AGENCY COM LTD, S-1/A, 1999-10-13

AGENCY COM LTD
S-1/A, 1999-10-13
BUSINESS SERVICES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 13, 1999

REGISTRATION NO. 333-86433

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

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

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

AGENCY.COM LTD.
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 7379 13-3808969
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
Incorporation or Organization) Classification Code Number) Number)
</TABLE>

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

665 BROADWAY, 9TH FLOOR
NEW YORK, NEW YORK 10012
(212) 358-8220
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
------------------------------

MR. CHAN SUH
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
AGENCY.COM LTD.
665 BROADWAY, 9TH FLOOR
NEW YORK, NEW YORK 10012
(212) 358-8220
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------------

Copies to:

<TABLE>
<S> <C>
ALEXANDER D. LYNCH, ESQ. KEITH F. HIGGINS, ESQ.
SCOTT L. KAUFMAN, ESQ. JANE D. GOLDSTEIN, ESQ.
BROBECK, PHLEGER & HARRISON LLP ROPES & GRAY
1633 BROADWAY, 47(TH) FLOOR ONE INTERNATIONAL PLACE
NEW YORK, NEW YORK 10019 BOSTON, MASSACHUSETTS 02110
(212) 581-1600 (617) 951-7000
</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,
check the following box. / /

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

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
<S> <C> <C> <C> <C>
Common stock, par value $.001 per share........... 6,785,000 $12.00 $81,420,000 $22,635
</TABLE>

(1) Includes 885,000 shares which the underwriters have the option to purchase
to cover overallotments, if any.

(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(a) under the Securities Act of 1933, as amended.

(3) $20,850 previously paid.

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

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

SUBJECT TO COMPLETION. DATED OCTOBER 13, 1999.

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>

5,900,000 Shares
AGENCY.COM LTD.
Common Stock

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

This is an initial public offering of shares of common stock of AGENCY.COM
Ltd. All of the 5,900,000 shares of common stock are being sold by AGENCY.COM.

Before this offering, there has been no public market for the common stock.
AGENCY.COM currently anticipates that the initial public offering price will be
between $10.00 and $12.00 per share. AGENCY.COM has applied to have the common
stock approved for quotation on the Nasdaq National Market under the symbol
"ACOM".

SEE "RISK FACTORS" BEGINNING ON PAGE 8 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE BUYING SHARES OF THE COMMON STOCK.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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

<TABLE>
<CAPTION>
Per Share Total
----------- ---------
<S> <C> <C>
Initial public offering price.......................................... $ $
Underwriting discount.................................................. $ $
Proceeds, before expenses, to AGENCY.COM............................... $ $
</TABLE>

To the extent that the underwriters sell more than 5,900,000 shares of
common stock, the underwriters have the option to purchase up to an additional
885,000 shares from AGENCY.COM at the initial public offering price less the
underwriting discount.

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

The underwriters expect to deliver the shares against payment in New York,
New York on , 1999.

GOLDMAN, SACHS & CO. SALOMON SMITH BARNEY

HAMBRECHT & QUIST

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

Prospectus dated , 1999.
<PAGE>

[Front Inside Cover--AGENCY.COM logo located in the left of the page. In the
center of the page is a vertical column of three graphics, captioned "Our
Vision", "Our Mission", and "Our Values" from top to bottom. Below the caption
"Our Vision" is the following text: To be the global leader in understanding,
inventing and delivering on the promise of the interactive future. Below the
caption "Our Mission" is the following text: We empower people and organizations
to gain competitive advantage by creating powerful interactive relationships.
Below the caption "Our Values" is the following text: We succeed only when our
clients benefit from our work. We deliver excellence with the highest standards
of integrity. We honor the dignity and value of individuals working as a team.
We celebrate diversity of people, ideas and cultures. We seek to grow through
learning and knowledge gathering. We embrace change and encourage innovation.

Gatefold--Located in the left of the page is the AGENCY.COM logo with the
words "We are an Internet professional services company" beneath the logo. Below
the words "We are an Internet professional services company" is the following
text: We provide clients with services that help them build Internet businesses
so they can become more responsive to their customers' needs, open new markets
and channels, reduce operating costs and improve internal and external
communications. We pioneered a strategy called Interactive Relationship
Management-TM- to help our clients in four key areas of online
business--Branding, Content, E-commerce and Customer Service.

To the right is a photograph of fourteen individuals holding a posterboard
with the caption "Bring New Energy to the World of Texaco" with various graphics
on the posterboard.

Across the top of the page are four photographs of a computer monitor
showing different Web pages from the British Airways Website, with the captions
"Branding", "Content", "E-commerce", and "Customer Service" underneath one
photograph each from left to right. Below the caption "Branding" is the
following text: Graphic design and information architecture services help our
clients to design user experiences that reflect their brand's personality and
image. Below the caption "Content" is the following text: Content development
and management services assist our clients in telling a compelling story and in
managing their content efficiently. Below the caption "E-commerce" is the
following text: Technical architecture and systems integration services help
clients facilitate a broad range of transactions from online sales to supply
chain management. Below the caption "Customer Service" is the following text:
Customer service and support strategies help clients to serve their customers'
ongoing needs via the Internet and foster long-term relationships.

Located in the bottom left is the Company's Integrated Capabilities graphic.
Next to the graphic is a caption "Integrated Capabilities." Below the caption
"Integrated Capabilities" is the following text: Our professionals work in
integrated, client-centered teams that combine strategy, creative, technology
and management expertise. Located in the bottom right is a graphic depicting the
Company's Compass Methodology. Next to the graphic is a caption "Compass-TM-
Methodology." Below the caption "Compass Methodology" is the following text: Our
internally-developed Compass-TM- methodology supports our clients through the
entire lifecycle of their online businesses from initial strategic assessments
of their opportunities to planning and implementation, and ultimately to ongoing
refinement and evolution.]

<PAGE>
PROSPECTUS SUMMARY

YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION AND OUR CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES TO THOSE
STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED,
THE INFORMATION IN THIS PROSPECTUS ASSUMES THAT THE UNDERWRITERS DO NOT EXERCISE
THE OPTION WE HAVE GRANTED TO THEM TO PURCHASE ADDITIONAL SHARES IN THIS
OFFERING. PLEASE SEE "UNDERWRITING".

AGENCY.COM

OUR COMPANY

Our strategy services include advising clients on business models for their
online businesses, devising strategies so that clients can open new online
distribution and sales channels, identifying opportunities to achieve
operational efficiencies by pursuing online initiatives, and planning for the
operations and organization necessary to support an online business. Our
creative services include advising clients on how to effectively bring their
brands online, developing graphic designs and information architectures for
client Web sites, and coordinating online marketing campaigns with clients'
traditional advertising agencies. Our technology services include technical
architecture and design, integration between Internet and older information
technology systems, and implementation of e-commerce systems to enable online
sales, support and communication.

We seek to empower our clients to gain competitive advantage by using the
Internet to create and enhance interactive relationships with their customers,
staff, business partners and suppliers. We accomplish this by enabling more
timely, convenient and efficient communications and transactions between a
company and these constituents. Since our founding in 1995, we have focused
exclusively on Internet technologies and their implications for businesses. We
serve a broad and diversified client base in a variety of industries, including
emerging e-businesses and businesses comprising Business Week magazine's "Global
1000" list of companies with the largest market capitalizations worldwide. We
have worked with more than 200 companies to help them develop and implement
their Internet businesses, including 3M, British Airways, Compaq, DIRECTV,
Enron, Sprint and Texaco. We currently employ more than 800 people in 11 offices
in four countries.

OUR MARKET OPPORTUNITY

Based on our experience, we believe many companies outsource some or all of
their growing Internet businesses, creating a large and expanding market for
providers of Internet professional services. According to International Data
Corporation, worldwide demand for Internet professional services is expected to
grow from $7.8 billion in 1998 to $78.5 billion in 2003.

A new breed of professional services firm devoted to the Internet has
emerged to provide companies with strategy, planning, design, development and
deployment services for their Internet resources. We believe these Internet
professional services providers must be able to serve their clients on an
international basis and offer integrated strategy, creative and technology
services.

3
<PAGE>
OUR STRATEGY

AGENCY.COM's goal is to become one of the leading global providers of
Internet professional services. To achieve this goal, we are pursuing the
following key strategies:

- CONTINUE TO BUILD LONG-TERM RELATIONSHIPS WITH OUR CLIENTS AND OTHER
INTERNATIONAL COMPANIES. We intend to target clients desiring long-term
relationships and increase the number of clients with whom we have a
retainer relationship.

- FURTHER ENCHANCE OUR MULTI-DISCIPLINARY TEAM APPROACH. We intend to
further develop our infrastructure, methodology and culture in order to
improve our team-based organization.

- DEVELOP STRONG POSITIONS IN SERVICES TO BENEFIT OUR CLIENTS. We will
continue to build strong positions in services such as Internet advisory,
consulting and planning services, Internet commerce and communication
services, and online branding and marketing services.

- COMPLEMENT OUR ORGANIC GROWTH WITH TARGETED, STRATEGIC ACQUISITIONS. We
intend to complement our organic growth by expanding our skill set,
locations and industry reach through strategic acquisitions.

- EXTEND OUR GEOGRAPHIC REACH. We intend to expand our geographic reach in
the United States and abroad to better meet the needs of enterprises on a
worldwide basis by hiring additional personnel and opening new offices and
through strategic acquisitions.

- ATTRACT AND RETAIN THE HIGHEST QUALITY PROFESSIONALS AND FACILITATE
EMPLOYEE DEVELOPMENT THROUGH TRAINING, CULTURE AND SUPPORT. We intend to
continue to invest in identifying, recruiting, training and supporting the
best possible professional staff to serve our clients.

- ENHANCE AWARENESS OF AGENCY.COM AS AN INTERNATIONAL PROVIDER OF INTERNET
PROFESSIONAL SERVICES. We plan on increasing awareness of AGENCY.COM
through the activities of our internal marketing and corporate
communications teams as well as through media coverage.

OUR HISTORY

We were incorporated in New York on February 10, 1995. We reincorporated in
Delaware on August 30, 1999. Our principal executive offices are located at 665
Broadway, 9th Floor, New York, New York 10012 and our telephone number is (212)
358-8220. Our Web site is WWW.AGENCY.COM. The information on our Web site is not
a part of this prospectus.

OUR TRADEMARK

AGENCY.COM is our registered trademark. All other trademarks and service
marks used in this prospectus are the property of their respective owners.

4
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Shares offered by AGENCY.COM................. 5,900,000 shares
Shares to be outstanding after this
offering................................... 32,563,282 shares
Proposed Nasdaq National Market symbol....... ACOM
Use of proceeds.............................. To repay amounts borrowed under our credit
facility, expand our operations and for
general corporate purposes, including working
capital. We may also use a portion of the
proceeds for strategic investments or
acquisitions. Please see "Use of Proceeds".
</TABLE>

This information is based on our shares of common stock outstanding as of
September 30, 1999. This information does not include:

- 4,606,088 shares subject to options outstanding as of June 30, 1999 at a
weighted average exercise price of $1.19 per share;

- 6,469,500 additional shares that could be issued under our stock option
plans; and

- 7,400,000 shares subject to warrants to purchase our common stock at an
exercise price of $0.005 per share.

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize the financial data for our business. You
should read this information with the discussion in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and notes to those statements included elsewhere in this
prospectus. The pro forma data for the year ended December 31, 1998 and the six
months ended June 30, 1998 give effect to the following acquisitions as if each
of these acquisitions had occurred on January 1, 1998:

- Ketchum Interactive, which was completed in August 1998;

- The Primary Group, which was completed in August 1998;

- Interactive Solutions, which was completed in April 1999;

- Eagle River Interactive, which was completed in April 1999;

- Digital Vision, which was completed in May 1999; and

- Twinspark Interactive People, which was completed in July 1999.

The pro forma data for the six months ended June 30, 1999 give effect to the
acquisition of Twinspark Interactive People as if it had occurred on January 1,
1999.

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 10,
1995
(INCEPTION) TO
DECEMBER 31, YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
1995 ---------------------------------------------- ---------------------------------
--------------- 1996 1997 1998 1998 1998 1999 1998
ACTUAL ACTUAL ACTUAL ACTUAL PRO FORMA ACTUAL ACTUAL PRO FORMA
--------------- ----------- --------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues................. $ 2,162 $ 6,095 $ 12,975 $ 26,452 $ 70,581 $ 12,585 $ 30,389 $ 33,989
Gross profit............. 1,511 3,878 6,775 10,522 30,531 6,483 15,317 15,785
Income (loss) from
operations............. 868 2,862 2,103 (2,476) (13,127) 477 697 (4,816)
Net income (loss)........ 791 1,502 1,165 (1,808) (10,630) 61 (411) (4,601)
Minority interest........ -- -- 167 (282) (282) (282) -- (282)
EBITDA(1)................ 874 2,923 2,619 (1,378) (3,858) 827 3,408 (642)
Basic net income (loss)
per common share....... $ 439.47 $ 0.32 $ 0.07 $ (0.11) $ (0.41) $ 0.00 $ (0.02) $ (0.18)
Diluted net income (loss)
per common share....... $ 439.47 $ 0.31 $ 0.07 $ (0.11) $ (0.41) $ 0.00 $ (0.02) $ (0.18)
Weighted average shares
outstanding used in
basic net income (loss)
per common share
calculation............ 2 4,750 16,200 16,854 25,824 16,285 21,135 25,255
Weighted average shares
outstanding used in
diluted net income
(loss) per common share
calculation............ 2 4,797 16,297 16,854 25,824 16,928 21,135 25,255

1999
PRO FORMA
-----------
<S> <C>

CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues................. $ 41,802
Gross profit............. 19,863
Income (loss) from
operations............. (4,282)
Net income (loss)........ (4,746)
Minority interest........ --
EBITDA(1)................ 1,377
Basic net income (loss)
per common share....... $ (0.18)
Diluted net income (loss)
per common share....... $ (0.18)
Weighted average shares
outstanding used in
basic net income (loss)
per common share
calculation............ 26,149
Weighted average shares
outstanding used in
diluted net income
(loss) per common share
calculation............ 26,149
</TABLE>

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

6
<PAGE>

we do. EBITDA is not a measurement of financial performance under GAAP. We
believe you should not consider EBITDA as an alternative to net income
(loss) as an indicator of our operating performance or as an alternative to
cash flow as a measure of our liquidity. You should be aware that items
excluded from the calculation of EBITDA are significant components in
understanding and assessing our financial performance.

The following table is a summary of our balance sheet as of June 30, 1999.
The pro forma data give effect to the acquisition of Twinspark Interactive
People as if it had occurred on June 30, 1999. The pro forma as adjusted data
reflect the sale of 5,900,000 shares of common stock at an assumed initial
public offering price of $11.00 per share, after deducting the underwriting
discount and estimated offering expenses.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
---------------------------------------
<S> <C> <C> <C>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
--------- -------------- ------------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.......................................... $ 1,402 $ 1,402 $ 39,009
Working capital.................................................... 5,530 5,088 42,695
Total assets....................................................... 97,596 104,705 142,312
Notes payable, excluding current portion........................... 47,276 48,028 27,778
Capital leases, excluding current installments..................... 1,216 1,216 1,216
Total stockholders' equity......................................... 18,491 22,789 80,646
</TABLE>

7
<PAGE>
RISK FACTORS

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER
THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO BUY OUR COMMON STOCK. IF ANY OF
THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION OR RESULTS
OF OPERATIONS WOULD LIKELY SUFFER. IN THIS CASE, THE TRADING PRICE OF OUR COMMON
STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.

RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL

OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT

We commenced operations in February 1995. Accordingly, you can only evaluate
our business based on our limited operating history. You should evaluate our
chances of financial and operational success in light of the risks,
uncertainties, expenses, delays and difficulties associated with starting a new
business, many of which may be beyond our control. As a result of our limited
operating history, our rapid growth and the emerging nature of the markets in
which we compete, we believe that quarter-to-quarter comparisons of our results
of operations for preceding quarters are not necessarily meaningful. You should
not rely upon them as indications of future performance. The uncertainty of our
future performance and the uncertainties of our operating in a new and expanding
market increase the risk that the value of your investment will decline.

OUR FUTURE SUCCESS IS UNCERTAIN BECAUSE WE ARE AN EARLY-STAGE COMPANY

Because we are in an early stage of development, we are subject to the risks
that we will fail to implement our business model and strategy successfully or
to revise our business model and strategy should industry conditions and
competition change. These risks are even greater because we are operating in a
new and rapidly evolving market. We cannot assure you that we will be successful
in addressing these risks. If we are not, our business, results of operations
and financial condition will be materially adversely affected.

OUR REVENUES COULD BE AFFECTED BY THE LOSS OF A MAJOR CLIENT

A substantial portion of our revenue is generated from a limited number of
major clients. In particular, on a pro forma basis our ten largest clients
accounted for 50.8% of our revenues for the six months ended June 30, 1999 and
36% of our revenues for the year ended December 31, 1998. If one of our major
clients discontinues or reduces the use of our services, our business, results
of operations and financial condition could materially suffer. We cannot assure
you that our clients will continue to use our services in the future. In
addition, because a substantial portion of our revenue is generated from a
limited number of clients, the non-payment or late payment of amounts due from a
major client could have a material adverse effect on our business, results of
operations and financial condition.

IF CLIENTS PREMATURELY TERMINATE OR REDUCE THE SCOPE OF EXISTING CONTRACTS, OUR
REVENUES MAY DECLINE

Our services are often sold pursuant to short-term arrangements and most
clients can reduce or cancel their contracts for our services without penalty
and with little or no notice. These arrangements are in writing, are binding
contracts and typically range in term from three months to one year. If a major
client or a number of small clients were to terminate, significantly reduce or
modify their business relationships with us, then our business, results of
operations and financial condition would be materially adversely affected.
Consequently, you should not predict or anticipate our future revenue based upon
the number of clients we

8
<PAGE>
currently have or the number and size of our existing projects.

OUR REVENUES ARE DIFFICULT TO PREDICT, WHICH COULD LEAD TO POOR OPERATING
RESULTS

We derive our revenues in part from fees for services generated on a
project-by-project basis. These projects vary in length and complexity, as well
as in the fee charged for our services. Our methods of recognizing revenue also
vary depending on whether we enter into a fixed fee, time-and-materials or
retainer arrangement with the client. As a result, there may be significant
fluctuation in the amount of revenue generated by a particular client in
different periods. Aggregate quarterly results may fluctuate as well. We may be
unable to adjust our cost structure quickly enough to offset unexpected revenue
shortfalls due to the fact that many of our costs are fixed or are associated
with commitments which cannot be immediately terminated, which could cause our
operating results to suffer.

OUR RECENT ACQUISITIONS MAKE EVALUATING OUR BUSINESS DIFFICULT

In April 1999, we acquired all of the issued and outstanding stock of
Interactive Solutions Incorporated. Immediately prior to the acquisition,
Interactive Solutions acquired Quadris Consulting, Inc. The historical revenue
of Interactive Solutions and Quadris combined was $3.6 million for the three
months ended March 31, 1999 and was $15.3 million for the year ended December
31, 1998. In April 1999, we acquired all of the issued and outstanding stock of
Eagle River Interactive Inc. The historical revenue of Eagle River was $5.1
million for the three months ended March 31, 1999 and was $23.4 million for the
year ended December 31, 1998. In May 1999, we acquired Digital Vision
Communications Inc. The historical revenue for Digital Vision was $326,000 for
the six months ended June 30, 1999. In August 1999, we acquired Twinspark
Interactive People B.V. The historical revenue for Twinspark Interactive was
$2.4 million for the six months ended June 30, 1999 and was $2.7 million the
year ended December 31, 1998.

Our historical results of operations do not fully give effect to the
operations of the companies we have acquired and the pro forma financial
information included in this prospectus is based in part on the separate
pre-acquisition financial reports of these acquired companies. Consequently, our
historical results of operations and pro forma financial information may not
give you an accurate indication of how AGENCY.COM, together with these combined
entities, will perform in the future.

WE MAY NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE TO US AND
MAY LIMIT OUR GROWTH

Our future liquidity and capital requirements are difficult to predict as
they depend upon numerous factors, including the success of our existing and new
service offerings and competing technological and market developments. We may
need to raise additional funds in order to meet additional working capital
requirements, support additional capital expenditures or take advantage of
acquisition opportunities. Our ability to obtain additional financing will be
subject to a number of factors, including market conditions, our operating
performance and investor sentiment. These factors may make the timing, amount,
terms and conditions of additional financing unattractive for us. If we are
unable to raise additional funds when needed or the terms are not favorable, our
growth could be impeded.

IF WE FAIL TO ACCURATELY ESTIMATE COSTS OF FIXED-FEE PROJECTS, OUR OPERATING
RESULTS
MAY SUFFER

We derive our revenues from services performed under one of three pricing
arrangements: retainer, time-and-materials and fixed-fee. We assume greater
financial risks on a fixed-fee project than on a time-and-materials

9
<PAGE>

project. We have limited experience in estimating our costs for fixed-fee
projects since we did not typically utilize this pricing structure prior to our
April 1999 acquisition of Interactive Solutions. If we miscalculate the
resources or time we need for these projects, the costs of completing these
projects may exceed the fixed fee, which could adversely affect our operating
results. We recognize revenues from fixed-fee projects based on our estimate of
the percentage of each project completed in a reporting period. To the extent
our estimates of the costs associated with each fixed-fee project are
inaccurate, the revenues and operating profits, if any, that we report for
periods during which we are working on that project may not accurately reflect
the final results of the project. In this case, we may be required to record an
expense for the final period in which we work on that project equal to the
amount by which our revenues were previously overstated.

RISKS RELATED TO OUR STRATEGY AND MARKET

FAILURE TO PROPERLY MANAGE OUR EXPANDING OPERATIONS MAY ADVERSELY IMPACT OUR
BUSINESS

Our rapid growth has placed a significant strain on our managerial and
operational resources. From January 1, 1997 to June 30, 1999, our staff
increased from approximately 60 to approximately 750 employees. If we cannot
effectively manage our expanding operations, we may not be able to continue to
grow, or may grow at a slower pace. To manage any future growth we must continue
to improve our financial and management controls, reporting systems and
procedures, and expand and train our work force. We cannot assure you that our
controls, systems or procedures will be able to support our expanding operations
or that we will be able to manage both internal and acquisition-based growth
effectively.

IF WE ARE UNABLE TO FIND SUITABLE ACQUISITION CANDIDATES, OUR GROWTH COULD BE
IMPEDED

Our ability to identify and invest in suitable acquisition and investment
candidates on acceptable terms is crucial to our strategy. We cannot assure you
that we will be able to continue to identify, acquire or make investments in
promising acquisition candidates on acceptable terms. Moreover, in pursuing
acquisition and investment opportunities, we may be in competition with other
companies having similar growth and investment strategies. Competition for these
acquisitions or investment targets could also result in increased acquisition or
investment prices and a diminished pool of businesses, technologies, services or
products available for acquisition or investment.

OUR ACQUISITION STRATEGY COULD SUBJECT US TO SIGNIFICANT RISKS, ANY OF WHICH
COULD HARM OUR BUSINESS

Acquisitions involve a number of risks and present financial, managerial and
operational challenges, including:

- adverse effects on our reported operating results due to the amortization
of goodwill associated with acquisitions;

- diversion of management attention from running our existing business;

- increased expenses, including compensation expenses resulting from
newly-hired employees; and

- potential disputes with the sellers of acquired businesses, technologies,
services or products.

We may not be successful in integrating the technology, operations and
personnel of any acquired business. Client satisfaction or performance problems
with an acquired business, technology, service or product could

10
<PAGE>

also have a material adverse impact on our reputation as a whole. In addition,
any acquired business, technology, service or product could significantly
underperform relative to our expectations. For all these reasons, our pursuit of
an overall acquisition and investment strategy or any individual acquisition or
investment could have a material adverse effect on our business, results of
operations and financial condition. In four of our nine acquisitions, we have
acquired companies owned or controlled by Omnicom Inc., our largest stockholder.
In the future, we expect to primarily acquire companies not owned or controlled
by Omnicom, which may make acquiring companies materially more difficult.

WE SOMETIMES AGREE NOT TO PERFORM SERVICES FOR OUR CLIENTS' COMPETITORS, WHICH
LIMITS OUR BUSINESS OPPORTUNITIES

We have agreed with approximately ten of our clients, including three of our
20 largest clients, to limit our right to enter into business relationships with
competitors of that client for a specific time period. These provisions
typically prohibit us from performing a broad range of our Internet professional
services which we might otherwise be willing to perform for potential clients.
These provisions are generally limited to six months and are sometimes further
limited by office location or apply only to specific employees. These provisions
may limit our ability to enter into engagements with new clients for specified
periods of time. This may adversely affect our business opportunities and our
revenues.

WE FACE INTENSE COMPETITION, WHICH COULD HARM OUR BUSINESS

Our market is new, intensely competitive, highly fragmented and subject to
rapid technological change. We expect competition to intensify and increase over
time because

- there are no substantial barriers to entering the Internet professional
services market;

- our industry is consolidating; and

- many of our competitors are forming cooperative relationships.

Many of our competitors have longer operating histories, greater name
recognition, larger established client bases, longer client relationships and
significantly greater financial, technical, personnel and marketing resources
than we do. Such competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to potential clients, employees and strategic partners. Further, our
competitors may perform Internet services that are equal or superior to our
services or that achieve greater market acceptance than our services. We have no
patented or other proprietary technology that would preclude or inhibit
competitors from duplicating our services. We must rely on the skills of our
personnel and the quality of our client service.

Increased competition is likely to result in price reductions, reduced gross
margins and loss of market share, any of which would have a material adverse
effect on our business, results of operations and financial condition. We cannot
assure you that we will be able to compete successfully against existing or
future competitors.

IF WE ARE UNABLE TO IDENTIFY, HIRE, TRAIN AND RETAIN HIGHLY QUALIFIED INTERNET
PROFESSIONALS AND RETAIN CURRENT KEY PERSONNEL, OUR BUSINESS AND GROWTH WILL
SUFFER

Our success depends on our ability to identify, hire, train and retain
highly qualified Internet professionals. These individuals are in high demand
and we may not be able to attract and retain the number of highly qualified
Internet professionals that we need.

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<PAGE>
Historically, we have experienced significant employee turnover. If we cannot
retain, attract and hire the necessary Internet professionals, our ability to
grow, complete existing projects and bid for new projects would be adversely
affected and our business, results of operations and financial condition would
suffer.

In addition, our future success depends, in part, upon the continued service
and performance of Chan Suh, our Chairman, Chief Executive Officer and
President, Kyle Shannon, our Chief Creative Officer, Kevin Rowe, our
President--North America and Eamonn Wilmott, our President--Europe. Particularly
in light of our relatively early stage of development, the fact that many of our
key personnel have worked together for only a short period of time and the
competitive nature of our industry, we cannot assure you that we will be able to
retain the services of our senior management and other key personnel. Losing the
services of any of these individuals at our current stage would impair our
ability to effectively deliver our services and manage our company. These
problems would negatively affect our business, results of operations and
financial condition, as well as our ability to grow.

OUR EFFORTS TO RAISE AWARENESS OF THE AGENCY.COM BRAND MAY NOT BE SUCCESSFUL,
WHICH MAY LIMIT OUR ABILITY TO EXPAND OUR CLIENT BASE AND ATTRACT ACQUISITION
CANDIDATES AND EMPLOYEES

We believe that building the AGENCY.COM brand is critical for attracting and
expanding our targeted client base and attracting acquisition candidates and
employees. If we do not continue to build the AGENCY.COM brand on a global
basis, we may not be able to effect our strategy. We also believe that
reputation and name recognition will grow in importance as the number of
companies competing in the market for Internet professional services increases.
Promotion and enhancement of our name will depend largely on our success in
continuing to provide high quality, reliable and cost-effective services. If
clients do not perceive our services as meeting their needs, or if we fail to
market our services effectively, we will be unsuccessful in maintaining and
strengthening our brand. If we fail to promote and maintain our brand, or incur
excessive expenses to do so, our business, results of operations and financial
condition will materially suffer.

OUR INTERNATIONAL EXPANSION STRATEGY COULD SUBJECT US TO SIGNIFICANT RISKS, MANY
OF WHICH COULD HARM OUR BUSINESS

We expect to expand our international operations and international sales and
marketing efforts. We commenced operations in France in April 1999, the
Netherlands in July 1999, and the United Kingdom in October 1997, and made
minority investments in a company in Singapore in December 1998 and July 1999.
Our international offices offer Internet professional services similar to our
domestic offices. We have had limited experience in marketing, selling and
distributing our services internationally, and we cannot assure you that we will
be able to maintain and expand our international operations or successfully
market our services internationally. Failure to do so may negatively affect our
business, results of operations and financial condition, as well as our ability
to grow.

OUR BUSINESS MAY SUFFER IF WE FAIL TO ADAPT APPROPRIATELY TO THE DIFFERENCES
ASSOCIATED WITH OPERATING INTERNATIONALLY

Our international operations began in October 1997 and we are initially
focusing our international operations in Europe and Asia. Other than with
respect to one possible acquisition of a company in Denmark, we have no current
plans to expand to any specific location internationally. Operating
internationally may require us to modify the way we conduct our business and
deliver our

12
<PAGE>
services in these markets. If we do not appropriately anticipate changes and
adapt our practices, our business, results of operations and financial condition
could materially suffer. We anticipate that we will face the following
challenges internationally:

- the burden and expense of complying with a wide variety of foreign laws
and regulatory requirements;

- potentially adverse tax consequences;

- longer payment cycles and problems in collecting accounts receivable;

- technology export and import restrictions or prohibitions;

- tariffs and other trade barriers;

- difficulties in staffing and managing foreign operations;

- political and economic instability;

- cultural and language differences;

- fluctuations in currency exchange rates; and

- seasonal reductions in business activity, especially during the summer
months in Europe and certain other parts of the world.

IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGES, OUR SERVICES MAY BECOME LESS
COMPETITIVE AND OUR BUSINESS COULD SUFFER

Our market is characterized by rapidly changing technologies, frequent new
product and service introductions, and evolving industry standards. If we cannot
keep pace with these changes our services could become less competitive and our
business will suffer. To achieve our goals, we need to provide strategic
business and Internet services that keep pace with continuing changes in
industry standards, information technology and client preferences. We may be
unable, for technological or other reasons, to develop and introduce new
services or enhancements to existing services in a timely manner or in response
to changing market conditions or client requirements. This would materially
adversely affect our business, results of operations and financial condition.

THE MARKET FOR OUR SERVICES AND OUR REVENUE GROWTH DEPEND ON OUR CURRENT AND
POTENTIAL CLIENTS ACCEPTING AND EMPLOYING THE INTERNET

Since we expect to derive most of our revenues from providing Internet
professional services, our future success is dependent on the increased use of
the Internet. If the Internet fails to develop into a viable marketplace, or
develops more slowly than expected, our business, results of operations and
financial condition could materially suffer. Most of our current or potential
clients have limited experience with the Internet and may determine that the
Internet is not an effective method for expanding their businesses. We cannot
assure you that the market for Internet professional services will continue to
grow or become sustainable.

The Internet may not develop into a viable commercial marketplace because of
many factors, including:

- the inadequate development of the necessary infrastructure;

- a lack of development of complementary products (such as high speed modems
and high speed communication lines); and

- delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity.

The Internet has experienced, and is expected to continue to experience,
significant growth in the number of users and volume of traffic. We cannot
assure you that the Internet infrastructure will be able to support the demands
placed on it by this continued

13
<PAGE>

growth. In addition to the Internet's uncertain ability to expand to accommodate
increasing traffic, critical issues concerning the use of the Internet
(including security, reliability, cost, ease of deployment and administration
and quality of service) remain unresolved. For example, a number of states have
recently permitted telephone companies to charge increased rates for consumers
connecting to the Internet. Concerns regarding these issues may affect the
growth of the use of Internet technologies to solve business problems.

YEAR 2000 PROBLEMS MAY DISRUPT OUR BUSINESS AND SUBJECT US TO INCREASED EXPENSES

The Year 2000 problem is the potential for system and processing failures of
date-related data. Many currently installed computer systems and software
products are coded to accept or recognize only two-digit entries in the date
code field. These systems may mistakenly interpret a date entered as "00" as the
year 1900 rather than the year 2000. As a result, it is necessary to update the
computer systems and/or software used by many companies and governmental
agencies to comply with Year 2000 requirements. Companies that do not update
their systems and/or software risk system failure or miscalculation that could
cause disruptions of normal business activity.

Year 2000 problems could require us, or our clients, to incur delays and
unanticipated expenses. We, and many of our clients, rely on third party vendors
for service and equipment. A significant Year 2000 disruption of these services
or equipment could require us to seek alternative providers. We may not be able
to immediately find alternative providers and we may not be able to enter into
commercially reasonable agreements with these providers. Similarly, our clients
may face the same obstacles. If our clients are not able to find alternative
providers for their normal business activities, they will likely not seek to
expand their business or utilize the Internet. This could decrease their demand
for our services.

Our failure to correct a material Year 2000 problem could have a material
adverse effect on our business, results of operations and financial condition.
We may experience operations difficulties because of undetected errors or
defects in the technology we use in our internal systems. Additionally, clients'
and future clients' purchasing patterns, especially in the fourth quarter of
1999, may be affected by Year 2000 issues as companies expend significant
resources to correct or replace their current systems for Year 2000 compliance.

The services we provide to our clients integrate software and other
technology from different providers. If there is a Year 2000 problem with
respect to a service performed by us, it may be difficult to determine whether
the problem relates to services which we have performed or is due to the
software, technology or services of other providers. Furthermore, we have
entered into a few contracts, including contracts with some of our largest
clients, which have express or implied warranties with respect to Year 2000
readiness without limitation as to liability. We may be subjected to Year
2000-related lawsuits, whether or not the services that we have performed are
Year 2000 compliant. We cannot be certain what the outcomes of these types of
lawsuits may be.

Failure to provide to our clients services that are Year 2000 compliant,
whether or not in violation of any warranty, could have a material adverse
effect on our business, results of operations and financial condition.

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<PAGE>
RISKS RELATED TO LEGAL UNCERTAINTY

GOVERNMENTAL REGULATIONS REGARDING THE INTERNET MAY BE ENACTED WHICH COULD
IMPEDE OUR BUSINESS

To date, governmental regulations have not materially restricted the use of
the Internet by our clients in their markets. However, the legal and regulatory
environment that pertains to the Internet may change. New laws and regulations,
or new interpretations of existing laws and regulations, could impact us
directly, by regulating our operations or imposing additional taxes on the
services we provide, which could adversely impact our results and operations.
These regulations could restrict our ability to provide our services or increase
our costs of doing business.

In addition, new laws could impact us indirectly by preventing our clients
from delivering products and services over the Internet or slowing the growth of
the Internet. In particular, our business may be indirectly affected if new laws
inhibit the growth of the Internet. New laws relating to sales and other taxes,
user privacy, pricing controls, consumer protection and international commerce
may dampen the growth of the Internet as a communications and commercial medium.
For example, a number of proposals have been made at the federal, state and
local levels and by foreign governments that could impose taxes on the online
sales of goods and services and other Internet activities. In addition,
unfavorable judicial interpretation of existing laws, and the adoption of new
laws, regarding liability for libel and defamation and copyright, trademark and
patent infringement may extend liability to Web site owners. If these new laws
decrease the acceptance of e-commerce and other aspects of the Internet, our
clients may be harmed and, as a consequence, our revenue growth and growth in
demand for our services would be limited and our business, results of operations
and financial condition would be adversely affected.

WE MAY BECOME SUBJECT TO CLAIMS REGARDING FOREIGN LAWS AND REGULATIONS, WHICH
COULD SUBJECT US TO INCREASED EXPENSES

Because we have employees, property and business operations in the United
States, France, the Netherlands, Singapore and the United Kingdom, we are
subject to the laws and the court systems of multiple jurisdictions. We may
become subject to claims in foreign jurisdictions for violations of their laws.
In addition, these laws may change or new laws may be enacted in the future.
International litigation is often expensive, time-consuming and distracting, and
could have a material adverse effect on our business, financial condition and
results of operations.

UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY DAMAGE OUR
BRAND

Unauthorized use of our intellectual property by third parties may damage
our brand and our reputation. We do not have any patents or patent applications
pending and existing trade secret, trademark and copyright laws afford us only
limited protection. It may be possible for third parties to obtain and use our
intellectual property without our authorization. Furthermore, the validity,
enforceability and scope of protection of intellectual property in
Internet-related industries is uncertain and still evolving. The laws of some
foreign jurisdictions may not protect our intellectual property rights to the
same extent as do the laws of the United States.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE EXPENSIVE
AND DISRUPTIVE TO OUR BUSINESS

We cannot be certain that our services, the finished products that we
deliver or materials provided to us by our clients for use in our finished
products do not or will not infringe

15
<PAGE>

valid patents, copyrights or other intellectual property rights held by third
parties. We may be subject to legal proceedings and claims from time to time
relating to the intellectual property of others in the ordinary course of our
business. Intellectual property litigation is expensive and time consuming and
successful infringement claims against us may result in substantial monetary
liability or may materially disrupt the conduct of our business.

IF WE FAIL TO DELIVER QUALITY SERVICES OR FULFILL CLIENT NEEDS, OR IF OUR
SERVICES HARM OUR CLIENTS' BUSINESSES, WE MAY FACE ADDITIONAL EXPENSES, LOSSES
OR NEGATIVE PUBLICITY

Many of our engagements involve projects that are critical to the operations
of our clients' businesses. If we cannot complete engagements to our clients'
expectations, we could materially harm our clients' operations. This could
damage our reputation, subject us to increased risk of litigation or force us to
redesign the project. Any of these events could have a material adverse effect
on our business, results of operations and financial condition. While our
agreements with clients often limit our liability for damages arising from our
rendering of services, we cannot assure you that these provisions will be
enforceable in all instances or would otherwise protect us from liability.
Although we carry general liability insurance coverage, our insurance may not
cover all potential claims to which we are exposed or may not be adequate to
indemnify us for all liability that may be imposed. The successful assertion of
one or more significant claims against us could have a material adverse effect
on our business, results of operations and financial condition.

WE MAY BE SUBJECT TO CLAIMS FOR PAST ACTS OF THE COMPANIES THAT WE ACQUIRE,
WHICH MAY SUBJECT US TO INCREASED EXPENSES

We could experience financial or other setbacks if any of the businesses
that we acquire had problems in the past of which we are not aware. We are not
aware of any material legal liabilities of the companies we have acquired to
date. However, to the extent any client or other third party asserts any legal
claim against any of the companies we have acquired, our business, results of
operations and financial condition could be materially adversely affected.

RISKS RELATED TO THIS OFFERING

MANAGEMENT MAY USE THE PROCEEDS OF THIS OFFERING IN WAYS WITH WHICH
YOU DO NOT AGREE

Our management will have significant flexibility in applying the net
proceeds of this offering and may use the proceeds in ways with which
stockholders disagree. If we do not apply the funds we receive effectively, our
accumulated deficit may increase and we may lose significant business
opportunities.

AS AN INTERNET-RELATED COMPANY, OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE
AND COULD DROP UNEXPECTEDLY

Following this offering, the price at which our common stock will trade is
likely to be highly volatile and may fluctuate substantially. As a result,
investors in our common stock may experience a decrease in the value of their
common stock regardless of our operating performance or prospects. In addition,
the stock market has from time to time experienced significant price and volume
fluctuations that have affected the market prices for the securities of
technology companies, particularly Internet companies. In the past, following
periods of volatility in the

16
<PAGE>
market price of a particular company's securities, securities class action
litigation was often brought against that company. Many technology-related
companies have been subject to this type of litigation. We may also become
involved in this type of litigation. Litigation is often expensive and diverts
management's attention and resources, which could have a material adverse effect
upon our business, financial condition and results of operations.

OUR DIRECTORS, EXECUTIVE OFFICERS AND AFFILIATES OWN ENOUGH OF OUR SHARES TO
CONTROL AGENCY.COM, WHICH WILL LIMIT YOUR ABILITY TO INFLUENCE CORPORATE MATTERS

Our directors, executive officers and affiliates currently beneficially own
approximately 89.0% of our common stock, and after the offering will
beneficially own approximately 77.6% of our common stock. Accordingly, these
stockholders could control the outcome of any corporate transaction or other
matter submitted to the stockholders for approval, including mergers,
consolidations and the sale of all or substantially all of our assets, and also
could prevent or cause a change in control. Third parties may be discouraged
from making a tender offer or bid to acquire us because of this concentration of
ownership. The interests of these stockholders may differ from the interests of
the other stockholders. Omnicom, together with its wholly-owned subsidiary
Communicade, currently beneficially own 49.9% of our common stock. Omnicom's and
Communicade's beneficial ownership of our common stock will only slightly
decrease after the offering due to their ability to purchase additional shares
underlying their warrants and will remain approximately 49.9%, permitting them
effectively to control AGENCY.COM.

OUR STOCKHOLDERS COULD BE ADVERSELY AFFECTED AS A RESULT OF OMNICOM'S AND ITS
TWO DESIGNATED DIRECTORS' POTENTIAL CONFLICTS OF INTERESTS

Under a stockholders agreement that terminates upon the closing of this
offering, Communicade has the right to designate two of our five directors.

In addition, Omnicom has significant ownership positions in some of our
direct competitors and John D. Wren, one of Communicade's nominees to our Board
of Directors, is a director of Razorfish, one of our competitors. The ownership
positions and directorship may create conflicts of interest for Omnicom and its
director nominees as a result of their access to information and business
opportunities possibly useful to us and to these competitors.

OMNICOM HAS PROVIDED US WITH FINANCING AND IT HAS NO OBLIGATION TO RENEW OUR
CREDIT FACILITY BEYOND ITS TERMINATION DATE

We have received significant benefits from our relationship with Omnicom,
our largest shareholder. To date, our working capital and many of our
acquisitions have been financed on favorable terms by lines of credit advanced
by Omnicom. After the closing of the offering, we will have $ million
outstanding under our credit facility provided by Omnicom after using $ million
from the proceeds of this offering to pay down indebtedness under this facility.
This credit facility provides for a $25.0 million term loan facility, a $54.0
million revolving credit line and a real property lease credit support facility
providing letters of credit and/or guarantees up to $6.0 million in the
aggregate. The credit facility bears interest at Omnicom's commercial paper rate
plus 1.25% which was % at , 1999. The credit facility places
restrictions on the conduct of our business that stockholders may not consider
favorable, including our ability to pay dividends and incur additional debt.
Omnicom is not

17
<PAGE>

obligated to extend this credit facility beyond September 30, 2001. We cannot
assure you that upon termination of this facility we will be able to obtain any
additional financing. As a result, our financial condition might suffer.

SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD ADVERSELY AFFECT OUR
STOCK PRICE

Based on shares outstanding on September 30, 1999, from time to time after
this offering, a total of 26,663,282 additional shares of common stock may be
sold in the public market by existing stockholders. The market price of our
common stock could decline as a result of sales by these existing stockholders
of their shares of common stock in the market after this offering, or the
perception that these sales could occur. These sales also might make it
difficult for us to sell equity securities in the future at a time and at a
price that we deem appropriate. In addition, Omnicom and Communicade together
hold warrants to purchase an aggregate of 7.4 million shares of our common
stock. If they exercise these warrants and sell the underlying shares of common
stock in the market, the market price of our common stock could decline.

OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY INHIBIT A TAKEOVER THAT STOCKHOLDERS
MAY CONSIDER FAVORABLE

Provisions in our charter and bylaws, including those that provide for a
classfied board of directors, authorized but unissued shares of common and
preferred stock and notice requirements for stockholder meetings, and Delaware
law, regarding the ability to conduct specific types of mergers within specified
time periods, may have the effect of delaying or preventing a change of control
or changes in our management that stockholders may consider favorable or
beneficial or that would provide stockholders with a premium to the market price
of their common stock. If a change of control or change in management is delayed
or prevented, this premium may not be realized or the market price of our common
stock could decline.

YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION

The initial public offering price per share will significantly exceed the
net tangible book value per share. Accordingly, investors purchasing shares in
this offering will suffer immediate dilution of their investment equal to $10.21
per share.

FORWARD-LOOKING STATEMENTS

Many statements made in this prospectus under the captions "Prospectus
Summary", "Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" and elsewhere are
forward-looking statements that are not based on historical facts. Because these
forward looking-statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements, including those
discussed under "Risk Factors".

The forward-looking statements made in this prospectus relate only to events
as of the date on which the statements are made. We undertake no obligation
except as required by law, to update any forward-looking statement to reflect
events or circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.

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<PAGE>
USE OF PROCEEDS

The net proceeds we will receive from the sale of the shares of common stock
offered by us are estimated to be $57.9 million, assuming an initial public
offering price of $11.00 per share and after deducting the underwriting discount
and estimated offering expenses. If the underwriters' over-allotment option is
exercised in full, we estimate that the net proceeds will be $67.0 million.

We have agreed under our credit facility to use 35% of the net proceeds from
this offering, up to a maximum of $25.0 million, to repay amounts borrowed under
the term loan portion of this credit facility. This credit facility bears
interest at Omnicom's commercial paper rate plus 1.25% and terminates on
September 30, 2001. As of October , 1999, this interest rate was %. As of
October , 1999, we had $ million outstanding under this credit facility, of
which $ million consisted of term loans.

As of the date of this prospectus, we have not made any specific plans with
respect to the remaining proceeds of the offering.

However, we currently intend to use the remaining net proceeds of this
offering over time:

- to expand our operations;

- for general corporate purposes, including working capital; and

- to expand through strategic investments or acquisitions.

