan settlement will be recognized in
1998.

Retirement plans

The Companies maintain various defined contribution retirement plans.
Substantially all of the Companies' employees are eligible to participate in
one of the plans under which annual contributions may be made by the Companies
for the benefit of all eligible employees. In certain cases, employees may
also make contributions to the plan in which they participate which, and
subject to certain limitations, may be matched by the Companies up to certain
specified percentages. Employees are generally eligible to participate in a
plan upon joining the Companies and receive matching contributions after one
year of employment. The Companies made contributions to the plans totaling
$2,115, $10,470 and $13,725 in 1995, 1996 and 1997, respectively.

12. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

The Companies have investments in the following companies/joint ventures:

<TABLE>
<CAPTION>
COMPANY/ CARRYING VALUE AT
JOINT VENTURE DECEMBER 31,
------------- OWNERSHIP -----------------
PERCENTAGE 1996 1997
---------- -------- --------
<S> <C> <C> <C>
Mac Publishing LLC............................. 50% $ -- $ 16,244
ExpoComm LLC................................... 50% $ 7,698 $ 7,758
Family PC G.P. ................................ 50% $ 10,138 $ 9,342
</TABLE>

The companies/joint ventures listed above are engaged primarily in the
publication or distribution of print media and the organization, production
and management of trade shows. Other investments and joint ventures are not
material to the Companies' financial statements.

The Companies equity income (loss) was $0, $(796) and $335 in 1995, 1996 and
1997, respectively.

F-23
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

13. SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
1995 1996 1997
-------- ---------- --------
<S> <C> <C> <C>
Cash paid during the year for:
Interest to related parties.................. $ 8,390 $ 99,509 $185,447
Income taxes................................. -- 360 4
Noncash investing and financing activities:
Fair value of assets acquired................ $836,479 $2,508,603 $ 20,749
Liabilities assumed.......................... 21,959 370,518 6,749
-------- ---------- --------
Cash paid.................................... 814,520 2,138,085 14,000
Less--Cash acquired.......................... -- 13,262 --
-------- ---------- --------
Net cash paid for acquisitions............... $814,520 $2,124,823 $ 14,000
======== ========== ========
Return of capital dividends.................. $ -- $ 899,948 $381,434
======== ========== ========
Capital contributions........................ $ -- $ 5,002 $ 61,580
======== ========== ========
</TABLE>

14. STOCKHOLDER'S EQUITY

The Companies' issued and outstanding Common Stock consists of 100 shares of
ZDI and 100 shares of ZDCF. Such shares provide the holder with identical
rights in corporate matters.

15. OPERATING LEASE COMMITMENTS

The Companies are obligated under various operating leases which expire at
various dates through 2021. Future minimum rental commitments under
noncancelable operating leases are as follows:

<TABLE>
<S> <C>
1998................................................................ $ 34,912
1999................................................................ 32,702
2000................................................................ 28,875
2001................................................................ 25,891
2002................................................................ 24,932
Thereafter.......................................................... 248,407
--------
Total........................................................... $395,719
========
</TABLE>

Netted in the above totals is approximately $5,000 for which ZDI has
noncancelable subleases in place. Total sublease income approximates ZDI's
required payments under the related leases. Rent expense amounted to
approximately $2,492, $23,015 and $29,994 for the years ended December 31,
1995, 1996 and 1997, respectively.

16. CONTINGENCIES

The Companies are subject to various claims and legal proceedings arising in
the normal course of business. Management believes that the ultimate
liability, if any, in the aggregate will not be material to the consolidated
balance sheet, future operations or cash flows.

F-24
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

17. SEGMENT INFORMATION

Business segment information

The Companies' operations have been classified into two business segments:
(i) publishing and (ii) trade shows and conferences.

Publishing

Trade shows and conferences

The trade shows and conferences segment is engaged in the organization,
production and management of trade shows, conferences and seminars for the
computer industry. The trade shows and conferences segment's principal
operations are in North America and to a lesser extent in Europe, Asia and
Latin America.

Summarized financial information by business segment as of December 31,
1995, 1996 and 1997 and for each of the years then ended is set forth below:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Revenue, net:
Publishing............................... $ -- $ 690,255 $ 866,233
Trade shows and conferences.............. 202,729 264,884 287,528
---------- ---------- ----------
$ 202,729 $ 955,139 $1,153,761
========== ========== ==========
Income from operations:
Publishing............................... $ -- $ 18,676 $ 49,997
Trade shows and conferences.............. 62,675 68,505 59,235
---------- ---------- ----------
$ 62,675 $ 87,181 $ 109,232
========== ========== ==========
Total assets at December 31:
Publishing............................... $ -- $2,440,651 $2,422,360
Trade shows and conferences.............. 1,090,981 1,143,522 1,124,286
---------- ---------- ----------
$1,090,981 $3,584,173 $3,546,646
========== ========== ==========
Depreciation and amortization:
Publishing............................... $ -- $ 106,587 $ 118,814
Trade shows and conferences.............. 24,305 33,149 36,126
---------- ---------- ----------
$ 24,305 $ 139,736 $ 154,940
========== ========== ==========
Capital expenditures:
Publishing............................... $ -- $ 14,657 $ 21,399
Trade shows and conferences.............. 3,367 7,708 8,797
---------- ---------- ----------
$ 3,367 $ 22,365 $ 30,196
========== ========== ==========
</TABLE>

Operating income by business segment excludes interest income and interest
expense.

F-25
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

<TABLE>
<CAPTION>
UNITED STATES OTHER AREAS COMBINED
Geographic Segment Information ------------- ----------- ----------

Year ended December 31, 1995:

<S> <C> <C> <C>
Revenue, net............................. $ 192,789 $ 9,940 $ 202,729
========== ======== ==========
Income (loss) from operations............ $ 64,930 $ (2,255) $ 62,675
========== ========
Other non-operating income............... 4,199
Related party-interest expense........... 44,005
----------
Income before taxes...................... $ 22,869
==========
Total assets at December 31, 1995........ $1,081,829 $ 9,152 $1,090,981
========== ======== ==========

Year ended December 31, 1996:

Revenue, net............................. $ 854,666 $100,473 $ 955,139
========== ======== ==========
Income (loss) from operations............ $ 92,210 $ (5,029) $ 87,181
========== ========
Other non-operating income............... 6,341
Related party-interest expense........... 120,646
----------
Loss before taxes........................ $ (27,124)
==========
Total assets at December 31, 1996........ $3,549,102 $ 35,071 $3,584,173
========== ======== ==========

Year ended December 31, 1997:

Revenue, net............................. $1,040,297 $113,464 $1,153,761
========== ======== ==========
Income from operations................... $ 107,085 $ 2,147 $ 109,232
========== ========
Other non-operating income............... 8,722
Related party-interest expense........... 190,445
----------
Loss before taxes........................ $ (72,491)
==========
Total assets at December 31, 1997........ $3,500,945 $ 45,701 $3,546,646
========== ======== ==========
</TABLE>

Transactions between geographic areas are not significant.

F-26
<PAGE>

ZDI (ZIFF-DAVIS INC.) AND ZDCF (ZD COMDEX AND FORUMS INC.)
(WHOLLY-OWNED INDIRECT SUBSIDIARIES OF SOFTBANK CORP.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

18. SUBSEQUENT EVENTS (UNAUDITED)

Reorganization of the Companies

In February 1998, Softbank announced a reorganization of the Companies (the
"Reorganization"). In connection with the Reorganization, Softbank will
contribute the common stock of ZDI and ZDCF to a newly formed company in
exchange for a majority of the new company's common stock, the balance of
which will be offered to the public. In addition, approximately $928 million
of obligations owed to Softbank will be converted to equity, approximately
$1.5 billion of notes payable to affiliates will be refinanced, the $370
million obligation for the purchase of the MAC Assets will be paid and
balances totaling approximately $42 million due from MAC will be settled. The
Reorganization is contingent upon the successful completion of the public
stock offering and refinancing of the notes payable to affiliates.

Guarantee of Softbank's U.S. Debt

In March 1998, the Company increased its guarantee of Softbank's U.S. debt
from $150 million to $450 million.

F-27
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder of
Ziff-Davis Inc., (formerly Ziff-Davis Publishing Company)

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, cash flows and changes in stockholder's
equity, present fairly, in all material respects, the financial position of
Ziff-Davis Inc. and its subsidiaries (formerly Ziff-Davis Publishing Company
or the "Company") at December 31, 1995 and February 28, 1996, and the results
of their operations and their cash flows for the year ended December 31, 1995
and for the period from January 1, 1996 to February 28, 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.

As discussed in Note 16 to the financial statements, the Company was acquired
by SOFTBANK Holdings Inc. on February 29, 1996.

PRICE WATERHOUSE LLP
New York, NY
February 17, 1998

F-28
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 10,083 $ 13,669
Accounts receivable, net........................... 113,078 116,075
Inventories........................................ 21,825 26,009
Deferred taxes..................................... 22,129 23,570
Prepaid postage and other current assets........... 16,621 16,852
---------- ----------
Total current assets................................. 183,736 196,175
Property and equipment, net.......................... 64,110 58,589
Intangible assets, net............................... 1,348,064 1,338,684
Deferred charges and other assets.................... 27,996 26,457
---------- ----------
Total assets......................................... $1,623,906 $1,619,905
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable................................... $ 56,488 $ 43,795
Accrued expenses................................... 68,814 78,333
Unexpired subscriptions, net....................... 81,737 86,435
Due to management and affiliates................... 58,480 58,762
Current portion of long-term debt.................. 6,847 6,847
Other current liabilities.......................... 2,048 2,733
---------- ----------
Total current liabilities............................ 274,414 276,905
Deferred taxes....................................... 11,822 10,815
Long-term debt....................................... 439,153 439,153
Subordinated debentures--related party............... 525,000 525,000
Other long-term liabilities.......................... 8,367 7,315
---------- ----------
Total liabilities.................................... 1,258,756 1,259,188
---------- ----------
Commitments and contingencies (Notes 14, 15 and 16)
Stockholder's equity:
Common stock, $.01 par value; 1,000 shares autho-
rized;
100 shares issued and outstanding................. -- --
Additional paid-in capital......................... 391,275 391,275
Accumulated deficit................................ (26,002) (30,549)
Cumulative translation adjustment.................. (123) (9)
---------- ----------
Total stockholder's equity........................... 365,150 360,717
---------- ----------
Total liabilities and stockholder's equity........... $1,623,906 $1,619,905
========== ==========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-29
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
JANUARY 1, 1996
YEAR ENDED TO
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ---------------
<S> <C> <C>
Revenue, net...................................... $768,995 $125,465
Cost of production................................ 193,646 31,112
Selling, general and administrative expenses...... 428,053 71,946
Depreciation and amortization of property and
equipment........................................ 37,160 6,073
Amortization of intangible assets................. 54,386 9,064
-------- --------
Income from operations.......................... 55,750 7,270
Interest expense, net............................. (92,609) (14,030)
Equity in losses of joint ventures................ 3,391 235
-------- --------
Loss before income taxes........................ (40,250) (6,995)
Income tax benefit................................ (14,248) (2,448)
-------- --------
Net loss.......................................... $(26,002) $ (4,547)
======== ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-30
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
JANUARY 1, 1996
YEAR ENDED TO
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ---------------
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................ $ (26,002) $ (4,547)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization................. 91,546 15,137
Loss from equity investments.................. 3,391 235
Provisions for bad debts, allowances and
cancellations................................ 14,097 3,014
Deferred tax benefit.......................... (14,248) (2,448)
Changes in operating assets and liabilities:
Accounts receivable......................... (26,956) (6,011)
Inventories................................. (9,014) (4,184)
Accounts payable and accrued expenses....... 8,136 (3,174)
Unexpired subscriptions, net................ 2,499 4,698
Due to management and affiliates............ (3,020) 282
Other, net.................................. (3,366) 1,136
----------- --------
Net cash provided by operating activities....... 37,063 4,138
----------- --------
Cash flows from investing activities:
Capital expenditures.......................... (14,163) (552)
Proceeds from sale of businesses.............. 23,508 --
----------- --------
Net cash provided (used) by investing
activities..................................... 9,345 (552)
----------- --------
Cash flows from financing activities:
Borrowings under revolving credit facility.... 80,625 24,335
Repayment of revolving credit facility........ (60,625) (24,335)
Repayment of acquisition indebtedness......... (1,122,931) --
----------- --------
Net cash used by financing activities........... (1,102,931) --
----------- --------
Net (decrease)/increase in cash and cash
equivalents.................................... (1,056,523) 3,586
Cash and cash equivalents at beginning of
period......................................... 1,066,606 10,083
----------- --------
Cash and cash equivalents at end of period...... $ 10,083 $ 13,669
=========== ========
Supplemental cash flow disclosures:
Interest paid................................. $ 78,811 $ 29,255
Income taxes paid............................. $ 92,729 $ --
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-31
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL CUMULATIVE TOTAL
------------- PAID-IN ACCUMULATED TRANSLATION STOCKHOLDER'S
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT EQUITY
------ ------ ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1995................... 100 $ -- $391,275 $ -- $ -- $391,275
Net loss................ -- -- -- (26,002) -- (26,002)
Foreign currency
translation adjustment. -- -- -- -- (123) (123)
--- ----- -------- -------- ----- --------
Balance at December 31,
1995................... 100 -- 391,275 (26,002) (123) 365,150
Net loss................ -- -- -- (4,547) -- (4,547)
Foreign currency
translation adjustment. -- -- -- -- 114 114
--- ----- -------- -------- ----- --------
Balance at February 28,
1996................... 100 $ -- $391,275 $(30,549) $ (9) $360,717
=== ===== ======== ======== ===== ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-32
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

1. ORGANIZATION AND ACQUISITION

Ziff-Davis Inc. ("ZDI," formerly Ziff-Davis Publishing Company) is a wholly-
owned subsidiary of Ziff-Davis Holdings Corp. ("Holdings").

ZDI is engaged in publishing magazines, journals and training manuals and
providing market research about the computer industry, with operations in the
United States, Canada and Europe.

Acquisition

Effective January 1, 1995, Holdings, through ZDI, directly and indirectly
acquired certain assets and assumed certain liabilities of the Ziff-Davis
publishing business and related businesses (the "Acquisition" or the "Acquired
Businesses") from Ziff Communications Company, L.P., a limited partnership
("ZCC") and other persons and entities (collectively referred to as the
"Sellers"), for an aggregate purchase price of approximately $1,400,000 plus
transaction costs. ZDI funded the Acquisition through the issuance of Common
Stock, bank borrowings and a subordinated note payable to Holdings.

The acquisition has been accounted for using the purchase method of
accounting.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of ZDI and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.

Investments in companies in which ownership interests range from 20 to 50
percent are accounted for under the equity method. ZDI has an equity
investment interest in Family PC G.P. of 50%. The equity investment in Family
PC G.P. is not material to ZDI's consolidated financial statements.

Cash and cash equivalents

ZDI considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

Concentration of credit risk

ZDI places its temporary cash investments with high credit quality financial
institutions. At times, such investments may be in excess of federally insured
limits. ZDI has not experienced losses in such accounts.

ZDI's advertisers include customers who represent a variety of technology
companies in the United States and other countries. ZDI extends credit to its
customers and historically has not experienced significant losses relating to
receivables from individual customers or groups of customers.

Property and equipment

Property and equipment have been recorded at their estimated fair value at
the date of acquisition. Depreciation is computed using the straight-line
method over the estimated useful lives of the acquired assets, ranging from 3
to 39 years. Leasehold improvements are amortized using the straight-line
method over the service life of the improvement or the life of the related
lease, whichever is shorter. Maintenance and repair costs are charged to
expense as incurred.

F-33
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

Paper inventories

Paper inventories are stated at the lower of cost or market. Cost is
determined on a first-in, first-out basis.

Intangible assets

Intangible assets consist principally of advertising lists, trademarks and
trade names and goodwill. Amortization of these assets is computed on a
straight-line basis over their estimated useful lives. Identifiable intangible
assets are amortized over a period of 2 to 39 years and goodwill, which
represents the excess of the purchase price over the estimated fair values of
net assets acquired, is amortized over 40 years. ZDI assesses the
recoverability of its intangible assets whenever adverse events or changes in
circumstances indicate that expected future cash flows (undiscounted and
without interest charges) may not be sufficient to support the carrying amount
of intangible assets. If undiscounted cash flows are not sufficient to support
the recorded assets, an impairment loss is recognized to reduce the carrying
value of the intangibles to its estimated recoverable value.

Revenue recognition

Advertising revenue for ZDI's publications, less agency commissions, is
recognized as income in the month that the related publications are sent to
subscribers or becomes available for sale at newsstands.

Circulation revenue consists of both subscription and single copy newsstand
sales. Subscription revenue, less estimated cancellations, is deferred and
recognized as income in the month that the related publications are sent to
subscribers. Newsstand sales, less estimated returns, are recognized in the
month that the related publications become available for sale at newsstands.

Revenue generated by market research is recognized when the service is
provided.

Operating costs and expenses

Cost of production includes paper, manufacturing, distribution and
fulfillment. Selling and promotion costs include subscriber acquisition costs
which are expensed as incurred. Editorial and product development costs are
generally expensed as incurred. Product development costs include the cost of
artwork, graphics, prepress, plates and photography for new products.

Foreign currency

Gains and losses on foreign currency transactions, which are not
significant, have been included in selling, general and administrative
expenses. The effect of translation of foreign currency financial statements
into U.S. dollars is included in the cumulative translation adjustments
account in stockholder's equity.

Income taxes

ZDI uses the asset and liability approach for financial accounting and
reporting of deferred taxes.

Use of estimates

F-34
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

Fair value of financial instruments

All current assets and liabilities are carried at cost, which approximates
fair value because of the short-term maturity of those instruments. The
recorded amounts of ZDI's long-term debt also approximate fair value which was
based upon the current rates available to ZDI for debt with similar remaining
maturities.

Impairment of long-lived assets

In 1995, the Financial Accounting Standards Board issued SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" ("SFAS 121"). ZDI adopted SFAS 121 in fiscal 1996 with no
effect on operations.

Earnings per share

Historical earnings per share data has been omitted on the basis that it is
not meaningful due to the insignificant number of shares outstanding.

3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
Accounts receivable............................... $168,961 $166,036
Allowance for doubtful accounts, returns and
cancellations.................................... (55,883) (49,961)
-------- --------
$113,078 $116,075
======== ========
</TABLE>

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
Computers and equipment............................ $ 55,838 $ 56,390
Leasehold improvements............................. 25,999 25,999
Furniture and fixtures............................. 12,404 12,404
Other.............................................. 7,029 7,029
-------- --------
101,270 101,822
Accumulated depreciation and amortization.......... (37,160) (43,233)
-------- --------
$ 64,110 $ 58,589
======== ========
</TABLE>

F-35
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

5. INTANGIBLE ASSETS, NET

Intangible assets, net, consist of the following:

<TABLE>
<CAPTION>
RANGE OF
LIVES DECEMBER 31, FEBRUARY 28,
(YEARS) 1995 1996
-------- ------------ ------------
<S> <C> <C> <C>
Advertiser lists.......................... 7-39 $ 645,800 $ 645,800
Trademarks and trade names................ 30 235,820 235,820
Subscriber lists.......................... 3-10 47,436 47,436
Other..................................... 2-5 28,800 28,800
License agreements........................ 6-14 11,211 11,211
Goodwill.................................. 40 433,383 433,067
---------- ----------
1,402,450 1,402,134
Accumulated amortization.................. (54,386) (63,450)
---------- ----------
$1,348,064 $1,338,684
========== ==========
</TABLE>

Intangible assets primarily relate to the acquisition of ZDI. As discussed
in Note 1, the acquisition was accounted for under the purchase method of
accounting. As such the purchase price was allocated to tangible and
identifiable intangible assets with the remaining amount allocated to
goodwill.

Advertising lists, exhibitor relationships and subscriber lists were
recorded at their estimated fair value as determined by an "income" approach.
Trademarks/trade names were recorded at their estimated fair value using a
"relief from royalty" approach.

All intangible assets are being amortized using the straight-line method
over their estimated useful lives, up to 40 years. In determining the
estimated useful lives, ZDI considered its competitive position in the markets
in which it operates, the historical attrition rates of advertisers,
exhibitors and subscribers, legal and contractual obligations, and other
factors.

6. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
Payroll and related employee benefits.............. $35,044 $35,152
Accrued interest................................... 16,804 27,526
Other taxes payable................................ 1,588 2,576
Other accrued expenses............................. 15,378 13,079
------- -------
$68,814 $78,333
======= =======
</TABLE>

F-36
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

7. INCOME TAXES

Loss before income taxes is attributable to the following jurisdictions:

<TABLE>
<CAPTION>
YEAR JANUARY 1
ENDED TO
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
United States...................................... $(31,114) $(4,757)
Foreign............................................ (9,136) (2,238)
-------- -------
Total............................................ $(40,250) $(6,995)
======== =======
</TABLE>

Components of the income tax benefit are as follows:

<TABLE>
<CAPTION>
YEAR JANUARY 1
ENDED THROUGH
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
U.S. federal income taxes:
Current.......................................... $ -- $ --
Deferred......................................... (11,040) (1,897)
State and local income taxes:
Current.......................................... -- --
Deferred......................................... (3,208) (551)
Foreign income taxes............................... -- --
-------- -------
Total income tax benefit....................... $(14,248) $(2,448)
======== =======
</TABLE>

A reconciliation of the U.S. federal statutory tax rate to ZDI's effective
tax rate on loss before income taxes is as follows:

<TABLE>
<CAPTION>
YEAR JANUARY 1
ENDED TO
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
Federal tax at 35%................................ 35.0% 35.0%
State and local taxes (net of federal tax bene-
fit)............................................. 6.0 6.0
Foreign losses.................................... (2.5) (2.5)
Amortization of nondeductible goodwill............ (1.3) (1.2)
Other nondeductible expenses...................... (1.8) (2.3)
---- ----
Effective tax rate.............................. 35.4% 35.0%
==== ====
</TABLE>

F-37
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

Following is a summary of the components of the deferred tax accounts at
December 31, 1995 and February 28, 1996:

<TABLE>
<CAPTION>
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
Current deferred tax assets:
Allowance for bad debts......................... $ 8,396 $ 8,535
Employee compensation, bonus, and vacation...... 12,248 12,687
Other........................................... 1,485 2,348
-------- --------
Current deferred tax assets................... 22,129 23,570
-------- --------
Noncurrent deferred tax assets and (liabilities):
Basis difference in intangible assets........... (69,271) (71,589)
Basis difference in property and equipment...... (3,378) (1,863)
Deferred rental expense......................... 3,285 3,139
Net operating loss carryforwards................ 102,165 103,954
Acquisition reserves............................ 2,773 2,756
Other........................................... (220) (36)
-------- --------
Gross noncurrent deferred tax assets.......... 35,354 36,361
Valuation allowance............................. (47,176) (47,176)
-------- --------
Net noncurrent deferred tax liabilities....... (11,822) (10,815)
-------- --------
Total net deferred tax assets..................... $ 10,307 $ 12,755
======== ========
</TABLE>

As of December 31, 1995 and February 28, 1996, ZDI had total deferred tax
assets of $83,176 and $86,243, respectively, and total deferred tax
liabilities of $72,869 and $73,488, respectively.

