VALUECLICK INC/CA, S-1/A, 1999-12-22

VALUECLICK INC/CA
S-1/A, 1999-12-22
ADVERTISING AGENCIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1999

REGISTRATION NO. 333-88765
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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VALUECLICK, INC.
(Exact Name of Registrant as Specified in its Charter)

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

<TABLE>
<S> <C> <C>
DELAWARE 7319 77-0495335
(State or Other Jurisdiction (Primary Standard Industry (I.R.S. Employer
of Incorporation or Organization) Classification Number) Identification Number)
</TABLE>

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

6450 VIA REAL
CARPINTERIA, CALIFORNIA 93013
(805) 684-6060

(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
--------------------------

JAMES R. ZARLEY
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
6450 VIA REAL
CARPINTERIA, CALIFORNIA 93013
(805) 684-6060

(Name, Address Including Zip Code, and Telephone Number Including
Area Code, of Agent for Service)

COPIES TO:

<TABLE>
<S> <C>
KENNETH R. BENDER, ESQ. TERRY M. KEE, ESQ.
ALLEN Z. SUSSMAN, ESQ. DAVID R. LAMARRE, ESQ.
RYAN S. HONG, ESQ. DAVID M. KOENINGER, ESQ.
MICHAEL W. CHOU, ESQ. DANIEL T. DASHIELL, ESQ.
BROBECK, PHLEGER & HARRISON LLP PILLSBURY MADISON & SUTRO LLP
550 SOUTH HOPE STREET P.O. BOX 7880
LOS ANGELES, CALIFORNIA 90071 SAN FRANCISCO, CALIFORNIA 94120
TELEPHONE: (213) 489-4060 TELEPHONE: (415) 983-1000
</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 under 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(b) 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 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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

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

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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.

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<PAGE>

SUBJECT TO COMPLETION, DATED DECEMBER 22, 1999

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. VALUECLICK
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
PROSPECTUS
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5,000,000 Shares

[LOGO]

Common Stock

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

ValueClick is offering 5,000,000 shares of its common stock in an initial public
offering. Prior to this offering there has been no public market for
ValueClick's common stock.

ValueClick is a global provider of Internet advertising solutions for publishers
of Web sites and online advertisers.

It is anticipated that the initial public offering price will be between $9.00
and $11.00 per share. The stock of ValueClick will be quoted on the Nasdaq
National Market under the symbol "VCLK."

<TABLE>
<CAPTION>
PER SHARE TOTAL
<S> <C> <C>
Public offering price................................. $ $
Underwriting discounts and commissions................ $ $
Proceeds, before expenses, to ValueClick.............. $ $
</TABLE>

SEE "RISK FACTORS" ON PAGES 7 TO 17 FOR FACTORS THAT SHOULD BE CONSIDERED BEFORE
INVESTING IN THE SHARES OF VALUECLICK.

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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

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

The underwriters may purchase up to an additional 340,000 shares from us and up
to an additional 410,000 shares from selling stockholders at the public offering
price less underwriting discounts and commissions. Delivery and payment for the
shares will be on .

PRUDENTIAL VOLPE TECHNOLOGY

A UNIT OF PRUDENTIAL SECURITIES

WILLIAM BLAIR & COMPANY

PRUDENTIALSECURITIES.COM

, 1999
<PAGE>

INSIDE FRONT COVER

Recent advertisement used by ValueClick to communicate information about its
products and services

Top of page reads: "We focus on a performance-based Internet advertising
solution, in which an advertiser only pays when an Internet user clicks on its
banner advertisement. Here is an example of an advertisement communicating the
benefit of our business model to potential Internet advertising customers."

Center of advertisement: a picture of the human eye with the phrase "This is not
a customer" written above it.

An arrow pointing at the center of the eye with the caption: "Pupil. The hole in
the eye where banners enter"

Text in the lower right hand corner of eye reads: "(Not shown) The hole in the
head where irrelevant banners leave"

Bottom portion of page reads: "A window-shopper, maybe. But definitely not a
customer. If you're only buying impressions, you're targeting the window
shopper, the looky-loo, the passive banner-blind viewer. To generate real
results--site visits, downloads, sales--you need more than eyes. You need
action. The people who don't visit your site can't become your customers. So why
pay to reach them? ValueClick's cost-per-click model guarantees site visits, and
doesn't waste your ad budget on disinterested viewers."

Bottom center displays the ValueClick logo with the phrase "The Pay-For-Results
Advertising Network".

INSIDE GATEFOLD

Flowchart diagram demonstrating business flows from Web publishers to
advertisers with the caption, "The ValueClick Pay-for-Results Advertising
Network in Action"

The right side of the gatefold displays a circular schematic with four large
arrows flowing in a clockwise circular manner pointing to boxes in each quadrant
of the circle. The boxes are titled "ValueClick", "Internet Advertisers",
"Payment Management" and "Web Site Publishers."

At the center of the circle of arrows are additional boxes lined in a vertical
order with each box titled: "Ad Serving Solutions" and "Reporting". Arrows point
from the "ValueClick" box to the "Ad Serving" box to the "Reporting" box to the
"Payment Management" box. A arrow labeled "Banner Advertisement" points from the
"Internet Advertisers" box to the "Ad Serving Solutions" box. A arrow labeled
"Internet user Delivered" points from the "Ad Serving" box to the "Internet
Advertisers" box. A two way arrow labeled "Banner Call Banner Served" points
between the "Ad Serving Solutions" box and the "Web Site Publishers" box. An
arrow labeled "Internet user clicks" points from the "Web Site Publisher" box to
the "Ad Serving Solutions" box. An arrow labeled "User Data/VisiTrak Software"
points from the "Reporting" box to the "Internet Advertisers" box. An arrow
labeled "Real-Time Statistics" points from the "Reporting" box to the "Web Site
Publishers" box.

The left side of gatefold contains a column of numbered textual boxes. Each
numbered box contains a description which corresponds to a point in the
flowchart indicating how the ValueClick network operates.

Box 1 reads: "The publisher of a Web site applies to become a member of the
ValueClick network. Membership in the network is non-exclusive."

Box 2 reads: "The advertising inventories of member Web sites are aggregated and
offered for sale to Internet advertisers."

Box 3 reads: "Internet advertisers provide their banner advertisements to
ValueClick. We then place this banner in our database where the banner waits to
be served through our proprietary ad serving software to an Internet user
visiting a ValueClick affiliated Web site."

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Box 4 reads: "When a user visits a ValueClick network Web site, a banner
advertisement is served to the site."

Box 5 reads: "The Internet user views the banner advertisement and clicks if he
or she is interested in the advertiser's message."

Box 6 reads: "Once an Internet user clicks he or she is then directed to the
advertiser's Web site. The click is counted and then recorded on the ValueClick
server."

Box 7 reads: "ValueClick reports click data in real time to both the advertiser
and the Web publishers."

Box 8 reads: "At the end of each month ValueClick invoices the advertiser for
the clicks generated by its banner advertisements during that month."

Box 9 reads: "At the end of each month ValueClick pays the Web site publisher
for the clicks generated on their Web site during that month."

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 7
Forward-Looking Statements........... 18
Use of Proceeds...................... 18
Dividend Policy...................... 18
Capitalization....................... 19
Dilution............................. 20
Selected Financial Data.............. 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 24
</TABLE>

<TABLE>
Business............................. 35
Management........................... 45
<CAPTION>
PAGE
----
<S> <C>
Related Party Transactions........... 52
Principal and Selling Stockholders... 54
Description of Capital Stock......... 56
Shares Eligible for Future Sale...... 58
Underwriting......................... 60
Legal Matters........................ 62
Experts.............................. 62
Where You Can Find More Information.. 62
Index to Financial Statements........ F-1
</TABLE>

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS
LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS PROSPECTUS MAY ONLY BE
ACCURATE ON THE DATE OF THIS PROSPECTUS.

2
<PAGE>

PROSPECTUS SUMMARY

This summary highlights the information contained elsewhere in this
prospectus. Because this is only a summary, it does not contain all of the
information that may be important to you. You should read the entire prospectus
carefully, and you should consider the information under "Risk Factors" and in
the financial statements and notes, before deciding to invest in the shares of
our common stock.

THE COMPANY

ValueClick is a global provider of Internet advertising solutions for
publishers of Web sites and online advertisers. Web publishers provide us with
an inventory of advertising space on their Web sites, which we sell to online
advertisers seeking to market goods and services over the Internet. We focus on
a performance-based advertising model, known as cost-per-click or CPC, in which
an advertiser only pays us when an Internet user clicks on the advertiser's
banner advertisement. This solution provides publishers of Web sites that have
low to moderate rates of traffic with an opportunity to generate advertising
revenue. We also provide publishers of high-traffic Web sites the ability to
capture additional revenue from their unsold advertising inventory. As of
December 1999, we had delivered banner advertisements to Web sites based in
foreign countries including, Australia, Belgium, Brazil, Canada, China, England,
France, Germany, Italy, Japan, Mexico and Spain.

The markets for Internet advertising and e-commerce transactions have grown
rapidly in recent years. Forrester Research estimates that in 1999, $2.8 billion
will be spent on Internet advertising in the United States, and projects that
this amount will grow to $22.2 billion by 2004, a compound annual growth rate of
57%. Additionally, the Yankee Group expects that e-commerce transactions will
increase from $25 billion in 1998 to $699 billion in 2002, a compound annual
growth rate of 130%.

Historically, most Internet advertising campaigns have been priced based on
a cost-per-thousand impressions model, commonly referred to as CPM. Under the
CPM model, Internet advertisers are charged based on the number of times a
banner advertisement is displayed. Although CPM has historically been the
predominant Internet advertising model, we believe it has several
inefficiencies:

- Underserves a large number of small- to medium-sized Web sites

- Frequently leaves unsold advertising inventory

- Difficulty in predicting effectiveness

We believe our CPC-based advertising model addresses these inefficiencies by
delivering to Web publishers and advertisers a cost-effective, performance-based
Internet advertising solution. Our strategy is to be the leading provider of
performance-based advertising solutions by taking advantage of our position as a
large aggregator of advertising inventory on small- to medium-sized Web sites
and our reputation as the "Pay-for-Results" advertising network. Key elements of
our strategy include:

- Expand our network of Web sites

- Grow with our Web publishers

- Expand our sales and marketing efforts

- Grow with our Web advertisers

- Enhance our technology

- Extend our global presence

- Provide superior customer service

3
<PAGE>

We believe we are a leading aggregator of small- to medium-sized Web sites
based on the number of Web sites within our network. Our network of Web sites,
which consists of independent sites that have agreed to sell us advertising
inventory on a non-exclusive basis, grew over 90% from July 1998 to July 1999,
from approximately 4,200 sites to approximately 8,200 sites, and included over
10,200 Web sites as of October 31, 1999. In October 1999, we delivered over
1.5 billion banner advertisements and registered over 6.2 million clicks, and
based on data provided by Media Metrix, for the quarter ended September 30, 1999
we believe that we reached approximately one-quarter of all U.S.-based Internet
users.

Our Internet advertising business began in July 1997, as a line of business
within Web-Ignite Corporation. In May 1998, the Internet advertising business of
Web-Ignite was transferred to ValueClick, LLC, a newly-formed California limited
liability company controlled by Web-Ignite's sole stockholder. On December 31,
1998, ValueClick, LLC reorganized as ValueClick, Inc., a Delaware corporation.

Our principal executive offices are located at 6450 Via Real, Carpinteria,
California 93013. Our telephone number at that location is (805) 684-6060 and
our Web site is www.valueclick.com. Information contained on our Web site does
not constitute part of this prospectus.

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

Unless otherwise indicated, all information in this prospectus assumes that:

- the initial public offering price will be $10.00 per share;

- the common stock has been split on a 2.88-for-one basis as the result of
stock splits effective in October 1999 and immediately prior to the
closing of this offering;

- each share of our preferred stock will be converted into 2.88 shares of
common stock upon the closing of this offering; and

- the underwriters will not exercise their over-allotment option and no
other person will exercise any other outstanding option.

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

We have registered the trademark "ValueClick" in the European Union and have
applied for registration of the trademark in the United States and Japan. This
prospectus also contains product names, trade names and trademarks that belong
to other organizations.

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THE OFFERING

Total common stock offered................................. 5,000,000 shares

Outstanding common stock after the offering................ 27,366,910 shares

Outstanding common stock owned by our affiliates after
the offering......................................... 15,606,574 shares

Outstanding common stock owned by our non-affiliates
after the offering................................... 11,760,336 shares

Use of proceeds............................................ For general corporate purposes including
expansion of sales and marketing
activities, enhancement of our
technology, possible acquisitions and
international expansions. See "Use of
Proceeds."

Proposed Nasdaq symbol..................................... VCLK
</TABLE>

The number of shares of common stock to be outstanding after the offering is
based on the number of shares outstanding as of September 30, 1999 and assumes
the conversion of our preferred stock into 7,622,744 shares of common stock at
that date. This number does not include 3,952,224 shares subject to outstanding
options under our 1999 Stock Option Plan with a weighted average exercise price
of $0.58 per share and 425,376 shares of common stock reserved for future
issuance under our 1999 Stock Option Plan as of September 30, 1999. See
"Management--Employee Benefit Plans" and Notes 1 and 8 of Notes to Financial
Statements for further information concerning our Stock Option Plan.

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION

(in thousands, except per share data)

The following tables set forth summary financial data for ValueClick to aid
investors in their analysis of this potential investment. The summary financial
data should be read in conjunction with our financial statements and the notes
to those financial statements appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
PERIOD FROM PRO FORMA
MAY 1, 1998 COMBINED HISTORICAL NINE MONTHS NINE MONTHS
(INCEPTION) THROUGH NINE MONTHS ENDED ENDED ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1998 1998(3) 1999 1999(4)
------------------- ------------------- -------------- --------------
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues.......................... $2,053 $1,038 $10,593 $11,386
Gross profit...................... 948 610 5,328 5,655
Loss from operations.............. (221) (125) (468) (1,090)
Net loss.......................... (222) (121) (982) (1,475)
Net loss per common share:

Basic and diluted(1)...... $(0.02) -- $ (0.07) --
Shares used to calculate
basic and diluted(1).... 14,273 -- 13,801 --
Pro forma basic and
diluted net loss per
common share(2)(4)...... -- -- -- $ (0.07)
Shares used in pro forma
basic and diluted net
loss per common share
calculation(2)(4)....... -- -- -- 21,424
</TABLE>

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
----------------------------------------
ACTUAL PRO FORMA(2) AS ADJUSTED(5)
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<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.................................. $2,574 $ 2,574 $48,174
Working capital............................................ 4,502 4,502 50,102
Total assets............................................... 11,984 11,984 57,584
Deferred stock compensation................................ (6,570) (6,570) (6,570)
Total stockholders' equity................................. 8,333 8,333 53,934
</TABLE>

(1) See Notes 1 and 9 of Notes to Financial Statements for determination of
shares used in computing basic and diluted net loss per common share.

(2) Pro forma to give effect to the conversion of all issued and outstanding
shares of preferred stock into common stock but not giving effect to the
exercise of outstanding options to purchase 3,952,224 shares of common stock
nor the vesting of 575,335 restricted shares of common stock as of
September 30, 1999.

(3) Combined historical statement of operations data for the nine months ended
September 30, 1998 reflects the combined historical operating results for
ValueClick for the period May 1, 1998 through September 30, 1998, and the
ValueClick line of business of Web-Ignite for the four months ended
April 30, 1998.

(4) Pro forma statement of operations data for the nine months ended
September 30, 1999 reflects the acquisition of a controlling interest in
ValueClick Japan on August 6, 1999 for 460,800 shares of common stock.

(5) As adjusted to reflect the sale of 5,000,000 shares of common stock offered
by us at an assumed initial public offering price of $10.00 per common share
after deducting the underwriting discounts and estimated offering expenses
payable by ValueClick. See "Use of Proceeds" on page 18 for more information
on our intended use of proceeds from this offering and "Capitalization" on
page 19 for more information on our capital structure.

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RISK FACTORS

This offering involves a high degree of risk. You should consider carefully
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in shares of our common stock. If
any of the following risks actually occur, our business, results of operations
and financial condition could be materially and adversely affected. This could
cause the trading price of our common stock to decline, and you might lose part
or all of your investment.

RISKS RELATED TO OUR BUSINESS

IF BANNER ADVERTISING ON THE INTERNET LOSES ITS APPEAL TO DIRECT MARKETING
COMPANIES, OUR REVENUES COULD DECLINE.

We currently derive all of our revenues by delivering banner advertisements
that generate clicks to our advertisers' Web sites. This business model may not
continue to be effective in the future for a number of reasons, including the
following:

- click rates have always been low and may decline as the number of banner
advertisements on the Web increases;

- Internet users can install "filter" software programs which allow them to
prevent banner advertisements from appearing on their screens;

- banner advertisements are, by their nature, limited in content relative to
other media;

- direct marketing companies may be reluctant or slow to adopt banner
advertising that replaces, limits or competes with their existing direct
marketing efforts; and

- direct marketing companies may prefer other forms of Internet advertising,
including permission-based e-mail.

If the number of direct marketing companies who purchase banner clicks from us
does not continue to grow, we may experience difficulty in attracting publishers
and advertisers, and our revenues could decline.

IF OUR BUSINESS MODEL IS NOT ACCEPTED BY INTERNET ADVERTISERS OR WEB
PUBLISHERS, OUR REVENUES COULD DECLINE.

We conduct all of our business on a cost-per-click or CPC pricing model.
This business model is relatively new and much less common than the
cost-per-thousand impressions or CPM pricing model, which many other Internet
advertising companies use. Our ability to generate significant revenue from
advertisers will depend, in part, on our ability to:

- demonstrate the effectiveness of our CPC pricing model to Internet
advertisers, many of which may be more accustomed to the CPM pricing
model, and to Web publishers; and

- attract and retain advertisers and Web publishers by differentiating our
technology and services from those of our competitors.

One component of our strategy is to enhance advertisers' ability to measure
their return on investment and track the performance and effectiveness of their
advertising campaigns. However, we have limited experience in implementing our
strategy. To date, few advertisers have taken advantage of the most
sophisticated tool we offer for tracking Internet users' activities after they
have reached advertisers' Web sites. We cannot assure you that our strategy will
succeed.

Intense competition among Web sites and Internet advertising services has
led to the proliferation of a number of alternative pricing models for Internet
advertising. These alternatives, and the likelihood that additional pricing
alternatives will be introduced, make it difficult for us to project the levels
of advertising revenue or the margins that we, or the Internet advertising
industry in general, will realize in the future. Moreover, an increase in the
amount of advertising on the Web may result in a

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decline in click rates. Since we predominantly rely on a performance-based
pricing model to generate revenue, any decline in click rates may make our CPC
pricing model a less viable or less attractive solution for Web publishers and
advertisers.

OUR REVENUES COULD DECLINE IF WE FAIL TO EFFECTIVELY MANAGE OUR EXISTING
ADVERTISING SPACE AND OUR GROWTH COULD BE IMPEDED IF WE FAIL TO ACQUIRE NEW
ADVERTISING SPACE.

Our success depends in part on our ability to effectively manage our
existing advertising space. The Web sites that list their unsold advertising
space with us are not bound by long-term contracts that ensure us a consistent
supply of advertising space, which we refer to as inventory. In addition, Web
sites can change the amount of inventory they make available to us at any time.
If a Web site publisher decides not to make advertising space from its Web sites
available to us, we may not be able to replace this advertising space with
advertising space from other Web sites that have comparable traffic patterns and
user demographics quickly enough to fulfill our advertisers' requests. This
could result in lost revenues. We expect that our customers' requirements will
become more sophisticated as the Web matures as an advertising medium. If we
fail to manage our existing advertising space effectively in order to meet our
customers' changing requirements, our revenues could decline.

Our growth is limited by our ability to expand our advertising inventory. In
order to attract new customers, we must maintain a consistent supply of
attractive advertising space. We intend to expand our advertising inventory by
selectively adding to our network new Web sites that offer attractive
demographics, innovative and quality content and growing Web user traffic. Our
ability to attract new Web sites to the ValueClick network and to retain Web
sites currently in our network will depend on various factors, some of which are
beyond our control. These factors include our ability to introduce new and
innovative product lines and services, our ability to efficiently manage our
existing advertising inventory, our pricing policies and the cost-efficiency to
Web publishers of outsourcing their advertising sales. In addition, the number
of competing Internet advertising networks that purchase advertising inventory
from small- to medium-sized Web sites continues to increase. We cannot assure
you that the size of our inventory will increase or even remain constant in the
future.

WE MAY FACE INTELLECTUAL PROPERTY DISPUTES THAT ARE COSTLY OR COULD HINDER
OR PREVENT OUR ABILITY TO DELIVER ADVERTISEMENTS OVER THE INTERNET.

We may be subject to disputes and legal actions alleging intellectual
property infringement, unfair competition or similar claims against us. One of
our principal competitors, DoubleClick, was recently awarded a patent on certain
aspects of ad-delivery technology, including the ability to target the delivery
of ads over a network such as the Internet and the ability to compile statistics
on individual Web users and the use of those statistics to target ads. The
DoubleClick patent may cover the technology we use in our advertising solutions;
accordingly, we may be sued by DoubleClick for infringement. If our technology
is not outside the scope of the technology covered under the DoubleClick patent
or if the DoubleClick patent is not invalidated, we may be limited in or lose
our ability to use our technology or may be required to pay DoubleClick for a
license of its technology. Furthermore, other companies, such as 24/7 Media, may
have or may in the future be granted patents that cover aspects of our
technology or our business. We cannot assure you that we could enter into
licensing agreements with DoubleClick or other companies on commercially
reasonable terms, if at all.

DoubleClick recently filed a lawsuit against L90, Inc., a company in our
industry that offers Internet advertising services. DoubleClick alleges that L90
is infringing its patent and seeks a preliminary and permanent injunction from
further alleged infringement, treble damages in an unspecified amount, and
attorneys' fees and costs. We cannot assure you that we will not be similarly
sued by DoubleClick. Our failure to prevail in any litigation with DoubleClick
or any other party asserting patent infringement could result in:

- substantial monetary damages, including damages for past infringement,
which could be tripled if a court determines that the infringement was
willful;

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- an injunction requiring us to stop offering our services in their current
form;

- the need to redesign our systems; or

- the need to pay significant license fees in order to use technology
belonging to third parties.

See "Business--Intellectual Property Rights" for more information regarding
our intellectual property.

IF WE FAIL TO KEEP PACE WITH RAPIDLY CHANGING TECHNOLOGIES, WE COULD LOSE
CUSTOMERS OR ADVERTISING INVENTORY.

The Internet advertising market is characterized by rapidly changing
technologies, evolving industry standards, frequent new product and service
introductions and changing customer demands. The introduction of new products
and services embodying new technologies and the emergence of new industry
standards and practices can render existing products and services obsolete and
unmarketable or require unanticipated investments in research and development.
Our success will depend on our ability to adapt to rapidly changing
technologies, to enhance existing solutions and to develop and introduce a
variety of new solutions to address our customers' changing demands.

For example, advertisers are increasingly requiring Internet advertising
networks to have the ability to deliver advertisements utilizing new formats
that surpass stationary images and incorporate rich media, such as video and
audio, interactivity, and more precise consumer targeting techniques. Our system
does not support some types of advertising formats, such as video and audio, and
many of the Web sites in our network have not implemented systems to allow rich
media advertisements. In addition, an increase in the bandwidth of Internet
access resulting in faster data delivery may provide new products and services
that will take advantage of this expansion in delivery capability. If we fail to
adapt successfully to developments such as these, we could lose customers or
advertising inventory.

We purchase most of the software we use in our business from third parties.
We intend to continue to acquire technology necessary for us to conduct our
business from third parties. We cannot assure you that, in the future, these
technologies will be available on commercially reasonable terms, or at all.

We may also experience difficulties that could delay or prevent the
successful design, development, introduction or marketing of new solutions. Any
new solution or enhancement we develop will need to meet the requirements of our
current and prospective customers and may not achieve significant market
acceptance. If we fail to keep pace with technological developments and the
introduction of new industry and technology standards on a cost-effective basis,
our expenses could increase, and we could lose customers or advertising
inventory.

IF THE USE OF THE TECHNOLOGY WE CURRENTLY USE TO TARGET THE DELIVERY OF
BANNERS AND TO PREVENT FRAUD ON OUR NETWORK IS RESTRICTED OR BECOMES SUBJECT
TO REGULATION, OUR EXPENSES COULD INCREASE AND WE COULD LOSE CUSTOMERS OR
ADVERTISING INVENTORY.

Web sites typically place small files of information, commonly known as
"cookies," on an Internet user's hard drive, generally without the user's
knowledge or consent. Cookie information is passed to the Web site through the
Internet user's browser software. We currently use cookies to collect
information about an Internet user's movement through the advertiser's Web site
and to monitor and prevent potentially fraudulent activity on our network. Most
currently available Internet browsers allow Internet users to modify their
browser settings to prevent cookies from being stored on their hard drive, and
some users currently do so. Internet users can also delete cookies from their
hard drives at any time.

Some Internet commentators and privacy advocates have suggested limiting or
eliminating the use of cookies. The effectiveness of our technology could be
limited by any reduction or limitation in the use of cookies. If the use or
effectiveness of cookies is limited, we would have to switch to other
technologies in order to gather demographic and behavioral information. While
such technologies

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<PAGE>
currently exist, they are substantially less effective than cookies. We would
also have to develop or acquire other technology to prevent fraud. Replacement
of cookies could require significant reengineering time and resources, might not
be completed in time to avoid losing customers or advertising inventory, and
might not be commercially feasible.

WE COULD LOSE CUSTOMERS OR ADVERTISING INVENTORY IF WE FAIL TO MEASURE
CLICKS ON BANNER ADVERTISEMENTS IN A MANNER THAT IS ACCEPTABLE TO OUR
ADVERTISERS AND WEB PUBLISHERS.

We earn advertising revenues and make payments to Web publishers based on
the number of clicks on advertisements delivered on our network. Advertisers'
and Web publishers' willingness to use our services and join our network will
depend on the extent to which they perceive our measurements of clicks to be
accurate and reliable. Advertisers and Web publishers often maintain their own
technologies and methodologies for counting clicks, and from time to time we
have had to resolve differences between our measurements and theirs. Any
significant dispute over the proper measurement of clicks or other user
responses to advertisements could cause us to lose customers or advertising
inventory.

IF WE FAIL TO COMPETE EFFECTIVELY AGAINST OTHER INTERNET ADVERTISING
COMPANIES, WE COULD LOSE CUSTOMERS OR ADVERTISING INVENTORY AND OUR REVENUES
COULD DECLINE.

The market for Internet advertising and related services is intensely
competitive. We expect this competition to continue to increase because there
are no significant barriers to entry. Increased competition may result in price
reductions for advertising space, reduced margins and loss of our market share.
We currently compete with the following types of companies:

- Internet advertising networks offered by several companies that focus on
the traditional CPM model, such as DoubleClick, 24/7 Media and Flycast;

- Internet advertising networks using a performance-based model, like us,
offered by several smaller companies, such as TeknoSurf and ClickAgents;

- providers of advertising inventory management products and related
services, such as NetGravity, Accipiter and AdForce;

- advertising, media agencies and other companies that facilitate Web
advertising, such as America Online, NBCi, Yahoo!, SmartAge, GoNetwork,
Excite@Home, Infoseek, Lycos and Microsoft;

- Internet navigational, Web search engine companies and informational
services and online service providers, such as America Online,
Excite@Home, Lycos, Microsoft, Yahoo!, and Infoseek; and

- traditional advertising and direct marketing media, such as radio, cable,
television, print and direct marketing.

We also compete with traditional advertising media, such as direct mail,
television, radio, cable and print, for a share of advertisers' total
advertising budgets.

Many of our current and potential competitors enjoy competitive advantages
over us, such as longer operating histories, greater name recognition, larger
customer bases, greater access to advertising space on high-traffic Web sites,
and significantly greater financial, technical and marketing resources. We may
not be able to compete successfully. If we fail to compete successfully, we
could lose customers or advertising inventory and our revenues could decline.

OUR MANAGEMENT IS NEW AND MAY NOT WORK TOGETHER SUCCESSFULLY.

Our future success depends on the ability of management to implement our
business plan. All executive officers other than Brian Coryat and James R.
Zarley have been directors or officers with us for less than a year. These
recently hired individuals have had limited experience working with the rest of
our management team. We cannot be certain that we will be able to integrate
these new executives

10
<PAGE>
into our organization effectively. In addition, our executive officers may not
be successful in carrying out their duties or making strategic decisions quickly
in a rapidly changing market. The failure to integrate our new executives into
our organization could divert management's time and attention, increase our
expenses and adversely affect our ability to manage our business efficiently.
The inability of our management to respond quickly in the rapidly evolving
Internet advertising market could cause us to lose customers or advertising
inventory.

WE DEPEND ON KEY PERSONNEL, THE LOSS OF WHOM COULD HARM OUR BUSINESS.

Our future success is substantially dependent on the continued service of
our key senior management, technical and sales personnel and in particular our
Chairman and Chief Executive Officer, James R. Zarley, our President and Chief
Operating Officer, Brian Coryat, and our Vice Chairman and Chief Marketing
Officer, Earle A. Malm II. Our employment agreements with our key personnel are
short term and on an at-will basis. We also do not have key-person insurance on
any of our employees, other than Brian Coryat, our President and Chief Operating
Officer. The loss of the services of any member of our management team, or of
any other key employees, could divert management's time and attention, increase
our expenses and adversely affect our ability to conduct our business
efficiently. Our future success also depends on our continuing ability to
attract, retain and motivate highly skilled employees. Competition for employees
in our industry is intense. We may be unable to retain our key employees or
attract, assimilate or retain other highly qualified employees in the future. We
have experienced difficulty from time to time in attracting the personnel
necessary to support the growth of our business, and we may experience similar
difficulties in the future.

OUR OFFICERS AND DIRECTORS WILL HAVE SUBSTANTIAL INFLUENCE OVER OUR
OPERATIONS, CAN SIGNIFICANTLY INFLUENCE ALL MATTERS REQUIRING STOCKHOLDER
APPROVAL AND MAY HAVE INTERESTS THAT ARE DIFFERENT FROM, OR IN ADDITION TO,
YOUR INTERESTS.

We anticipate that our executive officers and directors will beneficially
own approximately 50% of our common stock following the completion of this
offering, or 48% if the underwriters' over-allotment option is exercised in
full. Our executive officers and directors will have the ability to control all
matters requiring approval by our stockholders, including the election of
directors and approval of significant corporate transactions. These directors
and officers may have interests that are different from, or in addition to, your
interests. See "Principal and Selling Stockholders" for more detailed
information.

SYSTEM FAILURES COULD SIGNIFICANTLY DISRUPT OUR OPERATIONS, WHICH COULD
CAUSE US TO LOSE CUSTOMERS OR ADVERTISING INVENTORY.

Our success depends on the continuing and uninterrupted performance of our
systems. Sustained or repeated system failures that interrupt our ability to
provide our services to our customers, including failures affecting our ability
to deliver advertisements quickly and accurately and to process users' responses
to advertisements, would reduce significantly the attractiveness of our
solutions to advertisers and Web sites. Our business, results of operations and
financial condition could be materially and adversely affected by any damage or
failure that interrupts or delays our operations.

Our computer systems are vulnerable to damage from a variety of sources,
including telecommunications failures, malicious human acts and natural
disasters. We lease server space in Los Angeles, California, Boca Raton, Florida
and Tokyo, Japan. Therefore, any of the above factors affecting the Los Angeles,
Boca Raton or Tokyo areas would substantially harm our business. Moreover,
despite network security measures, our servers are potentially vulnerable to
physical or electronic break-ins, computer viruses and similar disruptive
problems in part because we cannot control the maintenance and operation of our
third-party data centers. Despite the precautions we have taken, unanticipated
problems affecting our systems could cause interruptions in the delivery of our
solutions in the future. Our data storage centers incorporate redundant systems,
consisting of additional

11
<PAGE>
servers, but our primary system does not switch over to our backup system
automatically. Our insurance policies may not adequately compensate us for any
losses that may occur due to any failures in our systems.