Pending any use, the net proceeds of this offering will be invested in
short-term, interest-bearing securities.

We cannot specify with certainty the particular uses for the net proceeds to
be received upon completion of this offering. Accordingly our management will
have significant flexibility in applying the net proceeds of this offering.

The principal purposes of this offering are to increase our working capital,
to create a public market for our common stock, to facilitate future access to
the public capital markets and to increase our visibility in the marketplace.

Although we engage in discussions with potential acquisition candidates from
time to time, we have no present commitments with respect to any acquisition
other than with respect to acquiring an interest in Pictoris Interactive, a
French company based in Paris. In addition, as part of our overall acquisition
strategy, we are currently engaged in discussions with respect to possible
acquisitions of an interactive television development company based in Denmark,
a U.S. based media buying firm and a U.S. based interactive direct marketing
company.

Pictoris consults with its clients to develop their overall interactive
strategy and helps them implement that strategy through design, programming and
production of Internet sites. On July 13, 1999, we entered into a letter of
intent with Pictoris and its shareholders with respect to this investment. The
letter of intent provides for the initial purchase of 5% of Pictoris's equity
from its existing shareholders with an option to purchase the remaining 95%. The
total value of the transaction could be as high as $13.5 million, which includes
a 10% contingent payment payable upon Pictoris' attaining operating targets. The
letter of intent also grants Pictoris's existing shareholders the right, subject
to conditions, to require us to purchase all of their shares.

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<PAGE>
DIVIDEND POLICY

We have not declared or paid any cash dividends on our common stock other than a
distribution to our stockholders prior to the September 1996 termination of our
status as an S-corporation. We currently intend to retain future earnings, if
any, to finance the expansion of our business. As a result, we do not intend to
pay cash dividends in the foreseeable future. Furthermore, our credit facility
prohibits us and our subsidiaries from paying cash dividends.

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<PAGE>
CAPITALIZATION

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

- on an actual basis;

- on a pro forma basis to reflect the acquisition of Twinspark Interactive
People, which was completed in July 1999; and

- on a pro forma as adjusted basis to reflect our sale of shares of common
stock at an assumed initial public offering price of $11.00 per share,
after deducting the underwriting discount and estimated offering expenses
payable by us. Please see "Use of Proceeds".

You should read this information together with our consolidated financial
statements and the notes to those statements appearing elsewhere in this
prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
---------------------------------------
<S> <C> <C> <C>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
----------- ----------- -------------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt, excluding current portion............................... $ 47,276 $ 48,028 $ 27,778
----------- ----------- -------------
Capital lease obligations under capital leases, excluding current
portion............................................................... 1,216 1,216 1,216
----------- ----------- -------------
Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized; no
shares issued and outstanding (actual, pro forma and pro forma as
adjusted)...........................................................
Common stock, $.001 par value, 200,000,000 shares authorized;
25,341,486 shares issued and 25,094,736 shares outstanding (actual);
26,398,712 shares issued and 26,151,962 shares outstanding (pro
forma); 32,298,712 shares issued and 32,051,962 shares outstanding
(pro forma as adjusted)............................................. 25 26 32
Additional paid-in capital.............................................. 19,100 23,397 81,248
Accumulated deficit..................................................... (601) (601) (601)
Cumulative foreign currency translation................................. (33) (33) (33)
----------- ----------- -------------
Total stockholders' equity.............................................. 18,491 22,789 80,646
----------- ----------- -------------
Total capitalization................................................ $ 66,983 $ 72,033 $ 109,640
----------- ----------- -------------
----------- ----------- -------------
</TABLE>

The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding as of June 30, 1999. It does not
include:

- 4,606,088 shares subject to options outstanding as of June 30, 1999 at a
weighted average exercise price of $1.19 per share;

- 6,469,500 additional shares that could be issued under our stock option
plans; and

- 7,400,000 shares subject to warrants to purchase our common stock at an
exercise price of $0.005 per share.

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<PAGE>
DILUTION

Giving effect to our acquisition of Twinspark Interactive People, our pro
forma net tangible book value as of June 30, 1999 was approximately $(32.7)
million, or $(1.25) per share of common stock. Pro forma net tangible book value
per share is determined by dividing the amount of our total tangible assets less
total liabilities by the pro forma number of shares of common stock outstanding
at that date. Dilution in net tangible book value per share represents the
difference between the amount per share paid by purchasers of shares of common
stock in this offering and the net tangible book value per share of common stock
immediately after the completion of this offering.

After giving effect to the issuance and sale of the shares of common stock
offered by us and after deducting the underwriting discount and estimated
offering expenses payable by us, our pro forma net tangible book value as of
June 30, 1999 would have been $25.8 million, or $0.83 per share. This represents
an immediate increase in pro forma net tangible book value of $2.11 per share to
existing stockholders and an immediate dilution of $10.17 per share to new
investors purchasing shares in this offering. If the initial public offering
price is higher or lower, the dilution to the new investors will be greater or
less, respectively. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.................... $ 11.00
Pro forma net tangible book value per share at June 30, 1999..... $ (1.25)
Increase in pro forma net tangible book value per share
attributable to this offering.................................. 2.04
----------
Pro forma net tangible book value per share after this offering.... 0.79
----------
Dilution per share to new investors................................ $ 10.21
----------
</TABLE>

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

The following table summarizes, on a pro forma basis giving effect to our
acquisition of Twinspark Interactive People, as of June 30, 1999, the
differences between the number of shares of common stock purchased from us, the
aggregate cash consideration paid to us and the average price per share paid by
existing stockholders and new investors purchasing shares of common stock in
this offering. The calculation below is based on an assumed initial public
offering price of $11.00 per share, before deducting the underwriting discount
and estimated offering expenses payable by us:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
-------------------------- --------------------------- AVERAGE PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
------------- ----------- -------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Existing stockholders..................... 26,151,962 81% $ 14,968,014 19% $ 0.57
New investors............................. 5,900,000 19 64,900,000 81 $ 11.00
------------- ----- -------------- -----
Total................................... 31,051,962 100% $ 79,868,014 100%
------------- ----- -------------- -----
------------- ----- -------------- -----
</TABLE>

This discussion and table assume no exercise of any stock options
outstanding as of June 30, 1999 and exclude 7,400,000 shares subject to warrants
to purchase our common stock at an exercise price of $0.005 per share. As of
June 30, 1999, there were options outstanding to purchase a total of 4,606,088
shares of common stock with a weighted average exercise price of $1.19 per
share. To the extent that any of these options are exercised, there will be
further dilution to new investors. Please see "Capitalization".

22
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated balance sheet data as of December 31, 1997 and
1998 and the selected consolidated statement of operations data for the years
ended December 31, 1996, 1997 and 1998 have been derived from our audited
consolidated financial statements included elsewhere in this prospectus. The
selected consolidated balance sheet data as of December 31, 1996 is derived from
our consolidated audited financial statements not included in this prospectus
and the selected consolidated balance sheet as of December 31, 1995 and the
selected consolidated statement of operations data for the period from February
10, 1995 (inception) to December 31, 1995 are derived from our unaudited
consolidated financial statements not included in this prospectus.

The selected actual and pro forma consolidated balance sheet data as of June
30, 1999 and the pro forma consolidated statement of operations data for the
year ended December 31, 1998 and the actual and pro forma consolidated statement
of operations data for the six months ended June 30, 1998 and 1999 have been
derived from unaudited consolidated financial statements included elsewhere in
this prospectus. The pro forma consolidated balance sheet data give effect to
the acquisition of Twinspark Interactive People, which was completed in July
1999, as if it had occurred on June 30, 1999. The pro forma consolidated
statement of operations data for the year ended December 31, 1998 and the six
months ended June 30, 1998 give effect to the acquisitions of Ketchum
Interactive, which was completed in August 1998, The Primary Group, which was
completed in August 1998, Interactive Solutions, which was completed in April
1999, Eagle River Interactive, which was completed in April 1999, Digital
Vision, which was completed in May 1999, and Twinspark Interactive People as if
the acquisitions had occurred on January 1, 1998. The pro forma consolidated
statement of operations data for the six months ended June 30, 1999 give effect
to the acquisition of Twinspark Interactive People as if it had occurred on
January 1, 1999.

The unaudited consolidated financial statements include all adjustments,
consisting only of normal recurring adjustments, which, in the opinion of
management, are necessary for the fair presentation of our consolidated
financial position and the consolidated results of operations for those periods.
Results of operations for the six months ended June 30, 1999 are not necessarily
indicative of the results that may be expected for the entire year or for any
future period.

You should read the following discussion of our financial condition and
results of operations in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the AGENCY.COM audited
consolidated financial statements and unaudited pro forma condensed consolidated
financial statements, the Interactive Solutions, Quadris Consulting, Eagle River
Interactive and Twinspark Interactive People audited financial statements, and
the notes to those statements included elsewhere in this prospectus.

23
<PAGE>

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 10,
1995
(INCEPTION) TO YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------- ---------------------------------
1995 1996 1998 1998 1999 1998
ACTUAL ACTUAL 1997 ACTUAL 1998 ACTUAL PRO FORMA ACTUAL ACTUAL PRO FORMA
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues.................. $ 2,162 $ 6,095 $ 12,975 $ 26,452 $ 70,581 $ 12,585 $ 30,389 $ 33,989
Direct salaries and
costs................... 651 2,217 6,200 15,930 40,050 6,102 15,072 18,204
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Gross profit.............. 1,511 3,878 6,775 10,522 30,531 6,483 15,317 15,785

Operating Expenses:
General and
administrative........ 519 955 3,815 10,944 30,764 5,176 10,655 14,708
Sales and marketing..... 118 -- 528 596 3,343 199 1,254 1,437
Amortization of
goodwill.............. -- -- 25 317 8,006 99 727 3,731
Depreciation and
amortization.......... 6 61 304 1,141 1,545 532 1,984 725
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Total operating
expenses................ 643 1,016 4,672 12,998 43,658 6,006 14,620 20,601
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Income (loss) from
operations.............. 868 2,862 2,103 (2,476) (13,127) 477 697 (4,816)
Other income (expense),
net..................... (77) (1,360) (938) 668 2,497 (416) (1,108) 215
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Net income (loss)......... $ 791 $ 1,502 $ 1,165 $ (1,808) $ (10,630) $ 61 $ (411) $ (4,601)
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Minority interest......... -- -- 187 (282) (282) (282) -- (282)
EBITDA(1)................. $ 874 $ 2,923 $ 2,619 $ (1,378) $ (3,858) $ 827 $ 3,408 $ (642)
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Basic net income (loss)
per common share(2)..... $ 439.47 $ 0.32 $ 0.07 $ (0.11) $ (0.41) $ 0.00 $ (0.02) $ (0.18)
Diluted net income (loss)
per common share(2)..... $ 439.47 $ 0.31 $ 0.07 $ (0.11) $ (0.41) $ 0.00 $ (0.02) $ (0.18)
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Weighted average shares
outstanding used in
basic net income (loss)
per common share
calculation............. 2 4,750 16,200 16,854 25,824 16,285 21,135 25,255
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
Weighted average shares
outstanding used in
diluted net income
(loss) per common share
calculation............. 2 4,797 16,297 16,854 25,824 16,928 21,135 25,255
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------
--------------- ---------- ----------- ----------- ----------- --------- --------- -----------

1999
PRO FORMA
-----------
<S> <C>

CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues.................. $ 41,802
Direct salaries and
costs................... 21,939
-----------
Gross profit.............. 19,863
Operating Expenses:
General and
administrative........ 16,371
Sales and marketing..... 2,115
Amortization of
goodwill.............. 3,493
Depreciation and
amortization.......... 2,166
-----------
Total operating
expenses................ 24,145
-----------
Income (loss) from
operations.............. (4,282)
Other income (expense),
net..................... (464)
-----------
Net income (loss)......... $ (4,746)
-----------
-----------
Minority interest......... --
EBITDA(1)................. $ 1,377
-----------
-----------
Basic net income (loss)
per common share(2)..... $ (0.18)
Diluted net income (loss)
per common share(2)..... $ (0.18)
-----------
-----------
Weighted average shares
outstanding used in
basic net income (loss)
per common share
calculation............. 26,149
-----------
-----------
Weighted average shares
outstanding used in
diluted net income
(loss) per common share
calculation............. 26,149
-----------
-----------
</TABLE>

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

24
<PAGE>

GAAP. We believe you should not consider EBITDA as an alternative to net
income (loss) as an indicator of our operating performance or as an
alternative to cash flow as a measure of our liquidity. You should be aware
that items excluded from the calculation of EBITDA are significant
components in understanding and assessing our financial performance.

(2) The number of shares used to calculate basic and diluted net income or loss
per share was calculated in accordance with the treasury stock method. The
treasury stock method is a method for calculating outstanding shares that
adds to the actual number of shares outstanding additional shares issuable
upon the exercise of stock options and warrants based on a calculation that
assumes that any proceeds that could be obtained upon the exercise of
outstanding stock options and warrants during the applicable period would be
used to purchase common stock at the average market price during the period.

The following balance sheet data are presented:

- on an actual basis;

- on a pro forma basis to reflect the acquisition of Twinspark Interactive
People; and

- on a pro forma as adjusted basis as of June 30, 1999 to give effect to the
sale of 5,900,000 shares in this offering after deducting the underwriting
discount and estimated offering expenses payable by us, assuming an
initial public offering price of $11.00 per share.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
AS OF DECEMBER 31, --------------------------------------
------------------------------------------ PRO FORMA
1995 1996 1997 1998 ACTUAL PRO FORMA AS ADJUSTED
--------- --------- --------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents...................... $ 58 $ 513 $ 388 $ 769 $ 1,402 $ 1,402 $ 39,009
Working capital................................ 734 1,633 4,289 1,319 5,530 5,088 42,695
Total assets................................... 1,083 4,100 11,338 25,483 97,596 104,705 142,312
Notes payable, excluding current portion....... -- -- 2,425 11,989 47,276 48,028 27,778
Capital leases, excluding current
installments................................. -- -- 116 848 1,216 1,216 1,216
Total stockholders' equity..................... 791 2,260 3,432 2,716 18,491 22,789 80,646
</TABLE>

25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

YOU SHOULD READ THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS IN CONJUNCTION WITH "SELECTED CONSOLIDATED FINANCIAL
DATA", THE AGENCY.COM CONSOLIDATED FINANCIAL STATEMENTS AND UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, THE INTERACTIVE SOLUTIONS, QUADRIS
CONSULTING, EAGLE RIVER INTERACTIVE AND TWINSPARK INTERACTIVE PEOPLE FINANCIAL
STATEMENTS, AND THE NOTES TO THOSE STATEMENTS APPEARING ELSEWHERE IN THIS
PROSPECTUS.

OVERVIEW

AGENCY.COM is an international Internet professional services firm. Our
revenues have grown from $2.2 million in 1995 to $26.5 million in 1998 on an
actual basis, and to $70.5 million in 1998 on a pro forma basis giving effect to
our acquisitions. We achieved this growth through significant long-term
relationships with multiple clients; six of our top 10 clients for the first six
months of 1999 have been clients since 1997 or before. At the same time, we have
not been overly dependent on any single client. No client represented more than
approximately 7% of our overall revenues on a pro forma basis in 1998, and,
other than British Airways, no client accounted for more than 10% of our
revenues on an actual basis in 1998. For the six months ended June 30, 1999,
British Airways and Compaq accounted for 14% and 12% of our revenues,
respectively, on an actual basis. We have grown organically and through
strategic acquisitions. We have acquired nine companies while expanding our
geographic reach to 11 locations in the United States and Europe and have made
one minority investment in Singapore. Please see note 9 to the AGENCY.COM
consolidated financial statements for a summary of our operations by geographic
area.

We derive our revenues from services performed under one of three pricing
arrangements: retainer, time-and-materials and fixed-price. The services
performed under any of these arrangements are substantially identical.

We bill and recognize revenues from retainer agreements on a monthly basis
while the agreement is in effect. We believe that retainer arrangements are
indicative of our strong, long-term relationships with clients which yield
significant benefits both to our clients and to us. We believe that we will
achieve greater predictability of revenues and higher revenue growth with
clients who engage us in retainer-based relationships. Retainer agreements are
generally one year in length and include a renewal clause. Typically, retainer
relationships with clients result in additional fixed-price and
time-and-materials projects since retainer arrangements may not cover the full
cost of specific projects. Retainer fees currently represent a small percentage
of our overall revenues, although revenues from clients with whom we have
retainer relationships represent a substantial portion of our overall revenues.
Consistent with our focus on long-term relationships, our goal is to increase
our number of retainer-based arrangements.

We bill and recognize revenues from time-and-materials projects on the basis
of costs incurred in the period. We estimate these costs according to an
internally developed process. This process takes into account the type and
overall complexity of the project, the anticipated number of personnel of
various skill sets needed and their associated billing rates, and the estimated
duration of and risks associated with the project. Management personnel familiar
with the production process evaluate and price all project proposals.

We recognize revenues from fixed-price projects using the
percentage-of-completion method based on the ratio of costs incurred to the
total estimated project costs. Fees are billed to the client over the course of
the

26
<PAGE>
project. We estimate the price for fixed-price projects using the same
methodology as time-and-materials projects. All fixed-price proposals must first
be approved by a member of our senior management team.

Provisions for estimated losses on all three types of contracts are made
during the period in which such losses become probable and can be reasonably
estimated. To date, such losses have not been significant. We report revenue net
of reimbursable expenses.

Our revenues and earnings are affected by a number of factors, including:

- the amount of business developed from existing relationships;

- our ability to meet the changing needs of the marketplace;

- employee retention;

- billing rates;

- our ability to deliver complex projects on time; and

- efficient utilization of our employees.

Many of our business initiatives, including our acquisition strategy, are aimed
at enhancing these factors. Further, we believe that our focus on retainer-based
arrangements will continue to improve the predictability of our
quarter-to-quarter results.

Our expenses include direct salaries and costs, sales and marketing, general
and administrative, depreciation and amortization of tangible assets, and
amortization of goodwill. Direct salaries and costs includes salaries, benefits
and incentive compensation of billable employees. Billable employees are full
time employees whose time spent working on client projects is charged to that
client at agreed upon rates. Billable employees are our primary source of
revenue. Direct costs and salaries also include other direct costs associated
with revenue generation. Sales and marketing expenses include promotion and new
business generation expenses and the salary and benefit costs of personnel in
these functions. General and administrative expenses include the salaries and
benefits costs of management and other non-billable employees, rent, accounting,
legal and human resources costs. Depreciation and amortization expenses
primarily include depreciation of technology equipment, furniture and fixtures,
and leasehold improvements. Amortization of goodwill expenses include charges
for the excess of purchase price over net tangible book value of acquired
companies. Personnel compensation and facilities costs represent a high
percentage of our operating expenses and are relatively fixed in advance of each
quarter.

We incurred losses in 1998 and the first six months of 1999. As of June 30,
1999 we had a retained deficit of approximately $0.6 million.

EBITDA on a pro forma and an actual basis for the six months ended June 30,
1999 was $1.3 million and $3.4 million, respectively, compared to ($642,000) and
$842,000, respectively, for the same period in the prior year. We believe that
the increase in EBITDA will continue as revenues continue to increase, our
margins continue to increase as a result of increased utilization of billable
employees and our fixed costs continue to decrease as a percentage of our
revenue.

We have achieved growth in revenues by pursuing a strategy of increasing
revenues from existing lines of businesses and through augmenting existing lines
of business with strategic acquisitions.

International revenues were $824,000 in 1997 and increased to $7.5 million
in 1998, an increase of 810%. Net loss from international operations was $68,000
in 1997 versus $113,000 in 1998, an increase of 66%.

To date, we have experienced success in organically growing the size and
scale of our business by attracting new clients, attracting new professional
staff and expanding the range and complexity of the services that we offer. We
seek to organically grow our existing offices and lines of business on an
ongoing basis.

27
<PAGE>

STRATEGIC ACQUISITIONS AND INVESTMENTS

In addition to organic growth, a key component of our overall growth
strategy is the acquisition of, or investment in, complementary businesses,
technologies, services and products. We have acquired nine companies since
inception and intend to continue acquiring similar businesses. We acquired
Spiral Media, Online Magic, Ketchum Interactive, The Primary Group, Interactive
Solutions, Quadris Consulting (Quadris became a wholly owned subsidiary of
Interactive Solutions immediately prior to our acquisition of Interactive
Solutions), Eagle River Interactive, Digital Vision, and Twinspark Interactive
People. We have also purchased a minority interest in The Edge Consultants, a
technology and services company based in Singapore, and signed a letter of
intent to acquire an interest in Pictoris Interactive. We are also in
discussions with respect to possible acquisitions of a U.S. based media buying
firm, an interactive television development company based in Denmark, and a U.S.
based interactive direct marketing company.

All of the companies and businesses in which we have acquired a 100%
ownership interest have been incorporated into our operations.

In July 1997, we acquired 51% of Spiral Media, Inc., and in July 1998, we
acquired the remaining 49%. The total consideration for the acquisition was
approximately $6.2 million, consisting of a cash payment of $5.5 million,
relinquishment of debt due from Spiral Media stockholders of $128,000 and the
issuance of 480,626 shares of our common stock valued at $1.12 per share. Spiral
Media created new media services for businesses and consumers by offering
Internet-based and digital media communications strategies and development for
clients.

In October 1997, we acquired 42.5% of Online Magic Limited and acquired the
remaining equity interest in two steps in May 1998 and July 1998. The total
consideration for the acquisition was $2.2 million. The consideration was
comprised of a cash payment of $1.6 million and the issuance of 498,434 share of
our common stock valued at $1.20 per share. Online Magic designed, built and
managed web sites for their clients.

In August 1998, we acquired assets from Ketchum Advertising Inc. The
consideration consisted of a cash payment of approximately $643,000. Ketchum
Interactive was an interactive marketing and branding agency, which developed
interactive communications for clients by utilizing strategic consulting, design
and production.

In August 1998, we acquired assets from Web Partners d/b/a The Primary Group
Inc. In consideration of the assets acquired, we paid approximately $53,220 in
cash. The Primary Group focused on online marketing needs for luxury and style
brands.

In December 1998, we entered into an agreement to acquire up to 60% of The
Edge Consultants PTE. LTD. in a staged transaction. In December 1998, we
acquired 12% of Edge's outstanding shares and in July 1999, acquired an
additional 18%. The total cash consideration for the 30% investment was $3.1
million. The remaining 30% must be purchased prior to January 2002 or our option
will expire. The Edge offers strategic, creative and technology services to its
clients. Its core businesses include Internet and e-commerce applications and
wireless/mobile services. The Edge is a separate legal entity and will be
accounted for under the equity method of accounting.

In April 1999, we acquired all of the issued and outstanding shares of
capital stock of Interactive Solutions Incorporated from its shareholders in
exchange for an aggregate of 4,176,846 shares of our common stock and a warrant
to purchase 3,071,248 shares of our common stock at a purchase price of $0.005
per share. The total consideration of the acquisition was approximately $9.5
million. Interactive Solutions created digital

28
<PAGE>

communications strategies to help its clients increase sales, improve
communications and create brand identities.

In April 1999, we acquired all of the issued and outstanding shares of
capital stock of Eagle River Interactive Inc. in exchange for an aggregate of
3,659,538 shares of our common stock and a warrant to purchase 4,328,752 shares
of our common stock at a purchase price of $0.005 per share. The total
consideration of the acquisition was approximately $9.8 million. Eagle River
created, developed and deployed online marketing strategies to assist a variety
of companies, primarily in the United States, in communicating effectively with
their targeted audiences.

In May 1999, we purchased all of the issued and outstanding shares of
capital stock of Digital Vision Communications Inc. for $1.1 million in cash.
Digital Vision was an interactive securities firm that provided web site design
and development.

In July 1999, we purchased all of the issued and outstanding shares of
capital stock of Twinspark Interactive People B.V. for $700,000 in cash and
1,057,226 shares of our common stock valued at $4.06 per share, of which
1,047,226 shares were issued to the shareholders of Twinspark Interactive People
and 10,000 shares were issued to former employees of Twinspark Interactive
People, for a total aggregate purchase price of $5.0 million. Twinspark
delivered Internet strategies to global organizations including e-commerce and
strategic consultancy, building and maintenance of Web sites, Intranet and
Extranet and enterprise Web site management systems.

We believe each of our acquisitions have supported our ability to grow
rapidly while continually enhancing the quality of services we offer our
clients. Our acquisitions have allowed us to rapidly build our base of
professionals in the context of a tight labor market for experienced technical
and creative professionals. From January 1, 1997, to June 30, 1999, our staff
increased from approximately 60 to approximately 750 employees. The acquired
entities collectively employed approximately 500 individuals at the time we
acquired them. Our broadening geographic coverage allows us to better meet the
needs of our international clients and to attract new clients who seek
integrated services across diverse geographic areas. We have also been able to
expand our service offerings through the acquisition of companies
with complementary products and skill sets. Additionally, we expect to achieve
cost synergies by consolidating management and back-office operations, and
sharing technical infrastructure. Please see "Business-- AGENCY.COM Strategy"
and "--Acquisition and Integration".

We evaluate acquisitions based on numerous quantitative and qualitative
factors. Quantitative factors include historical and projected revenues and
profitability, geographic coverage and backlog of projects under contract.
Qualitative factors include strategic and cultural fit, management skills,
customer relationships and technical proficiency. We used cash as the primary
consideration for our early acquisitions but, more recently, have used our
common stock as the primary consideration. We anticipate that we will use common
stock as the primary form of consideration for future acquisitions.

We fully integrate all acquired companies into our operating organization.
This integration includes business development, delivery of services, managerial
and administrative support, benefits, purchasing and all other areas.

A significant differentiating factor in our growth strategy is that we
manage regional locations based on key success factors rather than traditional
profit-loss statements. In order to facilitate cooperation across our company
and prevent territorial conflicts, we evaluate Regional Presidents on the basis
of key

29
<PAGE>
success factors, including project profitability, utilization, retention, client
satisfaction and revenue per billable employee. We believe that managing by
these key success factors enables our offices to function more effectively as a
team and to jointly take advantage of greater opportunities for synergies and
additional revenues.

All of our acquisitions have been accounted for using the purchase method.
Under the purchase method, the financial data of the acquired entities are
consolidated with our financial results from the effective dates of their
acquisition. For each acquisition, a portion of the purchase price is allocated
to the tangible and identifiable intangible assets acquired and liabilities
assumed based on their respective fair market values on the acquisition date.
The remaining unallocated portion of the purchase price is allocated to
intangible assets, primarily goodwill, and amortized on a straight-line basis
over the estimated period of benefit, which is currently 20 years. We evaluate
the period of benefit on a company-by-company basis. For the year ended December
31, 1998 and the six months ended June 30, 1999, amortization of goodwill
expense was $0.3 million and $0.7 million, respectively. We expect to incur
additional acquisition-related amortization expenses as a result of our
acquisition program.

30
<PAGE>
HISTORICAL RESULTS OF OPERATIONS

The following table sets forth the percentage of revenues of certain items
included in our statement of operations for the periods indicated:

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
------------------ ----------
1996 1997 1998 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT
PERCENTAGE DATA)
Revenues.......................................................................................... 100% 100% 100% 100% 100%
Direct salaries and costs......................................................................... 36 48 60 48 50
---- ---- ---- ---- ----
Gross profit...................................................................................... 64 52 40 52 50
Operating Expenses:
General and administrative...................................................................... 16 30 42 41 35
Sales and marketing............................................................................. -- 4 2 2 4
Amortization of goodwill........................................................................ -- -- 1 1 2
Depreciation and amortization................................................................... 1 2 4 4 7
---- ---- ---- ---- ----
Total operating expenses.......................................................................... 17 36 49 48 48
---- ---- ---- ---- ----
Income (loss) from operations..................................................................... 47 16 (9) 4 2
Interest income (expense), net.................................................................... -- -- (2) (1 ) (3)
Minority interest................................................................................. -- (2) (1) (2 ) --
---- ---- ---- ---- ----
Income (loss) before provision for (benefit from) income taxes.................................... 47 18 (12) 1 (1)
Provision (benefit) for income taxes.............................................................. 22 9 (5) 1 --
---- ---- ---- ---- ----
Net income (loss)................................................................................. 25% 9% (7)% 0% (1)%
---- ---- ---- ---- ----
---- ---- ---- ---- ----
EBITDA (1)........................................................................................ 48% 20% (5)% 7% 11%
---- ---- ---- ---- ----
---- ---- ---- ---- ----
</TABLE>

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

(1) EBITDA represents earning or loss before other income and expense
(consisting of provision (benefit) from income taxes and net interest
expense), depreciation and amortization. We have provided EBITDA because it
is a measure of financial performance commonly used in the Internet
professional services industry and because management believes many
investors use EBITDA as a measure of a company's historical ability to
service its debt since EBITDA shows available cash before debt service and
before deducting non-cash charges, such as depreciation and amortization.
Other companies may calculate EBITDA differently from the way we do. EBITDA
is not a measurement of financial performance under GAAP. We believe you
should not consider EBITDA as an alternative to net income (loss) as an
indicator of our operating performance or as an alternative to cash flow as
a measure of our liquidity. You should be aware that items excluded from the
calculation of EBITDA are significant components in understanding and
assessing our financial performance.

COMPARISON OF THE FISCAL YEARS 1996, 1997 AND 1998

The following discussion relates to our actual operating results for the
periods noted. The operating results discussed include the operations of
acquired companies from the effective dates of their acquisitions. Given that
each year includes revenues and expenses from new acquisitions, we believe that
the operating results for 1998 are not directly comparable to the operating
results for 1997, and, similarly, that 1997 results are not directly comparable
to those for 1996.

REVENUES. Revenues were $13.0 million in 1997 and grew to $26.5 million in
1998, an increase of 104%. Revenues were $6.1 million in 1996. The increase in
revenues reflected

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<PAGE>
growing demand for Internet professional services, increases in the number of
our client relationships, the size of our relationships with existing clients,
billing rates, and number of billable professionals, and the introduction of new
strategic, creative, and technological services to the marketplace.

DIRECT SALARIES AND COSTS. Direct salaries and costs were $6.2 million in
1997 and grew to $15.9 million in 1998, an increase of 156%. Direct salaries and
costs were $2.2 million in 1996. Direct salaries and costs represented 60%, 48%
and 36% of revenues in 1998, 1997 and 1996, respectively. For the years ended
December 31, 1996, 1997 and 1998, there were approximately 45, 90 and 160
employees, respectively, included in direct salaries and costs. The increase in
direct salaries and costs as a percentage of revenues in 1998 compared to 1997
was primarily due to the planned investment in additional employees in
anticipation of future growth. In the future, we expect direct salaries and
costs to increase in absolute dollar terms but to decrease as a percentage of
revenues due to our improved scale and the utilization of billable
professionals.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
were $3.8 million in 1997 and grew to $10.9 million in 1998, an increase of
187%. General and administrative expenses were $1.0 million in 1996. General and
administrative expenses represented 42% of revenues in 1998, 30% in 1997 and 16%
in 1996. The increase in general and administrative expenses in absolute dollar
terms and as a percentage of revenues in 1998 compared to 1997 was the result of
the expansion of the senior management team, an increase in the number of other
non-billable employees and in salary rates, and increases in many other types of
general and administrative expenses in anticipation of future growth and
increasing international reach. This included rent and other expenses incurred
in opening additional offices and hiring additional employees. In the future, we
expect general and administrative expenses to increase in absolute dollars but
to decrease as a percentage of revenues due to our improved scale, utilization
of billable professionals, increased efficiency of non-billable staff and higher
overall revenues.

SALES AND MARKETING EXPENSES. Sales and marketing expenses were $527,000 in
1997 and grew to $596,000 in 1998, an increase of 13%. We did not incur sales
and marketing expenses in 1996. Sales and marketing expenses represented 2% of
revenues in 1998 and 4% in 1997. The decrease in sales and marketing expenses as
a percentage of revenues from 1997 to 1998 was primarily due to higher overall
revenues. The increase of sales and marketing expenses in absolute dollar terms
from 1997 to 1998 was attributable to the increase in the number of sales
personnel and an overall increase in our marketing and branding efforts. We
expect sales and marketing expenses to increase in absolute dollar terms as we
continue to invest in building our brand. We do not anticipate that sales and
marketing expenses will increase significantly as a percentage of revenue in
future periods.

AMORTIZATION OF GOODWILL. Amortization of goodwill was approximately
$25,000 in 1997 and grew to $317,000 in 1998. There was no amortization of
goodwill in 1996. Amortization of goodwill represented 1% of revenues in 1998
and less than 1% of revenues in 1997. The increase in amortization of goodwill
was due to the goodwill resulting from Spiral Media, Online Magic, The Primary
Group and Ketchum acquisitions, all of which were completed during 1998.
Goodwill generated from these acquisitions is being amortized over a twenty year
period. We expect amortization of goodwill to increase in absolute dollar terms
as we acquire additional companies.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses were

32
<PAGE>

$304,000 in 1997 and grew to $1.1 million in 1998, an increase of 262%.
Depreciation and amortization was $61,000 in 1996. Depreciation and amortization
expenses represented 4% of revenues in 1998, 2% of revenues in 1997 and 1% in
1996. The increases in absolute dollar terms from year to year were related to
the investment in, and related depreciation of, technology equipment, furniture
and fixtures, and leasehold improvements, and the depreciation of the assets of
the companies we acquired. We expect these expenses to continue to grow in
absolute dollar terms as we continue to invest in growth and technology and
training to yield more efficient operations.

NET INCOME (LOSS). Net loss for 1998 was $1.8 million compared to net
income of $1.2 million in 1997 and $1.5 million in 1996. The decrease in net
income from period to period was primarily caused by increased direct salaries
and costs, general and administrative expenses and depreciation and
amortization, which together increased at a greater rate than our increase in
revenues, all of which are discussed above.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1999

REVENUES. Revenues were $12.6 million for the six months ended June 30,
1998 and grew to $30.4 million for the six months ended June 30, 1999, an
increase of 141%. The increase in revenues reflected our acquisitions over the
period, growing demand for Internet professional services, addition of new
client relationships, expansion of existing client relationships, increases in
billing rates and the number of billable professionals, and the introduction of
new strategy, creative and technology services to the marketplace.

DIRECT SALARIES AND COSTS. Direct salaries and costs were $6.1 million for
the six months ended June 30, 1998 and grew to $15.1 million for the six months
ended June 30, 1999, an increase of 148%. As a percentage of revenues, direct
salaries and costs increased from 48% for the six months ended June 30, 1998 to
50% for the six months ended June 30, 1999. For the six months ended June 30,
1998 and 1999, there were approximately 200 and 550 employees, respectively,
included in direct salaries and costs. This increase was primarily attributable
to increases in salary rates and the hiring of additional employees.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
were $5.2 million for the six months ended June 30, 1998 and grew to $10.7
million for the six months ended June 30, 1999, an increase of 106%. As a
percentage of revenues, general and administrative expenses decreased from 41%
for the six months ended June 30, 1998 to 35% for the six months ended June 30,
1999. The decrease in percentage terms was primarily attributable to improved
scale. The increase in general and administrative expenses in absolute dollar
terms was the result of an increase in salary rates, an increase in the number
of non-billable employees as we expanded our infrastructure to support growth
and all other types of general and administrative expenses.

SALES AND MARKETING EXPENSES. Sales and marketing expenses were $199,000
for the six months ended June 30, 1998 and grew to $1.3 million for the six
months ended June 30, 1999, an increase of 553%. As a percentage of revenues,
sales and marketing expenses increased from 2% for the six months ended June 30,
1998 to 4% for the six months ended June 30, 1999. Sales and marketing expenses
increased in absolute dollar terms and as a percentage of revenues primarily as
a result of the increase in the number of sales personnel and an overall
increase in our marketing and branding efforts.

AMORTIZATION OF GOODWILL. Amortization of goodwill was $100,000 for the six
months

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<PAGE>
ended June 30, 1998 and grew to $727,000 for the six months ended June 30, 1999,
an increase of 634%. As a percentage of revenues, amortization of goodwill
represented 1% of revenues in the first six months of 1998 and 2% of revenues in
the first six months of 1999. The increase was due to the acquisition of Eagle
River Interactive, Interactive Solutions (including Quadris) and Digital Vision,
the remainder of stock of Spiral Media and Online Magic and the acquisition of
all of the assets of Ketchum Interactive and the Primary Group.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses were
$532,000 for the six months ended June 30, 1998 and grew to $2.0 million for the
six months ended June 30, 1999, an increase of 276%. As a percentage of
revenues, depreciation and amortization represented 4% of revenues in the six
months ended June 30, 1998 and 7% of revenues in the six months ended June 30,
1999. The increases in absolute dollar terms from year to year resulted from
depreciation of growth related infrastructure investments, including technology
equipment, furniture and fixtures and leasehold improvements and the
depreciation of the assets of the companies that we acquired.

NET INCOME (LOSS). Net loss for the six months ended June 30, 1999 was
$411,000 compared to net income of $61,000 for the same period in 1998. The
decrease between the periods was primarily caused by increased direct salaries
and costs, general and administrative expenses, sales and marketing expenses,
and depreciation and amortization, which together increased at a greater rate
than our increase in revenues, all of which are discussed above.

QUARTERLY PRO FORMA RESULTS OF OPERATIONS

The following selected unaudited pro forma results of operations data gives
effect to our acquisitions since January 1, 1998 as if they had occurred on
January 1, 1998. We have included this table and the discussion below to assist
investors in evaluating our financial performance.

The pro forma financial statements do not purport to represent what the
results of our operations or financial condition would actually have been had
the acquisitions in fact occurred on January 1, 1998. The pro forma quarterly
results of operations should not be construed as being representative of future
results of operations. These pro forma amounts include the same adjustments that
are reflected in the pro forma consolidated statement of operations. The
unaudited pro forma consolidated financial data are based upon currently
available information, assumptions and estimates which our management believes
are reasonable. These assumptions and estimates, however, are subject to change,
including adjustments for potential cost savings or other synergies arising from
acquisitions we have made.

Investors should read these pro forma results of operations with the
unaudited pro forma condensed consolidated statement of operations and the
AGENCY.COM consolidated financial statements and unaudited pro forma condensed
consolidated financial statements, the Interactive Solutions, Quadris
Consulting, Eagle River Interactive and Twinspark Interactive People financial
statements, and the notes to those statements appearing elsewhere in this
prospectus.

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<PAGE>
PRO FORMA RESULTS OF OPERATIONS

The following tables set forth pro forma dollar amounts and percentage of
pro forma revenues of certain items included in our statement of operations for
the periods indicated.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1998 1998 1998 1998 1999 1999
--------- -------- --------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PERCENTAGE DATA)
Revenues..................................................... $15,521 $18,467 $18,170 $18,775 $18,847 $ 22,955
Direct salaries and costs.................................... 8,710 9,494 10,675 11,523 10,308 11,631
--------- -------- --------- -------- --------- -----------
Gross profit................................................. 6,811 8,973 7,495 7,252 8,539 11,324
Operating expenses:
General and administrative................................. 6,907 7,801 7,102 8,954 7,372 8,999
Sales and marketing........................................ 613 823 887 1,020 999 1,116
Amortization of goodwill................................... 1,620 2,111 2,138 2,137 2,801 692
Depreciation and amortization.............................. 349 376 342 479 1,219 947
--------- -------- --------- -------- --------- -----------
Total operating expenses..................................... 9,489 11,111 10,469 12,590 12,391 11,754
--------- -------- --------- -------- --------- -----------
Loss from operations......................................... (2,678) (2,138) (2,974) (5,338) (3,852) (430)
Interest expense, net........................................ 625 666 839 727 850 875
Minority interest............................................ 211 70 -- -- -- --
--------- -------- --------- -------- --------- -----------
Loss before benefit from income taxes........................ (3,514) (2,874) (3,813) (6,065) (4,702) (1,305)
Provision for (benefit from) income taxes.................... (930) (857) (1,464) (2,385) (1,305) 44
--------- -------- --------- -------- --------- -----------
Net loss..................................................... $(2,584) $(2,017) $(2,349) $(3,680) $(3,397) $ (1,349)
--------- -------- --------- -------- --------- -----------
--------- -------- --------- -------- --------- -----------
EBITDA (1)................................................... $ (920) $ 279 $ (494) $(2,722) $ 168 $ 1,209
--------- -------- --------- -------- --------- -----------
--------- -------- --------- -------- --------- -----------

Revenues..................................................... 100% 100% 100% 100% 100% 100%
Direct salaries and costs.................................... 56 51 59 61 55 51
--------- -------- --------- -------- --------- -----------
Gross profit................................................. 44 49 41 39 45 49
Operating expenses:
General and administrative................................. 45 42 39 48 39 39
Sales and marketing........................................ 4 5 5 5 5 5
Amortization of goodwill................................... 10 12 11 11 15 3
Depreciation and amortization.............................. 2 2 2 3 6 4
--------- -------- --------- -------- --------- -----------
Total operating expenses..................................... 61 61 57 67 65 51
--------- -------- --------- -------- --------- -----------
Loss from operations......................................... (17) (12) (16) (28) (20) (2)
Interest expense, net........................................ 4 4 5 4 5 4
Minority interest............................................ 2 -- -- -- -- --
--------- -------- --------- -------- --------- -----------
Loss before benefit from income taxes........................ (23) (16) (21) (32) (25) (6)
Benefit from income taxes.................................... (6) (5) (8) (12) (7) --
--------- -------- --------- -------- --------- -----------
Net loss..................................................... (17)% (11)% (13)% (20)% (18)% (6)%
--------- -------- --------- -------- --------- -----------
--------- -------- --------- -------- --------- -----------
EBITDA (1)................................................... (6)% 2% (3)% (14)% 1% 5%
--------- -------- --------- -------- --------- -----------
--------- -------- --------- -------- --------- -----------
</TABLE>

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

(1) EBITDA represents earning or loss before other income and expense
(consisting of provision (benefit) from income taxes and net intererst
expense), depreciation and amortization. We have provided EBITDA because it
is a measure of financial performance commonly used in the Internet
professional services industry and because management believes many
investors use EBITDA as a measure of a company's historical ability to
service its debt since EBITDA shows available cash before debt service and
before deducting non-cash charges, such as depreciation and amortization.
Other companies may calculate EBITDA differently from the way we do. EBITDA
is not a

35
<PAGE>

measurement of financial performance under GAAP. We believe you should not
consider EBITDA as an alternative to net income (loss), as a measure of our
operating performance or as an alternative to cash flow as a measure of our
liquidity. You should be aware that items excluded from the calculation of
EBITDA are significant components in understanding and assessing our
financial performance.

As a result of our limited operating history, rapid growth and the emerging
nature of the markets in which we compete, we believe that quarter-to-quarter
comparisons of results of operations are not necessarily meaningful. Investors
should not rely on the results of any one quarter as an indication of our future
performance. Additionally, quarterly results of operations may fluctuate
significantly in the future as a result of a variety of factors, many of which
are outside of our control.

COMPARISON OF 1998 AND 1999 QUARTERLY PRO FORMA RESULTS OF OPERATIONS

REVENUES. Pro forma revenues increased by 22% in the latest quarter. This
increase primarily reflects the benefits achieved following the completion of
our integration of Spiral Media, Online Magic, Ketchum, Primary Group,
Interactive Solutions and Eagle River. The increase also reflects the following:

- growing demand for Internet professional services in our target market;

- the addition of new client relationships;

- expansion of existing client relationships, increases in billing rates and
the number of billable professionals and their utilization; and

- the introduction of new strategy, creative and technology services to the
marketplace.

Revenues during the prior quarters were relatively stable due to our focus on
the full integration of our acquisitions.

DIRECT SALARIES AND COSTS. Pro forma direct salaries and costs increased in
absolute dollar terms and from the quarter ended March 31, 1998 through the
quarter ended December 31, 1998. This reflected our planned investment in
additional employees from approximately 187 employees as of March 31, 1998 to
approximately 625 as of June 30, 1999. The increase in pro forma direct salaries
and costs in absolute dollar terms and as a percentage of pro forma revenues in
the quarter ended December 31, 1998 was due to increased costs associated with
one-time charges of approximately $690,000 related to the Interactive Solutions
merger. These charges related primarily to one time payments made for accrued
vacation, special bonuses, travel bonuses and fringe benefits. Approximately
$300,000 of these charges were included in general and administrative expenses.
The decrease in these costs as a percentage of revenues from the first two
quarters of 1998 to the first two quarters of 1999 was due to cost savings and
efficiencies achieved upon integration of operations and management.
Year-over-year second quarter direct salaries and costs did not change
materially as a percentage of revenues.

GENERAL AND ADMINISTRATIVE EXPENSES. The overall increase in pro forma
general and administrative expenses was primarily attributable to an increase in
the number of non-billable employees, from 60 as of March 31, 1998 to 190 as of
June 30, 1999, an increase in their salary rates and the expansion of management
infrastructure necessary to support the growth in operations, including the
Spiral Media, Online Magic, Ketchum Interactive and The Primary Group
acquisitions announced in June 1998. The significant increase in pro forma
general and administrative expenses for the quarter ended

36
<PAGE>

December 31, 1998 compared to the quarter ended September 30, 1998 was due to an
increase in bad debt expense of $600,000 primarily attributable to accounts of
clients of Eagle River, one-time charges related to reconciliation of employee
benefits in connection with acquisitions, including payments made for accrued
vacation, special bonus, travel bonus and fringe benefits, and charges
associated with additional staffing.

In addition, bad debt expense increased in 1998 and the six months ended
June 30, 1999 as total accounts receivable and unbilled charges decreased for
Eagle River. This was attributable to the uncollectability of certain accounts
for which Eagle River did not provide any further service. This is not expected
to impact our operations in the future.