As of February 28, 1996, ZDI has U.S. and foreign net operating loss
carryforwards of approximately $244,172, which will begin to expire on
December 31, 1996. The December 31, 1995 and the February 28, 1996 net
deferred tax asset is reduced by a valuation allowance of $47,176 relating to
tax benefits of foreign net operating loss carryforwards which are not
expected to be recognized.

ZDI's foreign subsidiaries have no undistributed earnings for remittance to
the U.S. and therefore no U.S. or foreign tax provision on remittances has
been recorded.

8. DUE TO MANAGEMENT AND AFFILIATES

Payables to management and affiliates consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, FEBRUARY 28,
1995 1996
------------ ------------
<S> <C> <C>
Payable to:
Management....................................... $28,161 $28,443
Sellers.......................................... 21,500 21,500
Holdings......................................... 8,819 8,819
------- -------
$58,480 $58,762
======= =======
</TABLE>

F-38
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

As part of the Acquisition, ZDI agreed to assume certain obligations to
management arising out of prior employment arrangements. Approximately $40,000
was due under these arrangements, of which approximately $12,000 was paid in
1995. The balance of the obligation, including accrued interest, was paid in
1997.

Amounts due to sellers represent final amounts payable related to the
Acquisition.

9. LONG-TERM DEBT

Long-term debt at December 31, 1995 and February 28, 1996 is comprised of
the following:

<TABLE>
<S> <C>
Bank debt:
Tranche A........................................................ $ 86,604
Tranche B........................................................ 179,479
Tranche C........................................................ 159,917
Revolving credit arrangement..................................... 20,000
--------
446,000
Less--Current portion.............................................. (6,847)
--------
$439,153
========
</TABLE>

On December 21, 1994, ZDI borrowed $515,000 under the terms of a Credit
Agreement. The proceeds of the loan were used to finance a portion of the
Acquisition and pay certain transaction costs.

Tranche A, as amended on August 31, 1995, is a six-year term loan due
quarterly in varying amounts from September 30, 1995 through December 31,
2000. Tranche B is a seven-year term loan due quarterly in varying amounts
commencing September 30, 1995 through September 30, 2001, with a final payment
of $126,000 on December 31, 2001. Tranche C is an eight-year term loan
providing for quarterly payments, aggregating $1,000 per calendar year
commencing September 30, 1995 through December 31, 2001, followed by four
quarterly payments of $39,500 through December 31, 2002.

The Credit Agreement also provides ZDI with an additional $85,000, increased
to $150,000 under terms of the August 31, 1995 amendment, under a revolving
credit arrangement through December 31, 2000. These funds are available for
loans, letters of credit, and swing-line loans, subject to certain maximum
levels of borrowing. At least once during each year, for a period of 30
consecutive days, the loans outstanding under the revolving credit facility
must be reduced so that the aggregate outstanding amount does not exceed
$130,000 during such 30-day period. The commitment fee for the revolving
credit facility is .50% during 1995 and 1996 on the unused portion of the
facility. ZDI has the option to permanently reduce the amount available for
borrowings under the revolving credit facility by a minimum of $5,000 at any
time. At December 31, 1995 and February 28, 1996, $130,000 under the revolving
credit facility is available for borrowing.

During 1995 and the period January 1, 1996 to February 28, 1996, the Tranche
A and revolving credit loans bore interest, payable at least quarterly, at
either the Average Bank Rate ("ABR"), as defined, plus 1.25%, or at the
Eurodollar rate, plus 2.5% at the election of ZDI. Tranche B and C loans bore
interest, payable at least quarterly, at either the ABR, plus 1.75% and 2.25%,
respectively, or at the Eurodollar rate, as defined, plus 3% and 3.5%,
respectively, at the election of ZDI. Swing-line loans bear interest at the
ABR, plus the applicable margins as discussed above. Borrowings outstanding at
December 31, 1995 and February 28, 1996 were $446,000 and the weighted average
interest rate was 8.8% and 10.1%, respectively.

F-39
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

ZDI is required to comply with various restrictive covenants, including
maintaining certain financial ratios, restrictions on additional indebtedness,
capital expenditures, acquisitions, certain asset sales, declaration of
dividends and acquisition of ZDI's or Holdings' Common Stock. All borrowings
under the Credit Agreement are secured by the common stock and other equity
interests of ZDI and its wholly-owned subsidiaries.

ZDI is required to make mandatory prepayments of the loans with the net
proceeds of certain asset sales and debt issuances, if any. ZDI is also
required, commencing with the year ending December 31, 1995, to prepay the
loans with a portion of excess cash flow, as defined, once certain cash
balances are achieved. These cash balances were not achieved during 1995 or
for the period from January 1, 1996 to February 28, 1996 and therefore no
prepayments occurred.

Scheduled principal payments for each of the next five years are as follows:

<TABLE>
<S> <C>
1996................................................................ $ 6,847
1997................................................................ 13,518
1998................................................................ 21,524
1999................................................................ 23,658
2000................................................................ 52,795
Thereafter.......................................................... 327,658
--------
Total............................................................. $446,000
========
</TABLE>

10. RELATED PARTY TRANSACTIONS

Prior to the Acquisition, ZCC provided certain services to ZDI, including
legal, tax, human resources, payroll, facilities management and management
information services. The remaining unpaid balance (approximately $8,100) for
such services was paid in the normal course of business during 1995. Beginning
in 1995, ZDI sublet office space and provided administrative services to ZCC.
Such office space and services were provided to ZCC at ZDI's cost. The
majority partners of ZCC have a continuing investment in Holdings of
approximately 6%.

On the closing date of the Acquisition, ZDI paid approximately $280,000 in
cash to the Sellers and issued notes due January 13, 1995 and January 16, 1995
totaling $1,033,931, for the balance. These notes were subsequently fully paid
in January, 1995.

See Note 11 for a description of subordinated debentures.

In connection with the Acquisition, ZDI paid transaction costs of $14,000 to
an affiliate of Holdings.

The Company paid $44,555 and $3,791 in interest to Holdings for the year
ended December 31, 1995 and for the period from January 1, 1996 to February
28, 1996, respectively.

11. SUBORDINATED DEBENTURES--RELATED PARTY

On December 21, 1994, ZDI issued a $525,000 subordinated note payable to
Holdings to finance a portion of the Acquisition. The note bears interest at 8
1/2% per annum with interest payable semiannually on February 28 and August 31
of each year. The principal is repayable in three installments of $175,000
each on December 21, 2005, December 21, 2006 and December 21, 2007. This note
is fully subordinated in right of payment to the bank borrowings (see Note 9).

F-40
<PAGE>

ZDI (ZIFF-DAVIS INC., FORMERLY ZIFF-DAVIS PUBLISHING COMPANY)
(A WHOLLY-OWNED SUBSIDIARY OF ZIFF-DAVIS HOLDINGS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

12. EMPLOYEE BENEFIT PLANS

Retirement plans

ZDI and its subsidiaries maintain various defined contribution retirement
plans. Substantially all of ZDI's employees are eligible to participate in one
of the plans under which annual contributions may be made by ZDI for the
benefit of all eligible employees. Employees may also make contributions to
the plan in which they participate which, subject to certain limitations, may
be matched by ZDI up to certain specified percentages. Employees are generally
eligible to participate in a plan upon joining ZDI and receive matching
contributions immediately upon commencement of employment. In addition, the
employees become eligible to receive a discretionary Company contribution
after one year of employment. ZDI made contributions of $8,432 and $1,407 for
the year ended December 31, 1995 and for the period ended February 28, 1996,
respectively.

13. SALE OF BUSINESSES

During 1995, ZDI disposed of two subsidiaries and received cash
consideration of $23,508. No gain or loss was realized on the dispositions.

14. OPERATING LEASE COMMITMENTS

ZDI is obligated under various operating leases which expire at various
dates through 2006. Future minimum rental commitments under noncancelable
operating leases are as follows:

<TABLE>
<S> <C>
1996 (ten-month period).............................................. $15,771
1997................................................................. 19,606
1998................................................................. 18,219
1999................................................................. 12,532
2000................................................................. 9,611
Thereafter........................................................... 14,583
-------
Total.............................................................. $90,322
=======
</TABLE>

Netted in the above totals is approximately $2,300 for which ZDI has
noncancelable subleases in place. Total sublease income approximates ZDI's
required payments under the related leases. Rent expense amounted to
approximately $22,900 and $4,020 for the year ended December 31, 1995 and for
the period from January 1, 1996 to February 28, 1996, respectively.

15. CONTINGENCIES

ZDI is subject to various claims and legal proceedings arising in the normal
course of business. Management believes that the ultimate liability, if any,
in the aggregate will not be material to the consolidated balance sheet,
future operations or cash flows.

16. SUBSEQUENT EVENTS

Acquisition of the Company

In February 1996, SOFTBANK Corp. entered into an agreement to acquire the
stock of ZDI for an aggregate purchase price of approximately $1,800,000, plus
transaction costs. In a separate agreement, MAC Inc. Ltd., an affiliated
company of SOFTBANK Corp., acquired directly and through affiliates, certain
of the assets and assumed certain of the liabilities of ZDI for an aggregate
purchase price of approximately $302,000.

F-41
<PAGE>

Issued April 24, 1998 25,800,000 Shares

Ziff-Davis Inc.

COMMON STOCK
----------

ALL OF THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING SOLD BY THE
COMPANY. OF THE 25,800,000 SHARES OF COMMON STOCK BEING OFFERED HEREBY,
5,160,000 SHARES ARE BEING OFFERED INITIALLY OUTSIDE THE UNITED STATES AND
CANADA BY THE INTERNATIONAL UNDERWRITERS AND 20,640,000 SHARES ARE BEING
OFFERED INITIALLY IN THE UNITED STATES AND CANADA BY THE U.S.
UNDERWRITERS. SEE "UNDERWRITERS." PRIOR TO THE OFFERING, THERE HAS
BEEN NO PUBLIC MARKET FOR COMMON STOCK OF THE COMPANY. IT IS
CURRENTLY ANTICIPATED THAT THE INITIAL PUBLIC OFFERING PRICE WILL
BE BETWEEN $14.00 AND $17.00 PER SHARE. SEE "UNDERWRITERS" FOR
A DISCUSSION OF THE FACTORS TO BE CONSIDERED IN DETERMINING
THE INITIAL PUBLIC OFFERING PRICE.
----------
CONCURRENTLY WITH THE OFFERING BEING MADE HEREBY, THE COMPANY IS OFFERING, BY
MEANS OF A SEPARATE PROSPECTUS, $250 MILLION AGGREGATE PRINCIPAL AMOUNT OF
ITS % SENIOR SUBORDINATED NOTES DUE 2008 (THE "NOTES OFFERING" AND,
TOGETHER WITH THE OFFERING, THE "OFFERINGS"). THE CONSUMMATION OF
EACH OF THE OFFERINGS IS CONDITIONED UPON, AND WILL OCCUR
SIMULTANEOUSLY WITH, THE CONSUMMATION OF THE OTHER. SEE "USE OF
PROCEEDS."
----------
UPON COMPLETION OF THE OFFERINGS, AFFILIATES OF THE COMPANY WILL RETAIN
APPROXIMATELY 74.2% OF THE OUTSTANDING VOTING POWER OF THE COMPANY. SEE
"PRINCIPAL STOCKHOLDERS."
----------

ALL THE NET PROCEEDS WILL BE PAID TO AFFILIATES OF THE COMPANY. SEE "USE OF
PROCEEDS."
----------

THE COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK EXCHANGE

UNDER THE SYMBOL "ZD," SUBJECT TO OFFICIAL NOTICE OF ISSUANCE.
----------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------

PRICE $ A SHARE
----------

(2) Before deducting expenses payable by the Company, estimated at
$ .
(3) The Company has granted to the U.S. Underwriters an option, exercisable
within 30 days of the date hereof, to purchase up to an aggregate of
3,870,000 additional shares of Common Stock at the Price to Public less
Underwriting Discounts and Commissions, for the purpose of covering
over-allotments, if any. If the U.S. Underwriters exercise such option
in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriters."
----------
The Shares of Common Stock are offered, subject to prior sale, when, as and
if accepted by the Underwriters named herein and subject to approval of certain
legal matters by Davis Polk & Wardwell, counsel for the Underwriters. It is
expected that delivery of the Shares will be made on or about , 1998 at
the office of Morgan Stanley & Co. Incorporated, New York, New York, against
payment therefor in immediately available funds.
----------
MORGAN STANLEY DEAN WITTER
MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
International

, 1998
<PAGE>

Issued April 24, 1998

100,000 Shares

Ziff-Davis Inc.

COMMON STOCK

----------

SOFTBANK KINGSTON INC., AN AFFILIATE OF
THE COMPANY, INTENDS TO SELL A PORTION
OF THE SHARES OF COMMON STOCK OF THE
COMPANY ISSUED TO KINGSTON
TECHNOLOGY COMPANY IN EXCHANGE
FOR CERTAIN ASSETS
TRANSFERRED TO THE
COMPANY. SEE "THE
REORGANIZATION,"
"PRINCIPAL STOCKHOLDERS"
AND "UNDERWRITERS."
----------

THE COMPANY IS OFFERING, BY MEANS OF A SEPARATE PROSPECTUS, $250 MILLION
AGGREGATE PRINCIPAL AMOUNT OF ITS % SENIOR SUBORDINATED NOTES DUE 2008
(THE "NOTES OFFERING") AND 25,800,000 SHARES OF ITS COMMON STOCK (THE
"COMMON STOCK OFFERING") AND, TOGETHER WITH THE COMMON STOCK
OFFERING, THE "OFFERINGS"). THE CONSUMMATION OF EACH OF THOSE
OFFERINGS IS CONDITIONED UPON, AND WILL OCCUR SIMULTANEOUSLY
WITH, THE CONSUMMATION OF THE OTHER. SEE "USE OF
PROCEEDS."
----------
UPON COMPLETION OF THE OFFERINGS, AFFILIATES OF THE COMPANY WILL RETAIN
APPROXIMATELY 74.2% OF THE OUTSTANDING VOTING POWER OF THE COMPANY. SEE
"PRINCIPAL STOCKHOLDERS."
----------

ALL OF THE NET PROCEEDS HEREUNDER WILL BE PAID TO SOFTBANK KINGSTON INC. AND
NONE WILL BE PAID TO THE COMPANY, AND ALL THE NET PROCEEDS FROM THE OFFERINGS
WILL BE PAID TO AFFILIATES OF THE COMPANY. SEE "USE OF PROCEEDS."
----------

THE COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK EXCHANGE

PRICE $ A SHARE
----------

, 1998
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following is a statement of the estimated expenses, other than
underwriting discounts and commissions, to be incurred in connection with the
distribution of the securities registered under this Registration Statement.

<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Securities and Exchange Commission registration fee............ $ 149,297
NASD fees and expenses......................................... 30,500
Legal fees and expenses........................................ 650,000
NYSE listing fees and expenses................................. 135,000
Accounting fees and expenses................................... 1,000,000
Printing and engraving fees.................................... 450,000
Registrar and transfer agent's fees............................ 12,500
Miscellaneous.................................................. 72,703
----------
Total........................................................ $2,500,000
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees
and individuals against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with any threatened, pending or completed actions, suits or
proceeding in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the Registrant. The
statute provides that it is not exclusive of other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. Section 6.4 of the
Registrant's By-laws provides for indemnification by the Registrant of its
directors, officers and employees to the fullest extent permitted by the
Delaware General Corporation Law.

Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for payments of unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit. The Company's Certificate of Incorporation provides
for such limitation of liability.

Reference is also made to Section 7(c) of the Underwriting Agreement filed
as Exhibit 1.1 to the Registration Statement for information concerning the
Underwriters' obligation to indemnify the Registrant and its officers and
directors in certain circumstances.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

None

II-1
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Form of Certificate of Incorporation of the Company.*
3.2 Form of By-laws of the Company.*
4.1 Specimen of certificate representing the Company's Common Stock, par
value $.01 per share.
4.2 Indenture, dated as of May 1, 1998, between Ziff-Davis Inc. and The Bank
of New York, as Trustee (incorporated herein by reference to the exhibit
in the Company's Registration Statement on Form S-1, File No. 333-
49441).
5.1 Opinion of Sullivan & Cromwell, counsel to the Company.
10.1 1998 Incentive Compensation Plan.*
10.2 1998 Employee Stock Purchase Plan.
10.3 Undertaking, dated as of April 1, 1998, between SOFTBANK Corp. and ZD
Inc.*
10.4 License and Services Agreement, dated as of July 28, 1997, between Ziff-
Davis Inc., ZDTV LLC, ZD Television Productions, Inc., MAC Holdings
(America) Inc. and MAC Inc.*
10.5 Master License Agreement, dated as of April 1, 1998, between Ziff-Davis
Inc. and SOFTBANK Corp.
10.6 License Agreement, dated as of July 1, 1997, between MAC Inc. and Ziff-
Davis Inc. and SOFTBANK Corp.*
10.7 Agreement to Produce, dated April 1, 1998, between ZD COMDEX and Forums
Inc. and SOFTBANK Forums KK.*
10.8 Trademark License Agreement, dated as of April 1, 1998, between ZD
COMDEX and Forums Inc. and SOFTBANK Forums KK.*
10.9 Technical Assistance Agreement, dated as of April 1, 1998, between ZD
COMDEX and Forums Inc. and SOFTBANK Forums KK.*
10.10 Accounting and Administrative Services Agreement, dated as of April 1,
1998, between ZD COMDEX and Forums Inc. and SOFTBANK Forums KK.*
10.11 Registration Rights Agreement, dated as of April 1, 1998, between ZD
Inc. and SOFTBANK Holdings Inc.*
10.12 Credit Agreement, dated as of March 27, 1996 between SOFTBANK Holdings
Inc., the Guarantors listed therein, The Bank of New York and Morgan
Stanley Senior Funding, Inc., as amended March 9, 1998.*
10.13 Credit Agreement, dated as of , 1998, between Ziff-Davis Inc.,
BNY Capital Markets, Inc., Morgan Stanley Senior Funding, Inc. and the
Agents listed therein.**
10.14 Lease of Ziff-Davis Inc. headquarters at 28 East 28th Street, New York,
New York.*
10.15 Lease Agreement, dated as of May 4, 1998, between Ziff-Davis Inc., ZD
Inc., ZD COMDEX and Forums Inc. and Kingston Technology Company.
10.16 1998 Non-Employee Directors Stock Option Plan Agreement.
10.17 Assignment, dated as of May 4, 1998, between Kingston Technology Company
and Ziff-Davis Inc.
10.18 Employment Agreement, dated as of April 1, 1998, between ZD Inc. and
Eric Hippeau.
10.19 Employment Agreement, dated as of April 1, 1998, between ZD COMDEX and
Forums Inc. and Jason E. Chudnofsky.
12. Computation of Ratio of Earnings to Fixed Charges.*
21.1 List of subsidiaries of the Company.*
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Sullivan & Cromwell (included in Exhibit 5 above).
27 Financial Data Schedule.*
</TABLE>
- --------
* Previously filed.
** To be filed by amendment.

(B) FINANCIAL STATEMENT SCHEDULES

Not applicable.

II-2
<PAGE>

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing of the Offering, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

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

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York on the 24th day of April, 1998.

ZD Inc.

By /s/ Eric Hippeau
-----------------------------------

ERIC HIPPEAU

CHAIRMAN, CHIEF
EXECUTIVE OFFICER

Each of the undersigned hereby constitutes and appoints Timothy C. O'Brien
(Chief Financial Officer of the Company) and J. Malcolm Morris (Senior Vice
President and General Counsel), and each of them severally, his/her true and
lawful attorney-in-fact or attorneys-in-fact with power of substitution and
resubstitution to sign in his/her name, place and stead in any and all such
capacities the Registration Statement and any and all amendments thereto
(including post-effective amendments and amendments filed pursuant to Rule
462(b) under the Securities Act) and any documents in connection therewith,
and to file the same with the Securities and Exchange Commission, each of said
attorneys-in-fact to have power to act with or without the other, and to have
full power and authority to do and perform, in the name and on behalf of each
such officer and director of the Registrant who shall have executed such a
power of attorney, every act whatsoever which such attorneys-in-fact, or any
of them, may deem necessary or desirable to be done in connection therewith as
fully and to all intents and purposes as such officer or director of the
Registrant might or could do in person.

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities indicated on April 24, 1998.

<S> <C>
NAME TITLE

/s/ Eric Hippeau Chairman, Chief Executive Officer, Director
- ------------------------------------- (Principal Executive Officer)
ERIC HIPPEAU

/s/ Timothy C. O'Brien Chief Financial Officer, Director
- ------------------------------------- (Principal Financial Officer)
TIMOTHY C. O'BRIEN

/s/ Mark D. Moyer Controller
- ------------------------------------- (Principal Accounting Officer)
MARK D. MOYER

/s/ Masayoshi Son Director
- -------------------------------------
MASAYOSHI SON

/s/ Yoshitaka Kitao Director
- -------------------------------------
YOSHITAKA KITAO

/s/ Ronald D. Fisher Director
- -------------------------------------
RONALD D. FISHER
</TABLE>

II-4
<PAGE>

NAME TITLE

/s/ Jason E. Chudnofsky Director
- -------------------------------------
JASON E. CHUDNOFSKY

/s/ Claude P. Sheer Director
- -------------------------------------
CLAUDE P. SHEER

/s/ Jonathan D. Lazarus Director
- -------------------------------------
JONATHAN D. LAZARUS

/s/ Jerry C.-Y. Yang Director
- -------------------------------------
JERRY C.-Y. YANG

II-5

<PAGE>

EXHIBIT 1.1
25,800,000 SHARES

ZD INC.

COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT

April 28, 1998
<PAGE>

April 28, 1998

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman Sachs & Co.
Donaldson Lufkin & Jenrette
Securities Corporation
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Morgan Stanley & Co. International Limited
Merrill Lynch International
Goldman Sachs International
Donaldson, Lufkin & Jenrette International
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England

Dear Sirs and Mesdames:

ZD Inc., a Delaware corporation (the "COMPANY"), proposes to issue and
sell to the several Underwriters (as defined below) 25,800,000 shares (the
"FIRM SHARES") of its Common Stock, par value $.01 per share (the "COMMON
STOCK").

