Sales of technology-related books account for a majority of the Company's net revenue. Sales of books devoted to the use of software products sold by Microsoft, including its Windows operating system, accounted for approximately 18% and 44% of the Company's net revenue for the three months ended June 30, 2000 and 1999, respectively. The Company does not expect the percentage of net revenue from the sale of books related to Microsoft software products to continue to be as significant.

The Company's customers consist principally of national retail chain booksellers, wholesale distributors, office superstores, membership clubs, and computer/electronic superstores located primarily in the United States and Canada. Over the last several years, there has been significant consolidation in the distribution channels for books, including retail outlets, although alternative distribution channels have emerged. As a result, the Company expects that this trend will lead to increased concentration within each distribution channel. During the three and nine months ended June 30, 2000, the Company's top three customers accounted for approximately 38% and 40% of the Company's net revenue as compared to 34% and 36% in 1999. The Company's top ten customers accounted for approximately 64% of the Company's nine-month net revenue in 2000 as compared to 70% in 1999.

The following table summarizes the results of operations as a percentage of net revenue for the periods shown:

                                             THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    JUNE 30,              JUNE 30,
                                            --------------------- ---------------------
                                                 2000       1999       2000       1999
                                            ---------- ---------- ---------- ----------

CONDENSED CONSOLIDATED STATEMENT OF INCOME DATA:
Net Revenue:
Technology group .........................       52.3%      76.2%      54.3%      78.3%
Consumer  group...........................       47.7%      23.8%      45.7%      21.7%
                                            ---------- ---------- ---------- ----------
Total Net Revenue ........................      100.0%     100.0%     100.0%     100.0%
                                            ========== ========== ========== ==========

Cost of sales ............................       53.6%      49.9%      55.3%      49.3%
Selling, general and administrative ......       32.3%      35.9%      29.2%      33.1%
Depreciation and amortization ............        3.2%       3.1%       2.6%       3.0%
                                            ---------- ---------- ---------- ----------
Operating income .........................       10.9%      11.1%      12.9%      14.6%
   Interest expense - net ................        2.9%       0.2%       2.7%       0.1%
                                            ---------- ---------- ---------- ----------
Income before provision for income taxes .        8.0%      10.9%      10.2%      14.5%
                                            ---------- ---------- ---------- ----------
Net income ...............................        4.6%       6.3%       5.9%       8.4%
                                            ========== ========== ========== ==========

Other Data:
EBITDA(1) ................................       14.1%      14.3%      15.5%      17.7%
                                            ========== ========== ========== ==========

_____________________

(1) "EBITDA" is defined as income before provision for income taxes, interest, 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 EBITDA is a standard measure commonly reported and widely used by analysts, investors and other interested parties in the publishing and media industries, however, EBITDA, as presented herein, may not be comparable to similarly titled measures reported by other companies. EBITDA for the three and nine months ended June 30, 2000 was $7.8 million and $27.5 million, respectively, compared to $5.9 million and $21.8 million for the three and nine months ended June 30, 1999.

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999

Net Revenue. Net revenue increased $13.7 million, or 33.0%, to $55.2 million for the three months ended June 30, 2000 from $41.5 million for the three months ended June 30, 1999. This increase was primarily the result of an increase in net revenues of $16.4 million for the Company's Consumer Group, which includes the For Dummies^® and CliffsNotes™ consumer titles, and acquired Reference Brands. The acquired Reference Brands accounted for $14.9 million of the Consumer Group growth, which were not included in the third fiscal quarter of 1999. Excluding the acquired Reference Brands, the Consumer Group's growth was 15.4% for the three months ended June 30, 2000 compared to the comparable period in 1999. The Technology Group net revenue decreased by $2.7 million to $28.9 million for the third fiscal of 2000, a decrease of 8.7% over the 1999 fiscal third quarter. Of the Company's net revenue for the three months ended June 30, 2000, $8.3 million was attributable to sales of titles (including new editions) first published during that period, as compared to $12.0 million for titles (including new editions) first published during the same period for 1999.