SALES AND MARKETING EXPENSES. The overall increase in pro forma sales and
marketing expenses in absolute dollar terms through the second quarter of 1999
was primarily a result of the increase in the number of sales and marketing
personnel from 17 at March 31, 1998 to 25 at June 30, 1999, and an overall
increase in our marketing and branding efforts.

AMORTIZATION OF GOODWILL. Pro forma amortization of goodwill expense
increased in absolute dollar terms through the quarter ended March 31, 1999 due
to goodwill recorded in connection with the Spiral Media, Online Magic, Ketchum
and Primary Group acquisitions. As a percentage of revenues, amortization of
goodwill remained relatively constant through the quarter ended March 31, 1999
as acquired companies contributed revenues constant with acquired goodwill.

DEPRECIATION AND AMORTIZATION. Pro forma depreciation and amortization
generally increased over the period reflecting growth-related infrastructure
investment. On a year-over-year basis, second quarter depreciation and
amortization expenses increased as a percentage of revenue.

NET INCOME (LOSS). Net loss increased for the quarter ended March 31, 1999
compared to the same quarter for the prior year on a pro forma basis primarily
due to increased direct salaries and costs, general and administrative expenses,
sales and marketing expenses and depreciation and amortization, which together
increased at a greater rate than our increase in revenues, all of which are
discussed above. Net loss decreased for the quarter ended June 30, 1999 compared
to the same quarter for the prior year on a pro forma basis primarily due to a
significant reduction in amortization of goodwill and increase in revenues,
which was offset in part by increases in direct salaries and costs, general and
administrative expenses, sales and marketing expenses and depreciation and
amortization.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have funded our operations and investments in property
and equipment through cash from operations, equity financings, borrowings from
Omnicom, and capital leases.

At year end our cash and cash equivalents were $513,000 in 1996, $388,000 in
1997 and $769,000 in 1998, and our cash balance was $1.4 million at June 30,
1999.

Cash provided by operating activities was $902,000 in 1998 compared to cash
provided by operating activities of $632,000 in 1997 and cash provided by
operating activities of $952,000 in 1996. Cash provided by operating activities
in 1998 was primarily due to depreciation and amortization of $1.5 million and
an increase in accounts payable and accrued expenses of $3.2 million offset by a
net loss of $1.8 million, deferred taxes of $1.7 million and an increase in
unbilled charges of $1.6 million. Cash provided by operating activities in 1997
was primarily due

37
<PAGE>

to net income of $1.1 million and an increase in accounts payable and accrued
expenses of $1.2 million offset by a decrease in accounts receivable of $3.3
million. Cash provided by operating activities in 1996 was primarily due to net
income of $1.5 million and deferred taxes of $1.2 million offset by an increase
in accounts receivable of $1.6 million.

Cash used in operating activities was $10.3 million for the six months ended
June 30, 1999 compared to cash provided by operating activities of $941,000 for
the six months ended June 30, 1998. Cash used in operating activities for the
six months ended June 30, 1999 was primarily due to an increase in accounts
receivable of $9.2 million and an increase in unbilled charges of $15.0 million
offset by an increase in accounts payable and accrued expenses of $5.6 million
and an increase in deferred revenue of $5.0 million. This was the result of the
significant increase in our operations due to the acquisition of Eagle River and
Interactive Solutions. Cash used in operating activities for the six months
ended June 30, 1998 was primarily due to a decrease in accounts receivable of
$1.4 million and an increase in accounts payable and accrued expenses of $1.6
million offset by an increase in unbilled charges of $2.9 million.

Cash used in investing activities was $9.6 million in 1998 compared to $3.2
million in 1997 and $515,000 in 1996. Cash used in investing activities in 1998
was primarily the result of capital expenditures of $1.9 million and
acquisitions of $7.7 million. Cash used in investing activities in 1997 was
primarily the result of capital expenditures of $1.6 million and acquisitions of
$1.5 million. Cash used in investing activities in 1996 was primarily the result
of capital expenditures of $515,000.

Cash provided by investing activities was $1.9 million for the six months
ended June 30, 1999 compared to cash used in investing activities of $6.2
million for the six months ended June 30, 1998 primarily due to capital
expenditures and acquisitions, respectively.

Cash provided by financing activities was $9.1 million in 1998 compared to
$2.4 million in 1997 and $18,000 in 1996. Cash provided by financing activities
in 1998 was primarily the result of an increase in borrowings from Omnicom of
$9.6 million. Cash provided by financing activities in 1997 was primarily the
result of an increase in borrowings from Omnicom of $2.4 million. Cash provided
by financing activities in 1996 was primarily the result of the repayment of
shareholder advances offset by a capital distribution.

Cash provided by financing activities was $9.1 million for the six months
ended June 30, 1999 compared to cash provided by financing activities of $5.5
million for the six months ended June 30, 1998. Cash provided by financing
activities for the six months ended June 30, 1998 and 1999 was primarily the
result of an increase in borrowings from Omnicom of $5.6 million and $10.0
million, respectively.

On October , 1999, we entered into an $85.0 million credit facility with
Omnicom Finance, a wholly owned subsidiary of Omnicom, which replaced our
revolving credit line and consolidated all of our previously outstanding
indebtedness due to Omnicom Finance. As of June 30, 1999, we had approximately
$57.2 million due to Omnicom Finance of which $19.8 million was outstanding
under the working capital line of credit and $37.4 million under the acquisition
term loans. The credit facility, which terminates on September 30, 2001,
provides for a $25.0 million term loan facility, a $54.0 million revolving
credit line and a real property lease credit support facility providing letters
of credit and/or guarantees up to $6.0 million in the aggregate. We are required
by the credit facility to use 35% of the net proceeds from this offering, up to
a maximum of $25.0 million, to repay amounts borrowed under the term

38
<PAGE>

loan portion of the new credit facility. This credit facility bears interest at
Omnicom's commercial paper rate plus 1.25%. As of October , 1999, this rate
was %. The credit facility is secured by substantially all of our assets,
including the shares of our subsidiaries, is guaranteed by our domestic
subsidiaries and prohibits us and our subsidiaries from paying dividends other
than in shares of our stock. The credit facility requires compliance with a
number of covenants, including restrictions on asset sales, liens, the
incurrence of debt, making of loans and the repurchase, redemption or other
acquisition of our stock.

As of June 30, 1999 unbilled charges were $17.3 million compared to $2.3
million as of December 31, 1998. This significant increase in unbilled charges
from the prior year was due to our focus on integrating our acquisitions. The
increase in unbilled charges was funded partially from operations and borrowings
from Omnicom. This impacted our liquidity by reducing available borrowings under
our credit facility and increasing our interest expense.

To date, our main sources of liquidity have been cash from operations,
equity financings and borrowings from Omnicom. We believe that on a short-term
basis we will continue to fund our working capital and capital expenditures
through cash flow from operations and additional borrowings from Omnicom. We
believe that on a long-term basis our liquidity will be funded from operations
and, if necessary, additional equity financings or borrowings from Omnicom. We
believe that our current cash, cash equivalents and short-term investments,
available borrowings under our credit facility and the net proceeds from this
offering will be sufficient to meet our working capital and capital expenditure
requirements for at least the next 12 months. However, we cannot assure you that
we will not require additional financing within this time frame or that such
additional financing, if needed, will be available on terms acceptable to us, if
at all.

MARKET RISK

INTEREST RATE RISK. To date, we have not utilized derivative financial
instruments or derivative commodity instruments. We invest our cash in money
market funds, which are subject to minimal credit and market risk. We believe
the market risks associated with these financial instruments are immaterial.

FOREIGN CURRENCY RISK. We face foreign currency risks primarily as a result
of the revenues we receive from services delivered through our foreign
subsidiaries. These subsidiaries incur most of their expenses in the local
currency. Accordingly, our foreign subsidiaries use the local currency as their
functional currency.

We are also exposed to foreign exchange rate fluctuations, primarily with
respect to the British Pound and the Euro, as the financial results of foreign
subsidiaries are translated into United States dollars for consolidation. As
exchange rates vary, these results, when translated, may vary from expectations
and adversely impact net income (loss) and overall profitability. The effect of
foreign exchange rate fluctuation for the year ended December 31, 1998 was not
material.

YEAR 2000 READINESS DISCLOSURE

Many currently installed computer systems and software products are coded to
accept or recognize only two-digit entries in the date code field. These systems
may recognize a date using "00" as the year 1900 rather than the year 2000. As a
result, it is necessary to update the computer systems and/or software used by
many companies and governmental agencies to comply with Year 2000 requirements
or risk system failure or miscalculations causing disruptions of normal business
activities.

39
<PAGE>
We are exposed to the risk that the systems on which we depend to conduct
our operations are not Year 2000 compliant.

STATE OF READINESS

We have completed a preliminary assessment of our Year 2000 readiness and
are conducting ongoing testing and implementation of any necessary upgrades in
order to become Year 2000 compliant. Our assessment and testing has focused on
four areas as follows:

- MISSION CRITICAL SYSTEMS. Our mission critical systems are used for
timekeeping, accounting, and the production of financial statements.
Testing of this system is ongoing and final testing will be completed by
November 1999. We have received a Year 2000 warranty from the vendor who
licenses the mission critical systems to us, however monetary liability
may be limited.

- CRITICAL SYSTEMS. Our critical systems consist of Domain Name Services
(DNS), email, routers and switches, telephone, voice mail systems, and
desktop computers. All critical infrastructure machines have been verified
by their vendors as Year 2000 compliant. In addition, we are testing all
of our desktop computer systems and will install upgrades if appropriate.
Domain Name Services allow computers to find one another on the Internet
by matching alpha-numeric domain names to exact computer network
addresses.

- EXTERNAL AGENTS. Our external agents include vendors and licensors of
other material hardware and software utilized by us. We are in the process
of contacting these vendors and licensors to request the status of Year
2000 readiness for those products. We will continue to attempt to obtain
verification from all remaining distributors, suppliers, and vendors that
their systems are Year 2000 compliant. If we do not receive verification
that the systems are compliant, we will upgrade to compliant products.

- INTERNALLY DEVELOPED PROPRIETARY SOFTWARE. Our internally developed
proprietary software consists of our software and hardware and includes
date-dependent code. We have evaluated and tested proprietary systems used
by us and believe that all material files and systems are Year 2000
compliant. Although we believe that substantially all of the software
developed by us is Year 2000 compliant, we have only performed compliancy
evaluation and testing for the clients that have requested us to do so.

We intend to complete our testing and replace or remediate any non-Year 2000
compliant technologies by the end of November 1999.

In addition, we face non-information technology Year 2000 related risks,
both internally and externally based. Internal non-information technology risks
include disruption to our security and mailing systems, mail room facilities,
fire and backup generator systems. External non-information technology risks
include the possible interruption of electrical power, water, sewage,
telecommunications, mass transportation and garbage collection. If a disruption
in either internal or external non-information technology systems occurs, we
could experience a material disruption in our business similar to other
businesses in our geographic locations.

COSTS

We estimate that the total cost for our Year 2000 compliance efforts will be
approximately $250,000. Most of these expenses relate to the operating costs
associated with time spent by

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<PAGE>
our employees in Year 2000 compliance matters. If we encounter unexpected
difficulties, or we are unable to obtain compliance information from material
third parties, we may need to spend additional amounts to ensure that our
systems are Year 2000 compliant.

RISKS

Although we have received compliance information from many of our material
third-party vendors, we have not received compliance information from all of our
third-party vendors. In addition, it is possible that our third-party vendors
were mistaken in certifying that their systems are Year 2000 compliant. We will
not conduct an end-to-end critical system test until November 1999. If we fail
to fix our internal systems or to fix or replace material third-party software,
hardware or services on a timely basis, we may suffer lost revenues, increased
operating costs and other business interruptions, any of which could have a
material adverse effect on our business, results of operations and financial
condition. Moreover, if we fail to adequately address Year 2000 compliance
issues, we may be subject to claims of mismanagement and related litigation,
which would be costly and time-consuming to defend. Furthermore, if services we
provided a client cause damage or injury to that client because the service was
not Year 2000 compliant, we could be liable to the client for breach of
warranty.

In addition, we cannot assure you that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside our control will be Year 2000 compliant. If those entities fail to be
Year 2000 compliant, there may be a systemic failure beyond our control, such as
a prolonged Internet, telecommunications or electrical failure, which could have
a material adverse effect on our business, results of operations and financial
condition.

CONTINGENCY PLAN

We are engaged in an ongoing Year 2000 testing and have developed a
contingency plan to address the worst-case scenario that might occur if critical
technologies we depend upon actually are not Year 2000 compliant.

FORWARD-LOOKING STATEMENTS

The Year 2000 discussion above is provided as a "Year 2000 Readiness
Disclosure" as defined in the Year 2000 Information and Readiness Disclosure Act
of 1998 (Public Law 105-271, 112 Stat. 2386) enacted on October 19, 1998 and
contains forward-looking statements. These statements are based on management's
best current estimates, which were derived from a number of assumptions about
future events, including the continued availability of resources,
representations received from third parties and other factors. However, we
cannot assure you that these estimates will be achieved, and our actual results
could differ materially from those anticipated. Specific factors that might
cause material differences include:

- the ability to identify and remediate all relevant systems;

- results of Year 2000 testing;

- adequate resolution of Year 2000 issues by governmental agencies,
businesses and other third parties who are our outsourcing service
providers, suppliers, and vendors;

- unanticipated system costs; and

- our ability to implement adequate contingency plans.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 130, "Reporting
Comprehensive Income". This statement establishes standards for reporting

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and display of comprehensive income and its components (revenues, expenses,
gains and losses) in a full set of general-purpose financial statements. SFAS
No. 130 offers alternatives for presentation of disclosures required by the
standard. We adopted this statement in 1998 and the adoption of this statement
did not have an impact on our financial position or results of operations.

In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information." This statement establishes standards for
the way public business enterprises report information about operating segments
in annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial reports
issued to shareholders. The statement also establishes standards for related
disclosure about products and services, geographic areas and major customers.
This statement is effective for financial statements for periods beginning after
December 15, 1997 and need not be applied to interim periods in the initial year
of application. Comparative information for earlier years presented is to be
restated. We currently believe that we operate in one segment and that the
adoption of SFAS No. 131 will not materially affect our current disclosure of
geographic information.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), which provides guidance
for determining whether computer software is internal-use software and on
accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 is effective for fiscal years
beginning after December 31, 1998. We adopted SOP 98-1 in 1999 and there has not
been any material effect on our consolidated financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards of
derivative instruments, including certain derivative instruments embedded in
other contrats, and for hedging activities. We do not currently engage in
derivative activity and do not expect the adoption of this standard to have a
material effect on our results of consolidated operations, financial position or
cash flows.

In July 1999, the FASB approved SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of FASB
Statement No. 133", which amends SFAS No. 133 to be effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000.

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BUSINESS

OVERVIEW

OUR COMPANY

AGENCY.COM is an international Internet professional services firm. We
provide our clients with an integrated set of strategy, creative and technology
services that take them from concept to launch and operation of their Internet
business. We deliver our services through our multidisciplinary teams of
strategy, creative and technology specialists. These services help our clients
create and enhance relationships with their customers, staff, business partners
and suppliers.

We believe that our experience in providing Internet professional services
enhances our ability to meet the needs of clients. Since our inception in 1995,
we have provided services to more than 200 clients, including 3M, British
Airways, Compaq, DIRECTV, Enron, Sprint, Texaco and Unilever. Six of our top 10
clients for the first six months of 1999 have been clients since 1997 or before.
These six clients continue to seek our expertise for additional projects. We
believe that our focus on long-term relationships with clients allows us to
provide a broader and more effective range of services.

We have complemented our organic growth with targeted, strategic
acquisitions. Since 1997, we have acquired nine companies and integrated them
culturally and operationally. We deliver our services through 11 offices located
in the United States and Europe. We also have a minority investment in a
technology company in Asia.

We believe the Internet is particularly effective when used to extend and
enhance the relationship that exists between a company and its customers, staff,
partners and suppliers. We intend to be the Internet professional services firm
of choice for companies comprising Business Week magazine's Global 1000, which
includes companies with the largest market capitalizations worldwide.

INDUSTRY BACKGROUND

The Internet is becoming an integral part of many people's lives.
Individuals and businesses are increasingly using the Internet to find
information, communicate and conduct business. International Data Corporation
("IDC") estimates that the number of Internet users worldwide will grow from an
estimated 142 million at the end of 1998 to approximately 500 million at the end
of 2003. Also, according to IDC, worldwide commerce conducted over the Internet
totaled approximately $50 billion in 1998, with the business to business market
accounting for $35 billion and the consumer market accounting for $15 billion.
The overall market is projected to exceed $1.3 trillion by the end of 2003.

The increasing acceptance of the Internet has created numerous opportunities
for companies that seek to grow and are challenged by highly competitive and
rapidly

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changing markets, and demands for increased efficiencies. Already, companies are
taking advantage of the Internet's opportunities to strengthen customer
relationships, improve operational efficiency and spur product innovation.
Initially, companies developed "read-only," or brochure-ware, Web sites that
lowered marketing and service costs and that increased customer awareness.
Companies later added transaction and commerce capabilities to their online
resources to enable two-way sharing of data and information among businesses and
their constituents, including end-customers, suppliers, business partners and
employees. These transaction and commerce capabilities have changed the business
landscape by introducing new channels, catalyzing competition and prompting new
customer needs.

Today, many companies realize that the Internet is no longer an adjunct to
their operations and is redefining all aspects of their businesses, including
the way they interact with their customers. The Internet enables consumers,
business partners, suppliers and employees to transact on a one-to-one basis
with companies at any time and from any location.

We believe that companies have found that merely enabling online
transactions and commerce does not ensure success in doing business on the
Internet. Consumers want more than the mechanical ability to transact with a
company online. They want to interact with a company that not only markets to
them but is responsive to their needs. By successfully satisfying these needs,
we believe that businesses can build a long-lasting, ongoing interactive
relationship that fosters customer loyalty, increases margins and enables new
markets.

Developing successful Internet businesses that promote interactive
relationships requires a special set of capabilities. Developers of these
businesses must provide integrated strategy, creative and technology services.
In addition, developers must have the ability to understand the needs of
customers and fulfill them. Few companies possess this multi-disciplinary
expertise as it is usually divided into separate information technology,
marketing and planning groups. Further, companies lack the management and
technical infrastructure required to develop and support Internet services.

Therefore, companies seeking to do business on the Internet are increasingly
engaging Internet professional services firms to provide integrated strategy,
creative and technology services. We believe that companies are best served by
firms that have overcome the cultural and operational challenges of integrating
strategy, creative and technology services into a single offering and that have
a proven methodology centered on the needs of customers.

AGENCY.COM SOLUTION

AGENCY.COM provides a broad range of integrated services that enable
businesses to use the Internet and Internet technologies to develop and enhance
long-term interactive relationships with their customers. AGENCY.COM's approach
includes the following key elements:

INTEGRATED FULL-SERVICE OFFERING

We provide integrated strategy, creative and technology services in a
seamless package. We start from the initial assessment of a client's positioning
and needs and work through post-implementation analysis and development. We
believe that our comprehensive integrated service offering results in time and
cost savings for our clients and also increases the likelihood that their
projects will be completed successfully.

INTERNET FOCUS AND EXPERIENCE

Since our founding in 1995, we have focused exclusively on Internet
technologies and their implications for businesses. Our

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Internet focus allows us to best fulfill our clients' needs and continuously
refine our services by staying at the forefront of the Internet's rapid
evolution.

CUSTOMER DRIVEN

In planning, designing and deploying Internet services and strategies, we
base our work on the needs of our clients' customers. We focus on our clients'
customers because these individuals ultimately determine the success of our
clients' Internet businesses. Our approach enables us to establish a solid and
effective base from which our clients may develop their interactive
relationships. We work with our clients to analyze their customers' needs to
create Internet strategies best-suited for the client and these customers. This
analysis includes usability studies.

RELATIONSHIPS WITH CLIENTS

We seek to develop long-term relationships with our clients. We become
familiar with their businesses and work closely with senior management to
understand, predict and address our clients' evolving strategic business needs.
Upon engagement, we assign to the client a dedicated multi-disciplinary team of
professionals which works with our client during each phase of the initial
project and on future projects. We share our experience and knowledge with our
clients to enhance their familiarity with the Internet and its capabilities. We
also establish extranets with our clients to improve the exchange of information
on all ongoing projects.

AGENCY.COM CULTURE

Our culture is based on the principles of honoring the value of individuals
working as a team, growing through learning and knowledge-gathering, embracing
change and encouraging innovation. We recognize that we succeed as a firm only
when clients benefit from our work. We believe that nurturing our culture and
values enables us to deliver innovative solutions and attract and retain top
professionals. Our management and operational infrastructure foster our culture.
For example, substantially all of our employees have an equity stake in the
company through our stock option plan, and we have developed and put into
practice a number of internal mentoring and learning programs.

AGENCY.COM STRATEGY

AGENCY.COM's goal is to build upon our position as an international provider
of Internet professional services. To achieve this goal, we are pursuing the
following strategies:

CONTINUE TO BUILD LONG-TERM RELATIONSHIPS WITH OUR CLIENTS AND OTHER
INTERNATIONAL COMPANIES

We believe that strong, long-term relationships with clients yield
significant benefits both to our clients and to our business. The depth and
breadth of our client relationships are demonstrated by our integral involvement
in developing Internet strategies, including the planning and budgeting process,
for a number of our large clients. In addition, we have retainer-based
relationships with a number of these clients and plan to increase the number of
clients on retainer. We believe that our record of client satisfaction has
contributed to an increase in the amount, scope and complexity of services
requested by many of our clients. As an indication of our success, 18 of our top
20 clients in 1998 continued to engage us in 1999.

FURTHER ENHANCE OUR MULTI-DISCIPLINARY TEAM APPROACH

Because our work requires expert knowledge of multiple disciplines, we
believe that Internet professional services are most effective when delivered
through integrated, multi-disciplinary client teams. We provide all our services
through client-centered teams that include strategy, creative, technology,
project management and client services professionals.

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Our client teams, and the culture of teamwork that they enforce, shape the
overall structure and operation of our company. In order to deliver to our
clients a broad range of sophisticated services on an international basis, all
of our offices operate together as a single, unified organization rather than a
set of competing entities. We will continue to invest in and nurture our
team-based organization in order to better fulfill our clients' needs.

DEVELOP STRONG POSITIONS IN SERVICES TO BENEFIT OUR CLIENTS

We will continue to build strong positions in services such as Internet
advisory, consulting and planning services, Internet commerce and communication
services, and online branding and marketing services. We believe that these
services provide opportunities for high margins and strong growth, and help
differentiate us from our competitors. We have developed, and will continue to
develop, new interactive strategies as our clients' needs evolve and as new
technologies emerge. We are currently working with many emerging technologies
and stay current with industry developments through our dedicated team of
technical specialists who continually evaluate new technologies and develop
innovative strategies. Our future strategies may incorporate technologies such
as wireless devices and devices suited to high bandwidth Internet connections
for transmission of voice, video, data and fax, known as broadband network
devices.

COMPLEMENT OUR ORGANIC GROWTH WITH TARGETED, STRATEGIC ACQUISITIONS

We believe that expanding our skill set, geographic locations and industry
reach through strategic acquisitions will enable us to better serve our existing
clients, attract new clients and take advantage of new markets for our services.
We integrate each acquired company into our operations and culture. All of our
acquisitions have met some or all of the following characteristics:

- cultural fit;

- quality management;

- highly motivated and skilled staff;

- market leadership position in complementary skills and/or in a
strategically important location;

- ability to provide service to a strong client base; and

- strong future revenue growth and profitability.

We have successfully acquired nine companies over the last two years and made
one minority investment in Asia.

EXTEND OUR GEOGRAPHIC REACH

We believe that significant opportunities exist for our services beyond our
current locations, including serving existing and new clients in other markets.
We have expanded, and intend to continue to expand, our geographic presence in
key locations based on our clients' needs and market opportunities. We will
continue to expand through a combination of organic growth and acquisitions.
Extending our geographic reach allows us to better serve our multi-national
clients by providing services locally through our regional offices while taking
advantage of our international resources and knowledge base. We believe our
ability to provide Internet professional services internationally provides us
with a competitive advantage. We currently have offices located in the United
States and Europe, and have an affiliate in Asia.

ATTRACT AND RETAIN THE HIGHEST QUALITY PROFESSIONALS AND FACILITATE EMPLOYEE
DEVELOPMENT THROUGH TRAINING, CULTURE AND SUPPORT

We believe that attracting and retaining high quality professionals is
critical to our success. Our culture is an integral part of our

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ability to attract and retain quality professionals. We provide a stimulating
and nurturing work environment to increase employee satisfaction. We will
continue to invest in knowledge transfer, training and staff development
resources for our employees. In addition, we offer a competitive compensation
package, including broad-based equity ownership through our stock option plan.

ENHANCE AWARENESS OF AGENCY.COM AS AN INTERNATIONAL PROVIDER OF INTERNET
PROFESSIONAL SERVICES

AGENCY.COM has built a recognized brand in the Internet professional
services market. Our internal marketing and corporate communications teams
promote our brand through speaking engagements, event sponsorships, interviews
and industry conferences. We receive additional promotion from media coverage
and from the numerous awards we have received for our work. Our brand enables us
to more effectively attract clients, employees and acquisition candidates. We
seek to be the most recognized Internet professional services firm and to be
among the few firms that the Global 1000 consider when choosing an Internet
professional services provider.

AGENCY.COM SERVICES

We provide fully integrated Internet professional services to our clients
that enhance the development of their interactive relationships. We conceive and
implement Internet services and strategies that add value to our clients'
businesses. Each client benefits from our fully integrated service offering
delivered by a team of strategy, creative and technology professionals. Each
engagement has a project manager who coordinates and oversees the team. The
project manager reports to the relationship manager who has direct
responsibility for the client relationship. The following is a description of
the primary components of our service offerings:

STRATEGIC SERVICES

AGENCY.COM helps clients translate their corporate goals and objectives into
Internet strategies. We work closely with our clients to understand and analyze
their businesses. We help our clients formulate and execute their Internet
strategies in the context of their business and marketing goals, operational
methods and success criteria. Our strategic services include assisting our
clients in:

- establishing the operational guidelines and management structure necessary
to execute their Internet strategies;

- helping clients to formulate Internet strategies to reach new customers;

- reducing the costs of serving existing customers;

- improving the efficiency of internal operations; and

- promoting customer loyalty and designing appropriate and innovative ways
to extend our clients' brands on the Internet.

INTERNET COMMERCE AND COMMUNICATION SERVICES

We help our clients use the Internet as an effective means of communicating
and transacting with customers. We create an Internet environment for our
clients that encompasses the entire customer relationship, including:

- introducing relevant, customized information, products and services;

- demonstrating the benefits of their products and services and gaining
customer acceptance;

- facilitating transactions; and

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- providing ongoing service tailored to the needs of and based on the
feedback from each customer.

SYSTEMS INTEGRATION

We design, develop and implement the technical architecture and systems that
support our clients' Internet strategies. We provide the data integration and
transaction processing systems required for functional transaction and
commerce-focused resources. We often integrate Internet-based technologies with
our clients' older information technology systems, such as legacy and
client-server systems. We also adapt and develop custom software solutions and
build add-on components to our clients' existing software applications. Systems
integration projects have included the integration of sales systems, accounting
systems and inventory systems to function over the Internet.

EMERGING AND OTHER TECHNOLOGIES

The Internet is constantly changing. AGENCY.COM employs emerging
technologies and capitalizes on new media developments to provide services that
improve its clients' businesses. For example, we provide our clients with
broadband and multimedia capabilities through our dedicated film, audio and
video (FAV) group, and provide clients with interactive television services
through our dedicated iTV group. These applications include live, realtime
Internet-based video broadcasts, known as Web-casting, motion graphics, music
and streaming media. We work with many emerging technologies and stay current
with industry developments through our dedicated team of technical specialists
who continually evaluate new technologies and develop innovative services.

AGENCY.COM COMPASS METHODOLOGY

[GRAPHIC DEPICTING THE AGENCY.COM COMPASS METHODOLOGY]

Our "Compass" methodology guides project management and execution. We
believe this methodology enables us to provide consistent quality on all
engagements and maximizes the value we deliver to our clients. Compass is
scalable and handles projects of all types, sizes and geographic boundaries. Our
process follows four distinct phases-- DISCOVERY, DESIGN, PRODUCTION AND
DEPLOYMENT--and incorporates a system of checks and balances to ensure that our
clients' expectations for the quality of our work are met at each stage. We
refine our methods within Compass's four phases based on input from clients and
client teams. We also integrate the best practices of the companies we acquire
into Compass.

DISCOVERY

During the Discovery phase, we assess the client's positioning and needs,
with an emphasis on the client's customers, and analyze the tasks and resources
required to deliver an effective Internet strategy. Based on this understanding,
we develop an initial plan for designing and completing the project. AGENCY.COM
works closely with the client to formulate and finalize the strategy and
services to be provided.

DESIGN

During the Design phase, we define the creative components, technical design
and information architecture. These components are integrated and represented in
a detailed Design document, which is reviewed by the client at numerous stages.
We build a prototype and conduct usability testing during

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this phase to ensure that the design is best suited to the client's needs. The
final design document serves as a blueprint for the ensuing phases.

PRODUCTION

During the Production phase, we develop and integrate all of the creative,
technical and information components. We then test the system jointly with the
client and optimize the performance of the hardware and software. At the end of
this phase, we deliver to our client a product that is ready for deployment.

DEPLOYMENT

During the Deployment phase, we formally "launch" the client's Internet
system following all final testing and acceptance. We also educate and train our
client to use and maintain the finished application and, where appropriate,
transfer full control of the product to our client. We finish projects with a
post-implementation evaluation, including measurement against initial benchmarks
and a client evaluation of AGENCY.COM's work. Following the completion of a
project, we document non-proprietary knowledge and experiences, such as revised
work plans or enhanced knowledge of a particular technology, through
post-engagement, internal reviews. This information is then disseminated to our
employees both through our internal intranet and specific training sessions. By
broadening our professionals' knowledge base and improving their understanding
of their field, we are able to assist them in better serving client needs.

Following the completion of the Deployment phase, at the request of the
client, the AGENCY.COM client team often returns to the Discovery phase in order
to further develop and evolve our client's Internet business.

PEOPLE AND CULTURE

We believe that our people and culture represent a significant competitive
advantage and that our ability to scale innovation and creativity is at the core
of our success to date. To successfully compete in the future, we must continue
to identify, recruit, hire and retain outstanding professionals. We continually
nurture, develop and evolve a culture that supports innovation and creativity.

RECRUITING, RETAINING AND GROWING

We promote and support each employee's personal growth through a variety of
career development programs. Internal knowledge management resources gather the
collective experience of client teams and individuals. Informal, internal
educational programs expose staff to new experiences. Examples include InspireU,
a collection of employee-led training courses, and URBAN DESIRES, a Web-zine
owned by our founders that is used to explore advanced and artistic interactive
experiences. More formal programs, involving internal and external resources,
focus growth along specific career tracks. Examples include seminars with
outside experts and multi-day training workshops.

Recruiting and training are important to us. A dedicated recruitment group
works with management to fulfill staffing objectives on a regional and
international basis. New hires are commonly obtained through referrals from
current and former staff as well as from recruiters and self-initiated
referrals.

Once we have hired an employee, our focus shifts to retention. In addition
to offering competitive compensation, we believe that we retain employees by
offering them a meaningful career path. Each employee is assigned a career
manager who provides regular coaching and helps the employee to establish goals
and objectives and to achieve them. Employees are reviewed by supervisors,
co-workers and employees they supervise in a 360-degree review process that is
integral to our team approach.

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SCALING INNOVATION AND CREATIVITY

We believe that possessing a single, unified culture in all offices
internationally is critical to fulfilling our business objectives. We pursue a
number of initiatives to emphasize and reinforce our culture and values. We
encourage regional managers to share resources across offices. Our client teams
combine individuals with experience in a variety of backgrounds to collaborate,
innovate and deliver services as a single unit. We instill and maintain our
culture throughout our company by promoting our core values:

- - We succeed only when our clients benefit from our work

- - We deliver excellence with the highest standards of integrity

- - We honor the dignity and value of individuals working as a team

- - We celebrate diversity of people, ideas and cultures

- - We seek to grow through learning and knowledge gathering

- - We embrace change and encourage innovation

CLIENTS AND CASE STUDIES

We provide Internet professional services to a variety of clients in a range
of industries. We focus on long-term relationships with Global 1000 companies.
For the year ended December 31, 1998, our two largest clients each provided
approximately 7% of our revenues on a pro forma basis, and our top ten clients
provided approximately 36% of our revenues on a pro forma basis. For the six
months ended June 30, 1999, our top ten clients provided approximately 50% of
our revenues on a pro forma basis. For the six months ended June 30, 1999, each
of British Airways, Compaq and Sprint accounted for more than 10% of our
revenues on a pro forma basis. For the year ended December 31, 1998, British
Airways accounted for more than 10% of our revenues on an actual basis. The
following list is a representative cross-section of our clients:

<TABLE>
<S> <C> <C>
3M Countrywide SmithKline-Beecham
Armstrong World DIRECTV Sprint
Industries FT Group (Financial Texaco
British Airways Times) Unilever
Colgate-Palmolive Enron
Compaq Salomon Smith Barney
</TABLE>

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BRITISH AIRWAYS: COMPREHENSIVE SERVICES

We began our relationship with British Airways in 1996 with a redesign and
redevelopment of its existing Web site. From that initial project, this
relationship has evolved to now include advising on the strategic, operational,
management, technological and creative elements of British Airways' Internet
strategy. We work with British Airways out of our New York and London offices,
as well as a number of other locations. We have expanded British Airways' online
commerce efforts, united its broad product range and global sales channels, and
extended its customer service operations online in a manner consistent with its
high-quality reputation.

[GRAPHIC DEPICTING SCREENSHOTS OF
BRITISH AIRWAYS' WEB SITE]

<TABLE>
<S> <C> <C> <C>
ONLINE BRANDING SYSTEMS DEVELOPMENT E-COMMERCE RELATIONSHIP
ENHANCEMENT

Extend one of the Establish a Create brand Enhance
world's most transaction appropriate selling relationships
respected brands infrastructure that experiences that between British
online; translate it enables sales, open new channels Airways and its
for the new medium service and for purchasing customers with
distribution realtime,
personalized
customer support
</TABLE>

We have provided to British Airways a wide range of services. Illustrative
work includes:

- working with British Airways staff and senior management to devise and
execute an Internet strategy;

- creating strategies and processes for managing sales, distribution and
service for multiple channels;

- establishing companywide guidelines so autonomous business groups can
create Internet resources;

- enabling online customer service;

- developing an immersive, branded selling experience; and

- introducing the use of interactive TV as a medium for sales, distribution
and service.

Today, British Airways customers have access to customer service, flight
information

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and ticket sales 24 hours a day, seven days a week. British Airways believes its
Internet initiatives have successfully extended its brand and enhanced its
reputation for superior customer service. In May, 1999, British Airways was
judged one of the 100 "hottest companies on the Net" by BUSINESS 2.0, a United
States magazine that covers the Internet industry and new technologies. British
Airways has won numerous awards for its Internet presence, including the
designation by CIO Magazine as one of the top 50 Internet sites of 1999, the
1998 @d:tech Gold award for "Best Direct Marketing Web Site" and the 1997
Advertising Age award for "Best Interactive Site".

We continue to work with British Airways, developing strategies and
fulfilling its needs for Internet services around the world.

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DIRECTV: IMPROVING OPERATIONS WITH EASE

DIRECTV is one of the nation's leading providers of digital television
entertainment with more than 7 million customers, including customers
subscribing to the PRIMESTAR by DIRECTV medium-power digital broadcast service.
We began our relationship with DIRECTV by creating a floppy disk-based
client-server application for order processing. Working with DIRECTV, we have
developed further applications that have improved the quality and decreased the
operation costs of DIRECTV's computerized ordering systems.

[GRAPHIC DEPICTING SCREENSHOTS OF
DIRECTV'S WINDOWS-BASED PROGRAMS AND WEB SITE]

<TABLE>
<S> <C> <C> <C>
TECHNICAL E-COMMERCE, PRE- WEB WEB-BASED SEAMLESS SALES
ARCHITECTURE

Design and implement Create an e- commerce Provide a web Use computer system
a technical dial up system for a interface to the to automate cross-
architecture that non- technical system for greater selling and
allows distribution audience accessibility and up-selling for the
and sales through lower costs sales force
multiple computer
systems
</TABLE>

Our work for DIRECTV includes:

- creating a client-server application for then partner United States
Satellite Broadcasting, Inc. (USSB), to eliminate order processing
complications associated with its retailers' reliance on facsimile
transmission. Our solution to the often inaccurate and costly fax and data
entry method used by these companies was EASe, a client-server software
application which allowed retailers to enter orders and establish
subscriber accounts directly with USSB through a digital modem connection.
EASe provided automated customer sign-up and support functionalities
capable of guarding against fraudulent order entry. The system also
provided systematic feedback that enabled retailers to determine their
eligibility for commission credit;

- modifying the EASe system (prior to DIRECTV's merger with USSB in early
1999) to include business orders from DIRECTV, a significant
accomplishment given DIRECTV's presence in more than 26,000 retail
locations nationwide;

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- designing and developing a technical architecture that integrated the EASe
application with several enterprise systems. The integration allowed
DIRECTV to serve both its retail dealers and new customers more
efficiently by transmitting new customer accounts directly to DIRECTV's
billing system and thereby expediting the set-up process; and

- distributing the EASe software application to retailers over the Internet,
further cutting costs and facilitating business between DIRECTV and its
retailers.

Using EASe software from AGENCY.COM, DIRECTV dealers enjoyed a simplified
customer account set-up and benefited from fewer processing errors. As a result,
DIRECTV believes that it has achieved increased retailer loyalty and reduced
operating costs. Today, the majority of small-to-medium DIRECTV retailers and
franchise dealers use the EASe application to transmit new customer orders to
DIRECTV. One of our currently scheduled projects is to extend EASe to
Web-enabled access, which will allow dealers to work with the system on-line.
The projects illustrate the continuation of our successful relationship with
DIRECTV.

SPRINT: LEVERAGING THE INTERNET

In late 1997, Sprint first enlisted the help of AGENCY.COM to redesign its
existing web site. That initial relationship has expanded to include a range of
strategy, creative and technology services that support Sprint's online sales,
distribution, marketing and customer service efforts. We currently deliver
services to Sprint through client teams collaborating in three offices across
the United States. Through our relationship with Sprint, we have helped to
improve Sprint's ability to conduct business online, assisted in enabling Sprint
to present a consistent brand image across a diverse product range and begun the
process of helping Sprint to better fulfill the needs of customers online.

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<PAGE>
[GRAPHIC DEPICTING SCREENSHOTS OF
SPRINT'S WEB SITE]

<TABLE>
<S> <C> <C> <C>
IDENTIFY ESTABLISH GUIDELINES COORDINATE SUPPORT NEW
OPPORTUNITIES DEVELOPMENT TRANSACTIONS

Identify strategic Develop creative and Participate in a Add additional
opportunities to technical guidelines management group to transaction
leverage the that enable Sprint steer and coordinate opportunities for
Internet for a divisions to development across Sprint customers,
diverse range of interact with their markets and such as selecting
customers customers in a divisions new services
consistent way
</TABLE>

Sprint has enlisted the help of AGENCY.COM for a number of projects.
Illustrative work includes:

- redesigning the sprint.com Web site interface, information architecture
and branding to provide a more consistent and unified online experience
and to serve the needs of distinct customer groups across multiple Sprint
business units, as well as working with Sprint to maintain and update the
site;

- creating a set of Internet standards and guidelines for Sprint that allows
content and services to be added to Sprint's online presence in a
consistent manner;

- assisting Sprint in identifying and evaluating opportunities for
additional, enhanced interactions with customers and for increased
e-commerce and customer service offerings for customers;

- participating in the Sprint steering organization that sets the strategic
Internet agenda across Sprint business units;

- developing an online strategy to support the launch of Sprint's ION
service, an integrated, broadband network that can support voice, video,
data, fax and Internet communications over a single connection; and

- enhancing online sales of Sprint products and services through online
media and marketing strategy and implementation.

As a result of this relationship, both Sprint and we believe that Sprint has
significantly improved its online presence and success in doing business on the
Internet. Both Sprint and we believe that Sprint has achieved substantial
increases in online sales, reduced cost of sales, more effective branding and a

55
<PAGE>
significant increase in customer satisfaction with Sprint's online services.

We continue to work with Sprint to anticipate the needs of its customers
online and to improve, extend and enhance its Internet presence.

SALES AND MARKETING

We seek to generate revenues from our existing and new clients. We continue
to work with many of our early clients. We target the Global 1000, top private
companies and new e-businesses.

EXISTING RELATIONSHIPS

We focus on long-term relationships with our clients. To facilitate this, we
assign a relationship manager to each of our clients. This relationship manager
leads the client engagement and proactively works with the client to refine and
further develop its Internet strategies. Our client team, led by a relationship
manager, identifies areas for potential business growth and positions AGENCY.COM
as the provider of these services.

NEW BUSINESS DEVELOPMENT

To target new clients, we have more than 20 New Business Development
professionals located in our regional offices who seek to develop relationships
with companies that have businesses that can benefit from Internet services and
strategies, are willing to make a significant commitment to pursuing interactive
opportunities and are located in the same geographic regions as our offices.

MARKETING EFFORTS

Our marketing program focuses on extending our brand, generating incremental
revenue and increasing our visibility. We supplement our marketing efforts with
our marketing and technology alliances. Marketing and technology alliances
provide mutually beneficial staff cross-training opportunities and business
development opportunities to enhance the services we provide to our clients and
to increase our technical awareness and internal capabilities.

ACQUISITIONS AND INTEGRATION

We evaluate potential acquisitions based on strategic and geographic fit.
After determining that an acquisition candidate meets one of these two criteria,
we then focus on its cultural fit. We target companies that will help us become
the leading global provider of Internet professional services. Acquired
companies benefit from our management expertise, international infrastructure,
long-term client focus, track record, brand awareness and brand strength.

ACQUISITIONS

Since our founding in 1995, we have acquired the following companies:

- Spiral Media, completed in July 1998;

- Online Magic, completed in July 1998;

- Ketchum Interactive, completed in August 1998;

- Web Partners d/b/a The Primary Group, completed in August 1998;

- Interactive Solutions, completed in April 1999;

- Quadris Consulting, completed in April 1999;

- Eagle River Interactive, completed in April 1999;

- Digital Vision, completed in May 1999; and

- Twinspark Interactive People, completed in July 1999.

In addition to these acquisitions, we own 30% of The Edge Consultants and
have an option to acquire an additional 30% of its equity.

INTEGRATION

We are able to provide the flexible, seamless service demanded by our
clients by fully integrating acquired companies, both operationally and
culturally. One of our key strengths is our ability to successfully instill our
culture after we acquire new companies. Our

56
<PAGE>
acquisition and integration approach includes the following elements:

- MANAGEMENT INTEGRATION. We integrate members of the acquired company's
senior management into AGENCY.COM's management. This allows the senior
management of the acquired company to learn our culture, increases the
effectiveness of the acquired company's integration and increases loyalty
to the combined organization.

- STAFF INTEGRATION. We integrate the acquired company's staff into our
existing structure. Strategy, creative and technology personnel are
assigned, where geography permits, to existing client teams in order to
integrate new skill sets into our knowledge base. We also meld the sales
staff of the acquired company into our New Business Development
organization. Additionally, where appropriate, we transfer staff between
new and old offices to further allow staff to share experiences and learn
from one another.

- OPERATIONAL INTEGRATION. We have designed our financial and information
technology infrastructure to be easily scalable. This allows us to quickly
integrate a new acquisition into our financial control and accounting
structure and into our existing information technology network. We
integrate the phones, computers and other technology into our existing
infrastructure in order to provide a seamless working environment between
AGENCY.COM and the acquired company. This fosters the feeling of one firm
and one culture and enables collaboration among offices.

- INTERNAL COMMUNICATION. We use internal publications, Web-casts, online
chats and intranet initiatives as well as frequent office visits by our
senior management to facilitate communication between older and newer
offices and to encourage camaraderie among our employees.

- METHODOLOGY INTEGRATION. We study the methodology and practices of the
acquired company and may incorporate them into our Compass methodology,
allowing us to use the best practices of the combined entity.

COMPETITION

We compete with other providers of Internet professional services. The
market for these services has grown dramatically in recent years as a result of
the increasing use of the Internet by businesses for communication, marketing
and information dissemination to their customers, suppliers, business partners
and employees. Our market is intensely competitive, highly fragmented and
subject to rapid technological change. We expect competition to persist and
intensify in the future. Our current and potential competitors include:

- Internet professional services firms, such as iXL, Organic Online,
Proxicom, Razorfish, Scient, USWeb/CKS and Viant;

- traditional strategic consulting firms, such as Booz-Allen & Hamilton,
Boston Consulting Group and McKinsey;

- interactive advertising agencies, such as Modem Media.Poppe Tyson and
OgilvyOne;

- professional services groups of computer equipment companies, such as
Hewlett-Packard and IBM;

- traditional systems integrators, such as Andersen Consulting, Cambridge
Technology Partners, EDS and Sapient; and

- internal resources of current or potential clients.

We believe the principal competitive factors in our market are:

- breadth and integration of service offerings;

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<PAGE>
- cost and quality of service;

- client relationships;

- technical knowledge and creative skills;

- reliability;

- ability to attract and retain quality professionals;

- brand recognition;

- reputation; and

- vertical industry knowledge.