It is understood that, subject to the conditions hereinafter stated,
20,640,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the several
U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the
United States and Canada to United States and Canadian Persons (as such
terms are defined in the Agreement Between U.S. and International
Underwriters of even date herewith), and 5,160,000 Firm Shares (the
"INTERNATIONAL SHARES") will be sold to the several International
Underwriters named in Schedule II hereto (the "INTERNATIONAL UNDERWRITERS")
in connection with the offering and sale of such International Shares
outside the United States and Canada to persons other than

1
<PAGE>

United States and Canadian Persons. Morgan Stanley & Co. Incorporated
("MORGAN STANLEY"), Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman Sachs & Co. and Donaldson Lufkin & Jenrette Securities Corporation
shall act as representatives (the "U.S. REPRESENTATIVES") of the several
U.S. Underwriters, and Morgan Stanley & Co. International Limited, Merrill
Lynch International, Goldman Sachs International and Donaldson Lufkin &
Jenrette International shall act as representatives (the "INTERNATIONAL
REPRESENTATIVES") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter
collectively referred to as the "UNDERWRITERS."

The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 3,870,000 shares of Common Stock
(the "ADDITIONAL SHARES") if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of Common Stock granted to
the U.S. Underwriters in Section hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES."

The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The
registration statement contains two prospectuses to be used in connection
with the offering and sale of the Shares: the U.S. prospectus, to be used
in connection with the offering and sale of Shares in the United States and
Canada to United States and Canadian Persons, and the international
prospectus, to be used in connection with the offering and sale of Shares
outside the United States and Canada to persons other than United States
and Canadian Persons. The international prospectus is identical to the
U.S. prospectus except for the outside front cover page. The registration
statement as amended at the time it becomes effective, including the
information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of
1933, as amended (the "SECURITIES ACT"), is hereinafter referred to as the
"REGISTRATION STATEMENT"; the U.S. prospectus and the international
prospectus in the respective forms first used to confirm sales of Shares
are hereinafter collectively referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such
Rule 462 Registration Statement.

As part of the offering contemplated by this Agreement, Morgan Stanley &
Co. Incorporated ("MORGAN STANLEY") has agreed to reserve out of the Shares
set forth opposite its name on Schedule I to this Agreement, up

2
<PAGE>

to 1,550,000 shares, for sale to the Company's employees, officers, and
directors and other parties associated with the Company (collectively,
"PARTICIPANTS"), as set forth in the Prospectus under the heading
"Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
Morgan Stanley pursuant to the Directed Share Program (the "DIRECTED
SHARES") will be sold by Morgan Stanley pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for
purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by Morgan Stanley as
set forth in the Prospectus.

It is understood and agreed that as of the Closing Date (as defined
below), the Company will consummate a series of transactions pursuant to
which (i) all of the stock of Ziff-Davis Inc. ("ZDI"), ZD COMDEX and Forums
Inc. ("ZDCF") and ZD Holdings (U.K.) Limited will be contributed to the
Company by SOFTBANK Holdings Inc., a wholly owned subsidiary of SOFTBANK
Corp., in exchange for 74,200,000 shares of Common Stock, (ii) certain
obligations owed to SOFTBANK Corp. will be converted to equity, (iii) the
Company will enter into a U.S.$1.35 billion Credit Agreement with The Bank
of New York, Morgan Stanley Senior Funding and other lenders (the "CREDIT
AGREEMENT") and borrow $1.25 billion thereunder, (iv) the Company will
issue and sell the Shares pursuant to this Agreement and shall issue and
sell $250 million principal amount of its [ ]% Senior Subordinated Notes
due 2008 (the "NOTES") pursuant to an underwriting agreement (the "DEBT
UNDERWRITING AGREEMENT") of even date herewith and (v) the Company will
apply the proceeds of the sale of the Shares and the Notes, together with
amounts borrowed under the Credit Agreement, to purchase from MAC Inc.
certain operations and assets relating to certain publications and trade
shows and to repay certain Indebtedness owed to SOFTBANK Corp. and its
affiliates (all such transactions, as more fully described in the
Prospectus, shall collectively be referred to herein as the
"REORGANIZATION"), which transactions shall be deemed to take place
simultaneously on the Closing Date. In connection with the Reorganization,
the Company will change its name to "Ziff-Davis Inc." and ZDI will change
its name to "ZD Inc."

1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:

(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the Company's knowledge, threatened by the Commission.

3
<PAGE>

(b) (i) The Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.

(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus.

(d) Each entity that will be a subsidiary of the Company
after giving effect to the Reorganization (each a "SUBSIDIARY") has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its Subsidiaries, taken as
a whole; all of the issued shares of capital stock of each Subsidiary
of the Company (including, but not limited to, ZDI, ZDCF and Holdings)
have been duly and validly authorized and issued, are fully paid and
non-assessable and, as of the Closing Date, will be owned directly by
the Company, free and clear of all liens, encumbrances, equities or
claims.

(e) This Agreement has been duly authorized, executed and
delivered by the Company.

4
<PAGE>

(f) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.

(g) The shares of Common Stock to be outstanding as of the
Closing Date (other than the Shares) have been duly authorized and,
upon consummation of the transactions comprising the Reorganization,
will be validly issued, fully paid and non-assessable.

(h) The Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.

(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
and the consummation of the transactions comprising the Reorganization
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its Subsidiaries that is
material to the Company and its Subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Subsidiary, and no
consent, approval, authorization or order of, or qualification with
(any of the foregoing, a "CONSENT"), any governmental body or agency
is required for the performance by the Company of its obligations
under this Agreement or the consummation of the transactions
comprising the Reorganization, except (i) such as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares and (ii) for Consents the
failure of which to have been obtained would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole.

(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its Subsidiaries, taken as a whole, from
that set forth in or contemplated by the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement).

(k) There are no legal or governmental proceedings pending
or, to the Company's knowledge, threatened to which the Company or any
of its Subsidiaries is a party or to which any of the properties of
the Company or any of its Subsidiaries is subject that are required to
be described in the

5
<PAGE>

Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.

(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder.

(m) The Company is not and, after giving effect to the
Reorganization will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.

(n) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.

(o) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(i) the Company and its Subsidiaries have not incurred any liability
or obligation, direct or contingent that is material to the Company
and its Subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business that is material to
the Company and its Subsidiaries, taken as a whole, and (ii) there has
not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its consolidated subsidiaries,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).

(p) The Company and its Subsidiaries have good and
marketable title to all personal property owned by them which is
material to the business of the Company and its Subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
Subsidiaries; the Company does not hold title to any real property
that is material to the Company and its

6
<PAGE>

Subsidiaries, taken as a whole; and any real property and buildings
held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company and its
Subsidiaries, in each case except as described in or contemplated by
the Prospectus.

(q) The Company and its Subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them, the loss or failure to obtain of which would not
have a material adverse effect on the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole, and neither the Company nor
any of its Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its Subsidiaries,
taken as a whole.

(r) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.

(s) No material labor dispute with the employees of the
Company or any of its Subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company,
is imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or
in the earnings,

7
<PAGE>

business or operations of the Company and its Subsidiaries, taken as a
whole.

(t) As of the Closing Date, the Reorganization will have
been completed as described in the Prospectus.

Furthermore, the Company represents and warrants to Morgan
Stanley that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus or any preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with
the Directed Share Program, and that (ii) no authorization, approval,
consent, license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as have
been obtained, is necessary under the securities laws and regulations of
foreign jurisdictions in which the Directed Shares are offered outside the
United States.

The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.

2. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth
in Schedules I and II hereto opposite its names at U.S.$______ a share (the
"PURCHASE PRICE").

On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the U.S. Underwriters the Additional Shares, and the U.S.
Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 3,870,000 Additional Shares at the Purchase Price. If the
U.S. Representatives, on behalf of the U.S. Underwriters, elect to exercise
such option, the U.S. Representatives shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which
notice shall specify the number of Additional Shares to be purchased by the
U.S. Underwriters and the date on which such shares are to be purchased.
Such date may be the same as the Closing Date (as defined below) but not
earlier than the Closing Date nor later than ten business days after the
date of

8
<PAGE>

such notice. Additional Shares may be purchased as provided in Section
hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares
are to be purchased, each U.S. Underwriter agrees, severally and not
jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in
Schedule I hereto opposite the name of such U.S. Underwriter bears to the
total number of U.S. Firm Shares.

The Company hereby agrees that, without the prior written consent
of Morgan Stanley on behalf of the Underwriters, neither it nor any of its
affiliates will, during the period ending 180 days after the date of the
Prospectus, directly or indirectly, (i) 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, lend or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the issuance by the Company of shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised
in writing, (C) transactions by any person other than the Company relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the offering of the Shares, (D) the
issuance of shares of Common Stock in connection with the Reorganization or
(E) the issuance of up to [ ] shares of Common Stock in connection with
the Company's Employee Stock Purchase Plan.

3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The
Company is further advised by you that the Shares are to be offered to the
public initially at U.S.$___ a share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a concession not
in excess of U.S.$____ a share under the Public Offering Price, and that
any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of U.S.$___ a share, to any Underwriter or to certain other
dealers.

9
<PAGE>

4. Payment and Delivery. Payment for the Firm Shares shall be made
to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on May [4],
1998, or at such other time on the same or such other date, not later than
May [11], 1998, as shall be designated in writing by you. The time and
date of such payment are hereinafter referred to as the "CLOSING DATE."

Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the
several U.S. Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section or at such other time on the
same or on such other date, in any event not later than June [12], 1998, as
shall be designated in writing by the U.S. Representatives. The time and
date of such payment are hereinafter referred to as the "OPTION CLOSING
DATE."

Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to
the Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters (or
the several U.S. Underwriters, in the case of Additional Shares), with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.

5. Conditions to the Underwriters' Obligations. The
obligations of the Company to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares
on the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than 5:30 p.m. (New York
City time) on the date hereof.

The several obligations of the Underwriters are subject to the
following further conditions:

(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:

(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not

10
<PAGE>

indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and

(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its Subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in the judgment of Morgan Stanley, is material
and adverse and that makes it, in the judgment of Morgan Stanley,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.

(b) The Underwriters shall have received on the Closing Date
a certificate from the Company, dated the Closing Date and signed by
an executive officer of the Company to the effect set forth in Section
5(a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before the Closing Date.

The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.

(c) The Underwriters shall have received on the Closing Date
an opinion or opinions of Sullivan & Cromwell, counsel for the
Company, dated the Closing Date, to the effect that:

(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has the corporate power and authority to
own its property and to conduct its business as described in the
Prospectus;

(ii) each of ZDI and ZDCF has been duly incorporated,
is validly existing as a corporation in good standing under the
laws of the State of Delaware and has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus;

11
<PAGE>

(iii) the authorized capital stock of the Company
is as set forth in the Prospectus under the caption
"Capitalization";

(iv) all of the outstanding shares of the Company's
Common Stock, including the Shares, have been duly authorized and
validly issued and are fully paid and non-assessable;

(v) all of the issued and outstanding shares of capital
stock of each of ZDI and ZDCF have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
directly by the Company and, to the best of such counsel's
knowledge, are owned by the Company, free and clear of all liens,
encumbrances and claims;

(vi) this Agreement has been duly authorized, executed
and delivered by the Company;

(vii) none of (A) the execution and delivery by the
Company of, and the performance by the Company of its obligations
under, this Agreement, (B) the execution and delivery by the
Company of, and the performance by the Company of its obligations
under, the agreements entered into by the Company in connection
with the transactions comprising the Reorganization or (C) the
transfer of the shares of Common Stock to SOFTBANK Corp. or its
affiliates in exchange for the stock of ZDI and ZDCF, the
purchase of the MAC Assets and the repayment of approximately
$1.589 billion of obligations to SOFTBANK Corp., all in
connection with the Reorganization: (1) will violate the
Company's certificate of incorporation or by-laws, (2) to the
best of such counsel's knowledge, result in a default under or
breach of any agreement or other instrument binding upon the
Company or any of its Subsidiaries that is filed as an exhibit to
the Registration Statement or (3) violate any Federal law of the
United States or law of the State of New York applicable to the
Company; provided, however, that for the purposes of this
paragraph, such counsel need express no opinion with respect to
Federal or state securities laws, other antifraud laws and
fraudulent transfer laws; provided, further, that insofar as
performance by the Company of its obligations under agreements
entered into by the Company in connection with the Reorganization
and this Agreement are concerned, such counsel need express no
opinion as to bankruptcy,

12
<PAGE>

insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights.

(viii) all regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company under the Federal laws of the United States and the
General Corporation Law of the State of Delaware for the
issuance, sale and delivery of the Shares by the Company to you
have been obtained or made.

(ix) after due inquiry, such counsel does not know of
any litigation or governmental proceedings instituted or
threatened against the Company or any of its Subsidiaries that
are required to be disclosed in the Registration Statement or the
Prospectus and are not so disclosed or of any documents that are
required to be summarized in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not summarized or filed as required;

(x) the Company is not and, after giving effect to the
Reorganization will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;

(xi) the Registration Statement, as of the effective
date of the Registration Statement, and the Prospectus, as of the
date of the Prospectus, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the Act and the applicable rules and regulations
of the Commission thereunder; nothing that came to such counsel's
attention in the course of their review has caused such counsel
to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the Prospectus, contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. Such counsel may state that they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus except for those made under the captions "Description
of Capital Stock," "Certain United States Tax Consequences to
Non-U.S. Holders of Common Stock," and "Underwriters" in the
Prospectus, insofar as they relate to provisions of documents or
of

13
<PAGE>

Delaware General Corporation Law or United States Federal tax law
therein described. Such counsel may also state that they do not
express any opinion or belief as to the financial statements or
other financial or statistical data contained in the Registration
Statement or the Prospectus.

(d) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(vi) and 5(c)(xi) (but with specific reference only as to the
statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") above and to the effect that the Shares have been duly
authorized and, when issued and delivered in accordance with this
Agreement, will be validly issued, fully paid and non-assessable.

With respect to Section 5(c)(xi) above, Sullivan and Cromwell and
Davis Polk & Wardwell may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.

The opinion of Sullivan & Cromwell described in Section (c) above
shall be rendered to the Underwriters at the request of the Company
and shall so state therein. The matters covered in Section 5(c)(iv)
and (v) shall give effect to the Reorganization as of the Closing
Date.

(e) The Underwriters shall have received, on each of the
date hereof and the Closing Date, a letter dated the date hereof or
the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Price Waterhouse, independent
public accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements of the Company, ZDI and ZDCF,
and certain financial information contained in the Registration
Statement and the Prospectus (including pro forma and other unaudited
combined financial data); provided that the letters delivered on the
Closing Date shall use a "cut-off date" not earlier than the date
hereof.

(f) You shall have received evidence satisfactory to you
that the contribution to the Company of the stock of ZDI, ZDCF and ZD
Holdings (U.K.) Ltd. by SOFTBANK Holdings Inc. shall have occurred,
and that the other transactions comprising the Reorganization shall
have occurred

14
<PAGE>

or will occur as of the Closing Date, including the concurrent
closings of the issuance and sale of the Notes contemplated by the
Debt Underwriting Agreement and the borrowings under the Credit
Agreement.

(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and each of (i) the executive
officers and directors of the Company and (ii) SOFTBANK Corp.,
relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.

(h) The Shares shall have been approved for listing on the
New York Stock Exchange, subject to notice of issuance.

The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.

6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:

(a) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to
you in New York City, without charge, prior to 10:00 a.m. New York
City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(c) below, as
many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably
request.

(b) Before filing any amendment or supplement to the
Registration Statement or the Prospectus, to furnish to you a copy of
each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which you reasonably object, and
to file with the Commission within the applicable period specified in
Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.

15
<PAGE>

(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the reasonable opinion of
counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare,
file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.

(d) To endeavor, in cooperation with the Representatives, to
qualify the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you shall reasonably request; provided
that the Company shall not be required to qualify to do business in
any jurisdiction where it is not now qualified or to take any action
which would subject it to general or unlimited service of process in
any jurisdiction where it is not now so subject or to subject itself
to taxation in respect of doing business in any jurisdiction in which
it is not otherwise subject.

(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending June 30, 1999 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.

(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all

16
<PAGE>

printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection
with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for
offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the
National Association of Securities Dealers, Inc., (v) all fees and
expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and
all costs and expenses incident to listing the Shares on the New York
Stock Exchange, (vi) the cost of printing certificates representing
the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (ix) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 7 entitled
"Indemnity and Contribution", and the last paragraph of Section 9
below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make. In
addition, the Underwriters agree to pay to the Company the sum of $[
] in reimbursement of a portion of the Company's expenses for the
Offering.

(g) That in connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent required by the National Association of Securities Dealers,
Inc. (the

17
<PAGE>

"NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Morgan Stanley will
notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.

(h) To pay all reasonable fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed
Share Program.

Furthermore, the Company covenants with Morgan Stanley that the
Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.

7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.

(b) The Company agrees to indemnify and hold harmless Morgan
Stanley and each person, if any, who controls Morgan Stanley within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act ("Morgan Stanley Entities"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement
or alleged untrue statement of a

18
<PAGE>

material fact contained in the prospectus wrapper material prepared by or
with the consent of the Company for distribution in foreign jurisdictions
in connection with the Directed Share Program attached to the Prospectus or
any preliminary prospectus, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statement therein, when considered in conjunction with the
Prospectus or any applicable preliminary prospectus, not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of
the shares which, immediately following the effectiveness of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, provided that, the Company shall not be responsible
under this subparagraph (iii) for any losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of
Morgan Stanley Entities.

(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Company's directors, the
Company's officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity from the Company to such Underwriter pursuant to Section 7(a)
hereof, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.

(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a), 7(b) or 7(c), such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom
such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed in writing to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party

19
<PAGE>

shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 7(b) hereof in respect of such
action or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate firm (in
addition to any local counsel) for Morgan Stanley for the defense of any
losses, claims, damages and liabilities arising out of the Directed Share
Program, and all persons, if any, who control Morgan Stanley within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act.
Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a)
or 7(b), and by the Company, in the case of parties indemnified pursuant to
Section 7(c). The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.

(e) To the extent the indemnification provided for in Section
7(a), 7(b) or 7(c) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties

20
<PAGE>

on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause 7(e)(i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 7(e)(i) above but also the relative fault of the
indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of
the Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.

(f) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in Section
7(e). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

21
<PAGE>

(g) The indemnity and contribution provisions contained in this
Section and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.

8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any
of the New York Stock Exchange, the American Stock Exchange or the National
Association of Securities Dealers, Inc., (ii) trading of any securities of
the Company shall have been suspended on any exchange or in any over-the-
counter market, (iii) a general moratorium on commercial banking activities
in New York shall have been declared by either Federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of Morgan Stanley, is material and adverse and (b) in
the case of any of the events specified in clauses 8(a)(i) through
8(a)(iv), such event, singly or together with any other such event, makes
it, in the judgment of Morgan Stanley, impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus.

9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties
hereto.

If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on
such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate number of the Shares to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I or Schedule II bears to the aggregate number
of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such number of Shares without the written consent of
such Underwriter. If, on the

22
<PAGE>

Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect
to which such default occurs is more than one-tenth of the aggregate number
of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 48
hours after such default, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter or the Company. In any such
case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If,
on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Additional Shares to be purchased, the non-
defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Additional Shares or (ii) purchase not
less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.

If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all reasonable and documented out-of-
pocket expenses (including the fees and disbursements of their counsel)
incurred by such Underwriters in connection with this Agreement or the
offering contemplated hereunder.

10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.

11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.

23
<PAGE>

12. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.

Very truly yours,

ZD INC.

By:
-----------------------------------
Name:
Title:

Accepted as of the date hereof

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman Sachs and Co.
Donaldson Lufkin & Jenrette Securities
Corporation

Acting severally on behalf of themselves
and the several U.S. Underwriters named
in Schedule I hereto.

By: Morgan Stanley & Co. Incorporated

By:
--------------------------------------------
Name:
Title:
<PAGE>

Morgan Stanley & Co. International Limited
Merrill Lynch International
Goldman Sachs International
Donaldson, Lufkin & Jenrette International

Acting severally on behalf of themselves and the several International
Underwriters named in Schedule II hereto.

By: Morgan Stanley & Co. International Limited

By:
--------------------------------------------
Name:
Title:
<PAGE>

SCHEDULE I

NUMBER OF FIRM
SHARES
U.S. UNDERWRITER TO BE PURCHASED
---------------- ---------------
Morgan Stanley & Co. Incorporated........

Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................

Goldman Sachs and Co.....................

Donaldson Lufkin & Jenrette Securities
Corporation.............................

Total U.S. Firm Shares:................
---------------

===============

1
<PAGE>

SCHEDULE II

NUMBER OF FIRM
SHARES
INTERNATIONAL UNDERWRITER TO BE PURCHASED
------------------------- ---------------

Morgan Stanley & Co. International Limited......

Merrill Lynch International.....................

Goldman Sachs International.....................

Donaldson, Lufkin & Jenrette International......

---------------
Total International Firm Shares:..............
===============

2
<PAGE>

EXHIBIT A-1

[FORM OF LOCK-UP LETTER--
EXECUTIVE OFFICERS AND DIRECTORS]

____________, 1998

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman Sachs & Co.
Donaldson Lufkin & Jenrette Securities
Corporation
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with ZD Inc., a Delaware corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by
the several Underwriters, including Morgan Stanley (the "UNDERWRITERS"), of
25,800,000 shares (the "SHARES") of the Common Stock, $.01 par value, of
the Company (the "COMMON STOCK").

To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period
commencing on the date hereof
<PAGE>

and ending 180 days after the date of the final prospectus relating to the
Public Offering (the "PROSPECTUS"), (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, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (a) transactions relating to
shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering or (b) any
issuance of shares of Common Stock by the Company that is permitted under
Section 2 of the Underwriting Agreement. In addition, the undersigned
agrees that, without the prior written consent of Morgan Stanley on behalf
of the Underwriters, it will not, during the period commencing on the date
hereof and ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.

Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.

Very truly yours,

--------------------------------
(Name)

--------------------------------
(Address)

2
<PAGE>

EXHIBIT A-2

[FORM OF LOCK-UP LETTER--SOFTBANK CORP.]