Cost of Sales. Cost of sales increased $8.9 million, or 43.0%, to $29.6 million for the three months ended June 30, 2000 from $20.7 million for the three months ended June 30, 1999. Cost of sales as a percentage of net revenue was 53.6% for 2000 and 49.9% for 1999. Product costs, including paper, printing, and binding expenses, royalty expense and inventory obsolescence expense increased as a percentage of net revenue to 35.5% for the three months ended June 30, 2000 from 30.0% for the three months ended June 30, 1999 as a result of a change in product mix. This mix includes a higher percentage of overall sales related to the Consumer Group which has slightly higher paper, printing and binding costs. Product development costs, which are relatively fixed, decreased as a percentage of net revenue to 10.7% for the three months ended June 30, 2000 from 12.3% for the three months ended June 30, 1999, reflecting a decrease in the cost of development of new and cross branded titles. Fulfillment and distribution expenses decreased as a percentage of net revenue to 7.3% for the three months ended June 30, 2000 from 7.6% for the three months ended June 30, 1999 as a result of efficiencies achieved at the Company's new distribution facility.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $2.9 million, or 19.9%, to $17.8 million for the three months ended June 30, 2000 from $14.9 million for the three months ended June 30, 1999. Approximately 54% or $1.6 million of this increase was attributable to increased selling and marketing expenses, including increases as a result of the retail marketing incentive program and expenses for other marketing programs where costs increase as net revenues increase. A significant portion of the increase was also attributable to a $1.3 million increase in general and administrative expenses including increased occupancy costs for the Company's new San Francisco Internet and New York offices. Selling, general and administrative expenses as a percentage of net revenue decreased to 32.3% for the three months ended June 30, 2000 from 35.9% for the three months ended June 30, 1999, which can be attributable to operating leverage and efficiencies achieved for the incremental business associated with the acquired Reference Brands. The Company's sales and marketing costs as a percentage of net revenue decreased to 19.8% for the three months ended June 30, 2000 from 22.5% for the three months ended June 30, 1999, due to performance-based customer incentive programs which are driven by net revenue results.

Depreciation and Amortization. The increase of $0.5 million was due to a larger depreciable asset base and the amortization of intangible assets.

Operating Income. Operating income increased $1.4 million, or 30.2%, to $6.0 million for the three months ended June 30, 2000 from $4.6 million for the three months ended June 30, 1999. Operating income decreased as a percentage of net revenue to 10.9% for the three months ended June 30, 2000 from 11.1% for the same period the prior year due to an increase in cost of sales, as a percentage of net revenue, as described above.

Income Before Provision for Income Taxes. Income before provision for income taxes decreased $0.1 million, or 2.9% to $4.4 million for the three months ended June 30, 2000 from $4.5 million for the three months ended June 30, 1999. Income before provision for income taxes decreased as a percentage of net revenue to 8.0% for the three months ended June 30, 2000 from 10.9% for the three months ended June 30, 1999 due to an increase cost of sales, as a percentage of net revenue, as described above. In addition, interest expense of $1.6 million for the three months ended June 30, 2000 compared to $0.1 million for the same period in 1999 on borrowings used to fund the acquisition of the Reference Brands reduced income before provision for income taxes.

Net Income. Net income of $2.55 million for the three months ended June 30, 2000 decreased $80,000 or 2.9% from net income of $2.63 million for the three months ended June 30, 1999 for the same reasons as described above.

Net Revenue. Net revenue increased $54.0 million, or 43.8%, to $177.5 million for the nine months ended June 30, 2000 from $123.5 million for the nine months ended June 30, 1999. This increase was primarily the result of an increase in net revenues of $54.4 million for the Company's Consumer Group, which includes the For Dummies^® and CliffsNotes™ consumer titles, and acquired Reference Brands. The acquired Reference Brands accounted for $49.9 million of the Consumer Group growth, which were not included in the first nine-months of 1999. Excluding the acquired Reference Brands, the Consumer Group's growth rate was 16.7% for the nine months ended June 30, 2000 compared to the comparable period in 1999. The Technology Group net revenue decreased by $0.4 million to $96.5 million for the nine-month period in fiscal 2000, a decrease of less than one percent over the comparable nine-month period in 1999. Of the Company's net revenue for the nine months ended June 30, 2000, $30.0 million was attributable to sales of titles (including new editions) first published during that period, as compared to $25.2 million for titles (including new editions) first published during the same period for 1999.