We believe that we compete favorably with respect to these factors, but we
cannot assure you that we will continue to do so in the future.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

We regard our copyrights, service marks, trademarks, trade secrets and other
intellectual property as critical to our success. Unauthorized use of our
intellectual property by third parties may damage our brand and our reputation.
We rely on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with our employees, customers,
partners and others to protect our intellectual property rights. Despite our
precautions, it may be possible for third parties to obtain and use our
intellectual property without our authorization. Furthermore, the validity,
enforceability and scope of protection of intellectual property in
Internet-related industries is uncertain and still evolving. The laws of some
foreign countries do not protect intellectual property to the same extent as do
the laws of the United States.

We pursue the registration of our trademarks in the United States and
internationally in France, Germany, the Netherlands, Singapore and the United
Kingdom. We may not be able to secure adequate protection of our trademarks in
the United States and other countries. We currently hold trademark registrations
in the United States, France and Germany for the AGENCY.COM trademark and have
applied for the registration of "Interactive Relationship Management" in the
United States, the United Kingdom and Singapore. Effective trademark protection
may not be available in all the countries in which we conduct business.

Our application to register the AGENCY.COM trademark in the United Kingdom
was initially denied. Although we have filed an appeal, the outcome of the
appeal is uncertain. We have also filed to register the AGENCY.COM trademark in
the United Kingdom together with our logo and believe that this registration
will be accepted. We have also filed applications to register the AGENCY.COM
trademark in Singapore and the Netherlands, however, we have not received any
responses to date. As we begin operations in new countries, it is our intention
to file trademark applications for the AGENCY.COM mark in these countries. We
cannot assure you that any of these applications will be accepted.

Policing unauthorized use of our marks is difficult and expensive. In
addition, it is possible that our competitors will adopt product or service
names similar to ours, thereby impeding our ability to build brand identity and
possibly leading to customer confusion.

We may be subject to legal proceedings and claims from time to time relating
to the intellectual property of others in the ordinary course of our business.
We may incur substantial expenses in defending against these third-party
infringement claims, regardless of their merit. Successful infringement claims
against us may result in substantial monetary liability or may materially
disrupt the conduct of our business.

EMPLOYEES

As of June 30, 1999, we had 748 full-time employees. None of our employees
are represented by a labor union. We have experienced no work stoppages and we
believe our relationship with our employees is good.

FACILITIES

Our principal executive offices are currently located in a leased facility
in New

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<PAGE>
York, New York, consisting of an aggregate of approximately 37,000 square feet.
We expect to move our principal executive offices by January 2000 to another
leased facility in New York, New York, consisting of an aggregate of
approximately 100,000 square feet. The lease for this new office space expires
on April 15, 2014. We also lease space for our operations in California,
Colorado, Illinois, Massachusetts, New Jersey, Oregon and Texas, as well as in
France, the Netherlands and the United Kingdom. We believe that our existing
facilities, together with our newly-leased facilities, are adequate for our
current needs and that additional space will be available as needed.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

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<PAGE>
MANAGEMENT

The following table sets forth the executive officers, directors, director
nominee and key employees of AGENCY.COM, their ages and the positions they hold:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- --- ------------------------------------------------------------------------
<S> <C> <C>
Chan Suh......................... 38 Chairman of the Board, Chief Executive Officer and President
Kyle Shannon..................... 34 Chief Creative Officer and Director
Kenneth Trush.................... 44 Executive Vice President, Chief Financial Officer, Treasurer and
Director
Janet Ambrosi Wertman............ 37 Executive Vice President, General Counsel and Secretary
Kevin Rowe....................... 40 President, North America
Eamonn Wilmott................... 38 President, Europe
Larry Krakauer................... 43 Chief Technology Officer
Gerald Bruce Redditt............. 48 Director
John D. Wren..................... 47 Director
Jeffrey Rayport.................. 39 Director-Nominee
</TABLE>

CHAN SUH co-founded AGENCY.COM in February 1995 and has served as the President,
Chief Executive Officer and Chairman of the board of directors since that time.
From June 1992 to January 1995, Mr. Suh was with Time Inc., most recently as
Marketing Director of VIBE MAGAZINE, where he was involved in the
conceptualization and launching of Pathfinder, Time Warner's service on the
World Wide Web, and created Vibe Online, the online service for VIBE MAGAZINE.
Prior to joining Time Inc., Mr. Suh held various marketing positions at Conde
Nast and NewsCorp. In addition, since February 1995, Mr. Suh has been publisher
of URBAN DESIRES, one of the first online magazines for art and culture.

KYLE SHANNON co-founded AGENCY.COM in February 1995 and has served as Chief
Creative Officer and a director since that time. From April 1993 to January
1995, Mr. Shannon served as Manager, Image Processing for YAR Communications, a
communications agency specializing in multicultural advertising. With a B.F.A.
in performance from Penn State University, Mr. Shannon pursued a professional
acting and screenwriting career from 1987 to 1995. In addition, in November
1994, Mr. Shannon launched URBAN DESIRES, one of the first online magazines for
art and culture, and founded the World Wide Web Artists' Consortium, a group
dedicated to exploring new media in New York City.

KENNETH TRUSH has served as AGENCY.COM's Executive Vice President and Chief
Financial Officer since July 1997 and has served as a director since September
1996. From November 1984 to June 1997, Mr. Trush owned his own certified public
accounting firm. Before founding his own accounting firm, Mr. Trush was a
Supervisor at Ernst & Young LLP.

JANET AMBROSI WERTMAN has served as Executive Vice President, General Counsel
and Secretary of AGENCY.COM since January 1998. From 1988 until August 1997, Ms.
Ambrosi Wertman was an attorney with the law firm of Davis & Gilbert, most
recently as a partner in the firm.

KEVIN ROWE has served as AGENCY.COM's President of North American operations
since April 1999 and has acted in this capacity since June 1998, presiding over
Eagle River Interactive, an interactive agency acquired by AGENCY.COM. From
December 1996 to April 1999, Mr. Rowe served as President of Eagle River
Interactive. From October 1991 to

60
<PAGE>
September 1996, Mr. Rowe was Executive Vice President and General Manager of the
Midwest Region of MCI Systemhouse Inc., a division of MCI Communications Inc.
Prior to joining MCI Systemhouse, Mr. Rowe held various positions at Andersen
Consulting, most recently as an Associate Partner, and Ferrin Corporation.

EAMONN WILMOTT has served as President of European operations since June 1999
and acted as Managing Director of the London office of AGENCY.COM from May 1997
until June 1999. Prior to joining AGENCY.COM, Mr. Wilmott served as Director of
Online Magic Limited, an interactive agency that he founded in the United
Kingdom in 1994, which was acquired by AGENCY.COM in July 1998. Prior to
founding Online Magic, Mr. Wilmott founded, and served as President of Supernet
International, one of the world's first commercial Internet service.

LARRY KRAKAUER has served as Chief Technology Officer since April 1999 and has
acted in such capacity since July 1998, presiding over Quadris Consulting until
it was acquired by AGENCY.COM in April 1999. From January 1995 to April 1999,
Mr. Krakauer served as President of Quadris Consulting, which began as a
division of JYACC, Inc., an information technology consulting company and became
an independent company in 1998. From 1989 to 1995, Mr. Krakauer served in
various capacities at JYACC.

GERALD BRUCE REDDITT has served as a director of AGENCY.COM since January 1999.
Since May 1998, Mr. Redditt has served as Executive Vice President of Omnicom.
From 1995 to 1998, Mr. Redditt served as Head of Communications and Governmental
Relations at Sony Pictures Entertainment. Prior to 1995, Mr. Redditt served for
nine years in various capacities at GTE, a global telecommunications company,
most recently as Head of Corporate Communications. Mr. Redditt has been
nominated to our board of directors by Communicade, a subsidiary of Omnicom,
pursuant to a shareholders agreement.

JOHN D. WREN has served as a director of AGENCY.COM since September 1996. Mr.
Wren has served as Chief Executive Officer of Omnicom since January 1997 and has
also been President of Omnicom since September 1995. From May 1993 until June
1998, he served as Chairman and Chief Executive Officer of the Diversified
Agency Services division of Omnicom. Mr. Wren was appointed to Omnicom's Board
of Directors in May 1993. Mr. Wren also serves on the Board of Directors of
Razorfish Inc. Mr. Wren has been nominated to our board of directors by
Communicade, a subsidiary of Omnicom, pursuant to a shareholders agreement.

JEFFREY RAYPORT has agreed to serve as a director of AGENCY.COM upon the
completion of the initial public offering. Mr. Rayport has been an associate
professor of business administration in the Service Management Unit at the
Harvard Business School since September 1991. Mr. Rayport has developed a
specialized course on "Managing Marketspace Service Interfaces", which focuses
on electronic commerce and technology-mediated service channels. Mr. Rayport
currently serves as director on the boards of Global Sports, Be Free and Andrews
McMeel Universal.

CLASSIFIED BOARD OF DIRECTORS

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

61
<PAGE>

directors by filling the vacancies with its own nominees. and
will be Class I directors whose terms expire at the 2000 annual
meeting of shareholders; and will be class II
directors whose terms expire at the 2001 annual meeting of shareholders; and
and will be class III directors whose terms
expire at the 2002 annual meeting.

Messrs. Redditt and Wren had originally been elected to our board of
directors under an agreement we entered into with Communicade, a wholly-owned
subsidiary of Omnicom, in order for Omnicom as our majority stockholder to have
an active role in board decisions. The provision of the agreement providing
Communicade with the right to select two directors does not extend to future
elections.

BOARD COMMITTEES

The audit committee reports to the board regarding the appointment of our
independent public accountants, the scope and results of our annual audits,
compliance with our accounting and financial policies and management's
procedures and policies relative to the adequacy of our internal accounting
controls. Upon the completion of this offering, the audit committee will consist
of Jeffrey Rayport and a director to be determined later. In compliance with
Nasdaq National Market rules and regulations, our audit committee will consist
of at least two independent directors within 90 days of the closing of this
offering.

The compensation committee of the board of directors reviews and makes
recommendations to the board regarding our compensation policies and all forms
of compensation to be provided to our executive officers and directors. In
addition, the compensation committee reviews bonus and stock compensation
arrangements for all of our other employees. Upon the completion of this
offering, the members of the compensation committee will be Jeffrey Rayport and
a director to be determined later. No interlocking relationships exist between
our board of directors or compensation committee and the board of directors or
compensation committee of any other company, nor has any interlocking
relationship existed in the past. Our compensation committee will consist of at
least two directors, both of whom will be independent. This permits options
granted by the compensation committee to receive favorable treatment under
applicable federal securities and tax law.

DIRECTOR COMPENSATION

We do not currently compensate directors for attending meetings of the board
of directors or committee meetings of the board of directors, but we do
reimburse directors for their reasonable travel expenses incurred in connection
with attending these meetings.

Under the automatic option grant program of the 1999 Stock Option/Stock
Issuance Plan, which is described below under "--1999 Stock Option/Stock
Issuance Plan", and subject to the last sentence of this paragraph, each
individual who is serving as a non-employee member of the board of directors on
the date the underwriting agreement is executed and who has not previously been
in our employ will receive at that time an option to purchase 50,000 shares of
common stock with an exercise price equal to the public offering price set forth
on the cover page of this prospectus. Each individual who first joins the board
of directors after the completion of this offering as a non-employee member of
the board of directors will also receive an option grant for 50,000 shares of
common stock at the time of his or her commence of service on the board of
directors, provided such individual has not otherwise been in our prior employ
and has not received options to purchase, in the aggregate, more than 40,000
shares of

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<PAGE>
common stock in the last 12 months. In addition, at each annual meeting of
stockholders, beginning with the 2000 annual meeting, each individual who is to
continue to serve as a non-employee member of the board of directors will
receive an option to purchase 15,000 shares of common stock, provided such
individual has served as a non-employee board member for at least six months.

Mr. Rayport has agreed to be named as a director-nominee for this prospectus
and to serve as a director of AGENCY.COM upon the closing of this offering. Upon
agreeing to serve as a director, Mr. Rayport was issued options to purchase
50,000 shares of our common stock at an exercise price of $1.225 per share under
our 1999 Stock Option/Stock Issuance Plan. These options become exercisable at
the time Mr. Rayport is elected as a director of AGENCY.COM.

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EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid to our Chief
Executive Officer, Chief Creative Officer and our four most highly compensated
executive officers (collectively, the "named executive officers") during the
fiscal year ended December 31, 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------------
------------------------ SHARES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS OPTIONS COMPENSATION
- -------------------------------------------- ----------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C>

Chan Suh.................................... $ 75,000 $ -- -- $ 563(1)
Chief Executive Officer

Kyle Shannon................................ 75,000 -- -- 563(1)
Chief Creative Officer

Kenneth Trush............................... 150,000 2,000 -- 1,140(2)
Chief Financial Officer

Kevin Rowe (3).............................. 250,000 320,000 -- 12,685
President, North America

Eamonn Wilmott.............................. 107,868(4) -- -- --
President, Europe

Larry Krakauer (5).......................... 146,410 39,646 92,572 13,421
Chief Technology Officer
</TABLE>

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

(1) AGENCY.COM paid $563 in matching 401(k) contributions to each of Messrs. Suh
and Shannon.

(2) Mr. Trush received $378 as payment for long-term disability premiums and
$762 as matching 401(k) contributions.

(3) Mr. Rowe was appointed AGENCY.COM's President, North America, in April 1999.
The amounts stated above were paid to Mr. Rowe by Eagle River Interactive.
Mr. Rowe received a car allowance of $7,800, a matching 401(k) contribution
of $2,000 and $2,885 for unused time off.

(4) Mr. Wilmott's annual salary was paid in pounds sterling (L). The dollar
amount reflects a conversion rate of 1.6595 dollars per pound sterling as of
December 31, 1998.

(5) Mr. Krakauer was appointed AGENCY.COM's Chief Technology Officer in April
1999. The amounts stated above were paid to Mr. Krakauer by Quadris
Consulting. Mr. Krakauer received a $3,316 matching 401(k) contribution and
$10,105 for unused time off.

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<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth grants of stock options for the year ended
December 31, 1998 to each of the named executive officers. We have never granted
any stock appreciation rights. The potential realizable value is calculated
based on the term of the option at its time of grant. It is calculated assuming
that the fair market value of common stock on the date of grant appreciates at
the indicated annual rate compounded annually for the entire term of the option
and that the option is exercised and sold on the last day of its term for the
appreciated stock price. These numbers are calculated based on the requirements
of the Securities and Exchange Commission and do not reflect our estimate of
future stock price growth.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
PERCENT OF FAIR RATES
NUMBER OF TOTAL MARKET OF STOCK PRICE
SECURITIES OPTIONS VALUE PER APPRECIATION
UNDERLYING GRANTED TO EXERCISE SHARE ON FOR OPTION TERM
OPTIONS EMPLOYEES PRICE PER DATE EXPIRATION --------------------
NAME GRANTED IN 1998 SHARE OF GRANT DATE 5% 10%
- -------------------------------------- ----------- --------------- ----------- ------------- ---------- --------- ---------
Chan Suh.............................. -- --% $ -- $ -- -- $ -- $ --
Kyle Shannon.......................... -- -- -- -- -- -- --
Kenneth Trush......................... -- -- -- -- -- -- --
Kevin Rowe............................ -- -- -- -- -- -- --
Eamonn Wilmott........................ -- -- -- -- -- -- --
Larry Krakauer (1).................... 185,144 9.8 0.44 0.44 12/30/08 51,232 129,832
</TABLE>

(1) These represent options issued to Mr. Krakauer while he was an employee of
Quadris Consulting which converted into AGENCY.COM options upon the closing
of the acquisition.

FISCAL YEAR-END OPTION VALUES

The following table sets forth information concerning the number and value
of unexercised options held by each of the named executive officers at December
31, 1998. There was no public trading market for the common stock as of December
31, 1998. Accordingly, the values set forth below have been calculated on the
basis of an assumed initial public offering price of $11.00 per share, less the
applicable exercise price per share, multiplied by the number of shares
underlying the options.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END AT FISCAL YEAR-END
--------------------------------- -----------------------------
<S> <C> <C> <C> <C>
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------- ------------ ------------------- ------------- --------------
Chan Suh............................................ -- -- $ -- $ --
Kyle Shannon........................................ -- -- -- --
Kenneth Trush....................................... 278,730 -- 2,745,491 --
Kevin Rowe.......................................... -- -- -- --
Eamonn Wilmott...................................... -- -- -- --
Larry Krakauer...................................... 185,144 -- 1,955,121 --
</TABLE>

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EMPLOYMENT AGREEMENTS

In April 1999, we entered into employment agreements with each of Messrs.
Suh, Shannon, Trush, Rowe, Wilmott and Krakauer and Ms. Ambrosi Wertman.

Mr. Suh's employment agreement provides for an annual base salary of
$155,000. If Mr. Suh's employment agreement is terminated for reasons other than
for cause or if Mr. Suh should resign for good reason, he will be entitled to
receive his annual base salary payable through March 31, 2004 if the date of
termination occurs on or prior to March 31, 2003 or one year from the date of
termination, if such termination occurs after March 31, 2003. In addition, all
stock options that would vest during this period are accelerated to vest and
become exercisable prior to the date of termination. Mr. Suh's employment
agreement has a term ending in March 2004, but will continue indefinitely until
terminated on one year's notice by either party.

Mr. Shannon's employment agreement provides for an annual base salary of
$150,000. If Mr. Shannon's employment agreement is terminated for reasons other
than for cause or if Mr. Shannon should resign for good reason, he will be
entitled to receive his annual base salary payable through March 31, 2004 if the
date of termination occurs on or prior to December 31, 2003 or 90 days from the
date of termination, if such termination occurs after December 31, 2003. In
addition, all stock options that would vest during this period are accelerated
to vest and become exercisable prior to the date of termination. Mr. Shannon's
employment agreement has a term ending in March 2004, but will continue
indefinitely until terminated on 90 days' notice by either party.

Mr. Rowe's employment agreement provides for an annual base salary of
$150,000. Mr. Rowe is entitled to receive an annual bonus of $100,000. In
addition, based on criteria agreed to by Mr. Rowe and the chief executive
officer, Mr. Rowe will be eligible to receive an annual discretionary
performance-based bonus of up to $250,000. Mr. Rowe also receives an automobile
allowance of $600 per month. If Mr. Rowe's employment agreement is terminated
for reasons other than for cause or if Mr. Rowe should resign for good reason,
he will be entitled to receive his annual base salary payable through April 30,
2002 if the date of termination occurs on or prior to January 31, 2002 or 90
days from the date of termination, if such termination occurs after January 31,
2002. In addition, all stock options that would vest during this period are
accelerated to vest and become exercisable prior to the date of termination. Mr.
Rowe's employment has a term ending in April 2002 but will continue indefinitely
until terminated on 90 days' notice by either party.

At the time that Mr. Rowe became an employee of AGENCY.COM, we made a
restricted stock grant to him of 80,690 shares of our common stock. Provided Mr.
Rowe remains in our continuous employ, 33 1/3% of the restricted shares will
automatically vest on each of the first three anniversaries of the date of
grant. If Mr. Rowe retires or his employment is involuntarily terminated prior
to any of the first three anniversaries, the pro rata portion of the number of
restricted shares that would have vested as of such termination date will vest.
The board of directors has sole discretion to increase the number of shares that
will vest on retirement or involuntary termination.

Messrs. Trush, Wilmott and Krakauer and Ms. Ambrosi Wertman have employment
agreements with substantially the same terms. Messrs. Trush and Krakauer receive
annual base salaries of $150,000 and Ms. Ambrosi Wertman receives an annual base
salary of $120,000. Mr. Wilmott receives an annual base salary of L93,050, which
is approximately $150,000. Each agreement has a term ending on March 31, 2002,
but will continue indefinitely until terminated on 90 days' notice by either
party. If any of these persons should

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resign for good reason or are terminated for reasons other than for cause, all
stock options which would have vested during the term of the agreement will
automatically vest. In addition, in cases of termination other than for cause or
resignation for good reason, he or she will be entitled to receive his or her
annual base salary payable through March 31, 2002 if the date of termination
occurs on or prior to December 31, 2001 or 90 days from the date of termination,
if termination occurs after December 31, 2001.

Each executive officer serves at the discretion of the Board of Directors
and holds office until his or her successor is elected and qualified or until
his or her earlier resignation or removal.

1999 STOCK OPTION/STOCK ISSUANCE PLAN

INTRODUCTION

The 1999 Amended and Restated Stock Option/Stock Issuance Plan is the
successor program to our 1996 Stock Option Plan and 1997 Stock Option Plan. The
1999 plan was initially adopted by our board of directors and our stockholders
in February 1999 and became effective as of that date. All outstanding options
under our 1996 Stock Option Plan and 1997 Stock Option Plan will be transferred
to the 1999 plan upon the closing of this offering, and no further option grants
will be made under the predecessor plans. The transferred options will continue
to be governed by their existing terms. All outstanding options currently under
our 1996 and 1997 plans are currently exercisable in full. Except as otherwise
noted, the transferred options have substantially the same terms as those for
grants to be made under the discretionary option grant program of the 1999 plan.

SHARE RESERVE

9,676,178 shares of our common stock have been authorized for issuance under
the 1999 plan. This share reserve consists of the number of shares carried over
from the 1996 and 1997 plans plus an additional increase of 8,823,266 shares.
The share reserve will automatically increase on the first trading day in
January each year, by an amount equal to 3% of the total number of shares of
common stock outstanding on the last trading day of the prior year, but in no
event will this annual increase exceed 1,500,000 shares. In addition, no
participant in the 1999 plan may be granted stock options, separately
exercisable stock appreciation rights or direct stock issuances for more than
1,100,000 shares of common stock in total in any calendar year.

PROGRAMS

The 1999 plan has three separate programs:

- the discretionary option grant program, under which our board or
compensation committee may grant eligible individuals in our service (1)
options to purchase shares of our common stock at an exercise price
determined by the plan administrator and (2) stock appreciation rights;

- the stock issuance program, under which eligible individuals may be issued
shares of common stock upon the attainment of performance milestones, upon
the completion of a period of service or as a bonus for past services; and

- the automatic option grant program, under which option grants will be made
at periodic intervals to eligible non-employee board members to purchase
shares of common stock at an exercise price equal to the fair market value
of those shares on the grant date.

The individuals eligible to participate in our 1999 plan include our
officers, employees, board members and consultants.

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ADMINISTRATION

The discretionary option grant and stock issuance programs will be
administered by our compensation committee. This committee will determine which
eligible individuals are to receive option grants or stock issuances under those
programs, the time or times when the grants or issuances are to be made, the
number of shares subject to each grant or issuance, the status of any granted
option as either an incentive stock option or a nonstatutory stock option under
the federal tax laws, the vesting schedule to be in effect for the option grant
or stock issuance and the maximum term for which any granted option is to remain
outstanding. The administration of the automatic option grant program will be
self-executing in accordance with its terms.

PLAN FEATURES

The 1999 plan includes the following additional features:

- Options granted under the plan may be exercised by payment in cash or (i)
by payment of shares of our common stock valued at fair market value on
the exercise date or (ii) through a same-day sale program without any cash
outlay by the optionee.

- The compensation committee will have the authority to cancel outstanding
options with the consent of the holder under the discretionary option
grant program, including any transferred options from our 1996 and 1997
plans, in return for the grant of new options for the same or different
number of options shares with an exercise price per share based upon the
fair market value of our common stock on the new grant date.

- Stock appreciation rights will provide the holders with the election to
surrender their outstanding options for a payment from AGENCY.COM equal to
the fair market value of the shares subject to the surrendered options
less the exercise price payable for those shares. We may make the payment
in cash or in shares of our common stock.

- Limited stock appreciation rights will automatically be included as part
of each grant made under the automatic option grant program. Options with
this feature may be surrendered to us upon the successful completion of a
hostile tender offer for more than 50% of our outstanding voting stock or
a change in the majority of our board through one or more contested
elections. In return for the surrendered option, the optionee will be
entitled to a cash distribution from us in an amount per surrendered
option share based upon the fair market value per share upon the date of
surrender or, if in connection with a hostile tender offer, the highest
price per share of our common stock paid in that tender offer.

CHANGE IN CONTROL

The 1999 plan includes the following change in control provisions which may
result in the accelerated vesting of outstanding option grants and stock
issuances:

- In the event that we are acquired by merger or asset sale or a board-
approved sale of more than 50% of our stock, each outstanding option under
the discretionary option grant program which is not to be assumed or
continued by the successor corporation will immediately become exercisable
for all the option shares, and all outstanding unvested shares will
immediately vest, except to the extent our repurchase rights with respect
to those shares are assigned to the successor corporation.

- The compensation committee will have complete discretion to grant one or
more options which will become exercisable for all the option shares in
the event those options are assumed in

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<PAGE>
the acquisition but the optionee's service with AGENCY.COM or the
acquiring entity is subsequently terminated. The vesting of any
outstanding shares under the stock issuance program may be accelerated
upon similar terms and conditions.

- The compensation committee may grant options and structure repurchase
rights so that the shares subject to those options or repurchase rights
will immediately vest in connection with a successful tender offer for
more than 50% of our outstanding voting stock or a change in the majority
of our board through one or more contested elections. Such accelerated
vesting may occur either at the time of such transaction or upon the
subsequent termination of the individual's service.

AUTOMATIC OPTION GRANT PROGRAM

Each eligible individual who is serving as a non-employee board member on
the date the underwriting agreement for this offering is executed will
automatically receive on such date an option to purchase 50,000 shares of our
common stock. Each eligible individual who first becomes a non-employee board
member at any time after this offering will automatically receive on the date of
his or her appointment, an option to purchase 50,000 shares of our common stock.
A non-employee board member will receive an option grant on the underwriting
agreement date for this offering or when he or she first joins the board only if
he or she (i) has not been in the prior employ of AGENCY.COM, (ii) had not
received options to purchase more than 40,000 shares of our common stock in the
12 month period preceding the underwriting agreement date for this offering or
the date of the initial appointment or election and (iii) is not a
representative of, or affiliated with, any of our shareholders who, directly or
indirectly, own 30% or more of our voting stock. On the date of each annual
stockholders meeting following this offering, each individual who is to continue
to serve as a non-employee board member will automatically be granted an option
to purchase 15,000 shares of our common stock, provided he or she has served on
the board for at least six months and is not a representative of, or affiliated
with, any of our shareholders who, directly or indirectly, own 30% or more of
our voting stock.

Each automatic grant will have a term of ten years, subject to earlier
termination following the optionee's cessation of board service. The option will
be immediately exercisable for all of the option shares; however, any unvested
shares purchased under the option will be subject to repurchase by us, at the
exercise price paid per share, should the optionee cease board service prior to
vesting of those shares. The shares subject to each 50,000 share initial
automatic option grant will vest over a four-year period in successive equal
annual installments upon the individual's completion of each year of board
service over the four-year period measured from the option grant date. Each
15,000 share subsequent automatic option grant will vest upon the individual's
completion of one year of board service measured from the option grant date.
However, the shares subject to each automatic grant will immediately vest in
full upon certain changes in control or ownership of AGENCY.COM or upon the
optionee's death or disability while a board member.

The board may amend or modify the 1999 plan at any time, subject to any
required stockholder approval. The 1999 plan will terminate no later than
January 31, 2009.

ASSUMED OPTION PLANS

Pursuant to the terms of the merger agreement between AGENCY.COM and
Interactive Solutions, we assumed the Quadris Consulting 1998 Equity Incentive
Plan and all outstanding options thereunder and the Interactive Solutions
Incorporated 1996 Stock

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Option Plan and all outstanding options thereunder. In connection with the
merger, the plans were terminated, however, the assumed options outstanding at
the time of such termination will continue to be governed by their existing
terms. 1,399,410 shares of AGENCY.COM common stock have been reserved for
issuance pursuant to the assumed options. The exercise price per share under
each plan was determined by the Quadris Consulting board or the Interactive
Solutions board in its discretion and was based upon the fair market value of
the stock at the time of grant. Incentive options granted under the plans have
an exercise price per share not less than 100% of the fair market value at the
time of grant. The exercise price for any options granted the plans may be paid
in cash or, after the initial public offering, in shares of our common stock
valued at fair market value on the exercise date. In the event that we are
acquired by merger or asset sale, each outstanding option under the plans which
is not assumed by the acquiring company will immediately become exercisable for
all the option shares, and all outstanding unvested shares will immediately
vest.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

OMNICOM'S ORIGINAL INVESTMENT IN AGENCY.COM

In September 1996, Communicade, Inc. (f/k/a JWL Associates Corp.), a wholly
owned subsidiary of Omnicom, paid $11.7 million for an aggregate of 6,272,278
shares of the then outstanding shares of our common stock from the holders of
our outstanding shares, Chan Suh, Kyle Shannon, Kenneth Trush and Paul Galli.
Communicade's interest in AGENCY.COM as a result of this transaction was 40% of
the outstanding common stock of AGENCY.COM. Communicade also consented to the
creation of a stock option plan, which provided AGENCY.COM the ability to issue
up to 10% of AGENCY.COM's equity in the form of stock options.

Under a shareholders agreement entered into by these parties in connection
with Communicade's investment:

- these individuals granted Communicade options to purchase additional
shares sufficient to give Communicade 51% or 80% of AGENCY.COM's
outstanding shares, depending on the circumstances;

- the parties agreed to a board of five members, two of whom would be
designated by Communicade as long as it owned less than 50% of
AGENCY.COM's outstanding capital stock; and

- the parties agreed that as long as Communicade owned less than 51% of
AGENCY.COM's common stock, specified transactions would require
Communicade's prior consent.

This shareholders agreement with Communicade was superseded by a new
shareholders agreement entered into in April 1999 which will terminate on the
closing of this offering. Under this new agreement, Communicade's options to
acquire additional shares were removed and the working capital line was
increased to $10.0 million. The other material provisions of the 1996
shareholders agreement such as the acquisition line, the director nomination
rights and the size of the board, and Communicade's consent rights on specified
transactions were continued on similar terms. Messrs. Redditt and Wren, the
executive vice president and chief executive officer of Omnicom, respectively,
also serve as directors of AGENCY.COM.

OMNICOM FINANCING ARRANGEMENTS

On October , 1999, we entered into a new $85.0 million credit facility
with Omnicom Finance, a wholly owned subsidiary of Omnicom, which replaced our
revolving credit line and consolidated all of our previously outstanding
indebtedness due to Omnicom Finance. The credit facility, which terminates on
September 30, 2001, provides for a $25.0 million term loan facility, a $54.0
million revolving credit line and a real property lease credit support facility
providing letters of credit and/or guarantees up to $6.0 million in the
aggregate. We are required by the credit facility to use 35% of the net proceeds
from this offering, subject to a maximum of $25.0 million, to repay amounts
borrowed under the term loan portion of the new credit facility. This credit
facility bears interest at Omnicom's commercial paper rate plus 1.25%. The
credit facility is secured by substantially all of our assets including the
shares of our subsidiaries, is guaranteed by our domestic subsidiaries and
prohibits us and our subsidiaries from paying dividends other than in shares of
our stock. The credit facility requires compliance with a number of covenants,
including restrictions on asset sales, liens, the incurrence of debt, making of
loans and the repurchase, redemption or other acquisition of our stock.

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<PAGE>

Under the 1996 shareholders agreement with Communicade, Communicade agreed
that it, or Omnicom or its affiliates, would lend AGENCY.COM $1.0 million on a
revolving basis for its working capital needs. Substantially all of AGENCY.COM's
assets, including the shares of its subsidiaries, were pledged to secure this
working capital line. Communicade also agreed that it, or Omnicom or its
affiliates, would provide financing to AGENCY.COM to finance "new media"
acquisitions approved by Communicade or its designated directors. Interest on
the revolving credit line and the acquisition line accrued on a non-cash basis
and was payable when the line terminated. As discussed above, this agreement was
superceded in April 1999. The credit agreement provisions under the shareholders
agreement were terminated upon the effectiveness of the new credit facility.

ACQUISITION OF OMNICOM SUBSIDIARIES

In August 1998, AGENCY.COM purchased certain assets and assumed certain
liabilities from Ketchum Advertising Inc., a wholly owned subsidiary of Omnicom,
relating to its Ketchum Interactive business. The purchase price was $643,000 in
cash.

In December 1998, Communicade purchased 60% of Interactive Solutions' shares
from its former President for a purchase price of $1.6975 per share. Before the
AGENCY.COM-Interactive Solutions merger, Communicade sold to a group of
AGENCY.COM employees, Quadris employees and Eagle River Interactive employees,
including all of AGENCY.COM's executive officers, a portion of these repurchased
shares aggregating 4.47% of Interactive Solutions' outstanding shares. The
purchase price was $1.6975 per share, for an aggregate purchase price of
$412,492. Communicade owned substantially all of Interactive Solutions'
remaining outstanding shares.

In April 1999, Interactive Solutions merged with Quadris Consulting, a
company in which it held preferred stock. The transaction was valued at $1.9
million. The Quadris preferred stock held by Interactive Solutions was
convertible into 60% of Quadris's outstanding common stock. Quadris's
stockholders, other than Interactive Solutions, received Interactive Solutions
shares in the merger. Immediately after this merger, Interactive Solutions
merged with AGENCY.COM.

Pursuant to the merger with AGENCY.COM, the Interactive Solutions
stockholders other than Communicade received an aggregate of 330,860 shares of
AGENCY.COM common stock and the former Quadris stockholders received an
aggregate of 1,244,534 shares of AGENCY.COM common stock. The aggregate value of
these shares was approximately $1.9 million. AGENCY.COM also assumed $12.7
million of indebtedness owed by Interactive Solutions to Omnicom and assumed the
Quadris and Interactive Solutions stock option plans covering options now
exercisable for an aggregate of 1,399,410 shares of AGENCY.COM common stock. In
connection with this merger, Communicade received 2,596,452 shares of common
stock and a 20-year warrant to purchase 3,071,248 shares of AGENCY.COM common
stock at an exercise price of $0.005 per share. The transaction was valued at
$9.5 million. Following the consummation of this transaction, Communicade held
35.4% of our outstanding shares of common stock, in addition to the shares of
common stock underlying their warrants. The warrant provides that if Communicade
and Omnicom beneficially own in the aggregate less than 50% of AGENCY.COM's
outstanding shares of common stock at the time of exercise, the warrant may be
exercised only to the extent that the number of shares of common stock
beneficially owned after such exercise remains less than 50% of the outstanding
shares.

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In April 1999, AGENCY.COM merged with Eagle River Interactive, a wholly
owned subsidiary of Omnicom. In connection with the merger, AGENCY.COM assumed
$17.4 million of indebtedness owed by Eagle River Interactive to Omnicom.
Pursuant to this merger, Omnicom received 3,659,548 shares of AGENCY.COM common
stock and a 20-year warrant to purchase 4,328,752 shares of AGENCY.COM common
stock at an exercise price of $0.005 per share. Following this transaction,
Omnicom, together with Communicade, held 49.9% of our outstanding shares of
common stock, in addition to shares of common stock underlying its and
Communicade's warrants. The transaction was valued at approximately $9.8
million. This value was established in July 1998 at the time the transaction was
announced. Omnicom negotiated the merger with AGENCY.COM's directors, other than
Communicade's two nominees. As a result of these negotiations, each company was
valued based on a multiple of revenues, and a discount was applied to Eagle
River Interactive's value based on its losses. The warrant issued to Omnicom
provides that if Communicade and Omnicom beneficially own in the aggregate less
than 50% of AGENCY.COM's outstanding shares of common stock at the time of
exercise, the warrant may be exercised only to the extent that the number of
shares of common stock beneficially owned after such exercise remains less than
50% of the outstanding shares. In September 1997, a wholly owed subsidiary of
Omnicom acquired Eagle River Interactive's assets for an aggregate of $13.5
million, which includes cash paid at closing and additional payments based on
Eagle River Interactive's earnings.

At the time of the AGENCY.COM-Eagle River merger, Eagle River settled
obligations due by it under an earn-out provision from an earlier transaction
with certain employees, including Kevin Rowe. These obligations to Mr. Rowe were
settled by delivering 4,084 shares of AGENCY. COM common stock to Mr. Rowe. In
connection with this settlement, Rowe released Communicade, Omnicom, Eagle River
and any or their affiliates from any further obligations.

OMNICOM REGISTRATION RIGHTS

In October 1999, we entered into a registration rights agreement with
Omnicom. Under the registration rights agreement, from time to time after 180
days after the date of this prospectus, Omnicom may, on up to three occasions,
require us to register for sale under the securities laws all or a portion of
their shares of AGENCY.COM common stock. In addition, if at any time we propose
to file a registration statement under the securities laws with respect to any
class of equity securities, Omnicom may require us to include in the
registration as many shares as it shall request, subject to reduction, based on
the opinion of the managing underwriter of the offering. The registration rights
do not expire. We may not issue registration rights to any other person that are
senior in right to those of Omnicom under the registration rights agreement
without Omnicom's consent. We have agreed to bear all expenses associated with
the registration of Omnicom's securities, other than underwriting discounts and
commissions and fees of Omnicom's counsel.

ACQUISITIONS AND INVESTMENTS FINANCED
BY OMNICOM

As of the date of this prospectus, AGENCY.COM has approximately $41.1
million plus accrued interest outstanding under the acquisition line of credit
provided by Omnicom. See "--Omnicom Financing Arrangements". The table below
sets forth the amount borrowed for each acquisition of or investment in a "new
media" company that AGENCY.COM funded with a loan from Communicade or assumed in
connection with an acquisition or investment:

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<TABLE>
<CAPTION>
ACQUISITION OR INVESTMENT
- -------------------------------------------------------------------------- AMOUNT BORROWED
------------------
(IN THOUSANDS)
<S> <C>
Spiral Media.............................................................. $ 5,480
Online Magic.............................................................. 1,450
Ketchum Interactive....................................................... 643
The Primary Group......................................................... 53
The Edge Consultants...................................................... 1,527
Eagle River Interactive (Omnicom debt assumed)............................ 17,407
Interactive Solutions (Omnicom debt assumed).............................. 12,691
Digital Vision............................................................ 1,100
Twinspark Interactive People.............................................. 700
----------
Total............................................................... $ 41,051
----------
----------
</TABLE>

AGREEMENT WITH UNDERWRITER

In the past, we provided Internet professional services to Salomon Smith
Barney pursuant to an agreement negotiated at arm's length. We entered into this
agreement prior to our selection of the underwriters for this offering. Our
revenues from this contract were $131,000 in 1998 and $95,000 for the six months
ended June 30, 1999.

OTHER TRANSACTIONS

AGENCY.COM provides services on an informal basis to URBAN DESIRES, an
online magazine for art and culture. URBAN DESIRES was founded by Kyle Shannon,
our Chief Creative Officer and a director, and is owned by Mr. Shannon and Chan
Suh, our Chairman, Chief Executive Officer and President. We billed URBAN
DESIRES approximately $345,976, $244,219, $115,000 and $78,000 in 1996, 1997,
1998 and in the first six months of 1999, respectively, for our services and are
providing services to URBAN DESIRES currently.

In September 1996, each of Messrs. Suh and Shannon agreed with Communicade
not to sell any portion of his interest in URBAN DESIRES to any competitor of
Communicade or Omnicom.

It is our current policy that all transactions with officers, directors, 5%
stockholders and their affiliates be entered into only if they are approved by a
majority of the disinterested independent directors, are on terms no less
favorable to us than could be obtained from unaffiliated parties and are
reasonably expected to benefit us.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to beneficial
ownership of our common stock, as of September 30, 1999 and as adjusted to
reflect the sale of common stock offered by us in this offering for:

- each person known by us to beneficially own more than 5% of our common
stock;

- each executive officer named in the Summary Compensation Table;

- each of our directors and our director-nominee; and

- all of our executive officers, directors, and director nominee as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power with
respect to the securities. Unless otherwise indicated, the address for those
listed below is c/o AGENCY.COM Ltd., 665 Broadway, 9th Floor, New York, New York
10012. Except as indicated by footnote, and subject to applicable community
property laws, the persons named in the table have sole voting and investment
power with respect to all shares of common stock shown as beneficially owned by
them. The number of shares of common stock outstanding used in calculating the
percentage for each listed person includes the shares of common stock underlying
options held by such persons that are exercisable within 60 days of September
30, 1999, but excludes shares of common stock underlying options held by any
other person. Percentage of beneficial ownership is based on 26,663,282 shares
of common stock outstanding as of September 30, 1999, and 32,563,282 shares of
common stock outstanding after completion of this offering.

<TABLE>
<CAPTION>
PERCENTAGE OF COMMON STOCK
BENEFICIALLY OWNED
--------------------------
<S> <C> <C> <C>
PRIOR TO AFTER
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED OFFERING OFFERING(1)
- ------------------------------------------------------------- -------------------------- ----------- -------------
Chan Suh..................................................... 4,755,902 17.8% 14.6%
Kyle Shannon (2)............................................. 4,579,900 17.2 14.1
Kenneth Trush (3)............................................ 599,856 2.2 1.8
Kevin Rowe (4)............................................... 114,774 * *
Eamonn Wilmott (5)........................................... 407,971 1.5 1.3
Larry Krakauer (6)........................................... 940,192 3.5 2.9
Gerald Bruce Redditt (7)..................................... 14,135,003 49.9 49.9
John D. Wren (8)............................................. 14,135,003 49.9 49.9
Jeffrey Rayport.............................................. -- *
Communicade, Inc. (9)........................................ 10,475,455 37.1 33.5
Omnicom Group Inc. (10)...................................... 14,135,003 49.9 49.9
All directors, director-nominee and executive officers as a
group
(10 persons) (11).......................................... 25,640,991 89.0 77.6
</TABLE>

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

* Indicates less than one percent of the common stock.

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(1) Assumes that the underwriters' over-allotment option to purchase up to an
additional 885,000 shares from AGENCY.COM is not exercised.

(2) Includes 400,000 shares of common stock held by the Shannon Family Trust.

(3) Includes 278,730 shares of common stock issuable upon the exercise of stock
options which are exercisable within 60 days of June 30, 1999. Also includes
30,000 shares of common stock held by The Daniel N. Trush 1999 Trust and
30,000 shares of common stock held by The Michael J. Trush 1999 Trust.

(4) Includes 80,690 shares of restricted common stock subject to a Restricted
Stock Agreement, dated April 16, 1999 between AGENCY.COM and Mr. Rowe.

(5) Does not include 76,977.80 shares of common stock held in an escrow account,
which are eligible to be released pending the financial results of
AGENCY.COM for fiscal 1999. Mr. Wilmott does not have voting or dispositive
control over these shares while held in escrow.

(6) Includes 185,986 shares of common stock issuable upon the exercise of stock
options which are exercisable within 60 days of June 30, 1999.

(7) Includes 8,868,730 shares of common stock held by Communicade Inc. and
3,659,548 shares of common stock held by Omnicom. Shares beneficially owned
prior to the offering includes 1,606,725 shares of common stock issuable
upon the exercise of the currently exercisable portion of warrants to
purchase 4,328,752 shares of common stock held by Omnicom and warrants to
purchase 3,071,248 shares of common stock held by Communicade. Each warrant
provides that if Communicade and Omnicom beneficially own in the aggregate
less than 50% of our outstanding shares of common stock at the time of
exercise, it may be exercised only to the extent that the number of shares
of common stock beneficially owned by Communicade and Omnicom remains less
than 50% of the outstanding shares. Shares beneficially owned after the
offering will be 19,928,278, which includes all 7,400,000 shares of common
stock issuable upon the exercise of these warrants. Mr. Redditt serves as an
Executive Vice President of Omnicom. In this capacity, Mr. Redditt may be
deemed to be the beneficial owner of these shares, although he disclaims
beneficial ownership of these shares except to the extent of his pecuniary
interest. The address of Mr. Redditt is c/o Omnicom Group Inc., 437 Madison
Avenue, New York, New York 10022.

(8) Includes 8,868,730 shares of common stock held by Communicade Inc. and
3,659,548 shares of common stock held by Omnicom. Shares beneficially owned
prior to the offering includes 1,606,725 shares of common stock issuable
upon the exercise of warrants to purchase 4,328,752 shares of common stock
held by Omnicom and warrants to purchase 3,071,248 shares of common stock
held by Communicade. Each warrant provides that if Communicade and Omnicom
beneficially own in the aggregate less than 50% of our outstanding shares of
common stock at the time of exercise, it may be exercised only to the extent
that the number of shares of common stock beneficially owned by Communicade
and Omnicom remains less than 50% of the outstanding shares. Shares
beneficially owned after the offering will be 19,928,278, which includes all
7,400,000 shares of common stock issuable upon the exercise of these
warrants. Mr. Wren serves as a Chief Executive Officer and President of
Omnicom. In this capacity, Mr. Wren may be deemed to be the beneficial owner
of these shares, although he disclaims ownership of these shares except to
the extent of his pecuniary interest. The address of Mr. Wren is c/o Omnicom
Group Inc., 437 Madison Avenue, New York, New York 10022.

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(9) Shares beneficially owned prior to the offering include 1,606,725 shares of
common stock issuable upon the exercise of the currently exercisable portion
of a warrant to purchase 3,071,248 shares of common stock held by
Communicade. The warrant provides that if Communicade and Omnicom
beneficially own in the aggregate less than 50% of our outstanding shares of
common stock at the time of exercise, the warrant may be exercised only to
the extent that the number of shares of common stock beneficially owned by
Communicade and Omnicom remains less than 50% of the outstanding shares.
Shares beneficially owned after the offering will be 11,939,978, which
includes all 3,071,298 shares of common stock issuable upon the exercise of
this warrant. The address of Communicade, Inc. is 437 Madison Avenue, New
York, New York 10022.