THE YEAR 2000 PROBLEM COULD CAUSE SIGNIFICANT HARM TO OUR OPERATIONS.

The Year 2000 problem is the result of many computer systems and software
programs having been designed to accept or recognize only two digits rather than
four digits to define the applicable year. Date sensitive hardware and software
may recognize a date using "00" as the year 1900 rather than the year 2000. As a
result, computer systems and software used by many organizations and
governmental agencies may need to be upgraded to comply with these Year 2000
requirements or risk system failure or miscalculations causing disruptions of
normal business activities.

The success of our CPC business model depends on our ability to serve a
large number of banner advertisements to our Web publishers and to provide a
large number of clicks to our advertisers. If the Web publishers in our network,
the Internet service providers, or ISPs, who provide access to those Web sites,
or the advertisers whose banner advertisements we serve experience disruptions
in their computer systems related to the Year 2000 problem, we may not be able
to deliver advertisements to our Web publishers or enable Web users to click to
our advertisers, and our revenues could decline. Please see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Year
2000 Compliance" for more detailed information on our state of readiness, costs,
risks and contingency plans regarding the Year 2000 problem.

WE MAY EXPERIENCE CAPACITY CONSTRAINTS THAT COULD REDUCE OUR REVENUES.

Our future success depends in part on the efficient performance of our
software and technology, as well as the efficient performance of the systems of
third parties, such as our ISPs. As the numbers of Web pages and users increase,
our services and infrastructure may not be able to grow to meet the demand. A
sudden and unexpected increase in the volume of advertising delivered through
our servers or in click rates could strain the capacity of the software or
hardware that we have deployed. Any capacity constraints we experience could
lead to slower response times or system failures and adversely affect the
availability of advertisements, the number of advertising views delivered and
the level of user responses received, which would harm our revenues. To the
extent that we do not effectively address capacity constraints or system
failures, our business, results of operations and financial condition could be
harmed substantially. See "Business--Technology Platform" for more detailed
information.

We also depend on the ISPs that provide consumers with access to the Web
sites on which our customers' advertisements appear. Internet users have
occasionally experienced difficulties connecting to the Web due to failures of
their ISPs' systems. Any disruption in Internet access provided by ISPs or
failures by ISPs to handle the higher volumes of traffic expected in the future
could materially and adversely affect our revenues.

IT MAY BE DIFFICULT FOR YOU TO EVALUATE OUR BUSINESS AND YOUR INVESTMENT
BECAUSE WE HAVE A LIMITED OPERATING HISTORY.

Because we have a limited operating history, it may be difficult to evaluate
our business and prospects. You should consider our prospects in light of the
risks, expenses and difficulties frequently encountered by early-stage companies
in the rapidly-changing Internet market. These risks include our ability to:

- maintain and increase our inventory of advertising space on Web sites;

- maintain and increase the number of advertisers that use our products and
services and offer banner advertisements that generate significant
response rates;

- continue to expand the number of products and services we offer and the
capacity of our systems;

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<PAGE>
- continue to increase the acceptance of the CPC pricing model; and

- adapt to changes in Web advertisers' promotional needs and policies, and
the technologies used to generate Web advertisements.

If we are unsuccessful in addressing these risks and uncertainties, our
business, results of operations and financial condition could be materially and
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for more detailed information.

IT MAY BE DIFFICULT TO PREDICT OUR FINANCIAL PERFORMANCE BECAUSE OUR
QUARTERLY OPERATING RESULTS MAY FLUCTUATE.

Our revenues and operating results may vary significantly from quarter to
quarter due to a variety of factors, many of which are beyond our control. You
should not rely on period-to-period comparisons of our results of operations as
an indication of our future performance. Our results of operations may fall
below the expectations of market analysts and investors in some future periods.
If this happens, the market price of our common stock may fall.

The factors that may affect our quarterly operating results include:

- fluctuations in demand for our advertising solutions;

- fluctuations in click rates;

- fluctuations in the amount of available advertising space, or views, on
Web sites in the ValueClick network;

- the timing and amount of sales and marketing expenses incurred to attract
new advertisers;

- fluctuations in sales of different types of advertising, for example, the
amount of advertising sold at higher rates rather than lower rates;

- changes in our pricing policies, the pricing policies of our competitors
or the pricing policies for advertising on the Internet generally;

- timing differences at the end of each quarter between our payments to Web
publishers for a given set of clicks and our collection of advertising
revenue for those clicks; and

- costs related to acquisitions of technology or businesses.

Expenditures by advertisers also tend to be cyclical, reflecting overall
economic conditions as well as budgeting and buying patterns. Any decline in the
economic prospects of advertisers or the economy generally may alter current or
prospective advertisers' spending priorities, or may increase the time it takes
us to close sales with advertisers, and could materially and adversely affect
our business, results of operations and financial condition.

WE MAY EXPERIENCE SEASONAL FLUCTUATIONS IN OUR REVENUES.

We believe that our revenues will be subject to seasonal fluctuations
because advertisers generally place fewer advertisements during the first and
third calendar quarters of each year. Additional seasonal patterns in Internet
advertisers' spending may emerge as the industry matures.

OUR FUTURE REVENUES AND OPERATING RESULTS ARE DIFFICULT TO FORECAST AND MANY
OF OUR EXPENSES ARE FIXED.

Our current and future expense estimates are based, in large part, on our
estimates of future revenues and on our investment plans. In particular, we plan
to increase our operating expenses significantly in order to:

- expand our sales and marketing operations;

- enhance our technology and software solutions;

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<PAGE>
- acquire additional advertising inventory;

- enhance our advertising management platform; and

- continue our international expansion.

Most of our expenses are fixed in the short term. We may be unable to reduce
spending if our revenues are lower than expected. Any significant shortfall in
revenues in relation to our expectations could materially and adversely affect
our cash flows. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" for more detailed information.

IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY, OUR EXPENSES COULD INCREASE AND
OUR MANAGEMENT'S TIME AND ATTENTION COULD BE DIVERTED.

As we continue to increase the scope of our operations, we will need an
effective planning and management process to implement our business plan
successfully in the rapidly evolving Internet advertising market. Our business,
results of operations and financial condition will be substantially harmed if we
are unable to manage our expanding operations effectively. We commenced
operations, through joint ventures, in Japan in March 1998 and the United
Kingdom in August 1999. We have grown from six employees in July 1998 to 47
full- and part-time employees domestically in September 1999 and have grown to
16 full- and part-time employees in Japan in September 1999. We plan to continue
to expand our sales and marketing, customer support and research and development
organizations. Past growth has placed, and any future growth will continue to
place, a significant strain on our management systems and resources. We have
recently implemented a new financial reporting system and expect that we will
need to continue to improve our financial and managerial controls and our
reporting systems and procedures. In addition, we will need to expand, train and
manage our work force. Our failure to manage our growth effectively could
increase our expenses and divert management's time and attention.

IF WE DO NOT SUCCESSFULLY DEVELOP OUR INTERNATIONAL STRATEGY, OUR REVENUES
AND CASH FLOWS AND THE GROWTH OF OUR BUSINESS COULD BE HARMED.

We initiated operations, through joint ventures, in Japan in March 1998, and
in the United Kingdom in August 1999, and we expect to commence operations in
other selected international markets in 2000. For the nine months ended
September 30, 1999, international sales represented 7% of our revenues, on a pro
forma basis. Our Japanese operation subjects us to foreign currency exchange
risks as it denominates its transactions in Japanese Yen. Our international
expansion will subject us to additional foreign currency exchange risks and will
require management attention and resources. We expect to pursue expansion
through a number of international alliances and to rely extensively on these
business partners initially to conduct operations, establish local networks,
register Web sites as affiliates and coordinate sales and marketing efforts. Our
success in these markets will depend on the success of our business partners and
their willingness to dedicate sufficient resources to our relationships. We
cannot assure you that we will be successful in our efforts overseas.
International operations are subject to other inherent risks, including:

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

- changes in domestic regulatory requirements, as well as differences
between domestic and foreign regulatory requirements;

- export restrictions, including export controls relating to encryption
technology;

- reduced protection for intellectual property rights in some countries;

- potentially adverse tax consequences;

- difficulties and costs of staffing and managing foreign operations;

- political and economic instability;

14
<PAGE>
- tariffs and other trade barriers; and

- seasonal reductions in business activity.

Our failure to address these risks adequately could materially and adversely
affect our business, results of operations and financial condition.

RISKS RELATED TO OUR INDUSTRY

OUR REVENUE GROWTH DEPENDS ON THE CONTINUED GROWTH OF INTERNET USAGE AND
INFRASTRUCTURE.

Our business and financial results depend on continued growth in the use of
the Internet. Internet usage may be inhibited for a number of reasons, such as:

- inadequate network infrastructure;

- security concerns;

- inconsistent quality of service; and

- unavailability of cost-effective, high-speed service.

If Internet usage grows, its infrastructure may not be able to support the
demands placed on it and its performance and reliability may decline. In
addition, Web sites have experienced interruptions in their service as a result
of outages and other delays occurring throughout the Internet network
infrastructure. The Internet could lose its viability as a commercial medium due
to delays in the development or adoption of new technology required to
accommodate increased levels of Internet activity. If use of the Internet does
not continue to grow, or if the Internet infrastructure does not effectively
support its growth, our revenues could be materially and adversely affected.

OUR LONG-TERM SUCCESS MAY DEPEND ON THE DEVELOPMENT OF E-COMMERCE BECAUSE
MANY OF OUR CUSTOMERS' ADVERTISEMENTS RELATE TO ONLINE PURCHASING.

Because many of our customers' advertisements encourage online purchasing,
our long-term success may depend in part on the growth and market acceptance of
e-commerce. Our business would be adversely affected if the growth or acceptance
of e-commerce does not develop, or develops more slowly than expected. A number
of factors outside of our control could hinder the development of e-commerce,
including the following:

- the network infrastructure necessary for substantial growth in Internet
usage may not develop adequately or its performance and reliability may
decline;

- insufficient availability of telecommunication services or changes in
telecommunication services could result in inconsistent quality of service
or slower response times on the Internet; and

- negative publicity and consumer concern surrounding the security of
e-commerce could impede its acceptance and growth.

In particular, any well-publicized compromise of security involving Web-based
transactions could deter people from purchasing items on the Internet, clicking
on advertisements, or using the Internet generally, any of which could cause us
to lose customers and advertising inventory and could materially, adversely
effect our revenues.

INCREASED GOVERNMENT REGULATION COULD DECREASE DEMAND FOR OUR SERVICES AND
INCREASE OUR COSTS OF DOING BUSINESS.

Laws and regulations that apply to Internet communications, commerce and
advertising are becoming more prevalent. These regulations could affect the
costs of communicating on the Web and adversely affect the demand for our
advertising solutions or otherwise harm our business, results of operations and
financial condition. Recently, the United States Congress enacted Internet
legislation regarding children's privacy, copyrights and taxation. Other laws
and regulations may be adopted, and

15
<PAGE>
may address issues such as user privacy, pricing, acceptable content, taxation
and quality of products and services. This legislation could hinder growth in
the use of the Web generally and decrease the acceptance of the Web as a
communications, commercial and advertising medium. In addition, the growing use
of the Web has burdened the existing telecommunications infrastructure and has,
at times, caused interruptions in telephone service. Telephone carriers have
petitioned the government to regulate and impose fees on ISPs and online service
providers in a manner similar to long distance carriers.

Due to the global nature of the Web, it is possible that, although our
transmissions currently originate in California, Florida and Japan, the
governments of other states or foreign countries might attempt to regulate our
transmissions or levy sales or other taxes relating to our activities. The
European Union recently adopted a directive addressing data privacy that may
result in limits on the collection and use of user information. The laws
governing the Internet remain largely unsettled, even in areas where there has
been some legislative action. It may take years to determine whether and how
existing laws, including those governing intellectual property, privacy, libel
and taxation, apply to the Internet and Internet advertising. In addition, the
growth and development of the market for Internet commerce may prompt calls for
more stringent consumer protection laws, both in the United States and abroad,
that may impose additional burdens on companies conducting business over the
Internet. Our business, results of operations and financial condition could be
materially and adversely affected by the adoption or modification of laws or
regulations relating to the Internet, or the application of existing laws to the
Internet or Internet-based advertising.

WE MAY BE LIABLE FOR CONTENT DISPLAYED ON THE WEB SITES OF OUR PUBLISHERS
WHICH COULD INCREASE OUR EXPENSES.

We may be liable to third parties for content in the advertising we deliver
if the artwork, text or other content involved violates copyright, trademark, or
other intellectual property rights of third parties or if the content is
defamatory. Any claims or counterclaims could be time-consuming, result in
costly litigation or divert management's attention.

RISKS RELATED TO THIS OFFERING

VIRTUALLY ALL OF OUR SHARES WILL BE ELIGIBLE FOR SALE SHORTLY AFTER THIS
OFFERING, WHICH COULD RESULT IN A DECLINE IN OUR STOCK PRICE.

If our stockholders sell substantial amounts of common stock in the public
market following this offering, the market price of our common stock could fall.
These sales also might make it more difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
appropriate. Based on shares outstanding as of September 30, 1999, upon
completion of this offering, we will have 27,366,910 shares of common stock
outstanding. Of these shares, the 5,000,000 shares being offered hereby will be
freely tradable and the remaining shares will become eligible for sale in the
public market at various times after the date of this prospectus pursuant to
Rule 144. All of these remaining shares are subject to contractual restrictions
with the underwriters that prevent them from being sold until 180 days after the
date of this prospectus without the consent of Prudential Securities.

In addition, upon the effective date of this offering, we expect to register
for sale 5,760,000 shares of common stock reserved for issuance under the 1999
Stock Option Plan. As of September 30, 1999, options to purchase 3,952,224
shares of common stock were outstanding. Shares acquired upon exercise of these
options will be eligible for sale in the public market from time to time subject
to vesting and the 180-day lockup restrictions that apply to the outstanding
stock. The exercise price of all of these stock options is lower than the
expected initial public offering price of our common stock. The sale of a
significant number of these shares could cause the price of our common stock to
decline. See "Shares Eligible for Future Sale" for more detailed information.

16
<PAGE>
WE EXPECT TO EXPERIENCE VOLATILITY IN OUR STOCK PRICE.

Prior to this offering, there has been no public market for our common
stock. Accordingly, we cannot assure you that an active trading market will
develop or be sustained or that the market price of our common stock will not
decline. The initial public offering price for the shares will be determined by
us and the representatives of the underwriters and may not be indicative of
prices that will prevail in the trading market. The price at which our common
stock will trade after this offering is likely to be highly volatile and may
fluctuate substantially due to factors such as:

- actual or anticipated fluctuations in our results of operations;

- changes in securities analysts' expectations, or our failure to meet those
expectations;

- announcements of technological innovations;

- introduction of new services by us or our competitors;

- developments with respect to intellectual property rights;

- conditions and trends in the Internet and other technology industries; and

- general market conditions.

In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have affected the market prices for the
common stocks of technology companies, particularly Internet companies. In the
past, these broad market fluctuations have been unrelated or disproportionate to
the operating performance of these companies. Any significant fluctuations in
the future might result in a decline in the market price of our common stock. In
the past, following periods of volatility in the market price of a particular
company's securities, securities class action litigation has often been brought
against that company. We may become involved in this type of litigation in the
future. Litigation is often expensive and diverts management's attention and
resources, which could harm our business and operating results.

DELAWARE LAW CONTAINS ANTI-TAKEOVER PROVISIONS THAT COULD DETER TAKEOVER
ATTEMPTS, EVEN IF SUCH TRANSACTIONS WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.

Provisions of Delaware law could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our stockholders. Section
203 of the Delaware General Corporation Law may make the acquisition of
ValueClick and the removal of incumbent officers and directors more difficult by
prohibiting stockholders holding 15% or more of ValueClick's outstanding voting
stock from acquiring ValueClick without the Board's consent for at least three
years from the date they first hold 15% or more of the voting stock. See
"Description of Capital Stock--Delaware Anti-Takeover Law" for more detailed
information.

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<PAGE>
FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties. You should not rely on these forward-looking statements. We use
words such as "anticipates," "believes," "plans," "expects," "future," "intends"
and similar expressions to identify forward-looking statements. Our actual
results could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks faced by us and described in
the preceding "Risk Factors" section and elsewhere in this prospectus. This
prospectus also contains forward-looking statements attributed to third parties
relating to their estimates regarding the growth of Internet use, e-commerce and
Internet advertising. You should not place undue reliance on these
forward-looking statements.

In evaluating our business, prospective investors should consider carefully
the factors presented in the "Risk Factors" section and the other information
contained in this prospectus.

USE OF PROCEEDS

The net proceeds to us from the sale of the 5,000,000 shares being offered
by us at an assumed initial public offering price of $10.00 per share, after
deducting underwriting discounts and commissions and estimated offering
expenses, are estimated to be $45.6 million, or $48.8 million if the
underwriters' over-allotment option is exercised in full. We expect to use the
net proceeds of the offering for general corporate purposes, including expansion
of sales and marketing activities, enhancement of our technology and
international expansions. As of the date of this prospectus, we have not
allocated any specific amount of proceeds for these purposes. However, we
presently anticipate that we will spend between $10 million and $15 million in
sales and marketing expenses during the year ending December 31, 2000 to promote
our brand and attract Web publishers and Internet advertisers. We further
anticipate that we will spend between $5 million and $8 million on capital
expenditures associated with technology and system upgrades. We anticipate that
we will spend between $10 million and $15 million on international expansions.
The remainder of the net proceeds will be used for general corporate purposes
and working capital. This allocation is only an estimate and we will have broad
discretion to adjust it as necessary to address our operational needs in the
future. For instance, we may also use a portion of the net proceeds to acquire
complementary technologies or businesses. However, we currently have no
commitments or agreements and are not involved in any negotiations with respect
to any such transactions. Pending these uses, we intend to invest the net
proceeds in short-term, interest-bearing, investment grade securities.

DIVIDEND POLICY

We currently anticipate that we will retain any future earnings for use in
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future. Any determination to pay dividends in the future will be at
the discretion of our board of directors and will depend upon, among other
factors, our results of operations, financial condition and capital
requirements. Our loan agreement with Silicon Valley Bank prohibits us from
paying cash dividends without the bank's consent.

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<PAGE>
CAPITALIZATION

The following table sets forth our capitalization as of September 30, 1999
(a) on an actual basis, (b) on a pro forma basis to reflect the automatic
conversion of all outstanding shares of preferred stock into shares of common
stock upon the closing of this offering and (c) the pro forma information on an
as adjusted basis to give effect to the receipt of the estimated net proceeds
from the sale of shares of common stock in this offering at an assumed initial
public offering price of $10.00 per common share. The table does not include
outstanding options to acquire 3,952,224 shares of common stock as of
September 30, 1999 with a weighted average exercise price of $0.58 per share.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
---------------------------------------
ACTUAL PRO FORMA AS ADJUSTED
-------- -------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents.................................. $ 2,574 $ 2,574 $48,174
======= ======= =======
Stockholders' equity
Preferred stock, $0.001 par value; 20,000,000 shares
authorized:
Series A convertible preferred stock, 297,132 shares
authorized; 297,132 shares issued and outstanding,
actual; no shares issued and outstanding, pro forma
and pro forma as adjusted............................ -- -- --
Series B convertible preferred stock, 1,047,804 shares
authorized; 1,047,804 shares issued and outstanding,
actual; no shares issued and outstanding, pro forma
and pro forma as adjusted............................ 1 -- --
Series C convertible preferred stock, 1,400,000 shares
authorized; 1,301,850 shares issued and outstanding,
actual; no shares issued and outstanding, pro forma
and pro forma as adjusted............................ 1 -- --
Common stock, par value $.001; 100,000,000 shares
authorized; 14,744,166 shares issued and outstanding,
actual; 22,366,910 shares issued and outstanding, pro
forma; 27,366,910 shares issued and outstanding, pro
forma as adjusted...................................... 15 22 27
Deferred stock compensation................................ (6,570) (6,570) (6,570)
Additional paid in capital................................. 15,818 15,813 61,409
Cumulative foreign currency translation adjustments........ 50 50 50
Accumulated deficit........................................ (982) (982) (982)
------- ------- -------
Total stockholders' equity............................... 8,333 8,333 53,934
------- ------- -------
Total capitalization................................. $ 8,333 $ 8,333 $53,934
======= ======= =======
</TABLE>

19
<PAGE>
DILUTION

Our pro forma net tangible book value as of September 30, 1999 was
approximately $4.8 million or $0.22 per share of common stock. Net tangible book
value per share represents the amount of our total tangible assets reduced by
the amount of our total liabilities and divided by the total number of shares of
common stock outstanding as of September 30, 1999 after giving effect to the
automatic conversion of all outstanding shares of preferred stock upon the
closing of this offering. After giving effect to the sale of the shares of
common stock offered by us at an assumed initial public offering price of $10.00
per common share after deducting estimated underwriting discounts and
commissions and estimated offering expenses, our pro forma net tangible book
value as of September 30, 1999 would have been $1.84 per share of common stock.
This represents an immediate increase in net tangible book value of $1.62 per
common share to existing stockholders and an immediate dilution of $8.16 per
share to new investors. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $10.00
Pro forma net tangible book value per share before the
offering................................................ $0.22
Increase attributable to new investors.................... 1.62
-----
Pro forma net tangible book value after the offering........ 1.84
------
Dilution per share to new investors......................... $ 8.16
======
</TABLE>

The following table summarizes on a pro forma basis, as of September 30,
1999, the differences between our existing stockholders and new investors with
respect to the number of shares of common stock purchased from us, the total
consideration paid to us and the average price per common share paid.

<TABLE>
<CAPTION>
TOTAL
SHARES PURCHASED CONSIDERATION
--------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- -------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders (1)........ 22,366,910 81.7% $ 7,816,120 13.5% $ 0.35
New investors.................... 5,000,000 18.3 50,000,000 86.5 $10.00
---------- ---- ----------- ----
Totals....................... 27,366,910 100% $57,816,120 100% $ 2.11
========== ==== =========== ====
</TABLE>

The foregoing table assumes no exercise of the underwriters' over-allotment
option or issuance of shares underlying outstanding options. As of
September 30, 1999, options to purchase 3,952,224 shares of common stock were
outstanding at a weighted average exercise price of $0.58 per share. To the
extent that these options are exercised, new investors will experience further
dilution. See "Description of Capital Stock" on page 55 and Notes 1 and 8 of the
notes to our financial statements for more information on our capital stock and
further dilution you may experience.

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

(1) If the underwriters' over-allotment option is exercised in full, sales by
the selling stockholders in this offering will reduce the number of shares
of common stock held by existing stockholders to 21,956,910 or approximately
80% of total shares of common stock outstanding after this offering.

20
<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected financial data set forth below should be read in conjunction
with the financial statements, the notes to the financial statements and the
other information contained in this prospectus. The selected balance sheet data
as of December 31, 1997 and statement of operations data for the period July 1,
1997 through December 31, 1997 and the four months ended April 30, 1998 have
been derived from the audited financial statements of the ValueClick line of
business of Web-Ignite Corporation appearing elsewhere in this prospectus. The
selected balance sheet data as of December 31, 1998 and the selected statement
of operations data for the period from May 1, 1998 (inception) through
December 31, 1998 have been derived from the audited financial statements of
ValueClick, Inc. appearing elsewhere in this prospectus. The selected balance
sheet data as of September 30, 1999 and the selected statement of operations
data for the nine months ended September 30, 1999 have been derived from the
unaudited financial statements of ValueClick, Inc. appearing elsewhere in this
prospectus. The combined historical selected financial data for the nine months
ended September 30, 1998 and the twelve months ended December 31, 1998 reflect
the combined selected financial data of ValueClick, Inc. for the period May 1,
1998 through September 30, 1998 and the ValueClick line of business of
Web-Ignite Corporation for the four months ended April 30, 1998 and ValueClick,
Inc. for the period May 1, 1998 through December 31, 1998 and the ValueClick
line of business of Web-Ignite Corporation for the four months ended April 30,
1998. We believe that the unaudited financial statements contain all adjustments
necessary to present fairly the information included in those statements, and
that the adjustments consist only of normal recurring adjustments. Operating
results for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999.

The pro forma selected balance sheet data as of September 30, 1999 and the
pro forma selected statement of operations data for the nine months ended
September 30, 1999 have been derived from the unaudited pro forma condensed
consolidated financial statements appearing elsewhere in this prospectus.

21
<PAGE>
STATEMENT OF OPERATIONS DATA:
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
VALUECLICK LINE OF BUSINESS OF
WEB-IGNITE CORPORATION VALUECLICK, INC.
------------------------------- ---------------------------------
PERIOD FROM
PERIOD FROM MAY 1, 1998
JULY 1, 1997 FOUR MONTHS (INCEPTION) NINE MONTHS
THROUGH ENDED THROUGH ENDED
DECEMBER 31, APRIL 30, DECEMBER 31, SEPTEMBER 30,
1997 1998 1998 1999
------------- --------------- ------------- -----------------
<S> <C> <C> <C> <C>
Revenues........................................ $ 122 $ 253 $ 2,053 $ 10,593
Cost of revenues................................ 37 88 1,105 5,265
-------- -------- -------- --------
Gross profit.................................... 85 165 948 5,328
Operating expenses:
Sales and marketing........................... -- -- 516 1,467
General and administrative.................... 116 134 404 2,079
Technology enhancements....................... -- -- 155 587
Stock-based compensation...................... -- -- 61 1,477
Amortization of intangibles and acquired
software.................................... -- -- 33 186
-------- -------- -------- --------
Total operating expenses........................ 116 134 1,169 5,796
-------- -------- -------- --------
(Loss) income from operations................... (31) 31 (221) (468)
Equity in loss of ValueClick Japan.............. -- -- (9) (64)
Interest and other income, net.................. -- -- 8 38
-------- -------- -------- --------
(Loss) income before income taxes and minority
interest...................................... (31) 31 (222) (494)
Provision for income taxes...................... -- -- -- 516
-------- -------- -------- --------
Net (loss) income before minority interest...... (31) 31 (222) (1,010)
Minority interest............................... -- -- -- 28
-------- -------- -------- --------
Net (loss) income............................... $ (31) $ 31 $ (222) $ (982)
======== ======== ======== ========
Net loss per share:
Basic and diluted net loss per common
share(1).................................. -- -- $ (0.02) $ (0.07)
Shares used to calculate basic and diluted
net loss per share(1)..................... -- -- 14,273 13,801
</TABLE>

22
<PAGE>
STATEMENT OF OPERATIONS DATA:
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
COMBINED HISTORICAL(3) PRO FORMA
------------------------------ -----------------
TWELVE
NINE MONTHS MONTHS NINE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1998 1998 1999
-------------- ------------- -----------------
<S> <C> <C> <C>
Revenues.................................................... $ 1,038 $ 2,306 $ 11,386
Cost of revenues............................................ 428 1,193 5,731
-------- -------- --------
Gross profit................................................ 610 1,113 5,655
Operating expenses:
Sales and marketing....................................... 233 516 1,637
General and administrative................................ 336 538 2,439
Technology enhancements................................... 85 155 587
Stock-based compensation.................................. 61 61 1,477
Amortization of intangibles and acquired software......... 20 33 605
-------- -------- --------
Total operating expenses.................................... 735 1,303 6,745
-------- -------- --------
Loss from operations........................................ (125) (190) (1,090)
Equity in loss of ValueClick Japan.......................... -- (9) --
Interest and income, net.................................... 4 8 38
-------- -------- --------
Loss before income taxes and minority interest.............. (121) (191) (1,052)
Provision for income taxes.................................. -- -- 516
-------- -------- --------
Net loss before minority interest........................... (121) (191) (1,568)
Other minority interest..................................... -- -- 93
-------- -------- --------
Net loss.................................................... $ (121) $ (191) $ (1,475)
======== ======== ========
Net loss per share:
Basic and diluted net loss per common share(1).......... -- -- --
Shares used to calculate basic and diluted net loss per
share(1).............................................. -- -- --
Pro forma basic and diluted net loss per common
share(2).............................................. -- -- $ (0.07)
Shares used in pro forma basic and diluted net loss per
common share(2)....................................... -- -- 21,424
</TABLE>

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, 1998 SEPTEMBER 30, 1999
BALANCE SHEET DATA: ------------------ -------------------
<S> <C> <C>
Cash and cash equivalents................................. $ 262 $ 2,574
Working capital........................................... 454 4,502
Total assets.............................................. 1,323 11,984
Deferred stock compensation............................... -- (6,570)
Total stockholders' equity................................ 765 8,333
</TABLE>

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

1. See Notes 1 and 9 of Notes to Financial Statements for determination of
shares used in computing basic and diluted net loss per common share.

2. Pro forma to give effect to the automatic conversion of all issued and
outstanding shares of preferred stock into 7,622,744 shares of common stock,
but not giving effect to the exercise of outstanding options to purchase
3,952,224 shares of common stock nor the vesting of 575,335 restricted
shares of common stock as of September 30, 1999.

3. The combined historical statement of operations for the nine months ended
September 30, 1998 reflects the combined results of our operations for the
period from May 1, 1998 through September 30, 1998 and the ValueClick line
of business of Web-Ignite for the four months ended April 30, 1998.

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

The following discussion and analysis of our financial condition and our
results of operations should be read in conjunction with "Selected Financial
Data" and our financial statements and the related notes thereto. This
discussion contains forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from
historical results or anticipated results including those set forth in "Risk
Factors" and elsewhere in this prospectus.

OVERVIEW

We focus on a performance-based Internet advertising solution, known as
cost-per-click or CPC, in which an advertiser only pays when a user clicks on
the advertiser's banner advertisement. We provide our advertising customers,
primarily e-commerce and direct marketing companies, an Internet advertising
alternative to the cost-per-thousand-impressions, or CPM, model, in which
advertisers pay whenever their banner ads are displayed. Our solution provides
publishers of over 10,200 small- to medium-sized Web sites the opportunity to
generate advertising revenues. We also provide publishers of large Web sites the
ability to capture incremental revenues from their unsold advertising inventory.

We generate revenues by delivering advertisements to Web sites in the
ValueClick network. Pricing of our advertising is on a cost-per-click basis and
varies depending on whether advertising is delivered across our entire network
or across targeted categories within our network. At this time, all of our
revenues are derived from banner advertising delivered across our entire
network. We sell our services through our sales and marketing staff located in
Carpinteria, California and Tokyo, Japan. The advertisements we deliver are sold
under short-term agreements that are subject to cancellation. Revenues are
recognized in the month that clicks on delivered banner advertisements occur,
provided that no significant obligations on our part remain and collection of
the related receivable is probable. To date, our agreements have not required a
guaranteed minimum number of clicks. We pay each Web site in the ValueClick
network a price-per-click, which is based upon the volume of clicks delivered by
the Web site in a given month. These payments made to Web publishers are
included in the cost of revenues.

We expect to generate most of our revenues in the foreseeable future from
Internet banner advertising. Our ten largest advertisers accounted for 77% of
our revenues for the period from May 1, 1998 (inception) through December 31,
1998 and 34% of our revenues for the nine months ended September 30, 1999. One
advertiser, Microsoft, accounted for 23% of our revenues for the period from
May 1, 1998 (inception) through December 31, 1998. For the nine months ended
September 30, 1999, no single advertiser accounted for more than 10% of our
revenues and no Web site contributed more than 10% of our advertising inventory,
as measured by the number of clicks generated by each Web site in the ValueClick
network.

In light of the rapidly evolving nature of our business and our limited
operating history, we believe that period-to-period comparisons of our operating
results are not meaningful and that the results for any period should not be
relied upon as an indication of future performance. We expect to increase
significantly our operating expenses in order to expand our sales and marketing
operations, to enhance our network technologies and to continue our
international expansion.