Cost of Sales. Cost of sales increased $37.3 million, or 61.3%, to $98.2 million for the nine months ended June 30, 2000 from $60.9 million for the nine months ended June 30, 1999. Cost of sales as a percentage of net revenue was 55.3% for 2000 and 49.3% for 1999. Product costs, including paper, printing, and binding expenses, royalty expense and inventory obsolescence expense increased as a percentage of net revenue to 34.4% for the nine months ended June 30, 2000 from 31.4% for the nine months ended June 30, 1999 as a result of a change in product mix. This mix includes a higher percentage of overall sales related to the Consumer Group which has slightly higher paper, printing and binding costs. Product development costs, which are relatively fixed, increased as a percentage of net revenue to 11.4% for the nine months ended June 30, 2000 from 10.6% for the nine months ended June 30, 1999, reflecting an increase in the development of new cross-branded titles. Fulfillment and distribution expenses increased as a percentage of net revenue to 9.6% for the nine months ended June 30, 2000 from 7.2% for the nine months ended June 30, 1999 as a result of one-time costs incurred in the relocation of product to the Company's new distribution facility.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $11.0 million, or 27.0%, to $51.8 million for the nine months ended June 30, 2000 from $40.8 million for the nine months ended June 30, 1999. Approximately 62% or $6.8 million of this increase was attributable to increased selling and marketing expenses, including increases as a result of the retail marketing incentive program and expenses for other marketing programs where costs increase as net revenues increase. A significant portion of the increase was also attributable to a $4.2 million increase in general and administrative expenses including increased occupancy costs for the Company's new San Francisco Internet and New York offices. Selling, general and administrative expenses as a percentage of net revenue decreased to 29.2% for the nine months ended June 30, 2000 from 33.1% for the nine months ended June 30, 1999, which can be attributable to operating leverage and efficiencies achieved for the incremental business associated with the acquired Reference Brands. The Company's sales and marketing costs as a percentage of net revenue decreased to 17.8% for the nine months ended June 30, 2000 from 20.0% for the nine months ended June 30, 1999, due to performance-based customer incentive programs which are driven by net revenue results.

Depreciation and Amortization. The increase of $0.7 million was due to a larger depreciable asset base and the amortization of intangible assets.

Operating Income. Operating income increased $5.0 million, or 27.5%, to $23.0 million for the nine months ended June 30, 2000 from $18.0 million for the nine months ended June 30, 1999. Operating income decreased as a percentage of net revenue to 13.0% for the nine months ended June 30, 2000 from 14.6% for the same period the prior year due to increases in cost of sales, product development and distribution expenses, as percentages of net revenue, as described above.

Income Before Provision for Income Taxes. Income before provision for income taxes increased $0.2 million, or 1.1% to $18.1 million for the nine months ended June 30, 2000 from $17.9 million for the nine months ended June 30, 1999. Income before provision for income taxes decreased as a percentage of net revenue to 10.2% for the nine months ended June 30, 2000 from 14.5% for the nine months ended June 30, 1999 due to increases in cost of sales, product development and distribution expenses, as percentages of net revenue, as described above. In addition, net interest expense of $4.9 million for the nine months ended June 30, 2000 compared to $0.1 million for the same period in 1999 on borrowings used to fund the acquisition of the Reference Brands reduced income before provision for income taxes.

Net Income. Net income of $10.5 million for the nine months ended June 30, 2000 increased $0.1 million, or 1.4%, from net income of $10.4 million for the nine months ended June 30, 1999 for the same reason as described above.