____________, 1998

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman Sachs & Co.
Donaldson Lufkin & Jenrette Securities
Corporation
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, either directly or
indirectly through its affiliates or otherwise, during the period
commencing on the date hereof and ending 180 days
<PAGE>

after the date of the final prospectus relating to the Public Offering (the
"PROSPECTUS"), (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, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock, or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided, that with respect to sales by
SOFTBANK Kingston Inc. of shares of Common Stock issued to Kingston
Technology Company in exchange for certain assets transferred to the
Company (the "KINGSTON SHARES"), no consent shall be required for sales of
Kingston Shares in an aggregate amount equal to or less than $2,000,000.
The foregoing sentence shall not apply to transactions relating to shares
of Common Stock or other securities acquired in open market transactions
after the completion of the Public Offering In addition, the undersigned
agrees that, without the prior written consent of Morgan Stanley on behalf
of the Underwriters, it will not, either directly or indirectly through
affiliates or otherwise, during the period commencing on the date hereof
and ending 180 days after the date of the Prospectus, make any demand for
or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock (other than with respect to sales of the
Kingston Shares permitted hereunder).

Very truly yours,

By: SOFTBANK Corp.

-----------------------------------
Name: Yoshitaka Kitao
Title: Executive Vice President
and Chief Financial Officer

<PAGE>

EXHIBIT 4.1

The face of the specimen certificate representing the Company's Common Stock,
par value $0.01 per share, has the Ziff-Davis logo on the front center of the
certificate with "Ziff-Davis Inc." written underneath it. In the bottom center
of the certificate is the corporate seal of the company. The specimen
certificate conforms to the New York Stock Exchange, Inc. requirements for
certificate forms, printing and engraving.

At the top of the certificate, outside of the certificate's border, the
following legend appears:

TEMPORARY CERTIFICATE - EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY.

The text of the face of the certificate, appearing within the border, is as
follows:

ZIFF-DAVIS INC.

Incorporated under the laws of the State of Delaware
See reverse for certain definitions
This certificate is transferable in New York, New York
CUSIP

THIS CERTIFIES that _________ is the owner of ___________ FULLY PAID AND
NONASSESSABLE SHARES OF THE COMMON STOCK, OF ZIFF-DAVIS INC. transferable on the
books of the Corporation by the holder hereof in person or by duly authorized
attorney, on surrender of this certificate properly endorsed.

This certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

Dated:

/s/ J. Malcolm Morris /s/ Eric Hippeau
Secretary Chairman and
Chief Executive Officer

On the right hand side of the certificate, appearing sideways within the
certificate's border, is the following text:
Countersigned and registered:
<PAGE>

THE BANK OF NEW YORK
Transfer Agent and Registrar
By:
Authorized Signature

The back of the certificate does not have a border and contains the following
text:

ZIFF-DAVIS INC.

The Corporation will furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.

The following abbreviations, when used in the inscription on the face of
the certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common.
UNIF GIFT MIN ACT - ____________Custodian____________
(Cust) (Minor)
under Uniform Gifts to Minors
Act ____________
(State)

Additional abbreviations may also be used though not in the above
list.

For value received, _____________ hereby sell assign and transfer unto
(please insert social security or other identifying number of assignee)
________________ (please print or typewrite name and address, including zip
code, of assignee) shares of the capital stock represented by the Certificate,
and do hereby irrevocably constitute and appoint _______________ Attorney to
transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.

Dated ____________________

__________________________________________
NOTICE: The signature to this Assignment must correspond
with the name as written upon the face of the
<PAGE>

certificate in every particular, without
alteration or enlargement, or any change
whatever.

Signature(s) Guaranteed:

_____________________________
The signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings
and loans associations and credit unions with membership
in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.

<PAGE>

EXHIBIT 5

April 24, 1998

ZD Inc.,
One Park Avenue,
New York, New York, 10016.

Dear Sirs:

In connection with the registration under the Securities Act of 1933 (the
"Act") of 29,770,000 shares (the "Securities") of Common Stock, par value $0.01
per share, of ZD Inc., a Delaware corporation (the "Company"), we, as your
counsel, have examined such corporate records, certificates and other documents,
and such questions of law, as we have considered necessary or appropriate for
the purposes of this opinion.

Upon the basis of such examination, we advise you that, in our opinion,
when the registration statement relating to the Securities (the "Registration
Statement") has become effective under the Act, a certificate of amendment to
the Company's certificate of incorporation substantially in the form filed as an
exhibit to the Registration Statement has been duly filed with the
<PAGE>

ZD Inc. -2-

Secretary of State of the State of Delaware, the terms of the sale of the
Securities have been duly established in conformity with the Company's
certificate of incorporation, and the Securities have been duly issued and sold
as contemplated by the Registration Statement, the Securities will be validly
issued, fully paid and nonassessable.

The foregoing opinion is limited to the Federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware and we are expressing no opinion as to the effect of the laws of any
other jurisdiction.

We have relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by us to be
responsible.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act.

Very truly yours,

SULLIVAN & CROMWELL

<PAGE>

EXHIBIT 10.2

ZIFF-DAVIS
1998 EMPLOYEE STOCK PURCHASE PLAN

1. Purpose.
-------

The purpose of the Ziff-Davis 1998 Employee Stock Purchase Plan (the
"Plan") is to provide employees of ZD Inc. (the "Company") and its Subsidiaries
with an opportunity to acquire an interest in the Company through the purchase
of common stock of the Company, par value $0.01 per share (the "Common Stock")
with accumulated payroll deductions. The Company intends the Plan to qualify as
an "employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the provisions of
the Plan shall be construed in a manner consistent with the requirements of
Section 423 of the Code. For purposes of the Plan, "Subsidiary" shall mean any
corporation, if any, having the relationship to the Company described in Section
424(f) of the Code.

2. Administration.
--------------

The Plan shall be administered by a committee (the "Committee") of at
least three members of the board of directors of the Company (the "Board")
appointed by the Board to administer the Plan and who are "non-employee
directors" within the meaning of Rule 16b-3 as promulgated under Section 16 of
the Securities Exchange Act of 1934. A majority of the Committee shall
constitute a quorum, and the acts of the majority of such quorum shall be the
acts of the Committee. The Committee may select an administrator to whom its
duties and responsibilities hereunder may be delegated. The Committee shall
have full power and authority, subject to the provisions of the Plan, to
promulgate such rules and regulations as it deems necessary for the proper
administration of the Plan, to interpret the provisions and supervise the
administration of the Plan, and to take all action in connection therewith or in
relation thereto as it deems necessary or advisable. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan in
the manner and to the extent it shall deem desirable to carry it into effect.
The determinations of the Committee in the administration of the Plan, as
described herein, shall be final, conclusive and binding on all persons,
including the Company and its Subsidiaries, its shareholders, Participants and
their estates and beneficiaries. Members of the Committee and any officer or
employee of the Company or any Subsidiary acting at the direction of, or on
behalf of, the Committee shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified by the Company with respect
to any such action or determination.
<PAGE>

3. Eligibility and Participation.
-----------------------------

(a) Any person, including an officer, who is regularly employed by
the Company or one of its Subsidiaries (an "Employee") who is an Eligible
Employee on an Offering Date (as defined in Section 5(a)) shall be eligible to
become a Participant in the Plan beginning on such Offering Date. For purposes
of the Plan, an "Eligible Employee" is any Employee of the Company or a
Subsidiary excluding:

(1) any Employee who customarily is employed for 20 hours per
week or less;

(2) any Employee who customarily is employed for not more than
five (5) months in a calendar year; or

(3) any Employee who (immediately after the grant of an option
under the Plan and applying the rules of Section 424(d) of the Code in
determining stock ownership) would own shares, and/or hold outstanding
options to purchase shares, possessing five percent (5%) or more of
the total combined voting power or value of all classes of shares of
the Company (or its "parent corporation" or "subsidiary corporation"
as such terms are defined in Section 424 of the Code).

(b) Any Employee who first becomes an Eligible Employee during an
Offering Period (as defined in Section 5(a)) shall be eligible to become a
Participant in the Plan as of the first day of the Offering Period occurring
after the date on which such Employee becomes an Eligible Employee.

(c) An Eligible Employee shall become a Participant in the Plan by
completing a form (an "Authorization Form") supplied by and delivered to the
Company by a Participant authorizing payroll deductions as set forth in Section
6 hereof and such other terms and conditions as the Company from time to time
may determine, and filing such Authorization Form with the Company by the date
required by the Company, or by any other means prescribed by the Committee.
Such Authorization Form shall remain in effect for subsequent Offering Periods,
until modified or terminated by the Participant.

(d) A person shall cease to be a Participant upon the earliest to
occur of:

-2-
<PAGE>

(1) the date the Participant ceases to be an Eligible Employee,
for any reason;

(2) the first day of the Offering Period beginning after the date
on which the Participant ceases payroll deductions under the Plan; or

(3) the date of a withdrawal from the Plan by the Participant.

4. Shares Subject to Plan.
----------------------

(a) The maximum number of shares of Common Stock reserved for sale
under the Plan shall be 1,500,000, subject to adjustment as provided in Section
13. If the total number of shares which would otherwise be subject to options
granted pursuant to Section 5(a) on an Offering Date exceeds the number of
shares then available under the Plan (after deduction of all shares for which
options have been exercised or are then outstanding), the Committee shall make a
pro rata allocation of the shares remaining available for option grant in as
uniform a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable. In such event, the Committee shall give written
notice to each Participant of such reduction of the number of option shares
affected thereby and shall similarly reduce the rate of payroll deductions, if
necessary. The Plan shall terminate upon the issuance of the maximum number of
shares of Common Stock (unless sooner terminated under Section 14).

(b) Shares of Common Stock to be delivered to a Participant under the
Plan shall be registered in the name of the Participant or, at the election of
the Participant, in the name of the Participant and another person as joint
tenants with rights of survivorship.

5. Grant of Option.
---------------

(a) On each Offering Date the Company shall grant each Eligible
Employee an option to purchase shares of Common Stock, and each Eligible
Employee shall have the same rights and privileges under the Plan, subject only
to the limitations set forth in Sections 4, 5(b), and 5(c). For purposes of the
Plan, "Offering Date" means the first business day of any period of time (the
"Offering Period") as determined from time to time by the Committee during the
effectiveness of the Plan during which options to purchase shares of Common
Stock are granted to Participants.

(b) The option price per share of Common Stock in respect of any
Offering Period shall be an amount equal to the lesser of: (i) eighty-five
percent (85%) of the Fair Market Value of a share of Common Stock on the
Offering Date or (ii) eighty-five percent (85%) of the Fair Market Value of a
share of Common Stock on the last

-3-
<PAGE>

business day of such Offering Period (the "Exercise Date"). For purposes of the
Plan, "Fair Market Value" shall mean, per share of Common Stock, the closing
price of the Common Stock on the New York Stock Exchange (the "NYSE") on the
applicable date, or, if there are no sales of Common Stock on the NYSE on such
date, then the closing price of the Common Stock on the last previous day on
which a sale on the NYSE is reported.

(c) No Participant shall be granted an option which permits such
Participant's rights to purchase Common Stock under all employee stock purchase
plans of the Company to accrue at a rate which exceeds $25,000 of the Fair
Market Value of the Common Stock (determined at the time the option is granted)
for each calendar year in which such stock option is outstanding at any time.

6. Payroll Deductions.
------------------

A Participant may, in accordance with rules adopted by the Committee,
submit an Authorization Form that authorizes a payroll deduction of any whole
percentage (from one (1) percent to ten (10) percent) of such Participant's
Compensation (as defined below) on each pay period during the Offering Period.
A Participant may increase, decrease or cease such payroll deduction effective
as of the beginning of each calendar quarter, provided such Participant files
with the Company an Authorization Form requesting such change by the date
required by the Company. For purposes of the Plan, "Compensation" means base
salary or wage, including salary deferral contributions pursuant to Section
401(k) of the Code and any amount excludable pursuant to Section 125 of the
Code, but excluding any bonus, fee, overtime pay, severance pay, incentive
commission or other special emolument or any credit or benefit under any
employee plan maintained by the Company or any Subsidiary. All payroll
deductions made by a Participant shall be credited to such Participant's account
under the Plan. A Participant may not make any additional payments into such
account.

7. Exercise of Option.
------------------

(a) Unless a Participant withdraws from the Plan as provided in
Section 9 hereof, such Participant's election to purchase shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to such option shall be purchased for such Participant at the
applicable option price with the accumulated payroll deductions and cash
dividends (credited pursuant to Section 10 hereof) in such Participant's
account. During a Participant's lifetime, such Participant's option to purchase
shares hereunder is exercisable only by such Participant.

(b) The shares of Common Stock purchased upon exercise of an option
hereunder shall be credited to the Participant's account under the Plan and
shall be

-4-
<PAGE>

deemed to be transferred to the Participant on the Exercise Date and, except as
otherwise provided herein, the Participant shall have all rights of a
stockholder with respect to such shares. Notwithstanding the foregoing, in
accordance with the rules and procedures prescribed by the Committee, in lieu of
crediting shares of Common Stock to the Participant's account, such shares may
be issued or transferred to the Participant.

(c) Shares of Common Stock held in nominee name for the account of a
Participant shall be voted as the Participant directs.

8. Delivery of Common Stock.
------------------------

As promptly as practicable after receipt by the Committee of a written
request by a Participant for withdrawal of Common Stock, the Company shall cause
to be delivered to such Participant a stock certificate representing the shares
of Common Stock which the Participant requests to withdraw. Withdrawals may be
made no more frequently than once each Offering Period unless otherwise approved
by the Committee in its sole discretion.

9. Withdrawal; Termination of Employment.
-------------------------------------

(a) A Participant may withdraw all, but not less than all, the
payroll deductions and cash dividends credited to such Participant's account
(that have not been used to purchase shares of Common Stock) under the Plan at
any time by giving written notice to the Company received at least [15] days
prior to the next Exercise Date. All such payroll deductions and cash dividends
credited to such Participant's account shall be paid to such Participant
promptly after receipt of such Participant's notice of withdrawal and such
Participant's option for the Offering Period in which the withdrawal occurs
shall be automatically terminated. No further payroll deductions for the
purchase of shares of Common Stock shall be made for such Participant during
such Offering Period, and any additional cash dividends during the Offering
Period shall be distributed to the Participant.

(b) Upon termination of a Participant's status as an Eligible
Employee during the Offering Period for any reason, including voluntary or
involuntary termination, retirement or death, the payroll deductions and cash
dividends credited to such Participant's account that have not been used to
purchase shares of Common Stock shall be returned (and any future cash dividends
shall be distributed) to such Participant or, in the case of such Participant's
death, his designated beneficiary, or if no beneficiary has been designated, his
estate, and such Participant's option with respect to such Offering Period shall
be automatically terminated. A Participant's status as an Employee shall not be
considered terminated in the case of a leave of absence agreed to in writing by
the Company (including, but not limited to, military and sick leave), provided
--------
that such leave

-5-
<PAGE>

is for a period of not more than ninety (90) days or reemployment upon
expiration of such leave is guaranteed by contract or statute.

(c) A Participant's withdrawal from an offering shall not have any
effect upon such Participant's eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the Company.

10. Dividends.
---------

(a) Cash dividends paid on Common Stock held in a Participant's
account shall be credited to such Participant's account and used in addition to
payroll deductions to purchase shares of Common Stock on the Exercise Date.
Dividends paid in Common Stock or stock splits of the Common Stock shall be
credited to the accounts of Participants. Dividends paid in property other than
cash or Common Stock shall be distributed to Participants as soon as
practicable.

(b) No interest shall accrue on or be payable with respect to the
payroll deductions or credited cash dividends of a Participant in the Plan.

11. Nontransferability.
------------------

Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of by the
Participant in any way (other than by will and the laws of descent and
distribution) by the Participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 9
hereof.

12. Use of Funds.
------------

All payroll deductions received or held by the Company under the Plan
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such payroll deductions.

13. Adjustment of and Change in Stock.
---------------------------------

(a) In the event of any change in the outstanding shares of Common
Stock by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
change, or any distributions to common shareholders other than cash dividends,
the Committee shall in its sole discretion conclusively determine the
appropriate equitable adjustments, if any, to be

-6-
<PAGE>

made under the Plan, including without limitation adjustments to the number of
shares of Common Stock which have been authorized for issuance under the Plan
but have not yet been placed under option, as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised.

(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
Company is not the surviving corporation, or upon a sale of substantially all of
the Company's assets, or a sale or distribution of a Subsidiary, any affected
Participant will thereafter be entitled to receive on the next Exercise Date for
each share of Common Stock subject to such Participant's option, the cash,
securities and/or property which a holder of one share of Common Stock was
entitled to receive upon and at the time of such transaction. The Board and the
Committee shall take such steps in connection with such transaction as the Board
and the Committee respectively shall deem necessary to assure that the
provisions of this Section 13(b) shall be complied with.

14. Amendment or Termination.
------------------------

The Board may at any time terminate or amend the Plan. Except as
provided in Section 4, no such termination shall adversely affect options
previously granted and no amendment may make any change in any option
theretofore granted which adversely affects the rights of any Participant. No
amendment shall be effective unless approved by the stockholders of the Company
if stockholder approval of such amendment is required to comply with any law,
regulation or stock exchange rule.

15. Notices.
-------

All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.

16. Governing Law; Regulatory Approvals.
-----------------------------------

(a) This Plan and the rights of all persons claiming hereunder shall
be construed and determined in accordance with the laws of the State of New York
applicable to contracts made and to be performed in such State.

(b) The obligation of the Company to sell or deliver shares of Common
Stock with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable Federal and
state securities laws, and

-7-
<PAGE>

the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

17. Notice of Sale.
--------------

If the Participant makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any share or
shares issued to such Participant pursuant to such Participant's exercise of an
option granted hereunder, and such disposition occurs within the two-year period
commencing on the day after the Offering Date or within the one-year period
commencing on the day after the Exercise Date, such Participant shall, within
five (5) days of such disposition, notify the Company thereof (including the
proceeds of such disposition).

18. Reports.
-------

Each Participant having an account balance in the Plan shall receive a
quarterly statement of such Participant's account.

19. Effective Date; Approval of Stockholders.
----------------------------------------

The Plan shall be effective as of July 1, 1998, subject to the
approval of the stockholders of the Company within 12 months before or after the
date the Plan is adopted, and failure to receive such approval shall render the
Plan and all outstanding options issued thereunder void and of no effect.

-8-

<PAGE>

Groupjmm\mlagmt.doc

EXHIBIT 10.5

MASTER LICENSE AGREEMENT
As of April 1, 1998

The parties to this agreement are ZIFF-DAVIS Inc., a Delaware corporation,
with its principal office at One Park Avenue, New York, New York 10016
("Licensor"), and SOFTBANK CORP., a corporation organized and existing under the
laws of Japan, with its principal office at 24-1, Nihonbashi-Hakozakicho, Chuo-
ku, Tokyo 103, Japan ("Licensee").
Licensor is a leading publisher in the United States of computer
publications and the owner of trademark registrations and logos for those
publications.
Licensee is a leading publisher in Japan of computer publications.
Licensor and Licensee have entered into a series of prior license
agreements and syndication agreements for the publication by Licensee of
Japanese editions of Licensor's publications and the use by Licensee of
materials from other Licensor publications.
Licensee and Licensor desire to continue their relationship under a master
license agreement which would continue to provide for Licensee to publish
foreign editions of Licensor's publications and to use editorial material from
other Licensor publications in its own publications.
Accordingly, it is agreed:

1. Grant of License.
----------------
(a) Foreign Edition Rights.
----------------------

(i)Subject to the terms and conditions set forth in this
agreement, Licensor hereby grants to Licensee, and Licensee hereby
accepts, the exclusive license during the terms provided in Section 2
below to publish and distribute throughout Japan (the "Territory") a
Japanese-language edition (each a "Foreign Edition" and collectively
the "Foreign Editions") of each of the Licensor's publications listed
on Exhibit A, as from time to time amended (each a "Publication and
collectively, the Publications"), in print and on CD-ROM, DVD and on
ZDNet (as long as Licensee holds a license to publish ZDNet in the
Territory) but not in any other platform without Licensor's consent
which shall not be unreasonably withheld. Licensee shall not, without
the prior written consent of Licensor, directly or indirectly export
or allow the export of any Foreign Edition outside of the

1
<PAGE>

Territory. Licensee shall use its best efforts in all respects in the
promotion, publication, distribution and sale of each Foreign Edition.

(ii)Subject to the terms and conditions set forth in this
agreement, Licensor also hereby grants to Licensee the right during
the term of each license to translate into and use in the Japanese
language, solely in connection with publication of a Foreign Edition,
Available Material (as defined in Section 6 below) from the
corresponding Publication and the right during the term of such
license to use, solely in connection with the publication, advertising
and promotion of such Foreign Edition in the Territory, the trademarks
in English, and the logos, as more fully described and illustrated in
Exhibit B, and as it may be amended from time to time by Licensor
upon notice to Licensee (collectively, the "Trademarks").

(b) Syndication Rights. Subject to the terms and conditions set forth
------------------
in this agreement, Licensor hereby grants to Licensee, and Licensee hereby
accepts, the exclusive right during the term of this agreement to select and
translate into the Japanese language Available Material as defined in Section 6,
from the Licensor's publications listed on Exhibit C (the "Additional
Publications") for publication and distribution in the Territory in print form
in a magazine format and to publish and distribute such translated material in
the Territory in print form in a magazine format, but only as part of the
designated Licensee publication also listed on Exhibit C (the "SB Publications")
and one time only; provided, however, that with respect to Available Material
for which Licensor's rights are non-exclusive, Licensee's rights hereunder shall
be non-exclusive.

(c) Rights to Other Publications. Licensor agrees to furnish Licensee
----------------------------
with copies of all its wholly owned publications worldwide and, upon written
request from Licensee, to include any such publication in Exhibit A or Exhibit C
to this agreement, thereby granting to Licensee the same rights as provided
above; provided, however, Licensor and Licensee agree on the amount of the fee
to be paid for Available Materials from publications added to Exhibit C and the
Licensee's publications in which such materials may be used. In addition,
Licensor agrees that Licensee shall have a right of first refusal on all
licenses with respect to publication in the Territory of any of Licensor's
existing or future publications, and that neither Licensor nor any of its
affiliates will initiate discussions with any third party in Japan with respect
to possible licensing of any of Licensor's publications to such party without
giving prior notice to Licensee. If Licensee shall terminate publication of any
Foreign Edition or the use of Available Material from
2
<PAGE>

any Additional Publication, a license for any Foreign Edition shall be
terminated for any other reason, or Licensee shall decline a right of first
refusal within sixty (60) days after Licensor's notice of such right, then
Licensor shall be free to license the right to publish that Foreign Edition or
to use that Available Material to any other entity in the Territory; but not on
terms more favorable than those offered to Licensee in the right of first
refusal.