(10) Shares beneficially owned prior to the offering include 1,606,725 shares of
common stock issuable upon the exercise of the currently exercisable portion
of warrants to purchase 4,328,752 shares of common stock held by Omnicom and
warrants to purchase 3,071,248 shares of common stock held by Communicade.
Each warrant provides that if Communicade and Omnicom beneficially own in
the aggregate less than 50% of our outstanding shares of common stock at the
time of exercise, the warrant may be exercised only to the extent that the
number of shares of common stock beneficially owned by Communicade and
Omnicom does not exceed 50% of the outstanding shares. Shares beneficially
owned after the offering will be 19,928,278, which includes all 7,400,000
shares of common stock issuable upon the exercise of these warrants. The
address of Omnicom Group, Inc. is 437 Madison Avenue, New York, New York
10022.

(11) Shares beneficially owned prior to the offering includes 1,606,725 shares
of common stock issuable upon the exercise of currently exercisable portions
of the Omnicom and Communicade warrants. Shares beneficially owned after the
offering will be 31,436,266, which includes all 7,400,000 shares of common
stock issuable upon the exercise of the warrants described above.

77
<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

AGENCY.COM's amended and restated certificate of incorporation, which will
become effective upon the closing of this offering, authorizes the issuance of
up to 200,000,000 shares of common stock, par value $.001 per share, and
10,000,000 shares of preferred stock, par value $.001 per share, the rights and
preferences of which may be established from time to time by our board of
directors. As of September 30, 1999, 26,663,282 shares of common stock were
outstanding and we had 233 stockholders of record.

COMMON STOCK

Under our amended and restated certificate of incorporation, holders of our
common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders, including the election of
directors. They do not have cumulative voting rights. Subject to preferences
that may be applicable to any then-outstanding preferred stock, holders of our
common stock are entitled to receive ratably dividends, if any, as may be
declared by the board of directors out of legally available funds. In case of a
liquidation, dissolution or winding up of AGENCY.COM, the holders of common
stock will be entitled to share ratably in the net assets legally available for
distribution to shareholders after payment of all of our liabilities and any
preferred stock then outstanding. Holders of common stock have no preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. The rights, preferences
and privileges of holders of common stock are subject to the rights of the
holders of shares of any series of preferred stock that we may designate and
issue in the future. After the closing of this offering, there will be no shares
of preferred stock outstanding.

PREFERRED STOCK

Under our amended and restated certificate of incorporation, our board of
directors has the authority, without further action by the stockholders, to
issue from time to time, shares of preferred stock in one or more series. The
board of directors may fix the number of shares, designations, preferences,
powers and other special rights of the preferred stock. The preferences, powers,
rights and restrictions of different series of preferred stock may differ. The
issuance of preferred stock could decrease the amount of earnings and assets
available for distribution to holders of common stock or affect adversely the
rights and powers, including voting rights, of the holders of common stock. Such
issuance may also have the effect of delaying, deferring or preventing a change
in control of AGENCY.COM. We have no current plans to issue any shares of
preferred stock.

WARRANTS

As of the date of this prospectus, Communicade held a warrant to purchase
3,071,248 shares of our common stock at an exercise price of $0.005 per share
and Omnicom held a warrant to purchase 4,328,752 shares of our common stock at
an exercise price of $0.005 per share. Each warrant provides that if Communicade
and Omnicom beneficially own in the aggregate less than 50% of our outstanding
shares of common stock at the time of exercise, it may be exercised only to the
extent that the number of shares of common stock beneficially owned by
Communicade and Omnicom after such exercise remains less than 50% of the
outstanding shares. Each warrant expires on March 31, 2019.

78
<PAGE>
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW AND OUR AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION AND BYLAWS

Provisions of our amended and restated certificate of incorporation and
amended and restated bylaws, which are summarized in the following paragraphs,
may have an anti-takeover effect and may delay, defer or prevent a tender offer
or takeover attempt that a stockholder might consider in its best interest,
including those attempts that might result in a premium over the market price
for the shares held by stockholders.

CLASSIFIED BOARD OF DIRECTORS

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

STOCKHOLDER ACTION; SPECIAL MEETING OF STOCKHOLDERS

Our amended and restated certificate of incorporation eliminates the ability
of stockholders to act by written consent. It further provides that special
meetings of our stockholders may be called only by the chairman of the board of
directors or a majority of the board of directors.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

Our amended and restated by-laws provide that stockholders seeking to bring
business before an annual meeting of stockholders, or to nominate candidates for
election as directors at an annual meeting of stockholders, must provide timely
notice thereof in writing. To be timely, a stockholder's notice must be received
at our principal executive offices not less than 60 days nor more than 90 days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders. In the event that the annual meeting is called for a date that is
not within thirty (30) days before or after the anniversary date, in order to be
timely, notice from the stockholder must be received no later than the tenth day
following the date on which notice of the annual meeting was mailed to
stockholders or made public, whichever occurred earlier. In the case of a
special meeting of stockholders called for the purpose of electing directors,
notice by the stockholder in order to be timely must be received not later than
the close of business on the tenth day following the day on which notice was
mailed or public disclosure of the date of the special meeting was made,
whichever first occurs. Our amended and restated by-laws also specify certain
requirements as to the form and content of a stockholder's notice. These
provisions may preclude stockholders from bringing matters before an annual or
special meeting of stockholders or from making nominations for directors at
these meetings.

AUTHORIZED BUT UNISSUED SHARES

The authorized but unissued shares of common stock and preferred stock are
available for future issuance without stockholder approval. These additional
shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and
employee benefit plans. The existence of authorized but unissued shares of
common stock and preferred stock could render more difficult or discourage an
attempt to obtain control of us by means of a proxy contest, tender offer,
merger or otherwise.

79
<PAGE>

The Delaware General Corporation Law provides generally that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to
amend a corporation's certificate of incorporation or bylaws, unless a
corporation's certificate of incorporation or bylaws, as the case may be,
requires a greater percentage. Our amended and restated certificate of
incorporation imposes a two-thirds supermajority vote requirement in connection
with various corporate governance actions and the amendment of various
provisions of our amended and restated certificate of incorporation and amended
and restated bylaws, including those provisions relating to the classified board
of directors, and special meetings of stockholders.

REGISTRATION RIGHTS

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for AGENCY.COM's common stock will be
American Stock Transfer & Trust Company, New York, New York.

LISTING

We have applied for quotation of our common stock on the Nasdaq National
Market under the trading symbol "ACOM".

80
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market could
adversely affect prevailing market prices of our common stock. Furthermore,
since no shares held by our existing stockholders will be available for sale
shortly after this offering because of the contractual and legal restrictions on
resale described below, sales of substantial amounts of common stock in the
public market after these 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 an aggregate of
shares of our common stock, assuming no exercise of the Underwriters'
over-allotment option and no exercise of outstanding options. Of these shares,
all of the shares sold in this offering will be freely tradable without
restriction or further registration under the Securities Act, unless the shares
are purchased by "affiliates" as that term is defined in Rule 144 under the
Securities Act. The remaining 26,663,282 shares of common stock held by existing
stockholders are "restricted securities" as that term is defined in Rule 144
under the Securities Act. Restricted securities may be sold in the public market
following registration or pursuant to an exemption from registration under Rule
144 promulgated under the Securities Act, which rules are summarized below.

LOCK-UP AGREEMENTS

All of our officers and directors and most of our stockholders, who together
hold an aggregate of at least 25,750,000 shares, have signed lock-up agreements
under which they agreed not to transfer or dispose of, directly or indirectly,
or hedge any shares of common stock or any securities convertible into or
exercisable or exchangeable for shares of common stock, for a period of 180 days
after the date of this prospectus. Transfers or dispositions can be made sooner
with the prior written consent of Goldman, Sachs & Co.

As a result of these lock-up agreements and the provisions of Rules 144 and
701, additional shares will be available for sale in the public market as
follows:

- approximately restricted securities will be eligible for immediate
sale on the date of this prospectus;

- approximately restricted securities will be eligible for sale
beginning 90 days after the date of this prospectus, subject in some cases
to compliance with Rule 144;

- approximately additional restricted securities will be eligible for
sale beginning 180 days after the effective date of this offering upon
expiration of the lock-up agreements, subject in some cases to compliance
with Rule 144; and

- the remainder of the restricted securities will be eligible for sale from
time to time thereafter, subject in some cases to compliance with Rule
144.

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned shares of our
common stock for at least one year, including the holding period of any prior
owner other than an affiliate, would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:

- 1% of the number of shares of common stock then outstanding, which will
equal approximately 325,633 shares immediately after this offering; or

- the average weekly trading volume of the common stock on the Nasdaq
National Market during the four calendar

81
<PAGE>
weeks preceding the filing of a notice on Form 144 with respect to such
sale.

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

RULE 144(K)

Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at anytime during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner other than an affiliate, is
entitled to sell those shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144. Therefore,
unless otherwise restricted, "144(k) shares" may be sold immediately upon the
completion of this offering.

RULE 701

In general, under Rule 701 of the Securities Act as currently in effect,
each of our employees, consultants or advisors who purchases shares from us
pursuant to securities, prior to our public offering, issued under a
compensatory stock plan or other written agreement is eligible to resell such
shares 90 days after the effective date of this offering in reliance on Rule
144, but without compliance with some of the restrictions, including the holding
period, contained in Rule 144.

STOCK PLANS

Promptly after this offering, we intend to file a registration statement
under the Securities Act covering 9,676,178 shares of common stock reserved for
issuance under our 1999 Plan and 852,912 shares reserved for issuance upon the
exercise of outstanding stock options previously granted under our other option
plans. This registration statement is expected to be filed as soon as
practicable after the effective date of this offering.

At June 30, 1999, options to purchase 4,606,088 shares were issued and
outstanding under our plans and otherwise. All of these shares will be eligible
for sale in the public market from time to time, commencing 90 days after the
effective date of this offering, subject to vesting provisions, Rule 144 volume
limitations applicable to our affiliates and, in the case of some of the
options, the expiration of lock-up agreements.

REGISTRATION RIGHTS

Beginning 180 days after this offering, Omnicom or its permitted transferees
will be entitled to require us to register their shares of AGENCY.COM common
stock for sale under the Securities Act. See "Description of Capital
Stock--Registration Rights".

VALIDITY OF COMMON STOCK

The validity of the shares of the common stock offered hereby will be passed
upon for AGENCY.COM by Brobeck, Phleger & Harrison LLP, New York, New York.
Legal matters in connection with this offering will be passed upon for the
underwriters by Ropes & Gray, Boston, Massachusetts.

82
<PAGE>
EXPERTS

The audited financial statements and schedules included in this prospectus
and elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

CHANGE IN ACCOUNTANTS

In July 1998, we determined to replace Ernst & Young LLP and engaged Arthur
Andersen LLP as our independent accountants to audit our financial statements as
of, and for the period ended December 31, 1997. The decision to change
independent accountants from Ernst & Young LLP to Arthur Andersen LLP was
approved by our board of directors. We believe, and have been advised by Ernst &
Young LLP that it concurs in this belief, that, for the period from January 1,
1996 through the date of dismissal (the entire period of its engagement),
AGENCY.COM and Ernst & Young LLP did not have any disagreement on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, that if not resolved to the satisfaction of Ernst & Young
LLP, would have caused it to make reference in connection with its report on our
financial statements to the subject matter of the disagreement. Ernst & Young
LLP's report on our financial statements for the period from January 1, 1996
through December 31, 1996 did not contain an adverse opinion or a disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles. During that year there were no "reportable events" within
the meaning of Item 304(a)(1)(v)of Regulation S-K promulgated under the
Securities Act.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 (including exhibits and schedules thereto) under the
Securities Act with respect to the common stock to be sold in this offering.
This prospectus, which constitutes a part of the registration statement, does
not contain all of the information set forth in the registration statement or
the exhibits and schedules which are part of the registration statement. For
further information with respect to us and our common stock, reference is made
to the registration statement and the exhibits and schedules thereto.

You may read and copy all or any portion of the registration statement or
any reports, statements or other information in our files in the Commission's
public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C., 20549 and at the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You can request copies of
these documents upon payment of a duplicating fee, by writing to the Commission.
Please call the Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. Our filings, including the registration
statement, will also be available to you on the Commission's Internet site
(www.sec.gov).

As a result of the offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, as amended, and,
in accordance with these requirements, will file periodic reports, proxy
statements and other information with the Securities and Exchange Commission.
Upon approval of the common stock for the quotation on the Nasdaq National
Market, these reports, proxy and information

83
<PAGE>

statements and other information may also be inspected at the offices of Nasdaq
Operations, 9801 Washingtonian Boulevard, 5th Floor, Gaithersburg, MD, 20878.

We intend to furnish our stockholders with annual reports containing
financial statements audited by our independent auditors and to make available
to our stockholders quarterly reports containing unaudited financial data for
the first three quarters of each fiscal year.

84
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
AGENCY.COM AND SUBSIDIARIES

Report of Independent Public Accountants............................................ F-3
Consolidated Balance Sheets as of December 31, 1997 and 1998 and June 30, 1999...... F-4
Consolidated Statements of Operations for the years ended December 31, 1996, 1997
and 1998 and for the six months ended June 30, 1998 and 1999....................... F-5
Consolidated Statements of Stockholders' Equity for the years ended December 31,
1996, 1997 and 1998 and for the six months ended June 30, 1999..................... F-6
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997
and 1998 and for the six months ended June 30, 1998 and 1999....................... F-7
Notes to Consolidated Financial Statements.......................................... F-8

EAGLE RIVER INTERACTIVE

Report of Independent Public Accountants............................................ F-30
Report of Independent Public Accountants............................................ F-31
Consolidated Balance Sheets as of December 31, 1997 and 1998 and March 31, 1999..... F-32
Combined/Consolidated Statements of Operations for the predecessor company for the
year ended December 31, 1996 and for the period ended September 26, 1997; and for
the successor company for the period from inception (September 26, 1997) through
December 31, 1997, for the year ended December 31, 1998 and for the three months
ended March 31, 1998 and 1999...................................................... F-33
Combined/Consolidated Statements of Divisional Deficit and Stockholders' Deficit for
the predecessor company for the years ended December 31, 1995 and 1996 and for the
period between January 1, 1997 through September 26, 1997; and for the successor
company for the period from inception (September 26, 1997) through December 31,
1997, for the years ended December 31, 1998 and for the three months ended March
31, 1999........................................................................... F-34
Combined/Consolidated Statements of Cash Flows for the predecessor company for the
year ended December 31, 1996 and for the period between January 1, 1997 through
September 26, 1997; and for the successor company for the period from inception
(September 26, 1997) through December 31, 1997, for the year ended December 31,
1998 and for the three months ended March 31, 1998 and 1999........................ F-35
Notes to Combined/Consolidated Financial Statements................................. F-36

INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

Report of Independent Public Accountants............................................ F-50
Consolidated Balance Sheets as of December 31, 1997 and 1998 and March 31, 1999..... F-51
Consolidated Statements of Operations for the years ended December 31, 1996, 1997
and 1998 and for the three months ended March 31, 1998 and 1999.................... F-52
Consolidated Statements of Stockholders' Equity (Deficit) for the years ended
December 31, 1996, 1997 and 1998 and for the three months ended March 31, 1999..... F-53
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997
and 1998 and for the three months ended March 31, 1998 and 1999.................... F-54
Notes to Consolidated Financial Statements.......................................... F-55
</TABLE>

F-1
<PAGE>
<TABLE>
<S> <C>
QUADRIS CONSULTING

Report of Independent Public Accountants............................................ F-71
Balance Sheets as of December 31, 1997 and March 15, 1998........................... F-72
Statements of Operations for the years ended December 31, 1996 and 1997 and for the
period from January 1 to March 15, 1998............................................ F-73
Statements of Divisional Equity for the years ended December 31, 1996 and 1997 and
for the period from January 1 to March 15, 1998.................................... F-74
Statements of Cash Flows for the years ended December 31, 1996 and 1997 and for the
period from January 1 to March 15, 1998............................................ F-75
Notes to Financial Statements....................................................... F-76

TWINSPARK INTERACTIVE PEOPLE B.V.

Report of Independent Public Accountants............................................ F-82
Balance Sheets as of December 31, 1997 and 1998 and June 30, 1999................... F-83
Statements of Operations for the years ended December 31, 1997 and 1998 and for the
six months ended June 30, 1998 and 1999............................................ F-84
Statements of Stockholders' Equity for the years ended December 31, 1997 and 1998
and for the six months ended June 30, 1999......................................... F-85
Statements of Cash Flows for the years ended December 31, 1997 and 1998 and for the
six months ended June 30, 1998 and 1999............................................ F-86
Notes to Financial Statements....................................................... F-87

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION.................... F-94
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1999.................. F-95
Notes to Pro Forma Condensed Consolidated Balance Sheet............................. F-96
Pro Forma Condensed Consolidated Statement of Operations for the six months ended
June 30, 1999...................................................................... F-98
Pro Forma Condensed Consolidated Statement of Operations for the six months ended
June 30, 1998...................................................................... F-99
Pro Forma Condensed Consolidated Statement of Operations for the year ended December
31, 1998........................................................................... F-100
Notes to Pro Forma Condensed Consolidated Statements of Operations.................. F-101
</TABLE>

F-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To AGENCY.COM Ltd.:

We have audited the accompanying consolidated balance sheets of AGENCY.COM Ltd.
(a Delaware corporation) and subsidiaries, as of December 31, 1997 and 1998 and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AGENCY.COM Ltd. and
subsidiaries as of December 31, 1997 and 1998 and the results of their
operations and their cash flows for each of the three years ended December 31,
1998 in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

New York, New York
September 2, 1999

F-3
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ JUNE 30,
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents............................................. $ 387,739 $ 769,358 $ 1,402,466
Accounts receivable, net of allowance for doubtful accounts of
$43,362, $825,576 and $4,060,415, respectively...................... 5,484,004 4,658,365 10,654,529
Unbilled charges...................................................... 700,060 2,345,752 17,315,902
Prepaid expenses and other current assets............................. 218,931 193,060 2,829,070
Income tax receivable................................................. -- -- 2,130,945
Due from related parties.............................................. 298,484 141,847 138,875
----------- ----------- ------------
Total current assets.......................................... 7,089,218 8,108,382 34,471,787
Property and Equipment, net of accumulated depreciation and amortization
of $486,092, $1,627,397 and $6,654,054, respectively.................. 2,032,008 4,215,128 8,639,524

Intangibles, net of accumulated amortization of $25,292, $341,806 and
$1,068,967, respectively.............................................. 1,549,310 8,450,940 50,542,365
Deferred Tax Assets..................................................... 558,660 2,758,610 1,010,396
Investment In Affiliate................................................. -- 1,572,203 1,582,132
Other Assets............................................................ 108,629 377,832 1,350,193
----------- ----------- ------------
Total assets.................................................. $11,337,825 $25,483,095 $ 97,596,397
----------- ----------- ------------
----------- ----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses................................. $ 1,725,226 $ 4,879,775 $ 10,800,239
Line of credit........................................................ 86,273 -- --
Income taxes payable.................................................. 266,795 202,984 537,009
Deferred revenue...................................................... 596,882 688,953 5,709,919
Current portion of due to Omnicom Group Inc........................... -- -- 11,031,371
Current portion of capital lease obligations.......................... 124,968 564,536 863,548
Due to related parties................................................ -- 453,408 --
----------- ----------- ------------
Total current liabilities..................................... 2,800,144 6,789,656 28,942,086
----------- ----------- ------------
Long-Term Liabilities:
Due to Omnicom Group Inc.............................................. 2,424,969 11,989,373 46,210,850
Deferred tax liabilities.............................................. 2,418,790 2,925,864 493,021
Capital lease obligations............................................. 115,599 848,321 1,216,447
Due to related parties................................................ -- -- 1,065,322
Other long-term liabilities........................................... 146,806 213,786 1,177,511
----------- ----------- ------------
Total long-term liabilities................................... 5,106,164 15,977,344 50,163,151
----------- ----------- ------------
Total liabilities............................................. 7,906,308 22,767,000 79,105,237
----------- ----------- ------------
Commitments And Contingencies (Note 10)
Stockholders' Equity (Note 8):
Common stock, $0.001 par value, 200,000,000 shares authorized;
16,200,000, 17,425,810 and 25,341,486 shares issued; and 16,200,000,
17,179,060 and 25,094,736 shares outstanding at December 31, 1997,
1998 and June 30, 1999 (unaudited), respectively.................... 16,200 17,178 25,094
Additional paid-in capital............................................ 1,797,691 2,898,270 19,099,786
Retained earnings (deficit)........................................... 1,617,626 (190,045) (601,175)
Cumulative foreign currency translation............................... -- (9,308) (32,545)
----------- ----------- ------------
Total stockholders' equity.................................... 3,431,517 2,716,095 18,491,160
----------- ----------- ------------
Total liabilities and stockholders' equity.................... $11,337,825 $25,483,095 $ 97,596,397
----------- ----------- ------------
----------- ----------- ------------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------ ------------------------
1996 1997 1998 1998 1999
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Revenues...................................... $6,094,784 $12,975,575 $26,452,191 $12,585,418 $30,389,175
Direct salaries and costs..................... 2,216,830 6,200,216 15,930,029 6,101,964 15,072,391
---------- ----------- ----------- ----------- -----------
Gross profit.............................. 3,877,954 6,775,359 10,522,162 6,483,454 15,316,784
General and administrative.................... 954,409 3,815,045 10,944,441 5,176,039 10,654,234
Sales and marketing........................... -- 527,432 595,886 198,628 1,254,112
Amortization of goodwill...................... -- 25,292 316,514 99,576 727,161
Depreciation and amortization................. 61,356 304,491 1,141,305 532,009 1,984,074
---------- ----------- ----------- ----------- -----------
Income (loss) from operations............. 2,862,189 2,103,099 (2,475,984) 477,202 697,203
Interest income (expense), net................ 28,201 9,924 (359,761) (94,214) (1,055,095)
---------- ----------- ----------- ----------- -----------
Income (loss) before minority interest and
income taxes............................ 2,890,390 2,113,023 (2,835,745) 382,988 (357,892)
Minority interest............................. -- 167,468 (281,559) (281,559) --
---------- ----------- ----------- ----------- -----------
Income (loss) before provision (benefit)
for income taxes........................ 2,890,390 2,280,491 (3,117,304) 101,429 (357,892)
Provision (benefit) for income taxes.......... 1,388,000 1,115,640 (1,309,633) 40,572 53,238
---------- ----------- ----------- ----------- -----------
Net income (loss)......................... $1,502,390 $ 1,164,851 $(1,807,671) $ 60,857 $ (411,130)
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Per share information:
Net income (loss) per common share
Basic..................................... $ 0.32 $ 0.07 $ (0.11) $ 0.00 $ (0.02)
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Diluted................................... $ 0.31 $ 0.07 $ (0.11) $ 0.00 $ (0.02)
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Weighted average common shares used in
computing per share amounts:
Basic..................................... 4,750,313 16,200,000 16,854,499 16,285,269 21,135,108
---------- ----------- ----------- ----------- -----------
Diluted................................... 4,796,943 16,297,345 16,854,499 16,927,887 21,135,108
---------- ----------- ----------- ----------- -----------
Pro forma net income (loss) data (Unaudited)
(Note 7):
Net income (loss) before provision
(benefit) for income taxes.............. $2,890,390 $ 2,280,491 $(3,117,304) $ 101,429 $ (357,892)
Pro forma income tax provision
(benefit)............................... 1,405,577 1,115,640 (1,309,633) 40,572 53,238
---------- ----------- ----------- ----------- -----------
Pro forma net income (loss)............... $1,484,813 $ 1,164,851 $(1,807,671) $ 60,857 $ (411,130)
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Pro forma per share information (Unaudited)
(Note 7):
Pro forma net income (loss) per common
share:
Basic..................................... $ 0.31 $ 0.07 $ (0.11) $ 0.00 $ (0.02)
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Diluted................................... $ 0.31 $ 0.07 $ (0.11) $ 0.00 $ (0.02)
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Weighted average common shares used in
computing pro forma per share amounts:
Basic..................................... 4,750,313 16,200,000 16,854,499 16,285,269 21,135,108
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
Diluted................................... 4,796,943 16,297,345 16,854,499 16,927,887 21,135,108
---------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- -----------
</TABLE>

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

F-5
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
CUMULATIVE
COMMON STOCK ADDITIONAL RETAINED FOREIGN TOTAL
----------------------- PAID-IN EARNINGS/ CURRENCY STOCKHOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) TRANSLATION EQUITY
---------- ----------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996........... 1,800 $ 2 $ 98 $ 791,048 $ -- $ 791,148
Distribution to shareholders..... -- -- -- (42,205) -- (42,205)
Common stock issued upon S-
Corporation termination........ 16,198,200 16,198 (7,298) -- -- 8,900
Termination of S-Corporation..... -- -- 1,798,458 (1,798,458) -- --
Net income....................... -- -- -- 1,502,390 -- 1,502,390
---------- ----------- ----------- ----------- ----------- --------------
Balance, December 31, 1996......... 16,200,000 16,200 1,791,258 452,775 -- 2,260,233
Capital contribution............. -- -- 6,433 -- -- 6,433
Net income....................... -- -- -- 1,164,851 -- 1,164,851
---------- ----------- ----------- ----------- ----------- --------------
Balance, December 31, 1997......... 16,200,000 16,200 1,797,691 1,617,626 -- 3,431,517
Common stock issued in connection
with Spiral Media Inc.
acquisition.................... 480,626 480 535,425 -- -- 535,905
Common stock issued in connection
with Online Magic Ltd.
acquisition.................... 498,434 498 555,255 -- -- 555,753
Capital contribution............. -- -- 9,899 -- -- 9,899
Foreign currency translation
adjustment..................... -- -- -- -- (9,308) (9,308)
Net loss......................... -- -- -- (1,807,671) -- (1,807,671)
---------- ----------- ----------- ----------- ----------- --------------
Balance, December 31, 1998......... 17,179,060 17,178 2,898,270 (190,045) (9,308) 2,716,095
Common stock issued in connection
with Eagle River Interactive
acquisition.................... 3,740,238 3,740 4,497,584 -- -- 4,501,324
Warrants issued in connection
with Eagle River Interactive
acquisition.................... -- -- 3,428,471 -- -- 3,428,471
Common stock issued in connection
with Interactive Solutions
acquisition.................... 4,171,846 4,172 5,127,199 -- -- 5,131,371
Stock options issued in
connection with Interactive
Solutions acquisition.......... -- -- 722,191 -- -- 722,191
Warrants issued in connection
with Interactive Solutions
acquisition.................... -- -- 2,424,620 -- -- 2,424,620
Foreign currency translation
adjustment..................... -- -- -- -- (23,237) (23,237)
Exercise of stock options........ 3,592 4 1,451 -- -- 1,455
Net loss (unaudited)............. -- -- -- (411,130) -- (411,130)
---------- ----------- ----------- ----------- ----------- --------------
Balance, June 30, 1999
(unaudited)...................... 25,094,736 $ 25,094 $19,099,786 $ (601,175) $ (32,545) $ 18,491,160
---------- ----------- ----------- ----------- ----------- --------------
---------- ----------- ----------- ----------- ----------- --------------
</TABLE>

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

F-6
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

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

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................ $1,502,390 $ 1,164,851 $(1,807,671) $ 60,857 $ (411,130)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities-
Allowance for doubtful accounts............ 15,207 142,589 785,235 338,386 140,839
Depreciation and amortization.............. 61,356 329,783 1,457,819 631,585 2,711,235
Deferred income taxes...................... 1,198,000 594,130 (1,692,876) (334,483) (120,635)
Changes in operating assets and liabilities:
Accounts receivable........................ (1,600,317) (3,030,333) 43,425 1,431,718 (9,231,003)
Unbilled charges........................... -- (700,060) (1,645,692) (2,899,453) (14,970,150)
Prepaid expenses and other current
assets................................... (73,120) (139,455) 25,871 105,285 (205,456)
Due from related parties................... (383,693) 99,999 156,637 199,928 2,927
Other assets............................... (117,126) 8,704 (123,904) (307,576) (461,587)
Accounts payable and accrued expenses...... 280,325 1,244,575 3,154,549 1,621,818 5,569,718
Deferred revenue........................... -- 596,882 92,072 (260,298) 5,020,966
Due to related parties..................... -- -- 453,408 400,614 611,914
Income taxes payable....................... 69,046 173,517 (63,811) (81,125) (202,984)
Other long-term liabilities................ -- 146,806 66,980 33,490 963,725
---------- ----------- ----------- ----------- ------------
Net cash provided by (used in)
operating activities................ 952,068 631,988 902,042 940,746 (10,340,351)
---------- ----------- ----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures......................... (514,658) (1,578,515) (1,880,846) (766,125) (3,221,404)
Trademark costs.............................. -- (112,222) (3,024) -- --
Acquisitions, net of cash acquired........... -- (1,462,380) (7,698,689) (5,400,319) 5,123,333
---------- ----------- ----------- ----------- ------------
Net cash used in investing
activities.......................... (514,658) (3,153,117) (9,582,559) (6,166,444) 1,901,929
---------- ----------- ----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable due to Omnicom.... -- 2,424,969 9,564,404 5,625,361 6,909,750
Payments under capital lease obligations..... -- (122,066) (271,290) (61,396) (389,011)
Net proceeds (borrowings) under line of
credit..................................... -- 86,273 (86,273) (86,273) 3,083,347
Repayments of shareholder advances........... 60,213 -- -- -- --
Deferred registration costs.................. -- -- (145,296) -- (510,774)
Capital (distribution) contribution.......... (42,205) 6,433 9,899 -- --
Proceeds from exercise of stock options...... -- -- -- -- 1,455
---------- ----------- ----------- ----------- ------------
Net cash provided by financing
activities.......................... 18,008 2,395,609 9,071,444 5,477,692 9,094,767
---------- ----------- ----------- ----------- ------------
EFFECT OF EXCHANGE RATE ON CASH AND CASH
EQUIVALENTS.................................. -- -- (9,308) (681) (23,237)
Net increase (decrease) in cash and cash
equivalents.................................. 455,418 (125,520) 381,619 251,313 633,108
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD....................................... 57,841 513,259 387,739 387,739 769,358
---------- ----------- ----------- ----------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD....... $ 513,259 $ 387,739 $ 769,358 $ 639,052 $ 1,402,466
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Income taxes paid............................ $ 96,722 $ 472,637 $ 315,449 $ 157,724 $ 220,876
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
Interest paid................................ $ -- $ 2,000 $ 1,805 $ -- $ 31,223
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
ACTIVITIES:
Equipment acquired under capital leases...... $ -- $ 362,633 $ 1,443,579 $ 57,297 $ 973,649
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING
ACTIVITIES:
Common stock issued for acquisitions......... $ -- $ -- $ 1,091,658 $ 1,091,658 $ 9,632,614
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
Warrants issued for acquisitions............. $ -- $ -- $ -- $ -- $ 5,853,091
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
Stock options issued for acquisitions........ $ -- $ -- $ -- $ -- $ 722,191
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
</TABLE>

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

F-7
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

AGENCY.COM Ltd. and subsidiaries (collectively the "Company" or
"AGENCY.COM") is an international Internet professional services firm. The
Company provides clients with an integrated set of strategy, creative and
technology services that take them from concept to launch and operation of their
Internet businesses. The Company's services include: advising, consulting and
planning on the strategic implications of the Internet for a company's business;
designing creative, content, interface and information architecture elements of
Internet resources such as Web sites; programming, technical architecture
development and systems integration to implement complex information technology
systems such as e-commerce platforms; and planning and executing online
marketing strategies that build audiences and develop brand awareness of
Internet resources. In order to serve its global clients, AGENCY.COM has
completed nine acquisitions since 1997, and currently has offices in New York;
Avon, Colorado; Chicago; Dallas; Portland, Oregon; San Francisco; Cambridge,
Massachusetts; Woodbridge, New Jersey; London; Paris; and Amsterdam.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of all
majority-owned subsidiaries. All significant intercompany transactions have been
eliminated in consolidation.

The Company's investments in 20% to 50% owned companies in which it has the
ability to exercise significant influence over operating and financial policies
are accounted for using the equity method. Accordingly, the Company's share of
the earnings and losses of these companies is included in consolidated net
income (loss). As of December 31, 1998 and June 30, 1999, the Company had a 12%
investment in an affiliate (Note 2) which was carried at cost.

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 could differ from those estimates.

REVENUE RECOGNITION

Revenues are recognized for time-and-materials projects on the basis of
costs incurred in the period. Revenue from fixed-fee arrangements is recognized
on the percentage-of-completion method of accounting based on the ratio of costs
incurred to total estimated costs. Unbilled charges represent labor costs
incurred and estimated earnings, production and other client reimbursable costs.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are probable. Amounts billed, which are not yet earned, are
classified as deferred revenue in the accompanying consolidated balance sheets.

F-8
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt and equity instruments with an
original maturity of three months or less to be cash equivalents. Cash
equivalents include investments in money market funds and are stated at cost,
which approximates market value.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, net of accumulated depreciation
and amortization. Property and equipment is depreciated on a straight-line basis
over their estimated useful lives of three to seven years. Leasehold
improvements and equipment held under capital leases are amortized utilizing the
straight-line method over the lesser of the estimated useful life of the asset
or the remaining term of the related lease.

INTANGIBLE ASSETS

Goodwill, which represents the excess of the purchase price over the fair
value of the net assets acquired, is included in intangible assets and is
presently being amortized over a period of twenty years on a straight-line
basis. The Company reviews its intangible assets to be held and used for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the intangible asset exceeds the fair value of the asset. If
circumstances indicate that the carrying amount of the intangible asset that the
Company expects to hold and use may not be recoverable, the Company will
estimate the future cash flows expected to result from the use of the asset and
its eventual disposition. Management has evaluated the amortization periods in
the current period and has determined that no impairment currently exists. These
amortization periods will be evaluated by management on a continuing basis, and
will be adjusted if the lives of the related intangible assets are impaired.

ACCOUNTING FOR LONG-LIVED ASSETS

The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed of." This statement establishes
financial accounting and reporting standards for the impairment of long-lived
assets, certain identifiable intangibles and goodwill related to those assets to
be held and used, and for long-lived assets and certain identifiable intangibles
to be disposed of. The Company reviews long-lived assets and certain
identifiable intangibles to be held and used for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset exceeds
the fair value of the asset. If other events or changes in circumstances
indicate that the carrying amount of an asset that the Company expects to hold
and use may not be recoverable, the company will estimate the future cash flows
expected to result from the use of the asset and its eventual disposition.
Management has performed a review of all long-lived assets and has determined
that no impairment of the respective carrying values has occurred as of December
31, 1997 and 1998.

F-9
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes." This statement requires an asset and liability
approach for measuring deferred taxes based on temporary differences between the
financial statement and income tax bases of assets and liabilities existing at
each balance sheet date using enacted tax rates for the years in which the taxes
are expected to be paid or recovered. The effect on deferred tax assets or
liabilities of a change in tax rates is recognized in the period in which the
tax change occurs. The Company has elected to file its income tax returns using
the cash basis of accounting. Subsequent to the year ending December 31, 1998,
the Company has elected to file its income tax returns using the accrual basis
of accounting.

FOREIGN CURRENCY TRANSLATION

All assets and liabilities of foreign subsidiaries are translated into U.S.
dollars at fiscal year-end exchange rates. Income and expense items are
translated at average exchange rates prevailing during the fiscal year. The
resulting translation adjustments are recorded as a component of stockholders'
equity in the accompanying consolidated financial statements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, accounts receivable, due
from affiliate and accounts payable approximate fair value due to the short-term
maturity of these instruments. The carrying amounts of due to Omnicom Group Inc.
and capital lease obligations, including current portions, approximate fair
value.

BUSINESS CONCENTRATIONS AND CREDIT RISK

Financial instruments, which subject the Company to concentrations of credit
risk, consist primarily of cash and cash equivalents and trade accounts
receivable. The Company maintains cash and cash equivalents with various
financial institutions. The Company performs periodic evaluations of the
relative credit standing of these institutions. The Company's clients are
primarily concentrated in the United States and Europe. The Company performs
ongoing credit evaluations, generally does not require collateral, and
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of customers, historical trends and other information.

For the year ended December 31, 1996, 4 clients accounted for 26%, 19%, 12%
and 12%, of total revenues.

For the year ended December 31, 1997, 4 clients accounted for 18%, 17%, 14%
and 10%, of total revenues.

For the year ended December 31, 1998, 1 client accounted for 16% of total
revenues.

F-10
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
For the six months ended June 30, 1998 (unaudited), 3 clients accounted for
14%, 10% and 10%, of total revenues.

For the six months ended June 30, 1999 (unaudited), 2 clients accounted for
14% and 12%, of total revenues.

As of December 31, 1997, 2 clients accounted for 22% and 12%, of total
accounts receivable and unbilled charges.

As of December 31, 1998, 1 client accounted for 31% of total accounts
receivable and unbilled charges.

As of June 30, 1999 (unaudited), 2 clients accounted for 13% and 12% of
total accounts receivable and unbilled charges.

NET INCOME (LOSS) PER COMMON SHARE

The Company computes net income (loss) per common share in accordance with
SFAS No. 128, "Earnings Per Share" and SEC Staff Accounting Bulletin No. 98
("SAB No. 98"). Under the provisions of SFAS No. 128 and SAB No. 98, basic net
income (loss) per common share ("Basic EPS") is computed by dividing net income
(loss) by the weighted average number of common shares outstanding. Diluted net
income (loss) per common share ("Diluted EPS") is computed by dividing net
income (loss) by the weighted average number of common shares and dilutive
common share equivalents then outstanding. SFAS No. 128 requires the
presentation of both Basic EPS and Diluted EPS on the face of the consolidated
statements of operations.

A reconciliation between the numerator and denominator of Basic EPS and
Diluted EPS is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
--------------------------------------------------
WEIGHTED AVERAGE NET INCOME PER
NET INCOME SHARES COMMON SHARE
------------- ---------------- -----------------
<S> <C> <C> <C>
Basic EPS:
Net income attributable to common stock...................... $ 1,502,390 4,750,313 $ 0.31
Stock options................................................ -- 46,630 --
------------- ---------------- -----
Diluted EPS.................................................... $ 1,502,390 4,796,943 $ 0.31
------------- ---------------- -----
------------- ---------------- -----
</TABLE>

F-11
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
--------------------------------------------------
WEIGHTED NET INCOME PER
NET INCOME AVERAGE SHARES COMMON SHARE
------------- ---------------- -----------------
<S> <C> <C> <C>
Basic EPS:
Net income attributable to common stock...................... $ 1,164,851 16,200,000 $ 0.07
Stock options................................................ -- 97,345 --
------------- ---------------- -----
Diluted EPS.................................................... $ 1,164,851 16,297,345 $ 0.07
------------- ---------------- -----
------------- ---------------- -----
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
-------------------------------------------------
WEIGHTED NET (LOSS) PER
NET (LOSS) AVERAGE SHARES COMMON SHARE
-------------- ---------------- ---------------
<S> <C> <C> <C>
Basic EPS:
Net (loss) attributable to common stock..................... $ (1,807,671) 16,854,499 $ (0.11)
Stock options............................................... -- -- --
-------------- ---------------- ------
Diluted EPS................................................... $ (1,807,671) 16,854,499 $ (0.11)
-------------- ---------------- ------
-------------- ---------------- ------
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
-----------------------------------------------
WEIGHTED NET (LOSS) PER
NET INCOME AVERAGE SHARES COMMON SHARE
------------ ---------------- ---------------
<S> <C> <C> <C>
Basic EPS:
Net income attributable to common stock....................... $ 60,857 16,285,269 $ 0.00
Stock options................................................. -- 642,618 --
------------ ---------------- ------
Diluted EPS..................................................... $ 60,857 16,927,887 $ 0.00
------------ ---------------- ------
------------ ---------------- ------
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
-------------------------------------------------
WEIGHTED NET (LOSS) PER
NET (LOSS) AVERAGE SHARES COMMON SHARE
-------------- ---------------- ---------------
<S> <C> <C> <C>
Basic EPS:
Net (loss) attributable to common stock..................... $ (411,130) 21,135,108 $ (0.02)
Stock options............................................... -- -- --
-------------- ---------------- ------
Diluted EPS................................................... $ (411,130) 21,135,108 $ (0.02)
-------------- ---------------- ------
-------------- ---------------- ------
</TABLE>

Diluted EPS for the year ended December 31, 1998 and the six months ended
June 30, 1999 (unaudited), respectively, does not include the impact of stock
options then outstanding, as the effect of their inclusion would be
antidilutive.

F-12
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK-BASED COMPENSATION

In 1998, the Company adopted the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation," by continuing to apply the provisions of Accounting
Principles Board No. 25, "Accounting for Stock Issued to Employees," ("APB No.
25") while providing the necessary pro forma disclosures as if the fair value
method had been applied (Note 8).

COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
-------------------------------------------- ----------------------------
1996 1997 1998 1998 1999
------------- ------------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Net income (loss).................... $ 1,502,390 $ 1,164,851 $ (1,807,671) $ 60,857 $ (411,130)
Foreign currency translation
adjustment......................... -- -- (9,308) (681) (23,237)
------------- ------------- -------------- ------------ --------------
Comprehensive income (loss)........ $ 1,502,390 $ 1,164,851 $ (1,816,979) $ 60,176 $ (434,367)
------------- ------------- -------------- ------------ --------------
------------- ------------- -------------- ------------ --------------
</TABLE>

PROPOSED PUBLIC OFFERING

In connection with its contemplated initial public offering of Common Stock,
the Company has incurred approximately $145,296 and $656,070, respectively, in
registration related costs for the year ended December 31, 1998 and the six
months ended June 30, 1999 (unaudited). These costs are being deferred until the
consummation of the offering, at which time they will be charged against
additional paid-in capital. If the offering is not consummated, the deferred
registration costs will be expensed. These amounts are included in other assets
in the accompanying consolidated balance sheets.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures About Segments of an Enterprise and Related Information."
This statement establishes standards for the way public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. The statement also
establishes standards for related disclosure about products and services,
geographic areas and major customers. This statement is effective for financial
statements for periods beginning after December 15, 1997 and need not be applied
to interim periods in the initial year of application.

F-13
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comparative information for earlier years presented is to be restated. The
Company currently believes that it operates in one segment and that the adoption
of SFAS No. 131 will not materially affect the Company's current disclosure of
geographic information (Note 9).

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), which provides guidance
for determining whether computer software is internal-use software and on
accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 is effective for fiscal years
beginning after December 31, 1998. The Company does not expect the adoption of
SOP 98-1 to have a material effect on its financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards of
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The Company does not currently
engage in derivative activity and does not expect the adoption of this standard
to have a material effect on the Company's results of consolidated operations,
financial position or cash flows.

UNAUDITED FINANCIAL STATEMENTS

The unaudited consolidated financial information included herein as of June
30, 1999 for the six months ended June 30, 1998 and 1999, have been prepared in
accordance with generally accepted accounting principles for interim financial
statements. In the opinion of the Company, these unaudited consolidated
financial statements, reflect all adjustments necessary, consisting of normal
recurring adjustments, for a fair presentation of such data on a basis
consistent with that of the audited data presented herein. The consolidated
results for interim periods are not necessarily indicative of the results
expected for a full year.

2. ACQUISITIONS AND INVESTMENTS

SPIRAL MEDIA INC.

In July 1997, the Company purchased 51% of the outstanding shares of Spiral
Media Inc. ("Spiral Media"). The Company purchased the remaining portion of
outstanding shares in July 1998. The total consideration for all of the stock
acquired was $6,165,880. This consideration was comprised of a cash payment of
$5,501,766, relinquishment of debt due from Spiral Media stockholders totaling
$128,209 and the issuance of 480,626 shares of the Company's common stock valued
at $1.12 per share, which in management's opinion was the fair market value of
the

F-14
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. ACQUISITIONS AND INVESTMENTS (CONTINUED)
common stock at the date of issuance. This acquisition has been accounted for
under the purchase method of accounting and, accordingly, the purchase price has
been allocated to the tangible and intangible assets acquired and liabilities
assumed on the basis of their respective fair values on the respective
acquisition dates. As a result of this acquisition, the Company has recorded
goodwill of approximately $6,111,199, which is the cost in excess of net assets
acquired and is being amortized over a period of twenty years.

ONLINE MAGIC LIMITED

In October 1997, the Company purchased 42.5% of the outstanding shares of
Online Magic Limited ("Online Magic"), a United Kingdom company, which
represented the controlling interest in Online Magic. The outstanding shares
acquired were deemed to be a controlling interest as after the investment, the
Company had the ability to direct or cause the direction of the management and
operating and financing policies of Online Magic. In May 1998 and July 1998, the
Company acquired all of the remaining outstanding shares of Online Magic through
two separate purchase agreements. The total consideration paid was approximately
$2,196,905. The consideration is comprised of a cash payment of $1,641,152 and
the issuance of 498,434 shares of the Company's common stock value at $1.12 per
share, which in management's opinion was the fair market value of the common
stock at the date of issuance. This acquisition has been accounted for under the
purchase method of accounting and, accordingly, the purchase price has been
allocated to the tangible and intangible assets acquired and liabilities assumed
on the basis of their respective fair values on the respective acquisition
dates. As a result of this acquisition, the Company has recorded goodwill of
approximately $1,872,456, which is the cost in excess of net assets acquired and
is being amortized over a period of twenty years. Furthermore, the purchase
agreements call for certain earn-out payments to former shareholders of Online
Magic based upon the achievement of targeted operating performance of Online
Magic through December 1999. These payments are payable in the form of 246,750
shares of the Company's common stock which are currently held in escrow and are
considered issued but not outstanding (Note 8). No earn-out amounts have been
earned as of December 31, 1998. Future payments, if any, will be recorded as
additional purchase price and, as such, an adjustment to goodwill.

KETCHUM ADVERTISING INC.