As of June 30, 2000, the Company's working capital increased $19.3 million to $56.6 million from $37.3 million as of September 30, 1999. This increase in working capital was the result of a decrease in cash of $1.7 million, an increase in net accounts receivable of $10.6 million, a $2.3 million decrease in net inventory, and a $3.6 million increase in other current assets and deferred tax assets. Additionally, there was a $1.4 million increase in accounts payable and a $10.5 million decrease in accrued liabilities. The significant decrease in accrued liabilities was primarily due to the timing of author royalty payments and customer marketing and promotional payments.

The net cash (used) by operating activities for the three months ended June 30, 2000 and 1999 was ($1.4) million and ($0.5) million, respectively. For the nine months ended June 30, 2000 and 1999 the net cash provided (used) by operating activities was ($8.5) million and $2.8 million, respectively. The fluctuations are due primarily to changes in accounts receivable and accrued liabilities.

The Company's net cash provided by investing activities for the nine months ended June 30, 2000 was $4.8 million. In June 2000 the Company sold its ARCO brand, which was acquired in August 1999 from Pearson Education, Inc., for $5.7 million less transaction costs of $0.1 million. This sale along with December 1999 sales of the J.K. Lasser and Chek-Chart brands completes the Company's planned divestiture program resulting from the August 1999 acquisition. Capital expenditures for the three and nine months ended June 30, 2000 were $7.4 million and $12.0 million, respectively, compared to $0.8 million and $2.4 million for the three and nine months ended June 30, 1999. Fiscal year 2000 capital expenditures primarily consist of leasehold improvements and equipment for the Company's new Indianapolis, New York and San Francisco offices.

The Company's net cash provided by financing activities was $2.0 million for the nine months ended June 30, 2000 as a result of issuances of common stock from stock option exercises, and $3.9 million for the nine months ended June 30, 1999 from advances on the Company's credit facility.

The Company had $0.3 million in cash invested in short-term financial instruments as of June 30, 2000. The Company believes that its remaining borrowing capacity, together with any cash generated from operations and any funds available under any future credit facilities, will be sufficient to meet the liquidity requirements of the Company for the foreseeable future. The Company's future capital requirements will depend on many factors, including, but not limited to, the levels at which the Company maintains inventory, the market acceptance of the Company's products, the levels of promotional activities and advertising required to launch the Company's products, and any future acquisitions. To the extent that the available cash, together with existing resources and future earnings, are insufficient to fund the Company's future activities, the Company may need to raise additional funds through public or private financing. No assurance can be given that any such additional funding will be available or that, if available, can be obtained on terms favorable to the Company.

Dependence on Microsoft Products and Competition with Microsoft Press. Sales of books devoted to the use of software products sold by Microsoft Corporation ("Microsoft"), including its Windows operating system, accounted for approximately 18% of the Company's net revenue in the three months ended June 30, 2000. As a result, future financial results will depend in part on continued consumer demand for Microsoft products. A decline in the use of Microsoft products would likely result in decreased demand for the Company's books and could adversely affect future financial results.

In addition to relying on the sales of books devoted to Microsoft products, the Company competes with Microsoft's publishing division, Microsoft Press, for readers of computer-related books, including books covering Microsoft products. Microsoft Press has substantially greater financial resources than the Company and, because it is owned by Microsoft, may have better access to planned and new Microsoft products. As a result, Microsoft Press may have a competitive advantage over the Company in providing books devoted to the use of software products sold by Microsoft.

Dependence on For DummiesÒ Publications. The Company derives a material portion of its net revenue from the sale of the For DummiesÒ brand of books. In addition, the Company has devoted substantial resources to the publication of these books and the development of the For DummiesÒ brand name. As a result, any change in reader preferences leading to a decline in demand for the For DummiesÒ books would likely have a material adverse effect on future financial results.