2. Terms. Unless terminated earlier pursuant to this agreement including
-----
pursuant to Section 3(a), the term of each license for a Foreign Edition listed
on Exhibit A shall be for an initial period commencing on April 1, 1998 (and
with the date of first publication for any Foreign Edition hereafter added) and
ending March 31, 2008, provided, however, if Licensee shall cease directly or
indirectly to own at least 30% of the Common Stock of Licensor, Licensor may
terminate this agreement on not less than one year's notice. Each license for
Available Material shall be for an initial period of three years commencing on
April 1, 1998 and ending March 31, 2001. After the expiration of the initial
term in each case above, the term shall be automatically extended for additional
one-year periods unless either party shall give notice to the other at least one
hundred eighty (180) days prior to the expiration of the initial or any renewal
period of its intention to terminate the license on that expiration date. As
used in this agreement, the term "License Year" shall mean a 12-month period
commencing on the first day of April of each year, except that if the
termination of any license is effective other than on the anniversary of any
such license commencement date, the final License Year shall end on the
effective date of termination. Each License Year shall be referred to by the
calendar year of each such April 1.

3. Compensation.
------------
(a) Foreign Edition. In consideration of the rights granted by Licensor
---------------
under Section 1(a) of this agreement, Licensee shall pay royalties to Licensor
equal to a specified percentage of Licensee's Net Revenue (as defined in Section
3(b) below) from each Foreign Edition during each Reporting Period (as defined
below). Royalties shall be computed and expressed in Japanese Yen. That
percentage shall be the amount set forth on Exhibit A. For any new Foreign
Editions added after this date, that royalty percentage shall be 5%, provided
that the royalty paid for any such Foreign Edition for any License Year shall
not exceed 30% of Operating Income (as defined below) of that Foreign Edition.
To the extent that the royalties based on Net Revenue shall be reduced by the
limitation of 30% of Operating Income, that reduction shall be carried forward
and paid in any future License Year in which 30% of Operating Income exceeds 5%
of Net Revenue for any Foreign Edition, but only to the extent of the excess of
the 30% of Operating Income over the 5% of Net Revenue for that License Year and
any unpaid balance shall be further carried forward to future License Years. In
addition, if the royalties for any Foreign Edition shall be less than $75,000
for two consecutive License Years, Licensor and Licensee shall confer concerning
the Foreign Publication and how to increase the royalties. If such conferring
shall not result in a plan reasonably satisfactory to Licensor, it may terminate
the license for that Foreign Edition upon 180 days notice. In such event
Licensee may cure such notice within thirty days of such notice by bringing the
amount of royalties paid up to $75,000 for the most recent License Year. In
addition if Licensee shall be unable to reasonably use sufficient Available
Material to constitute 30% of the editorial content of the Foreign Edition,
Licensee may request that Licensor and Licensee meet to consider a reduction in
the royalty appropriate to the use of the Available Material.

3
<PAGE>

(b) Net Revenue. As used in this agreement, the term "Net Revenue"
-----------
from a Foreign Edition shall mean the total amount (exclusive of value-added tax
or other sales, use or similar tax, but not income tax) of (i) Licensee's gross
advertising billings for such Foreign Edition, less related advertising agency
commissions, actual write-offs for bad debts, credits, discounts and other
similar standard allowances directly related to such billings; plus (ii) all
----
revenues derived from subscriptions to such Foreign Edition, less actual write-
offs for bad debts and credits; plus (iii) all revenues derived from the sale of
----
copies of such Foreign Edition other than by subscription, less returns; plus
----
(iv) all revenues derived from sponsorship of trade shows and conferences, and
list rentals of paid subscribers to such Foreign Edition and reprint sales; plus
----
(v) all revenues derived from any other activities contemplated by this
agreement, including, without limitation, distribution of such Foreign Edition
in any medium or form other than print form. All amounts included in Net
Revenue, as that term is defined in this Section 3(b), and the Reporting Period
in which such amounts shall be included, shall be determined in accordance with
generally accepted accounting principles for the magazine publishing industry in
the United States.

(c) Operating Income. As used in this agreement, the term "Operating
----------------
Income" shall mean the total amount of net income or net loss of the Foreign
Edition before any applicable income taxes (whether national, local or
otherwise), and before the determination of the royalty hereunder, determined on
the basis of financial statements prepared by Licensee in accordance with
generally accepted accounting principles in Japan, but with the following
adjustments: (i) the Foreign Edition shall be accounted for as a separate
business; (ii) gains and losses not considered recurring in the ordinary course
of business shall be excluded; (iii) the provisions of Section 9(b) shall be
applied; (iv) employee claims and similar extraordinary liabilities not directly
related to the Foreign Edition shall be excluded; (v) any payment under
Licensee's indemnity obligation shall be excluded; and (vi) general and
administrative expenses charged by Licensee to the Foreign Edition shall be
reasonable and shall not exceed allocations to Licensee's own publications of
comparable size.

4
<PAGE>

Shall be reasonable and shall not exceed allocations to Licensee's own
publications of comparable size.

(d) Syndication Rights. In consideration of the syndication rights
------------------
granted by Licensor under Section 1(b) of this agreement, Licensee shall pay to
Licensor the amount per year set forth on Exhibit C for Available Material from
each Additional Publication.

(e) PC Magazine. Licensee shall use reasonable efforts in cooperation
-----------
with Licensor to launch a Foreign Edition of PC Magazine as soon as practicable.
In addition to the assistance described in Section 6(g) below, Licensor shall
provide special assistance to Licensee in such undertaking including providing
special consultation and advice in the creation of laboratories, product reviews
and benchmarks and shall also make agreed upon contributions from time to time
for marketing support and special expenses which are useful to promote the
Foreign Edition. The annual royalties for such Foreign Edition shall be equal to
30% of the Operating Income of that Foreign Edition for each License Year.

4. Payments; Statements; Records.
-----------------------------
(a) Foreign Editions.
----------------

(i) With respect to each Foreign Edition licensed hereunder,
royalties for every six (6) month period during each License Year
(each such period shall herein be referred to as a "Reporting Period")
shall be paid by Licensee to Licensor within sixty (60) days after the
end of that Reporting Period. Royalties shall be paid, at Licensor's
option, in Japanese Yen or the equivalent in United States Dollars
converted at the TTS exchange rate in effect on the day of payment as
quoted by Licensee's transferring bank.

(ii) With each Reporting Period payment, Licensee shall deliver
to Licensor a statement certified by an authorized officer of its
publishing division in substantially the form of Exhibit D attached
hereto.

(iii) Within ninety (90) days after the end of each License
Year, Licensee shall provide Licensor with a statement certified by an
authorized officer setting forth the financial information required to
be contained in the statements for the Reporting Periods relating to
that License Year.

(b) Syndication Rights. Each annual payment for Available Material
------------------
from Additional Publications shall be payable in two installments in advance on
April 1 and October 1 of each License Year.

(c) If Licensee fails to pay any amount due under this agreement by
its due date and such failure continues for ten (10) business days, then
interest shall accrue on all unpaid amounts at the published prime rate of the
Bank of New York per annum, or, if lower, the highest rate then permitted by New
York law from the date on which payment was due through the date on which
Licensor receives payment. Licensee agrees to pay such interest and all
collection costs.

(d) The provisions of this Section 4 shall survive the expiration or
termination of any license under this agreement.

5
<PAGE>

5. Manner of Payment.
-----------------

(a) Each payment required to be made by Licensee pursuant to this
agreement shall be made by wire transfer to Licensor's account at a bank
designated by Licensor.

(b) Licensee shall be responsible for all bank transfer fees.

6. Available Material.
------------------
Foreign Editions.
----------------

(a) During the term of each license under this agreement, Licensor
shall at Licensor's expense, send via air mail or air courier, at Licensor's
option, to Licensee five (5) copies of each issue of each Publication or
Additional Publication immediately upon publication. For purposes of this
agreement, subject to any use restrictions identified by Licensor, all editorial
items (which term includes, without limitation, graphics and artwork) from each
Publication or Additional Publication in which Licensor owns the right to
license publication by Licensee in any Foreign Edition or SB Publication shall
be referred to as "Available Material", including editorial items available on
any CD version of the Publication or Additional Publication. Available Material
shall also include Benchmarks developed by any Publication or Additional
Publication and upon request, Licensor will provide Licensee with any software
required to conduct benchmark tests.

(b) Upon Licensee's request, Licensor shall make available to Licensee
electronic files, in a format and via a medium to be determined by Licensor, of
text, graphics and artwork that have been identified by Licensor as Available
Material. In the event that Licensee wishes to use at reasonable cost any
editorial item from any Publication or Additional Publication that is not
Available Material, Licensor shall use reasonable efforts to obtain permission,
on Licensee's behalf, for Licensee to use that item and Licensee shall promptly
reimburse Licensor for any fees, costs or expenses paid by Licensor to obtain
such permission, provided that Licensor shall have obtained Licensee's approval
of the amount of any such fees, costs or expenses prior to having incurred them.
Licensee shall also be responsible for the cost of all film or transparency
duplication and all costs of shipping or otherwise transmitting editorial
material, including Available Material (other than the copies of the
Publications and Additional Publications referred to above), for which Licensee
shall reimburse Licensor upon receipt of Licensor's invoice.

6
<PAGE>

(c) Notwithstanding any provision in this agreement to the contrary, if
Licensor is notified or believes that there is a likelihood of a suit or claim
relating to any item of Available Material, Licensor reserves the right not to
provide Licensee with such item and to revoke by notice to Licensee the right to
publish such item. Licensee shall not publish that item after receipt from
Licensor of such notice. Any action by Licensee in breach of this Section 6(c)
shall be at Licensee's own risk.

(d) In no event shall Licensee publish and distribute any Available
Material in any Foreign Edition or SB Publication prior to the publication and
distribution of such material by Licensor in the corresponding Publication or
Additional Publication.

(e) Licensee shall cause the translation of Available Material to be
made faithfully and accurately by a reasonably competent translator. Licensee,
if requested to do so, shall submit its translation to Licensor for review and
comment. Notwithstanding the foregoing, Licensee may edit Available Material so
long as the resulting changes do not affect the meaning of any item of Available
Material and are required (i) by any governmental authority, or (ii) in
Licensee's reasonable judgment, to fit space or similar editorial requirements
for publication or to render any item of Available Material more readily
comprehensible in style or language to the readers of the Foreign Edition or the
SB Publication. Any information relating to authorship credit, trademarks or
copyrights shall not be changed for any reason and must be included.

(f) In addition to Available Material from Publications, Licensee may
also include in any Foreign Edition other material prepared by Licensee or
purchased or licensed from other parties (the "Other Material"), provided that
the standard, content and quality of the Other Material is reasonably consistent
with the standard, content and quality of the corresponding Publication or
Publications; provided further that if Licensee wishes to include in any Foreign
Edition material which is not created specifically for such Foreign Edition,
Licensee shall first obtain Licensor's prior written consent.

(g) During the term of each license hereunder, upon request, Licensor
shall provide Licensee with a reasonable amount of editorial and sales training
support, and marketing and promotional assistance for each Foreign Edition.
Licensee shall bear all of Licensor's reasonable out-of-pocket expenses in
providing such support or assistance, including, without limitation, reasonable
travel and per diem expenses for support or assistance provided outside of the
United States. Licensor and Licensee shall promptly after this date review the
progress of the Foreign Edition of PC Computing and explore ways Licensor can
assist in making it more successful.

7
<PAGE>

(h) In no event may the Available Material contained in any SB
Publication exceed 25% of the total edit material in that SB Publication.

7. Identification of Foreign Edition. The front cover of each issue of
---------------------------------
any Foreign Edition shall bear the title set forth in Exhibit A, and all the
trademarks and logos set forth in Exhibit B, all in accordance with the
standards for form, size, logo, color and position set forth in Exhibit B, and
language identifying the Foreign Edition as the Japanese edition or derivative
of the Publication. Licensee will take reasonable steps to insure that all
references to the Trademarks and any other trademarks of Licensor or its
affiliates in the editorial content of any Foreign Edition, including articles,
headlines and section headlines, and on the cover of any Foreign Edition and in
advertising, publicity and promotional materials, and any editorial references
to any other trademarks of Licensor or its affiliates, are consistent with
proper trademark usage, Exhibit B and such other guidelines of Licensor on such
usage as are communicated by Licensor to Licensee in writing from time to time.

8. Quality Standards and Quality Control; Conflict of Interest.
-----------------------------------------------------------

(a) All aspects of the publication and distribution of each Foreign
Edition, including, but not limited to, all aspects of advertising (including
advertisers, products advertised, advertising copy, sales practices and terms),
all aspects of editorial content, design and structure (including design, art
work, layout and design and copy lines of the front cover), all aspects of
manufacturing and production (including paper, printing and binding), and all
advertisements, publicity and promotional material regarding such Foreign
Edition, including, without limitation, premium disks and CD-ROMs, shall be of a
standard, content and quality that meets or exceeds the standard, content and
quality of the Publication, and that does not, in all material respects,
adversely reflect upon the reputation, integrity and high standing of the
Publication and Licensor or its affiliates or infringe or adversely affect the
value or reputation of or misuse any of the Trademarks or any other trademarks
of Licensor or its affiliates.

(b) Licensee shall, at its expense, send by air mail to Licensor five
(5) copies of each issue of each Foreign Edition published by Licensee promptly
after its publication so that Licensor may verify the continued overall quality
of the same.

(c) Licensee shall not engage in any actual or apparent conflict of
interest which would tend to create an impression in the minds of the public,
and especially readers of and advertisers in computer publications, that any
Foreign Edition is not an impartial, independent publication. The sale by
Licensee or its subsidiaries or affiliates of computer hardware or

8
<PAGE>

software shall not by itself be deemed a conflict of interest under this Section
8(c), provided such activity does not affect the impartiality or the
independence of any Foreign Edition.

9. Specific Advertising Matters.
----------------------------

(a) In the event that advertising in any Foreign Edition is sold in
combination with one or more of Licensee's other publications, the revenues from
such a combined sale shall be allocated among all publications involved in that
sale on the ratio of the then current one-time full page black and white rate
card rates for those publications.

(b) For the purpose of calculating Net Revenue or Operating Income, any
barter advertisement (i.e., any advertisement for which Licensee receives
consideration in a form other than cash) shall be deemed to have generated
revenues at the average page rate for the issue in which the advertisements
appeared and any house advertisements (i.e., advertisements promoting Licensee's
own products and/or services) in excess of two (2) pages per issue of the
Foreign Edition, shall be deemed to have generated revenues at the greater of
(x) the amount charged by Licensee to its divisions for those advertisements and
(y) the paper, printing and other production costs of such ads.

10. Copyright and Trademark Notice and Credit.
-----------------------------------------

(a) Each copy of each Foreign Edition shall carry the following notice
and credit on the contents or masthead page in the Japanese language: "The
Japanese edition of [the Publication] is published under license from Ziff-Davis
Inc., New York, New York. Editorial items appearing in [the Foreign Edition]
that were originally published in the U.S. Edition of [the Publication] are the
copyright property of Ziff-Davis Inc. Copyright _199_ [or other year of first
publication] Ziff-Davis Inc. All Rights Reserved. [Trademark] is a trademark of
Ziff-Davis Inc".

(b) Each copy of each SB Publication containing Available Material
shall carry the following notice and credit on the contents or masthead page in
the Japanese language: "Editorial items appearing in [the SB Publication] that
were originally published in the U.S. Edition of [the Additional Publication]
are the copyright property of Ziff-Davis Inc. Copyright _199_ [or other year of
first publication] Ziff-Davis Inc. All Rights Reserved. [Trademark] is a
trademark of Ziff-Davis Inc"

11. Non-Competition.
---------------

(a) During the term of this agreement, Licensee shall not, directly or
indirectly, engage in the business of publishing or distributing in the
Territory any publication, in print, electronic or other form, the principal
editorial content of which is directly competitive with any

9
<PAGE>

Foreign Edition, provided, that nothing herein shall prevent Licensor's
continued publication of its existing publications. Nothing herein shall prevent
Licensee from licensing materials or publications from other US publishers
provided such publishers are not competitors of Licensor. If such publishers are
competitors of Licensor, Licensee shall not licensee materials or publications
without Licensor's consent, not be unreasonably withheld.

(b) The provisions of this Section 11 shall also apply in the Territory
to the actions of and be directly binding on any company directly or indirectly
owned or controlled by or under common ownership or control with Licensee, or
which directly or indirectly owns or controls Licensee (each of the foregoing
companies shall be referred to in this agreement as a "Licensee Affiliate") to
the same extent Licensee is bound by such provisions, as if they were direct
obligations of the Licensee Affiliate and as if the Licensee Affiliate were a
party to this agreement.

12. Trademarks.
----------

(a) Except for the permission specifically given to Licensee in this
agreement, as between Licensor and Licensee, all rights and interests in the
Trademarks remain Licensor's exclusive property. The scope of Licensee's
permission will not be considered as expanded in any respect, by implication,
operation of law or any other means except by a writing signed by both parties.
All use of the Trademarks and any other trademarks owned by Licensor or its
affiliates at any time during or after the term of each license under this
agreement anywhere in the world (collectively, the "Other Trademarks"), and all
translations of and any marks similar to any of the foregoing (all of the
foregoing Other Trademarks, and all translations of such Other Trademarks and
any marks similar to such Other Trademarks in English or in translation, and any
marks similar to the Trademarks, in English or in translation, are hereinafter
collectively referred to as the "Ziff-Davis Marks") will accrue solely to the
benefit of Licensor or its affiliates, as the case may be.

(b) Licensee (including all Licensee Affiliates) acknowledges that, as
between Licensee and Licensor, Licensor or its affiliate(s), as the case may be,
is the exclusive owner of the Trademarks and the Ziff-Davis Marks and of all
trademark rights related to or created by Licensee's use of the Trademarks in
any language or the Ziff-Davis Marks and agrees that it will

10
<PAGE>

not have or obtain, by exercising its rights under this agreement or otherwise,
any right or interest in the Trademarks or the Ziff-Davis Marks, beyond the
rights specifically given in this agreement.

(c) Licensee agrees to use the Trademarks only in accordance with, and
subject to the restrictions set forth in, this agreement and Exhibit B and such
other guidelines as Licensor may prescribe from time to time and in a manner
that does not derogate Licensor's rights therein, and not in combination with
any other word(s) or mark(s). Licensee shall not at any time directly or
indirectly, use or permit the use of the Trademarks or the Ziff-Davis Marks in
any way which might infringe the rights of Licensor or its affiliates therein.

(d) Ancillary to the licenses granted under this agreement, to the
extent that any trademarks owned by Licensor or its affiliates, in addition to
the Trademarks, are used by Licensor within the editorial content of any
Publication and are included in the Available Material, Licensee shall have the
limited right to use such trademarks in the corresponding Foreign Edition during
the term of its license under this agreement, but only in connection with the
publication of Available Material in such Foreign Edition in accordance with the
terms and conditions of this agreement and only as used by Licensor in the
Publication in connection with the Available Material and only in the exact
context and form used by Licensor in the Publication in connection with the
Available Material and not in combination with any other words or marks or in
any other manner.

(e) Licensee agrees that it shall not, directly or indirectly (i)
challenge, contest or attack the ownership by Licensor or its affiliate, of the
Trademarks or any Ziff-Davis Marks or the validity of the Trademarks or any
Ziff-Davis Marks or the license granted under this agreement, or (ii) seek to
register or claim ownership of any of the Trademarks, or any other designation
similar to the Trademarks or any copyright, trademark, including, without
limitation, the Ziff-Davis Marks, or other right of Licensor or its affiliates.

(f) Upon Licensor's written instructions, Licensee will assist and
reasonably cooperate with Licensor's efforts to secure, protect and preserve
Licensor's rights and interests in the Trademarks, including Licensor's
procuring of copyright and trademark registrations, and Licensee will, at its
expense, execute and deliver any and all documents and perform any and all acts
related thereto, including, without limitation, the supplying of such samples
and similar materials (e.g., copies of issues of the Foreign Edition and
promotional or similar materials) as may be required in this agreement or
requested by Licensor, including, without limitation, documents and acts to
reflect or confirm Licensor's or its affiliate's exclusive ownership rights.

11
<PAGE>

Licensee further agrees, at its expense, to execute and deliver to Licensor such
documents as Licensor may request to register or record Licensee as a Registered
User or Permitted User of such trademark rights in any jurisdiction and to
follow Licensor's instructions for proper use thereof in order that protection
and/or registrations for the trademark rights may be obtained or maintained.

(g) During the term of this agreement, Licensee will immediately notify
Licensor in writing of any infringement or imitation of, or any other event or
claim adverse to or in violation of Licensor's or its affiliates' rights or
interests in, the Trademarks or the Ziff-Davis Marks, or any other rights,
occurring within the Territory, which comes to Licensee's attention. Licensor
will have sole discretion to decide whether any communication or legal action is
undertaken with respect to such events or claims, and will have sole right to
control all aspects of such communication and action (including choice of
attorney and settlement). Licensee will assist and fully cooperate with Licensor
in connection with any such communications and actions, and, in connection
therewith, Licensee will execute and deliver any and all documents and perform
any and all acts related thereto.

(h) The obligations, acknowledgments, representations, covenants and
agreements of a Licensee Affiliate under this Section 12 shall be directly
binding on such Licensee Affiliate to the same extent Licensee is bound by such
provisions, as if they were direct obligations, acknowledgments,
representations, covenants and agreements of the Licensee Affiliate and as if
the Licensee Affiliate were a party to this agreement.

13. Indemnities.
-----------

(a) Subject to Section 13(b) below, Licensor shall indemnify and hold
Licensee harmless from any and all loss, cost, liability, damage and expense
(including reasonable attorneys' fees and other legal costs) incurred by
Licensee on account of any suit or claim by a third party against Licensee
alleging (i) that Licensee's use of the Trademarks in accordance with the terms
and conditions hereof is an infringement of the rights of that third party in
their trademark, or (ii) that Licensee's publication in any Foreign Edition in
accordance with the terms and conditions of this agreement of any item
designated as Available Material and supplied pursuant to Section 6(a) above
(but only if the claim did not arise out of the translation or alteration by
Licensee of the Available Material) is libelous, an infringement of copyright,
or an invasion of privacy (but only to the extent that the claim would have been
actionable in the United States, it being understood that Licensor shall not be
responsible for claims of libel, infringement of copyright, or invasion of

12
<PAGE>

privacy that may arise solely under the law of any country other than the United
States). Licensee shall promptly advise Licensor of any such claim, shall give
Licensor the opportunity to defend, compromise or settle the same, as Licensor
in its sole discretion may determine, shall cooperate fully with Licensor in the
defense of same, and shall not settle any such claim without first obtaining
Licensor's written consent thereto.