In April 1998, the Company acquired certain assets and assumed certain
liabilities from Ketchum Advertising Inc. ("Ketchum"). Ketchum was a subsidiary
of the Omnicom Group Inc. ("Omnicom"), which is a significant shareholder of the
Company's common stock both directly and through a wholly owned subsidiary. In
consideration for the net assets acquired, the Company paid approximately
$643,000 in cash. This acquisition has been accounted for under the purchase
method of accounting and, accordingly, the purchase price has been allocated to
the tangible and intangible assets acquired and liabilities assumed on the basis
of their respective fair values on the acquisition date. As a result of this
acquisition, the Company has recorded goodwill of approximately $643,000, which
is being amortized over a period of twenty years.

F-15
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. ACQUISITIONS AND INVESTMENTS (CONTINUED)
PRIMARY GROUP INC.

In August 1998, the Company acquired certain assets from Primary Group Inc.
("Primary Group") and assumed certain liabilities. In consideration for the net
assets acquired, the Company paid approximately $53,220 in cash. This
acquisition has been accounted for under the purchase method of accounting and,
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. As a result of this acquisition,
the Company has recorded goodwill of approximately $50,845, which is being
amortized over a period of twenty years.

The acquisitions described were valued based on management's estimate of the
fair value of the net assets acquired at the date of acquisition. Costs in
excess of net assets acquired were recorded as intangible assets. Presented
below is the allocation of the purchase price among assets acquired, liabilities
assumed and intangible assets.

<TABLE>
<CAPTION>
SPIRAL MEDIA ONLINE MAGIC KETCHUM PRIMARY GROUP
------------- -------------- ----------- ---------------
<S> <C> <C> <C> <C>
Accounts receivable.................................. $ 402,412 $ 1,079,719 $ -- $ --
Fixed assets......................................... 201,973 345,299 -- 2,375
Other assets......................................... 131,627 797,202 -- --
Intangible assets.................................... 6,111,199 1,872,456 643,000 50,845
Current liabilities.................................. (615,277) (1,313,073) -- --
Long-term liabilities................................ (66,054) (584,698) -- --
------------- -------------- ----------- ---------------
Total purchase price............................... $ 6,165,880 $ 2,196,905 $ 643,000 $ 53,220
------------- -------------- ----------- ---------------
------------- -------------- ----------- ---------------
</TABLE>

THE EDGE CONSULTANTS PTE. LTD.

In December 1998, the Company entered into an agreement to acquire 60% of
the outstanding shares of The Edge Consultants PTE. LTD. ("Edge") in a step
transaction. In accordance with the agreement, in December 1998, the Company
purchased 12% of the outstanding shares of Edge for $1,572,203 in cash. In July
1999, the Company purchased an additional 18% under the agreement for a cash
payment of approximately $1,500,000 and will account for this investment under
the equity method of accounting in future periods. Prior to the additional 18%
investment, the Company accounted for this investment under the cost method of
accounting. The Company may purchase an additional 30% for an amount that is
contingent upon the achievement of targeted operating performance goals by Edge.

INTERACTIVE SOLUTIONS INCORPORATED AND QUADRIS CONSULTING, INC.

In April 1999, the Company acquired all of the issued and outstanding shares
of capital stock of Interactive Solutions Incorporated ("ISI") from the ISI
shareholders (including Communicade Inc., a wholly owned subsidiary of Omnicom)
in exchange for an aggregate of 4,171,846 shares of the Company's common stock
and a warrant to purchase 3,071,248 shares of the Company's common stock at a
purchase price of $0.005 per share. Such warrant was valued at $0.80 per share
and the

F-16
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. ACQUISITIONS AND INVESTMENTS (CONTINUED)
fair value of the Company's common stock on the date of purchase was $1.23 per
share, each as determined by an independent third-party valuation.

Immediately, prior to the acquisition of ISI, ISI acquired all of the issued
and outstanding shares of capital stock of Quadris Consulting, Inc. ("Quadris")
from the Quadris shareholders in exchange for an aggregate of 1,869,528 shares
of ISI common stock. Prior to both acquisitions, Communicade sold 485,999.64
shares of ISI common stock to certain of the Company's shareholders for an
aggregate price of $412,492.

Outstanding stock options under the stock option plans of Quadris and ISI
were converted into approximately 1,402,382 options to purchase the Company's
common stock. Included in these options were 558,820, 185,146 and 659,036
options which were converted at exercise prices of $0.41, $0.45 and $1.21,
respectively, which were lower than the fair market value of the Company's
common stock at the date of grant, which was $1.23. Accordingly, the Company has
recorded additional purchase price of approximately $623,000 for the difference
between the exercise price and the fair market value of the underlying common
shares relating to these options.

EAGLE RIVER INTERACTIVE INC.

In April 1999, the Company acquired all of the issued and outstanding shares
of capital stock of Eagle River Interactive Inc. ("ERI") from Omnicom, ERI's
sole shareholder, in exchange for an aggregate of 3,659,548 shares of the
Company's common stock and a warrant to purchase 4,328,752 shares of the
Company's common stock at a purchase price of $0.005 per share. Such warrant was
valued at $0.80 per share and the fair value of the Company's common stock on
the date of purchase was $1.23 per share, each as determined by an independent
third-party valuation. In addition, 13,322 shares of the Company's common stock
were issued to certain participants of the ERI Key Executive Incentive Program
in settlement of all obligations due under the program and 80,690 shares were
issued to an executive of Eagle River Interactive. These shares have been
considered additional purchase price at $1.23 per share, the then fair market
value of the Company's common stock.

DIGITAL VISION COMMUNICATIONS INC.

In May 1999, the Company purchased all of the issued and outstanding shares
of capital stock of Digital Vision Communications Inc. ("Digital Vision") for
$1,100,000 in cash. This acquisition has been accounted for under the purchase
method of accounting and, accordingly, the purchase price has been allocated to
the tangible and intangible assets acquired and liabilities assumed on the basis
of their respective fair values on the acquisition date.

TWINSPARK INTERACTIVE PEOPLE B.V.

In August 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Twinspark Interactive People B.V. ("Twinspark") for
$700,000 in cash and 1,057,226 shares of the Company's common stock valued at
$4.06 per share, of which 1,047,226 shares will be

F-17
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. ACQUISITIONS AND INVESTMENTS (CONTINUED)

given to the shareholders of Twinspark and 10,000 to former employees of
Twinspark, for a total aggregate purchase price of $4,997,624. The Company also
granted 75,000 stock options to former employees of Twinspark at an exercise
price equal to the then fair market value of the Company's common stock. This
acquisition has been accounted for under the purchase method of accounting and,
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. Furthermore, the purchase
agreement calls for certain earn-out payments to the former shareholders of
Twinspark based upon the achievement of certain targeted operating results of
Twinspark through December 1999. These payments are payable in the form of
168,066 shares of the Company's common stock which are currently held in escrow.
Future payments, if any, will be recorded as additional purchase price and,
accordingly, an adjustment to goodwill.

PRO FORMA RESULTS OF OPERATIONS (UNAUDITED)

The following unaudited pro forma consolidated statement of operations data
for the year ended December 31, 1998 and the six months ended June 30, 1998 give
effect to the acquisitions of Ketchum Interactive, The Primary Group,
Interactive Solutions, Eagle River Interactive, Digital Vision and Twinspark
Interactive People as if each of these acquisitions had occurred on January 1,
1998. The pro forma consolidated statement of operations data for the six months
ended June 30, 1999 give effect to the acquisition of Twinspark Interactive
People as if it had occurred on January 1, 1999. All of the following unaudited
pro forma consolidated results of operations give effect to purchase accounting
adjustments. These pro forma results have been prepared for comparative purposes
only and do not purport to be indicative of what operating results would have
been had the acquisitions actually taken place on January 1, 1997, January 1,
1998, or January 1, 1999 and may not be indicative of future operating results.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
-----------------------
<S> <C> <C> <C> <C>
YEAR ENDED
DECEMBER 31, 1998 1998 1999
------------------------------- ----------- ----------

<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Pro forma: Revenues............................. $ 70,933 $ 33,989 $ 41,802
Net loss............................. (10,630) (4,601) (4,746)
Basic net loss per share............. (0.41) (0.18) (0.18)
Diluted net loss per share........... (0.41) (0.18) (0.18)
</TABLE>

3. RELATED PARTY TRANSACTIONS

On September 12, 1996, the controlling shareholders of the Company entered
into a shareholder's agreement (the "Shareholders Agreement") with Communicade
Inc., a wholly owned subsidiary of Omnicom. The Shareholders Agreement provided
a line of credit for working capital purposes of up to $1,000,000 (subsequently
amended to $2,500,000) at the same interest rate charged by Omnicom to its
subsidiaries under the Omnicom cash management system, which was approximately
6.50%. Borrowings were secured by a first priority lien on all assets. In
addition, the

F-18
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. RELATED PARTY TRANSACTIONS (CONTINUED)
Shareholders Agreement provided for additional financing to the Company for "new
media" acquisitions at the same interest rate charged by Omnicom to its
subsidiaries under the Omnicom cash management system.

On April 28, 1999, the Company entered into a new shareholder's agreement
(the "New Agreement") with Omnicom. The New Agreement nullified and superseded
the previous Shareholders Agreement dated September 12, 1996. The New Agreement
provides a line of credit for working capital purposes of not less than
$10,000,000 at the same interest rate charged by Omnicom to its subsidiaries
under the Omnicom cash management system, which was approximately 5.89%.
Borrowings are secured by a first priority lien on all assets. In addition, the
New Agreement provides for additional financing to the Company for "new media"
acquisitions at the same interest rate charged by Omnicom to its subsidiaries
under the Omnicom cash management system. Interest on any such loans shall be
paid quarterly on the then outstanding principal balance. Principal shall be
repaid quarterly in equal installments over a five-to-ten-year period.

At December 31, 1997 and 1998 and June 30, 1999 (unaudited), there were
approximately $1.0 million, $2.5 million and $19.8 million outstanding,
respectively, on the working capital line of credit at an interest rate of 6%.
At December 31, 1997 and 1998 and June 30, 1999 (unaudited), there were
approximately $1.4 million, $9.5 million and $37.5 million outstanding,
respectively, on the acquisition loans at an average rate of 6%. The amounts
owed as of June 30, 1999, include amounts assumed in the Eagle River and ISI
acquisitions. Related interest expense under the financing arrangements was $0,
$34,106 and $377,086, respectively, for the three years ended December 31, 1998
and $86,762 and $1,035,000, respectively, for the six months ended June 30, 1998
and 1999 (unaudited).

In September 1999, the Company signed a term sheet for a new credit facility
with Omnicom (See Note 13).

F-19
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. RELATED PARTY TRANSACTIONS (CONTINUED)

DUE FROM/TO RELATED PARTIES

Due from related parties consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ JUNE 30,
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
(UNAUDITED)
Urban Desires Inc.................................... $ 272,322 $ 130,093 $ 130,718
ISI.................................................. -- 11,754 --
Due from shareholders................................ 26,162 -- --
Other................................................ -- -- 8,157
----------- ----------- ------------
Due from related parties......................... $ 298,484 $ 141,847 $ 138,875
----------- ----------- ------------
----------- ----------- ------------
</TABLE>

Certain of the primary shareholders of the Company own Urban Desires Inc.
The Company provides services at its normal rates to Urban Desires Inc. for
which the Company is reimbursed. The total amount billed to Urban Desires Inc.
was not material to the accompanying consolidated financial statements.

Due to related parties consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
<S> <C> <C>
1998 1999
-------------- -------------

<CAPTION>
(UNAUDITED)
<S> <C> <C>
Quadris........................................................ $ 252,680 $ --
Eagle River.................................................... 33,987 --
Loan payable to shareholders................................... 166,741 1,065,322
-------------- -------------
Due to related parties..................................... $ 453,408 $ 1,065,322
-------------- -------------
-------------- -------------
</TABLE>

There were no outstanding amounts to related parties as of December 31,
1997.

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------- JUNE 30,
1997 1998 1999
------------- ------------- ---------------
<S> <C> <C> <C>
(UNAUDITED)
Equipment under capital leases................ $ 362,633 $ 1,804,702 $ 2,438,233
Equipment..................................... 936,711 801,932 1,326,561
Computer equipment............................ 470,796 1,948,470 7,464,834
Furniture and fixtures........................ 553,939 806,454 2,350,897
</TABLE>

F-20
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------- JUNE 30,
1997 1998 1999
------------- ------------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Leasehold improvements........................ 194,021 480,967 1,713,053
------------- ------------- ---------------
Total property and equipment.............. 2,518,100 5,842,525 15,293,578
Less--Accumulated depreciation and
amortization................................ (486,092) (1,627,397) (6,654,054)
------------- ------------- ---------------
Property and equipment, net............... $ 2,032,008 $ 4,215,128 $ 8,639,524
------------- ------------- ---------------
------------- ------------- ---------------
</TABLE>

Depreciation and amortization expense was $61,356, $304,491 and $1,141,305,
respectively, for the three years ended December 31, 1998 and $532,009 and
$1,984,074, respectively, for the six months ended June 30, 1998 and June 30,
1999 (unaudited).

5. INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------- JUNE 30,
1997 1998 1999
------------- ------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Goodwill....................................... $ 1,462,380 $ 8,677,500 $ 51,496,086
Trademark...................................... 112,222 115,246 115,246
Less--Accumulated amortization............. (25,292) (341,806) (1,068,967)
------------- ------------- --------------
Intangible assets, net......................... $ 1,549,310 $ 8,450,940 $ 50,542,365
------------- ------------- --------------
------------- ------------- --------------
</TABLE>

Amortization expense was $0, $25,292 and $316,514, respectively, for the
three years ended December 31, 1998 and $99,576 and $727,161, respectively, for
the six months ended June 30, 1998 and June 30, 1999 (unaudited).

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------- JUNE 30,
1997 1998 1999
------------- ------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Accounts payable............................... $ 1,130,815 $ 3,103,991 $ 5,265,604
Accrued expenses--other........................ 467,716 1,370,289 4,217,059
Accrued professional fees...................... 126,695 405,495 966,830
------------- ------------- --------------
$ 1,725,226 $ 4,879,775 $ 10,449,493
------------- ------------- --------------
------------- ------------- --------------
</TABLE>

F-21
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (CONTINUED)

There were no other individual items greater than 5% of current liabilities
as of December 31, 1997, December 31, 1998 and June 30, 1999 (unaudited).

7. INCOME TAXES

Income (loss) before income taxes and minority interest and the provision
(benefit) for taxes on income (loss) consisted of the following:

<TABLE>
<CAPTION>
SIX
YEAR ENDED DECEMBER 31, MONTHS ENDED
-------------------------------------------- JUNE 30,
1996 1997 1998 1999
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
(UNAUDITED)
Income (loss) before income taxes and minority
interest:
Domestic......................................... $ 2,890,390 $ 2,441,330 $ (3,465,952) $ (767,963)
International.................................... -- (160,839) 348,648 410,071
------------- ------------- -------------- --------------
$ 2,890,390 $ 2,280,491 $ (3,117,304) $ (357,892)
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
Provision (benefit) for taxes on income (loss):
Current--
Federal........................................ $ 78,000 $ 206,222 $ 256,115 $ 648,354
State and local................................ 112,000 143,554 166,297 296,702
International.................................. -- -- 127,118 --
Deferred--
Federal........................................ 711,892 506,336 (1,214,512) (541,703)
State and local................................ 486,108 259,528 (644,651) (350,115)
International.................................. -- -- -- --
------------- ------------- -------------- --------------
$ 1,388,000 $ 1,115,640 $ (1,309,633) $ 53,238
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
</TABLE>

F-22
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)
A reconciliation of the difference between the statutory U.S. Federal Income
Tax Rate and the Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
SIX
YEAR ENDED DECEMBER 31, MONTHS ENDED
-------------------------------------------- JUNE 30,
1996 1997 1998 1999
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
(UNAUDITED)
Statutory federal income tax rate.................. $ 1,011,636 $ 798,172 $ (1,213,083) $ (125,262)
State and local taxes on income, net of federal
income tax benefit............................... 376,364 236,321 (209,033) (17,164)
Goodwill amortization.............................. -- 62,284 8,695 170,226
Nondeductible expense.............................. -- -- 68,091 21,457
Other.............................................. -- 18,863 35,697 3,981
------------- ------------- -------------- --------------
Effective rate..................................... $ 1,388,000 $ 1,115,640 $ (1,309,633) $ 53,238
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
</TABLE>

The tax effects of temporary differences that give rise to a significant
portion of the deferred income taxes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------- JUNE 30,
1997 1998 1999
-------------- ------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Current deferred income tax assets
(liabilities) net:
Accrual to cash adjustments.................. $ (489,087) $ (182,048) $ (172,767)
Allowance for doubtful accounts.............. 14,939 386,701 1,778,035
Noncurrent deferred tax asset (liabilities),
net:
Accrual to cash adjustments.................. (1,467,262) (649,109) (428,585)
967,463
Net operating loss........................... 120,884 102,965 (64,436)
Goodwill amortization........................ -- --
Other........................................ (39,604) 19,444 42,933
-------------- ------------- --------------
Total deferred income taxes, net......... $ (1,860,130) $ (322,047) $ 2,122,643
-------------- ------------- --------------
-------------- ------------- --------------
</TABLE>

Deferred income taxes are provided for the temporary difference between the
financial reporting basis and tax basis of the Company's assets and liabilities.
Deferred tax assets result principally from recording certain expenses in the
financial statements, which are not currently deductible for tax purposes, and
differences between the tax and book basis of assets and liabilities recorded in
connection with the acquisitions. Deferred tax liabilities result principally
from expenses which are currently deductible for tax purposes, but have not yet
been expensed in the financial statements.

F-23
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)
The Company has concluded that it is probable that it will be able to
realize its deferred tax assets in future periods.

On September 12, 1996, pursuant to the Shareholder Agreement (Note 3), the
Company's S Corporation status was terminated and the Company began operations
as a C Corporation. Accordingly, the Company became subject to federal and state
income taxes and the retained deficit of the Company was transferred to
additional paid-in capital.

If the Company operated as a C corporation since its inception, the pro
forma income tax provision would have been $1,405,577 (unaudited), without
contemplating any applicable tax laws related to the utilization of net
operating losses. No pro forma adjustments are required for the years ended
December 31, 1997 and 1998 as the Company was operating as a C Corporation
during those years.

Management believes that amortization relating to certain goodwill generated
from international acquisitions is deductible under the Internal Revenue Code.
The Company may be restricted to the use of its net operating losses as a result
of the aforementioned acquisitions (Note 3).

8. STOCKHOLDERS' EQUITY

COMMON SHARES

In August 1999, the certificate of incorporation was amended to increase the
number of authorized shares of common stock, $0.001 par value, to 200,000,000.

STOCK SPLITS

On October 31, 1996, the Board of Directors authorized a 1.8 for 1 stock
split of the Company's common stock. On November 21, 1997, the Board of
Directors authorized a 5 for 1 stock split of the Company's common stock. On
July 15, 1998, the Board of Directors authorized a 1.8 for 1 stock split of the
Company's common stock. In June 1999, the Board of Directors authorized a 2 for
1 stock split of the Company's common stock. All share and per-share amounts in
the accompanying consolidated financial statements and footnotes have been
restated to give effect to these stock splits.

STOCK OPTIONS

On November 1, 1996, the Board of Directors adopted the 1996 Stock Option
Plan (the "1996 Plan"). The 1996 Plan authorizes the granting of awards, the
exercise of which would allow up to an aggregate of 1,800,000 shares of the
Company's common stock to be acquired by the holders of said awards, to key
employees.

On November 24, 1997, the Board of Directors adopted the 1997 Stock Option
Plan (the "1997 Plan"). The 1997 Plan authorizes the granting of awards, the
exercise of which would allow up to

F-24
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)
an aggregate of 2,078,730 shares of the Company's common stock to be acquired by
the holders of said awards, to key employees.

The awards under both plans take the form of nonqualified stock options and
expire five years from the date of grant. In the opinion of management, the
exercise price of options granted is equal to the fair market value of the
Company's common stock on the date of grant.

Options granted under the 1996 Plan and 1997 Plan vest upon the happening of
either an initial public offering of the common stock of the Company or a change
in control of the Company. Additionally, the 1997 Plan offers a discretionary
five-year vesting schedule in the event that either of the preceding events does
not occur, based upon the approval of the Board of Directors.

A summary of stock option activity for the 1996 Plan and 1997 Plan is as
follows:

<TABLE>
<CAPTION>
1996 PLAN 1997 PLAN
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
WEIGHTED WEIGHTED
AVERAGE EXERCISE AVERAGE EXERCISE
SHARES PRICE SHARES PRICE
--------- ----------------- --------- -----------------
Balance at December 31, 1996................................ 154,800 $ 0.86 -- $ --
Granted................................................... 164,088 1.05 332,730 1.12
Exercised................................................. -- -- -- --
Canceled.................................................. (9,000) 0.86 -- --
--------- ---------
Balance at December 31, 1997................................ 309,888 0.96 332,730 1.12
Granted................................................... 96,030 1.12 148,560 1.12
Exercised................................................. -- -- -- --
Canceled.................................................. (75,960) 0.99 (20,000) 1.12
--------- ---------
Balance at December 31, 1998................................ 329,958 $ 1.00 461,290 $ 1.12
--------- ---------
--------- ---------
</TABLE>

No options were exercisable at December 31, 1998. In the aggregate, at
December 31, 1998, there were 791,248 options outstanding. Of this amount,
149,688 were outstanding with an average remaining contractual life of 2.98
years, and a weighted average exercise price of $0.86, and 641,560 were
outstanding with an average remaining contractual life of 4.14 years, and a
weighted average exercise price of $1.12. At December 31, 1998, there were
1,470,042 options and 1,617,440 options available for future grant under the
1996 Plan and 1997 Plan, respectively.

The 1999 Stock Option/Stock Issuance Plan is the successor program to our
1996 Stock Option Plan and 1997 Stock Option Plan. The 1999 plan was adopted in
February 1999 and became effective as of that date. All outstanding options
under our 1996 Stock Option Plan and 1997 Stock Option Plan will be transferred
to the 1999 plan upon the closing of the Company's initial public offering, and
no further option grants will be made under the predecessor plans. The
transferred options will continue to be governed by their existing terms. Except
as otherwise noted, the transferred options have substantially the same terms as
those for grants to be made under the discretionary option grant program of the
1999 plan.

F-25
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)
9,601,178 shares of our common stock have been authorized for issuance under
the 1999 plan. This share reserve consists of the number of shares carried over
from the 1996 and 1997 plans plus an additional increase of 8,748,266 shares.
The share reserve will automatically increase on the first trading day in
January each year, by an amount equal to 3% of the total number of shares of
common stock outstanding on the last trading day of the prior year, but in no
event will this annual increase exceed 1,500,000 shares. In addition, no
participant in the 1999 plan may be granted stock options, separately
exercisable stock appreciation rights or direct stock issuances for more than
1,100,000 shares of common stock in total in any calendar year. Of the 9,601,178
shares 6,394,500 remained available for issuance at the close of business on
June 30, 1999.

The Company accounts for the stock option plans in accordance with APB No.
25, under which no compensation has been recognized for stock options granted.
Had compensation for the stock option plans been determined consistent with the
provisions of SFAS No. 123, the effect on the Company's net income (loss) and
basic and diluted net income (loss) per common share would have been the
following:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------------------
<S> <C> <C>
1997 1998
------------- ---------------
Net income (loss), as reported................................ $ 1,164,851 $ (1,807,671)
Net income (loss), pro forma.................................. 1,137,972 (2,062,147)
Basic income (loss) per share, as reported.................... 0.07 (0.11)
Basic income (loss) per share, pro forma...................... 0.07 (0.12)
Diluted income (loss) per share, as reported.................. 0.07 (0.11)
Diluted income (loss) per share, pro forma.................... 0.07 (0.12)
</TABLE>

The fair value of each option grant has been estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
<S> <C> <C>
1997 1998
--------- ---------
Expected option lives................................................... 5 years 5 years
Risk-free interest rates................................................ 5.88% 5.04%
Expected volatility..................................................... 99.89% 99.89%
Dividend yield.......................................................... 0% 0%
Fair value.............................................................. $0.85 $0.86
</TABLE>

On February 22, 1999, the Company's Board of Directors adopted and the
Company's shareholders approved the 1999 Stock Option/Stock Issuance Plan (the
"1999 Plan"). The 1999 Plan is divided into the following three separate equity
programs:

a) Discretionary Option Grant Program-under which eligible persons may, at
the discretion of the Plan Administrator, be granted options to purchase
shares of common stock.

F-26
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)
b) Stock Issuance Program-under which eligible persons may, at the
discretion of the Plan Administrator, be issued shares of common stock
directly, either through the immediate purchase of such shares or as a
bonus for services rendered.

c) Automatic Option Grant Program-under which eligible non-employee Board
members shall automatically receive options at periodic intervals to
purchase shares of common stock.

The maximum number of shares of common stock initially reserved for issuance
over the term of the 1999 Plan is 9,601,178 shares. The number of shares
available for issuance automatically increase on the first trading day of each
calendar year during the term of the 1999 Plan, beginning with the 2000 calendar
year (by an amount equal to 3% of the shares outstanding on the last trading day
of the preceding calendar year, but in no event shall any such annual increase
exceed 1,500,000 shares). No option shall have a term in excess of 10 years
measured from the option grant date.

In April 1999, the Company issued options to purchase 50,000 shares of
common stock at an exercise price of $1.225 per share, which was then the fair
market value of the Company's common stock, to an individual who agreed to serve
as a director of the Company upon the closing of the Company's initial public
offering. The options will only become exercisable at the time the director-
nominee is elected to serve as a director of the Company.

9. GEOGRAPHIC REPORTING

The Company began operations outside of the United States during 1997. A
summary of the Company's operations by geographical area as of December 31, 1997
and 1998 and for the years then ended is presented below:

As of and for the year ended December 31, 1997:

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL CONSOLIDATED
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues..................................... $ 12,151,636 $ 823,939 $ 12,975,575
Income (loss) from operations................ 2,263,938 (160,839) 2,103,099
Net income (loss)............................ 1,233,208 (68,357) 1,164,851
Long--lived assets........................... 3,382,102 199,216 3,581,318
Current assets............................... 6,100,383 988,835 7,089,218
Other assets................................. 658,887 8,402 667,289
</TABLE>

F-27
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. GEOGRAPHIC REPORTING (CONTINUED)
As of and for the year ended December 31, 1998:

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL CONSOLIDATED
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues..................................... $ 18,936,199 $ 7,515,992 $ 26,452,191
Income (loss) from operations................ (2,562,168) 86,184 (2,475,984)
Net income (loss)............................ (1,694,622) (113,049) (1,807,671)
Long--lived assets........................... 13,768,465 469,806 14,238,271
Current assets............................... 6,460,598 1,647,784 8,108,382
Other assets................................. 3,129,090 7,352 3,136,442
</TABLE>

As of and for the six months ended June 30, 1999 (unaudited):

<TABLE>
<S> <C> <C> <C>
Revenues............................ $24,158,181 $ 6,230,996 $30,389,177
Income (loss) from operations....... 287,016 410,187 697,203
Net income (loss)................... (817,126) 405,996 (411,130)
Long--lived assets.................. 60,040,640 723,381 60,764,021
Current assets...................... 31,558,587 2,913,200 34,471,787
Other assets........................ 2,138,036 222,553 2,360,589
</TABLE>

10. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

As of December 31, 1998 and June 30, 1999 (unaudited), respectively, the
Company was committed under operating leases, principally for office space and
equipment, expiring through 2003. Subsequent to December 31, 1998, the Company
entered into a a lease agreement for new office space for its headquarters in
New York and its Boston location. Certain leases are subject to rent reviews and
require payment of expenses under immaterial escalation clauses. Rent expense
was $71,000, $232,913 and $671,759, respectively, for the three years ended
December 31, 1998 and $335,640 and $1,666,281, respectively, for the six months
ended June 30, 1998 and June 30, 1999 (unaudited). Future minimum base rents
under terms of noncancellable operating leases are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1999........................................................ $ 846,653
2000........................................................ 4,189,138
2001........................................................ 4,090,397
2002........................................................ 4,084,131
2003........................................................ 4,295,534
Thereafter.................................................. 29,896,623
</TABLE>

F-28
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)
EMPLOYMENT AGREEMENTS

In April 1999 the Company entered into employment agreements with Chan Suh,
Chief Executive Officer, and Kyle Shannon, Chief Creative Officer. Mr. Suh and
Mr. Shannon's agreements obligate the Company to pay an annual salary of
$155,000 and 150,000, respectively, through March 31, 2004. Under the provisions
of the agreements, if early termination occurs any options that would have
vested during this employment period are accelerated to vest and become
exercisable prior to the date of termination. The Company also has an employment
agreement with its President, North America whereby the executive receives an
annual salary of $150,000, entitled to receive an annual bonus of $100,000 and
is eligible for an annual discretionary bonus of up to $250,000. The Company
also made a restricted stock grant to this executive of 80,690 shares of common
stock, which vest equally on each of the first three anniversaries of the date
of the grant. In addition during April 1999, the Company entered into employment
agreements under similar terms with four other key members of management that
expire on various dates through March 2004.

Future minimum compensation for all of these agreements is as follows.

<TABLE>
<S> <C>
Year ending December 31:
1999........................................................ $ 683,333
2000........................................................ 1,025,000
2001........................................................ 1,025,000
2002........................................................ 497,500
2003........................................................ 305,000
Thereafter.................................................. 76,250
</TABLE>

LITIGATION

The Company, from time to time, becomes involved in various routine legal
proceedings in the ordinary course of its business. The Company believes that
the outcome of all pending legal proceedings and unasserted claims in the
aggregate will not have a material adverse effect on its consolidated results of
operations, consolidated financial position or liquidity.

11. CAPITAL LEASE OBLIGATIONS

At December 31, 1997 and 1998, the Company was committed under capital
leases, principally for computer equipment and office equipment, expiring
through 2003. The assets and liabilities under the capital leases are recorded
at the lower of the present value of minimum lease payments or the fair market
value of the assets. The assets are depreciated over their estimated useful
lives. The average interest rate on the capital leases is 5.6%.

F-29
<PAGE>
AGENCY.COM LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. CAPITAL LEASE OBLIGATIONS (CONTINUED)
Future minimum payments under the lease agreements are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1999........................................................ $ 613,021
2000........................................................ 529,532
2001........................................................ 317,363
2002........................................................ 21,395
2003........................................................ 15,825
-----------
Total minimum lease payments............................ 1,497,136
Less--Amounts representing interest......................... 84,279
Less--Current portion....................................... 564,536
-----------
Present value of net minimum lease payments............. $ 848,321
-----------
-----------
</TABLE>

12. EMPLOYEE BENEFIT PLAN

The Company has a defined contribution plan covering all of its eligible
employees in the U.S. The Plan was effective from January 1, 1996 and is
qualified under Section 401(k) of the Internal Revenue Code. Employees may begin
participation on monthly enrollment dates provided that they have reached 21
years of age and 6 months of service. The Company may make matching and/or
profit sharing contributions to the plan at its discretion. Contribution expense
was $16,095 and $45,320, respectively, for the years ended December 31, 1997 and
1998 and zero for each of the six months ended June 30, 1998 (unaudited) and
June 30, 1999.

13. SUBSEQUENT EVENTS

The Company is pursuing an initial public offering of its securities. The
offering contemplates the sale of shares of common stock at an offering price of
$11.00 per share, before underwriting discounts and commissions and offering
expenses. The Company plans to use 35% of the net proceeds of this offering
subject to a maximum of $25 million to repay amounts borrowed under the term
loan portion of the new Omnicom credit facility (see below).

In September 1999, the Company signed a term sheet for a new $85 million
credit facility with Omnicom Finance, a wholly owned subsidiary of Omnicom,
which will replace the Company's revolving credit lines and consolidates all of
the Company's previously outstanding indebtedness due to Omnicom. The credit
facility will provide for a $25 million term loan, a $54 million revolving
credit line and a $6,000,000 lease credit support facility. Under the term
sheet, the Company must use 35% of the net proceeds from its initial public
offering, up to a maximum of $25 million, to repay amounts borrowed under the
term loan. The remaining amounts will be due in full on September 30, 2001. This
credit facility bears interest at the rate of Omnicom's commercial paper rate
plus 1.25% and terminates in September 2001.

F-30
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Eagle River Interactive:

We have audited the accompanying combined statements of operations, divisional
equity (deficit) and cash flows of Eagle River Interactive (formerly a division
of Mastering, Inc., the "Predecessor" see Note 1) for the year ended December
31, 1996 and the period from January 1, 1997 through September 26, 1997. These
financial statements are the responsibility of the management of Eagle River
Interactive Inc. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Eagle River
Interactive (formerly a division of Mastering, Inc.) for the year ended December
31, 1996 and the period from January 1, 1997 through September 26, 1997 in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado

July 19, 1999

F-31
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Eagle River Interactive Inc.:

We have audited the accompanying consolidated balance sheets of Eagle River
Interactive Inc. (a Delaware corporation) (the "Successor Company" see Note 1),
as of December 31, 1997 and 1998, and the related consolidated statements of
operations, stockholders' deficit and cash flows for the period from inception
(September 26, 1997) to December 31, 1997 and the year ended December 31, 1998.
These financial statements are the responsibility of the Companies' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eagle River Interactive Inc. as
of December 31, 1997 and 1998, and the results of its operations and its cash
flows for the period from inception (September 26, 1997) to December 31, 1997
and the year ended December 31, 1998, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

New York, New York

July 19, 1999

F-32
<PAGE>
EAGLE RIVER INTERACTIVE INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ MARCH 31,
1997 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
(UNAUDITED)
ASSETS
Current Assets:
Cash................................................................... $ 632,000 $ 711,000 $ 683,000
Accounts receivable, net of allowance for doubtful accounts of
$184,000, $2,784,000 and $2,784,000 (unaudited), respectively........ 3,600,000 4,525,000 521,000
Unbilled charges....................................................... 1,344,000 139,000 2,912,000
Prepaid expenses and other current assets.............................. 975,000 1,000 251,000
Due from affiliates.................................................... -- 34,000 670,000
Federal income tax receivable.......................................... 770,000 2,567,000 3,076,000
Deferred tax assets.................................................... 241,000 366,000 366,000
----------- ----------- -----------
Total current assets............................................... 7,562,000 8,343,000 8,479,000

Property and Equipment, net of accumulated depreciation and amortization
of $1,572,000, $2,888,000 and $3,280,000 (unaudited), respectively..... 3,384,000 2,406,000 2,132,000

Goodwill, net of accumulated amortization of $1,076,000, $5,398,000 and
$6,479,000 (unaudited), respectively................................... 11,889,000 7,567,000 6,486,000
Deferred Tax Assets...................................................... 298,000 1,237,000 1,540,000
Other Assets............................................................. 64,000 53,000 43,000
----------- ----------- -----------
Total assets....................................................... $23,197,000 $19,606,000 $18,680,000
----------- ----------- -----------
----------- ----------- -----------

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued expenses.................................. $ 4,966,000 $ 7,300,000 $ 4,139,000
Line of credit due to Omnicom.......................................... 3,128,000 2,160,000 5,162,000
Deferred revenue....................................................... 1,012,000 429,000 115,000
Current portion of capital lease obligations........................... 352,000 150,000 150,000
Management fee due to Omnicom Finance Inc.............................. -- 182,000 182,000
Due to affiliates...................................................... -- 111,000 710,000
Other current liabilities.............................................. 208,000 259,000 414,000
----------- ----------- -----------
Total current liabilities.......................................... 9,666,000 10,591,000 10,872,000

Long-term Liabilities:
Due to Omnicom Finance Inc............................................. 15,968,000 17,063,000 17,407,000
Capital lease obligations.............................................. 103,000 -- --
Other long-term liabilities............................................ 81,000 -- --
----------- ----------- -----------
Total liabilities.................................................. 25,818,000 27,654,000 28,279,000
----------- ----------- -----------
Commitments and Contingencies

Shareholders' Deficit:
Common stock, no par value, 1,500 shares authorized, 100 shares issued
and outstanding, respectively........................................ -- -- --
Accumulated deficit.................................................... (2,632,000) (8,023,000) (9,542,000)
Cumulative foreign currency translation................................ 11,000 (25,000) (57,000)
----------- ----------- -----------
Total shareholders' deficit........................................ (2,621,000) (8,048,000) (9,599,000)
----------- ----------- -----------
Total liabilities and shareholders' deficit........................ $23,197,000 $19,606,000 $18,680,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-33
<PAGE>
EAGLE RIVER INTERACTIVE INC.
COMBINED/CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SUCCESSOR COMPANY
-----------------------------------------------------------------
PREDECESSOR COMPANY PERIOD
-------------------------------------- FROM INCEPTION
PERIOD FROM (SEPTEMBER 26, THREE MONTHS ENDED MARCH
JANUARY 1, 1997 1997) 31,
YEAR ENDED THROUGH THROUGH YEAR ENDED ------------------------
DECEMBER 31, 1996 SEPTEMBER 26, 1997 DECEMBER 31, 1997 DECEMBER 31, 1998 1998 1999
----------------- ------------------ ------------------ ----------------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Revenues............... $15,439,000 $ 12,927,000 $ 4,984,000 $23,442,000 $ 5,063,000 $ 5,072,000
Direct salaries and
costs................ 14,327,000 10,252,000 3,347,000 11,782,000 2,742,000 2,885,000
----------------- ------------------ ------------------ ----------------- ----------- -----------
Gross profit....... 1,112,000 2,675,000 1,637,000 11,660,000 2,321,000 2,187,000
General and
administrative....... 2,957,000 6,649,000 3,755,000 12,022,000 2,275,000 2,452,000
Sales and marketing.... 2,987,000 4,631,000 427,000 1,958,000 355,000 602,000
Amortization of
goodwill............. -- -- 1,076,000 4,322,000 1,081,000 1,081,000
----------------- ------------------ ------------------ ----------------- ----------- -----------
Loss from
operations....... (4,832,000) (8,605,000) (3,621,000) (6,642,000) (1,390,000) (1,948,000)
Other expense, net..... 500,000 1,100,000 5,000 10,000 -- --
Interest expense net... -- -- 315,000 1,601,000 368,000 382,000
----------------- ------------------ ------------------ ----------------- ----------- -----------
Loss before income
taxes............ (5,332,000) (9,705,000) (3,941,000) (8,253,000) (1,758,000) (2,330,000)
Benefit for income
taxes................ -- -- (1,309,000) (2,862,000) (623,000) (811,000)
----------------- ------------------ ------------------ ----------------- ----------- -----------
Net loss........... ($5,332,000) ($ 9,705,000) ($2,632,000) ($5,391,000) ($1,135,000) ($1,519,000)
----------------- ------------------ ------------------ ----------------- ----------- -----------
----------------- ------------------ ------------------ ----------------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these combined/consolidated
statements.

F-34
<PAGE>
EAGLE RIVER INTERACTIVE INC.

COMBINED/CONSOLIDATED STATEMENTS OF DIVISIONAL EQUITY (DEFICIT)
AND STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996--
PREDECESSOR
COMPANY
---------------

<S> <C>
Divisional Deficit, December 31, 1995............................................................ ($ 1,853,000)

Net loss for the period........................................................................ (5,332,000)
Advances from Parent........................................................................... 13,664,000
---------------

Divisional Equity, December 31, 1996............................................................. 6,479,000

Net loss for the period........................................................................ (9,705,000)
Advances from Parent........................................................................... 5,140,000
---------------

Divisional Equity, September 26, 1997............................................................ $ 1,914,000
---------------
---------------
</TABLE>

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION (SEPTEMBER 26, 1997)
THROUGH DECEMBER 31, 1998--SUCCESSOR COMPANY
---------------------------------------------------------------------------------------
COMMON STOCK CUMULATIVE TOTAL
-------------------------- ACCUMULATED FOREIGN CURRENCY STOCKHOLDERS'
SHARES AMOUNT DEFICIT TRANSLATION DEFICIT
------------- ----------- ---------------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
Balance, September 26, 1997... -- $ -- $ -- $ -- $ --

Common stock issued in
connection with
acquisition................. 100 -- -- -- --
Foreign currency translation
adjustment.................. -- -- -- 11,000 11,000
Net loss.................... -- -- (2,632,000) -- (2,632,000)
--- ----- ---------------- -------- ------------------
Balance, December 31, 1997.... 100 -- (2,632,000) 11,000 (2,621,000)

Foreign currency translation
adjustment.................. -- -- -- (36,000) (36,000)
Net loss.................... -- -- (5,391,000) -- (5,391,000)
--- ----- ---------------- -------- ------------------
Balance, December 31, 1998.... 100 -- (8,023,000) (25,000) (8,048,000)

Foreign currency translation
adjustment.................. -- -- -- (32,000) (32,000)
Net loss (unaudited)........ -- -- (1,519,000) -- (1,519,000)
--- ----- ---------------- -------- ------------------
Balance, March 31, 1999
(unaudited)................. 100 $ -- ($ 9,542,000) ($ 57,000) ($ 9,599,000)
--- ----- ---------------- -------- ------------------
--- ----- ---------------- -------- ------------------
</TABLE>

The accompanying notes are an integral part of these combined/consolidated
statements.

F-35
<PAGE>
EAGLE RIVER INTERACTIVE INC.
COMBINED/CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PREDECESSOR COMPANY SUCCESSOR COMPANY
----------------------------- ------------------------------
<S> <C> <C> <C> <C>

<CAPTION>
PERIOD FROM
PERIOD FROM INCEPTION
JANUARY 1, (SEPTEMBER 26,
1997 1997)
YEAR ENDED THROUGH THROUGH YEAR ENDED
DECEMBER 31, SEPTEMBER 26, DECEMBER 31, DECEMBER 31,
1996 1997 1997 1998
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................................... ($5,332,000) ($ 9,705,000) ($ 2,632,000) ($ 5,391,000)
Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:
Impairment of long-lived assets............................ -- -- -- --
Loss on disposal of fixed assets........................... -- -- 199,000 543,000
Write-off of software...................................... -- -- -- --
Write-off of prepaid expenses and other current assets..... -- 344,000 -- --
Allowance for doubtful accounts............................ -- 980,000 44,000 1,045,000
Amortization of goodwill................................... -- -- 1,076,000 4,322,000
Depreciation and amortization.............................. 1,096,000 1,086,000 234,000 1,686,000
Change in assets and liabilities:
Increase (decrease) in deferred revenue.................. (60,000) 168,000 531,000 (583,000)
(Increase) decrease in accounts receivable............... (2,444,000) 278,000 (846,000) (1,970,000)
Increase in Federal income tax receivable................ -- -- (770,000) (1,797,000)
Increase in deferred tax assets.......................... -- -- (539,000) (1,064,000)
Increase (decrease) due to/from affiliates............... -- -- -- 77,000
(Increase) decrease in unbilled charges.................. (2,123,000) 219,000 330,000 1,205,000
(Increase) decrease in prepaid expenses and other current
assets................................................. (143,000) 239,000 (814,000) 985,000
Increase (decrease) in other current liabilities......... 58,000 (320,000) 77,000 233,000
Increase (decrease) in other long-term liabilities....... -- -- (18,000) (81,000)
Increase (decrease) in accounts payable and accrued
expenses............................................... (599,000) 2,428,000 700,000 2,334,000
------------- -------------- -------------- --------------
Net cash (used in) provided by operating activities.... (9,547,000) (4,283,000) (2,428,000) 1,544,000
------------- -------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................... (3,140,000) (677,000) (520,000) (1,251,000)
Acquisition of subsidiary...................................... (349,000) (26,000) -- --
Acquisition of software........................................ (241,000) -- -- --
------------- -------------- -------------- --------------
Net cash (used in) in investing activities............. (3,730,000) (703,000) (520,000) (1,251,000)
------------- -------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under capital lease obligations....................... (117,000) (154,000) (34,000) (305,000)
Payments under note payable.................................... (270,000) -- -- --
Net change in due to/from corporate............................ 13,664,000 5,140,000 -- --
Proceeds from issuance of long-term debt and line of credit.... -- -- 3,596,000 19,451,000
Repayment of long-term debt and line of credit................. -- -- -- (19,324,000)
------------- -------------- -------------- --------------
Net cash provided by (used in) financing activities.... 13,277,000 4,986,000 3,562,000 (178,000)
------------- -------------- -------------- --------------
EFFECT OF EXCHANGE RATES ON CASH................................. -- -- 11,000 (36,000)
------------- -------------- -------------- --------------
Net increase (decrease) in cash........................ -- -- 625,000 79,000
------------- -------------- -------------- --------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD................... -- -- 7,000 632,000
------------- -------------- -------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD......................... $ -- $ -- $ 632,000 $ 711,000
------------- -------------- -------------- --------------
------------- -------------- -------------- --------------
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING ACTIVITIES:
Equipment acquired under capital leases........................ $ 452,000 -- -- --

<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED MARCH 31,
----------------------------
1998 1999
------------- -------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................................... ($ 1,135,000) ($ 1,519,000)
Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:
Impairment of long-lived assets............................ --
Loss on disposal of fixed assets........................... --
Write-off of software...................................... --
Write-off of prepaid expenses and other current assets..... -- --
Allowance for doubtful accounts............................ --
Amortization of goodwill................................... 1,081,000 1,081,000
Depreciation and amortization.............................. 391,000 393,000
Change in assets and liabilities:
Increase (decrease) in deferred revenue.................. 820,000 (314,000)
(Increase) decrease in accounts receivable............... (1,283,000) 4,003,000
Increase in Federal income tax receivable................ (356,000) (508,000)
Increase in deferred tax assets.......................... (266,000) (303,000)
Increase (decrease) due to/from affiliates............... -- (38,000)
(Increase) decrease in unbilled charges.................. (772,000) (2,774,000)
(Increase) decrease in prepaid expenses and other current
assets................................................. 304,000 (238,000)
Increase (decrease) in other current liabilities......... 82,000 155,000
Increase (decrease) in other long-term liabilities....... (81,000) --
Increase (decrease) in accounts payable and accrued
expenses............................................... 1,313,000 (3,161,000)
------------- -------------
Net cash (used in) provided by operating activities.... 98,000 (3,223,000)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................... (265,000) (119,000)
Acquisition of subsidiary...................................... -- --
Acquisition of software........................................ -- --
------------- -------------
Net cash (used in) in investing activities............. (265,000) (119,000)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under capital lease obligations....................... (142,000) --
Payments under note payable.................................... -- --
Net change in due to/from corporate............................ -- --
Proceeds from issuance of long-term debt and line of credit.... 3,033,000 8,005,000
Repayment of long-term debt and line of credit................. (2,000,000) (4,660,000)
------------- -------------
Net cash provided by (used in) financing activities.... 891,000 3,345,000
------------- -------------
EFFECT OF EXCHANGE RATES ON CASH................................. (34,000) (31,000)
------------- -------------
Net increase (decrease) in cash........................ 690,000 (28,000)
------------- -------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD................... 632,000 711,000
------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD......................... $ 1,322,000 $ 683,000
------------- -------------
------------- -------------
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING ACTIVITIES:
Equipment acquired under capital leases........................ -- --
</TABLE>

The accompanying notes are an integral part of these combined/consolidated
statements

F-36
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

ORGANIZATION AND BUSINESS

Eagle River Interactive ("ERI") refers to the interactive marketing
solutions division of Eagle River Interactive, Inc., subsequently renamed
Mastering, Inc. ("Parent"). During 1996, the Parent completed a merger with
Graphic Media, Inc. ("GM"), which was accounted for as a pooling of interests.
In addition, during 1996, the Parent acquired SRC Localisation ("SRC"), a 99%
owned subsidiary, which is located in Paris, France. Collectively ERI, GM and
SRC are referred to as the "Predecessor." All significant intercompany accounts
and transactions have been eliminated in the accompanying financial statements.