Risks of New Product Introductions. Generally, as a particular book gets older, the Company sells fewer copies of that book. Consequently, the Company's future success depends on its ability to identify trends in the technology, business, and self-help markets and to offer new titles, as well as other products and services, that address the changing needs of the target audiences. To establish market acceptance of a new publication, the Company must dedicate significant resources to research and editorial development, production, and sales and marketing. The Company incurs significant costs in developing, publishing, and selling a new book, which often significantly precede meaningful revenues from its sale. Consequently, new publications can require significant time and investment to achieve profitability. Investors should note, however, that there can be no assurance that the Company's efforts to introduce new publications or other products or services will be successful or profitable.

The Company records as an expense the costs related to the development of new publications and products, other than author advances, as products are introduced. As a result, the Company's profitability from quarter to quarter and from year to year may be adversely affected by the number and timing of new publications and product launches in any period and the level of acceptance gained by such publications and products.

Risks Associated with Fluctuations in Paper Costs. Paper is the principal raw material used in the Company's business. The Company generally purchases paper from merchants representing the paper mills. The Company does not have long-term paper supply contracts with these paper merchants. The arrangements with merchants are negotiated each year and provide for quarterly price adjustments. Paper prices have been volatile over the past several years and are affected by many factors, including demand, mill capacity, pulp supply, energy costs, and general economic conditions. Consequently, the Company's cost of paper, relative to our net revenue, can vary from period to period. In the past, paper has also been difficult to obtain due to industry- wide shortages. Significant paper price increases, sustained over a period of time, could adversely affect the Company's future financial condition or operating results.

Fluctuations in Quarterly Results and Cyclicality of Revenue. The Company's operating expenses, which include product development costs and selling, general, and administrative expenses, are relatively fixed in the short term and are based on our long term revenue expectations. If the Company sells fewer books or otherwise has lower revenue than expected, the Company may not be able to quickly reduce its spending. Any shortfall in the Company's revenue would have a direct impact on its results of operations, and fluctuations in quarterly results could affect the market price of its common stock in a manner unrelated to the Company's long-term operating performance. The Company typically sells more books during the first and second quarters of its September fiscal year because of increased sales during the Christmas season. In addition, the Company typically sells more books in quarters in which software manufacturers release new or updated versions of popular software products. Because a substantial portion of the Company's selling, general, and administrative expenses are incurred evenly throughout the year, the Company generally experiences relatively lower net profit during quarters not impacted by increases in net revenue due to seasonal or other factors discussed above.

In addition, the Company typically publishes books relating to new trends and technologies. Accordingly, if general economic conditions worsen, people may defer spending on these new trends and technologies, which could reduce the number of books sold.

Risks Associated with Product Distribution Channels; Risk of Product Returns. The Company sells its books primarily to large retail chains, large wholesalers, warehouse clubs, office superstores, and computer and electronics superstores. For the three months ended June 30, 2000 the Company's three largest customers, Barnes & Noble, Inc., Borders, Inc., and Ingram Book Company accounted for approximately 18%, 13%, and 7% of net revenue, respectively. The Company's future financial results depend in large part on its relationships with its customers. Any disruption in relationships with its customers could adversely affect financial performance.

The Company's sales policy generally permits book customers to return any unsold or damaged books for full credit. The Company records as revenue all books sold to its customers in a particular quarter and, at the same time, records a provision for estimated returns. During the three months ended June 30, 2000, the Company recorded a provision for returns of approximately 22% of its gross sales. If, during any period, customers return more books than previously estimated, the Company's financial results in that period would be adversely affected.

Competition. The Company faces competition directly from other book publishers and indirectly from non- print media. Competition in book publishing stems mainly from editorial quality, timely introduction of new titles, product positioning, pricing, and brand name recognition. In addition to the Company, Pearson Education, Inc., Microsoft Press, and McGraw- Hill all have a strong market presence in the United States and internationally in technology publishing. The principal competitors for the Company's business and self-help titles include Random House, Simon & Schuster, and HarperCollins. Each of these competitors has substantially greater financial resources than the Company.

Non-print media, such as the Internet and CD-ROMs, may also present substantial competition. If computer users increase their reliance on instruction and other information disseminated on-line, the Company's business could be adversely affected.