24
<PAGE>
VALUECLICK JAPAN

In January 1999, we entered into a license agreement with ValueClick Japan.
Under this agreement, we granted ValueClick Japan an exclusive 10-year
non-renewable license to use our trademarks, copyrights and ad tracking and
serving technology in connection with the delivery of advertisements to Japanese
language Web sites in Japan. In exchange for this license, ValueClick Japan pays
us a monthly fee equal to the greater of $3,500 or 10% of the net revenue of
ValueClick Japan for that month. In addition, ValueClick Japan has granted us an
option to acquire all the outstanding shares of ValueClick Japan in exchange for
an amount of our common stock. We may only exercise this option upon the
occurrence of a major transaction, including a sale of substantially all of our
assets, a merger involving us or the completion of a public offering of our
stock. The amount of our common stock exchanged will be determined based on the
valuation of ValueClick Japan using the same methodology used to determine our
valuation in the applicable major transaction. Under this arrangement, the
valuation of ValueClick Japan will in no event be less than two times its annual
revenue plus (minus) 10 times its net profit (loss) for that year. This
agreement may be terminated by either party if the other party ceases to do
business, breaches any term or condition of the agreement or is subject to
bankruptcy or similar proceedings. In addition, we may terminate the agreement
immediately if ValueClick Japan:

- fails to meet a minimum gross revenue target,

- fails to pay the monthly fee due under the agreement,

- modifies or removes any intellectual property notices included in the
technology,

- issues promotional materials without our consent,

- transfers any of its rights under the agreement without our consent, or

- engages in any fraudulent conduct or illegal activity with respect to the
licensed technology.

Prior to August 6, 1999, we had a 32% ownership interest in ValueClick
Japan, which was accounted for using the equity method of accounting. On August
6, 1999, we purchased an additional 22% of ValueClick Japan stock in exchange
for 460,800 shares of our common stock valued at $7.65 per share, giving us a
54% controlling ownership interest in ValueClick Japan. The acquisition was
accounted for using the purchase method. The purchase price was allocated to the
estimated fair value of assets acquired and liabilities assumed, to the extent
acquired by us. The remaining portion of the ValueClick Japan assets and
liabilities was recorded at the historical cost basis of the minority
stockholders. The preliminary purchase price allocation indicate additional
intangible assets, comprised of goodwill, totaling $3.6 million, which will be
amortized on a straight-line basis over an estimated life of five years.

See "Unaudited Pro Forma Condensed Consolidated Financial Statements" on
pages F-20 through F-23 for more information on the consolidation of ValueClick
Japan with our domestic operations.

25
<PAGE>
RESULTS OF OPERATIONS

The following table sets forth statement of operations data for the periods
indicated as a percentage of revenues:

<TABLE>
<CAPTION>
PERIOD FROM
MAY 1, 1998 COMBINED
(INCEPTION) HISTORICAL(1) NINE MONTHS
THROUGH ------------------- ENDED
DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
1998 SEPTEMBER 30, 1998 1999
------------- ------------------- --------------
<S> <C> <C> <C>
Revenues...................................... 100% 100% 100%
Costs of revenues............................. 54 41 50
--- ---- ---

Gross profit.................................. 46 59 50
Operating expenses:
Sales and marketing......................... 25 23 14
General and administrative.................. 20 32 20
Technology enhancements..................... 8 8 5
Stock-based compensation.................... 3 6 14
Amortization of intangibles and acquired
software.................................. 1 2 1
--- ---- ---

Total operating expenses.................... 57 71 54
--- ---- ---
Loss from operations.......................... (11) (12) (4)
Equity in loss of ValueClick Japan............ -- -- --
Interest income, net.......................... -- -- --
--- ---- ---
Loss before income taxes and minority
interest.................................... (11) (12) (4)
Provision for income taxes.................... -- -- (5)
--- ---- ---
Net loss before minority interest............. (11) (12) (9)
Minority interest............................. -- -- --
Net loss...................................... (11)% (12)% (9)%
=== ==== ===
</TABLE>

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

(1) The combined historical statement of operations for the nine months ended
September 30, 1998 reflects the combined results of our operations for the
period from May 1, 1998 through September 30, 1998 and the ValueClick line
of business of Web-Ignite for the four months ended April 30, 1998.

REVENUES

Our revenues are derived primarily from the sale of clicks on banner
advertisements delivered through the ValueClick network. We charge each
advertiser an amount based on the number of times consumers click on the
advertiser's banner ad. The ValueClick line of business of Web-Ignite
Corporation had revenues of $122,000 for the period of July 1, 1997 (inception
of line of business) through December 31, 1997 and revenues of $253,000 for the
four months ended April 30, 1998. We had revenues of $2.1 million for the period
from May 1, 1998 (inception) through December 31, 1998. Our revenues were
$10.6 million for the nine months ended September 30, 1999 as compared to $1.0
million for the combined historical nine months ended September 30, 1998. The
increase in revenues over these periods was due to the growth of the ValueClick
network and our ability to serve a larger advertiser customer base.

COST OF REVENUES

Cost of revenues consists primarily of amounts we pay to Web sites on the
ValueClick network. We pay these Web sites on a cost-per-click basis. Cost of
revenues also includes depreciation costs of the

26
<PAGE>
advertising delivery system and Internet access costs. The ValueClick line of
business of Web-Ignite Corporation had cost of revenues of $37,000 for the
period of July 1, 1997 (inception of line of business) through December 31, 1997
and a cost of revenues of $88,000 for the four months ended April 30, 1998. Our
cost of revenues was $1.1 million for the period from May 1, 1998 (inception)
through December 31, 1998. For the nine months ended September 30, 1999 our cost
of revenues was $5.3 million compared to $428,000 for the combined historical
nine months ended September 30, 1998. The increase in cost of revenues over
these periods was directly attributable to the increased delivery of banner
advertisements and clicks on banner advertisements.

SALES AND MARKETING

Sales and marketing expenses consist primarily of compensation (including
commissions), travel, advertising, trade show costs and costs of marketing
materials. Our sales and marketing expenses were $516,000 for the period from
May 1, 1998 (inception) through December 31, 1998. For the nine months ended
September 30, 1999 our sales and marketing expenses were $1.5 million compared
to $233,000 for the combined historical nine months ended September 30, 1998. Of
the $1.3 million increase in sales and marketing expense, $455,000 was due to
the addition of nine sales and marketing personnel, and the remainder was due to
increased advertising, public relations and other sales and marketing
activities. We expect sales and marketing expenses to continue to increase in
future periods as we hire additional personnel in sales and marketing, open
additional sales offices in major domestic markets, expand into international
markets and continue to promote our advertising solutions.

GENERAL AND ADMINISTRATIVE

General and administrative expenses consist primarily of compensation and
professional service fees. The ValueClick line of business of Web-Ignite
Corporation had general and administrative expenses of $116,000 for the period
from July 1, 1997 (inception of line of business) through December 31, 1997 and
general and administrative expenses of $134,000 for the four months ended
April 30, 1998. We had general and administrative expenses of $404,000 for the
period from May 1, 1998 (inception) through December 31, 1998. For the nine
months ended September 30, 1999 we had general and administrative expenses of
$2.1 million compared to $336,000 for the combined historical nine months ended
September 30, 1998. The $1.8 million increase in the comparable period in 1999
was primarily attributable to the addition of 14 executive and administrative
employees, which accounted for $900,000 of this increase. In addition, we
increased our allowance for doubtful accounts by approximately $500,000 as a
result of the significant growth in our revenue and accounts receivable with
limited historical collection trends. We anticipate our allowance for doubtful
accounts will decline as a percentage of revenues in the future as the current
level of allowance will be adequate to cover our anticipated losses from
uncollectible receivables. We also have incurred related expenses associated
with hiring additional personnel, expanding our corporate offices to accommodate
our increased personnel and other professional service expenses that were not
incurred in 1998. We expect general and administrative expenses to increase in
future periods as we hire additional personnel and incur additional costs
related to the growth of our business and our operations as a public company.

TECHNOLOGY ENHANCEMENTS

Technology enhancement costs include expenses for the development of new
technologies designed to enhance the performance of our service, including the
salaries and related expenses for our software engineering department, as well
as costs for contracted services, supplies and equipment. To date, all product
development costs have been expensed as incurred. We had technology enhancement
expenses of $155,000 for the period from May 1, 1998 (inception) through
December 31, 1998. For the nine months ended September 30, 1999, we had
technology enhancement expenses of $587,000 compared to $85,000 on a combined
historical basis for the nine months ended September 30, 1998. The increase was
primarily attributable to the hiring of five additional engineers. We believe
that continued

27
<PAGE>
investment in technology enhancement is critical to attaining our strategic
objectives and, as a result, we expect technology enhancement expenses to
increase in future periods.

STOCK-BASED COMPENSATION

In connection with the grant of stock options to employees and the
imposition of restrictions on common shares held by certain founding employees
during the nine months ended September 30, 1999, we recorded total deferred
compensation of $8.0 million. This deferred compensation represented the
difference between the deemed fair value of our common stock for accounting
purposes and the exercise price of these options or the purchase price of these
restricted shares at the date of grant, resulting in an expense charge of
$1.5 million for the nine months ended September 30, 1999 related to
amortization of this deferred compensation. Deferred compensation is presented
as a reduction of stockholders' equity and amortized over the vesting period of
applicable options, generally four years.

Annual amortization of deferred stock compensation for options and
restricted shares granted as of September 30, 1999 is estimated to be $2.6
million for the year ending December 31, 1999, $3.2 million for the year ending
December 31, 2000, $1.5 million for the year ending December 31, 2001, $609,100
for the year ending December 31, 2002, and $153,800 for the year ending
December 31, 2003. In addition, employees have options that have accelerated
vesting upon a change of control of ValueClick, including the closing of this
offering or the transfer of ownership of 50% or more of our stock. Assuming the
closing of this offering by December 31, 1999, we believe that the amortization
of deferred stock compensation for the years listed above would not be
significantly different than the amounts presented above.

AMORTIZATION OF INTANGIBLES AND ACQUIRED SOFTWARE

Amortization of intangibles and acquired software represents principally the
amortization of acquired software purchased from a founding stockholder in May
1998 and amortization created as a result of the acquisition of majority control
of ValueClick Japan in August 1999.

EQUITY IN LOSS OF VALUECLICK JAPAN

Equity in loss of ValueClick Japan increased to $64,000 for the nine months
ended September 30, 1998. The loss is primarily a result of the increase in
operating expenses required to grow the ValueClick Japan business, which began
full operation in November 1998. We expect ValueClick Japan to be at a
break-even point in the near future, as the business volume and related revenues
increase to a level greater than the operating expenses.

INTEREST AND OTHER INCOME (EXPENSE), NET

Interest and other income principally consists of interest earned on our
cash and cash equivalents and is net of interest paid on capital lease and debt
obligations. Interest income was $8,000 for the period from May 1, 1998
(inception) through December 31, 1998 and $35,000 for the nine months ended
September 30, 1999. Interest expense was $0 for the period from May 1, 1998
(inception) through December 31, 1998 and $1,500 for the nine months ended
September 30, 1999. No interest expense was incurred for the combined historical
nine months ended September 30, 1998.

INCOME TAXES

For the period from May 1, 1998 (inception) through December 31, 1998, we
were a limited liability company, or LLC, and as such, were subject to the
provisions of Subchapter K of the Internal Revenue Code. Under those provisions,
we did not pay Federal income taxes on any taxable income. Instead, the members
of the LLC were liable for individual Federal income taxes on our taxable
income. Upon conversion to a C-corporation on December 31, 1998, we commenced
using the asset and liability method of accounting for income taxes. Our
conversion from an LLC to a C-corporation

28
<PAGE>
did not have a material impact on our financial position or results of
operations. Following the conversion, we have been operating as a C-corporation
and are subject to Federal and state income taxes. For the nine months ended
September 30, 1999, our provision for Federal and state income taxes amounted to
$517,000. No provision has been recorded for the combined historical nine months
ended September 30, 1998 as the predecessor entity was taxed as an S-corporation
and we were taxed as an LLC.

QUARTERLY RESULTS OF OPERATIONS

The following tables sets forth unaudited quarterly statement of operations
data and the percentages of revenue for each of the quarters of 1998 and the
first three quarters of 1999. The unaudited combined historical statement of
operations for the three months ended March 31, 1998 and June 30, 1998 reflect
the combined results of operations of the ValueClick line of business of Web-
Ignite for the three months ended March 31, 1998 and ValueClick for the period
from May 1, 1998 through June 30, 1998 and the ValueClick line of business of
Web-Ignite for the one month ended April 30, 1998. In the opinion of management,
this information has been prepared on the same basis as the audited financial
statements appearing elsewhere in this prospectus, and all necessary
adjustments, consisting only of normal recurring adjustments, have been included
in the amounts stated below to present fairly the unaudited quarterly results of
operations. The quarterly data should be read in conjunction with our audited
financial statements and the notes to the financial statements appearing
elsewhere in this prospectus. The results of operations for any quarter are not
necessarily indicative of the results of operations for any future period.

<TABLE>
<CAPTION>
COMBINED
HISTORICAL MAY 1,
THREE MONTHS 1998
ENDED (INCEPTION) THREE MONTHS ENDED
-------------------- THROUGH ----------------------------------------------------------
MARCH 31, JUNE 30, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1998 1998 1998 1998 1998 1999 1999 1999
--------- -------- ----------- ------------ -------- --------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................... $207 $ 243 $ 197 $ 588 $1,268 $1,968 $2,899 $5,726
Cost of revenues........... 74 107 93 247 765 1,087 1,348 2,830
---- ----- ----- ----- ------ ------ ------ ------
Gross profit............... 133 136 104 341 503 881 1,551 2,896
---- ----- ----- ----- ------ ------ ------ ------
Operating expenses:
Sales and marketing...... -- 55 55 178 283 257 391 819
General and
administrative......... 101 108 75 127 202 342 612 1,125
Technology
enhancements........... -- 15 15 70 70 108 213 266
Stock-based
compensation........... -- 61 61 -- -- 33 441 1,003
Amortization of
intangibles and
acquired software...... -- 7 7 13 13 13 13 160
---- ----- ----- ----- ------ ------ ------ ------
Total operating
expenses............. 101 246 213 388 568 753 1,670 3,373
---- ----- ----- ----- ------ ------ ------ ------
Income (loss) from
operations............... 32 (110) (109) (47) (65) 128 (119) (477)
Equity in losses of
ValueClick Japan......... -- -- -- -- (9) (42) (10) (12)
Interest income, net....... -- 1 1 3 4 5 14 19
---- ----- ----- ----- ------ ------ ------ ------
Income (loss) before income
taxes.................... 32 (109) (108) (44) (70) 91 (115) (470)
Provision for income
taxes.................... -- -- -- -- -- (62) (154) (300)
---- ----- ----- ----- ------ ------ ------ ------
Net income (loss) before
minority interest........ $ 32 $(109) $(108) $ (44) $ (70) $ 29 $ (269) $ (770)
==== ----- ----- ----- ------ ------ ------
Minority interest.......... -- -- -- -- -- -- -- 28
---- ----- ----- ----- ------ ------ ------ ------
Net income (loss).......... $ 32 $(109) $(108) $ (44) $ (70) $ 29 $ (269) $ (742)
==== ===== ===== ===== ====== ====== ====== ======
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
COMBINED
HISTORICAL MAY 1,
THREE MONTHS 1998
ENDED (INCEPTION) THREE MONTHS ENDED
-------------------- THROUGH ----------------------------------------------------------
MARCH 31, JUNE 30, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1998 1998 1998 1998 1998 1999 1999 1999
--------- -------- ----------- ------------ -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As a Percentage of Revenues:
Revenues................... 100% 100% 100% 100% 100% 100% 100% 100%
Cost of revenues........... 36 44 47 42 60 55 46 49
----- ----- ----- ----- ----- ----- ----- -----
Gross profit............... 64 56 53 58 40 45 54 51
----- ----- ----- ----- ----- ----- ----- -----
Operating expenses:
Sales and marketing...... -- 23 28 30 22 13 14 14
General and
administrative......... 49 44 38 22 16 17 21 20
Technology
enhancements........... -- 6 8 12 6 5 7 5
Stock-based
compensation........... -- 25 31 -- -- 2 15 18
Amortization of
intangibles and
acquired software...... -- 3 4 2 1 1 1 3
----- ----- ----- ----- ----- ----- ----- -----
Total operating
expenses............. 49 101 108 66 45 38 58 60
----- ----- ----- ----- ----- ----- ----- -----
Income (loss) from
operations............... 15 (45) (56) (8) (5) 7 (4) (9)
Equity in losses of
ValueClick Japan......... -- -- -- -- (1) (2) (1) 0
Interest income, net....... -- -- 1 1 -- -- 1 0
----- ----- ----- ----- ----- ----- ----- -----
Income (loss) before income
taxes.................... 15 (45) (55) (7) (6) 5 (4) (9)
Provision for income
taxes.................... -- -- -- -- -- (3) (5) (5)
----- ----- ----- ----- ----- ----- ----- -----
Net income (loss) before
minority interest........ 15 (45) (55) (7) (6) 2 (9) (14)
Minority interest.......... -- -- -- -- -- -- -- 1
----- ----- ----- ----- ----- ----- ----- -----
Net income (loss).......... 15% (45)% (55)% (7)% (6)% 2% (9)% (13)%
===== ===== ===== ===== ===== ===== ===== =====
</TABLE>

Revenues increased to $5.7 million for the three months ended September 30,
1999, compared to $0.6 million for the three months ended September 30, 1998.
Revenues increased $9.6 million or 960% from $1.0 million for the nine months
ended September 30, 1998 to $10.6 million for the nine months ended
September 30, 1999. Our revenues increased in each quarter presented due to an
average 76% quarter to quarter increase in the number of advertisements
delivered on the ValueClick network. Cost of revenues as a percentage of
revenues decreased in the first and second quarters of 1999 due to a greater
increase in the average cost-per-click charged to advertisers than the
cost-per-click paid to Web sites. Cost of revenues as a percentage of revenue
increased in the third quarter of 1999 due to the consolidation of ValueClick
Japan's operations with our domestic operations. The resulting improvement in
gross margins reversed the trend of cost of revenues increasing in 1998. The 67%
increase in cost of revenues during 1998 was due to the impact of paying a
greater cost-per-click to Web publishers to provide needed inventory for the
growing backlog of advertising sold. With the addition of new Web sites to our
network during the first nine months of 1999, these pricing pressures
subsequently subsided. Gross margin was 51% and 58% for the three months ended
September 30, 1999 and 1998, respectively. Gross margin was 50% and 59% for the
nine months ended September 30, 1999 and 1998, respectively. Operating expenses
increased in absolute dollars in each quarter in 1998 and decreased overall as a
percentage of revenues as the revenue base grew. In 1999, operating expenses
increased on an absolute dollar basis. Sales and marketing expenses increased as
a result of increased sales personnel and commissions and increased advertising
and promotion. Technology enhancement expenses increased as a result of the
hiring of additional software engineers and the continued development of
technology. General and administrative expenses increased primarily due to the
hiring of an executive, accounting and administrative personnel, as well as the
relocation of our company and expansion into a larger facility. Operating
expenses remained relatively constant as a percentage revenues.

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We believe that our revenues will be subject to seasonal fluctuations
because advertisers generally place fewer advertisements during the first and
third calendar quarters of each year. In addition, expenditures by advertisers
tend to be cyclical, reflecting overall economic conditions as well as budgeting
and buying patterns. In addition, our results of operations may fluctuate
significantly in the future as a result of a variety of factors, many of which
are beyond our control. See "Risk Factors--It may be difficult to predict our
financial performance because our quarterly operating results may fluctuate" and
"--We may experience seasonal fluctuations in our revenues."

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations through working capital
generated from operations and private equity financings, raising $4.3 million
through September 30, 1999. Net cash used in operating activities was $623,000
for the nine months ended September 30, 1999, which resulted principally from
increases in accounts receivable of $4.1 million partially offset by net income
and increases in income taxes payable and deferred revenue.

At December 31, 1998 and at September 30, 1999, we had no known material
commitments for capital expenditures.

Net cash provided by financing activities during the nine months ended
September 30, 1999 represented the net proceeds from the sale of our Series C
preferred stock for $3.5 million.

On October 21, 1999, we executed a loan and security agreement with Silicon
Valley Bank for a $2.5 million revolving credit line to be used for general
working capital. Interest on the outstanding balances accrues at an annual rate
of one percentage point above the bank's prime rate. As of December 22, 1999,
the bank's prime rate was 8.5%. We are also required to pay the bank on a
quarterly basis an unused line fee on the unused portion of the line of credit
at an annual rate of half a percent. The credit facility contains provisions
requiring us to:

- maintain our corporate existence and remain in good standing,

- provide regular financial reports to the bank,

- pay all taxes when due,

- maintain satisfactory insurance,

- meet specified financial ratios,

- net worth tests on a monthly basis, or

- protect our intellectual property rights.

The credit facility also restricts our ability to:

- transfer our business or property,

- merge or consolidate,

- borrow funds,

- mortgage our property,

- acquire or invest in other entities,

- pay dividends, or

- enter into transactions with affiliates.

The credit facility expires on and all outstanding balances are due on the
first anniversary of the agreement. In exchange for the credit facility, we
granted the bank a first priority security interest in our goods and equipment,
inventory, accounts receivables and intellectual property. As of December 22,
1999, we have not borrowed against this credit line.

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<PAGE>
Net cash used in investing activities for the nine months ended
September 30, 1999 was $393,000 representing an additional equity investment of
$263,000 in ValueClick Japan offset by $413,000 of acquired cash, $99,000 in
equity investments in ValueClick Europe and the purchase of $443,000 of fixed
assets.

We believe that our existing cash and cash equivalents, our available bank
credit and the proceeds from this offering will be sufficient to meet our
anticipated cash needs for working capital and capital expenditures for the next
12 months.

YEAR 2000 COMPLIANCE

Our business depends on our ability to serve a large number of banner
advertisements to our Web publishers and to provide a large number of clicks to
our advertisers. If the Web publishers in our network, the Internet service
providers, or ISPs, who provide access to those Web sites, or the advertisers
whose banner advertisements we serve experience disruptions in their computer
systems related to the Year 2000 problem, we may not be able to deliver
advertisements to our Web publishers or clicks to our advertisers, and our
business could be harmed substantially.

The Year 2000 problem results from computer programs and hardware designed
to use the last two digits rather than all four digits to define the applicable
year. As a result, these systems may recognize a date using "00" as the year
1900 rather than the year 2000. If these systems are not made Year 2000
compliant, they could create erroneous information causing us or our customers
or suppliers to become unable to process normal business transactions accurately
or at all.

STATE OF READINESS. We have completed an assessment of our Year 2000
readiness and believe that all of our computer programs and hardware are Year
2000 compliant. Our Year 2000 readiness assessment included the following
overlapping phases:

- Identification--The identification of all of our internal hardware and
software systems as well as our key third party relationships that may be
affected by the Year 2000 issue (including advertisers, Web publishers,
suppliers, and co-location facilities among others).

- Analysis--An evaluation of the impact and magnitude of any potential Year
2000 problems for all of our previously identified items.

- Conversion and Implementation--The development and execution of a plan to
bring any identified non-Year 2000 compliant items into compliance,
including the conversion, upgrade or replacement of any non-Year 2000
compliant systems.

- Testing--The continuous testing of our systems to determine their Year
2000 compliance after any necessary Year 2000 remediations.

Based our Year 2000 readiness assessment, we believe that that all of our
non-information technology, including security and phone systems, upon which we
are materially dependent is Year 2000 compliant. We also believe that our
information technology systems, including our internally developed software, are
not sensitive to any Year 2000 risks. Although we have not discovered any
material Year 2000 problems with our internal information technology to date, we
may in the future.

We have inquired as to the Year 2000 readiness of our co-location providers
and the major vendors of the hardware and software we use in our business. Based
on the results of these inquiries and based on our own internal testing of the
third party hardware and software we use, we believe that our co-location
providers and major vendors are Year 2000 compliant. We have tested and continue
to test our internal computer systems to simulate Year 2000 conditions. These
tests have, at this time, indicated that all of our major vendors are Year 2000
compliant. If any vendor was not compliant, we would either alert the vendor and
request that the non-compliant software or hardware be remedied, develop an
internal solution or replace the vendor with a Year 2000 compliant vendor. We
cannot assure you, however, that we will not experience unanticipated
consequences, including material costs

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<PAGE>

caused by undetected errors or defects in the technology used in our internal
systems. We have not contacted any advertisers or publishers of Web sites
concerning their Year 2000 compliance. In addition, we have not contacted, nor
do we intend to contact, any utilities, telecommunications providers or
financial institutions regarding their Year 2000 compliance. We have relied upon
publicly released statements from these companies indicating that they are
Year 2000 compliant.

COSTS TO ADDRESS OUR YEAR 2000 COMPLIANCE. We estimate that total costs for
the Year 2000 compliance assessment and remediation will not exceed $150,000. We
believe that these compliance costs will be paid through our working capital. To
date, we have not incurred any material expenditure in connection with
identifying, evaluating, or remediating any Year 2000 compliance issues.
However, if we discover any Year 2000 issue, the costs of remediating the
problem could be higher than anticipated and could harm our business, results of
operations and financial condition.

RISKS. We are not currently aware of any additional significant Year 2000
compliance problems relating to our software, our information technology systems
or other systems that would materially harm our business, results of operations
or financial conditions. During our ongoing assessment, we may discover Year
2000 compliance problems that may require substantial repair or replacement
which could cause our business to suffer. In addition, our customers' ability to
deliver advertisements over our network may be disrupted if the software and
hardware products used by Web publishers, advertisers, governmental agencies,
public utilities, telecommunications companies and others are not Year 2000
compliant. We also depend on the uninterrupted availability of the Internet
infrastructure to conduct our business. Year 2000 problems affecting the
Internet could result in significant harm to our business, results of operations
and financial condition.

We depend on the uninterrupted availability of the Internet infrastructure
and the operations of our network of Web sites to conduct our business as an
advertising network. We are heavily dependent upon the success of Year 2000
compliance efforts of the many service providers that support the Internet.
Interruptions in the Internet infrastructure affecting us or our network of Web
sites could severely affect our ability to generate revenue.

CONTINGENCY PLAN. We have completed the development of our contingency plan
to deal with Year 2000 problems. All of our technology departments will be on
standby alert on December 31, 1999 and January 1, 2000. A senior technical
employee from each area of technology will monitor our information technology
systems at that time. If these efforts to become Year 2000 compliant are not
successful, or if our Web publishers, suppliers and other third parties do not
successfully become Year 2000 compliant, our business, results of operations and
financial condition could be harmed.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in hedging
activities. Also, we do not hold any variable interest rate debt or lines of
credit and thus have minimal exposure to interest rate fluctuations.

Our investment in ValueClick Japan, including the additional 22% controlling
interest we acquired in August 1999, subjects us to foreign currency exchange
risks as ValueClick Japan denominates its transactions in the Japanese Yen. Our
exposure is limited to the extent of the amount of ValueClick Japan's assets
which totaled $1.2 million at September 30, 1999. We also will have foreign
currency exchange risks for ValueClick Europe which will denominate its
transactions in U.K. pounds. At September 30, 1999, our investment in ValueClick
Europe was $99,000. For all of our other advertising services provided in
foreign countries during 1999 including Australia, Belgium, Brazil, China,
England, France, Mexico and Spain, the transactions were denominated in US
dollars. Historically, we have not hedged our exposure to exchange rate
fluctuations. Accordingly, we may experience economic loss and a negative impact
on earnings or equity as a result of foreign currency exchange rate
fluctuations.

33
<PAGE>
RECENTLY ISSUED ACCOUNTING STANDARDS

In March 1998, the Accounting Standards Executive Committee issued Statement
of Position No. 98-1, or SOP 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," which provides guidance on
accounting for the cost of computer software developed or obtained for internal
use. SOP 98-1 is effective for financial software statements for fiscal years
beginning after December 15, 1998. Implementation of SOP 98-1 did not have a
significant impact on our financial position, results of operations or cash
flows.

In April 1998, the Accounting Standards Executive Committee issued Statement
of Position No. 98-5, or SOP 98-5, "Reporting on the Costs of Start-Up
Activities." This standard requires companies to expense the costs of start-up
activities and organization costs as incurred. In general, SOP 98-5 is effective
for fiscal years beginning after December 13, 1998. Adoption of SOP 98-5 did not
have a significant impact on our financial position, results of operations or
cash flows.

In June 1998, the Accounting Standards Executive Committee issued Statement
of Accounting Standards No. 133, or SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes new standards of
accounting and reporting for derivative instruments and hedging activities. SFAS
133 requires that all derivatives be recognized at fair value in the statement
of financial position, and that the corresponding gains and losses be reported
either in the statement of operations or as a component of comprehensive income,
depending on the type of hedging relationship that exists. SFAS 133 will be
effective for fiscal years beginning after June 15, 2000. We do not currently
hold derivative instruments or engage in hedging activities. Accordingly,
management believes the adoption of this statement will not have a significant
impact on our financial position, results of operations or cash flows.

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<PAGE>
BUSINESS

OVERVIEW

ValueClick is a global provider of Internet advertising solutions for
publishers of Web sites and online advertisers. We focus on a performance-based
Internet advertising solution, known as cost-per-click or CPC, in which an
advertiser only pays when an Internet user clicks on the advertiser's banner
advertisement. We provide advertisers a low-risk solution since they do not pay
us for advertisements which do not result in action by Internet users. This
solution also provides publishers of Web sites that have low to moderate rates
of traffic, also referred to as small- to medium-sized Web sites, an opportunity
to generate advertising revenue. We also provide publishers of high-traffic Web
sites the ability to capture additional revenue from their unsold advertising
inventory. As a leading aggregator of small- to medium-sized Web sites, based on
the number of Web sites within our network, we provide our advertising
customers, primarily direct marketing and e-commerce companies, a more
cost-effective Internet advertising solution than purchasing advertising space
directly from individual Web publishers. As of December 1999, we had delivered
banner advertisements to Web sites based in foreign countries including,
Australia, Belgium, Brazil, Canada, China, England, France, Germany, Italy,
Japan, Mexico and Spain. In October 1999, we delivered in excess of 1.5 billion
Web advertisements and as of October 31, 1999, our network consisted of more
than 10,200 Web sites. Based on data provided by Media Metrix, for the quarter
ended September 30, 1999, we believe that we reached approximately one-quarter
of all U.S. based Internet users.

INDUSTRY BACKGROUND

THE INTERNET

The Internet has developed into a global medium for interactive content,
communications and commerce that has changed the face of business worldwide. In
recent years, the Internet has experienced substantial growth in the number of
users and Web sites, the volume of e-commerce transactions and the amount of
advertising dollars spent. Jupiter Communications estimates that in 1996, 15.1
million or 15.3% of U.S. households were Internet users, compared to 44.9
million or 44.1% in 1999, and projects that Internet use will grow to 67.6
million or 63.4% of U.S. households by 2003. The Yankee Group estimates that the
number of people using the Internet worldwide will grow from 140 million in 1998
to over 570 million by the end of 2003.

INTERNET ADVERTISING AND E-COMMERCE

The Internet has emerged as an attractive new medium for advertisers due to
its significant growth in number of users and volume of e-commerce transactions,
and also due to the unique characteristics of the Internet as compared with
other advertising media. These characteristics include the potential for
Internet advertisers to establish dialogues and direct relationships with
potential customers, receive immediate feedback on advertising campaigns and
adapt them quickly to respond to this feedback. As a result, Internet
advertising and e-commerce transactions have grown rapidly in recent years.
Forrester Research estimates that in 1999, $2.8 billion will be spent on
Internet advertising in the United States, and projects that this amount will
grow to $22.2 billion by 2004, a compound annual growth rate of 57%.
Additionally, the Yankee Group expects that e-commerce transactions will
increase from $25 billion in 1998 to $699 billion in 2002, a compound annual
growth rate of 130%. The growth rate of these markets may differ from the growth
rate of ValueClick.