(b) In the event of a third party claim alleging that Licensee's use of
the Trademarks is an infringement of the rights of that third party, Licensee
shall, upon Licensor's request and at Licensee's expense, use for the title of
any Foreign Edition a modified non-infringing form of the Trademarks, or a
different title and/or logo, as designated by Licensor, which shall be the sole
and exclusive property of Licensor and licensed to Licensee by Licensor under
the terms and conditions of this agreement. If the title and/or logo of such
Foreign Edition is changed pursuant to this Section 13(b), unless restricted by
law, Licensee shall place the title and logo of the corresponding Publication in
small size print on the cover page accompanied by words indicating that such
Foreign Edition is the Japanese edition or derivative of the Publication.
Licensor shall have the right to settle any claim or action arising out of any
such third party claim in its sole discretion. Subject to Section 13(a) above,
if Licensee brings any claim or counterclaim against such third party with
respect to any of the Trademarks, or continues to use any of the Trademarks
following any judgment or settlement enjoining such use, Licensee shall
indemnify and hold Licensor and its affiliates harmless from and against any and
all loss, cost, liability, damage and expense (including reasonable attorneys'
fees and other legal costs) incurred by Licensor and its affiliates on account
of such claim, counterclaim or use. In no event may Licensee make any settlement
or compromise which may authorize or permit any third party to use any of the
Trademarks, or any element thereof, or any similar trademark in any language
without Licensor's written consent.

(c) Licensee shall indemnify and hold Licensor and its affiliates
harmless from any and all loss, cost, liability, damage and expense (including
reasonable attorneys' fees and other legal costs) incurred by Licensor and its
affiliates on account of any third party claims or lawsuits arising out of or
relating to any of Licensee's activities hereunder (other than claims as to
which Licensor indemnifies Licensee under Section 13(a)), including, without
limitation, the claims or lawsuits arising out of or relating to the Other
Material; the mistranslation of Available Material or the marketing, promotion,
publication, sale or distribution of the Foreign Edition.

13
<PAGE>

(d) Notwithstanding anything to the contrary in this agreement, in no
event shall either party be liable to the other for consequential or indirect
damages, including, but not limited to damages resulting from lost profits or
goodwill, whether or not that party has been advised or is aware of the
possibility of such damages.

(e) The provisions of this Section 13 shall survive the expiration or
termination of any license under this agreement.

14. Retention of Rights. All rights not specifically granted to Licensee
-------------------
herein are retained by Licensor. Without limiting the generality of the
foregoing, except for the rights specifically granted to Licensee in Section
1(a) above, Licensor retains all rights in and to the Trademarks, and any
additional trademarks used by Licensee pursuant to Section 12(d) above, and all
Available Material, including, but not limited to, the right to use and exploit
the Trademarks and such additional trademarks and all Available Material
throughout the world other than the Territory, in all languages in any medium or
form. Notwith-standing the foregoing, Licensee is authorized to use any of the
material licensed under this agreement in advertising or promotion of any
Foreign Edition or in promotional or similar products ancillary to the
publication of such Foreign Edition (for example, calendars, tee shirts, etc.).

15. Assignment.
----------

(a) This agreement and all rights and obligations under this agreement
shall not, other than to a subsidiary or majority-owned affiliate or with the
prior written consent of Licensor, be assigned, sublicensed, delegated or
otherwise transferred by Licensee or by operation of law.

(b) This agreement shall not, without the prior written consent of
Licensee, be assigned by Licensor except to an affiliate or division or in
connection with the sale or transfer of all or substantially all of the assets
of any Publication, or the sale or transfer, merger, consolidation or similar
reorganization by Licensor of trademarks and/or other intangible property or all
or substantially all of its assets.

16. Breach. If Licensee fails to timely pay to Licensor any amounts due
------
under this agreement (after giving effect to applicable cure period) or any
other agreement, or Licensor fails to provide the support under Section 6(g), or
either party breaches in a material way any other provision of this agreement
(including for any deficiency in use of the Trademarks or in the quality

14
<PAGE>

of such Foreign Edition or related materials) or of any other agreement between
Licensor or any of its affiliates or divisions and Licensee or its affiliates or
divisions, the non-breaching party may give notice to the breaching party of
such breach, and unless the non-breaching party receives, within ten (10) days
after the delivery of that notice in the case of non-payment of amounts due
under this agreement or such other agreement, and within thirty (30) days after
the delivery of that notice in the case of any other breach, evidence of the
cure of that breach satisfactory to the non-breaching party, the non-breaching
party shall have the right (in addition to any other rights or remedies
available at law or in equity, except as otherwise provided herein) to terminate
this agreement and any other agreement with respect to such Foreign Edition or
Additional Publication between Licensor, or its affiliates or divisions and
Licensee or its affiliates or divisions, immediately upon notice to the
breaching party.

17. Bankruptcy. If either Licensee or Licensor suffers any insolvency
----------
proceeding, either voluntary or involuntary, or is adjudicated bankrupt or makes
any assignment for the benefit of creditors or has a receiver appointed, the
other party shall have the right to terminate this agreement by written notice
to the party in proceedings, but that termination shall not relieve the party in
proceedings from liability for the performance of its obligations under this
agreement. The other party shall also have all other rights and remedies which
may be available to it at law or in equity by reason of the breach by the party
in proceedings of its obligations under this agreement, except as otherwise
provided herein.

18. Discontinuance of a Publication. Notwithstanding anything contained
-------------------------------
herein to the contrary, Licensor and its affiliates shall have the absolute
right in their sole discretion, at any time, to discontinue, suspend, abandon or
otherwise terminate the publication of any Publication or Additional Publication
or incorporate any Publication or Additional Publication into or with another
publication. Licensor shall give Licensee as much notice as practical of such
event. In that event, Licensor's obligation to provide Available Material shall
automatically terminate, and Licensee shall have the right to terminate this
agreement with respect to such Publication and the corresponding Foreign Edition
or Additional Publication by notice to Licensor.

19. Discontinuance of a Foreign Edition. Notwithstanding anything
-----------------------------------
contained herein to the contrary, Licensee shall have the absolute right, in its
sole discretion, at any time during the term of this agreement, to discontinue,
suspend, abandon or otherwise terminate the publication of any Foreign Edition
or SB Publication upon not less than ninety (90) days prior notice to

15
<PAGE>

Licensor and the license for that Foreign Edition or Available Material from an
Additional Publication shall then cease.

20. Licensor's Right to Terminate. Notwithstanding anything contained
-----------------------------
herein to the contrary, Licensor shall have the right to terminate this
agreement upon not less than one hundred twenty (120) days' notice to Licensee
in the event that after execution of this agreement, any new Japanese income or
other tax shall be imposed against Licensor or any existing income or other tax
shall be increased against Licensor which either separately or in the aggregate
causes taxes to be paid by Licensor to increase by more than twenty (20%)
percent. Licensor may exercise its right to terminate this agreement pursuant
to this Section 20 at any time following the occurrence of such event without
limitation or restriction as to how soon after the occurrence such right must be
exercised.

21. Effects of Termination. In the event notice of termination of a
----------------------
license under this agreement with respect to any Publication or Foreign Edition
is given by either party for any reason, from and after such termination or
expiration of a license under this agreement, Licensee shall immediately cease
publication of such Foreign Edition, shall immediately discontinue all use of
the Trademarks and Available Material and shall immediately cease the exercise
of any other rights with respect to such Foreign Edition granted under this
agreement. Upon such termination, unless termination is due to a breach by
Licensee, copies of the most recent issue of such Foreign Edition that were
previously printed, but only those copies, may be distributed by Licensee,
subject to the terms and conditions of this agreement, including, without
limitation, the provisions of Sections 3, 4 and 5 of this agreement.

22. Confidential Information. If pursuant to this agreement Licensee
------------------------
receives or becomes aware of any information from Licensor concerning Licensor
or any Publication or Additional Publication that is confidential or proprietary
in nature, Licensee shall keep such information confidential and shall not,
without Licensor's prior written consent, disclose such information in any
manner whatsoever, in whole or in part, and shall not use such information for
any purpose except that with respect to confidential information belonging to a
third party and intended for publication in any Publication or Additional
Publication at such time as it is no longer confidential, Licensee may publish
such information following its publication in the U.S. edition of such
Publication or Additional Publication, subject to Section 6(c) above and
provided it is identified by Licensor as Available Material.

16
<PAGE>

The provisions of this Section 22 shall survive the expiration or
termination of any license under this agreement.

23. Compliance with Law. Licensee shall conduct its efforts under this
-------------------
agreement in strict accordance with all applicable laws and regulations.

24. Miscellaneous.
-------------

(a) Notices. All notices, requests, statements and other communications
-------
under this agreement shall be in writing, and shall be deemed given when
delivered personally, sent by air courier, or mailed Air Mail Registered Mail,
Return Receipt Requested, to each party at the following addresses (or such
other address as a party may give notice of hereafter);

(i) with respect to requests by Licensee to Licensor for editorial
material, and for all other requests, notices, statements and other
communications to:

Ziff-Davis Inc.
One Park Avenue
New York, New York 10016
Attention: Executive Director, Licensing

(ii) with respect to notices to Licensor regarding the breach,
extension or termination of this agreement, copies shall be sent to:

Ziff-Davis Inc.
One Park Avenue
New York, New York 10016
Attention: Executive Director of Licensing

with a copy to Licensor's Legal Department at the same address;

(iii) with respect to notices to Licensee regarding any matters, to:

SOFTBANK Corp.
24-1, Nihonbashi Hakozakicho
Chuo-ku, Tokyo 103-8501
Attention: Executive Vice President,
Publishing
with a copy to Licensee's Legal Department at the same address.

(b) Entire Agreement. This agreement contains a complete statement of
----------------
all of the arrangements between Licensor and Licensee with respect to the listed
Publications, Additional Publications, SB Publications and Foreign Editions,
supersedes all previous agreements, arrangements and understandings, written or
oral, relating thereto, and may not be modified except by a writing signed by
both parties. This agreement shall be binding on the parties

17
<PAGE>

permitted successors and permitted assigns, including subsequent owners. Nothing
herein shall affect Licensee's obligations to Licensor arising prior to April 1,
1998 under the prior license agreements and syndication agreements including,
without limitation, payments for periods prior to April 1, 1998.

(c) Governing Law. This agreement shall be governed by and construed
-------------
during and after the term of this agreement in accordance with the laws of the
State of New York applicable to agreements made and to be performed in New York.
Licensee irrevocably consents to the non-exclusive jurisdiction of the Courts
of New York in connection with any action or proceeding brought during or after
the term of this agreement and arising out of or related to this agreement. In
any such action or proceeding, each party waives personal service of any
summons, complaint or other process and agrees that service thereof shall be
deemed made when mailed registered air mail, return receipt requested, addressed
to that party at its address set forth in Section 26(a) or at such other address
as that party may specify by written notice to the other party. Within thirty
(30) days after such service (subject to such extensions as may be agreed to
between the parties or their attorneys), the party upon whom service was made
shall appear or answer to the summons, complaint or other process; if that party
shall fail to appear or answer within that thirty (30) day period (as it may be
extended as provided above), that party shall be deemed in default and judgment
may be entered by the other party for the relief demanded in the summons,
complaint or other process.

(d) No Joint Venture. This agreement is not intended to be and shall
----------------
not be one of partnership or joint venture and neither Licensee nor Licensor is
an agent for the other, except where Licensor is named Licensee's attorney-in-
fact.

(e) No Waiver. The failure of a party to insist upon strict adherence
---------
to any term of this agreement on any occasion shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this agreement. Any waiver must be in writing.

(f) Separability. If any provision of this agreement is invalid or
------------
unenforceable, the balance of this agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.

18
<PAGE>

(g) Counterparts. This agreement may be executed in two or more
------------
counterparts, each of which shall be considered an original, but all of which
together shall constitute the same instrument.

(h) Headings. The headings in this agreement are solely for convenience
--------
of reference and shall not affect its interpretation.

(i) Further Instruments. Each party agrees to execute such further
-------------------
documents and take such further steps as may be reasonably requested by the
other party to further the purposes of this agreement.

(j) Survival. All provisions of this agreement which expressly state
--------
that they survive the expiration or termination of any license under this
agreement, or which state that they apply during and after the term of any
license under this agreement, or which by their sense are intended to survive
the expiration or termination of any license under this agreement, shall survive
the expiration or termination of any license under this agreement.

(k) Interpretation. This agreement has been negotiated by the parties
--------------
and their respective counsel. This agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either party.

ZIFF-DAVIS INC. SOFTBANK CORP.

By: _____________________ By:_____________________
Name: Gertrud Borchardt Name:
Title: Executive Director, Title: Executive Vice
Licensing President, Publishing

19
<PAGE>

Exhibit A

Publication: Royalty Percentage:
- ----------- ------------------

PC Computing 5%

PC Week 7%

Computer Shopper 5%

20
<PAGE>

Exhibit B

Guidelines for the Use of the "PC Week" Trademark and Logo by Licensee

The "PC Week" trademark and the "PC Week" logo licensed under the agreement to
which this Exhibit is attached (the "Agreement") may be used by Licensee only as
a composite mark as specified below and or the attached which is incorporated
herein (except for textual references)and only in connection with the Foreign
Edition and only in the exact form and context specified by Licensor, all as
more fully set forth below and in the Agreement.

The "PC Week" trademark and the "PC Week" logo composite mark licensed under the
Agreement consists of two individual marks:

1. the words "PC Week"
2. the "PC Week" stylized type

All rights of Licensor and all obligations of Licensee, and its Licensee
Affiliates, under the Agreement shall apply with equal force and effect to the
composite mark and the two individual marks comprising the composite mark.

The "PC Week" trademark and the "PC Week" logo composite mark
licensed under the Agreement shall be used only in accordance with the
specifications as to placement, size and design set forth herein, may not be
combined with any other word(s) or mark(s) and must appear as the title of the
Foreign Edition and always be used in one of the three following color choices:

1. 100% PMS 540 (for "PC"), 100% PMS 542 (for "WEEK")
2. 100% Cyan, 50% Magenta, 50% Black (for "PC"); 50%
Cyan, 20% Magenta, 20% Black (for "WEEK")
3. 100% Black

The "PC Week" trademark and the "PC Week" logo composite mark must not be
enclosed in any way by any border.

The "PC Week" trademark shall always be written in a distinctive fashion, e.g.,

.PC WEEK (all caps)
.PC Week (all italics)
.PC WEEK (bold)

Licensee will use commercially diligent efforts to use the "PC Week" trademark
only as an adjective followed by the common generic term for the mark, e.g., the
"PC Week" publication, and shall not use the "PC Week" trademark in the
possessive.

Any additional trademarks to be used by Licensee in the Foreign Edition pursuant
to Section 12(l) of the Agreement, if any, may be used only in connection with
Available Material and only in the exact context and form used by Licensor, as
more fully set forth in the Agreement.

Whenever reasonable in the context of a particular use of the trademarks
licensed under the Agreement, Licensee shall identify such trademarks as being
used under license from Licensor.

All terms used in this Exhibit which are defined in the Agreement shall
have the meaning ascribed to them in the Agreement.

These guidelines may be amended from time to time by the Licensor on written
notice to Licensee.

21
<PAGE>

Exhibit B-2

Guidelines for the Use of the "PC/Computing" Trademark and Logo by Licensee

The "PC/Computing" trademark and the "PC/Computing" logo licensed under the
agreement to which this Exhibit is attached (the "Agreement") may be used by
Licensee only as a composite mark as specified below and or the attached which
is incorporated herein (except for textual references) and only in connection
with the Foreign Edition and only in the exact form and context specified by
Licensor, all as more fully set forth below and in the Agreement.

The "PC/Computing" trademark and the "PC/Computing" logo composite mark licensed
under the Agreement consists of two individual marks:

1. the words "PC/Computing"
2. the "PC/Computing" stylized type

The "PC/Computing" trademark and the "PC/Computing" logo composite mark
licensed under the Agreement shall be used only in accordance with the
specifications as to placement, size and design set forth herein, may not be
combined with any other word(s) or mark(s) and must appear as the title of the
Foreign Edition and always be used in one of the two following color choices:

1. 100% Black
2. 100% Magenta, 100% Yellow for "PC", 100% Cyan, 70%
Magenta for "Computing" (process color)

The "PC/Computing" trademark and the "PC/Computing" logo composite mark must not
be enclosed in any way by any border.

The "PC/Computing" trademark shall always be written in a distinctive fashion,
e.g.,

.PC/COMPUTING (all caps)
.PC/Computing (all italics)
.PC/COMPUTING (bold)

Licensee will use commercially diligent efforts to use the "PC/Computing"
trademark only as an adjective followed by the common generic term for the mark,
e.g., the "PC/Computing" publication, and shall not use the "PC/Computing"
trademark in the possessive.

Whenever reasonable in the context of a particular use of the trademarks
licensed under the Agreement, Licensee shall identify such trademarks as being
used under license from Licensor.

All terms used in this Exhibit which are defined in the Agreement shall
have the meaning ascribed to them in the Agreement.

These guidelines may be amended from time to time by the Licensor on written
notice to Licensee.

22
<PAGE>

Exhibit B-3

Guidelines for the Use of the "Computer Shopper" Trademark and Logo by Licensee

The "Computer Shopper" trademark and the "Computer Shopper" logo licensed under
the agreement to which this Exhibit is attached (the "Agreement") may be used by
Licensee only as a composite mark as specified below and or the attached which
is incorporated herein (except for textual references) and only in connection
with the Foreign Edition and only in the exact form and context specified by
Licensor, all as more fully set forth below and in the Agreement.

The "Computer Shopper" trademark and the "Computer Shopper" logo composite mark
licensed under the Agreement consists of two individual marks:

1. the words "Computer Shopper"
2. the "Computer Shopper" stylized type

The "Computer Shopper" trademark and the "Computer Shopper" logo composite mark
licensed under the Agreement shall be used only in accordance with the
specifications as to placement, size and design set forth herein, may not be
combined with any other word(s) or mark(s) and must appear as the title of the
Foreign Edition and always be used in one of the two following color choices:

1. 100% Black
2. 100% Yellow

The "Computer Shopper" trademark and the "Computer Shopper" logo composite mark
must not be enclosed in any way by any border.

The "Computer Shopper" trademark shall always be written in a distinctive
fashion, e.g,

COMPUTER SHOPPER (all caps)
Computer Shopper (all italics)
COMPUTER SHOPPER (bold)

Licensee will use commercially diligent efforts to use the Computer Shopper
trademark only as an adjective followed by the common generic term for the mark,
e.g., the Computer Shopper publication, and shall not use the Computer Shopper
trademark in the possessive.

Any additional trademarks to be used by Licensee in the Foreign Edition pursuant
to Section 12(1) of the Agreement, if any, may be used only in connection with
Available Material and only in the exact context and form used by Licensor, as
more fully set forth in the Agreement.

23
<PAGE>

Whenever reasonable in the context of a particular use of the trademarks
licensed under the Agreement, Licensee shall identify such trademarks as being
used under license from Licensor.

All terms used in this Exhibit which are defined in the Agreement shall have the
meaning ascribed to them in the Agreement.

These guidelines may be amended from time to time by the Licensor on written
notice to Licensee.

24
<PAGE>

Exhibit C

Additional Publications: SB Publications: Annual Fee:
- -------------------------- ---------------- -----------

Computer Gaming World DOS/V Magazine $12,000

PC Magazine Gekkan/Intranet $15,000

Internet Business
Advantage (COBB) Gekkan/Intranet $15,000

25
<PAGE>

EXHIBIT D
----------
REVENUE STATEMENT
FOR THE REPORTING PERIOD
Ended___________

CURRENCY:

ADVERTISING

Gross Rev _____

Commission _____
Bad Debts _____
Credits _____
Discount & Other
Standard Allowances _____
NET AD REVENUE _____

CIRCULATION

Subscription Billing _____
Bad Debt _____
Credits _____
Single Copy Sales _____
Less Returns _____
NET CIRCULATION REV _____

MISCELLANEOUS

List Rentals __________
Reprint Sales __________
Trade Shows, Conferences __________
Supplements __________
Microfilm __________
Electronic __________
Barter
[Other Sources - __________
Separate line item for each source]

NET REVENUE
REPORTING PERIOD

%Royalty on Net Revenue
for Reporting Period ==========

[if applicable]

30% of Operation Income
==========

Final Royalty
==========

================================================================================

<PAGE>

EXHIBIT 10.15

LEASE AGREEMENT

This Lease Agreement, dated as of May 4, 1998, between Ziff-Davis Inc.
("Ziff-Davis"), ZD Inc. ("ZDI") and ZD COMDEX and Forums Inc. ("ZDCF"), all
Delaware corporations, as Lessors (the "Lessors"), and Kingston Technology
Company, a Delaware partnership, as Lessee (the "Lessee"),

W I T N E S S E T H:

WHEREAS, certain fixed assets described in Annex A hereto (the
"Assets") were transferred by the Lessee to Ziff-Davis in payment for shares of
Ziff-Davis common stock in a transaction intended to qualify under Section
351(a) of the Internal Revenue Code of 1986, as amended;

WHEREAS, Ziff-Davis then transferred an undivided 33% interest in the
Assets to each of ZDI and ZDCF as contributions to capital, so that the Lessors
now jointly own the Assets; and

WHEREAS, the Lessee desires to lease the Assets from the Lessors, and
the Lessors are willing to so lease the Assets to the Lessee, on the terms and
conditions herein set forth;

NOW, THEREFORE, the parties hereby agree as follows:

1. Lease
-----

Subject to the terms and conditions set forth below, the Lessors agree
to lease the Assets to the Lessee, from the date hereof until December 31, 1998,
subject to extension for additional one-year periods at the option of the
Lessee. During such term, the Lessee shall be entitled to exclusive use and
possession of the Assets.

2. Rent
----

The Lessee agrees to pay the Lessors rent of (i) $300,000 the date
hereof and on the first day of each month hereafter through December 31, 1998,
and (ii) such amount on the first day of each month thereafter for any extended
one-year term as shall be agreed to by the parties.
<PAGE>

Such rent will be paid to a bank account specified by Ziff-Davis, which will
then transfer their allocable amounts to the other Lessors.

3. Maintenance
-----------

The Lessee shall, at its cost and expense, keep the Assets in good
order and condition, excepting reasonable wear and tear, and shall make all
necessary repairs thereto throughout the term hereof; provided Lessee shall only
--------
be required to provide ordinary maintenance and repairs, and shall not be
obligated to undertake repairs that would constitute an improvement of, or
addition to, the Assets.

4. Insurance
---------

The Lessee, at its cost and expense, shall maintain insurance in the
name of Lessee and Lessors covering the Assets.

5. Inspection by Lessors
---------------------

The Lessee will permit the Lessors and their authorized
representatives to enter the Lessee's premises at all reasonable times, upon
reasonable notice, during usual business hours for the purpose of inspecting the
Assets; provided nothing herein shall imply any duty upon the part of the
--------
Lessors to inspect or to do any work which under any provision of this Agreement
the Lessee may be required to perform.

6. Miscellaneous
-------------

(a) This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns; provided it may
--------
not be assigned by either party without the prior written consent of the other
party.