Control by IDG (Parent); Potential Conflicts of Interests; Benefits to IDG. The parent owns all of the shares of the Class B common stock, each share of which is entitled to ten votes per share on most stockholder actions, and has approximately 76% of the combined voting power of both classes of common stock as of June 30, 2000. The remaining holders of the shares of Class A common stock are entitled to one vote per share and have approximately 24% of the combined voting power. The parent has two representatives on the Company's Board of Directors and has enough votes to elect all members of the Board of Directors. As a result of its stock ownership, the parent is in a position, without the approval of the Company's public stockholders, to amend the Company's charter or approve a merger, sale of assets, or other major corporate transaction; defeat any non-negotiated takeover attempt that might otherwise benefit the public stockholders; determine the amount and timing of dividends paid to itself and to the Company's public stockholders; and otherwise control the Company's management and operations and the outcome of all matters submitted for a stockholder vote that could conflict with the interests of its public stockholders. In January 2000, the parent announced its plans to purchase up to 500,000 shares of IDGB common stock from time to time at prevailing market prices.

Dependence on Key Personnel. The Company relies, and will continue to rely, on its senior executive officers and other key management personnel. During the second fiscal quarter the Company completed its search for two key executive officers, a President and Chief Financial Officer, to fill two open positions due to prior resignations. In January 2000, the Company announced the appointment of William G. Barry as President and Chief Operating Officer, effective March 1, 2000. Mr. Barry is the former Senior Vice President, Corporate Development of Random House, Inc. In April 2000 the Company announced the appointment of John M. Harris as Senior Vice President and Chief Financial Officer, effective May 1, 2000. Mr. Harris is the former Chief Financial Officer of Marketplace by Marriott, a $4 billion global procurement startup. If any senior executives or key management leave the Company, the relationships that these people have with the Company's authors, customers, manufacturers, or investors could be lost, and the Company would need to find people who could develop new relationships. In addition, the Company expects that it will need to hire additional employees, including key management positions for Internet business development. The competition for employees at all levels of the book publishing and Internet industries is intense and is increasing. In our Northern California operations, in particular, the Company has experienced increased turnover of employees and is experiencing difficulty in attracting new employees. If the Company does not succeed in attracting new employees or retaining and motivating current employees, the Company's business could suffer significantly.

Transition to New Distribution Service. The Company historically outsourced distribution and fulfillment functions to retail and wholesale customers through two vendors. During the first fiscal quarter of 2000, the Company began the transition of these services to a new single source facility in Virginia. This transition was completed at the end of the fiscal third quarter.

Risks Associated with Acquisitions. As part of the Company's growth strategy, it may buy or make significant investments in, complementary companies, publications or products. The Company has completed the acquisition of Cliffs Notes, Inc. and recently completed the acquisition of the Reference Brands. These acquisitions, as well as any future acquisition, will be accompanied by the risks commonly encountered in making acquisitions of products, companies, and technologies.

For example, it could have difficulty assimilating the personnel and operations of the acquired company. This could cause a disruption of its ongoing business, distraction of management and other resources, and difficulty in maintaining uniform standards, controls, and procedures. There can be no assurance that the Company would succeed in overcoming these risks or any other problems encountered in connection with any acquisitions it may make. In addition, the Company may be required to incur additional debt or issue equity to pay for any future acquisitions

In addition to historical information, this Quarterly Report contains forward-looking statements. The forward- looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinion only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors described in other documents the Company files from time to time with the SEC, including the Company's Registration Statement on Form S-1 (file no. 333- 53433) filed in connection with the Company's initial public offering, and Form 10-K as of and for the year ended September 30, 1999.

PART II-OTHER INFORMATION

IDG BOOKS WORLDWIDE, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IDG BOOKS WORLDWIDE, INC.

	(Registrant)

Dated: August 8, 2000

	By:	/s/ JOHN M. HARRIS

	John M. Harris
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer and Duly Authorized Officer)