THE EVOLUTION OF INTERNET ADVERTISING

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<PAGE>
was adopted from traditional media, is generally associated with advertising
campaigns that are designed to generate brand awareness through widespread
exposure to advertisements.

Although CPM has historically been the predominant Internet advertising
model, we believe that the CPM model has several inefficiencies:

- UNDERSERVES A LARGE NUMBER OF SMALL- TO MEDIUM-SIZED WEB SITES. Because
small- to medium-sized Web sites typically serve more targeted audiences
than large Web sites, they individually cannot drive enough traffic to
appeal to CPM advertisers. These sites are often disregarded as an
advertising outlet because it is not cost-effective for CPM advertisers to
manage a large number of small media buys and audit these sites for
traffic and appropriate content.

- FREQUENTLY LEAVES UNSOLD ADVERTISING INVENTORY. High-traffic Web sites
typically charge high CPM rates for their premium advertising space. At
these premium prices, insufficient demand, coupled with controlled
distribution, results in large amounts of unsold inventory on these Web
sites. This unsold inventory represents an incremental revenue opportunity
for these publishers, provided the solution does not conflict with their
underlying CPM pricing strategy, which seeks to maximize the rate card for
premium inventory.

- DIFFICULTY IN PREDICTING EFFECTIVENESS. With CPM, an advertiser pays each
time its banner is "loaded" or displayed without knowing whether the
displayed advertisement will generate responses or be converted into
sales. This uncertainty makes it difficult for advertisers to predict the
actual return on their Internet advertising dollars.

Due in part to these inefficiencies, we believe that Internet advertisers,
especially direct marketing and e-commerce based companies, are increasingly
seeking performance-based alternatives to the CPM model. Performance-based
advertising is intended to generate a specific or direct response or action from
a consumer and is designed to maximize the number of responses per advertising
dollar. These responses can include a simple electronic reply by the consumer,
registration of the consumer and actual purchases. Forrester Research projects
that performance-based advertising models will account for 50% of online
advertising budgets by 2003, up from 15% in 1999.

The Web is particularly well-suited for direct response advertising. Reading
and clicking on a Web advertisement is easier and more convenient for many
consumers than traditional direct response advertising mechanisms such as
toll-free numbers or business reply cards. Web advertisements also allow
consumers to respond immediately to advertising and interact directly with the
advertiser in real-time. Advertisers can also use this feedback to rapidly
adjust their advertising campaigns.

THE VALUECLICK SOLUTION

We believe our CPC-based advertising model delivers to Web publishers and
advertisers a cost-effective, performance-based Internet advertising solution.
Our solution provides publishers of small- to medium-sized Web sites the
opportunity to generate advertising revenue at little or no added cost while
allowing publishers of high-traffic Web sites the ability to capture additional
revenue for excess advertising inventory that would otherwise remain unsold. Our
CPC solution also gives Internet advertisers a convenient way to predict ad
effectiveness, because they only pay for visitors to their sites.

We have developed highly automated systems and processes which make it easy
for publishers of small- to medium-sized Web sites, which may otherwise have
been ignored by many CPM-based advertisers, to join the ValueClick network. We
have also developed an effective publisher referral program that facilitates
growth and retention of publishers. By aggregating this underutilized inventory
of advertising space, we have developed a low cost solution for advertisers who
want to access the visitors of these quality sites. Our network of Web sites
grew over 90% from July 1998 to July 1999 from approximately 4,300 sites to
approximately 8,200 sites, and included over 10,200 Web sites as of October 31,
1999. In October 1999, we delivered over 1.5 billion banner advertisements and
registered over 6.2 million clicks.

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<PAGE>
BENEFITS FOR WEB PUBLISHERS

OUTSOURCED ADVERTISING SERVICES FOR PUBLISHERS OF SMALL- TO MEDIUM-SIZED WEB
SITES

Our outsourced solution provides small- to medium-sized Web sites the
technology for managing and delivering Internet advertising. Our solution allows
these sites to avoid the hardware, software and personnel costs associated with
building and maintaining their own ad serving technology and sales force. In
addition, small- to medium-sized Web sites on the ValueClick network benefit
from our experienced management team, our sales and marketing organization and
access to advertisers.

ADVERTISING REVENUE OPPORTUNITIES FOR PUBLISHERS OF SMALL- TO MEDIUM-SIZED
WEB SITES

Advertisers paying CPM rates often impose traffic requirements that exclude
small- to medium-sized Web sites. By aggregating those sites, and providing the
built-in performance tracking of CPC, we offer a revenue opportunity for
publishers of small- to medium-sized Web sites that may not otherwise be
available. This has allowed us to develop a network of small- to medium-sized
Web sites which meet our screening standards. In addition, publishers can earn
referral commissions for introducing ValueClick to other publishers whose sites
are accepted into our network.

INCREMENTAL ADVERTISING REVENUE FROM UNSOLD INVENTORY FOR PUBLISHERS OF
HIGH-TRAFFIC WEB SITES

We offer publishers of high-traffic Web sites a stream of incremental
revenue for ad space that normally would remain unsold under the CPM model. Web
publishers that attract CPM rates rarely sell their entire stock of ad
inventory. By using the ValueClick solution, Web publishers have an opportunity
to sell a significant portion of their unsold inventory to response-oriented
advertisers under the ValueClick brand name. This protects the value of the Web
site's brand name and therefore does not jeopardize the Web site's published CPM
rate card structure.

BENEFITS FOR ADVERTISERS

CPC GIVES ADVERTISERS A PERFORMANCE-BASED MODEL

Using CPC, Internet advertisers only pay if Web users click on their
advertisements, not each time an advertisement is displayed. For Internet
advertisers trying to attract visitors who are actively looking to make a
purchase or who want to learn more about a product, CPC is a more efficient and
cost-effective choice than CPM for predicting and calculating return on
advertising investment.

A LEADING AGGREGATOR OF SMALL- TO MEDIUM-SIZED WEB SITES

We are a leading aggregator of small- to medium-sized Web sites, with over
10,200 sites currently in our network. This extensive network provides
advertisers the opportunity to place large media buys across a broad collection
of sites as well as niche targeting opportunities that have otherwise been
difficult for advertisers to reach.

CONSUMER TRACKING DATA AFTER THE CLICK

Our proprietary tracking management software, VisiTrak, provides real-time
marketing data regarding banner effectiveness by tracking the consumers after
they click through to our advertiser's Web site. This tool provides useful
feedback to advertisers regarding banner ad success rates, allowing them to
maximize the effectiveness of their Internet marketing strategy.

OUR STRATEGY

Our strategy is to be the leading provider of performance-based advertising
solutions by taking advantage of our position as a large aggregator of
advertising inventory of small- to medium-sized Web

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<PAGE>
sites and our reputation as the "Pay-for-Results" advertising network. Key
elements of our strategy include:

EXPAND OUR NETWORK OF WEB SITES

We are a leading aggregator of Internet advertising inventory for small-to
medium-sized Web sites. Our highly automated proprietary software and focused
customer support allow us to manage a network that, in October 1999, included
over 10,200 Web sites and a volume of advertising inventory that exceeded
1.5 billion banners served. Through these services, we expect to continue to
increase the number of small- to medium-sized Web sites in our network and
continue to attract publishers of high-traffic Web sites with remnant inventory
solutions.

GROW WITH OUR WEB PUBLISHERS

We intend to maximize the revenue potential of every Web site on our network
by providing an opportunity to increase the quality of site content, increase
traffic to the site and by delivering new tools that generate advertising
revenue. We intend to grow with our Web publishers as their sites attract more
traffic by providing new and expanded services that position us as a one-stop
advertising revenue solution.

EXPAND OUR SALES AND MARKETING EFFORTS

We intend to increase the size of our direct sales force and continue our
public relations and marketing efforts, including our e-mail and telemarketing
approaches. We believe that brand awareness of ValueClick and our CPC
"Pay-for-Results" solution is critical to our success, given the highly
competitive nature of the Internet advertising market.

GROW WITH OUR WEB ADVERTISERS

Our goal is to provide the highest quality and most cost-effective traffic
for online marketing programs. We intend to achieve this goal by working closely
with our advertisers and direct marketers to expand our services to target,
measure, optimize return on investment, and improve the quality of traffic
generated.

ENHANCE OUR TECHNOLOGY

We seek to increase the efficiency, effectiveness and attractiveness of our
services to advertisers through the use of technology. Our proprietary VisiTrak
software facilitates the simultaneous tracking and management of advertising
transactions, enabling advertisers to track campaigns effectively and increase
response rates. We intend to continue to improve the performance and
capabilities of VisiTrak and other technologies.

EXTEND OUR GLOBAL PRESENCE

We plan to aggressively continue our international expansion. ValueClick
Japan, our majority-owned subsidiary launched in March 1998, delivered over 153
million banner ads and registered over 671,000 clicks in October 1999. In the
same month, we organized our operations in London and we are planning to offer
services throughout continental Europe. We believe that the ability of our
technology and business model to accommodate increased levels of demand will
allow us to continue to successfully develop our networks in these and other
international markets.

PROVIDE SUPERIOR CUSTOMER SERVICE

We believe that strong customer service is vital in generating repeat
business. Therefore, we intend to continue to hire, train and support a staff of
highly skilled customer service representatives who

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<PAGE>
work effectively with both advertisers and Web publishers. We also plan to
continue enhancing our service by providing on-demand, customized online
statistical information that allows advertisers and Web publishers to rapidly
assess the efficiency and performance of Web advertisements.

PRODUCTS AND SERVICES

We offer the following products and services for Web publishers:

REAL-TIME STATISTICAL REPORTING

Our proprietary Web-based tools for Web publishers provide them with
current, cumulative, historical and referral statistical information.
Information currently available includes the real-time tabulation of the current
day's click activity, relevant ratios, payment information, and amounts due.
Cumulative statistics show all-time impressions, clicks and click ratios.
Historical statistics highlight impressions and clicks in both daily and weekly
format and in either tabular or graphical format. Referral statistics detail the
amount owed the referring Web publisher.

STREAMLINED VALUECLICK NETWORK APPLICATION PROCESS

As part of our strategy to simplify the advertising sales process for
publishers of small- to medium-sized Web sites, we allow Web publishers to join
our network online. After completing the application, the publisher receives an
immediate response indicating our receipt of the application, and our publisher
service department then reviews the application. Web sites are selected based on
traffic and quality standards. Web sites with their own domain name must have a
minimum of 15,000 impressions per month. Web sites without their own domain name
require 50,000 impressions per month to qualify for selection. Web sites must
contain an adequate number of pages and are also evaluated for design and
content quality. We reject Web sites which contain restricted content such as
profanity, hate speech, pornography or any illegal activity. Once approved to
join the network, we provide the Web publisher with software to install on each
Web page where an advertisement will be placed. This process provides the
publisher with a simple, turnkey solution for entering our advertising network.

PAYMENT MANAGEMENT

Our publisher payment policy reduces risks to Web publishers of advertiser
bad debts and late payment carrying costs. We pay our network of publishers
monthly regardless of whether an advertiser has paid us or not. In contrast,
most other major Web advertising networks pay their publishers only upon
collection from advertisers.

WEB SITE CATEGORIZATION CAPABILITY

Our categorization capability enables Web publishers to maximize the value
of their advertising inventory by delivering more targeted banner advertisements
for the advertiser. This capability allows a publisher to categorize not only
its entire Web site, but also each page of its Web site.

ABILITY TO VETO COMPETING ADVERTISER CAMPAIGN

We provide Web publishers with the tools to exclude any competing advertiser
campaign on our network from their site.

REFERRAL COMMISSION PROGRAM

We provide ValueClick Web publishers the opportunity to earn commissions on
clicks generated from Web sites of publishers they introduce to the ValueClick
network through a referral. The referral program is highly automated and a
referring publisher can monitor the activity of all referred sites online
through our real-time reporting tools.

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<PAGE>
We offer the following products and services for advertisers:

AD SERVING SOLUTIONS

Our proprietary system for ad serving and reporting is provided to
advertisers at no additional cost. Advertisers deliver Internet banner
advertisements to us in a form ready to be delivered on our servers. Our
proprietary software can determine how many banners are in circulation, which
banners are appropriately targeted for the consumer, and whether or not the Web
publisher has excluded any particular banners from its site. Our server then
delivers the banner to the Web publisher's site to be viewed by the consumer and
adds one impression to both the advertiser's and publisher's counter. If a user
clicks on the banner to visit the advertiser's Web site, our server registers
one click to both the advertiser's and the publisher's counter. If a user on our
network clicks on the same advertisement more than once in a six-hour period,
the click is only counted once. This feature more accurately counts the number
of "unique" users clicking on the advertiser's banner and also provides more
accurate marketing data. This entire process occurs within a matter of seconds.

DISTRIBUTION OF ADVERTISEMENTS ON A COMPREHENSIVE OR TARGETED BASIS

We sell advertising on our network under two major categories: Comprehensive
Network or Targeted Categories. Our sales representatives work with advertisers
to select the appropriate product based on advertisers' requirements. The
following is a more detailed description of these two products:

Comprehensive Network: Comprehensive Network offers advertising
placements across our entire network without specifically targeting
individual Web sites. As the lowest-cost option offered by us, it
provides the greatest overall reach for advertisers.

Targeted Categories: Targeted Categories allows the advertiser to place
ads in one or more of 15 targeted categories within our network. The use
of these categories allows an advertiser or direct marketer to target a
particular audience. Currently we have the following 15 targeted
categories grouped by type of content:

<TABLE>
<S> <C>
- - Automotive - Games
- - Business & Finance - Health & Fitness
- - Careers - MIS & Information Technology
- - Consumer Technology - News & Culture
- - E-Commerce & Portals - Sports & Recreation
- - E-Commerce & Shopping - Travel
- - Entertainment - Youth & Students
- - Family & Lifestyles
</TABLE>

VISITRAK

Our proprietary VisiTrak software uses small data files residing on a
computer of a Web user, commonly known as cookies, to track users through an
advertiser's Web site. VisiTrak offers a powerful, automated solution for our
advertisers and direct marketers to enhance their Web site effectiveness. Using
VisiTrak, advertisers select the Web pages they wish to track. This feature
enables advertisers to determine the number of clicks, leads and sales each
banner has generated and allows them to tailor their Web marketing strategy
based on these results.

ANTI-FRAUD SOLUTIONS

Since the launch of our network we have made it a priority to detect and
investigate any fraudulent clicking activity, which are clicks intentionally
made to inflate the number of clicks and incur additional revenue for the host
Web site, on our advertisers' banner ads. Our system incorporates

40
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sophisticated algorithms that detect any Web site within our network that is
receiving an abnormal click pattern during any period with the goal of
protecting advertisers from fraudulent clicking activity and improving the
accuracy of information conveyed to our advertising clients. If fraudulent
clicking activity is detected, the Web site publisher is terminated from the
network and no payment is made for the fraudulent clicks.

OPERATING AGREEMENTS

WEB PUBLISHER AGREEMENT PROCEDURE

We enter into contracts with each of the Web publishers on our network. Our
contracts may be cancelled immediately by either party at any time without
notification. Web publishers are paid within ten days of the end of each month
based on the total number of clicks on advertisements served on their Web sites
for that particular month. The amount paid per click depends on the Web
publisher's traffic level for that month. We may deactivate a Web publisher's
account on our network at any time for activity or content deemed inappropriate.
We also have reserved the right to withhold payment to any Web publisher whose
Web site exhibits patterns of clicks that we deem questionable.

ADVERTISER AGREEMENT PROCEDURE

Advertisers desiring to advertise on our network of Web publishers enter
into short term contracts, or insertion orders, with us for each advertising
campaign they wish to run. The term of each insertion order is limited to the
length of the advertising campaign. We may reject, discontinue or omit any
advertisement that does not meet our standards. We may also remove any
advertisement for any reason upon written notice to the advertiser. Each
advertiser pays us only if Web users click on their advertisements. Advertisers
may terminate their agreements with ValueClick upon two weeks prior written
notice to us.

INTERNATIONAL OPERATIONS

We are actively pursuing an international expansion strategy. Our current
international expansion strategy involves the sharing of the risk of the
investment with local partners while providing the partners with support,
including a license to our software, training, technical support and local
copyright and trademark licenses.

In March 1998, we launched ValueClick Japan, a joint venture with a local
partner in Japan. We believe that there is a growing acceptance of the CPC model
in Japan. In August 1999, we acquired a majority interest in this joint venture,
which has 14 full-time employees, of whom seven are direct salespersons and
seven provide general and administrative support. We have also commenced our
operations in the European market with ValueClick Europe, a joint venture in
London formed in August 1999. Upon the closing of this offering, we will have
the option to acquire all of the outstanding shares of ValueClick Japan. We also
have an option to acquire all of the outstanding shares of ValueClick Europe
which will become exercisable in the future. See "Related Party Transactions."

In addition, we are currently building a Web publisher network on a
country-by-country basis from our U.S. office. This network will provide an
operating base for establishing a local presence as each market develops and
provide for easier transition to local operations when appropriate local
partners are identified.

TECHNOLOGY PLATFORM

Our operating infrastructure, including our network of servers, has been
designed to provide maximum performance, reliability and the ability to increase
our capacity without increasing our costs. We use dual processor systems running
the FreeBSD operating system. Our applications are developed primarily in Perl,
a widely used software development language, and are served on Apache servers.
We

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<PAGE>
maintain tolerance and performance objectives for banner delivery response time
from our network. To ensure that these standards are met and to facilitate our
maintenance procedures, we keep standby hardware for each component at our data
center locations. Our internal maintenance group assures quick and complete
resolution of hardware concerns.

We currently serve advertisements from three third-party data center
facilities located in Los Angeles, California, Boca Raton, Florida and Tokyo,
Japan and we expect a new facility to come online in London before the end of
1999. Our U.S. locations also provide redundancy for each other. The entire
network is monitored both electronically and by system administrators and
escalation procedures are designed to resolve abnormalities quickly. All systems
are backed up daily and the data is stored off-site.

We have agreements with SoftAware, Inc. and Verio to provide us with access
to the Internet at our data centers located in Los Angeles and Boca Raton,
respectively. The monthly service fees under our agreements with SoftAware and
Verio are $13,000 and $16,000, respectively. The SoftAware agreement expires in
October 2000 and is subject to automatic one year renewals until terminated by
either party with 30 days prior written notice. SoftAware may also discontinue
service at its discretion for a breach of the agreement. The Verio agreement
expires in June 2000 and is subject to automatic monthly renewals unless
terminated by us with 90 days written notice. We believe that our existing
agreements with our data centers are more than adequate for our current
operations, and that suitable replacement of and additional capacity at these
data centers will be available in the future in commercially reasonable terms.

SALES, MARKETING AND CUSTOMER SERVICE

We market our products and services primarily through direct marketing,
print advertising and online advertising throughout the year. We also market
them through the ValueClick Web site, trade show participation and other media
events. In addition, we actively pursue public relations programs to promote our
brand, products and services to potential network Web publishers and
advertisers.

WEB PUBLISHERS

Our highly automated, online application process is supported by a team of
nine network development and customer service professionals. Their
responsibilities include screening and marketing to prospective Web publishers,
monitoring network quality, maintaining relationships and consulting with
publishers on additional revenue opportunities.

ADVERTISERS

We sell our products and services to online advertisers primarily through
our direct sales force, consisting of eight sales persons as of September 30,
1999. These employees are located at our headquarters in Carpinteria,
California. We make extensive use of telemarketing and e-marketing strategies.
Each of our account executives assists the advertisers he or she services,
typically direct marketing and e-commerce companies, with all aspects of media
planning and design of their advertising campaigns. These services include
advertisement purchasing and placement, assessment of results and optimization
of performance. We intend to add additional sales personnel in the Carpinteria
office and to open additional sales offices in the U.S. over the next 12 months.

COMPETITION

We face intense competition in the Internet advertising market. We expect
that this competition will continue to intensify in the future as a result of
industry consolidations and the increasing number of advertising, media and
Internet companies. We compete with a diverse and large pool of advertising,
media and Internet companies.

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<PAGE>
Our ability to compete depends upon several factors, including the
following:

- our ability to aggregate a large network of small- to medium-sized Web
sites efficiently,

- the timing and market acceptance of new solutions and enhancements to
existing solutions developed by us,

- our customer service and support efforts,

- our sales and marketing efforts, and

- the ease of use, performance, price and reliability of solutions developed
by us.

Additional competitive factors include each competitor's reputation,
knowledge of the advertising market, financial controls, geographical coverage,
relationships with clients, technological capability and quality and breadth of
services. We expect that we will face additional competition from new entrants
into the market in the future.

Our principal competitors are Internet advertising networks that also use a
performance-based model, such as TeknoSurf and ClickAgents. Based on
publicly-available information, we believe that we are larger than TeknoSurf in
terms of revenue and larger than ClickAgents in terms of banners served. We also
compete with other Internet advertising networks that focus on the traditional
CPM model, including DoubleClick, 24/7 Media and Flycast. Unlike us, these
companies primarily deal with publishers of large Web sites and advertisers
seeking increased brand recognition. These companies have longer operating
histories, greater name recognition and have greater financial and marketing
resources than we do.

Competition for advertising placements among current and future suppliers of
Internet navigational and informational services, high-traffic Web sites and
ISPs, as well as competition with other media for advertising placements, could
result in significant price competition and reductions in advertising revenues.
In addition, as we expand the scope of our Web services, we may compete with a
greater number of Web publishers and other media companies across an increasing
range of different Web services, including in vertical markets where competitors
may have advantages in expertise, brand recognition and other areas. If existing
or future competitors develop or offer services that provide significant
performance, price, creative or other advantages over those offered by us, then
our business, result of operations and financial condition would be negatively
affected.

INTELLECTUAL PROPERTY RIGHTS

We currently rely on a combination of copyright and trademark laws, trade
secret protection, confidentiality and non-disclosure agreements and contractual
provisions with our employees and with third parties to establish and protect
our proprietary rights. We have registered the trademark "ValueClick" in the
European Union and have applied to register the trademark "ValueClick" in the
United States and Japan.

We intend to pursue the registration of our copyrights and trademarks in
other jurisdictions. We may not be able to secure copyright registration or
trademark registrations for all of our marks, in the United States or other
countries.

Owners of other registered or unregistered copyrights, trademarks or service
marks could bring copyright or trademark infringement claims against us. If a
court of law determines that our technology infringes on the rights of other
companies, we may be required to seek licenses from third parties. However, we
may not be able to do so on commercially reasonable terms, if at all. In
addition, we may also be subject to litigation to defend against claims of
infringement of the rights of others or to determine the scope and validity of
the intellectual property rights of others.

If our competitors prepare and file applications in the United States that
claim trademarks used or registered by us, we may oppose those applications and
be required to participate in proceedings before

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<PAGE>
the United States Patent and Trademark Office to determine priority of rights to
the trademark, which could result in substantial costs to us.

Actions could be brought by other third parties claiming that our products
or technology infringe patents or copyrights owned by others. In particular, the
Patent and Trademark Office recently granted a patent to DoubleClick claiming
targeting the delivery of advertisements through the Internet. The patent,
entitled "Method of Delivery, Targeting, and Measuring Advertising Over
Networks," claims the process of using linked advertising space and compiling
statistics on individual users in order to target advertisements. This patent
may limit or terminate our ability to use our technology, we may be sued by
DoubleClick for infringement and we may be required to pay for a license to
DoubleClick's technology. Any litigation regarding this patent, other parties'
proprietary rights, or any of our proprietary rights could be costly and divert
management's attention, result in the loss of some of our proprietary rights,
require us to seek licenses from third parties and prevent us from selling our
products and services.

EMPLOYEES

As of September 30, 1999, we had 42 full-time and five part-time employees
in the U.S. and 14 full-time and two part-time employees in Japan. None of these
employees are covered by collective bargaining agreements. Management believes
that our relations with our employees are good.

LEGAL PROCEEDINGS

We currently are not a party to any material litigation, nor are we aware of
any pending or threatened litigation that would have a material adverse effect
on our business, operating results or financial condition.

FACILITIES/PROPERTIES

Our principal executive offices are located in Carpinteria, California,
where we lease two properties with approximately 9,000 and 2,750 square feet of
space, respectively. One of our leases expires on December 31, 2000 and the
other expires on September 30, 2002. We have an option to extend the lease
expiring on December 31, 2000 for an additional three years. Our current monthly
rent due under these leases is $16,250 in the aggregate. We also lease
approximately 1,490 square feet of office space in Tokyo, Japan. Our lease in
Tokyo expires on January 31, 2001. We have an option to extend the Tokyo lease
for an additional three years. We believe that our existing leased space in
California and Japan is more than adequate for our current operations, and that
suitable replacement and additional space will be available in the future on
commercially reasonable terms.

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<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

Set forth below is information concerning the directors, executive officers
and other key employees of ValueClick as of November 15, 1999.

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- -------- -----------
<S> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS AND OTHER KEY
EMPLOYEES

James R. Zarley..................................... 55 Chairman of the Board and Chief
Executive Officer

Brian Coryat........................................ 38 Director, President and Chief
Operating Officer

Kurt A. Johnson..................................... 36 Chief Financial Officer and
Secretary

Earle A. Malm II.................................... 50 Vice Chairman of the Board, Director
and Chief Marketing Officer

Robert P. Sherry.................................... 42 Senior Vice President of Sales

John H. Schwenk..................................... 36 Chief Technical Officer

David S. Buzby...................................... 39 Director

Robert D. Leppo..................................... 56 Director

Martin T. Hart...................................... 63 Director

Steven J. Umberger.................................. 38 Director
</TABLE>

JAMES R. ZARLEY

Mr. Zarley is the Chairman of the Board and Chief Executive Officer of
ValueClick. He has served as Chairman, and has been an advisor to ValueClick
since May 1998. In February 1999, Mr. Zarley joined ValueClick in a full-time
capacity and in May 1999 he became Chief Executive Officer. Prior to joining
ValueClick, from April 1987 to December 1996, Mr. Zarley was Chief Executive
Officer of Quantech Investments, an information services company. From December
1996 to May 1998, Mr. Zarley was the Chairman and Chief Executive Officer of
Best Internet, until its merger with Hiway Technologies, a Web hosting company,
in May 1998. From May 1998 to January 1999, Mr. Zarley was the Chief Operating
Officer of Hiway Technologies until its merger with Verio. Mr. Zarley has more
than 30 years of technology business experience as a senior executive.

BRIAN CORYAT

Mr. Coryat is the founder of ValueClick and has acted as its President and a
director since its inception. In May 1999, he became Chief Operating Officer of
ValueClick. Mr. Coryat's prior experience includes the formation, development
and direction of Web-Ignite Corporation, an Internet promotions company, from
May 1996 through December 1998. From September 1994 through May 1996,
Mr. Coryat served as Chief Executive Officer of AAA Internet Promotions, an
Internet directory listing service.

KURT A. JOHNSON

Mr. Johnson joined ValueClick as its Chief Financial Officer in May 1999 and
has also served as its Secretary since September 1999. Mr. Johnson brings over
13 years of financial management

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experience to the ValueClick team. From February 1998 to May 1999, Mr. Johnson
was an investment banker at Olympic Capital Partners, specializing in mergers
and acquisitions and Internet company investments. Mr. Johnson also served as
Vice President of Investments for Bozarth & Turner Securities from March 1995
through January 1998. He served as Chief Financial Officer of HSD Corporation, a
privately held industrial automation company, from April 1994 to March 1995, and
was a divisional controller for Ogden Corporation from February 1990 to April
1994. Mr. Johnson graduated with a B.A. from Eastern Washington University and
an M.B.A. from Gonzaga University and is also a Certified Management Accountant.

EARLE A. MALM II

Mr. Malm joined ValueClick in June 1999 as its Chief Marketing Officer and
became the Vice Chairman of the Board in July 1999. Prior to joining ValueClick,
Mr. Malm was the Chief Operating Officer for AIM Funds, an investment management
company in San Francisco from June 1998 to March 1999. From March 1990 to May
1998, Mr. Malm served in various capacities at GT Global, an investment
management company, including Senior Vice President of Institutional Marketing,
Executive Vice President of Business Development and Chief Operating Officer. In
addition, Mr. Malm has over 25 years of business experience in service
industries. Mr. Malm has held senior management positions in technology
businesses with GE and RCA which has given him a background of business
development in consumer, commercial, industrial and financial services sectors.
Mr. Malm graduated with a B.S. and B.A. from Bowling Green State University.

ROBERT P. SHERRY

Mr. Sherry joined ValueClick in September 1999 as Senior Vice President of
Sales. Prior to joining ValueClick, Mr. Sherry was with the Miller Publishing
Group as Vice President of Sales and Marketing from June 1998 to September 1999
for its magazine network. From March 1994 to March 1998, he was the Western
Group Sales Director at Reader's Digest. In addition, Mr. Sherry brings over 12
years of publishing and advertising experience to ValueClick, having held sales
and management positions at Time Warner, McGraw-Hill, and Reader's Digest.
Mr. Sherry graduated with a B.A. from Georgetown University.

JOHN H. SCHWENK

Mr. Schwenk joined ValueClick as the Chief Technology Officer in April 1999.
Mr. Schwenk has been employed in the computer and technology field since 1985.
Prior to joining ValueClick, Mr. Schwenk was with Hiway Technologies from March
1997 to March 1999, initially serving as Director of Systems and Engineering and
most recently as Vice President of Information Systems. From 1989 to 1996,
Mr. Schwenk was Vice President of Systems Integration for BCR, a privately held
systems integration company.

DAVID S. BUZBY

Mr. Buzby has been a director since May 1999. Mr. Buzby is an investor and
operator of entrepreneurial companies, currently working at Inbar since June
1999 as Executive Vice President creating a business to business e-commerce
barter exchange. Previously, Mr. Buzby worked with Best Internet, a web hosting
company, from August 1994 to January 1999. Mr. Buzby held various positions at
Best Internet including Chief Financial Officer and Vice Chairman of the Board
and was a founding investor. Before joining Best Internet, Mr. Buzby founded,
acquired and reengineered recycling businesses in Northern California.
Mr. Buzby also serves on the Board of Directors of several private companies.
Mr. Buzby graduated with a B.A. from Middlebury College and an M.B.A. from
Harvard Business School.

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<PAGE>
ROBERT D. LEPPO

Mr. Leppo has been a director of ValueClick since May 1998. Mr. Leppo's
primary occupation since 1977 has been as a private investor. He serves on the
Board of Directors of several private companies. Mr. Leppo graduated with a B.A.
from Stanford University and an M.B.A. from Harvard Business School.

MARTIN T. HART

Mr. Hart has been a director since March 1999. Mr. Hart's primary occupation
since 1969 has been as a private investor. Mr. Hart is also a director of
PJ America, a foods service company, MassMutual Corporate Investors, an
investment company, MassMutual Participation Investors, an investment company,
Schuler Homes, a builder of homes, Optical Securities, a manufacturer of
security systems, T-Netix, a communications company, Vail Banks, a multi-bank
holding company, and Ardent Software, a software company, and he continues to
serve on the Board of Directors of several private companies. Mr. Hart graduated
with a B.A. from Regis University and is a Certified Public Accountant.

STEVEN J. UMBERGER

Mr. Umberger has been a director since May 1998. Mr. Umberger has served as
the President and has been the controlling stockholder of ValueClick Europe,
Limited since August 1999. From April 1999 to June 1999, he was employed as the
Chief Marketing Officer of Hiway Technologies, a Web hosting company. Prior to
that, he served as Chief Executive Officer of IAAI, a computer reseller company
from March 1991 to March 1995. From March 1993 to June 1997, Mr. Umberger was
also the co-owner of Acme Barricades Company, a construction rental company.
Mr. Umberger graduated with a B.A. from the Virginia Military Institute and an
M.B.A. from the College of William and Mary.

BOARD OF DIRECTORS

Our Board is currently composed of seven members. Each director serves until
the next annual meeting or until his or her successor is duly elected and
qualified.