(b) This Agreement may not be amended except by written instrument in
writing duly executed by the parties hereto.

(c) This Agreement constitutes the entire Agreement and supersedes all
prior agreements and understandings (oral and written) by and among the parties
hereto with respect to the subject matter hereof.

-2-
<PAGE>

(d) If one or more provisions of this Agreement are held to be
unenforceable against a party under applicable law pertaining to such party or
determined by pronouncement or interpretation of any regulatory agencies to be
in violation of law or regulation, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded.

(e) This Agreement shall be governed by the laws of the State of New
York.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

KINGSTON TECHNOLOGY COMPANY ZIFF-DAVIS INC.
(FEIN: 13-3987754)

By: KINGSTON TECHNOLOGY LLC By:_______________________
a General Partner Eric Hippeau, Chairman

By:________________________ ZD INC. (FEIN: 13-3798480)
John Tu, President

By:________________________
Eric Hippeau
President

ZD COMDEX AND FORUMS INC.
(FEIN: 94-3224838)

By:________________________
Jason Chudnofsky
President

-3-
<PAGE>

Exhibit A

ASSETS

-4-

<PAGE>

EXHIBIT 10.16

ZIFF-DAVIS

1998 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

1. Purpose.
-------

The purpose of the Ziff-Davis 1998 Non-Employee Directors Stock
Option Plan (the "Plan") is to promote the interests of ZD Inc., a Delaware
corporation (the "Company") and its affiliates and stockholders, by allowing the
Company to attract and retain highly qualified directors who are not employees
of the Company, SOFTBANK Corporation or SOFTBANK Holdings Inc. ("Non-Employee
Directors") by permitting such Non-Employee Directors to obtain or increase
their ownership position in the Company through the holding of common stock of
the Company, par value $0.01 per share (the "Common Stock"), and providing such
Non-Employee Directors with an interest in the Company parallel to that of the
Company's stockholders.

2. Plan Administration.
-------------------

The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board"). A majority
of the Committee shall constitute a quorum, and the acts of the majority of such
quorum shall be the acts of the Committee. Subject to the provisions of the
Plan, the Committee shall have the authority to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any option agreements entered into
hereunder, and to make all other determinations necessary or advisable for the
administration of the Plan. The Committee may accelerate the exercisability of
any option granted hereunder, and may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any option agreement in the manner
and to the extent it shall deem desirable to carry it into effect. The
determinations of the Committee in the administration of the Plan, as described
herein, shall be final, conclusive and binding on all persons, including the
Company and its subsidiaries, its shareholders, Non-Employee Directors and their
estates and beneficiaries. Members of the Committee and any officer or employee
of the Company or any subsidiary acting at the direction of, or on behalf of,
the Committee shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified by the Company with respect to any such
action or determination. It is the intention of the Company that the Plan and
the administration thereof comply in all respects with Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations thereunder, and in all events the Plan shall be construed in
favor of its meeting the requirements of Rule 16b-3 promulgated under the
Exchange Act.
<PAGE>

3. Eligibility.
-----------

Each Non-Employee Director is eligible to receive awards of stock
options ("Awards") under Section 5.

4. Shares Subject to the Plan.
--------------------------

Subject to adjustment as provided in Section 8, the number of
shares of Common Stock available for the grant of Awards under the Plan shall
not exceed 200,000 shares. The shares issued under the Plan may be authorized
and unissued shares or treasury shares, as the Company may from time to time
determine. Shares subject to or underlying an Award that expires unexercised, or
is forfeited, terminated or canceled, or is paid in cash in lieu of Common Stock
and shares that are tendered to pay for the exercise of a stock option shall
thereafter again be available for grant under the Plan.

5. Awards.
------

(a) Non-Discretionary Grants. Each Non-Employee Director shall
------------------------
receive upon election as a member of the Board an initial grant of stock options
to purchase 15,000 shares of Common Stock; provided, that each Non-Employee
Director who is on the Board on the date of the initial public offering of
Common Stock shall receive such initial grant of stock options on the date of
such initial public offering. On the date of each annual shareholders meeting
thereafter, each Non-Employee Director shall automatically receive an annual
grant of stock options to purchase 7,500 additional shares of Common Stock. The
terms of each stock option granted hereunder shall provide that (i) the option
price shall be equal to 100% of the Fair Market Value of the Common Stock on the
date of grant, (ii) such option shall not be exercisable for a period more than
10 years following the date of grant, and (iii) such option shall vest and
become exercisable in five equal installments beginning on the first anniversary
of the date of grant. For purposes of the Plan, "Fair Market Value" means, per
share of Common Stock, the closing price of the Common Stock on the New York
Stock Exchange (the "NYSE") on the applicable date, or, if there are no sales of
Common Stock on the NYSE on such date, then the closing price of the Common
Stock on the last previous day on which a sale on the NYSE is reported;
provided, that prior to the initial public offering of the Company, Fair Market
Value means such value as determined in good faith by the Committee. If an
optionee ceases to be a Non-Employee Director, such option shall terminate
except with respect to any portion of such option then exercisable, which
portion shall remain exercisable for a period of (x) 90 days, if the termination
as Non-Employee Director resulted from any reason other than death, disability
or cause, or (y) one year, if the termination resulted from death or disability;
provided, that in the event the termination resulted from a removal for cause,
- --------
such option shall immediately terminate and no longer be exercisable to any
extent; provided, further, that in no event
-------- -------
-2-
<PAGE>

shall any such option remain exercisable past the remainder of its scheduled
ten-year term.

(b) Method of Exercise. The option price of each share as to
------------------
which a stock option is exercised shall be paid in full at the time of such
exercise in cash, by tender of shares of Common Stock owned by the Non-Employee
Director valued at Fair Market Value as of the date of exercise (subject to such
guidelines for the tender of Common Stock as the Committee may establish), by a
"sale to cover" broker transaction or other cashless exercise method permitted
under Regulation T of the Federal Reserve Board, or by a combination of cash,
shares of Common Stock and other consideration as the Committee deems
appropriate.

6. Award Agreements.
----------------

Each Award under the Plan shall be evidenced by an agreement
setting forth the terms and conditions, as determined by the Committee, which
shall apply to such Award, in addition to the terms and conditions specified in
the Plan. In the sole discretion of the Committee, a Non-Employee Director may
be permitted to defer, on such terms and conditions as the Committee shall
specify, the receipt of Common Stock otherwise deliverable under any Award.

7. Nontransferability; Forfeiture.
------------------------------

No Award shall be assignable or transferable, and no right or
interest of any Non-Employee Director shall be subject to any lien, obligation
or liability of the Non- Employee Director, except by will or the laws of
descent and distribution. Notwithstanding the immediately preceding sentence,
the Committee may, subject to the terms and conditions it may specify, permit a
Non-Employee Director to transfer any stock options granted to him pursuant to
the Plan to one or more of his immediate family members or to trusts established
in whole or in part for the benefit of the Non-Employee Director and/or one or
more of such immediately family members. During the lifetime of the Non-Employee
Director, stock options shall be exercisable only by the Non-Employee Director
or by the immediate family member or trust to whom such stock options have been
transferred in accordance with this Section 7. For purposes of this Plan,
"immediate family" shall mean the Non-Employee Director's spouse and issue
(including adopted and step children). In addition, notwithstanding anything in
the Plan to the contrary, the Committee may provide in any Award agreement that
such Award may be forfeited for Cause (as determined by the Committee).

8. Adjustment of and Changes in Stock.
----------------------------------

In the event of any change in the outstanding shares of Common
Stock by reason of any stock dividend or split, recapitalization, merger,
consolidation, spinoff,

-3-
<PAGE>

combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than regular cash dividends, the
Committee may make such substitution or adjustment, if any, as it deems to be
equitable, as to the number or kind of shares of Common Stock or other
securities issued or reserved for issuance pursuant to the Plan and to
outstanding Awards.

9. Change of Control.
-----------------

(a) In the event of a Change of Control, all stock options shall
be fully vested and exercisable in full. For purposes of the Plan, "Change in
Control" means the occurrence of any one of the following events:

(1) individuals who, on June 1, 1998, are members of the
Board (the "Incumbent Directors") cease for any reason following
June 1, 1998 to constitute at least a majority of the Board;
provided, that any new director who is approved by a vote of at
least a majority of the Incumbent Directors shall be treated as
an Incumbent Director;

(2) the shareholders of the Company approve a merger,
consolidation, statutory share exchange or similar form of
corporate transaction in which the Company is not the surviving
corporation or entity; provided, however, that such approval
-------- -------
shall not be a Change in Control if immediately following such
transaction, SOFTBANK Corporation, directly or indirectly, would
be the beneficial owner of more than 25% of the securities
entitled to vote for the election of the board of directors of
the surviving corporation or entity; or

(3) the shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or a sale of
all or substantially all of the Company's assets.

(b) The Committee, in its sole discretion, may further provide
that in the event of a Change of Control, each Non-Employee Director shall
receive in cancellation of such Non-Employee Director's outstanding and
unexercised stock options, a cash payment in an amount equal to the difference
between the option price of such stock options and (A) in the event the Change
of Control is the result of a tender offer or exchange offer for the Common
Stock, the final offer price per share paid for the Common Stock, or such lower
price as the Committee may determine with respect to any incentive stock option
to preserve its incentive stock option status, multiplied by the number of
shares of Common Stock covered by such stock options, or (B) in the event the
Change of Control is the result of any other occurrence, the aggregate value of
the Common Stock covered by such stock options, as determined by the Committee
at such time; provided, that such cash payment election shall not be available
--------
in the event such

-4-
<PAGE>

cancellation and payment would prevent the Company from using the
pooling-of-interests method of accounting with respect to the transaction giving
rise to the Change of Control.

10. Governmental Compliance.
-----------------------

Each Award under the Plan shall be subject to the requirement
that if at any time the Committee shall determine that the listing, registration
or qualification of any shares issuable or deliverable thereunder upon any
securities exchange or under any Federal or state law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition thereof, or in connection therewith, no such grant or award may be
exercised or shares issued or delivered unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

11. Amendment and Termination.
-------------------------

The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that (a) no amendment shall be made without
stockholder approval (including an amendment to increase the number of shares
reserved for issuance under the Plan) if such approval is necessary in order for
the Plan to comply with any applicable law, regulations or stock exchange rule,
and (b) except as provided in Section 9, no amendment shall be made that would
adversely affect the rights of a Non-Employee Director under any Award
previously granted, without such Non-Employee Director's written consent.

12. Effective Date.
--------------

The Plan shall be effective as of February 13, 1998. Subject to
earlier termination pursuant to Section 11, the Plan shall have a term of ten
years from its Effective Date. The Plan is conditioned upon the approval of the
shareholders of the Company prior to the initial public offering of shares of
Common Stock of the Company, and failure to receive such approval shall render
the Plan and all outstanding Awards issued thereunder void and of no effect.

-5-

<PAGE>

EXHIBIT 10.17

ASSIGNMENT

ASSIGNMENT dated May 4, 1998 between Kingston Technology Company, a
Delaware partnership ("Kingston"), and Ziff-Davis Inc., a Delaware corporation
("Ziff-Davis").

WHEREAS, Kingston owns certain fixed assets listed in Annex A hereto
(the "Assets") which it wishes to transfer and assign to Ziff-Davis in exchange
for Ziff-Davis common stock plus cash;

WHEREAS, Ziff-Davis wishes to acquire the Assets in exchange for its
common stock plus cash; and

WHEREAS, the parties intend that the transaction contemplated hereby
shall qualify as a tax-free exchange pursuant to Section 351(a) of the Internal
Revenue Code of 1986, as amended;

NOW, THEREFORE, the parties hereby agree as follows.

1. Transfer of Assets
------------------

Kingston does hereby assign, transfer, convey and deliver to Ziff-
Davis, its successors and assigns, all of Kingston's right, title and interest
in the Assets, free and clear of all liens, encumbrances, equities or claims.

2. Consideration
-------------

The consideration for the Assets is _______ shares (the "Shares") of
Ziff-Davis common stock, .01 par value per share, plus $100,000 in cash, which
will be delivered on the date hereof to Kingston.

3. Representations and Warranties of Kingston
------------------------------------------

Kingston hereby represents and warrants to Ziff-Davis as follows:

(a) Organization. Kingston is duly organized and validly existing
------------
under the laws of the State of Delaware, and has all requisite power and
authority to own and operate the Assets.
<PAGE>

(b) Authority. This Assignment has been duly authorized, executed
---------
and delivered by Kingston and constitutes a valid and binding instrument
enforceable against Kingston in accordance with its terms.

(c) No Governmental Consents. No notice to, filing with, or
------------------------
authorization, consent or approval of any governmental authority, domestic
or foreign, is required for the consummation by Kingston of the
transactions contemplated by this Assignment.

(d) Title to Assets. Kingston has good and valid title to (or valid
---------------
leasehold or contractual interests in) all property comprising the Assets,
free and clear of all liens, encumbrances, equities or claims. The
execution of this instrument and any other documents of transfer to be
executed and delivered by Kingston to Ziff-Davis are sufficient to convey
to Ziff-Davis good and valid title to the Assets, free and clear of all
liens, encumbrances, equities or claims.

4. Representations and Warranties of Ziff-Davis
--------------------------------------------

Ziff-Davis hereby represents and warrants to Kingston as follows:

(a) Organization. Ziff-Davis is duly organized, validly existing and
------------
in good standing under the laws of the State of Delaware.

(b) Authority. This Assignment has been duly authorized, executed
---------
and delivered by Ziff-Davis and constitutes a valid and binding instrument
enforceable against Ziff-Davis in accordance with its terms.

(c) No Governmental Consents. No notice to, filing with, or
------------------------
authorization, consent or approval of any governmental authority, domestic
or foreign, is required for the consummation by Ziff-Davis of the
transactions contemplated by this Assignment.

(d) Validity of Shares. The Shares have been duly authorized and,
------------------
when delivered to Kingston pursuant to this Assignment, will be duly and
validly issued, fully paid and non-assessable.

-2-
<PAGE>

5. Taxes
-----

Ziff-Davis shall indemnify and hold Kingston harmless from any and all
taxes (including sales taxes) resulting from the transaction contemplated by
this Agreement, except capital gains taxes, if any, applicable to the cash
portion of the consideration specified in Section 2 above.

6. Further Assurances
------------------

Kingston agrees, at any time and from time to time after the date
hereof, upon the request of Ziff-Davis, to do, execute, acknowledge and deliver,
or to cause to be done, executed, acknowledged and delivered, all such further
acts, deeds, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably required for the better assigning, transferring,
conveying and confirming to Ziff-Davis, or to its successors and assigns, its
title to any or all of the Assets.

7. Successors and Assigns
----------------------

This Assignment shall bind and inure to the benefit of each of
Kingston and Ziff-Davis and their respective successors and assigns.

8. Applicable Law
--------------

This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.

9. Amendments
----------

No amendment or modification of this Assignment shall be effective
unless it is set forth in writing and signed by both parties.

10. Counterparts
------------

This Assignment may be executed in one or more counterparts, each of
which shall be deemed an original, but

-3-
<PAGE>

all of which together shall constitute one and the same instrument.

KINGSTON TECHNOLOGY COMPANY

By: KINGSTON TECHNOLOGY LLC
a General Partner

By:_________________________
John Tu, President

ZIFF-DAVIS INC.
(FEIN: 13-3987754)

By:_________________________
Eric Hippeau, Chairman

-4-

<PAGE>

EXHIBIT 10.18

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of April 1, 1998, between ZD Inc., a Delaware
corporation (the "Company"), and Eric Hippeau (the "Executive").

WHEREAS, the Executive is currently employed by Ziff-Davis Inc., a
Delaware corporation ("ZDI"), pursuant to the Employment Agreement, dated as of
February 29, 1996, with ZDI and SOFTBANK Holdings Inc., a Delaware corporation
("SB Holdings"); and

WHEREAS, as part of a reorganization involving the worldwide
operations of SOFTBANK Corp., a Japanese corporation ("SOFTBANK"), and its
affiliates (the "SOFTBANK Group"), the operations of ZDI are being consolidated
under the management of the Company; and

WHEREAS, the Executive has been awarded in connection with such
reorganization (i) one-time stock options to purchase 398,750 shares and 31,250
shares of Company common stock scheduled to vest over a five-year period (the
"Fixed Option"), and (ii) a one-time stock option to purchase 430,000 shares of
Company common stock the vesting of which is accelerated upon the attainment of
certain performance targets are met (the "Incentive Option"), both granted under
the Company's 1998 Incentive Compensation Plan; and

WHEREAS, the Company and the Executive wish to provide for continuity
of management of the Company and the Business (as defined below); and

WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company to enter into this
Agreement.

THEREFORE, in consideration of the premises and the respective
covenants and agreements herein contained, the parties hereto agree as follows:
<PAGE>

1. Employment
----------

The Company will employ the Executive as its sole Chairman and sole
Chief Executive Officer, and the Executive will devote his full business time
and use his best efforts to serve the Company in such capacity, on the terms and
conditions set forth herein; it being understood that the Executive will also
spend a reasonable amount of business time in serving as a director of certain
affiliates of the Company and non-profit organizations. The Executive will have
full authority and power to manage the Company and the Business consistent with
his position and the directions of the Board.

As used in this Agreement, the term "Business" includes (i) the
business of the Company and its subsidi aries and (ii) businesses of affiliates
of the Company that the Company manages. The term "affiliate" of the Company
means any corporation, partnership or other entity which, directly or
indirectly, owns or controls, is owned or controlled by, or is under common
ownership or control with, the Company.

2. Term
----

Unless sooner terminated as contemplated herein, the initial term of
employment of the Executive under this Agreement will commence on the date
hereof and end on April 1, 2004 (the "Initial Term"). Such employment shall
continue thereafter until terminated by either party upon not less than 12
months notice or as provided below. The Company agrees not to bring any action
against the Executive with respect to claims arising out of the Executive's
voluntary termination of his employment hereunder; provided, that such agreement
--------
shall not prevent the Company from exercising its rights to dispute whether such
termination shall be considered to be for Good Reason (as defined herein).

3. Place of Performance
--------------------

The Executive's employment will be based at the principal office of
the Company in New York, New York.

-2-
<PAGE>

4. Compensation and Related Matters
--------------------------------

(a) Salary. During the term of the Executive's employment, the
------
Company will pay to the Executive an annual base salary of not less than
$900,000 (subject to periodic review by the Compensation Committee of the Board
for increases based upon performance), with such salary to be paid pursuant to
the Company's normal payroll practices.

(b) Incentive Bonus. During the term of his employment, the
---------------
Executive will receive an annual incentive bonus as determined by the
Compensation Committee of the Board, with the proportion awarded based upon the
Company's achievement of objective performance goals pre-established by the
Board in consultation with the Executive; provided, however, that the annual
-------- -------
target bonus payable for any fiscal year upon achievement of 100% of such
performance goals shall not be less than $600,000.

(c) Stock Award and Option Programs. During the term of his
-------------------------------
employment, the Executive will participate in the executive stock bonus and
option programs of the Company and of the SOFTBANK Group as may be determined by
the respective Compensation Committees appointed by the Boards of Directors of
the Company and SB Holdings.

(d) Benefits and Perquisites. During the term of his employment, the
------------------------
Executive will continue to participate in employee benefit plans and programs,
and be provided with perquisites, at least equivalent to those currently
provided to the Executive, including participation in employee benefit plans and
the use of the Company's leased apartment in New York City. Upon termination of
his employment as contemplated by Section 5(d), the Executive will be entitled
to continue, to the extent permitted by law, his participation in such employee
benefit plans and programs and to receive such perquisites (other than use of
the Company's New York City apartment) during the period Executive continues to
receive his base salary under Section 5(d).

5. Termination
-----------

The Executive's employment shall terminate upon his death. The
Company may terminate the Executive's employment at or after April 1, 2004 upon
12 months notice as provided in Section 2, or otherwise at any time for

-3-
<PAGE>

Disability or Cause, or without Cause, and the Executive may terminate such
employment at or after April 1, 2004 upon 12 months notice as provided in
Section 2 or otherwise at any time for Good Reason (all as defined below). Any
termination of such employment shall be subject to the following conditions:

(a) Regardless of the reason for such termination, the Company will
pay the Executive his base salary through the Date of Termination (as defined
below) and any amounts owed to the Executive pursuant to the terms and
conditions of the employment benefit plans and programs of the Company at the
time such payments are due.

(b) If such employment is terminated as a result of the Executive's
Disability or death, the Company will pay, following the determination of such
award, the prorated portion of any annual incentive bonus the Executive would
have received for the year of such termination to the Executive or his legal
representatives or to Executive's estate or as may be directed by the legal
representatives of such estate, as the case may be.

(c) If such employment is terminated by the Company for Cause or prior
to the end of the Initial Term by the Executive voluntarily for other than Good
Reason, the Company will have no additional obligations to the Executive under
this Agreement.

(d) If the Company terminates the Executive's employment other than
for Disability or Cause (including termination upon 12 months notice as provided
in Section 2) or the Executive terminates such employment for Good Reason, then
during the period commencing on the Executive's termination of employment and
ending on the later of (i) the second anniversary of such termination, and (ii)
March 31, 2001, the Company will pay the Executive his base salary at the level
in effect as of the Date of Termination (at the time such payments would
normally be made) plus an amount equal to the Executive's average annual
incentive bonus for the two years preceding the year in which the Date of
Termination occurs; provided, however, if such termination is by the Executive
-------- -------
for Good Reason, the level of such base salary and the amount of such average
annual incentive bonus shall, if greater, be measured with reference to the date
immediately prior to the occurrence of the event justifying

-4-
<PAGE>

the termination (as provided in Section 5(e)(iii) below) rather than with
reference to the Date of Termination.

(e) For purposes of this Agreement, the following terms shall have
the meanings specified below:

(i) "Disability" will mean the Executive's absence from his full-time
duties hereunder by reason of physical or mental illness for a period of
six consecutive months.

(ii) Termination for "Cause" will mean termination of the Executive's
employment by the Company following the Executive's:

(A) gross misconduct that is injurious to the Company;

(B) conviction of, or plea of nolo contendere to, a felony by or
---- ----------
before any criminal tribunal;

(C) willful and continuing failure to substantially perform his
reasonable duties (other than as a result of physical or mental
illness) that is not corrected within 30 days following a written
demand by the Company that specifically identifies the manner in which
the Company believes the Executive has not substantially performed his
duties; or

(D) willful misconduct that results in gain or personal
enrichment of the Executive to the detriment of the Company, whether
monetarily or otherwise.