For the year ended December 31, 1996, and for the period January 1, 1997
through September 26, 1997, the accompanying financial statements were derived
from the historical accounting records maintained by the Parent and were
prepared on the accrual basis of accounting. Historically, the Parent maintained
separate records of revenues of the Predecessor and direct expenses and costs
that were clearly identifiable for the Predecessor, were recorded as expenses of
the Predecessor. For purposes of the accompanying statements of operations, the
Predecessor has made an allocation of the expenses of centralized functions such
as human resources, in-house legal and other such shared services, based upon
the estimated expected usage of such services by the Predecessor. This
allocation was based on levels of relative employees, business activity and
similar measures, of the Predecessor as compared to the other businesses of the
Parent. No allocations of corporate expenses for corporate executives, corporate
functions and similar expenses were made. The results of operations for the
periods presented are not necessarily indicative of results to be expected in
the future.

The Predecessor created, developed and deployed interactive marketing
strategies to assist a variety of companies, primarily in the United States, in
communicating effectively with their targeted audiences. The Predecessor created
these strategies by combining its knowledge of leading technologies with its
creative expertise and strategic marketing experience.

On September 26, 1997, substantially all of the assets and liabilities of
the Predecessor were sold to a newly formed wholly-owned subsidiary of the
Omnicom Group Inc., which was subsequently renamed Eagle River Interactive Inc.,
which will be referred to hereafter as the "Company" or "Successor." The
transaction was accounted for as a purchase transaction. The purpose of the
business and its operations remained the same after the acquisition.

In April 1999, the Company was purchased by AGENCY.COM Ltd. ("AGENCY.COM")
under a merger agreement (Note 14).

All footnotes to follow for the year ended December 31, 1996, and for the
period from January 1, 1997 through September 26, 1997, will refer to the
Predecessor while the footnotes for the period from September 27, 1997 through
December 31, 1997, the year ended December 31, 1998 and the three months ended
March 31, 1998 and 1999 will refer to the Successor.

F-37
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the operations of
Eagle River Interactive and its 99% owned subsidiary, SRC. All significant
intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

REVENUE RECOGNITION

Revenues are recognized as services are rendered on the
percentage-of-completion method of accounting based on the ratio of costs
incurred to total estimated costs. Unbilled charges represent labor costs
incurred and estimated earnings, production and other client reimbursable costs
in excess of related billings. Deferred revenues represent billings of
production and other client reimbursable out-of-pocket costs in excess of
revenues earned. Provisions for estimated losses on uncompleted contracts are
made in the period in which such losses are determined. Revenue from time and
material jobs is recognized on the basis of costs incurred during the period.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost or fair market value as determined
when acquired on September 26, 1997, net of accumulated depreciation and
amortization. Property and equipment are depreciated on a straight-line basis
over estimated useful lives of three to five years. Leasehold improvements and
equipment held under capital leases are amortized utilizing the straight-line
method over the lesser of the estimated useful life of the asset or the
remaining term of the related lease.

GOODWILL

Goodwill, which represents the excess of the purchase price over the fair
value of the net assets acquired on September 26, 1997, is presently being
amortized over a period of three years on a straight-line basis. Management has
evaluated the amortization period in the current period and has determined that
no impairment currently exists. This amortization period will be evaluated by
management on a continuing basis, and will be adjusted if the lives of the
related intangible assets are impaired.

F-38
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
ACCOUNTING FOR LONG-LIVED ASSETS

The Predecessor and Successor account for long-lived assets under the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." This statement establishes financial accounting and reporting
standards for the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used, and for
long-lived assets and certain identifiable tangibles to be disposed of. The
Company reviews long-lived assets and certain identifiable intangibles to be
held and used for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset exceeds the fair value of the
asset. If other events or changes in circumstances indicate that the carrying
amount of an asset that the Company expects to hold and use may not be
recoverable, the Company will estimate the future cash flows expected to result
from the use of the asset and its eventual disposition. Management has performed
a review of all long-lived assets and has determined that no impairment of the
respective carrying value has occurred at December 31, 1998 and March 31, 1999
(unaudited).

INCOME TAXES

As a division of Mastering, Inc., the Predecessor was not directly subject
to Federal, state and local income taxes. Provisions for deferred taxes were not
reflected on the Predecessor's books and records, but were reflected on
Mastering, Inc.'s books and records. Mastering, Inc. and its subsidiaries filed
a consolidated Federal income tax return. SRC filed a separate return in Paris.
The Predecessor's results of operations were combined with those of the
remainder of the Parent for tax reporting purposes. The Predecessor was
allocated a portion of the Parent's tax benefit or provision determined as if
the Predecessor was a separate tax paying entity. Because the Predecessor has
reported net losses since inception, no tax benefit or provision was recorded.

Beginning September 26, 1997, the Successor became fully subject to income
taxes in accordance with SFAS No. 109, "Accounting for Income Taxes." Under SFAS
No. 109, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their tax bases for
operating profit and tax liability carryforward. 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
recovered or settled. The effect on deferred tax assets or liabilities of a
change in tax rates is recognized in the period that the tax change occurs.

FOREIGN CURRENCY TRANSLATION

All assets and liabilities of the Company's foreign subsidiary are
translated into U.S. dollars at fiscal year-end exchange rates. Income and
expense items are translated at average exchange rates prevailing during the
fiscal year. The resulting translation adjustments are recorded as a component
of shareholders' deficit in the accompanying consolidated financial statements.

F-39
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts receivable, due to/from affiliates,
accounts payable and the line of credit approximate fair value due to the
short-term maturity of these instruments. The carrying amounts of due to
Ominicom Finance Inc. and capital lease obligations approximate fair value.

BUSINESS CONCENTRATIONS AND CREDIT RISK

Financial instruments, which subject the Company to concentrations of credit
risk, consist primarily of cash and trade accounts receivable. The Company
maintains cash with various financial institutions. The Company performs
periodic evaluations of the relative credit standing of these institutions. The
Company's clients are primarily concentrated in the United States. The Company
performs ongoing credit evaluations, generally does not require collateral, and
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of customers, historical trends and other information.

For the year ended December 31, 1996 and the period from January 1, 1997
through September 26, 1997 there were no customers whose revenues represented a
significant amount of total revenues.

For the period from September 27, 1997 through December 31, 1997, 1 client
accounted for 24% of total revenues.

For the year ended December 31, 1998, 1 client accounted for 21% of total
revenues.

For the three months ended March 31, 1998, 1 client accounted for 25% of
total revenues.

For the three months ended March 31, 1999, 2 clients accounted for 24% and
12%, respectively, of total revenues.

As of December 31, 1997, 1 client accounted for 24% of total accounts
receivable.

As of December 31, 1998, 3 clients accounted for 21%, 20% and 17%,
respectively, of total accounts receivable.

As of March 31, 1999, 1 client accounted for 14% of total accounts
receivable.

COMPREHENSIVE INCOME

During 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income," which established standards for reporting and displaying comprehensive
income and its components in a

F-40
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
financial statement that is displayed with the same prominence as other
financial statements. The components of comprehensive income are as follows:

<TABLE>
<CAPTION>
SUCCESSOR COMPANY
PREDECESSOR COMPANY ------------------------------------------------
------------------------------------------------ PERIOD FROM
PERIOD FROM INCEPTION (SEPTEMBER 26,
YEAR ENDED JANUARY 1, 1997 THROUGH 1997) THROUGH DECEMBER 31, YEAR ENDED
DECEMBER 31, 1996 SEPTEMBER 26, 1997 1997 DECEMBER 31, 1998
-------------------- -------------------------- -------------------------- --------------------
<S> <C> <C> <C> <C>
Net loss................... $ (5,332,000) $ (9,705,000) $ (2,632,000) $ (5,391,000)
Foreign currency
translation adjustment... -- -- 11,000 (36,000)
-------------------- ------------- ------------ --------------------
Comprehensive loss..... $ (5,332,000) $ (9,705,000) $ (2,621,000) $ (5,427,000)
-------------------- ------------- ------------ --------------------
-------------------- ------------- ------------ --------------------
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1998 1999
------------- --------------
<S> <C> <C>
(UNAUDITED)
Net loss........................................................................................... $ (1,135,000) $ (1,519,000)
Foreign currency translation adjustment............................................................ (9,000) (32,000)
------------- --------------
Comprehensive loss............................................................................. $ (1,144,000) $ (1,551,000)
------------- --------------
------------- --------------
</TABLE>

NEW ACCOUNTING PRONOUNCEMENTS

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), which provides guidance
for determining whether computer software is internal-use software and on
accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 is effective for fiscal years
beginning after December 31, 1998. The Company does not expect the adoption of
SOP 98-1 to have a material effect on its financial statements.

F-41
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards of
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The Company does not currently
engage in derivative activity and does not expect the adoption of this standard
to have a material effect on the Company's results of consolidated operations,
financial position or cash flows.

UNAUDITED FINANCIAL STATEMENTS

The unaudited consolidated financial information included herein as of March
31, 1999 and for the three months ended March 31, 1998 and 1999, have been
prepared in accordance with generally accepted accounting principles for interim
financial statements. In the opinion of the Company, these unaudited
consolidated financial statements, reflect all adjustments necessary, consisting
of normal recurring adjustments, for a fair presentation of such data on a basis
consistent with that of the audited data presented herein. The consolidated
results for interim periods are not necessarily indicative of the results
expected for a full year.

2. MERGER

On June 21, 1996, pursuant to an Agreement and Plan of Merger, the Parent
completed a merger of a wholly-owned subsidiary with GM, an Oregon corporation.
As a result of the merger, GM became a wholly-owned subsidiary of the Parent and
a component of the Predecessor. The business combination was accounted for by
the Parent as a pooling of interests. The Parent incurred approximately $500,000
to complete the GM merger, which has been reflected as Other Expense in the
accompanying 1996 statement of operations.

The merger was accounted for as a pooling of interests and, accordingly, the
historical financial statements for the Parent and GM for periods prior to
consummation of the merger were restated as though the companies had been
combined for all periods reported. The Predecessor's financial statements have
been correspondingly restated.

The following table provides information about revenues and earnings
reported by the Predecessor prior to the merger for the six months ended June
30, 1996:

<TABLE>
<CAPTION>
ERI GM TOTAL
------------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
Revenues............................................................ $ 6,971,000 $ 2,519,000 $ 9,490,000
------------- ------------- -------------
Net loss............................................................ $ (14,000) $ (150,000) $ (164,000)
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

F-42
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. RELATED PARTY TRANSACTIONS

OMNICOM FINANCE INC.

In September 1997, Omnicom Finance Inc. ("OFI"), a wholly-owned subsidiary
of Omnicom, loaned the Company $15,500,000 to acquire the assets of the
interactive services business of Mastering, Inc., then known as Eagle River
Interactive. This amount bears interest at the rate charged by Omnicom to its
subsidiaries under Omnicom's cash management program ("the Applicable Rate"),
which was 6.85%, 6.00%, 6.63% and 5.93% as of December 31, 1997 and 1998, and
for the three months ended March 31, 1998 and 1999, respectively.

In September 1997, OFI agreed to provide a line of credit to the Company.
Amounts borrowed under the line of credit bear interest at the rate then in
effect charged by Omnicom to its subsidiaries under Omnicom's cash management
program which ranged from 6.63% to 6.85%, 6.00% to 6.70%, 6.6% to 6.65% and
5.91% to 5.95% for the years ended December 31, 1997 and 1998 and for the three
months ended March 31, 1998 and 1999, respectively. The Company had
approximately $3,128,000, $2,160,000 and $5,162,000 of the line of credit
outstanding at December 31, 1997 and 1998 and March 31, 1999 (unaudited),
respectively. All outstanding amounts are repayable on demand.

Interest expense on all amounts due OFI amounted to approximately $315,000
and $1,601,000 for the years ended December 31, 1997 and 1998, respectively, and
$368,000 and $382,000 for the three months ended March 31, 1998 and 1999,
respectively.

On May 15, 1998, Omnicom entered into a letter of credit guarantee, not to
exceed approximately $645,000 on behalf of the Company. Under the terms of the
agreement, Omnicom guarantees the payment of all sums under one of ERI's leases
for office space. The letter of credit expires on May 31, 2001.

DUE FROM/TO AFFILIATES

The Company provides and receives consulting services from/to affiliated
companies.

Due from affiliates consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 MARCH 31, 1999
------------------- ---------------
<S> <C> <C>
(UNAUDITED)
AGENCY.COM................................................................. $ 34,000 $ --
Online Magic Limited....................................................... -- 366,000
Quadris Consulting, Inc.................................................... -- 234,000
Other affiliates........................................................... -- 70,000
-------- ---------------
$ 34,000 $ 670,000
-------- ---------------
-------- ---------------
</TABLE>

F-43
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. RELATED PARTY TRANSACTIONS (CONTINUED)
Due to affiliates consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 MARCH 31, 1999
------------------- ---------------
<S> <C> <C>
(UNAUDITED)
Interactive Solutions Inc.................................................. $ 111,000 $ 51,000
AGENCY.COM................................................................. -- 659,000
---------- ---------------
$ 111,000 $ 710,000
---------- ---------------
---------- ---------------
</TABLE>

There were no outstanding amounts due from/to related parties as of December
31, 1997.

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ MARCH 31,
1997 1998 1999
-------------- -------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Software.......................................................... $ 793,000 $ 833,000 $ 870,000
Furniture and fixtures............................................ 2,473,000 3,032,000 3,054,000
Leasehold improvements............................................ 1,690,000 1,429,000 1,488,000
-------------- -------------- --------------
Total property and equipment.................................. 4,956,000 5,294,000 5,412,000
Less--Accumulated depreciation and amortization................... (1,572,000) (2,888,000) (3,280,000)
-------------- -------------- --------------
Property and equipment, net................................... $ 3,384,000 $ 2,406,000 $ 2,132,000
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

Depreciation and amortization expense was approximately $1,096,000 and
$1,086,000 for the year ended December 31, 1996 and for the period from January
1, 1997 through September 26, 1997, respectively. Depreciation and amortization
expense was approximately $234,000, $1,686,000, $391,000 and $393,000 for the
period September 27, 1997 through December 31, 1997, the year ended 1998 and for
the three months ended March 31, 1998 and 1999 (unaudited), respectively.

5. GOODWILL

Goodwill consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ MARCH 31,
1997 1998 1999
-------------- -------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Goodwill........................................................ $ 12,965,000 $ 12,965,000 $ 12,965,000
Less--Accumulated amortization.................................. (1,076,000) (5,398,000) (6,479,000)
-------------- -------------- --------------
Goodwill, net............................................... $ 11,889,000 $ 7,567,000 $ 6,486,000
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

F-44
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. GOODWILL (CONTINUED)
Amortization expense was approximately $1,076,000 and $4,322,000,
respectively, for the years ended December 31, 1997 and 1998 and $1,081,000 and
$1,081,000, respectively, for the three months ended March 31, 1998 and 1999.

The Predecessor did not have any goodwill or related amortization expense
prior to September 26, 1997.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------- MARCH 31,
1997 1998 1999
-------------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
Accounts payable.................................................... $ 376,000 $ 1,474,000 $ 429,000
Accrued stay bonuses................................................ 1,206,000 641,000 --
Accrued project costs............................................... 327,000 561,000 --
Accrued merger expenses............................................. 379,000 -- --
Accrued vacation.................................................... 254,000 221,000 101,000
Accrued professional fees........................................... -- 364,000 364,000
Accrued expenses.................................................... 2,424,000 4,039,000 3,245,000
-------------- ------------- -------------
Total........................................................... $ 4,966,000 $ 7,300,000 $ 4,139,000
-------------- ------------- -------------
-------------- ------------- -------------
</TABLE>

There were no other individual items greater than 5% of current liabilities
as of December 31, 1997, December 31, 1998 and March 31, 1999 (unaudited).

F-45
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES

Loss before income taxes and the provision for (benefit from) income taxes
consisted of the amounts shown below:

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
(SEPTEMBER 26, 1997) THREE MONTHS
THROUGH YEAR ENDED ENDED MARCH 31,
DECEMBER 31, DECEMBER 31, ------------------------------
1997 1998 1998 1999
--------------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
(UNAUDITED)
Income (loss) before income taxes:
Domestic................................ $ (3,773,000) $ (8,201,000) $ (1,794,000) $ (2,338,000)
International........................... (168,000) (52,000) 36,000 8,000
--------------------- -------------- -------------- --------------
$ (3,941,000) $ (8,253,000) $ (1,758,000) $ (2,330,000)
--------------------- -------------- -------------- --------------
--------------------- -------------- -------------- --------------
(Benefit from) income taxes:
Current--Federal........................ $ (770,000) $ (1,798,000) $ (356,000) $ (508,000)
Deferred--Federal....................... (539,000) (1,064,000) (267,000) (303,000)
--------------------- -------------- -------------- --------------
$ (1,309,000) $ (2,862,000) $ (623,000) $ (811,000)
--------------------- -------------- -------------- --------------
--------------------- -------------- -------------- --------------
</TABLE>

A reconciliation of the difference between the statutory U.S. Federal Income
Tax Rate and the Company's effective tax rate follows:

F-46
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)
The tax effects of temporary differences that give rise to a significant
portion of the deferred income tax assets (liabilities), net, are as follows:

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
(SEPTEMBER 26, 1997)
THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1998 MARCH 31, 1999
--------------------- ------------- ---------------
<S> <C> <C> <C>
(UNAUDITED)
Deferred tax assets:
Goodwill amortization................................... $ 298,000 $ 1,222,000 $ 1,525,000
Allowance for doubtful accounts......................... 288,000 366,000 366,000
Other................................................... 15,000 15,000 15,000
---------- ------------- ---------------
Total deferred tax assets................................. 601,000 1,603,000 1,906,000
---------- ------------- ---------------
Deferred tax liabilities:
Other................................................... (62,000) -- --
---------- ------------- ---------------
Total deferred tax liabilities............................ (62,000) -- --
---------- ------------- ---------------
Net deferred tax asset.................................... $ 539,000 $ 1,603,000 $ 1,906,000
---------- ------------- ---------------
---------- ------------- ---------------
</TABLE>

Deferred income taxes are provided for the temporary difference between the
financial reporting basis and tax basis of the Company's assets and liabilities.
Deferred tax assets result principally from recording certain expenses in the
financial statements, which are not currently deductible for tax purposes and
differences between the tax and book basis of assets and liabilities recorded in
connection with the acquisitions. Deferred tax liabilities result principally
from expenses which are currently deductible for tax purposes, but have not yet
been expensed in the financial statements.

The Company has concluded that it is probable that it will be able to
realize these net deferred tax assets in future periods.

8. STOCKHOLDERS' DEFICIT

The Company has 1,500 authorized shares of Common Stock, no par value, of
which 100 were issued and outstanding as of December 31, 1997 and 1998 and March
31, 1999 (unaudited).

F-47
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. GEOGRAPHIC REPORTING

The Company began operations outside of the United States during 1996. A
summary of the Company's operations and financial position by geographical area
is presented below:

For the period January 1, 1997 through September 26, 1997:

For the period September 26, 1997 through December 31, 1997 and as of
December 31, 1997:

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL CONSOLIDATED
--------------- ------------- ---------------
<S> <C> <C> <C>
Revenues........................................................ $ 4,791,000 $ 193,000 $ 4,984,000
Income (loss) from operations................................... (3,459,000) (162,000) (3,621,000)
Net income (loss)............................................... (2,464,000) (168,000) (2,632,000)
Long-lived assets............................................... 15,189,000 84,000 15,273,000
Current assets.................................................. 7,333,000 229,000 7,562,000
Other assets.................................................... 343,000 19,000 362,000
</TABLE>

As of and for the year ended December 31, 1998:

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL CONSOLIDATED
--------------- ------------- ---------------
<S> <C> <C> <C>
Revenues........................................................ $ 21,875,000 $ 1,567,000 $ 23,442,000
Income (loss) from operations................................... (6,601,000) (41,000) (6,642,000)
Net income (loss)............................................... (5,339,000) (52,000) (5,391,000)
Long-lived assets............................................... 9,868,000 105,000 9,973,000
Current assets.................................................. 7,880,000 463,000 8,343,000
Other assets.................................................... 1,270,000 20,000 1,290,000
</TABLE>

As of and for the three months ended March 31, 1999 (unaudited):

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL CONSOLIDATED
--------------- ------------- ---------------
<S> <C> <C> <C>
Revenues........................................................ $ 4,575,000 $ 497,000 $ 5,072,000
Income (loss) from operations................................... (1,956,000) 8,000 (1,948,000)
Net income (loss)............................................... (1,527,000) 8,000 (1,519,000)
Long-lived assets............................................... 8,501,000 117,000 8,618,000
Current assets.................................................. 8,142,000 337,000 8,479,000
Other assets.................................................... 1,566,000 17,000 1,583,000
</TABLE>

F-48
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company is committed under operating leases, principally for office
space. Certain leases are subject to rent reviews and require payment of
expenses under escalation clauses. Rent expense was approximately $281,000,
$1,070,000, $288,000 and $261,000 for the period from September 27, 1997 through
December 31, 1997, the year ended December 31, 1998 and for the three months
ended March 31, 1998 and 1999 (unaudited), respectively. Future minimum base
rents under terms of noncancelable operating leases are as follows:

<TABLE>
<S> <C>
1999........................................................... $1,244,000
2000........................................................... 1,259,000
2001........................................................... 984,000
2002........................................................... 688,000
2003........................................................... 634,000
Thereafter..................................................... 2,493,000
----------
$7,302,000
----------
----------
</TABLE>

LITIGATION

11. CAPITAL LEASE OBLIGATIONS

At December 31, 1998, the Company was committed under capital leases,
principally for computer equipment and office equipment. The assets and
liabilities under the capital leases are recorded at the lower of the present
value of minimum lease payments or the fair market value of the assets. The
assets are depreciated over their estimated useful lives. The interest rate on
the capital leases ranges from 5.00% to 10.25%.

Future minimum payments under the lease agreements are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1999.......................................................... $ 165,000
---------
Total minimum lease payments.............................. 165,000
Less--Amounts representing interest........................... 15,000
---------
Present value of net minimum lease payments............... $ 150,000
---------
---------
</TABLE>

F-49
<PAGE>
EAGLE RIVER INTERACTIVE INC.

NOTES TO COMBINED/CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. EMPLOYEE BENEFIT PLAN

The Company has a defined contribution plan covering all of its eligible
employees in the U.S. The Plan became effective on October 1, 1997 and is
qualified under Section 401(k) of the Internal Revenue Code of 1996. Employees
may begin participation on monthly enrollment dates provided that they have
completed three months of service. The Company may make matching and/or profit
sharing contributions to the Plan at its discretion.

Contribution expense was $24,000, $225,000, $64,000, and $57,000 for the
period September 27, 1997 through December 31, 1997, the year ended December 31,
1998 and for the three months ended March 31, 1998 and 1999 (unaudited),
respectively.

13. ORGANIZATIONAL REALIGNMENT

In the second quarter of 1997 the Parent completed an organizational
realignment, which included moving the Parent's corporate office to Scottsdale,
Arizona and the Predecessor's headquarters to Chicago, Illinois. The Predecessor
incurred approximately $1.1 million of expenses in connection with the
realignment for severance charges, moving costs, and similar charges, which was
recorded in Other Expense in the accompanying statement of operations for the
period from January 1, 1997 through September 26, 1997. Substantially all of
this amount was disbursed prior to the sale to Omnicom Group on September 26,
1997.

14. SUBSEQUENT EVENT

Pursuant to an Agreement and Plan of Merger dated April 28, 1999, the
Company was acquired by AGENCY.COM effective April 1, 1999. As a result of the
sale, the separate existence of the Company ceased. Under the merger agreement,
the 100 outstanding shares of the Company's common stock was converted into
3,659,548 of AGENCY.COM common shares and a warrant to purchase 4,328,752
AGENCY.COM common shares.

F-50
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Interactive Solutions, Inc.:

We have audited the accompanying consolidated balance sheets of Interactive
Solutions, Inc. (a Massachusetts corporation) and subsidiary as of December 31,
1997 and 1998, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Interactive Solutions, Inc. and
subsidiary as of December 31, 1997 and 1998, and the results of their operations
and their cash flows for each of the three years ended December 31, 1998, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

New York, New York

July 16, 1999

F-51
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- MARCH 31,
1997 1998 1999
---------- ----------- ------------
<S> <C> <C> <C>
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents......................... $ 422,114 $ 880,663 $ 325,279
Accounts receivable, net of allowance for doubtful
accounts of $37,481, $310,000 and $310,000
(unaudited), respectively....................... 1,301,208 2,871,281 810,562
Unbilled charges.................................. 206,277 219,228 3,281,020
Prepaid expenses and other current assets......... 491 173,359 --
Due from affiliates............................... -- 351,770 --
Income tax receivable............................. 54,262 147,992 147,992
---------- ----------- ------------
Total current assets.......................... 1,984,352 4,644,293 4,564,853
Property And Equipment, net of accumulated
depreciation and amortization of $92,787,
$388,061 and $485,003 (unaudited),
respectively.................................... 357,539 1,109,914 1,026,136
Goodwill, net of accumulated amortization of $0,
$1,953,783 and $3,233,779 (unaudited),
respectively.................................... -- 5,450,026 14,446,736
Deferred Tax Assets................................. 258,550 1,798,932 2,254,479
Other Assets........................................ -- 33,545 52,025
---------- ----------- ------------
Total assets.................................. $2,600,441 $13,036,710 $22,344,229
---------- ----------- ------------
---------- ----------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses............. $ 627,855 $ 2,186,909 $1,298,297
Due to Omnicom Finance Inc........................ -- 2,358,106 2,786,024
Deferred revenue.................................. 618,440 519,320 828,745
Due to affiliates................................. -- -- 305,316
Deferred tax liabilities.......................... 157,987 94,893 96,938
---------- ----------- ------------
Total current liabilities..................... 1,404,282 5,159,228 5,315,320
---------- ----------- ------------
---------- ----------- ------------
Due To Omnicom Finance Inc.......................... 828,346 9,737,645 9,904,727
---------- ----------- ------------
Commitments and Contingencies
Stockholders' Equity (Deficit):
Common stock, $.01 par value, 7,000,000 shares
authorized, 4,500,000, 4,505,500 and 4,505,500
(unaudited) shares issued and outstanding,
respectively.................................... 45,000 45,055 45,055
Additional paid-in capital........................ 486,375 495,120 10,771,825
Accumulated deficit............................... (163,562) (2,400,338) (3,692,698)
---------- ----------- ------------
Total stockholders' equity (deficit).......... 367,813 (1,860,163) 7,124,182
---------- ----------- ------------
Total liabilities and shareholders' equity
(deficit)................................... $2,600,441 $13,036,710 $22,344,229
---------- ----------- ------------
---------- ----------- ------------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-52
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------------- -----------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
---------- ---------- ----------- ---------- -----------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues........................................ $1,513,027 $4,187,300 $15,370,470 $1,805,075 $ 3,598,106
Direct Salaries And Costs....................... 803,991 2,432,179 9,659,366 1,256,519 2,207,841
---------- ---------- ----------- ---------- -----------
Gross profit................................ 709,036 1,755,121 5,711,104 548,556 1,390,265

General And Administrative...................... 385,396 1,467,918 6,220,344 780,152 1,509,291
Sales And Marketing............................. 66,028 692,288 482,952 84,697 39,898
Amortization Of Goodwill........................ -- -- 1,953,783 102,771 1,279,996
Depreciation And Amortization................... 12,819 79,969 295,274 36,235 96,942
---------- ---------- ----------- ---------- -----------
Income (loss) from operations................. 244,793 (485,054) (3,241,249) (455,299) (1,535,862)
Interest Expense, net........................... -- 22,444 599,003 45,464 210,000
---------- ---------- ----------- ---------- -----------
Income (loss) before (provision) benefit for
income taxes................................ 244,793 (507,498) (3,840,252) (500,763) (1,745,862)
(Provision) Benefit For Income Taxes............ (100,192) 199,335 1,603,476 206,430 453,502
---------- ---------- ----------- ---------- -----------
Net income (loss)......................... $ 144,601 $ (308,163) $(2,236,776) $ (294,333) $(1,292,360)
---------- ---------- ----------- ---------- -----------
---------- ---------- ----------- ---------- -----------
</TABLE>

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

F-53
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL RETAINED STOCKHOLDERS'
---------------------- PAID-IN EARNINGS EQUITY
SHARES AMOUNT CAPITAL (DEFICIT) (DEFICIT)
----------- --------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>

Balance, January 1, 1996............... 4,500,000 $ 45,000 $ (13,625) $ -- $ 31,375

Capital contribution................. -- -- 500,000 -- 500,000

Net income........................... -- -- -- 144,601 144,601
----------- --------- -------------- -------------- --------------

Balance, December 31, 1996............. 4,500,000 45,000 486,375 144,601 675,976

Net income........................... -- -- -- (308,163) (308,163)
----------- --------- -------------- -------------- --------------

Balance, December 31, 1997............. 4,500,000 45,000 486,375 (163,562) 367,813

Exercise of stock options............ 5,500 55 8,745 -- 8,800

Net loss............................. -- -- -- (2,236,776) (2,236,776)
----------- --------- -------------- -------------- --------------

Balance, December 31, 1998............. 4,505,500 45,055 495,120 (2,400,338) (1,860,163)

Allocation from parent of costs over
fair value of assets acquired...... -- -- 10,276,705 -- 10,276,705

Net loss (unaudited)................. -- -- -- (1,292,360) (1,292,360)
----------- --------- -------------- -------------- --------------

Balance, March 31, 1999 (Unaudited).... 4,505,500 $ 45,055 $ 10,771,825 $ (3,692,698) $ 7,124,182
----------- --------- -------------- -------------- --------------
----------- --------- -------------- -------------- --------------
</TABLE>

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

F-54
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------- ------------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
--------- --------- ----------- ----------- -----------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................... $ 144,601 $(308,163) $(2,236,776) $ (294,333) $(1,292,360)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities-
Amortization of goodwill........................ -- -- 1,953,783 102,771 1,279,996
Depreciation and amortization................... 12,819 79,969 295,274 36,235 96,942
Allowance for doubtful accounts................. 6,000 86,481 261,537 59,509 --
Changes in operating assets and liabilities:
Accounts receivable......................... (402,331) (730,680) (72,425) (611,044) 2,060,719
Unbilled charges............................ -- (206,277) 376,037 287,205 (3,061,792)
Prepaid expenses and other current assets... (557) 66 (172,868) (39,176) 173,359
Income tax receivable....................... (82,886) (54,262) (93,730) -- --
Due from affiliates......................... -- -- (351,770) -- 657,086
Deferred tax assets......................... -- (175,664) (1,041,037) (208,473) (455,547)
Other assets................................ (528) 836 35,566 35,866 (18,480)
Accounts payable and accrued expenses....... 66,634 561,221 929,954 281,316 (888,613)
Deferred revenue............................ 123,787 494,653 (485,975) 122,952 309,425
Deferred tax liabilities.................... 181,657 (23,670) (562,439) 2,044 2,045
--------- --------- ----------- ----------- -----------

Net cash provided by (used in) operating
activities...................................... 49,196 (275,490) (1,164,869) (225,128) (1,137,220)
--------- --------- ----------- ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired.............. -- (300,000) (8,827,538) (8,827,538) --
Capital expenditures............................ (98,403) (281,635) (825,249) (111,999) (13,164)
--------- --------- ----------- ----------- -----------

Net cash used in investing activities..... (98,403) (581,635) (9,652,787) (8,939,537) (13,164)
--------- --------- ----------- ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from Omnicom Finance Inc.:........... -- 828,346 11,267,405 9,451,463 595,000
Proceeds from exercise of stock option.......... -- -- 8,800 --
Proceeds from capital contribution.............. 500,000 -- -- -- --
--------- --------- ----------- ----------- -----------
Net cash provided by financing activities..... 500,000 828,346 11,276,205 9,451,463 595,000
--------- --------- ----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents................................. 450,793 (28,779) 458,549 286,798 (555,384)
CASH AND CASH EQUIVALENTS, beginning of year...... 100 450,893 422,114 422,114 880,663
--------- --------- ----------- ----------- -----------

CASH AND CASH EQUIVALENTS, end of year............ $ 450,893 $ 422,114 $ 880,663 $ 708,912 $ 325,279
--------- --------- ----------- ----------- -----------
--------- --------- ----------- ----------- -----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for-
Income taxes.................................. $ 160,400 $(104,620) $ 62,200 $ -- $ --
Interest...................................... -- -- 37,598 -- --
--------- --------- ----------- ----------- -----------
--------- --------- ----------- ----------- -----------
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING
ACTIVITY:
Increase in goodwill resulting from allocation
from Parent of cost over fair value of assets
acquired........................................ $ -- $ -- $ -- $ -- $10,276,706
</TABLE>

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

F-55
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Interactive Solutions, Inc. and subsidiary (collectively known as the
"Company" or "Interactive") is a digital communications services provider. Prior
to December 31, 1998, Interactive was owned 60% by its majority shareholder and
40% by Communicade Inc. ("Communicade"), formerly known as JWL Associates,
Corp., a wholly-owned subsidiary of the Omnicom Group Inc. ("Omnicom")--See
Notes 3 and 12. The Company creates digital communications strategies to help
its clients increase sales, improve communications and create brand identities.
The Company's integrated service offering includes strategic consulting, design
of information architecture and end-user interfaces and customization and
implementation of enabling software technologies. The Company primarily uses
Internet-based technologies to create digital communications strategies and is
building capabilities in additional technologies.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Interactive and its subsidiary, Quadris Consulting, Inc. ("Quadris"). The
Company had no subsidiary prior to March 16, 1998 (See Note 2). All significant
intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

REVENUE RECOGNITION

Revenue from contracts is recognized as services are rendered on the
percentage-of-completion method of accounting based on the ratio of costs
incurred to total estimated costs. Unbilled charges represent labor costs
incurred and estimated earnings, production and other client reimbursable costs
in excess of related billings. Deferred revenue represents billings of
production and other client reimbursable out-of-pocket costs in excess of
revenues earned. Provisions for estimated losses on uncompleted contracts are
made in the period in which such losses are determined. Revenue from time and
material jobs is recognized on the basis of costs incurred during the period.

CASH AND CASH EQUIVALENTS

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

F-56
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, net of accumulated depreciation
and amortization. Property and equipment are depreciated on a straight-line
basis over estimated useful lives ranging from three to seven years. Leasehold
improvements are amortized utilizing the straight-line method over the lesser of
the estimated useful life of the asset or the remaining term of the related
lease.

GOODWILL

Goodwill, which represents the excess of the purchase price over the fair
value of the net assets acquired, is being amortized over a period of three
years on a straight-line basis. Management has evaluated the amortization period
in the current period and has determined that no impairment currently exists.
This amortization period will be evaluated by management on a continuing basis,
and will be adjusted if the life of the goodwill is impaired.

ACCOUNTING FOR LONG-LIVED ASSETS

The Company accounts for long-lived assets under the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."
This statement establishes financial accounting and reporting standards for the
impairment of long-lived assets, certain identifiable intangibles and goodwill
related to those assets to be held and used, and for long-lived assets and
certain identifiable tangibles to be disposed of. The Company reviews long-lived
assets and certain identifiable intangibles to be held and used for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset exceeds the fair value of the asset. If other events or changes in
circumstances indicate that the carrying amount of an asset that the Company
expects to hold and use may not be recoverable, the Company will estimate the
future cash flows expected to result from the use of the asset and its eventual
disposition. Management has performed a review of all long-lived assets and has
determined that no impairment of the respective carrying value has occurred as
of December 31, 1997 and 1998.

INCOME TAXES

The Company accounts for income taxes under the provisions of the SFAS No.
109, "Accounting for Income Taxes." Under SFAS No. 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their tax bases for operating profit and tax liability
carryforward. 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 recovered or settled. The effect on deferred tax
assets or liabilities of a change in tax rates is recognized in the period that
the tax change occurs.

F-57
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, accounts receivable, due
from affiliates, accounts payable and due to Omnicom Finance Inc. approximate
fair value due to the short-term maturity of these instruments. The carrying
amount of due to Omnicom Group Inc. approximates fair value.

STOCK-BASED COMPENSATION

SFAS No. 123, "Accounting for Stock-Based Compensation," requires that stock
awards granted subsequent to January 1, 1995, be recognized as compensation
expense based on their fair value at the date of grant. Alternatively, a company
may use Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees," and disclose pro forma income amounts which would
have resulted from recognizing such awards at their fair value. The Company has
elected to account for stock-based compensation expense under APB No. 25 and
make the required pro forma disclosures for compensation (See Note 8).

NEW ACCOUNTING PRONOUNCEMENTS

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), which provides guidance
for determining whether computer software is internal-use software and on
accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 is effective for fiscal years
beginning after December 31, 1998. The Company does not expect the adoption of
SOP 98-1 to have a material effect on its financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards of
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The Company does not currently
engage in derivative activity and does not expect the adoption of this

F-58
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
standard to have a material effect on the Company's results of consolidated
operations, financial position or cash flows.

UNAUDITED FINANCIAL STATEMENTS

2. ACQUISITIONS

QUADRIS CONSULTING, INC.

On March 16, 1998, the Company purchased 60% of the equity of a newly formed
corporation, Quadris. Concurrent with this transaction, Quadris acquired
substantially all of the assets and liabilities of the Quadris division of
JYACC, Inc. The total consideration for the net assets acquired was $8,827,538.
The remaining 40% of Quadris is owned by Quadris' management.

This acquisition was accounted for under the purchase method of accounting
and, accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. As a result of this acquisition,
the Company has recorded goodwill of $7,403,809, which is the cost in excess of
net assets acquired and is being amortized over a period of three years.

ECHO STRATEGIES GROUP

On June 20, 1997, the Company purchased substantially all of the assets of
Echo Strategies Group ("Echo") for cash consideration of $300,000. This
acquisition was accounted for under the purchase method of accounting and,
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired on the basis of their respective fair values on the
acquisition date. In conjunction with the purchase of Echo, the Company signed
employment contracts with two former Echo employees and issued to them a total
of 200,000 stock options with a five-year vesting period, exercisable at $1.60
per share. These options vested and converted to options to acquire AGENCY.COM
LTD. ("AGENCY.COM") shares on April 28, 1999 (See Note 12). As a result of the
acquisition, the separate existence of the Company ceased to exist.

F-59
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. ACQUISITIONS (CONTINUED)
The acquisitions described above were valued based on management's estimates
of the fair value of the assets and liabilities acquired at the date of
acquisition. An independent third party valuation corroborating management's
estimates for the Quadris acquisition was obtained. Assets and liabilities
acquired were recorded as follows:

<TABLE>
<CAPTION>
QUADRIS ECHO
------------------- ---------------------
<S> <C> <C>
Accounts receivable.................................................. $ 1,759,185 $ 229,403
Unbilled charges..................................................... 388,988 --
Fixed assets......................................................... 222,400 70,289
Other assets......................................................... 69,111 308
Goodwill............................................................. 7,403,809 --
Accounts payable and accrued expenses................................ (385,986) --
Deferred revenue..................................................... (386,855) --
Accrued loss on contracts............................................ (243,114) --
------------------- ----------
Total purchase price............................................... $ 8,827,538 $ 300,000
------------------- ----------
------------------- ----------
</TABLE>

The results of the acquired businesses have been included in the
consolidated financial statements from their respective acquisition dates.

PRO FORMA RESULTS OF OPERATIONS (UNAUDITED)

The following unaudited pro forma consolidated results of operations reflect
the results of operations as if Quadris had been acquired January 1, 1998 and
Echo had been acquired January 1, 1997, and after giving effect to purchase
accounting adjustments. These pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of what operating
results would have been had the acquisitions actually taken place on January 1,
1998 and 1997, respectively, or of future operating results.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS
----------------------------- ENDED MARCH 31,
1997 1998 1998
------------- -------------- ---------------------
<S> <C> <C> <C>
Pro forma:
Revenues.......................................... $ 4,777,217 $ 17,097,861 $ 3,602,466
Net loss.......................................... 277,671 2,107,423 164,980
</TABLE>

3. RELATED PARTY TRANSACTIONS

COMMUNICADE, INC.

During December 1996, the Company entered into a shareholder agreement with
Communicade. The shareholder agreement stipulates that Omnicom Finance Inc., a
wholly owned subsidiary of Omnicom, provide the Company with a line of credit
for working capital purposes of up to $2.5 million and additional financing, in
connection with the Company's acquisition of "new

F-60
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. RELATED PARTY TRANSACTIONS (CONTINUED)
media companies," as defined in the shareholder agreement, provided that
Communicade remains a shareholder of the Company.

Amounts borrowed for working capital and acquisition funding under the line
of credit bear interest at the same rate charged by Omnicom Finance Inc. to
subsidiaries of Omnicom under a cash management program. The interest rates
ranged from 6.63% to 6.85%, 6.00% to 6.70%, for the years ended December 31,
1997 and 1998 and 6.60% to 6.65% and 5.91% to 5.95% for the three months ended
March 31, 1998 and 1999 (unaudited), respectively. Interest expense amounted to
$0, $22,444, $599,003 for the years ended December 31, 1996, 1997 and 1998 and
$45,464 and $210,000 for the three months ended March 31, 1998 and 1999
(unaudited), respectively. All outstanding amounts are secured by a priority
lien on all of the Company's assets.

At December 31, 1997 and 1998 and March 31, 1999, $528,346, $2,358,106 and
$2,786,024, respectively, were outstanding under the working capital line of
credit, repayable in full upon the closing of the initial public offering of
AGENCY.COM's common stock (See Note 12). In addition, the Company has $300,000,
$9,737,645 and $9,904,727 of acquisition funding outstanding as of December 31,
1997 and 1998 and March 31, 1999 (unaudited), respectively, in connection with
the acquisition of "new media companies" with repayments falling due in the
principal amount of $300,000 and $8,886,000 (unaudited) and accumulated interest
in the years 2003 and 2004, respectively.

AGENCY.COM

During the year ended December 31, 1998, the Company provided $240,928 of
consulting services to AGENCY.COM, an affiliated company. At December 31, 1998
and March 31, 1999, the Company had net receivables from and payables to
AGENCY.COM of $240,928 and $703,914 (unaudited), respectively.

EAGLE RIVER INTERACTIVE

During the year ended December 31, 1998, the Company provided $110,842 of
consulting services to Eagle River Interactive ("Eagle River"), an affiliated
company. At December 31, 1998, the Company had net receivables from Eagle River
of $110,842. At March 31, 1999 no amounts were due to or from Eagle River.

Prior to January 1, 1998, the Company had not provided any services to
AGENCY.COM and Eagle River and consequently, had no amounts receivable from
either company.

For the three months ended March 31, 1998 and 1999, the Company had not
provided any consulting services to AGENCY.COM or Eagle River.

F-61
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- MARCH 31,
1997 1998 1999
----------- ------------- ---------------
<S> <C> <C> <C>
(UNAUDITED)
Computer equipment................................................... $ 312,925 $ 1,008,289 $ 1,021,453
Furniture and fixtures............................................... 120,977 422,508 422,508
Leasehold improvements............................................... 16,424 67,178 67,178
----------- ------------- ---------------
Total property and equipment................................... 450,326 1,497,975 1,511,139

Less--Accumulated depreciation and amortization...................... 92,787 388,061 485,003
----------- ------------- ---------------
Property and equipment, net.................................... $ 357,539 $ 1,109,914 $ 1,026,136
----------- ------------- ---------------
----------- ------------- ---------------
</TABLE>

Depreciation and amortization expense aggregated $12,819, $79,969 and
$295,274 for the years ended December 31, 1996, 1997 and 1998 and $36,235 and
$96,942 for the three months ended March 31, 1998 and 1999 (unaudited),
respectively.