BOARD COMMITTEES

In March 1999, the Board established an audit committee and a compensation
and incentive plan committee. Mr. Leppo, Mr. Hart and Mr. Umberger serve on the
audit committee and Mr. Leppo and Mr. Buzby comprise the compensation and
incentive plan committee.

BOARD COMPENSATION

The directors of ValueClick do not currently receive salaries or fees for
serving as directors or for serving on committees of our Board of Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No interlocking relationship exists between our Board of Directors and the
Board of Directors or compensation committee of any other company, nor has any
interlocking relationship existed in the past.

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<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation
earned by our chief executive officer for services rendered in all capacities
during the period from May 1, 1998 (inception) through December 31, 1998:

EXECUTIVE COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS/SAR COMPENSATION
- --------------------------- -------- -------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Brian Coryat................................ $74,591 $ 0 $ 0 0 $9,039(2)
President, Chief Operating Officer and
Secretary(1)
</TABLE>

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

(1) Mr. Coryat served as our Chief Executive Officer from May 1998 to May 1999.

(2) Represents 401(k) matching contributions paid by us of $8,252 and insurance
premiums paid on Mr. Coryat's behalf of $787.

In addition to the above named executive officer for the fiscal year ended
December 31, 1998, we currently employ certain other executive officers who we
anticipate will qualify as named executive officers in future years due to their
position or compensation level. Those executives include James R. Zarley,
Chairman and Chief Executive Officer; Kurt Johnson, Chief Financial Officer; and
Earle A. Malm II, Vice Chairman and Chief Marketing Officer. For information
about these officers' compensation, see "--Employment Agreements."

EMPLOYEE BENEFIT PLANS

1999 STOCK OPTION PLAN

In May 1999, the Board of Directors adopted and the stockholders
approved our 1999 Stock Option Plan. Under the 1999 plan, the Board, or its
designated administrators, have the flexibility to determine the type and amount
of awards to be granted to eligible participants. Employee directors do not
participate in votes concerning issuances of stock options to themselves.

PURPOSE, STRUCTURE, AWARDS AND ELIGIBILITY. The plan is intended to secure
for us and our stockholders the benefits arising from ownership of common stock
by individuals employed or retained by us who will be responsible for our future
growth. The plan is intended to strengthen us and our subsidiaries by attracting
and retaining competent directors, officers and employees by giving them an
incentive to contribute to our success.

The plan administrators may grant incentive stock options or
non-statutory stock options under the 1999 plan. The options may be awarded
under the 1999 plan for any term not to exceed ten years from the date the
option is granted, except for the case of incentive stock options granted to
principal stockholders holding 10% of our outstanding common stock in which case
the term shall be no longer than five years from the date the option is granted.

Directors, officers, and all full-time salaried employees or consultants
of us or our subsidiaries who contribute to the growth and success of the
business are eligible to be selected by the plan administrators to participate
in the 1999 plan. Our employees, including employee officers and directors, of
us or our subsidiaries may be granted either incentive stock options or
non-statutory stock options, while consultants, including non-employee officers
and directors, may only be granted non-statutory stock options.

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<PAGE>
SHARES SUBJECT TO 1999 STOCK OPTION PLAN. We have authorized and reserved
for issuance an aggregate of 5,760,000 shares of our common stock under the 1999
plan. The shares of common stock issuable under the 1999 plan may be authorized
but unissued shares, shares issued and reacquired by us or shares purchased by
us on the open market. If any of the awards granted under the 1999 plan expire,
terminate or are forfeited for any reason before they have been exercised,
vested or issued in full, the unused shares subject to those expired, terminated
or forfeited awards will again be available for purposes of the 1999 plan.

EFFECTIVE DATE AND DURATION. The 1999 plan became effective upon its
adoption by the Board of Directors in May 1999. The plan will continue in effect
for ten years from the date of its adoption unless sooner terminated by the
Board of Directors. In the event of a merger or consolidation in which
ValueClick is not the surviving corporation, and such surviving corporation
refuses to assume a substitute option as provided in the plan, such options
shall become fully exercisable for a period of 15 days of the date of notice
from the Board.

ADMINISTRATION. The 1999 plan is administered by the full Board of
Directors or at the discretion of the Board by a Stock Option Committee
appointed by the Board. The Stock Option Committee shall consist of no less than
two members of the Board who are:

- non-employee directors within the meaning of the Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, so long as non-employee
director administration is required under Rule 16b-3; and

- outside directors as defined in section 162(m) of the Internal Revenue
Code of 1986, so long as outside directors are required by the Code.

Subject to the above limitations, the Board of Directors may from time to
time remove members from the committee and fill all vacancies on the committee,
however caused. The program administrators may hold meetings when and where they
determine, will keep minutes of their meetings, and may interpret, prescribe,
amend, and rescind rules and regulations in accordance with the terms of the
1999 plan.

401(K) RETIREMENT PLAN

We adopted an amended 401(k) defined contribution retirement plan in May
1999 which became effective in July 1999. The plan covers all full-time
employees. Employees become eligible to participate in the plan after they have
worked for a three-consecutive month period, commencing on the date of hire, and
for which the employee is credited with at least 1,000 paid hours, including
vacation, sickness, disability, leave of absence and back pay. The plan provides
for voluntary employee contributions up to 20% of annual compensation, subject
to the maximum limit allowed by the Internal Revenue Service guidelines, which
is currently $10,000 annually. We may make matching contributions to each
participating employee based on his or her voluntary contributions to the plan.
We may also make discretionary contributions to the plan at our sole discretion.
As of September 30, 1999 we have contributed approximately $14,000 to the plan.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

We have included in our Certificate of Incorporation a provision indicating
that, to the extent permitted by Delaware General Corporation Law, our directors
will not be personally liable to us or our stockholders for monetary damages for
breach of fiduciary duty as directors, except for liability:

- for any breach of the director's duty of loyalty to us or our
stockholders;

- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

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<PAGE>
- under Section 174 of the General Corporation Law of the State of Delaware;
or

- for any transaction from which the director derived an improper personal
benefit.

Our Bylaws provide for the indemnification of our directors and executive
officers to the fullest extent permitted by the Delaware General Corporation
Law. We may limit the extent of such indemnification by individual contracts
with our directors and executive officers, but have not done so. We are not,
however, required to indemnify any director or executive officer in connection
with any proceeding initiated by such person or any proceeding by such person
against us or our directors, officers, employees or other agents unless such
indemnification is expressly required to be made by law, the proceeding was
authorized by our Board of Directors or such indemnification is provided by us,
in our sole discretion, pursuant to the powers vested in us under the Delaware
General Corporation Law. We are required to advance, prior to the final
disposition of any proceeding, promptly on request, all expenses incurred by any
director or executive officer in connection with such proceeding on receipt of
an undertaking by or on behalf of such person to repay those amounts if it
should be determined ultimately that he or she is not entitled to be indemnified
under our Bylaws or otherwise.

We have entered into indemnification agreements with our directors and some
of our officers. These agreements contain provisions that may require us, among
other things, to indemnify these directors and officers against liabilities that
may arise because of their status or service as directors or officers, except
for liabilities arising from willful misconduct of a culpable nature, advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, and obtain directors' and officers' liability
insurance if it is maintained for other directors or officers. These agreements
do not require us to indemnify our directors and officers in situations where:

- the renumeration paid to the director or officer is determined by final
judgment to be in violation of law;

- a judgment is rendered against the director or officer for an accounting
of profits made from the purchase or sale of our securities pursuant to
the provisions of Section 16(b) of the Securities Exchange Act of 1934;

- the director or officer's conduct is adjudged to have been knowingly
fraudulent or deliberately dishonest, or constitutes willful misconduct;
or

- a court determines that indemnification under the circumstances is not
lawful.

At present, we are not aware of any pending or threatened litigation or
proceeding involving a director, officer, employee or agent in which
indemnification would be required or permitted. We are not aware of any
threatened litigation or proceeding that might result in a claim for
indemnification. We believe that our charter provisions and indemnification
agreements are necessary to attract and retain qualified persons as directors
and officers.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with each of Messrs. Zarley,
Schwenk, Johnson and Malm. Under these agreements, each of them is entitled to a
base salary as set forth in the table below. In connection with these
agreements, we have granted each of them options to purchase shares of our
common stock under our 1999 Stock Option Plan as set forth in the table below.
All of the options granted to Messrs. Zarley and Malm, 144,000 of the options
granted to Mr. Schwenk, and 108,000 of the options granted to Mr. Johnson will
become immediately exercisable upon the closing of our initial public offering
or upon transfer of 50% or more of the ownership of ValueClick.

50
<PAGE>
OPTIONS GRANTED UNDER EMPLOYMENT AGREEMENTS

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
NAME BASE SALARY UNDERLYING OPTIONS EXERCISE PRICE EXPIRATION DATE
- ---- ----------- -------------------- -------------- ----------------
<S> <C> <C> <C> <C>
James R. Zarley....... $150,000 864,000(2) $0.17 January 1, 2009
John H. Schwenk....... $100,000 288,000(3) $0.17 May 13, 2009
Kurt A. Johnson....... $130,000(1) 216,000(4) $0.69 May 23, 2009
Earle A. Malm II...... $150,000 576,000(5) $0.69 June 1, 2009
</TABLE>

- ------------------------------
(1) Mr. Johnson will be entitled to a $20,000 bonus upon the closing of this
offering or a change of 50% or more of our ownership.

(2) 216,000 of Mr. Zarley's options became exercisable in July 1999. The
remaining 648,000 options will become exercisable in equal monthly
installments over the following 18 months.

(3) 36,000 of Mr. Schwenk's options became exercisable in October 1999. The
remaining 252,000 options will become exercisable in equal monthly
installments over the following 42 months.

(4) 27,000 of Mr. Johnson's options become exercisable in November 1999. The
remaining 189,000 options will become exercisable in equal monthly
installments over the following 42 months.

(5) Mr. Malm's options will vest in 12 equal monthly installments commencing on
June 1, 1999.

Messrs. Zarley's, Schwenk's and Johnson's employment agreements may be
terminated at any time by either party upon ten days' notice. These employment
agreements continue until terminated by either us or the employee. Mr. Malm's
employment agreement provides for a one-year term but may be terminated at any
time by either party upon ten days' notice. If we terminate Mr. Johnson's
employment in connection with, or following and by reason of, the transfer of
ownership of 50% or more of ValueClick, he will be entitled to severance equal
to one year's salary. In the event we terminate Mr. Malm's employment following
a change in control of ValueClick or for any reason other than for cause,
Mr. Malm will be entitled to all compensation, stock options and health and
welfare benefits to which he would otherwise be entitled during the remaining
term of employment.

51
<PAGE>
RELATED PARTY TRANSACTIONS

ValueClick was formed as a California limited liability company, ValueClick,
LLC, on May 1, 1998. Upon formation, ValueClick, LLC issued securities equal to
6% of its total equity to investors for an aggregate purchase price of $60,000.
It also issued securities equal to 92% of its total equity to Messrs. Coryat and
Bueno, as described below, in consideration for intellectual property, including
trademarks, software and trademark licenses and contractual rights. Valueclick,
LLC also issued securities equal to 2% of its total equity to two individuals on
May 1, 1998, in consideration for services rendered. Among the investors who
purchased 6% of ValueClick, LLC's total equity as described above, Web-Ignite
contributed assets worth $5,000 to ValueClick, LLC in exchange for a 0.5%
membership interest. Web-Ignite subsequently transferred its 0.5% interest to
Mr. Coryat in connection with Mr. Coryat's sale of 2,250 shares of Web-Ignite
common stock to a third party for $45,000.

On May 1, 1998, Brian Coryat, the sole stockholder of Web-Ignite
Corporation, caused Web-Ignite to transfer to ValueClick, LLC its rights to:

- the ValueClick trademarks and domain names; and

- the trademark license, software license and copyright agreement with
Trans-Pacific Ltd., predecessor to ValueClick Japan.

In exchange for the transfer of these rights, which had an estimated aggregate
value of $770,000, ValueClick, LLC issued a 77% membership interest to Mr.
Coryat. We believe that the transfer of the Web-Ignite business was on terms
comparable to terms we would expect to have received in an arm's length
transaction. At that time, Michael Bueno, the primary developer of certain
technology underlying the software used to deliver advertisements, had licensed
this software to Web-Ignite. In connection with the transfer of the Web-Ignite
business to ValueClick, LLC, Web-Ignite and Mr. Bueno terminated their license
agreement resulting in all rights in the software reverting back to Mr. Bueno.
Mr. Bueno subsequently transferred all of his ownership rights in the software
to ValueClick, LLC. In exchange for the transfer of these software rights, which
had an estimated aggregate value of $150,000, ValueClick, LLC issued a 15%
membership interest to Mr. Bueno.

On December 31, 1998, ValueClick, LLC was reorganized into ValueClick, Inc.,
a Delaware corporation. In connection with this reorganization, ValueClick, Inc.
acquired all the assets and assumed all of the liabilities of ValueClick, LLC.
It also issued to ValueClick, LLC 13,406,581 shares of its common stock, 297,132
share of its Series A Convertible Preferred Stock and 1,047,804 shares of its
Series B Convertible Preferred Stock, all of which ValueClick, LLC then
distributed to its members upon its dissolution. The 13,406,581 shares of common
stock were distributed to the members who originally contributed intellectual
property, contractual rights and services to ValueClick, LLC in proportion to
their membership interests in ValueClick, LLC. The 297,132 shares of Series A
Convertible Preferred Stock were distributed to the investors who originally
purchased 6% of ValueClick, LLC's equity interest for $60,000 in proportion to
their membership interests in ValueClick, LLC. The 1,047,804 shares of Series B
Convertible Preferred Stock were distributed to the investors who purchased 17%
of ValueClick, LLC's equity interest for $716,000 in June 1998 in proportion to
their membership interests in ValueClick, LLC.

Upon the reorganization of ValueClick, LLC as ValueClick, Inc., as described
above, Mr. Coryat's entire membership interest in ValueClick, LLC was exchanged
for 10,981,987 shares of our common stock and 24,761 shares of our Series A
Convertible Preferred Stock and Mr. Bueno's membership interest in ValueClick,
LLC was exchanged for 2,139,348 shares of our common stock. Mr. Coryat was the
sole stockholder and sole director of Web-Ignite, and was President and Chief
Executive Officer and a director of ValueClick, LLC. Mr. Coryat is a director,
and is President and Chief Operating Officer of ValueClick, Inc. Mr. Bueno
served as a director and as Chief Technical Officer of ValueClick, LLC and was
Vice President, Chief Technology Officer and a director of ValueClick, Inc.

52
<PAGE>

Mr. Bueno resigned as a director of ValueClick, Inc. as of September 30, 1999
and is no longer an officer of ValueClick, Inc. Mr. Coryat and Mr. Bueno each
currently holds more than 5% of our stock.

In June 1998, Brian Coryat borrowed $50,000, at an interest rate of 9% per
annum, from ValueClick, LLC. Mr. Coryat repaid this loan in full in December
1998 and paid total interest under the loan of $2,687. Mr. Coryat served as
President and Chief Executive Officer and was a director of ValueClick, LLC.

On December 31, 1998, we borrowed $200,000, at an interest rate of 10% per
annum, from Brian Coryat, a director, and our President and Chief Operating
Officer. We repaid this loan in full in January 1999 and paid total interest
under the loan of $1,480.

VALUECLICK EUROPE

In August 1999, we formed a joint venture with three of our directors to
engage in the Internet advertising business in the United Kingdom and Europe by
purchasing a 20% interest in ValueClick Europe, Limited, a corporation organized
under the laws of the U.K., for $99,000. We co-founded ValueClick Europe with
Mr. Umberger, one of our directors; Mr. Coryat, our President, Chief Operating
Officer and director; Mr. Zarley, our Chairman of the Board and Chief Executive
Officer; and Todd Treusdell, one of our stockholders. At that time, we granted
ValueClick Europe an exclusive license to our trademarks and other intellectual
property within western Europe, Scandinavia and the U.K. for $200,000. This
license may become non-exclusive if ValueClick Europe fails to recognize a
minimum level of gross revenues during the 12 months ending August 2000.
Pursuant to the license agreement, ValueClick Europe will also pay us a royalty
fee equal to five percent of the advertising revenues it receives per month on
its network. The license agreement may be terminated at any time by mutual
consent of the parties or by any party if the other party breaches any terms of
the agreement and the breach is not cured within 45 days. In addition,
ValueClick Europe may terminate the agreement if we are subject to bankruptcy
proceedings, if our assets are subject to a receivership or if any part of our
patents subject to the agreement is found to be invalid.

As part of the formation of ValueClick Europe, all five of the founders
entered into a shareholders agreement which gave us an option to acquire all of
the shares of ValueClick Europe owned by each of the other founders in the event
the shareholder proposed to sell or transfer their shares or upon a change of
control of ValueClick Europe. In December 1999, we purchased all of the shares
of ValueClick Europe held by the other four founders. All of these founders
waived their rights under the shareholders agreement in connection with this
transaction and the shareholders agreement terminated by its own terms upon the
closing of the transaction. As a result of this transaction, ValueClick Europe
became our wholly-owned subsidiary.

We paid Mr. Umberger a total of $239,829 for his 45% interest in ValueClick
Europe, which included the reimbursement of $17,519 for out-of-pocket expenses
incurred by Mr. Umberger related to the operation of ValueClick Europe. We paid
Messrs. Zarley and Coryat $12,375 each for their 2.5% interests in ValueClick
Europe. In exchange for Mr. Treusdell's 30% interest in ValueClick Europe, we
agreed to assume his obligation to pay ValueClick Europe $148,200, which was the
outstanding balance of the purchase price for his 30% interest.

53
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of our common stock as of September 30, 1999, as adjusted to reflect
the sale of common stock in this offering and the automatic conversion of all
shares of preferred stock to common stock upon the consummation of this
offering, for each of the following persons:

- each of our directors and each of the named officers in the
"Management--Executive Compensation" section of this prospectus;

- all directors and executive officers as a group; and

- each person who is known by us to own beneficially five percent or more of
our common stock prior to this offering.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or become exercisable within 60 days of September 30, 1999 are
included. Those shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of any other person. Unless otherwise
indicated in the table, each person and entity named in the table has sole
voting and sole investment power with respect to the shares set forth opposite
its name. Except as specified, all share numbers and percentages assume no
exercise of the underwriters' over-allotment option.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED PRIOR TO SHARES BENEFICIALLY
OFFERING OWNED AFTER OFFERING(2)
------------------- -----------------------
NAME OF STOCKHOLDER(1) NUMBER PERCENT NUMBER PERCENT
- ---------------------- ---------- -------- ------------- --------
<S> <C> <C> <C> <C>
Named executive officers and directors:
James R. Zarley(3).............................. 1,622,863 6.4% 1,622,863 5.6%
Brian Coryat(4)................................. 7,443,308 33.3 7,443,308 25.5
Kurt A. Johnson(5).............................. 108,000 * 108,000 *
Earle A. Malm II(6)............................. 798,483 3.3 798,483 2.7
John H. Schwenk(7).............................. 197,335 * 197,335 *
David S. Buzby(8)............................... 664,652 3.0 664,652 2.3
Robert D. Leppo................................. 1,458,832 6.5 1,458,832 5.0
Martin T. Hart(9)............................... 906,667 4.1 906,667 3.1
Steven J. Umberger.............................. 1,385,582 6.2 1,385,582 4.7
5% stockholder:
Michael J. Bueno(10)............................ 1,958,014 8.8 1,958,014 6.7
All directors and executive officers
as a group (9 persons)(11)...................... 14,585,723 60.2% 14,585,723(12) 49.9%
</TABLE>

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

* Less than one percent

(1) Unless otherwise indicated, the address of each person set forth above is in
care of ValueClick, Inc., 6450 Via Real, Carpinteria, California 93013.

(2) Assumes the sale of 5,000,000 shares offered hereby but excludes any common
stock that may be issued upon exercise of the underwriters' over-allotment
option in connection with this offering.

(3) Includes (a) 864,000 shares of Common Stock issuable upon exercise of stock
options at a price of $0.17 per share, which will automatically become
exercisable upon the closing of this offering and (b) 144,000 shares of
Common Stock issuable upon exercise of stock options at a price of $0.69

54
<PAGE>
per share, which are presently exercisable or will become exercisable within
60 days from September 30, 1999.

(4) If the underwriters' over-allotment option is exercised in full, Mr. Coryat
will sell 342,000 shares in this offering and will beneficially own
7,101,308 shares (23.7%) after the offering.

(5) Includes 108,000 shares of Common Stock issuable upon exercise of stock
options at a price of $0.69 per share that will automatically become
exercisable upon the closing of this offering.

(6) Includes 576,000 shares of Common Stock issuable upon exercise of stock
options at a price of $0.69 per share that will automatically become
exercisable upon the closing of this offering, and 19,584 shares of Common
Stock presently exercisable at a price of $0.69 per share.

(7) Includes 144,000 shares of Common Stock issuable upon exercise of stock
options at a price of $0.69 per share that will automatically become
exercisable upon the closing of this offering.

(8) Includes 453,920 shares of Common Stock and 210,732 shares of Series B
Preferred Stock held by Buzby-Vasan 1997 Trust.

(9) Represents 906,667 shares of Common Stock held by VC Investors LLC.
Mr. Hart is the managing partner of VC Investors LLC.

(10) If the underwriters' over-allotment option is exercised in full, Mr. Bueno
will sell 68,000 shares in this offering and will beneficially own 1,890,014
shares (6.3%) after the offering. From June 1998 to April 1999 Mr. Bueno
served as the lead engineer for ValueClick, LLC, the predecessor of
ValueClick. Since April 1999, Mr. Bueno has served in various capacities
with ValueClick including Chief Technical Officer and his current position,
lead engineer.

(11) Includes (a) 163,584 shares of Common Stock issuable upon the exercise of
stock options with a price of $0.69 per share, which are presently
exercisable or will become exercisable within 60 days of September 30, 1999
and (b) 1,008,000 and 684,000 shares, respectively, of Common Stock issuable
upon the exercise of stock options with a price of $0.17 and $0.69 per
share, respectively, which will automatically become exercisable upon the
closing of this offering.

(12) Includes 342,000 shares which Mr. Coryat and 68,000 shares which Mr. Bueno
will sell in this offering if the underwriters' over-allotment option is
exercised in full.

55
<PAGE>
DESCRIPTION OF CAPITAL STOCK

Upon the completion of this offering, we will be authorized to issue
100,000,000 shares of common stock, $.001 par value per share, and 20,000,000
shares of preferred stock, $.001 par value per share.

COMMON STOCK

As of September 30, 1999, there were 14,744,166 shares of common stock
outstanding held of record by 16 stockholders (or 22,366,910 shares, held of
record by 47 stockholders as adjusted to reflect the conversion of all
outstanding preferred stock upon the consummation of this offering). Options to
purchase an aggregate of 3,952,224 shares of common stock were also outstanding
as of September 30, 1999. There will be 27,366,910 shares of common stock
outstanding (assuming no exercise of the underwriters' over-allotment option or
exercise of outstanding options under our 1999 stock option plan after
September 30, 1999) after giving effect to the sale of the shares offered
hereby.

The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Subject to
preferences that may be applicable to any outstanding preferred stock, holders
of common stock are entitled to receive ratably such dividends as may be
declared by the board out of funds legally available for that purpose. See
"Dividend Policy." In the event of liquidation, dissolution or winding up of
ValueClick, the holders of common stock are entitled to share ratably in all
assets remaining after payment of liabilities, subject to the prior distribution
rights of any outstanding preferred stock. The common stock has no preemptive or
conversion rights or other subscription rights. The outstanding shares of common
stock are, and the shares of common stock to be issued upon completion of this
offering will be, fully paid and non-assessable.

PREFERRED STOCK

The Board will have the authority, without further action by the
stockholders, to issue up to 20,000,000 shares of preferred stock, $.001 par
value, in one or more series. The Board will also have the authority to
designate the rights, preferences, privileges and restrictions of each such
series, including dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, redemption prices, liquidation preferences and the
number of shares constituting any series.

The issuance of preferred stock might have the effect of delaying, deferring
or preventing a change in control of ValueClick without further action by the
stockholders. The issuance of preferred stock with voting and conversion rights
might also adversely affect the voting power of the holders of common stock. In
certain circumstances, an issuance of preferred stock could have the effect of
decreasing the market price of the common stock. As of the closing of this
offering, no shares of preferred stock will be outstanding. We currently have no
plans to issue any shares of preferred stock.

The Board has authorized the issuance of three series of preferred stock --
Series A, B and C convertible preferred stock. There are 297,132 authorized,
issued and outstanding shares of Series A, 1,047,804 authorized, issued and
outstanding shares of Series B and 1,400,000 shares of Series C authorized, of
which 1,301,850 are issued and outstanding. Upon consummation of this offering,
the 297,132 shares of Series A, 1,047,804 shares of Series B, and 1,301,850
shares of Series C will be converted into 855,740, 3,017,676, and 3,749,328
shares of common stock, respectively, or an aggregate of 7,622,744 shares of
common stock.

AUTHORIZED BUT UNISSUED CAPITAL STOCK

We estimate that following the completion of this offering we will have
approximately 72,633,090 shares of authorized but unissued common stock,
including an aggregate of 5,760,000 shares reserved for issuance upon the
exercise of options under our 1999 stock plan, and 20,000,000 shares of
authorized preferred stock, of which none will be issued and outstanding. If the
underwriters' over-allotment option is exercised in full, we will have
approximately 72,293,090 shares of authorized but

56
<PAGE>
unissued common stock. Delaware law does not require stockholder approval for
the issuance of authorized shares. However, the listing requirements of the
Nasdaq National Market, which apply so long as the common stock remains included
in that inter-dealer quotation system, require prior stockholder approval of
specified issuances, including issuances of shares bearing voting power equal to
or exceeding 20% of the pre-issuance outstanding voting power or pre-issuance
outstanding number of shares of common stock. These additional shares could be
used for a variety of corporate purposes, including future public offerings to
raise additional capital or to facilitate corporate acquisitions. We currently
do not have any plans to issue additional shares of common stock or preferred
stock, other than in connection with employee compensation plans. See
"Management--Employee Benefit Plans." One of the effects of the existence of
unissued and unreserved common stock and preferred stock may be to enable the
Board to issue shares to persons who may agree or be inclined to vote in concert
with current management on issues put to consideration of stockholders, which
issuance could render more difficult or discourage an attempt to obtain control
of us by means of a merger, tender offer, proxy contest or otherwise, and
protect the continuity of our management and possibly deprive the stockholders
of the opportunity to sell their shares of common stock at prices higher than
prevailing market prices.

DELAWARE ANTI-TAKEOVER LAW

Section 203 of the Delaware General Corporation Law could make the
acquisition of ValueClick and the removal of incumbent officers and directors
more difficult. This statute is expected to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage persons seeking
to acquire control of ValueClick to negotiate with it first. We believe that the
benefits of increased protection of our potential ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to acquire or restructure
ValueClick outweigh the disadvantages of discouraging such proposals because,
among other things, negotiation of such proposals could result in an improvement
of their terms.

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, this statute prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date that the person became
an interested stockholder unless (with certain exceptions) the business
combination or the transaction in which the person became an interested
stockholder is approved in a prescribed manner. Generally, a "business
combination" includes a merger, asset or stock sale, or other transaction
resulting in a financial benefit to the stockholder. Generally, an "interested
stockholder" is a person who, together with affiliates and associates, owns (or
within three years prior, did own) 15% or more of the corporation's voting
stock. These provisions may have the effect of delaying, deferring or preventing
a change in control of us without further action by our stockholders.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the common stock is ChaseMellon
Shareholder Services, L.L.C.

57
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock.
Future sales of substantial amounts of common stock in the public market could
adversely affect prevailing market prices. Furthermore, since only a limited
number of shares will be available for sale shortly after this offering because
of certain contractual and legal restrictions on resale (as described below),
sales of substantial amounts of our common stock in the public market after the
restrictions lapse could adversely affect the prevailing market price and our
ability to raise equity capital in the future.

Upon completion of this offering, we will have outstanding 27,366,910 shares
of common stock. Of these shares, the 5,000,000 shares sold in the offering
(plus any shares issued upon exercise of the underwriters' over-allotment
option) will be freely tradable without restriction under the Securities Act,
unless purchased by our "affiliates" as that term is defined in Rule 144 under
the Securities Act (generally, officers, directors or 10% stockholders).

The remaining 22,366,910 shares outstanding are "restricted securities"
within the meaning of Rule 144 under the Securities Act. Restricted securities
may be sold in the public market only if registered or if they qualify for an
exemption from registration under Rules 144, 144(k) or 701 promulgated under the
Securities Act, which are summarized below. Sales of the restricted securities
in the public market, or the availability of such shares for sale, could
adversely affect the market price of the common stock.

Our stockholders and our option holders have entered into lock-up agreements
generally providing that they will not offer, sell, contract to sell or grant
any option to purchase or otherwise dispose of our common stock or any
securities exercisable for or convertible into our common stock owned by them
for a period of 180 days after the date of this prospectus without the prior
written consent of Prudential Securities on behalf of the underwriters. As a
result of these contractual restrictions, notwithstanding possible earlier
eligibility for sale under the provisions of Rules 144, 144(k) and 701, shares
subject to lock-up agreements may not be sold until such agreements expire or
are waived by the designated underwriters' representative. Taking into account
the lock-up agreements, and assuming Prudential Securities does not release
stockholders from these agreements, the following shares will be eligible for
sale in the public market at the following times:

- Beginning on the effective date of the offering, only the shares sold in
the offering will be immediately available for sale in the public market;

- Beginning 180 days after the effective date of the offering, 21,191,149
shares will be eligible for sale pursuant to Rules 144, 144(k) and 701;
and

- An additional 1,175,770 shares will become eligible for sale pursuant to
Rule 144 beginning on June 23, 2000. Shares eligible to be sold by
affiliates pursuant to Rule 144 are subject to volume restrictions as
described below.

In general, under Rule 144 as currently in effect, and beginning after the
expiration of the lock-up agreements (180 days after the date of this
prospectus), a person (or persons whose shares are aggregated) who has
beneficially owned restricted securities for at least one year would be entitled
to sell within any three-month period a number of shares that does not exceed
the greater of: one percent of the number of shares of common stock then
outstanding (which will equal approximately shares immediately after
the offering) or the average weekly trading volume of the common stock during
the four calendar weeks preceding the sale. Sales under Rule 144 must be
conducted through a broker or directly with a market maker are also subject to
and notice requirements and to the availability of current public information
about us. Under Rule 144(k), a person who is not deemed to have been our
affiliate at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years, is
entitled to sell such shares without

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<PAGE>
complying with the manner of sale, public information, volume limitation or
notice provisions of Rule 144.

Beginning 90 days after the effective date of the registration statement for
this offering, any employee, officer or director of or consultant to us who
purchased shares pursuant to a written compensatory plan or contract may be
entitled to rely on the resale provisions of Rule 701. Rule 701 permits
affiliates to sell their Rule 701 shares under Rule 144 without complying with
the holding period requirements of Rule 144. Rule 701 further provides that
non-affiliates may sell such shares in reliance on Rule 144 without having to
comply with the holding period, public information, volume limitation or notice
provisions of Rule 144. In addition, we intend to file registration statements
under the Securities Act as promptly as possible after the effective date to
register shares to be issued pursuant to our employee benefit plans. As a
result, any options exercised under the 1999 Stock Option Plan, as amended, or
any other benefit plan after the effectiveness of such registration statement
will also be freely tradable in the public market, except that shares held by
affiliates will still be subject to the volume limitation, manner of sale,
notice and public information requirements of Rule 144 unless otherwise
resalable under Rule 701. As of September 30, 1999, there were outstanding
options under the 1999 Stock Option Plan for the purchase of 3,952,224 shares.
See "Risk Factors--Virtually all of our shares will be eligible for sale shortly
after this offering, which could result in a decline in our stock price" and
"Management--Employee Benefit Plans."