(iii) Termination for "Good Reason" shall mean termination by the
Executive following (i) a material breach of this Agreement by the Company
or a material diminution of Executive's responsibilities (other than as a
result of the disposition of any part of the Business) or status that is
not corrected within 30 days of the Executive's notifying the Company in
writing of such breach or diminution, or (ii) either (x) a change in
control of the Company within the meaning of the Company's 1998 Incentive
Compensation Plan, (y) the acquisition on or after June 1, 1998 by any
person or group (other than the Company or any

-5-
<PAGE>

subsidiary thereof or any employee benefit plan of the Company) of
beneficial ownership of securities of the Company sufficient to elect a
majority of the Board, provided that such person or group did not have such
sufficient beneficial ownership immediately prior to such acquisition of
Company securities or (z) so long as SOFTBANK Corp. has beneficial
ownership of more than 50% of the Company securities entitled to vote at
the election of directors of the Company, a change in control of SOFTBANK
Corp. such that any person or group (other than SOFTBANK Corp. or any
subsidiary thereof) acquires beneficial ownership of securities of SOFTBANK
Corp. sufficient to elect a majority of the board of directors of SOFTBANK
Corp., provided that such person or group was not the beneficial owner of
such sufficient beneficial ownership immediately prior to such acquisition
of securities of SOFTBANK Corp. (any of the events in this clause (ii), a
"Change in Control"); provided, however, the Executive will have the right
-------- -------
to terminate his employment for Good Reason by virtue of a Change in
Control only upon notification within 60 days following the first
anniversary of such Change in Control.

(iv) "Date of Termination" shall mean the date of Executive's death
or the date otherwise set forth on a notice of termination provided by one
party hereof to the other (which in the event of any termination other than
a termination requiring 12 months notice, shall be no later than 30 days
following such notice of termination)).

6. Confidentiality; Non-Competition
--------------------------------

(a) For a period of two years commencing upon the termination of his
employment hereunder (regardless of the reason for the termination), the
Executive shall not, with out written consent of the Company, engage, as a
stockholder, director, officer, consultant or otherwise, in any enterprise
anywhere in the world which competes with the Company or any business of its
affiliates that, at the time of such termination, is under the Company's
management control, or directly or indirectly employ, contract for or solicit
the services in any capacity of any person who is, or within the prior three
months has been, employed by the Company or any such business. The Executive
will not be deemed to be engaged in a competing enterprise if (A) less

-6-
<PAGE>

than 10% of the gross receipts of such enterprise are derived from businesses
that compete with the Company or businesses of its affiliates that were under
the Company's management control, and (B) the Executive's engagement does not
involve such competing businesses. This paragraph shall not bar Executive from
owning up to 5% of the outstanding securities of any publicly-held company.

(b) The Executive shall keep secret and confidential and not use
(except in connection with the business of the Company and its affiliates or
pursuant to applicable law or court order) any confidential information with
respect to the business or affairs of the Company or its affiliates. This
obligation will be in effect while the Executive is employed by the Company and
at all times after he ceases to be so employed, but it will not apply at any
time to information that is or becomes generally known to the public (other than
through a breach of this Section 6(b)).

(c) The Executive acknowledges that the remedy at law for breach of
his covenants under this Section 6 will be inadequate and, accordingly, in the
event of any breach or threatened breach by the Executive of the provisions of
this Section 6 the Company will be entitled (without the necessity of showing
economic loss or other actual damage), in addition to all other remedies (which
shall include the termination of the right to any payment under this Agree
ment), to an injunction restraining any such breach, without any bond or other
security being required. The Executive and the Company recognize and agree that
the duration and scope for which the covenants not to compete and solicit set
forth in this Section 6 are to be effective are reasonable. In the event that
any court determines that the time period or the area, or both of them, are
unreasonable and that such covenants are to that extent unenforceable, the
parties agree that the covenants shall remain in full force and effect for the
greatest time period and in the greatest area that would not render them
unenforceable.

(d) In the event of a breach by the Executive of any covenant under
this Section 6, the Executive agrees that, notwithstanding anything to the
contrary in this Agreement or any award of or letter agreement for any option to
acquire common stock of the Company or of SOFTBANK, including the Fixed Option
and the Incentive Option, any

-7-
<PAGE>

such option that is at the time of such breach unexercised shall immediately
terminate.

7. Inventions
----------

All copyrights, trademarks, proprietary processes and analytical
models or formulas and other intangible or intellectual property rights that may
be invented, conceived, developed or enhanced by the Executive during the term
of his employment under this Agreement that relate to the business or operations
of the Company or any affiliate thereof of which the Executive has served as an
officer or in which the SOFTBANK Group has held an equity interest, or that
result from any work performed by the Executive for the Company or any such
affiliate, will be the sole property of the Company or such affiliate, as the
case may be, and the Executive hereby waives any right or interest that he may
otherwise have in respect thereof. Upon the reasonable request of the Company,
the Executive will execute and deliver any instrument or document reasonably
necessary or appropriate to give effect to this Section 7 and do all other acts
and things reasonably necessary to enable the Company or such affiliate, as the
case may be, to exploit the same or to obtain patents or similar protection with
respect thereto.

8. Certain Taxes
-------------

In the event of termination of the Executive's employment as a result
of a Change in Control, the Company shall pay to the Executive an amount which,
on an after-tax basis (including federal income and excise taxes, and state and
local income taxes) equals the excise tax, if any, imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, upon the Executive by reason of
amounts payable under this Agreement (including this Section 8), as well as
amounts payable by the Company, SB Holdings, MAC Inc. or any affiliate thereof
under any stock option or stock award program that are described in Section
280G(b)(2)(A)(i) of the Code. For purposes of this Section 8, the Executive
shall be deemed to pay federal, state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the gross up payment is
to be made, taking into account the maximum reduction in federal income taxes
which could be obtained from deduction of state and local income taxes.

-8-
<PAGE>

9. No Obligation to Mitigate Damages; Other Rights
-----------------------------------------------

The Executive shall not be required to mitigate damages or any amount
payable under this Agreement by seeking other employment or otherwise, nor shall
any such amount be reduced by any compensation received by the Executive from
another employer after the date of resignation or termination, or otherwise.
The provisions of this Agreement, and any payment provided for hereunder, shall
not, to the extent permitted by law, reduce any amounts otherwise payable, or in
any way diminish the Executive's rights under any other employee benefit plan,
contract or arrangement.

10. Successors; Binding Agreement
-----------------------------

(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

(b) This Agreement and all rights of the Executive hereunder will
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die following his termination of
employment while any amounts would still be payable to him pursuant to the
provisions of Section 5 or Section 8 if he had continued to live, all such
amounts will be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.

11. Notices
-------

For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered

-9-
<PAGE>

mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Mr. Eric Hippeau
119 Gregory Boulevard, Unit 28
Norwalk, CT 06855

and

ZD Inc.
One Park Avenue
New York, NY 10016

with a copy to:

Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178

Attention: Kenneth S. Kail, Esq.

If to the Company:

ZD Inc.
One Park Avenue
New York, NY 10016
Attention: Corporate Secretary

and

ZD Inc.
One Park Avenue
New York, NY 10016
Attention: Legal Department

with a copy to:

SOFTBANK Holdings Inc.
10 Langley Road, Suite 403
Newton Center, MA 02159

Attention: Mr. Ronald D. Fisher
Vice Chairman

-10-
<PAGE>

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

12. Modification; Waiver
--------------------

No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and the Company and a duly authorized member of the Board. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement.

13. Arbitration
-----------

Any dispute arising out of or in connection with this Agreement or
under any related stock option or bonus program shall be settled exclusively by
arbitration in New York City in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction over the party against whom
the judgment is entered.

Nothing in this Section 13 shall prevent the Company from seeking
injunctive relief in any court in New York City or any other court having
jurisdiction over the Executive for any breach or threatened breach of this
Agreement, including, without limitation, the provisions of Section 6.

14. Entire Agreement
----------------

This Agreement and the related documents referred to herein set forth
the entire agreement of the parties in respect of the subject matter contained
herein, and upon the effectiveness of this Agreement shall supersede all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral

-11-
<PAGE>

or written, by any officer, employee or representative of any party hereto
(including the Employment Agreement, dated as of February 29, 1996, with ZDI and
SB Holdings); provided, however, nothing herein shall affect the Executive's
-------- -------
continuing obligations with respect to non-competition and confidentiality under
any other agreements to which the Executive is a party (including, without
limitation, the "Phantom Equity" Agreement, dated as of July 3, 1989 and amended
September 9, 1994, or the Special Compensation Agreement dated May 8, 1990, as
amended June 17, 1994, both with Ziff Communications Company).

15. Validity
--------

The invalidity or unenforceability of any provision or provisions of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, which will remain in full force and effect.

16. Governing Law
-------------

This Agreement will be governed by, and construed in accordance with,
the laws of the State of New York. Subject to the provisions of Section 13, each
of the parties consents to personal jurisdiction in any action brought in any
court in New York City having subject matter jurisdiction over matters arising
under this Agreement.

17. Counterparts
------------

This Agreement may be signed in two counterparts, each of which shall
be deemed an original agreement, but both of which together shall constitute one
and the same instrument.

18. Condition
---------

The effectiveness of this Agreement is subject to completion of the
initial public offering of common stock of the Company.

____________________

IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.

-12-
<PAGE>

ZD INC.

___________________ By:______________________
Eric Hippeau Ronald D. Fisher
Director

FOR PURPOSES OF SECTION 14.

ZIFF-DAVIS INC.

By:_____________________
Ronald D. Fisher
Director

SOFTBANK HOLDINGS INC.

By:______________________
Ronald D. Fisher
Vice Chairman

-13-

<PAGE>

EXHIBIT 10.19

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of April 1, 1998, between ZD COMDEX and Forums
Inc., a Delaware corporation (the "Company"), and Jason E. Chudnofsky
("Executive").

WHEREAS, Executive has served as the chief executive officer of the
Company and its predecessor companies for a number of years.

WHEREAS, Executive and the Company desire that the Executive continue
to provide services to the Company.

WHEREAS, Executive has been awarded (i) a one-time bonus of $300,000
in recognition of Executive's contribution to the Company's 1997 results of
operations and (ii), in connection with the reorganization of the Company as a
subsidiary of ZD Inc., a Delaware corporation ("Ziff-Davis"), one-time stock
options to purchase 200,000 shares of Ziff-Davis common stock as part of the
Ziff-Davis executive bonus pool (the "Pool Option") and 100,000 shares of Ziff-
Davis common stock as a special option (the "Special Option"), both granted
under the Ziff-Davis 1998 Incentive Compensation Plan.

THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:

1. Employment
----------

The Company hereby agrees to employ Executive as President and Chief
Executive Officer of the Company, and Executive hereby agrees to devote his full
time and use his best efforts to serve the Company in such capacity, on the
terms and conditions set forth herein; it being understood that Executive shall
continue to participate in trade show industry organizations or similar
activities involving a reasonable amount of Company time and expense. Executive
will report directly to the Chairman of Ziff-Davis.

2. Term
----

Unless sooner terminated as contemplated herein, the initial term of
employment of Executive of the Company under the terms of this Agreement will
commence on the date
<PAGE>

hereof and end on March 31, 2001 (the "Initial Term"). Such employment shall
continue thereafter until terminated by either party upon not less than three
months notice or as provided below.

3. Place of Performance
--------------------

Executive's employment shall be based at the principal executive
offices of the Company, which shall be located at 300 First Avenue, Needham,
Massachusetts 02194, or elsewhere in the greater metropolitan area of Boston,
Massachusetts.

4. Compensation and Related Matters
--------------------------------

(a) Salary. During the term of Executive's employment, the Company
------
shall pay to Executive an annual base salary at a rate not less than $800,000
(subject to periodic review for increases), with such salary to be paid pursuant
to the Company's normal payroll practices.

(b) Incentive Bonus. During the term of Executive's employment, the
---------------
Company shall pay to Executive, on or before March 31 (or such earlier date as
bonuses may be paid to any other senior Ziff-Davis executive) in each year 1999
through 2001, an incentive bonus of $300,000 if 100% of EBITDA targets and non-
EBITDA related performance goals are achieved, as follows:

(i) A base bonus shall be paid if and to the extent the EBITDA of the
Company for the preceding calendar year exceeds 90% of the EBITDA target
pre-established for such year by the Company's Board of Directors in
consultation with Executive. The amount of such bonus shall increase
linearly at a rate of $24,000 for each 1% (calculated to the nearest one
thousandth) of EBITDA above 90% of target, reaching $240,000 at 100% of
target and continuing thereafter to increase at the rate of $24,000 for
each 1% of EBITDA, with no maximum limit if EBITDA achieved exceeds target;
provided such bonus payable in 1999 shall be at least $200,000 regardless
of the EBITDA achieved for 1998. Budgeted EBITDA targets will, from time
to time, be adjusted as necessary to take account of the removal or
addition of operations previously included or not included, respectively,
as contributing to the achievement of a budgeted target, as well as for any

-2-
<PAGE>

special expenditures not included in the budget, all by agreement between
the Executive and the Chairman of Ziff-Davis.

(ii) A supplemental bonus shall be paid each year upon the
achievement of pre-established performance goals not related to EBITDA,
determined by the Chairman of Ziff-Davis in consultation with Executive.
The amount of such supplemental bonus shall be $60,000 (in the event that
such performance goals are fully achieved) and shall be subject to increase
or decrease, by agreement between the Executive and the Chairman of Ziff-
Davis, in the event that such performance goals are exceeded or not fully
achieved, respectively.

(c) Benefits and Perquisites. During the term of his employment,
------------------------
Executive shall participate in and be provided with employee benefit plans and
programs and perquisites in the aggregate at least equivalent in value to those
provided to Executive and any other senior Ziff-Davis executive. In addition,
during such term the Company shall maintain term life insurance for Executive in
the amount of $1,000,000 and disability insurance of $200,000. Upon termination
of his employment as CEO, Executive shall be entitled to receive continued
employee health and other benefits during the period Executive continues to
receive his base salary under Section 5(d).

5. Termination
-----------

The Company may terminate Executive's employment at or after the end
of the Initial Term as provided in Section 2, or otherwise at any time for
death, Disability or Cause, or without Cause, and Executive may terminate such
employment at or after the end of the Initial Term as provided in Section 2 or
otherwise at any time for Good Reason (all as defined below). Any termination of
such employment shall be subject to the following conditions:

(a) Regardless of the reason for such termination, the Company shall
pay Executive his base salary through the Date of Termination (as defined below)
and any amounts owed to Executive pursuant to the terms and conditions of the
employee benefit plans and programs of the Company at the time such payments are
due.

-3-
<PAGE>

(b) If such employment is terminated as a result of Executive's
Disability or death, the Company shall pay, following the determination of such
award, the prorated portion of any annual incentive bonus Executive would have
received for the year of such termination to Executive or his legal
representatives or to Executive's estate or as may be directed by the legal
representatives of such estate, as the case may be.

(c) If Executive's employment is terminated by the Company for Cause
or prior to the end of the Initial Term by Executive voluntarily for other than
Good Reason, the Company shall have no additional obligations to Executive under
this Agreement.

(d) If the Company terminates Executive's employment other than for
Disability or Cause, or Executive terminates such employment for Good Reason,
then during the period commencing on the Executive's termination of employment
and ending on the later of (i) the second anniversary of such termination, and
(ii) March 31, 2001, the Company shall pay Executive (i) his base salary at the
level in effect as of the Date of Termination (at the time such payments would
normally be made) plus (ii) at the end of each year of such period (or on such
earlier date as bonuses may be paid to any other senior Ziff-Davis executive) an
amount equal to Executive's average annual incentive bonus for the year in which
termination occurs and the immediately preceding two years provided the amount
of any such payment under clause (ii) for each year following the Initial Term
shall be reduced by the amount of any other compensation received by Executive
from any third party during such year. Nothing herein shall prevent Executive's
full-time employment by another company during such period, subject to his
compliance with his covenants under Section 6 below.

(e) For purposes of this Agreement, the following terms shall have
the meanings specified:

(i) "Disability" shall mean Executive's absence from his full-time
duties hereunder by reason of physical or mental illness for a period of
six consecutive months.

-4-
<PAGE>

(ii) Termination for "Cause" shall mean termination of Executive's
employment by the Company following Executive's:

(A) gross misconduct that is injurious to the Company; or

(B) conviction of, or a plea of nolo contendere to, a felony by
---- ----------
any criminal tribunal; or

(C) willful and continuing failure to substantially perform his
reasonable duties (other than as a result of physical or mental
illness) that is not corrected within 30 days following a written
demand by the Company that specifically identifies the manner in which
the Company believes Executive has not substantially performed his
duties; or

(D) willful misconduct that results in gain or personal
enrichment of Executive to the detriment of the Company, whether
monetarily or otherwise;

(iii) Termination for "Good Reason" shall mean termination by
Executive following a material breach of this Agreement by the Company
(without Executive's written consent) that is not corrected within 30 days
of Executive notifying the Company in writing of such breach.

(iv) "Date of Termination" shall mean the date of Executive's death
or the date otherwise set forth on a notice of termination provided by one
party hereof to the other (which in the event of any termination other than
a termination requiring six months notice, shall be no later than 30 days
following such notice of termination).

6. Confidentiality; Non-Competition
--------------------------------

(a) Without written consent of the Company, Executive may not for a
period of two years following the termination of his employment (regardless of
the reason for the termination) engage in any computer or computer-related trade
show enterprise which competes with the Company or any

-5-
<PAGE>

of its affiliates. If Executive's position with another company gives him
responsibility for significantly all of the operations of that company or of a
division of that company, including computer or computer-related competitive
operations, such position will not violate this Section 6(a) if the annual
revenues of those competitive operations combined constitute less than 5% of the
total revenues under Executive's direction and are less than $40 million. This
paragraph also shall not bar Executive from owning up to 5% of the outstanding
securities of any publicly-held company. As used in this Agreement, the term
"affiliate" of the Company means any partnership, firm, corporation or other
entity which, directly or indirectly, owns or controls, is owned or controlled
by, or is under common ownership or control with, the Company.

(b) Executive shall keep secret and confidential and not use (except
in connection with the business of the Company and its affiliates or pursuant to
applicable law or court order) any information with respect to any confiden
tial or non-public aspect of the business or affairs of the Company or any of
its affiliates, including without limitation Ziff-Davis and SOFTBANK Corp. This
obligation shall be in effect while Executive is employed by the Company and at
all times after he ceases to be so employed, but it shall not apply at any time
to information that is or becomes generally known to the public (other than
through a breach of this Section 6(b)).

(c) Without written consent of the Company, Executive shall not, for
two years following the termination of his employment (regardless of the reason
for the termination), employ or solicit the employment of any person who is at
such time an employee of the Company or any of its affiliates or was such an
employee at any time during the year prior to the termination of Executive's
employment.

(d) Executive acknowledges that the remedy at law for breach of his
covenants under this Section 6 will be inadequate and, accordingly, in the event
of any breach or threatened breach by Executive of the provisions of this
Section 6 the Company shall be entitled (without the necessity of showing
economic loss or other actual damage), in addition to all other remedies (which
shall include the termination of Executive's right to any payment under this
Agreement), to seek an injunction restraining any such breach, without any bond
or other security being required.

-6-
<PAGE>

Executive and the Company recognize and agree that the duration and scope for
which the covenants not to compete and solicit set forth in this Section 6 are
to be effective are reasonable. In the event that any court determines that the
time period or the area, or both of them, are unreasonable and that such
covenants are to that extent unenforceable, the parties hereto agree that the
covenants shall remain in full force and effect for the greatest time period and
in the greatest area that would not render them unenforceable.

(e) In the event of a breach by Executive of any covenant under this
Section 6, Executive agrees that, notwithstanding anything to the contrary in
this Agreement or any award of or letter agreement for any option to acquire
common stock of Ziff-Davis or of SOFTBANK Corp., including the Pool Option and
the Special Option, any such option that is at the time of such breach
unexercised shall immediately terminate.

(f) In the event Executive's employment is terminated pursuant to
Section 5 and the Company defaults in its obligation to pay amounts provided in
such Section, Executive shall not be bound by the provisions of paragraphs (a)
and (c) of this Section 6.

(g) In the event Executive's employment is terminated for any reason,
the Company will consent to his employment by (i) any company owned or
controlled by Sheldon G. Adelson provided it does not compete with the Company
or any of its affiliates, or (ii) Worldwide Unlimited, Inc., a corporation owned
and controlled by Judy Chudnofsky or her children, provided the total revenues
from operations competing with the Company or any of its affiliates do not
exceed $10 million.

7. Successors; Binding Agreement
-----------------------------

(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolida tion or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

-7-
<PAGE>

(b) This Agreement and all rights of Executive hereunder shall inure
to the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

8. Notices
-------

If to Executive:

Mr. Jason E. Chudnofsky
42 Cranberry Lane
Needham, Massachusetts 02192

with a copy to:

Paul G. Roberts, Esq.
Abrams, Roberts, Klickstein & Levy
265 Franklin Street
Boston, Massachusetts 02110

If to the Company:

ZD COMDEX and Forums Inc.
300 First Avenue
Needham, Massachusetts 02194

Attn: Corporate Secretary

with copies to:

Ziff-Davis Inc.
One Park Avenue
New York, NY 10011

Attn: Chairman and

Attn: Corporate Secretary

-8-
<PAGE>

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

9. Modification; Waiver
--------------------

No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
Executive and the Chairman of Ziff-Davis. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.

10. Entire Agreement
----------------

This Agreement and the related documents referred to herein set forth
the entire agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto; and any
prior agreement of the parties hereto in respect of the subject matter contained
herein (including the Employment Agreement, dated as of April 1, 1995, between
SOFTBANK COMDEX Inc. and Executive) is hereby terminated and cancelled.

11. Validity
--------

The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

12. Governing Law
-------------

This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts. Subject to the provisions of
Section 13, each

-9-
<PAGE>

of the parties consents to personal jurisdiction in any action brought in any
court in Boston, Massachusetts having subject matter jurisdiction over matters
arising under this Agreement.

13. Arbitration
-----------

Any dispute or controversy under this Agreement shall be settled
exclusively by arbitration in Boston, Massachusetts by three arbitrators in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court in Boston
or any court elsewhere having jurisdiction over the party against whom the
judgment is entered.

Nothing in this Section 13 shall prevent the Company from seeking
injunctive relief in any court in Boston or any other court having jurisdiction
over Executive for any breach or threatened breach of this Agreement, including,
without limitation, the provisions of Section 6.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

ZD COMDEX AND FORUMS INC.

By:______________________

______________________
Jason E. Chudnofsky

-10-

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated March 27, 1998,
relating to the balance sheet of ZD Inc. and our reports dated February 17,
1998, relating to the combined financial statements of Ziff-Davis Inc. and ZD
COMDEX and Forums Inc., and the consolidated financial statements of Ziff-
Davis Inc. (formerly Ziff-Davis Publishing Company), which appear in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.

PRICE WATERHOUSE LLP
New York, NY

April 24, 1998