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<PAGE>

UNDERWRITING

We have entered into an underwriting agreement with the underwriters named
below, for whom Prudential Securities Incorporated, William Blair & Company,
L.L.C. and PrudentialSecurities.com, a unit of Prudential Securities, are acting
as representatives. We and the selling stockholders are obligated to sell, and
the underwriters are obligated to purchase, all of the shares offered on the
cover page of this prospectus, if any are purchased. Each underwriter has
severally agreed to purchase the shares indicated opposite its name:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------ ---------
<S> <C>
Prudential Securities Incorporated..........................
William Blair & Company, L.L.C..............................
PrudentialSecurities.com, a unit of Prudential Securities
Incorporated..............................................
---------

Total.................................................
=========
</TABLE>

The underwriters may sell more shares than the total number of shares
offered on the cover page of this prospectus and they have for a period of 30
days from the date of this prospectus an over-allotment option to purchase up to
340,000 additional shares from us and up to 410,000 additional shares from the
selling stockholders. If any additional shares are purchased, the underwriters
will severally purchase the shares in the same proportion as per the table
above.

The representatives of the underwriters have advised us that the shares will
be offered to the public at the offering price indicated on the cover page of
this prospectus. The underwriters may allow to selected dealers a concession not
in excess of $ per share and these dealers may reallow a concession not in
excess of $ per share to certain other dealers. After the shares are released
for sale to the public, the representatives may change the offering price and
the concessions. The representatives have informed us that the underwriters do
not intend to sell shares to any investor who has granted them discretionary
authority.

We and the selling stockholders have agreed to pay to the underwriters the
following fees, assuming both no exercise and full exercise of the underwriters'
over-allotment option to purchase additional shares.

<TABLE>
<CAPTION>
TOTAL FEES
--------------------------------------
WITHOUT EXERCISE OF FULL EXERCISE OF
OVER-ALLOTMENT OVER-ALLOTMENT
FEE PER OPTION OPTION
SHARE ------------------- ----------------
<S> <C> <C> <C>
Fees paid by us............................ $ $ $
Fees unpaid by the selling stockholders.... $ $ $
</TABLE>

In addition, we estimate that we will spend approximately $900,000 in
expenses for this offering. The selling stockholders will pay for their own
expenses. We and the selling stockholders have agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments that the underwriters may be required
to make in respect of these liabilities.

We, our officers and directors, and all stockholders, including the selling
stockholders of ValueClick, have entered into lock-up agreements pursuant to
which we and they have agreed not to offer or sell any shares of common stock or
securities convertible into or exchangeable or exercisable for shares of common
stock for a period of 180 days from the date of this prospectus without the
prior written consent of Prudential Securities Incorporated, on behalf of the
underwriters. Prudential Securities Incorporated may, at any time and without
notice, waive the terms of these lock-up agreements as specified in the
underwriting agreement.

Prior to this offering, there has been no public market for our common
stock. The public offering price, negotiated between us and the representatives,
is based upon various factors such as our financial

60
<PAGE>

and operating history and condition, our prospects, the prospects for the
industry we are in and prevailing market conditions.

Prudential Securities Incorporated, on behalf of the underwriters, may
engage in the following activities in accordance with applicable securities
rules:

- Over-allotments involving sales in excess of the offering size, creating a
short position. Prudential Securities Incorporated may elect to reduce
this short position by exercising some or all of the over-allotment
option.

- Stabilizing and short covering. Stabilizing bids to purchase the shares
are permitted if they do not exceed a specified maximum price. After the
distribution of shares has been completed, short covering purchases in the
open market may also reduce the short position. These activities may cause
the price of the shares to be higher than would otherwise exist in the
open market.

- Penalty bids permitting the representatives to reclaim concessions from a
syndicate member for the shares purchased in the stabilizing or short
covering transactions. To the extent the representatives purchase in the
open market shares of our common stock sold in this offering to reduce the
underwriters' short position or to stabilize the price of our common
stock, they may reduce the aggregate selling concession paid or payable to
each syndicate member by the amount of the selling concession attributable
to the portion of the repurchased shares sold in the offering by the
syndicate member while such short covering or stabilizing activities are
ongoing. To reduce the likelihood of the imposition of a penalty bid,
underwriters, in determining how to allocate shares in the offering, may
take into consideration the history of investors who have quickly sold
their shares in prior offerings. The imposition of a penalty bid may
discourage the immediate resale of shares sold in this offering.

These activities, which may be commenced and discontinued at any time, may
be effected on the Nasdaq National Market, in the over-the-counter market or
otherwise.

Each underwriter has represented that it has complied and will comply with
all applicable laws and regulations in connection with the offer, sale or
delivery of the shares and related offering materials in the United Kingdom,
including:

- the Public Offers of Securities Regulations 1995,

- the Financial Services Act 1986, and

- the Financial Services Act 1986, (Investment Advertisements) (Exemptions)
Order 1996 (as amended).

Prudential Securities Incorporated facilitates the marketing of new issues
online through its PrudentialSecurities.com unit. Clients of Prudential Advisor,
a full service brokerage firm program, may view offering terms and a prospectus
online and place orders through their financial advisors.

Prudential Volpe Technology, a unit of Prudential Securities Incorporated,
has, from time to time, performed various investment banking and financial
advisory services on a fee-for-services basis for ValueClick.

We have asked the underwriters to reserve shares for sale at the same
offering price directly to our officers, directors, employees and other business
affiliates or related third parties. The number of shares available for sale to
the general public in offering will be reduced to the extent such persons
purchase the reserved shares.

61
<PAGE>
LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for
ValueClick by Brobeck, Phleger & Harrison LLP, Los Angeles, California.
Pillsbury Madison & Sutro LLP, San Francisco, California, is acting as counsel
for the underwriters in connection with selected legal matters relating to the
shares of common stock offered by this prospectus.

EXPERTS

The financial statements of ValueClick, Inc. as of December 31, 1998, and
for the period from May 1, 1998 (inception) to December 31, 1998, the financial
statements of the ValueClick Line of Business of Web-Ignite Corporation as of
December 31, 1997 and April 30, 1998 and for the period from July 1, 1997
through December 31, 1997 and the four months ended April 30, 1998, and the
financial statements of ValueClick Japan as of December 31, 1998 and for the
period from March 26, 1998 through November 15, 1998 of its predecessor line of
business within Trans-Pacific Ltd. and ValueClick Japan for the period from
November 16, 1998 through December 31, 1998 included in this prospectus have
been so included in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

ValueClick has filed with the Securities and Exchange Commission a
registration statement on Form S-1 under the Securities Act with respect to the
common stock offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits thereto.
For further information with respect to ValueClick and the common stock offered
hereby, reference is made to the registration statement and to the exhibits
thereto. You should read the agreements and other documents we have filed as
exhibits to this registration statement.

Following the offering we will become subject to the reporting requirements
of the Securities Exchange Act of 1934. In accordance with that law, we will be
required to file reports and other information with the SEC. The registration
statement and exhibits, as well as those reports and other information when so
filed, may be inspected without charge at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the SEC located at Seven World Trade Center, 13th Floor,
New York, New York 10048, and the Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
facilities. Copies of all or any part of the registration statement may be
obtained from the SEC's offices upon payment of certain fees prescribed by the
SEC. The SEC maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. The address of the site is http://www.sec.gov.

We will furnish our stockholders annual reports and unaudited quarterly
reports for the first three quarters of each fiscal year. Annual reports will
include audited consolidated financial statements prepared in accordance with
generally accepted accounting principles. The financial statements included in
the annual reports will be examined and reported upon, with an opinion
expressed, by our independent auditors.

62
<PAGE>
VALUECLICK, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
ValueClick, Inc. Financial Statements

Report of Independent Accountants....................... F-2

Consolidated Balance Sheets............................. F-3

Consolidated Statements of Operations................... F-4

Consolidated Statements of Stockholders' Equity......... F-5

Consolidated Statements of Cash Flows................... F-6

Notes to Financial Consolidated Statements.............. F-7

Unaudited Pro Forma Condensed Consolidated Financial
Statements

Introduction............................................ F-20

Pro Forma Condensed Consolidated Statements of
Operations............................................. F-21

Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements................................... F-23

ValueClick Line of Business of Web-Ignite Corporation

Report of Independent Accountants....................... F-24

Balance Sheets.......................................... F-25

Statements of Operations................................ F-26

Statements of Changes in Invested Equity................ F-27

Statements of Cash Flows................................ F-28

Notes to Financial Statements........................... F-29

ValueClick Japan Financial Statements

Report of Independent Accountants....................... F-31

Balance Sheets.......................................... F-32

Statements of Operations................................ F-33

Statements of Stockholders' Equity...................... F-34

Statements of Cash Flows................................ F-35

Notes to Financial Statements........................... F-36
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

The following report is in the form that will be signed upon the completion
of the 1-for-0.72 reverse stock split as described in Note 12 of the notes to
the consolidated financial statements.

/s/ PRICEWATERHOUSECOOPERS LLP

Woodland Hills, California
December 20, 1999

To the Board of Directors and Stockholders of
ValueClick, Inc.

In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of operations, stockholders' equity and cash
flows present fairly, in all material respects, the financial position of
ValueClick, Inc. (the "Company") at December 31, 1998, and the results of
its operations and its cash flows for the period from May 1, 1998
(inception) through December 31, 1998, 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 audit. We conducted our audit of
these financial 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 audit provides a reasonable basis for the opinion expressed
above.

Woodland Hills, California
May 31, 1999, except for Notes 1 and 12, as
to which the date is December , 1999

F-2
<PAGE>
VALUECLICK, INC.

CONSOLIDATED BALANCE SHEETS

(All information as of September 30, 1999 is unaudited)

<TABLE>
<CAPTION>
PRO FORMA
STOCKHOLDERS'
EQUITY
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1998 1999 1999
------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 262,392 $ 2,573,642
Accounts receivable, net of allowance for doubtful
accounts of $8,000 and $519,701 as of December 31,
1998 and September 30, 1999, respectively............. 714,559 4,753,607
Receivable from ValueClick Japan........................ 10,263 --
Prepaid expenses and other current assets............... 24,524 203,792
Deferred income taxes................................... -- 202,723
---------- -----------
Total current assets.............................. 1,011,738 7,733,764
Property and equipment, net................................. 103,323 552,932
Acquired software........................................... 116,667 79,168
Investment in ValueClick Japan.............................. 90,923 --
Investment in ValueClick Europe............................. -- 99,000
Intangibles, net............................................ -- 3,439,484
Other assets................................................ -- 79,153
---------- -----------
Total assets...................................... $1,322,651 $11,983,501
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 343,135 $ 1,874,683
Income taxes payable...................................... -- 719,288
Deferred revenue.......................................... 14,894 637,373
Related party debt........................................ 200,000 --
---------- -----------
Total current liabilities......................... 558,029 3,231,344

Minority interest in ValueClick Japan....................... -- 418,882

Commitments and contingencies (Note 11).....................

Stockholders' equity:
Preferred stock, $0.001 par value; 3,000,000 and
20,000,000 shares authorized at December 31, 1998 and
September 30, 1999;
Series A Convertible - 297,132 shares issued and
outstanding at December 31, 1998 and September 30,
1999.................................................. 297 297 --
Series B Convertible - 1,047,804 shares issued and
outstanding at December 31, 1998 and September 30,
1999.................................................. 1,048 1,048 --
Series C Convertible - 0 and 1,301,850 shares issued and
outstanding at December 31, 1998 and September 30,
1999.................................................. -- 1,302 --
Common stock, $0.001 par value; 100,000,000 shares
authorized; 14,283,365 and 14,744,166 shares issued and
outstanding at December 31, 1998 and September 30, 1999,
respectively; pro forma 22,366,910 shares issued and
outstanding at September 30, 1999....................... 14,283 14,744 22,367
Additional paid-in capital................................ 748,994 15,818,348 15,813,372
Deferred stock compensation............................... -- (6,570,703) (6,570,703)
Cumulative foreign currency translation adjustment........ -- 50,419 50,419
Accumulated deficit....................................... -- (982,180) (982,180)
---------- ----------- -----------
Total stockholders' equity............................ 764,622 8,333,275 $ 8,333,275
---------- ----------- ===========
Total liabilities and stockholders' equity........ $1,322,651 $11,983,501
========== ===========
</TABLE>

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

F-3
<PAGE>
VALUECLICK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
MAY 1, 1998
(INCEPTION) NINE
THROUGH MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------- --------------
(UNAUDITED)
<S> <C> <C>
Revenues.................................................... $2,052,539 $10,593,497
Cost of revenues............................................ 1,104,237 5,265,416
---------- -----------
Gross profit.............................................. 948,302 5,328,081
---------- -----------
Operating expenses:
Sales and marketing....................................... 516,169 1,466,736
General and administrative................................ 403,856 2,079,204
Technology enhancements................................... 154,806 586,691
Stock-based compensation.................................. 61,375 1,476,856
Amortization of intangibles and acquired software......... 33,333 186,015
---------- -----------
Total operating expenses.............................. 1,169,539 5,795,502
---------- -----------
Loss from operations...................................... 221,237 (467,421)
Equity in loss of ValueClick Japan.......................... (9,077) (64,336)
Interest income, net........................................ 7,561 33,928
Other income................................................ -- 4,125
---------- -----------
Loss before income taxes and minority interest............ (222,753) (493,704)
Provision for income taxes.................................. -- 516,565
---------- -----------
Net income before minority interest......................... -- (1,010,269)
Minority interest in ValueClick Japan....................... -- 28,089
---------- -----------
Net loss.............................................. $ (222,753) $ (982,180)
========== ===========
Basic and diluted net loss per common share (Note 9)........ $ (0.02) $ (0.07)
========== ===========
Shares used to calculate basic and diluted net loss per
common share (Note 9)..................................... 14,273,470 13,800,866
========== ===========
Unaudited pro forma basic and diluted net loss per common
share..................................................... $ (0.05)
===========
Unaudited pro forma shares used to calculate pro forma basic
and diluted net loss per common share..................... 21,423,610
===========
</TABLE>

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

F-4
<PAGE>
VALUECLICK, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

LLC MEMBERSHIP
INTERESTS PREFERRED STOCK COMMON STOCK ADDITIONAL
------------------------ ---------------------- ---------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
------------ --------- ----------- -------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at May 1, 1998
(inception)...................... -- $ -- -- $ -- -- $ -- $ --
Issuance of LLC membership
interests........................ 4,111,220 926,000 -- -- -- -- --
Charge for issuance of LLC
interests to employees........... 876,786 61,375 -- -- -- -- --
Net loss........................... -- -- -- -- -- -- --
Exchange of LLC membership
interests to stock in the
C-corporation upon
reincorporation and conversion... (4,988,006) (987,375) 1,344,936 1,345 14,283,366 14,283 748,994
------------ --------- ----------- ------- ----------- ------- -----------
Balance at December 31, 1998....... -- -- 1,344,936 1,345 14,283,366 14,283 748,994
Issuance of Series C preferred
stock, net (unaudited)........... -- -- 1,301,850 1,302 -- -- 3,497,136
Deferred stock compensation
(unaudited)...................... -- -- -- -- -- -- 8,047,559
Amortization of stock-based
compensation (unaudited)......... -- -- -- -- -- -- --
Issuance of common stock to acquire
ValueClick Japan................. -- -- -- -- 460,800 461 3,524,659
Comprehensive loss:
Net loss (unaudited)............. -- -- -- -- -- -- --
Foreign currency translation..... -- -- -- -- -- -- --
------------ --------- ----------- ------- ----------- ------- -----------
Total comprehensive loss........... -- -- -- -- -- -- --
------------ --------- ----------- ------- ----------- ------- -----------
Balance at September 30, 1999
(unaudited)...................... -- -- 2,646,786 2,647 14,744,166 14,744 15,818,348
Assumed conversion of convertible
preferred stock (unaudited)...... -- -- (2,646,786) (2,647) 7,622,744 7,623 (4,976)
------------ --------- ----------- ------- ----------- ------- -----------
Balance at September 30, 1999, pro
forma (unaudited)................ -- $ -- -- $ -- 22,366,910 $22,367 $15,813,372
============ ========= =========== ======= =========== ======= ===========

<CAPTION>
CUMULATIVE
FOREIGN
CURRENCY TOTAL
DEFERRED STOCK TRANSLATION ACCUMULATED STOCKHOLDERS'
COMPENSATION ADJUSTMENT DEFICIT EQUITY
-------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Balance at May 1, 1998
(inception)...................... $ -- $ -- $ -- $ --
Issuance of LLC membership
interests........................ -- -- -- 926,000
Charge for issuance of LLC
interests to employees........... -- -- -- 61,375
Net loss........................... -- -- (222,753) (222,753)
Exchange of LLC membership
interests to stock in the
C-corporation upon
reincorporation and conversion... -- -- 222,753 --
----------- ------- --------- ----------
Balance at December 31, 1998....... -- -- -- 764,622
Issuance of Series C preferred
stock, net (unaudited)........... -- -- -- 3,498,438
Deferred stock compensation
(unaudited)...................... (8,047,559) -- -- --
Amortization of stock-based
compensation (unaudited)......... 1,476,856 -- -- 1,476,856
Issuance of common stock to acquire
ValueClick Japan................. -- -- -- 3,525,120
Comprehensive loss:
Net loss (unaudited)............. -- -- (982,180) (982,180)
Foreign currency translation..... -- 50,419 -- 50,419
----------- ------- --------- ----------
Total comprehensive loss........... -- -- -- (931,761)
----------- ------- --------- ----------
Balance at September 30, 1999
(unaudited)...................... (6,570,703) 50,419 (982,180) 8,333,275
Assumed conversion of convertible
preferred stock (unaudited)...... -- -- -- --
----------- ------- --------- ----------
Balance at September 30, 1999, pro
forma (unaudited)................ $(6,570,703) $50,419 $(982,180) $8,333,275
=========== ======= ========= ==========
</TABLE>

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

F-5
<PAGE>
VALUECLICK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
MAY 1, 1998 NINE
(INCEPTION) MONTHS
THROUGH ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------- --------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(222,753) $ (982,180)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization........................... 42,553 259,890
Provision for doubtful accounts......................... 8,000 501,588
Equity in loss of ValueClick Japan...................... 9,077 64,336
Stock-based compensation................................ 61,375 1,476,856
Minority interest in ValueClick Japan................... -- (28,088)
Benefit for deferred taxes.............................. -- (202,723)
Changes in operating assets and liabilities:
Accounts receivable................................... (722,559) (4,103,498)
Receivable from ValueClick Japan...................... (10,263) --
Prepaid expenses and other assets..................... (24,524) (108,509)
Accounts payable and accrued liabilities.............. 343,135 1,250,968
Income taxes payable.................................. -- 719,288
Deferred revenue...................................... 14,894 528,941
--------- -----------
Net cash used in operating activities............. (501,065) (623,131)
--------- -----------
Cash flows from investing activities:
Investment in ValueClick Japan............................ (100,000) (263,456)
Acquisition of ValueClick Japan, net of cash received..... -- 412,738
Investment in ValueClick Europe........................... -- (99,000)
Purchases of property and equipment....................... (112,543) (442,983)
--------- -----------
Net cash used in investing activities............. (212,543) (392,701)
--------- -----------
Cash flows from financing activities:
Proceeds from the issuance of short-term debt............. 200,000 --
Repayments on short-term debt............................. -- (200,000)
Proceeds from issuance of LLC membership interests........ 776,000 --
Net proceeds from issuance at Series C preferred stock.... -- 3,498,438
--------- -----------
Net cash provided by financing activities......... 976,000 3,298,438
--------- -----------
Effect of currency translations................... -- 28,644
--------- -----------
Net increase in cash and cash equivalents......... 262,392 2,311,250
Cash and cash equivalents, beginning of period.............. -- 262,392
--------- -----------
Cash and cash equivalents, end of period.................... $ 262,392 $ 2,573,642
========= ===========
Supplemental disclosures of cash flow information:
Cash paid for interest.................................... $ -- $ 1,480
========= ===========
Cash paid for taxes....................................... $ -- $ --
========= ===========
Non-cash investing and financing activities:
Issuance of LLC membership interests for acquired
software................................................ $ 150,000 $ --
========= ===========
Issuance of LLC membership interests for employee
services................................................ $ 61,375 $ --
========= ===========
Conversion of LLC membership interests into Series A and B
Preferred Stock......................................... $ 776,000 $ --
========= ===========
Conversion of LLC membership interests into common
stock................................................... $ 211,375 $ --
========= ===========
</TABLE>

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

F-6
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

ValueClick, Inc. ("ValueClick" or the "Company") commenced operations as
ValueClick, LLC, a California limited liability company, on May 1, 1998
(inception). Prior to the formation of ValueClick, LLC, the ValueClick Internet
advertising delivery business began in July 1997 as a line of business within
Web-Ignite Corporation, an S-corporation wholly owned by the founding member of
ValueClick, LLC. The reorganization and formation of ValueClick, LLC was
accounted for as a transaction by entities under common control and was effected
by the founding member causing Web-Ignite to transfer the rights to the
ValueClick trademarks, domain names, the trademark, license, software license
and copyright agreements with Trans-Pacific Ltd., predecessor to ValueClick
Japan, and the rights to the advertising delivery software used in the business
to ValueClick, LLC. On December 31, 1998, ValueClick, LLC completed its
conversion and reincorporation from a California LLC to a Delaware C-corporation
by completing a merger with ValueClick, Inc., a Delaware C-corporation formed by
ValueClick, LLC. The accompanying financial statements reflect the conversion
and reincorporation.

The Company is an Internet based advertising network that provides a
performance based advertising solution on a cost-per-click basis to advertisers
and e-commerce companies.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its majority owned subsidiary. All material intercompany transactions have
been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results may differ from those estimates.

CASH AND CASH EQUIVALENT

The Company considers all short-term investments with an original maturity
at date of purchase of three months or less to be cash equivalents. At
December 31, 1998, cash equivalents consist of money market funds.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation on property and
equipment is calculated on the straight-line method over the estimated useful
lives of the assets ranging from 3 to 5 years. Leasehold improvements are
amortized over their estimated useful lives, or the term of the lease, whichever
is shorter.

F-7
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACQUIRED SOFTWARE

Acquired software represents certain software used in the Internet
advertising delivery, which was acquired from a founding member of ValueClick
LLC in exchange for a 15% ownership interest in ValueClick LLC on May 1, 1998.
The acquisition of the software was accounted for as a nonmonetary exchange and
the acquired software was valued at $150,000. The acquired software is being
amortized on a straightline basis over an estimated useful life of 3 years.

INTANGIBLES

Intangible assets are principally comprised of goodwill which represents the
excess of the cost of the acquired business over the net assets acquired and is
being amortized on a straight line basis over 5 years. Accumulated amortization
at September 30, 1999 amounted to $148,516.

The carrying amounts of intangible assets are reviewed if the facts and
circumstances indicate potential impairment of their carrying value. If this
review indicates that intangible assets are not recoverable, as determined based
on the undiscounted cash flows of the entity acquired over the remaining
amortization period, the Company's carrying values related to the intangible
assets are reduced to the fair value of the assets.

REVENUE RECOGNITION

The Company's revenues are principally derived from the delivery of
advertising click-throughs through third-party Web sites comprising the
ValueClick Network (the "Network"). Revenue is recognized in the period that the
advertising click-throughs occur, provided that no significant Company
obligations remain and collection of the resulting receivable is probable. To
date, the Company's agreements have not required guaranteed minimum
click-throughs.

The Company becomes obligated to make payments to third-party Web sites,
which have contracted with the Company to be part of the Network, in the period
the advertising click-throughs are delivered. Such expenses are classified as
cost of revenues in the accompanying statements of operations

Deferred revenue represents payments received in advance for advertising
click-throughs. Such fees will be recognized as revenues once the advertising
click-throughs are delivered and no significant Company obligations remain.

COST OF REVENUES

Cost of revenues consist of payments to third-party web sites in the
Company's network, telecommunications costs, depreciation of equipment used for
ad delivery, and personnel and occupancy costs related to the Company's ad
delivery infrastructure.

SALES AND MARKETING

Sales and marketing expenses include salaries, sales commissions, employee
benefits, travel and related expenses for the Company's sales force, and
advertising costs.

F-8
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Advertising costs are expensed as incurred and totaled approximately
$318,000 and $402,000 for the year ended December 31, 1998 and nine months ended
September 30, 1999, respectively.

GENERAL AND ADMINISTRATIVE

General and administrative expenses include salaries, related benefits and
expenses for the executive, finance, legal and human resources personnel, and
other general overhead costs.

TECHNOLOGY ENHANCEMENTS

Technology development costs and enhancements to existing products are
charged to operations as incurred. Software development costs are required to be
capitalized when a product's technological feasibility has been established by
completion of a working model of the product and ending when a product is
available for general release to customers. To date, completion of a working
model of the Company's products and general releases have substantially
coincided. As a result, the Company has not capitalized any software development
costs since such costs have not been significant.

STOCK-BASED COMPENSATION

The Company accounts for its employee stock option plan in accordance with
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations.
Accordingly, compensation expense related to employee stock options is recorded
only if, on the date of the grant, the fair value of the underlying stock
exceeds the exercise price. The Company adopted the disclosure-only requirements
of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" ("Statement No. 123"), which allows entities to
continue to apply the provisions of APB Opinion No. 25 for transactions with
employees and provide pro forma net income and pro forma earnings per share
disclosures for employee stock grants made in 1999 and future years as if the
fair-value based method of accounting in Statement No. 123 had been applied to
these transactions.

FOREIGN CURRENCY TRANSLATION

The Company's investment in ValueClick Japan subjects it to foreign currency
exchange risks as ValueClick Japan denominates its transactions in the Japanese
Yen. The Company's exposure is limited to the extent of the equity investment in
ValueClick Japan which represents 7.5% of total assets at December 31, 1998. At
September 30, 1999, ValueClick Japan represented approximately 10.0% of total
assets. At September 30, 1999, all assets and liabilities of ValueClick Japan
are translated at the current exchange rate while revenues and expenses are
translated at the average rates in effect for the period. The effects of these
translation adjustments are reported in a separate component of stockholders'
equity. Transaction gains and losses are included in the statement of operations
and were not significant for the period subsequent to the acquisition through
September 30, 1999.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration
of credit risk consist of cash and cash equivalents and accounts receivable.
Cash and cash equivalents are deposited with

F-9
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

major financial institutions; at times, such balances with any one financial
institution may be in excess of FDIC insurance limits. Credit is extended to
customers based on an evaluation of their financial condition. The Company
generally does not require collateral or other security to support accounts
receivable. The Company performs ongoing credit evaluations of its customers and
maintains an allowance for potential bad debt. To date such losses, if any, have
been within management's expectations. At December 31, 1998, one customer
comprised 20% of the accounts receivable balance. For the year ended
December 31, 1998, one customer comprised 23% of revenues. For the nine months
ended September 30, 1999, no customer comprised greater than 10% of revenues and
at September 30, 1999, no customer comprised more than 10% of accounts
receivable.

FINANCIAL INSTRUMENTS

The Company's financial instruments, including cash and cash equivalents,
accounts receivable, accounts payable and short-term debt, are carried at
historical cost. At December 31, 1998, the fair values of these instruments
approximated their financial statement carrying amounts because of the
short-term maturity of these instruments and the relative stable interest rate
environment.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates its long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of such assets or
intangibles may not be recoverable. Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of an asset to future
undiscounted net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. To date, no such impairment has been recorded.

BASIC AND DILUTED NET LOSS PER SHARE

The Company has adopted the provisions of Financial Accounting Standards
Board ("FASB") issued SFAS No. 128, "Earnings Per Share" ("Statement 128").
Basic and diluted net loss per share is computed by dividing the net loss per
share by the weighted average shares of common stock outstanding.

UNAUDITED PRO FORMA NET LOSS PER SHARE

Unaudited pro forma net loss per share is computed by dividing net loss by
the sum of the weighted average number of shares of common stock outstanding,
including the shares resulting from the conversion of the convertible preferred
stock as though such conversion occurred at December 31, 1998 and September 30,
1999. Each share of preferred stock converts into four shares of common stock.
The conversion of the Series A, B and C convertible preferred stock has been
reflected in the accompanying unaudited pro forma statement of stockholders'
equity as if these events had occurred on September 30, 1999.

F-10
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COMPREHENSIVE INCOME (LOSS)

The Company has adopted the provisions of SFAS No. 130, "Reporting
Comprehensive Income" ("Statement No. 130"). Statement No. 130 establishes
standards for reporting comprehensive income and its components in financial
statements. Comprehensive income, as defined, includes all changes in equity
(net assets) during a period from non-owner sources. The only element of
comprehensive income, other than net loss, relates to foreign currency
translation adjustments subsequent to the acquisition of majority control of
ValueClick Japan as discussed in Note 3.

SEGMENTS

The Company adopted the provisions of SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information" ("Statement No. 131").
Statement No. 131 establishes standards for the way companies report information
about operating segments in annual financial statements. It also establishes
standards for related disclosures about its products, services, geographic areas
and major customers. The Company has determined that it does not have any
separately reportable business segments.

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information of the Company for the nine months ended
September 30, 1999 is unaudited. The unaudited financial information has been
prepared on the same basis as the annual financial statement statements and, in
the opinion of management, reflects all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position,
results of operations and cash flows as of and for the nine months ended
September 30, 1999.

RECENTLY ISSUED ACCOUNTING STANDARDS

In March 1998, the Accounting Standards Executive Committee issued Statement
of Position No. 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," which provides guidance on
accounting for the cost of computer software developed or obtained for internal
use. SOP 98-1 is effective for financial software statements for fiscal years
beginning after December 15, 1998. Implementation of SOP 98-1 did not have a
significant impact on the Company's financial position, results of operations or
cash flows.

In April 1998, the Accounting Standards Executive Committee issued Statement
of Position No. 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-Up
Activities." This standard requires companies to expense the costs of start-up
activities and organization costs as incurred. In general, SOP 98-5 is effective
for fiscal years beginning after December 13, 1998. Adoption of SOP 98-5 did not
have a significant impact on the Company's financial position, results of
operations or cash flows.

In June 1998, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 133, ("Statement No. 133"), Accounting for Derivative
Instruments and Hedging Activities. Statement No. 133 establishes new standards
of accounting and reporting for derivative instruments and hedging activities.
Statement No. 133 requires that all derivatives be recognized at fair value in
the statement of financial position, and that the corresponding gains and losses
be reported either in the statement of operations or as a component of
comprehensive income, depending on the

F-11
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

type of hedging relationship that exists. Statement No. 133 will be effective
for fiscal years beginning after June 15, 2000. The Company does not currently
hold derivative instruments or engage in hedging activities. Accordingly,
management believes the adoption of this statement will not have a significant
impact on the Company's financial position, results of operations or cash flows.

2. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1998 and September 30, 1999
consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------- --------------
<S> <C> <C>
Computer equipment and purchased software................... $105,541 $551,133
Furniture and office equipment.............................. 6,190 61,458
Leasehold improvements...................................... 812 27,659
-------- --------
112,543 640,250
Less: accumulated depreciation and amortization............. (9,220) (87,318)
-------- --------
$103,323 $552,932
======== ========
</TABLE>

3. INVESTMENT IN VALUECLICK JAPAN AND VALUECLICK EUROPE

At December 31, 1998, the Company owned approximately 31.7% of the
outstanding common stock of ValueClick Japan which is engaged in the web-based
advertising business in Japan. In February 1999, the Company contributed an
additional $263,457 to ValueClick Japan in order to maintain its 31.7%
investment in ValueClick Japan in connection with additional equity financing
raised by ValueClick Japan. The Company accounted for this investment using the
equity method accounting and has reported its proportional share of ValueClick
Japan's net loss for periods up through the acquisition date of majority control
as discussed below.

The Company and ValueClick Japan are subject to the Trademark License,
Software License and Copyright Agreement to use the ValueClick advertising
network in Japan, which has been subsequently amended to the License and Option
Agreement. This agreement requires a monthly license fee based on ValueClick
Japan's revenue, subject to monthly and quarterly minimum thresholds. $10,263
was due under the agreement at December 31, 1998 and $31,500 was earned from
activity for the nine months ended September 30, 1999. The outstanding balance
due from ValueClick Japan is included in the receivable from ValueClick Japan at
December 31, 1998 in the accompanying balance sheets.

On August 6, 1999, the Company entered into a Stock Purchase Agreement (the
"Agreement") to acquire a controlling interest in ValueClick Japan. Under the
Agreement, ValueClick purchased an additional 22.3% of the ValueClick Japan
stock in exchange for 460,800 shares of ValueClick common stock with an
estimated fair value purchase price of approximately $3,525,120 giving
ValueClick a 54% controlling ownership interest in ValueClick Japan. The
acquisition was accounted for using the purchase method and the purchase price
was allocated to the estimated fair value of assets acquired and liabilities
assumed to the extent acquired by the Company. The remaining portion of the
ValueClick Japan assets and liabilities were recorded at the historical cost
basis of the minority stockholders. The estimated fair value of the tangible
assets acquired and the liabilities assumed

F-12
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

3. INVESTMENT IN VALUECLICK JAPAN AND VALUECLICK EUROPE (CONTINUED)

approximated the historical cost basis and the excess of purchase price over the
net tangible assets acquired was allocated to goodwill. The preliminary purchase
price allocation resulted in goodwill of approximately $3,588,000 which is being
amortized on a straight-line basis over an estimated useful life of 5 years.
Direct transaction costs related to the acquisition amounted to $32,000.

On August 17, 1999, the Company entered into a license agreement and
invested $99,000 for a 20% interest in ValueClick Europe, Limited, formed in
August 1999 to engage in the web-based advertising business in the United
Kingdom. The Company has accounted for this investment using the equity method
of accounting. To date, ValueClick Europe has not yet begun operations. The
Company has the option to acquire all of the outstanding shares of ValueClick
Europe using a predetermined option price formula based on revenue.

4. RELATED PARTIES

In December 1998, the Company borrowed $200,000 from a majority stockholder
at 10% interest rate under an unsecured note agreement. Principal and interest
payments were due on demand. In January 1999, the note and accrued interest were
repaid in full.

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 SEPTEMBER 30, 1999
------------------ -------------------
<S> <C> <C>
Accounts payable............................................ $262,214 $ 991,856
Accrued payments to third-party web sites................... 51,115 497,302
Other accruals.............................................. 29,806 385,525
-------- ----------
$343,135 $1,874,683
======== ==========
</TABLE>

6. INCOME TAXES

For the period from May 1, 1998 (inception) through December 31, 1998, the
Company was subject to the provisions of Subchapter K of the Internal Revenue
Code and as such the Company did not pay Federal income taxes. Instead, the
members were liable for individual Federal income taxes on the Company's taxable
income. California generally conforms to federal treatment, except for the
imposition of a minimum tax based on gross receipts. The Company's conversion
from a LLC to a C-corporation did not have a material impact on the Company's
financial position or results of operations. The tax provision on a pro forma
basis assuming a C corporation status would not differ from the historical
presentation as a result of the Company's operating loss in 1998.

Upon conversion to a C-corporation, ValueClick commenced using the asset and
liability method of accounting for income taxes. Under this method, deferred tax
assets and liabilities are recognized for future taxable consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, and to operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be

F-13
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

6. INCOME TAXES (CONTINUED)

recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in results of operations in the period that
includes the enactment date.

The provision for income taxes for the nine months ended September 30, 1999
is comprised of the following:

<TABLE>
<S> <C>
Current:
Federal................................................... $ 557,097
State..................................................... 162,191
---------
$ 719,288
---------
Deferred
Federal................................................... $(171,885)
State..................................................... (30,838)
---------
$(202,723)
---------
Provision for income taxes.................................. $ 516,565
=========
</TABLE>

The components of the deferred tax assets at September 30, 1999 are as
follows:

<TABLE>
<S> <C>
Deferred tax assets:
Allowance for doubtful accounts and other................. $202,723
--------
Net deferred tax assets................................. $202,723
========
</TABLE>

The overall effective tax rate differs from the statutory Federal tax rate
for the six months ended September 30, 1999 as follows:

<TABLE>
<S> <C>
Tax benefit based on the federal statutory rate............. (34.0)%
State income taxes, net of federal benefit.................. 19.9
Equity in loss of ValueClick Japan.......................... 6.1
Stock based compensation.................................... 87.7
Non deductible amortization................................. 17.7
Other, net.................................................. 7.2
---------
104.6%
=========
</TABLE>

7. CAPITALIZATION

On December 31, 1998, in connection with the Company's LLC conversion and
reincorporation as a Delaware C-corporation, membership interests were exchanged
for an equivalent number of common and preferred shares.

PREFERRED STOCK

In May and June 1998, the Company sold membership interests in ValueClick,
LLC for total proceeds of approximately $776,000. On December 31, 1998, in
connection with the Company's conversion and reincorporation, the membership
interests were exchanged for Series A and Series B

F-14
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

7. CAPITALIZATION (CONTINUED)

preferred stock. The exchange of the membership interests for preferred stock is
summarized as follows:

<TABLE>
<S> <C>
Shares issued to exchange membership interests for Series A
preferred stock........................................... 297,132
Shares issued to exchange membership interests for Series B
preferred stock........................................... 1,047,804
---------
Total............................................... 1,344,936
=========
</TABLE>

In the first and second quarter of 1999, the Company sold 1,301,850 shares
of Series C preferred stock at $2.70 per share, for total gross proceeds of
approximately $3,515,000. Costs associated with the Series C financing amounted
to $17,864 and were netted against the proceeds received.

Convertible preferred stock at September 30, 1999 consist of the following:

<TABLE>
<CAPTION>
SHARES LIQUIDATION
OUTSTANDING PREFERENCE
----------- -----------
<S> <C> <C>
Series A convertible................................. 297,132 $ 60,000
Series B convertible................................. 1,047,804 716,000
Series C convertible................................. 1,301,850 3,515,000
</TABLE>

Significant terms of the preferred stock are as follows:

VOTING. Holders of preferred stock have the same voting rights (on a
converted basis) as the holders of common stock, except where a class vote may
be required by law or Certificate of Incorporation.

DIVIDENDS. The preferred stock has no right to receive dividends.

LIQUIDATION. In the event of any liquidation of the Company (not including
the acquisition of the Company by another entity), the holders of the preferred
stock have a liquidation preference over common stock. Upon payment of all
preferred stock liquidation preferences, any remaining proceeds will be
allocated to the common stockholders and the preferred stockholders according to
their respective shares and priorities on a converted basis.

CONVERSION. At the option of the holder, each share of preferred stock is
convertible at any time into one share of common stock, subject to adjustment
for certain dilutive issuances. As of September 30, 1999, giving effect to the
four-for-one common stock split and the 1-for-0.72 reverse common stock split,
each share of the Series A, Series B and Series C shares is convertible into
2.88 shares of common stock. The preferred shares automatically convert into
common stock upon consummation of an underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, with an
aggregate proceeds greater than or equal to $20,000,000.

FOUNDING EMPLOYEE RESTRICTED STOCK

In May and June of 1998, the Company issued LLC ownership interests to six
founding employees for no consideration and recorded a charge to stock-based
compensation of $61,375 for the estimated fair value of the LLC ownership
interests issued to these employees. The ownership interests were converted into
1,019,409 shares of common stock upon completion of the LLC conversion and

F-15
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

7. CAPITALIZATION (CONTINUED)

reincorporation on December 31, 1998. In May 1999, the Company entered into
stock restriction agreements with these founding employees' restricting 876,786
of their shares to monthly vesting over a 48-month period from their original
dates of employment with the unvested shares subject to repurchase upon the
employees termination. The Company recorded deferred stock compensation
amounting to $1,351,250 for the remeasurement of these shares covered under the
restriction agreements. The deferred amount will be recognized as compensation
expense over the vesting period. During the nine months ended September 30,
1999, such compensation expense included in stock-based compensation in the
accompanying statement of operations amounted to $358,788. At September 30,
1999, 575,337 shares of common stock were subject to repurchase under the
restricted stock agreements.

8. STOCK OPTION PLAN

On May 13, 1999, the Board of Directors adopted and the stockholders
approved, the 1999 Stock Option Plan (the "1999 Stock Plan"). A total of
4,377,600 shares of common stock have initially been reserved for issuance under
the 1999 Stock Plan, of which 425,376 shares were available for future grant at
September 30, 1999.

In January 1999, options to purchase 1,080,000 shares of common stock were
granted outside the 1999 Stock Plan and were subsequently included in the shares
reserved under the 1999 plan. 864,000 of these shares were granted to the
Chairman of the Board.

The 1999 Stock Option Plan provides for the granting of nonstatutory and
incentive stock options to employees, officers, directors and consultants of the
Company. Options granted generally begin vesting six months after the vesting
start date, generally the employee's date of employment, and vest pro rata
monthly over periods ranging from 12 to 42 months and generally expire ten years
from the date of grant. In addition, certain employees have options that have
accelerated vesting upon certain events including the closing of an initial
public offering of the Company's stock or the transfer of ownership of 50% or
more of the Company's stock.

The following table summarizes activity under the Stock Option Plan and also
includes the 1,080,000 shares of common stock granted outside the plan for the
period from May 1, 1998 (inception) through December 31, 1998 and the nine
months ended September 30, 1999:

<TABLE>
<CAPTION>
WEIGHTED
NUMBER AVERAGE
OF PRICE PER EXERCISE
SHARES SHARE PRICE
--------- -------------- --------
<S> <C> <C> <C>
Options outstanding at May 1, 1998 (inception)............ -- $ -- $ --
Granted................................................. -- -- --
Exercised............................................... -- -- --
Forfeited/expired....................................... -- -- --
--------- -------------- -----
Options outstanding at December 31, 1998.................. -- -- --
Granted................................................. 3,955,104 0.17 to 0.69 0.58
Exercised............................................... -- -- --
Forfeited/expired....................................... (2,880) 0.69 0.69
--------- -------------- -----
Options outstanding at September 30, 1999 (unaudited)..... 3,952,224 $0.17 to $0.69 $0.58
========= ============== =====
</TABLE>

F-16
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

8. STOCK OPTION PLAN (CONTINUED)

Options granted during the nine months ended September 30, 1999 resulted in
a total deferred compensation amount of $5,907,592 which was included in
deferred stock compensation in stockholders' equity. Deferred compensation
expense is recognized over the service period by using the aggregate percentage
of compensation accrued by the end of each year of service (the vesting period).
During the nine months ended September 30, 1999, such compensation expense
included in stock-based compensation in the statement of operations amounted to
$982,338.

Additional information with respect to the outstanding options as of
September 30, 1999 is as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
- ----------------------------------
AVERAGE OPTIONS EXERCISABLE
REMAINING --------------------
CONTRACTUAL AVERAGE AVERAGE
NUMBER OF LIFE (IN EXERCISE NUMBER OF EXERCISE
SHARES YEARS) PRICES SHARES PRICE
- --------- ----------- -------- --------- --------
<S> <C> <C> <C> <C>
1,368,000 9.3 $0.17 414,000 $0.17
2,193,984 9.7 0.69 179,544 0.69
390,240 9.9 1.39 --
- --------- -------
3,952,224 593,544
========= =======
</TABLE>

The Company calculated the minimum fair value of each option grant on the
date of grant using the minimum value option pricing model as prescribed by
Statement No. 123 using the following assumptions:

<TABLE>
<CAPTION>
MAY 1, 1998
(INCEPTION) NINE MONTHS
THROUGH ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------- --------------
<S> <C> <C>
Risk-free interest rates.................................... 5% 5%
Expected lives (in years)................................... 4 4
Dividend yield.............................................. 0% 0%
Expected volatility......................................... 0% 0%
</TABLE>

The compensation cost associated with the Company's stock-based compensation
plan, determined using the minimum value option pricing model did not result in
a material difference from the reported net loss for the nine months ended
September 30, 1998.

9. NET LOSS PER SHARE

The Company's historical capital structure prior to December 31, 1998 is not
indicative of its prospective structure as a result of its conversion and
reincorporation from a California LLC to a Delaware C-corporation on
December 31, 1998. Accordingly, the historical net loss per share for the period
May 1, 1998 (inception) through December 31, 1998 has been presented on a pro
forma historical basis as if the Company had been a C-corporation.

F-17
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

9. NET LOSS PER SHARE (CONTINUED)

The following table sets forth the computation of basic, diluted and pro
forma net loss per share for the periods indicated:

<TABLE>
<CAPTION>
PERIOD FROM
MAY 1, 1998
(INCEPTION)
THROUGH
DECEMBER 31, 1998 NINE MONTHS
HISTORICAL ENDED
PRO FORMA SEPTEMBER 30, 1999
------------------ -------------------
<S> <C> <C>
HISTORICAL PRESENTATION
Numerator:
Net loss.................................................. $ (222,753) $ (846,450)

Denominator:
Weighted average common shares............................ 14,273,470 13,800,866
Basic and diluted net loss per common share................. $ (0.02) $ (0.06)

PRO FORMA PRESENTATION
Denominator:
Shares used above......................................... 13,800,866

Weighted average effect of convertible preferred stock:
Series A convertible preferred stock...................... 855,740
Series B convertible preferred stock...................... 3,017,676
Series C convertible preferred stock...................... 3,749,328
-----------

Denominator for pro forma calculation....................... 21,423,610
===========

Unaudited pro forma basic and diluted net loss per common
share..................................................... $ (0.04)
===========
</TABLE>

The diluted per share computations exclude convertible preferred stock,
unvested restricted shares, and unvested common stock options which were
antidilutive. The number of shares excluded from the diluted net loss per common
share computation were 4,613,147 and 12,150,303 for the period from May 1, 1998
(inception) through December 31, 1998 and the nine months ended September 30,
1999, respectively. The number of such shares excluded from the pro forma
diluted net loss per share computation was 4,527,561 for the nine months ended
September 30, 1999.

10. DEFINED CONTRIBUTION PLAN

The Company has a Savings Plan (the "Savings Plan") that qualifies as a
defined contribution plan under Section 401(k) of the Internal Revenue Code.
Under the Savings Plan, participating employees may defer a percentage (not to
exceed 20%) of their eligible pretax earnings up to the Internal Revenue
Service's annual contribution limit. All full time employees on the payroll of
the Company are eligible to participate in the plan. Company matching and profit
sharing contributions are discretionary. To date, the Company has contributed
$11,931 to the Plan as of September 30, 1999.

F-18
<PAGE>
VALUECLICK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1999 IS UNAUDITED) (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES

LEASES

Future minimum net lease payments, net of sublease income, under
noncancellable operating leases with initial or remaining lease terms in excess
of one year as of December 31, 1998 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
- ------------------------------------------------------------
<S> <C>
1999........................................................ $30,122
2000........................................................ 30,122
2001........................................................ 17,571
-------
Total................................................... $77,815
=======
</TABLE>

Total rent expense under operating leases, net of sublease income, for the
period from May 1, 1998 (inception) through December 31, 1998 and September 30,
1999 was $30,023 and $109,148, respectively.

EMPLOYMENT AGREEMENTS

The Company is subject to employment agreements with certain members of
management.

12. SUBSEQUENT EVENTS

On October 8, 1999, the Board of Directors authorized the filing of a
registration statement with the Securities and Exchange Commission ("SEC") that
would permit the Company to sell shares of the Company's common stock in
connection with a proposed initial public offering ("IPO"). If the IPO is
consummated under the terms presently anticipated, upon the closing of the
proposed IPO, all of the then outstanding shares of the Company's convertible
preferred stock will automatically convert into shares of common stock on a
2.88-for-1 basis, subject to antidilution provisions, including the stock
splits.

On October 8, 1999, the Board of Directors approved increasing the number of
shares of common stock reserved for issuance under the 1999 Stock Plan to
5,760,000 shares.

On October 8, 1999, the Company authorized and implemented a four-for-one
stock split and increased the authorized number of common shares and preferred
shares to 100,000,000 and 20,000,000, respectively. The share information in the
accompanying financial statements has been retroactively restated to reflect the
effect of the stock split and increased number of authorized shares.

On October 21, 1999, the Company entered into a loan and security agreement
with Silicon Valley Bank for a $2.5 million revolving line of credit. Interest
on outstanding balances will accrue at an annual rate of one percentage point
above the Bank's Prime Rate (8.25% at September 30, 1999). The credit facility
has a revolving maturity date which is the anniversary date of the agreement and
is collateralized by substantially all the Company's assets.

On December __, 1999, the Board of Directors approved a 1-for-0.72 reverse
stock split of the outstanding shares of common stock. All share and per share
information included in these consolidated financial statements have been
retroactively adjusted to reflect this stock split.

F-19
<PAGE>
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

On August 6, 1999, ValueClick, Inc. ("ValueClick") entered into a Stock
Purchase Agreement (the "Agreement") to acquire a controlling interest in
ValueClick Japan. Prior to entering into the Agreement, ValueClick had a 31.7%
ownership interest in ValueClick Japan, which was accounted for using the equity
method of accounting. Under the Agreement, ValueClick purchased an additional
22.3% of the ValueClick Japan stock in exchange for 460,800 shares of ValueClick
common stock with an estimated fair value of approximately $3,525,000 giving
ValueClick a 54.0% controlling ownership interest in ValueClick Japan. The
acquisition was accounted for using the purchase method. The purchase price was
allocated to the estimated fair value of assets acquired and liabilities assumed
to the extent acquired by ValueClick, acquired and liabilities assumed. The
estimated fair value of the tangible assets acquired and the liabilities assumed
approximated the historical cost basis and the excess of the purchase price over
the net tangible assets acquired was allocated to goodwill. The remaining
portion of the ValueClick Japan assets and liabilities will be recorded at the
historical cost basis of the minority stockholders. The preliminary purchase
price allocation indicated goodwill, totaling approximately $3,588,000, which is
being amortized on a straight-line basis over an estimated life of 5 years.
Direct transaction costs related to the acquisition amounted to $32,000.

The following unaudited pro forma consolidated statements of operations for
the periods from January 1, 1998 through December 31, 1998 and the nine months
ended September 30, 1999 give effect to the acquisition as if it had occurred on
January 1, 1998.

The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of the results that would have occurred if the
acquisition had occurred as of the beginning of the period presented and should
not be construed as being representative of future operating results.

The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the ValueClick, ValueClick Line of Business of
Web-Ignite Corporation, and ValueClick Japan financial statements and notes
thereto, included elsewhere in this prospectus.

F-20
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PREDECESSOR LINE OF VALUECLICK,
VALUECLICK LINE OF VALUECLICK, BUSINESS OF JAPAN
BUSINESS INC. TRANS-PACIFIC LTD. NOVEMBER 16,
OF WEB-IGNITE CORPORATION MAY 1, 1998 MARCH 26, 1998 1998
JANUARY 1, 1998 THROUGH THROUGH THROUGH
THROUGH APRIL 30, 1998 DECEMBER 31, 1998 NOVEMBER 15, 1998 DECEMBER 31, 1998
(HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL)
------------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Revenues............................ $253 $2,053 156 $ 72
Cost of revenues.................... 88 1,105 34 39
---- ------ ---- ----
Gross profit...................... 165 948 122 33
Operating expenses:
Sales and marketing............... -- 516 -- 7
General and administrative........ 134 404 112 55
Technology enhancements........... -- 155 -- --
Stock-based compensation.......... -- 61 -- --
Amortization of intangibles and
acquired software............... -- 33 -- --
---- ------ ---- ----
Total operating expenses...... 134 1,169 112 62
---- ------ ---- ----
Income (loss) from operations....... 31 (221) 10 (29)
Equity in losses of ValueClick
Japan............................. -- (9) -- --
Interest income, net................ -- 8 -- --
---- ------ ---- ----
Income (loss) before provision for
income taxes and minority
interest.......................... 31 (222) 10 (29)
Provision for income taxes.......... -- -- -- --
---- ------ ---- ----
Net income (loss) before minority
interest.......................... 31 (222) 10 (29)
Minority interest in ValueClick
Japan............................. -- -- -- --
---- ------ ---- ----
Net income (loss)................... $ 31 $ (222) 10 $(29)
==== ====== ==== ====
Basic and diluted net loss per
common share......................
Shares used in computing basic and
diluted net loss per common
share.............................

PRO FORMA PRO FORMA
ADJUSTMENTS CONSOLIDATED
----------- ------------
<S> <C> <C>
Revenues............................ $ -- 2,534
Cost of revenues.................... -- 1,266
----- -----------
Gross profit...................... -- 1,268
Operating expenses:
Sales and marketing............... -- 523
General and administrative........ -- 705
Technology enhancements........... -- 155
Stock-based compensation.......... -- 61
Amortization of intangibles and
acquired software............... 718(1) 751
----- -----------
Total operating expenses...... 718 2,195
----- -----------
Income (loss) from operations....... (718) (927)
Equity in losses of ValueClick
Japan............................. 9(2) --
Interest income, net................ -- 7
----- -----------
Income (loss) before provision for
income taxes and minority
interest.......................... (709) (920)
Provision for income taxes.......... -- --
----- -----------
Net income (loss) before minority
interest.......................... (709) (920)
Minority interest in ValueClick
Japan............................. 9(3) 9
----- -----------
Net income (loss)................... $(700) $ (911)
===== ===========
Basic and diluted net loss per
common share...................... $ (0.06)
===========
Shares used in computing basic and
diluted net loss per common
share............................. 14,273,470
===========
</TABLE>

See the accompanying notes to unaudited Pro Forma Condensed Consolidated
Financial Statements

F-21
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
VALUECLICK, VALUECLICK,
INC. JAPAN PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS CONSOLIDATED
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues............................... $ 10,593 $ 793 $ -- $ 11,386
Cost of revenues....................... 5,265 466 -- 5,731
---------- ----- ----- ----------

Gross profit........................... 5,328 327 -- 5,655

Operating expenses:
Sales and marketing.................. 1,467 170 -- 1,637
General and administrative........... 2,079 360 -- 2,439
Technology enhancements.............. 587 -- -- 587
Stock-based compensation............. 1,477 -- -- 1,477
Amortization of intangibles and
acquired software.................. 186 -- 419(4) 605
---------- ----- ----- ----------

Total operating expenses........... 5,796 530 419 6,745
---------- ----- ----- ----------

Loss from operations................... (468) (203) (419) (1,090)
Equity in losses in ValueClick Japan... (64) -- 64(2) --

Interest income, net................... 34 -- -- 34
Other Income........................... 4 -- -- 4
---------- ----- ----- ----------

Loss before provision for
income taxes and minority interest... (494) (203) (355) (1,052)

Provision for income taxes............. 516 -- -- 516
---------- ----- ----- ----------

Net loss before minority interest...... (1,010) (203) (355) (1,568)
Minority interest...................... 28 -- 65(3) 93
---------- ----- ----- ----------

Net loss............................... $ (982) $(203) $(290) $ (1,475)
========== ===== ===== ==========

Basic and diluted net loss per common
share................................ $ (0.07)
==========

Shares used in computing basic and
diluted net loss per common share.... 13,800,866
==========

Pro forma basic and diluted
net loss per common share............ $ (0.04) $ (0.07)
========== ==========

Pro forma shares used to calculate pro
forma basic and diluted net loss per
common share......................... 21,423,610 21,423,610
========== ==========
</TABLE>

See the accompanying notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements

F-22
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

Pro forma adjustments giving effect to the acquisition of controlling
interest in ValueClick Japan as if the acquisition had occurred as of
January 1, 1998 for the pro forma statements of operations are as follows:

(1) To record amortization expense associated with goodwill created as a result
of the acquisition of majority control of ValueClick Japan as follows:

<TABLE>
<S> <C>
Estimated fair value of 460,800 shares of ValueClick common
stock..................................................... $ 3,525
Existing equity investment in ValueClick Japan.............. 264
Direct transaction costs.................................... 32
-------
Total investment and direct transaction costs........... 3,821
Less: ValueClick's 54.0% share of net assets............ 233
-------
$ 3,588
Estimated useful life....................................... 5 years
-------
Annual amortization expense................................. $ 718
=======
</TABLE>

The fair value of the ValueClick tangible assets acquired and liabilities
assumed approximated the historical cost basis and accordingly, no fair
value adjustments were required to be made to the tangible assets acquired
and liabilities assumed.

(2) To eliminate the equity in loss from ValueClick Japan.

(3) To record the portion of the losses in ValueClick Japan attributable to the
minority interests.

(4) To record pro forma amortization expense of $419 for the period from
January 1, 1999 through the August 6, 1999 acquisition date.

F-23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of ValueClick, Inc.

In our opinion, the accompanying balance sheets and the related statements of
operations and cash flows present fairly, in all material respects, the
financial position of the ValueClick Line of Business of Web-Ignite Corporation
(the "ValueClick Line of Business") at December 31, 1997 and April 30, 1998, and
the results of its operations for the period from July 1, 1997 (inception)
through December 31, 1997, and for the four months ended April 30, 1998, in
conformity with generally accepted accounting principles. These statements are
the responsibility of management; our responsibility is to express an opinion on
these statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

Woodland Hills, California

October 1, 1999

F-24
<PAGE>
VALUECLICK LINE OF BUSINESS OF WEB-IGNITE CORPORATION

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, APRIL 30,
1997 1998
------------- ----------
<S> <C> <C>
ASSETS

Current assets:
Accounts receivable................................. $12,775 $ 50,103
------- --------

Total current assets........................ 12,775 50,103

Other assets.......................................... 2,886 3,095
------- --------

Total assets................................ $15,661 $ 53,198
======= ========

LIABILITIES AND INVESTED EQUITY

Current liabilities:
Accounts payable.................................... $27,286 $ 14,225
------- --------

Total current liabilities................... 27,286 14,225

Commitments and contingencies: (Note 4)

Invested equity..................................... (11,625) 38,973
------- --------

Total liabilities and
invested equity........................... $15,661 $ 53,198
======= ========
</TABLE>

The accompanying notes are an integral part of these financial statements

F-25
<PAGE>
VALUECLICK LINE OF BUSINESS OF WEB-IGNITE CORPORATION

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM JULY 1,
1997 (INCEPTION)
THROUGH DECEMBER 31, FOUR MONTHS ENDED
1997 APRIL 30, 1998
--------------------- -----------------
<S> <C> <C>
Revenues................................ $122,067 $253,382
Cost of revenues........................ 37,029 88,168
-------- --------
Gross profit.......................... 85,038 165,214
Operating expenses:
General and administrative............ 116,122 133,741
-------- --------
Net (loss) income....................... $(31,084) $ 31,473
======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements

F-26
<PAGE>
VALUECLICK LINE OF BUSINESS OF WEB-IGNITE CORPORATION

STATEMENTS OF CHANGES IN INVESTED EQUITY

<TABLE>
<CAPTION>
INVESTED
EQUITY
--------
<S> <C>
Balance at July 1, 1997 (inception)......................... $ --
Net advances from Web-Ignite................................ 19,459
-------
Net loss.................................................. (31,084)
-------
Balance at December 31, 1997.............................. (11,625)

Net advances from Web-Ignite................................ 19,125
Net income................................................ 31,473
-------
Balance at April 30, 1998................................. $38,973
=======
</TABLE>

The accompanying notes are an integral part of these financial statements

F-27
<PAGE>
VALUECLICK LINE OF BUSINESS OF WEB-IGNITE CORPORATION

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
JULY 1, 1997
(INCEPTION)
THROUGH FOUR
DECEMBER 31, MONTHS ENDED
1997 APRIL 30, 1998
------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income......................................... $(31,084) $ 31,473
Adjustments to reconcile net loss (income) to net cash
used in operating activities:
Changes in operating assets and liabilities:
Accounts receivable................................... (12,775) (37,328)
Other assets.......................................... (2,886) (209)
Accounts payable and accrued liabilities.............. 27,286 (13,061)
-------- --------
Net cash used in operating activities................... (19,459) (19,125)

Cash flows from financing activities:
Advances from Web-Ignite.................................. 19,459 19,125
-------- --------
Net cash provided by financing activities................... 19,459 19,125
-------- --------
Net increase in cash and cash equivalents................... -- --

Cash and cash equivalents, beginning of period.............. -- --
-------- --------
Cash and cash equivalents, end of period.................... $ -- $ --
======== ========
Supplemental disclosures of cash flow information:
Cash paid for interest.................................... $ -- $ --
======== ========
Cash paid for taxes....................................... $ -- $ --
======== ========
</TABLE>

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

F-28
<PAGE>
VALUECLICK LINE OF BUSINESS OF WEB-IGNITE CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

The ValueClick Line of Business of Web-Ignite Corporation (the "ValueClick
Line of Business") was operated as a line of business within Web-Ignite
Corporation ("Web-Ignite"), a S-corporation wholly owned by the founding member
of ValueClick, LLC. The ValueClick Line of Business began the Internet
advertising delivery business in July 1997. Effective April 30, 1998, the
founding member caused Web-Ignite to transfer the rights to the ValueClick
Trademark, the rights to the ValueClick domain names, the rights to the
trademark, license, software license and copyright agreements within
Trans-Pacific Ltd., predecessor to ValueClick Japan and the rights to the ad
delivery software used in the business to ValueClick, LLC. The reorganization
and formation of ValueClick, LLC was accounted for as a transaction by entities
under common control.

The ValueClick Line of Business was an Internet based advertising network
that provided a performance based advertising solution on a cost-per-click to
advertisers and e-commerce companies.

The accompanying statements present the financial position at December 31,
1997 and April 30, 1998 and the results of operations and cash flows for the
period from July 1, 1997 (inception) to December 31, 1997 and the four months
ended April 30, 1998 for the ValueClick Line of Business. Web-Ignite did not
account for the ValueClick Line of Business as a separate entity. Accordingly,
the information included in the accompanying financial statements has been
obtained from Web-Ignite's financial records. The statements of operations
include revenues, cost of revenue and operating expenses as maintained in
Web-Ignite's general ledger attributed to the ValueClick Line of Business.
Certain general and administrative expenses presented in these financial
statements were allocated by management of Web-Ignite using a proportional cost
allocation method utilizing revenue as the basis for allocation of the costs of
services provided to the ValueClick Line of Business. Management believes the
allocations and allocation methodology used were reasonable. However, these
allocations may not be indicative of future operating expenses required by a
separate business operation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION

The ValueClick Line of Business's revenues were principally derived from the
delivery of advertising click-throughs through third-party Web sites comprising
the ValueClick Network (the "Network"). Revenue is recognized in the period that
the advertising click-throughs occur, provided that no significant obligations
remain and collection of the resulting receivable is probable.

COST OF REVENUES

The ValueClick Line of Business becomes obligated to make payments to
third-party websites, which have contracted with the ValueClick Line of Business
to be part of the Network, in the period the advertising click-throughs are
delivered. Such expenses are classified as cost of revenues in the accompanying
statement of operations.

F-29
<PAGE>
VALUECLICK LINE OF BUSINESS OF WEB-IGNITE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

OPERATING EXPENSES

Operating expenses consist of personnel and personnel related costs incurred
directly by the ValueClick Line of Business. Operating expenses also include
other costs, including office, facilities, management systems and general
corporate expenses. Certain operating expenses were allocated to the ValueClick
Line of Business using a proportionate cost allocation method utilizing revenue
as the basis for allocation of the costs. Management believes the allocations
and allocation method used were reasonable. However, the allocations may not be
indicative of what the expenses would have been had the ValueClick Line of
Business been a separate entity or future operating expenses required by a
separate business operation.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subjected the ValueClick Line of
Business to concentration of credit risk consist of cash and accounts
receivable. Cash was deposited with major financial institutions; at times, such
balances with any one financial institution may be in excess of FDIC insurance
limits. Credit was extended to customers based on an evaluation of their
financial condition. The ValueClick Line of Business did not generally require
collateral. The ValueClick Line of Business performed ongoing credit evaluations
of its customers and maintains an allowance for potential bad debt. To date such
losses, if any, have been within management's expectations.

COMPREHENSIVE INCOME

The ValueClick Line of Business adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income" ("Statement No. 130"). Statement No. 130
establishes standards for reporting comprehensive income and its components in
financial statements. Comprehensive income, as defined, includes all changes in
equity (net assets) during a period from nonowner sources. To date, the
ValueClick Line of Business has not had any transactions that were required to
be reported in comprehensive income.

3. INCOME TAXES

Web-Ignite operated as an S-corporation and as such was not subject to
federal and state income taxes. Accordingly, no separate tax provision was
required for the ValueClick Line of Business.

4. COMMITMENTS AND CONTINGENCIES

There were no separate leases or other commitments and contingencies related
to the ValueClick Line of Business.

5. INVESTED EQUITY

Invested equity represents the equity contributed to the ValueClick Line of
Business and related accumulated results of operations of the ValueClick Line of
Business.

F-30
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of ValueClick Japan

In our opinion, the accompanying balance sheet and the related statements of
operations, stockholders' equity and cash flows present fairly, in all material
respects, the financial position of ValueClick Japan (the "Company") at
December 31, 1998, and the results of its operations and its cash flows for the
period from November 16, 1998 (legal inception) through December 31, 1998, and
the results of operations of its predecessor line of business within
Trans-Pacific Ltd. for the period from March 26, 1998 (business inception)
through November 15, 1998, 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 financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

Woodland Hills, California
October 1, 1999

F-31
<PAGE>
VALUECLICK JAPAN

BALANCE SHEETS

(ALL INFORMATION AS OF JULY 31, 1999 IS UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, JULY 31,
1998 1999
------------- ----------
<S> <C> <C>
ASSETS

Current assets:
Cash and cash equivalents................................. $ 79,022 $ 444,938
Accounts receivable, net of allowance for doubtful
accounts of $0 and $10,000 at December 31, 1998 and July
31, 1999, respectively.................................. 91,179 397,032
Other current assets...................................... 4,007 56,228
-------- ----------
Total current assets.................................. 174,208 898,198

Property and equipment, net................................. 7,970 74,030
Other assets................................................ -- 23,377
-------- ----------
Total assets.......................................... $182,178 $ 995,605
======== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses..................... $ 82,358 $ 261,840
Payable to ValueClick, Inc................................ 10,262 3,510
Deferred revenue.......................................... 17,427 57,794
Amount due to a related party............................. 8,843 --
Other current liabilities................................. 4,773 --
-------- ----------
Total current liabilities............................. 123,663 323,144

Commitments and contingencies (Note 6)...................... -- --

Stockholders' equity:
Common stock, $420 par value as of December 31, 1998 and
$436 as of July 31, 1999; 800 shares authorized; 200
shares issued and outstanding as of December 31, 1998
and 244 issued and outstanding as of July 31, 1999...... 84,000 103,580
Additional paid-in capital.................................. -- 799,228
Cumulative foreign currency translation adjustment.......... 3,150 1,241
Accumulated deficit......................................... (28,635) (231,588)
-------- ----------
Total stockholders' equity.............................. 58,515 672,461
-------- ----------
Total liabilities and stockholders' equity............ $182,178 $ 995,605
======== ==========
</TABLE>

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

F-32
<PAGE>
VALUECLICK JAPAN

AND ITS PREDECESSOR LINE OF BUSINESS OF TRANS-PACIFIC LTD.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
TRANS-PACIFIC VALUECLICK JAPAN
------------- -----------------------------
PERIOD FROM PERIOD
MARCH 26, FROM
1998 NOVEMBER 16,
(INCEPTION) 1998
THROUGH THROUGH SEVEN MONTHS
NOVEMBER 15, DECEMBER 31, ENDED
1998 1998 JULY 31, 1999
------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Revenues................................................ $156,244 $ 72,385 $ 793,443
Cost of revenues........................................ 33,910 39,200 466,039
-------- -------- ---------
Gross profit.......................................... 122,334 33,185 327,404

Operating expenses
Sales and marketing................................... -- 7,185 170,214
General and administrative............................ 111,999 54,635 360,190
-------- -------- ---------
Total operating expenses............................ 111,999 61,820 530,404
-------- -------- ---------
Operating income (loss)................................. 10,335 (28,635) (203,000)
Interest income......................................... -- -- 47
-------- -------- ---------
Net income (loss)..................................... 10,335 (28,635) (202,953)

Other comprehensive income (loss)
Foreign currency translation.......................... -- 3,150 (1,909)
-------- -------- ---------
Comprehensive income (loss)......................... $ 10,335 $(25,485) $(204,862)
======== ======== =========
</TABLE>

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

F-33
<PAGE>
VALUECLICK JAPAN

STATEMENTS OF STOCKHOLDERS' EQUITY
(ALL INFORMATION AS OF JULY 31, 1999 IS UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL CUMULATIVE TOTAL
------------------- PAID-IN TRANSLATION ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL ADJUSTMENT DEFICIT EQUITY
-------- -------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at November 16, 1998
(inception).................... -- $ -- $ -- $ -- $ -- $ --

Issuance of common stock......... 200 84,000 -- -- -- 84,000

Net loss......................... -- -- -- -- (28,635) (28,635)

Foreign currency translation..... -- -- -- 3,150 -- 3,150
--- -------- -------- -------- --------- ---------

Balance at December 31, 1998..... 200 84,000 -- 3,150 (28,635) 58,515

Issuance of common stock......... 44 19,580 799,228 -- -- 818,808

Net loss......................... -- -- -- -- (202,953) (202,953)

Foreign currency translation..... -- -- -- (1,909) -- (1,909)
--- -------- -------- -------- --------- ---------

Balance at July 31, 1999......... 244 $103,580 $799,228 $ 1,241 $(231,588) $ 672,461
=== ======== ======== ======== ========= =========
</TABLE>

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

F-34
<PAGE>
VALUECLICK JAPAN

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 16,
1998
(INCEPTION) TO SEVEN MONTHS
DECEMBER 31, ENDED
1998 JULY 31, 1999
-------------- --------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(28,635) $(202,953)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization........................... -- 3,470
Provision for doubtful accounts......................... -- 10,000
Changes in operating assets and liabilities:
Accounts receivable................................... (87,270) (306,755)
Other assets.......................................... (34) (73,592)
Accounts payable and other current liabilities........ 82,955 151,876
Payable to ValueClick, Inc............................ 10,262 (6,752)
Deferred revenue...................................... 16,680 39,286
-------- ---------
Net cash used in operating activities................... (6,042) (385,420)

Cash flows from investing activities:
Purchases of property and equipment....................... (7,770) (67,470)
-------- ---------
Net cash used in investing activities................... (7,770) (67,470)

Cash flows from financing activities:
Proceeds from the issuance of related party debt.......... 8,464 --
Repayment of related party debt........................... -- --
Proceeds from issuance of common stock.................... 84,000 820,783
-------- ---------
Net cash provided by financing activities............... 92,464 820,783

Effect of foreign currency translation.................... 370 (1,977)
-------- ---------
Net increase in cash and cash equivalents............... 79,022 365,916

Cash and cash equivalents, beginning of period.............. -- 79,022
-------- ---------
Cash and cash equivalents, end of period.................... $ 79,022 $ 444,938
======== =========
Supplemental disclosures of cash flow information:
Cash paid for interest.................................... $ -- $ --
======== =========
Cash paid for taxes....................................... $ -- $ --
======== =========
</TABLE>

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

F-35
<PAGE>
VALUECLICK JAPAN
AND ITS PREDECESSOR LINE OF BUSINESS OF TRANS-PACIFIC LTD.

NOTES TO FINANCIAL STATEMENTS

(ALL INFORMATION WITH RESPECT TO JULY 31, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

ValueClick Japan (the "Company") was incorporated as a Japanese joint stock
corporation on November 16, 1998. Prior to its incorporation, the business was
operated as a line of business of Trans-Pacific Ltd. ("Trans-Pacific"), which,
on March 22, 1998, entered into a Trademark License, Software License and
Copyright Agreement (the "Agreement") with Web-Ignite Corporation ("Web-Ignite")
to use the ValueClick Advertising Network (the "Network") in Japan. Effective
November 16, 1998, Trans-Pacific contributed the rights under the Agreement to
the Company.

Effective January 1, 1999, Trans-Pacific and Web-Ignite confirmed their
assignment of all of their respective rights under the Agreement to ValueClick
Japan and ValueClick, Inc. ("ValueClick"), the successor to Web-Ignite, and
entered into a License and Option Agreement.

For the period from March 22, 1998 through November 15, 1998, the financial
statements have been prepared using Trans-Pacific's historical results of
operations related to ValueClick Japan Line of Business. Trans-Pacific did not
account for this line of business as a separate entity. Accordingly, certain
general and administrative expenses presented in these financial statements were
allocated by the management of Trans-Pacific using a proportional cost
allocation method utilizing revenue as the basis for the allocation of the costs
of services provided to the ValueClick Japan Line of Business. Trans-Pacific
management believes that the allocations and allocation method were reasonable.
However, the financial information included herein for the ValueClick Japan Line
of Business may not necessarily be indicative of the future results of
operations of ValueClick Japan.

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information of the Company for the seven months ended
July 31, 1999 is unaudited. The unaudited financial information has been
prepared on the same basis as the annual financial statements and, in the
opinion of management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position,
results of operations and cash flows as of and for the seven months ended
July 31, 1999.

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

The Company considers all short-term investments with an original maturity
of three months or less to be cash equivalents. At December 31, 1998, cash
equivalents consist of money market funds.

F-36
<PAGE>
VALUECLICK JAPAN
AND ITS PREDECESSOR LINE OF BUSINESS OF TRANS-PACIFIC LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION WITH RESPECT TO JULY 31, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY AND EQUIPMENT

INCOME TAXES

The operations of the ValueClick Japan line of business have been included
in the foreign income tax return of Trans-Pacific up through November 15, 1998.
Income taxes are accounted for under Statement of Financial Accounting Standards
("SFAS") Statement No. 109, "Accounting for Income Taxes" ("Statement No. 109").
Statement No. 109 requires that the deferred tax assets and liabilities be
determined based on differences between the financial reporting and tax basis of
assets and liabilities, and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

REVENUE RECOGNITION

The Company's revenues are principally derived from the delivery of
advertising click-throughs through third-party Web sites comprising the Network.
Revenue is recognized in the period the advertising click-throughs occur,
provided that no significant Company obligations remain and collection of the
resulting receivable is probable. To date, the Company's agreements have not
required guaranteed minimum click-throughs.

TECHNOLOGY ENHANCEMENTS

Technology development costs and enhancements to existing products are
charged to operations as incurred. These costs have not been significant during
the periods presented.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration
of credit risk consist of trade receivables. Credit is extended to customers
based on an evaluation of their financial condition. The Company generally does
not require collateral. The Company performs ongoing credit evaluations of its
customers and maintains reserves for potential credit losses. For the period
from November 16, 1998 (inception) through December 31, 1998, 3 customers
comprised 21%, 12% and

F-37
<PAGE>
VALUECLICK JAPAN
AND ITS PREDECESSOR LINE OF BUSINESS OF TRANS-PACIFIC LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION WITH RESPECT TO JULY 31, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

11% of revenues, respectively. At December 31, 1998, 2 customers comprised 15%
and 13% of accounts receivable, respectively. At July 31, 1999, one customer
comprised 10% of revenues, and one customer comprised 12% of accounts
receivable.

FOREIGN CURRENCY TRANSLATION

ValueClick Japan denominates its transactions in the Japanese Yen. Assets
and liabilities are translated at the exchange rate as of the balance sheet
date. All revenue and expense accounts are translated using a average of
exchange rates in effect during the year. Cumulative foreign currency
translation adjustments are recorded as a separate component of stockholders'
equity.

FINANCIAL INSTRUMENTS

The Company's financial instruments, including cash and cash equivalents,
accounts receivable, accounts payable and short-term debt, are carried at
historical cost, which approximates their fair values.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

COMPREHENSIVE INCOME

The Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income" ("Statement No. 130"). Statement No. 130 establishes standards for
reporting comprehensive income and its components in financial statements.
Comprehensive income, as defined, includes all changes in equity (net assets)
during a period from nonowner sources. To date, the only transactions that are
required to be reported as comprehensive income relate to foreign currency
translation adjustments.

SEGMENTS

Effective November 16, 1999, the Company adopted the provisions of SFAS No.
131, "Disclosures About Segments of an Enterprise and Related Information"
("Statement No. 131"). Statement No. 131 establishes standards for the way
companies report information about operating segments in annual financial
statements. It also establishes standards for related disclosures about its
products, services, geographic areas and major customers. The Company has
determined that it does not have any separately reportable business segments.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("Statement No. 133"), which defines
derivatives, requires that all derivatives be carried at

F-38
<PAGE>
VALUECLICK JAPAN
AND ITS PREDECESSOR LINE OF BUSINESS OF TRANS-PACIFIC LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION WITH RESPECT TO JULY 31, 1999 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

fair value, and provides for hedge accounting when certain conditions are met.
Statement No. 133 is effective for the Company in fiscal 2000. Although the
Company has not fully assessed the implications of Statement No. 133, the
Company does not believe that adoption of this statement will have a material
impact on the Company's financial position or results of operations.

2. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1998 and July 31, 1999 consisted
of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JULY 31,
1998 1999
------------- ---------
<S> <C> <C>
Computer equipment and purchased software................. $8,118 $66,733
Leasehold improvements.................................... -- 11,032
------ -------
Total..................................................... 8,118 77,764
Less accumulated depreciation and amortization............ (148) (3,735)
------ -------
$7,970 $74,030
====== =======
</TABLE>

3. RELATED PARTY TRANSACTIONS

The Company and ValueClick are subject to the Agreement to use the Network
in Japan, which has been subsequently amended to the License and Option
Agreement. This agreement requires a monthly license fee based on the Company's
revenue, subject to monthly and quarterly minimum thresholds. This agreement has
a minimum revenue requirement based on a rolling three-months.

At December 31, 1998, $10,263 was due under the agreement to ValueClick,
Inc. and $7,000 was due for activity for the seven months ended July 31, 1999.
The outstanding balances due to ValueClick, Inc. are included in the payable to
ValueClick, Inc. in the accompanying balance sheets.

In December 1998, the Company borrowed approximately $8,800 from a related
party. This obligation did not require interest payments. In January 1999, the
amount borrowed was repaid.

The Company leases a portion of the Network's infrastructure from a related
party on a month-to-month basis. Management believes that these costs are not
significant during the periods presented.

4. INCOME TAXES

Prior to November 16, 1998, the ValueClick Japan Line of Business was
operated as a division of Trans-Pacific, with any local income taxes recorded by
Trans-Pacific. From the date of incorporation, the Company has not recorded a
provision for its local country income taxes due to net operating losses
generated from operations. The Company may be able to carryforward these net
operating losses to offset future taxable income for a period of up to five
years, subject to utilization limitations, which may inhibit the Company's
ability to use the carryforwards in the future. Due to the uncertainty
surrounding the realization of the tax benefits in the future tax returns,
management has recorded a full valuation reserve against the deferred tax
assets.

F-39
<PAGE>
VALUECLICK JAPAN
AND ITS PREDECESSOR LINE OF BUSINESS OF TRANS-PACIFIC LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION WITH RESPECT TO JULY 31, 1999 IS UNAUDITED)

4. INCOME TAXES (CONTINUED)

The components of the deferred tax assets at July 31, 1999 are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JULY 31,
1998 1999
------------- ---------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 13,258 $ 84,708
Allowance for doubtful accounts........................... -- 4,630
-------- --------
Total deferred assets................................... 13,258 89,338

Valuation allowance....................................... (13,258) (89,338)
-------- --------
Net deferred assets......................................... $ -- $ --
======== ========
</TABLE>

5. CAPITALIZATION

The Company is authorized to issue 800 shares of common stock. The holders
of common stock are afforded equal voting rights on matters to be voted on by
the stockholders of the Company. Common stockholders are entitled to receive
ratably such dividends, if any, as may be declared by the Board of Directors.
The Company has not declared or paid any dividends during its operating history.

6. COMMITMENTS AND CONTINGENCIES

LEASES

Future minimum net lease payments, net of sublease income, under
noncancellable operating leases with initial or remaining lease terms in excess
of one year as of December 31, 1998 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
- ------------------------
<S> <C>
1999........................................................ $ 56,000
2000........................................................ 61,000
2001........................................................ 5,000
--------
Total..................................................... $122,000
========
</TABLE>

Total rent expense under operating leases for the period from November 16,
1998 through December 31, 1998 and the seven months ended July 31, 1999 was
approximately $3,600 and $33,554, respectively. Allocated rent for the period
from March 22, 1998 through November 15, 1998 was approximately $1,000.

7. SUBSEQUENT EVENT (UNAUDITED)

On August 6, 1999, ValueClick, Inc. acquired an additional 22.3% of the
Company's common stock to increase its investment in ValueClick Japan to
approximately 54% in exchange for 460,800 shares of common stock of
ValueClick, Inc., once the .72-for-1 stock split is effected, valued at
approximately $3,525,000.

F-40
<PAGE>

INSIDE BACK COVER

Recent advertisement used by ValueClick to communicate information about its
products and services

Title of advertisement: "Anatomy of a Click"

Center of advertisement: a picture of a skeletal human hand holding a computer
mouse.

Arrows pointing to parts of the hand leads to text that read the following:

"Extension of the distal phalanx"

"Click"

"Another company connects with a customer"

"Rotation of the Flexor retinaculum"

Lower left corner of advertisement reads:

"Take a closer look at your banner advertising strategy. People say banner
advertising is about impressions. But on closer inspection, it's really
about clicks. If you're not getting clicks, you're not connecting with your
customers. ValueClick is your guaranteed source of clicks. You pay for
clicks--as many as you want--but not for impressions. By the way,
cost-per-click campaigns usually generate more impressions per dollar than
CPM campaigns. So get impressions, but pay for results. Let one of our
experts help you plan your next campaign. We'll show you how to get a
guaranteed number of clicks, and more impressions, for the same budget."

Bottom of page and centered is the ValueClick logo with the phrase "The
Pay-for-Results Advertising Network" written below.

OUTSIDE BACK COVER

Company logo of "ValueClick" located in center of page with an arrow
pointing upwards in place of the letter "i." The phrase "The Pay-For-Results
Advertising Network" is centered beneath the logo.
<PAGE>
- --------------------------------------------------------------------------------

UNTIL , 2000, ALL DEALERS EFFECTING TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS 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.

[LOGO]

PRUDENTIAL VOLPE TECHNOLOGY
A UNIT OF PRUDENTIAL SECURITIES
WILLIAM BLAIR & COMPANY
PRUDENTIALSECURITIES.COM

------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of common stock being registered. All amounts are estimates except
the SEC registration fee, the NASD filing fee and the Nasdaq National Market
listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 17,584
NASD filing fee............................................. 6,825
Nasdaq National Market listing fee.......................... 95,000
Blue Sky fees and expenses.................................. 7,500
Printing and engraving expenses............................. 175,000
Legal fees and expenses..................................... 350,000
Accounting fees and expenses................................ 200,000
Transfer Agent and Registrar Fees........................... 30,000
Miscellaneous............................................... 18,091
----------
Total..................................................... $ 900,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Section 145 of the Delaware General Corporation Law, we can indemnify
our directors and officers against liabilities they may incur in such
capacities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). Our certificate of incorporation will provide that,
pursuant to Delaware Law, our directors shall not be liable for monetary damages
for breach of the directors' fiduciary duty of care to ValueClick and our
stockholders. This provision in the certificate of incorporation does not
eliminate the duty of care, and in appropriate circumstances equitable remedies
such as injunctive or other forms of nonmonentary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to ValueClick or our
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of the law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are unlawful under Delaware Law. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities laws or state or federal environmental laws.

Our bylaws will provide that we will indemnify our directors and officers to
the fullest extent permitted by law and require us to advance litigation
expenses upon our receipt of an undertaking by the director or officer to repay
such advances if it is ultimately determined that the director or officer is not
entitled to indemnification. Our bylaws will further provide that rights
conferred under such bylaws do not exclude any other right such persons may have
or acquire under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.

We also have directors' and officers' liability insurance. In addition,
prior to the closing of this offering, we will enter into agreements to
indemnify our directors and certain of our officers in addition to the
indemnification provided for in the certificate of incorporation and bylaws.
These agreements will, among other things, indemnify our directors and certain
of our officers for certain expenses (including attorneys fees), judgments,
fines and settlement amounts incurred by such person in any action or
proceeding, including any action by or in our right, on account of services by
that person as a director or officer of ValueClick or as a director or officer
of any subsidiary of ValueClick, or as a director or officer of any company or
enterprise that the person provides services to at the request of ValueClick.

The Underwriting Agreement provides for indemnification by the underwriters
of ValueClick and its officers and directors, and by ValueClick of the
underwriters, for certain liabilities arising under the Securities Act or
otherwise.

II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The following is a summary of transactions by ValueClick since its inception
in May 1998 involving sales of our securities that were not registered under the
Securities Act of 1933, as amended:

Upon its formation on May 1, 1998, ValueClick, LLC issued securities equal
to 6% of its total equity to four accredited investors and two non-accredited
investors for an aggregate purchase price of $60,000 and issued securities equal
to 92% of its total equity to Messrs. Coryat and Bueno in consideration of the
transfer of certain trademarks, software and trademark licenses and contractual
rights with an estimated fair market value of $920,000 to ValueClick.
ValueClick, LLC also issued securities equal to 2% of its total equity to two
individuals on May 1, 1998 in consideration of services rendered, with an
estimated fair market value of $20,000. The non-accredited investors received
offering materials satisfying the requirements of Rule 506 of Regulation D of
the Securities Act. By meeting the requirements of Rule 506 these issuances of
securities were exempt from registration under the Securities Act.

In May and June 1998, ValueClick, LLC issued securities equal to 17% of its
total equity to thirteen accredited and three non-accredited investors for an
aggregate purchase price of $716,000. The non-accredited investors received
offering materials satisfying the requirements of Rule 506. By meeting the
requirements of Rule 506 these issuances of securities were exempt from
registration under the Securities Act.

In June 1998, ValueClick, LLC issued securities equal to 4.83% of its total
equity to six employees in exchange for services, with an estimated fair market
value of $61,317, they performed for ValueClick, LLC. These securities were
exempt from registration under Rule 701 of the Securities Act as securities
issued in connection with services performed for the issuer.

On December 31, 1998, ValueClick, LLC was reorganized as ValueClick, Inc., a
Delaware corporation, and entered into an Exchange Agreement pursuant to which
ValueClick, Inc. issued to ValueClick, LLC 14,283,366 shares of ValueClick
common stock, 297,132 shares of Series A Convertible Preferred Stock and
1,047,804 shares of Series B Convertible Preferred Stock for distribution to the
members of ValueClick, LLC upon its dissolution and agreed to assume ValueClick,
LLC's liabilities and acquire ValueClick, LLC's assets. The issuances of shares
of ValueClick, Inc. common stock, Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock were exempt from registration under
Section 3(a)(9) of the Securities Act as an exchange of securities by an issuer
with its existing security holders where no commission or remuneration was paid,
and under Rule 506.

In January 1999, we issued an aggregate of 370,370 shares of Series C
Convertible Preferred Stock for an aggregate purchase price of $1,000,000 to an
accredited investor. This issuance of securities was exempt from registration
under Rule 506.

In February 1999, we issued an aggregate of 220,368 shares of Series C
Convertible Preferred Stock for an aggregate purchase price of $595,000 to ten
accredited investors and one non-accredited investor. The non-accredited
investors received offering materials satisfying the requirements of Rule 506.
By meeting the requirements of Rule 506 these issuances of securities were
exempt from registration.

In March 1999, we issued an aggregate of 462,859 shares of Series C
Convertible Preferred Stock for an aggregate purchase price of $1,249,719 to
four accredited investors. These issuances of securities were exempt from
registration under the Securities Act in reliance on Rule 506.

In June 1999, we issued an aggregate of 248,253 shares of Series C
Convertible Preferred Stock for an aggregate purchase price of $670,283 to seven
accredited investors and one non-accredited investor. The non-accredited
investor is an employee of ValueClick and received offering materials satisfying
the requirements of Rule 506. These issuances of securities were exempt from
registration under the Securities Act in reliance on Rule 506.

From January 1999 to April 1999, we granted options to purchase an aggregate
of 1,368,000 shares of common stock to our directors, executive officers,
employees and consultants at an exercise price of $0.17 per share. From May 1999
to July 1999, we granted options to purchase 2,193,984 shares of common stock to
our directors, executive officers, employees and consultants at an exercise
price of $0.69 per share. From August

II-2
<PAGE>

1999 to October 1999, we granted options to purchase an aggregate of 499,680
shares of common stock to our employees and consultants at an exercise price of
$1.39 per share. As of October 31, 1999, no options had been exercised. The
issuances of these options were exempt from registration under Rule 701 of the
Securities Act as securities issued under a written compensatory benefit plan
established by us for the participation of our employees, directors, officers or
consultants and advisors.

In August 1999, we issued 460,800 shares of our common stock to two holders
of shares of ValueClick Japan, each of whom are accredited investors, in
exchange for shares of ValueClick Japan equal to 22.3% of the outstanding equity
of ValueClick Japan and having a fair market value of $3,525,120. Accordingly,
these issuances of securities were exempt from registration under the Securities
Act in reliance on Rule 506.

The recipients of securities in each transaction described above represented
their intentions to acquire the securities for investment only and not with a
view to or for sale in connection with any distribution thereof and appropriate
legends were affixed to the share certificates issued in these transactions. In
connection with each transaction described above, we did not engage in a general
solicitation for sales. Based on representations of the investors in each of the
transactions described above, we believe each non-accredited investor had such
knowledge and experience in financial and business matters that the investor was
capable of evaluating the merits and risks of the investment in our securities.
All investors had adequate access, through their relationships with ValueClick,
or otherwise, to information about ValueClick.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

See Exhibit Index at page II-6.

(b) Financial Statement Schedules

None required.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in
denominations as required by the underwriters and registered in names as
required by the underwriters to permit prompt delivery to each purchaser.

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 foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against liabilities (other than the payment by 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 a
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 indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of this issue.

The undersigned Registrant hereby undertakes that:

(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 430A and contained in a form of
prospectus filed by the registrant pursuant to 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 this offering of these 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 No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Carpinteria, State of California on December 21, 1999.

<TABLE>
<S> <C> <C>
VALUECLICK, INC.

By: /s/ KURT A. JOHNSON
-----------------------------------------
Kurt A. Johnson
CHIEF FINANCIAL OFFICER
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 2 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
JAMES R. ZARLEY*
------------------------------------------- Chairman of the Board and December 21, 1999
James R. Zarley Chief Executive Officer

EARLE A. MALM II* Vice Chairman of the Board
------------------------------------------- and Chief Marketing December 21, 1999
Earle A. Malm II Officer

BRIAN CORYAT*
------------------------------------------- Director, President and December 21, 1999
Brian Coryat Chief Operating Officer

/s/ KURT A. JOHNSON Chief Financial Officer
------------------------------------------- (Principal Financial and December 21, 1999
Kurt A. Johnson Accounting Officer)

DAVID S. BUZBY*
------------------------------------------- Director December 21, 1999
David S. Buzby

ROBERT D. LEPPO*
------------------------------------------- Director December 21, 1999
Robert D. Leppo
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
MARTIN HART*
------------------------------------------- Director December 21, 1999
Martin Hart

STEVEN J. UMBERGER*
------------------------------------------- Director December 21, 1999
Steven J. Umberger
</TABLE>

<TABLE>
<S> <C> <C>
/s/ KURT A. JOHNSON
-------------------------------------------
Kurt A. Johnson
*By: ATTORNEY-IN-FACT
</TABLE>

II-5
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
1.1 *Form of Underwriting Agreement.

3.1+ Amended and Restated Certificate of Incorporation of the
Registrant, as currently in effect.

3.2+ Bylaws of the Registrant.

4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and
Restated Certificate of Incorporation and Bylaws for the
Registrant defining the rights of holders of Common Stock
of the Registrant.

4.2 *Specimen Stock Certificate.

5.1+ Form of Opinion of Brobeck, Phleger & Harrison LLP.

10.1+ Deed of Assignment, dated January 1, 1999, by and between
Web-Ignite Corporation and the Registrant.

10.2+ Trademark Assignment, dated as of May 1, 1998, from
Web-Ignite Corporation to the Registrant.

10.3+ Exchange Agreement, dated December 31, 1998, by and between
the Registrant and ValueClick, LLC.

10.4+ Bill of Sale and Assignment and Assumption of Liabilities,
dated December 31, 1998.

10.5+ Loan and Share Issuance Agreement, dated October 22, 1998,
by and between ValueClick, LLC and Jonathan Hendriksen.

10.6+ License and Option Agreement, dated January 1, 1999, by and
between ValueClick, LLC and ValueClick Japan, Inc.

10.7+ Stock Purchase Agreement, dated August 6, 1999, by and
between Jonathan Hendriksen and Timothy Williams and the
Registrant.

10.8 *Share Purchase Agreement, dated December , 1999, by and
between the Registrant and Steve Umberger.

10.9+ License Agreement, dated August 17, 1999, by and between the
Registrant and ValueClick Europe, Limited.

10.10+ 1999 Stock Option Plan, as amended, and form of option
agreement.

10.11+ Key Employee Agreement between the Registrant and Kurt A.
Johnson.

10.12+ Key Employee Agreement between the Registrant and James R.
Zarley.

10.13+ Key Employee Agreement between the Registrant and Earle A.
Malm II.

10.14+ Key Employee Agreement between the Registrant and John H.
Schwenk.

10.15+ Form of Employee Confidentiality, Noncompetition and
Invention Agreement between the Company each of its
directors and officers and certain employees.

10.16+ Sublease, dated April 1, 1999, between QAD, Inc. and the
Registrant.

10.17+ Lease, dated August 30, 1999, by and between William D. and
Edna J. Wright, dba South Coast Business Park and the
Registrant.

10.18+ Service Agreement, dated August 17, 1999, by and between
SoftAware, Inc. and the Registrant.

10.19+ Service Agreement, dated June 8, 1999, by and between Verio
and the Registrant.
</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
10.20 *Form of Indemnification Agreement between the Company and
each of its directors and officers.

10.21+ Loan and Security Agreement, dated October 21, 1999, between
Silicon Valley Bank and the Registrant.

10.22+ Intellectual Property Security Agreement, dated October 21,
1999, by and between Silicon Valley Bank and the
Registrant.

10.24 *Share Purchase Agreement, dated December , 1999, by and
between the Registrant and Todd Treusdell.

10.25 *Share Purchase Agreement, dated December , 1999, by and
between the Registrant and James R. Zarley.

10.26 *Share Purchase Agreement, dated December , 1999, by and
between the Registrant and Brian Coryat.

23.1 Consent of PricewaterhouseCoopers LLP.

23.2+ Consent of Counsel (included in Exhibit 5.1).

23.3+ Consent of Media Metrix, Inc.

23.4+ Consent of Jupiter Communications

23.5+ Consent of The Yankee Group

24.1+ Power of Attorney

27.1+ Financial Data Schedule.
</TABLE>

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* To be filed by amendment.

+ Previously filed.

II-7

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of
our legended report on ValueClick, Inc., dated May 31, 1999, except for Notes 1
and 12 as to which the date is December 20, 1999, our report on the ValueClick
Line of Business of Web-Ignite Corporation, dated October 1, 1999, and our
report on ValueClick Japan and its predecessor line of business within Trans-
Pacific Ltd., dated October 1, 1999, relating to the financial statements which
appear in such Registration Statement. We also consent to the references to us
under the heading "Experts" in such Registration Statement.

Woodland Hills, California
December 20, 1999