5. GOODWILL

Goodwill consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
----------------- ---------------
<S> <C> <C>
(UNAUDITED)
Goodwill...................................................................... $ 7,403,809 $ 17,680,515
Less--Accumulated amortization.............................................. (1,953,783) (3,233,779)
----------------- ---------------
Goodwill, net............................................................. $ 5,450,026 $ 14,446,736
----------------- ---------------
----------------- ---------------
</TABLE>

Amortization expense aggregated $1,953,783 and $1,279,996 for the year ended
December 31, 1998 and for the three months ended March 31, 1999 (unaudited),
respectively. The Company did not have any goodwill prior to March 15, 1998.

F-62
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- MARCH 31,
1997 1998 1999
----------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
Accrued bonuses........................................................ $ 173,055 $ 700,687 $ 60,008
Accrued payroll........................................................ 84,508 554,081 --
Accrued expenses....................................................... 52,556 176,749 525,289
Accrued professional fees.............................................. 109,623 518,981 471,500
Accounts payable....................................................... 208,113 163,403 241,500
Accrued loss on contract............................................... -- 73,008 --
----------- ------------- -------------
$ 627,855 $ 2,186,909 $ 1,298,297
----------- ------------- -------------
----------- ------------- -------------
</TABLE>

There were no other individual items greater than 5% of current liabilities
as of December 31, 1997, December 31, 1998 and March 31, 1999 (unaudited).

7. INCOME TAXES

Income (loss) before (provision) benefit for income taxes and the
(provision) benefit for income taxes consisted of the following:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------------------ ----------------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
------------ ------------ -------------- ------------ --------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income (loss) before income taxes:...... $ 244,793 $ (507,498) $ (3,840,252) $ (500,763) $ (1,745,862)
------------ ------------ -------------- ------------ --------------
------------ ------------ -------------- ------------ --------------
(Provision for) benefit from income
taxes:
Current--
Federal........................... $ (1,086) $ 155,794 $ 598,816 $ 93,665 $ 160,155
State and local................... (335) 48,328 164,536 26,779 43,274

Deferred--
Federal........................... (75,470) (3,658) 643,203 65,784 191,476
State and local................... (23,301) (1,129) 196,921 20,202 58,597
------------ ------------ -------------- ------------ --------------
$ (100,192) $ 199,335 $ 1,603,476 $ 206,430 $ 453,502
------------ ------------ -------------- ------------ --------------
------------ ------------ -------------- ------------ --------------
</TABLE>

F-63
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)
The differences between the tax (provision) benefit from continuing
operations reflected in the financial statements and the amounts calculated at
the federal statutory income tax rate of 34% are as follows:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
------------ ----------- ------------- ----------- -----------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income tax (provision) benefit at statutory
rate....................................... $ (83,230) $ 172,549 $ 1,305,686 $ 170,259 $ 593,593
State and local taxes on income, net of
federal tax (provision) benefit............ (15,600) 30,412 303,985 38,290 86,923
Other........................................ (1,362) (3,626) (6,195) (2,119) (227,014)
------------ ----------- ------------- ----------- -----------
$ (100,192) $ 199,335 $ 1,603,476 $ 206,430 $ 453,502
------------ ----------- ------------- ----------- -----------
------------ ----------- ------------- ----------- -----------
</TABLE>

The tax effects of temporary differences that give rise to a significant
portion of the deferred income tax assets (liabilities), net, are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------- MARCH 31,
1997 1998 1999
------------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
Deferred tax assets:
Cash basis to accrual basis adjustment.......................... $ -- $ -- $
Goodwill amortization........................................... -- 628,502 826,976
Bad Debt........................................................ 34,826 124,837 144,972
Net operating loss carryforward................................. 204,122 967,473 1,170,903
Others.......................................................... 19,602 78,120 111,628
------------- ------------- -------------
Total deferred tax assets........................................... 258,550 1,798,932 2,254,479
Less: valuation allowance........................................... -- -- --
------------- ------------- -------------
Net deferred tax assets............................................. 258,550 1,798,932 2,254,479
------------- ------------- -------------

Deferred tax liabilities:
Cash basis to accrual basis adjustment.......................... (142,545) (71,273) (53,454)
Others.......................................................... (15,442) (23,620) (43,484)
------------- ------------- -------------
Total deferred tax liabilities...................................... (157,987) (94,893) (96,938)
------------- ------------- -------------
Net deferred tax asset.............................................. $ 100,563 $ 1,704,039 $ 2,157,541
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

F-64
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)
As of December 31, 1997 and 1998 and March 31, 1999, the Company has
$513,383, $2,418,683 and $2,927,258 (unaudited), respectively net operating loss
carryforwards available to offset future taxable income through 2012.

Deferred income taxes are provided for the temporary difference between the
financial reporting basis and tax basis of the Company's assets and liabilities.
Deferred tax assets result principally from recording certain expenses in the
financial statements, which are not currently deductible for tax purposes, and
differences between the tax and book bases of assets and liabilities recorded in
connection with the acquisitions. Deferred tax liabilities result principally
from expenses which are currently deductible for tax purposes but have not yet
been expensed in the financial statements.

Interactive has elected to file its income tax return using the accrual
basis of accounting for the year ended December 31, 1998. For the years ended
December 31, 1997 and 1996, the Company filed on the cash basis. Quadris has
elected to file its income tax return using the cash basis of accounting from
inception (March 16, 1998) to December 31, 1998.

8. STOCKHOLDERS' EQUITY (DEFICIT)

CAPITAL CONTRIBUTION

On December 6, 1996, the Company and Communicade entered into a Stock
Purchase Agreement (See Note 3) by which the Company received a $500,000 capital
contribution from Communicade, who had previously purchased shares of the
Company's common stock from the founder.

STOCK SPLITS

On January 10, 1996, the Company's Board of Directors authorized an 18 to 1
stock split of the Company's common stock effective immediately. This resulted
in the issuance of 170,000 additional shares of common stock.

On April 28, 1998, the Company's Board of Directors authorized a 25 to 1
stock split of its common stock effective immediately. This resulted in the
issuance of 4,320,000 additional shares of common stock.

All share amounts in the accompanying consolidated financial statements and
footnotes have been restated to give effect to these stock splits as of December
31,1995.

STOCK OPTIONS

INTERACTIVE

Interactive has a Stock Option and Incentive Plan (the "Interactive Plan"),
that provides for the granting of stock options to employees. Pursuant to the
Interactive Plan, an aggregate of 500,000 shares of common stock has been
reserved for issuance. Under the Interactive Plan, the optionees

F-65
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
will receive options to purchase shares in Interactive if, and only if,
Interactive merges into AGENCY.COM (See Note 12).

A summary of the status of the Interactive Plan as of December 31, 1996,
1997, 1998 and March 31, 1999 and the changes during the periods then ended is
presented below:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MARCH 31,
1996 1997 1998 1999
------------------------ ------------------------ ------------------------ ---------

<CAPTION>
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE OPTIONS
----------- ----------- --------- ------------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of
period............................ -- $ -- -- $ -- 420,000 $ 1.60 494,500
Granted............................. -- -- 420,000 1.60 212,000 1.60 --
Exercised........................... -- -- -- -- (5,500) 1.60 --
Cancelled........................... -- -- -- -- (132,000) 1.60 --
----- ----------- --------- ----- --------- ----- ---------
Outstanding at end of period........ -- $ -- 420,000 $ 1.60 494,500 $ 1.60 494,500
----- ----------- --------- ----- --------- ----- ---------
----- ----------- --------- ----- --------- ----- ---------

<S> <C>

WEIGHTED-
AVERAGE
EXERCISE
PRICE
-------------
(UNAUDITED)
<S> <C>
Outstanding at beginning of
period............................ $ 1.60
Granted............................. --
Exercised........................... --
Cancelled........................... --
-----
Outstanding at end of period........ $ 1.60
-----
-----
</TABLE>

The following table summarizes information on stock options outstanding and
exercisable under the Interactive Plan at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE REMAINING EXERCISE EXERCISE
PRICE NUMBER LIFE PRICE NUMBER PRICE
- ---------------------------------------------------- --------- ----------- ----------- --------- -----------
$1.60............................................... 494,500 9 years $ 1.60 167,830 $ 1.60
</TABLE>

Options outstanding under the Interactive Plan have been granted at prices
above the fair market value of the stock on the date of grant.

The Company has elected, in accordance with the provisions of SFAS No. 123,
to apply the current accounting rules under APB Opinion No. 25. Accordingly, no
compensation cost has been recognized for the stock option plan.

Had compensation for those awards been determined based on the fair value at
the grant dates for those awards consistent with the method in SFAS No. 123, the
Company's net loss would have been increased to the pro forma amounts indicated
below. The pro forma effects of applying SFAS No. 123 are not indicative of
future amounts because this statement does not apply to

F-66
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
awards granted prior to fiscal year 1996. Additional stock option awards are
anticipated in future years.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------
<S> <C> <C>
1997 1998
----------- -------------
Net Loss
As reported......................................................................... $ 308,163 $ 2,236,776
Pro forma........................................................................... 308,458 2,237,366
</TABLE>

The plan was not in existence prior to December 31, 1997.

The Company used the Black-Scholes option-pricing model to determine the
fair value of grants made in 1997 and 1998. There were no grants made prior to
1997. The following assumptions were applied in determining the pro forma
compensation cost:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
<S> <C> <C>
1997 1998
----------------- -----------------
Expected option life..................................................... 9.5 years 9.3 years
Risk free interest rate.................................................. 6.36% 5.25%
Expected stock price volatility.......................................... 0.00% 0.00%
Expected dividend yield.................................................. 0.00% 0.00%
Fair value of options granted............................................ $ 0.02 $ --
</TABLE>

QUADRIS

Quadris has a Stock Option and Incentive Plan (the "Quadris' Plan") that
provides for the granting of 1,500,000 of options to employees of Quadris. These
options give the optionee the right to purchase common stock of Quadris. Under
the Quadris' Plan, the optionees will receive options to purchase shares in
Interactive if, and only if, Interactive merges into AGENCY.COM (See Note 12).

F-67
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
A summary of the status of the Quadris' Plan as of December 31, 1998 and
March 31, 1999 and the changes during the periods then ended is presented below:
<TABLE>
<CAPTION>
DECEMBER 31, 1998 MARCH 31, 1999
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
WEIGHTED- WEIGHTED-
AVERAGE AVERAGE
OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE
----------- --------------- ----------- ---------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
Outstanding at beginning of period................... -- $ -- 1,500,000 $ 0.20
Granted.............................................. 1,500,000 0.20 --
----------- ----- ----------- -----
Outstanding at end of period......................... 1,500,000 $ 0.20 1,500,000 $ 0.20
----------- ----- ----------- -----
----------- ----- ----------- -----
</TABLE>

The plan was not in existence prior to 1998.

The following table summarizes information on stock options outstanding and
exercisable under the Quadris Plan at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED- WEIGHTED- WEIGHTED-
EXERCISE AVERAGE AVERAGE AVERAGE
PRICE REMAINING EXERCISE EXERCISE
RANGE NUMBER LIFE PRICE NUMBER PRICE
- ---------------------------------------------------- ----------- ----------- ----------- ------------- -------------
$0.20-0.22.......................................... 1,500,000 10 years $ 0.20 -- $ --
</TABLE>

Options outstanding under the Quadris' Plan have been granted at prices at
or above the fair market value of the stock on the date of grant.

Had compensation for those awards been determined based on the fair value at
the grant dates for those awards consistent with the method in SFAS No. 123,
there would have been no impact on the Company's net loss for December 31, 1998
as the options were granted on December 31, 1998. The pro forma effects of
applying SFAS No. 123 are not indicative of future amounts because this
statement does not apply to awards granted prior to fiscal year 1996. Additional
stock option awards are anticipated in future years.

F-68
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
The Company used the Black-Scholes option-pricing model to determine the
fair value of grants made in 1998. There were no grants made prior to 1998. The
following assumptions were applied in determining the pro forma compensation
cost:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1998
--------------
<S> <C>
Expected option life.............................................................................. 10 years
Risk free interest rate........................................................................... 4.65%
Expected stock price volatility................................................................... 0.00%
Expected dividend yield........................................................................... 0.00%
Fair value of options granted..................................................................... $ 0.06-0.07
</TABLE>

9. COMMITMENTS AND CONTINGENCIES

LEASES

The Company is committed under operating leases, principally for office
space and equipment. Certain leases are subject to rent reviews and require
payment of expenses under escalation clauses. Rent expense and equipment rental
were $48,099, $203,042, $1,064,650 for the years ended December 31, 1996, 1997
and 1998 and $125,509 and $360,046 for the three months ended March 31, 1998 and
1999, (unaudited) respectively. Future minimum base rents under terms of
non-cancelable operating leases are as follows:

<TABLE>
<CAPTION>
RENTAL
PAYMENTS
-------------
<S> <C>
Years ending December 31:
1999............................................................................................... $ 726,861
2000............................................................................................... 598,735
2001............................................................................................... 603,968
2002............................................................................................... 603,968
2003............................................................................................... 298,401
Thereafter......................................................................................... 48,538
-------------
$ 2,880,471
-------------
-------------
</TABLE>

LITIGATION

F-69
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLAN

The Company has a defined contribution plan covering all of its eligible
employees. The Plan became effective on February 1, 1997 and is qualified under
Section 401(k) of the Internal Revenue Code of 1996. The Company matches
employee contributions to the plan at a rate of 50%, up to a total match of 3%
of the participating employee's salary. Expenses related to the Company's
contributions to the Plan amounted to $125,850 for the year ended December 31,
1998 and $35,956 and $87,071 for the three months ended March 31, 1998 and 1999
(unaudited), respectively. The Company started the matching program in 1998 and,
therefore, there are no contributions for 1996 and 1997.

This plan was terminated in May of 1999 and replaced with the AGENCY.COM
401K plan. Under the AGENCY.COM plan, participants are eligible for a
discretionary employer match equal to 50% of the first 6% of the participating
employee's compensation, with vesting in this match occurring over a five-year
period.

11. BUSINESS CONCENTRATIONS AND CREDIT RISK

Financial instruments which subject the Company to concentrations of credit
risk consisted primarily of cash and cash equivalents and trade accounts
receivable. The Company maintains cash and cash equivalents with various
financial institutions. The Company performs periodic evaluations of the
relative credit standing of these institutions. The Company's clients are
primarily concentrated in the United States. The Company performs ongoing credit
evaluations, generally does not require collateral, and establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of
customers, historical trends and other information. To date, such losses have
been within management's expectations.

For the year ended December 31, 1996, one client accounted for 69% of total
revenues.

For the year ended December 31, 1997, one client accounted for 68% of total
revenues.

For the year ended December 31, 1998, two clients accounted for 25% and 11%,
respectively, of total revenues.

For the three months ended March 31, 1998, two clients accounted 31% and
17%, (unaudited) respectively, of total revenues.

For the three months ended March 31, 1999, one client accounted for 12% of
total revenues.

As of December 31, 1997, two clients accounted for 48% and 18%,
respectively, of total accounts receivable.

As of December 31, 1998, two clients accounted for 26% and 17%, (unaudited)
respectively, of total accounts receivable.

As of March 31, 1999, four clients accounted for 25%, 20%, 16% and 11%,
(unaudited) respectively, of total accounts receivable.

F-70
<PAGE>
INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. SUBSEQUENT EVENTS

On January 27, 1999, the majority shareholder of Interactive sold 2,700,000
shares of common stock (100% of his interest) to Communicade. Communicade paid
$3,000,000 in consideration for the shares. As part of the transaction,
Communicade also paid this stockholder $1,500,000 to settle the earnout
associated with Communicade's initial investment in the Company, as noted in the
stock purchase agreement dated December 6, 1996. As a result of the transaction,
Interactive became a wholly-owned subsidiary of Communicade. This transaction
was accounted for by Communicade under the purchase method of accounting and
resulted in Communicade recording $10,276,706 of costs over fair value of the
assets acquired. As a result, Communicade allocated these costs to the Company.
These costs are reflected in the accompanying March 31, 1999 financial
statements as goodwill (net of amortization expense for the period) and
additional paid-in capital.

Pursuant to an Agreement and Plan of Merger dated April 1, 1999, a merger
was consummated between AGENCY.COM and the Company. The stock-for-stock
transaction was approved by the shareholders of both companies after which the
Company was merged with and into AGENCY.COM, with AGENCY.COM continuing as the
surviving corporation in the merger. As a result of the merger, the separate
existence of the Company ceased. Under the merger agreement, the Company
received 24.6% of the outstanding shares in AGENCY.COM.

In conjunction, with the transaction, the Company issued 934,763 shares of
common stock and created 558,742 new options to acquire the minority interest of
Quadris (See Note 8).

As a result of Interactive being acquired by AGENCY.COM, the options granted
under both the Interactive Plan and the Quadris Plan convert to options to
acquire AGENCY.COM shares.

F-71
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Quadris Consulting:

We have audited the accompanying balance sheets of Quadris Consulting, a
division of JYACC, Inc. (a New York corporation) as of December 31, 1997 and
March 15, 1998, and the related statements of operations, divisional equity and
cash flows for each of the two years ended December 31, 1997 and the period from
January 1, 1998 to March 15, 1998. These financial statements are the
responsibility of the management of JYACC, Inc. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quadris Consulting as of
December 31, 1997 and March 15, 1998, and the results of its operations and its
cash flows for each of the two years ended December 31, 1997 and the period from
January 1, 1998 to March 15, 1998 and, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

New York, New York
July 16, 1999

F-72
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 15,
1997 1998
-------------- -------------
<S> <C> <C>
ASSETS

Current Assets:
Accounts receivable.............................................................. $ 1,823,385 $ 1,750,197
Unbilled charges................................................................. -- 385,094
Prepaid expenses and other current assets........................................ 4,822 35,866
-------------- -------------
Total current assets......................................................... 1,828,207 2,171,157

Property and Equipment, net of accumulated depreciation and amortization of
$670,287 and $693,941, respectively.............................................. 291,330 270,247

Other Assets....................................................................... 39,941 33,245
-------------- -------------
Total assets................................................................. $ 2,159,478 $ 2,474,649
-------------- -------------
-------------- -------------

LIABILITIES AND DIVISIONAL EQUITY

Current Liabilities:
Accounts payable and accrued expenses............................................ $ 577,317 $ 385,986
Accrued loss on contract......................................................... 249,277 243,113
Deferred revenue................................................................. 423,253 386,855
-------------- -------------
Total current liabilities.................................................... 1,249,847 1,015,954
-------------- -------------

Commitments and Contingencies (Note 6)

Divisional Equity.................................................................. 909,631 1,458,695
-------------- -------------
Total liabilities and divisional equity...................................... $ 2,159,478 $ 2,474,649
-------------- -------------
-------------- -------------
</TABLE>

The accompanying notes are an integral part of these balance sheets.

F-73
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED DECEMBER 31, JANUARY 1 TO
-------------------------------- MARCH 15,
1996 1997 1998
--------------- --------------- ---------------
<S> <C> <C> <C>

Revenues..................................................... $ 8,138,275 $ 8,914,995 $ 1,727,391

Direct Salaries and Costs.................................... 4,634,533 6,050,616 1,144,664
--------------- --------------- ---------------
Gross profit............................................. 3,503,742 2,864,379 582,727

Sales and Marketing.......................................... 18,714 5,560 1,577

General and Administrative................................... 1,707,854 1,585,467 362,872
--------------- --------------- ---------------
Income from operations................................... 1,777,174 1,273,352 218,278

Interest Expense, net........................................ -- -- 1,925
--------------- --------------- ---------------
Income before provision for income taxes................. 1,777,174 1,273,352 216,353

Provision for Income Taxes................................... 711,000 509,000 87,000
--------------- --------------- ---------------
Net income............................................... $ 1,066,174 $ 764,352 $ 129,353
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>

The accompanying notes are an integral part of these statements.

F-74
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

STATEMENTS OF DIVISIONAL EQUITY

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED DECEMBER 31, JANUARY 1 TO
-------------------------- MARCH 15,
1996 1997 1998
------------ ------------ -------------
<S> <C> <C> <C>
Divisional Equity, beginning of period................................ $ 722,626 $ 404,712 $ 909,631
Net income.......................................................... 1,066,174 764,352 129,353
Less-- Net (decrease) increase in investment with
JYACC, Inc........................................................ (1,384,088) (259,433) 419,711
------------ ------------ -------------
Divisional Equity, end of period...................................... $ 404,712 $ 909,631 $ 1,458,695
------------ ------------ -------------
------------ ------------ -------------
</TABLE>

The accompanying notes are an integral part of these statements.

F-75
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED PERIOD FROM
DECEMBER 31, JANUARY 1 TO
---------------------------- MARCH 15,
1996 1997 1998
------------- ------------- ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income......................................................... $ 1,066,174 $ 764,352 $ 129,353
Adjustments to reconcile net income to net cash provided by (used
in) operating activities--
Depreciation and amortization.................................. 122,680 123,749 23,654
Changes in assets and liabilities:
Accounts receivable.......................................... (573,616) (236,287) 73,188
Unbilled charges............................................. -- -- (385,094)
Prepaid expenses and other current assets.................... -- (4,822) (31,044)
Other assets................................................. (3,250) (22,386) 6,696
Accounts payable and accrued expenses........................ 171,143 (143,765) (191,331)
Accrued loss on contracts.................................... 406,769 (157,492) (6,164)
Deferred revenue............................................. 299,439 123,814 (36,398)
------------- ------------- ------------
Net cash provided by (used in) operating activities........ 1,489,339 447,163 (417,140)
------------- ------------- ------------
Cash Flows From Investing Activities:
Capital expenditures............................................... (105,251) (187,730) (2,571)
------------- ------------- ------------
Net cash received from (remitted to) JYACC, Inc............ $ 1,384,088 $ 259,433 $ (419,711)
------------- ------------- ------------
------------- ------------- ------------
</TABLE>

The accompanying notes are an integral part of these statements.

F-76
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Quadris Consulting ("Quadris" or the "Company") is a division of JYACC, Inc.
("JYACC") and is not a separate legal entity. On March 16, 1998, Quadris was
acquired by Quadris Consulting, Inc. (a majority--owned subsidiary of
Interactive Solutions, Inc.--See Note 9). Interactive Solutions, Inc. is owned
40% by Communicade, Inc., formerly known as JWL Associates Corp., a
wholly--owned subsidiary of the Omnicom Group Inc. ("Omnicom") and 60% by its
majority shareholder. Quadris is a systems integrator and developer of custom
software solutions. Quadris creates digital communications strategies to help
its clients increase sales and improve communications. Quadris' integrated
service offering includes strategic consulting, user requirements analysis,
technical and functional systems design, software development and systems
integration, quality assurance, documentation, and software deployment services.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts receivable and accounts payable
approximate fair value due to the short-term maturity of these instruments.

USE OF ESTIMATES

DIVISIONAL EQUITY

Divisional equity as used in these financial statements represents a summary
of all intercompany activity between Quadris and JYACC as well as the
accumulation of earnings.

REVENUE RECOGNITION

Revenues from contracts are recognized as services are rendered on the
percentage-of-completion method of accounting based on the ratio of costs
incurred to total estimated costs. Unbilled charges represent labor costs
incurred and estimated earnings, production and other client reimbursable costs
in excess of billings. Deferred revenue represents billings of production and
other client reimbursable out-of-pocket costs in excess of revenues earned.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined. Revenue from time and material jobs is
recognized on the basis of costs incurred during the period.

F-77
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, net of accumulated depreciation
and amortization. Property and equipment are depreciated on a straight-line
basis over the estimated useful lives of three to seven years. Leasehold
improvements are amortized utilizing the straight-line method over the lesser of
the estimated useful life of the asset or the remaining term of the related
lease.

ACCOUNTING FOR LONG-LIVED ASSETS

Quadris accounts for long-lived assets under the provisions of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." This statement establishes financial accounting and reporting
standards for the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used, and for
long-lived assets and certain identifiable tangibles to be disposed of. The
Company reviews long-lived assets and certain identifiable intangibles to be
held and used for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset exceeds the fair value of the
asset. If other events or changes in circumstances indicate that the carrying
amount of an asset that the Company expects to hold and use may not be
recoverable, the Company will estimate the future cash flows expected to result
from the use of the asset and its eventual disposition. Management has performed
a review of all long-lived assets and has determined that no impairment of the
respective carrying value has occurred as of December 31, 1997 and March 15,
1998.

INCOME TAXES

As a division of JYACC, Quadris was not subject to federal, state and local
income taxes. The effective rate herein reflects the rate that would have been
applicable had Quadris been independent. Provisions for deferred taxes were not
reflected on Quadris' books, but were reflected on JYACC's books and records.
Going forward, Quadris will record deferred taxes in accordance with the
provisions of SFAS No. 109, "Accounting for Income Taxes."

NEW ACCOUNTING PRONOUNCEMENTS

F-78
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
believes that it operates in one segment and that the adoption of SFAS No. 131
will not materially affect the Company's current disclosure.

2. RELATED PARTY TRANSACTIONS

JYACC has provided services to Quadris including, but not limited to,
financial, systems and legal services, administration of benefit and insurance
programs, income tax management, cash management and treasury services. These
financial statements include an allocation of JYACC's administrative expenses.
The allocation was based on a percentage of the number of employees working for
Quadris in relation to the total number of employees of JYACC taken as a whole.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 15,
1997 1998
-------------- -----------
<S> <C> <C>
Computer equipment............................................... $ 731,974 $ 734,545
Furniture and fixtures........................................... 81,402 81,402
Computer software................................................ 89,586 89,586
Leasehold improvements........................................... 58,655 58,655
-------------- -----------
Total property and equipment................................. 961,617 964,188
Less--Accumulated depreciation and amortization.................. 670,287 693,941
-------------- -----------
Property and equipment, net.................................. $ 291,330 $ 270,247
-------------- -----------
-------------- -----------
</TABLE>

Depreciation and amortization aggregated $122,680, $123,749, and $23,654,
respectively, for the years ended December 31, 1996 and 1997 and the period from
January1, 1998 to March 15, 1998, respectively.

F-79
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 15,
1997 1998
-------------- -----------
<S> <C> <C>
Accounts payable................................................. $ 77,855 $ 64,709
Accrued payroll.................................................. 156,940 --
Accrued vacation................................................. 241,771 286,826
Accrued expenses--other.......................................... 100,751 34,451
-------------- -----------
$ 577,317 $ 385,986
-------------- -----------
-------------- -----------
</TABLE>

5. INCOME TAXES

The financial statements reflect an effective tax rate of 40%, which
reasonably reflects what Quadris' tax rate would have been as a separate entity.
Deferred taxes are reflected as a component of divisional equity as JYACC is the
taxable legal entity. If Quadris were a separate taxable entity, the components
of the temporary differences would be primarily due to customer reserves and
allowances, unbilled charges, deferred revenue, depreciation, and accrued
vacation.

For the years ended December 31, 1996 and 1997 and the period from January
1, 1998 to March 15, 1998, the following provisions for income taxes were made:

<TABLE>
<CAPTION>
YEARS ENDED PERIOD
DECEMBER 31, FROM JANUARY 1
------------------------ TO MARCH 15,
1996 1997 1998
----------- ----------- ----------------
<S> <C> <C> <C>
Current:
Federal......................................... $ 604,350 $ 432,650 $ 73,950
State........................................... 106,650 76,350 13,050
----------- ----------- --------
Provision for income taxes.................... $ 711,000 $ 509,000 $ 87,000
----------- ----------- --------
----------- ----------- --------
</TABLE>

F-80
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES (CONTINUED)
The difference between Quadris' effective tax rate and the statutory federal
income tax rate is as follows:

<TABLE>
<CAPTION>
YEARS ENDED PERIOD
DECEMBER 31, FROM JANUARY 1
---------------------------- TO MARCH 15,
1996 1997 1998
------------- ------------- ----------------
<S> <C> <C> <C>
Provision for income taxes................... $ 711,000 $ 509,000 $ 87,000
Income before taxes.......................... 1,777,174 1,273,352 216,353
Effective tax rate........................... 40% 40% 40%
Net state tax................................ 6% 6% 6%
Federal statutory rate....................... 34% 34% 34%
</TABLE>

6. COMMITMENTS AND CONTINGENCIES

Quadris is committed under operating leases, principally for office space
and equipment. Rent expense and equipment rental were $222,973, $323,860 and
$116,599, respectively, for the years ended December 31, 1996 and 1997 and the
period from January 1, 1998 to March 15, 1998. Future minimum base rents under
the terms of the noncancelable operating leases are as follows:

<TABLE>
<S> <C>
Period from March 16, 1998 to December 31, 1998................ $ 501,000
Year ending December 31:
1999......................................................... 636,000
2000......................................................... 616,000
2001......................................................... 604,000
2002......................................................... 604,000
Thereafter................................................... 347,000
----------
$3,308,000
----------
----------
</TABLE>

LITIGATION

7. EMPLOYEE BENEFIT PLAN

JYACC maintains a defined contribution plan covering all eligible employees,
which also covers Quadris employees. The plan is qualified under Section 401(k)
of the Internal Revenue Code. Under the plan, JYACC was required to make certain
matching contributions as defined.

F-81
<PAGE>
QUADRIS CONSULTING
(A DIVISION OF JYACC, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. EMPLOYEE BENEFIT PLAN (CONTINUED)
This plan was terminated in May of 1999 and replaced with the AGENCY.COM
401(k) plan. Under the AGENCY.COM plan participants are eligible for a
discretionary employer match equal to 50% of the first 6% of the participating
employees compensation.

8. BUSINESS CONCENTRATIONS AND CREDIT RISK

Financial instruments which subject Quadris to concentrations of credit risk
consist primarily of trade accounts receivable. Quadris' clients are primarily
concentrated in the United States. Quadris performs ongoing credit evaluations,
generally does not require collateral, and establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of customers, historical
trends and other information. To date, such losses have been within management's
expectations.

For the year ended December 31, 1996, two clients accounted for 39% and 29%,
respectively, of total revenues.

For the year ended December 31, 1997, two clients accounted for 47% and 21%,
respectively, of total revenues.

For the period from January 1, 1998 to March 15, 1998, two clients accounted
for 40% and 18%, respectively, of total revenues.

As of December 31, 1997, five clients accounted for 27%, 16%, 14%, 13% and
10%, respectively, of total accounts receivable.

As of March 15, 1998, four clients accounted for 27%, 19%, 15% and 14%,
respectively, of total accounts receivable.

9. SUBSEQUENT EVENT

On March 16, 1998, Quadris Consulting, Inc. (a majority--owned subsidiary of
Interactive Solutions, Inc.) purchased the remaining 60% of Quadris for
approximately $8,828,000.

F-82
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Twinspark Interactive People B.V.:

We have audited the accompanying balance sheets of Twinspark Interactive People
B.V. (a Dutch corporation), as of December 31, 1997 and 1998, and the related
statements of operations, stockholders' equity and cash flows for each of the
years ended December 31, 1997 and December 31, 1998. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these 1997 and 1998 financial statements based on our
audits.

We conducted our audits in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Twinspark Interactive People
B.V. as of December 31, 1997 and 1998, and the results of their operations and
their cash flows for each of the years then ended in conformity with United
States generally accepted accounting principles.

ARTHUR ANDERSEN

Rotterdam, The Netherlands

August 9, 1999

F-83
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------------- -------------
1997 1998 1999
----------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents............................................ $ -- $ 97,946 $ --
Accounts receivable, net of allowance for doubtful accounts of $0,
$44,090 and $181,370 (unaudited), respectively..................... 318,042 1,583,016 1,040,445
Unbilled charges..................................................... 43,595 110,123 156,426
Prepaid expenses and other current assets............................ 48,548 97,416 141,399
Due from affiliates.................................................. -- 19,589 279,030
----------- ------------- -------------
Total current assets............................................. 410,185 1,908,090 1,617,300
Property and Equipment, net of accumulated depreciation and
amortization of $121,370, $211,245 and $256,810 (unaudited),
respectively......................................................... 81,245 292,778 511,086
Intangibles, net of accumulated amortization of $9,908, $21,178 and
$30,534(unaudited), respectively..................................... 39,631 31,766 100,996
----------- ------------- -------------
Total assets..................................................... $ 531,061 $ 2,232,634 $ 2,229,382
----------- ------------- -------------
----------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses................................ $ 193,699 $ 819,568 $ 1,380,124
Line of credit....................................................... 93,629 -- 537,392
Income taxes payable................................................. -- 55,591 --
Deferred revenue..................................................... -- 362,135 108,982
Due to affiliates.................................................... 80,749 10,059 32,413
----------- ------------- -------------
Total current liabilities........................................ 368,077 1,247,353 2,058,911
----------- ------------- -------------
Long-term Liabilities:
Bank loans........................................................... 49,539 63,532 52,142
----------- ------------- -------------
Total long-term liabilities...................................... 49,539 63,532 52,142
----------- ------------- -------------
Total liabilities................................................ 417,616 1,310,885 2,111,053
----------- ------------- -------------
Commitments (Note 10)

Stockholders' Equity:
Common stock, $0.05 par value, 15,000,000 shares authorized; 0,
15,000,000 and 15,000,000 (unaudited) shares issued respectively... -- 755,705 755,705
Retained earnings (deficit).......................................... 152,773 158,819 (546,076)
Cumulative translation adjustment.................................... (39,328) 7,225 (91,300)
----------- ------------- -------------
Total stockholder's equity....................................... 113,445 921,749 118,329
----------- ------------- -------------
Total liabilities and stockholders' equity....................... $ 531,061 $ 2,232,634 $ 2,229,382
----------- ------------- -------------
----------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these balance sheets.

F-84
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------- ----------------------------
1997 1998 1998 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)

Revenues............................................. $ 1,287,802 $ 2,690,816 $ 746,270 $ 2,417,259

Direct salaries and costs............................ 1,020,127 1,771,878 582,120 1,467,849
------------- ------------- ------------- -------------

Gross profit....................................... 267,675 918,938 164,150 949,410

General and administrative........................... 360,646 469,545 150,920 1,524,269

Sales and marketing.................................. -- -- -- 94,000

Depreciation and amortization........................ 73,049 91,189 34,300 79,659
------------- ------------- ------------- -------------

Income (loss) from operations...................... (166,020) 358,204 (21,070) (748,518)

Interest expense..................................... 8,173 12,091 6,370 6,164
------------- ------------- ------------- -------------

Income (loss) before (provision) benefit for income
taxes............................................ (174,193) 346,113 (27,440) (754,682)

Provision for (benefit from) income taxes............ -- 52,899 -- (49,787)
------------- ------------- ------------- -------------

Net income (loss).................................. $ (174,193) $ 293,214 $ (27,440) $ (704,895)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these statements.

F-85
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
CUMULATIVE
COMMON STOCK ADDITIONAL FOREIGN
-------------------------- PAID-IN RETAINED CURRENCY
SHARES AMOUNT CAPITAL EARNINGS/(DEFICIT) TRANSLATION TOTAL
------------- ----------- ----------- ----------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997........... -- $ -- $ -- $ 326,966 $ -- $ 326,966

Translation adjustment........... -- -- -- -- (39,328) (39,328)
Net loss......................... -- -- -- (174,193) -- (174,193)
------------- ----------- ----------- ----------------- ----------- ------------

Balance, December 31, 1997......... -- -- -- 152,773 (39,328) 113,445

Translation adjustment........... -- -- -- -- 46,553 46,553
Issuance of shares............... 15,000,000 287,168 -- (287,168) -- --
Capital contribution............. -- 468,537 -- -- -- 468,537
Net income....................... -- -- -- 293,214 -- 293,214
------------- ----------- ----------- ----------------- ----------- ------------

Balance, December 31, 1998......... 15,000,000 755,705 -- 158,819 7,225 921,749
Translation adjustment........... -- -- -- -- (98,525) (98,525)
Net loss (unaudited)............. -- -- -- (704,895) -- (704,895)
------------- ----------- ----------- ----------------- ----------- ------------

Balance, June 30, 1999
(unaudited)...................... 15,000,000 $ 755,705 $ -- $ (546,076) $ (91,300) $ 118,329
------------- ----------- ----------- ----------------- ----------- ------------
------------- ----------- ----------- ----------------- ----------- ------------
</TABLE>

The accompanying notes are an integral part of these statements.

F-86
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX
YEAR ENDED MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------------- ---------------------------
1997 1998 1998 1999
------------ -------------- ------------ -------------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
Cash Flows From Operating Activities:
Net income (loss).................................... $ (174,193) $ 293,214 $ (27,440) $ (704,895)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities--
Depreciation and amortization.................... 73,049 91,189 34,300 79,659
Allowance for doubtful accounts.................. -- 44,090 -- 132,780
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable....... (318,042) (1,309,064) (52,430) 405,291
(Increase) in unbilled charges................... (43,595) (66,528) (96,530) (46,303)
(Increase) decrease in prepaid expenses and other
current assets................................. (48,548) (48,868) 32,830 (43,983)
(Increase) in due from affiliates................ -- (19,589) -- (259,441)
Increase in accounts payable and accrued
expenses....................................... 193,699 607,581 144,550 560,556
Increase (decrease) in deferred revenue.......... -- 362,135 77,420 (253,153)
Increase in due to affiliates.................... 80,749 (70,690) 19,600 22,354
Increase (decrease) in income taxes payable...... -- 55,591 -- (55,591)
------------ -------------- ------------ -------------
Net cash provided by (used in) operating
activities................................... (236,881) (60,939) 132,300 (162,726)
------------ -------------- ------------ -------------
Cash Flows From Investing Activities:
Capital expenditures, net............................ 182,580 (277,092) (132,300) --
Acquisition of subsidiary, net of cash acquired...... (49,539) -- -- (362,697)
------------ -------------- ------------ -------------
Net cash provided by (used in) investing
activities................................... 133,041 (277,092) (132,300) (362,697)
------------ -------------- ------------ -------------
Cash Flows From Financing Activities:
Borrowings under bank loans, net..................... 49,539 13,993 -- (11,390)
Proceeds from capital contribution................... -- 468,537 -- --
Borrowings under line of credit...................... 93,629 -- -- 537,392
------------ -------------- ------------ -------------
Net cash provided by financing activities...... 143,168 482,530 -- 526,002
------------ -------------- ------------ -------------
Net increase (decrease) in cash and cash equivalents... 39,328 144,499 -- 579
Effect of Exchange Rates on Cash....................... (39,328) 46,553 -- (98,525)
Cash and Cash Equivalents, beginning of period......... -- -- -- 97,946
------------ -------------- ------------ -------------
Cash and Cash Equivalents, end of period............... $ -- $ 97,946 $ -- $ --
------------ -------------- ------------ -------------
------------ -------------- ------------ -------------
</TABLE>

The accompanying notes are an integral part of these statements.

F-87
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Twinspark Interactive People B.V. (the "Company" or "Twinspark") is an
Internet professional services firm. The Company provides a broad range of
interactive services that enable businesses to develop and implement interactive
media products.

Effective January 1, 1997, Topics Interactive factory B.V. (Topics)
contributed its business to Twinspark Interactive People B.V. i.c.

USE OF ESTIMATES

REVENUE RECOGNITION

Revenues are recognized for time and materials-based arrangements on the
basis of costs incurred in the period. Revenue from fixed-fee arrangements is
recognized on the percentage-of-completion method of accounting based on the
ratio of costs incurred to total estimated costs. Unbilled charges represent
labor costs incurred and estimated earnings, production and other client
reimbursable costs. Provisions for estimated losses on uncompleted contracts are
made in the period in which such losses are determined. Amounts billed, which
are not yet earned, are classified as deferred revenue in the accompanying
consolidated balance sheets.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt and equity instruments with an
original maturity of three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

INTANGIBLES

F-88
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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

amount of the intangible asset that the Company expects to hold and use may not
be recoverable, the Company will estimate the future cash flows expected to
result from the use of the asset and its eventual disposition. Management has
evaluated the amortization periods in the current period and has determined that
no impairment currently exists. These amortization periods will be evaluated by
management on a continuing basis, and will be adjusted if the lives of the
related intangible assets are impaired.

ACCOUNTING FOR LONG-LIVED ASSETS

The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed of." This statement establishes
financial accounting and reporting standards for the impairment of long-lived
assets, certain identifiable intangibles and goodwill related to those assets to
be held and used, and for long-lived assets and certain identifiable intangibles
to be disposed. The Company reviews long-lived assets and certain identifiable
intangibles to be held and used for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset exceeds the fair
value of the asset. If other events or changes in circumstances indicate that
the carrying amount of an asset that that the Company expects to hold and use
may not be recoverable, the Company will estimate the future cash flows expected
to result from the use of the asset and its eventual disposition. Management has
performed a review of all long-lived assets and has determined that no
impairment of the respective carrying values has occurred as of December 31,
1998 and March 31, 1999 (unaudited).

INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes." This statement requires an asset and liability
approach for measuring deferred taxes based on temporary differences between the
financial statement and income tax bases of assets and liabilities existing at
each balance sheet date using enacted tax rates for the years in which the taxes
are expected to be paid or recovered. The effect on deferred tax assets or
liabilities of a change in tax rates is recognized in the period that the tax
change occurs. The Company has elected to file its income tax returns using the
cash basis of accounting.

FOREIGN CURRENCY TRANSLATION

All assets and liabilities of foreign subsidiaries are translated into Dutch
guilders at fiscal year-end exchange rates. Income and expense items are
translated at average exchange rates prevailing during the fiscal year.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, accounts receivable, due
from/to affiliates and accounts payable approximate fair value due to the
short-term maturity of these instruments.

F-89
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BUSINESS CONCENTRATIONS AND CREDIT RISK

Financial instruments, which subject the Company to concentrations of credit
risk, consist primarily of cash and cash equivalents and trade accounts
receivable. The Company maintains cash and cash equivalents with various
financial institutions. The Company performs periodic evaluations of the
relative credit standing of these institutions. The Company's clients are
primarily concentrated in The Netherlands. The Company performs ongoing credit
evaluations, generally does not require collateral, and establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of
customers, historical trends and other information.

For the year ended December 31, 1997, 2 clients accounted for 22% and 12%,
respectively, of total revenues.

For the year ended December 31, 1998, 3 clients accounted for 16%, 10% and
10% of total revenues.

As of December 31, 1997, 1 client accounted for 26% of total accounts
receivable and unbilled charges.

As of December 31, 1998, 2 clients accounted for 18% and 9% respectively of
total accounts receivable and unbilled charges.

COMPREHENSIVE INCOME

During 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income," which established standards for reporting and displaying comprehensive
income and its components in a financial statement that is displayed with the
same prominence as other financial statements. The components of comprehensive
income are as follows:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------------- --------------------------
<S> <C> <C> <C> <C>
1997 1998 1998 1999
------------ ----------- ------------ ------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
Net income (loss).......................................... $ (174,193) $ 293,214 $ (27,440) $ (704,895)
Foreign currency translation adjustment.................... (39,328) 46,553 23,276 (98,525)
------------ ----------- ------------ ------------
Comprehensive income (loss).............................. $ (213,521) $ 339,767 $ (4,164) $ (803,420)
------------ ----------- ------------ ------------
------------ ----------- ------------ ------------
</TABLE>

NEW ACCOUNTING PRONOUNCEMENTS

F-90
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
operations in the Netherlands and currently believes that it operates in one
segment, therefore, the adoption of SFAS No. 131 will not materially affect the
Company's current disclosure.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), which provides guidance
for determining whether computer software is internal-use software and on
accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 is effective for fiscal years
beginning after December 31, 1998. The Company does not expect the adoption of
SOP 98-1 to have a material effect on its financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards of
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The Company does not currently
engage in derivative activity and does not expect the adoption of this standard
to have a material effect on the Company's results of consolidated operations,
financial position or cash flows.

UNAUDITED FINANCIAL STATEMENTS

The unaudited consolidated financial information included herein as of June
30, 1999 and for the three months ended June 30, 1998 and 1999, have been
prepared in accordance with generally accepted accounting principles for interim
financial statements. In the opinion of the Company, these unaudited
consolidated financial statements, reflect all adjustments necessary, consisting
of normal recurring adjustments, for a fair presentation of such data on a basis
consistent with that of the audited data presented herein. The consolidated
results for interim periods are not necessarily indicative of the results
expected for a full year.

2. ACQUISITIONS

COOL B.V.

As of January 9, 1999 the Company signed a letter of intent to acquire all
activities of a Dutch entity called Cool B.V. The goodwill which will be paid
and included in the letter of intent is approximately $95,300. Per date of the
issuance of these financial statements, the acquisition is not completed.

F-91
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. RELATED PARTY TRANSACTIONS

Due from affiliates consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1997 1998 1999
--------- --------- -----------
<S> <C> <C> <C>
(UNAUDITED)
3WIS Beheer B.V................................................................ $ -- $ 19,589 $ 17,850
Tridion B.V.................................................................... -- -- 261,180
--------- --------- -----------
Due from affiliates.......................................................... $ -- $ 19,589 $ 279,030
--------- --------- -----------
--------- --------- -----------
</TABLE>

Due to affiliates consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1997 1998 1999
--------- --------- -----------
<S> <C> <C> <C>
(UNAUDITED)
3WIS Beheer B.V.............................................................. $ 49,044 $ -- $ --
Topics Interactive Factory B.V............................................... 31,705 10,059 32,413
--------- --------- -----------
Due to affiliates.......................................................... $ 80,749 $ 10,059 $ 32,413
--------- --------- -----------
--------- --------- -----------
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- JUNE 30,
1997 1998 1999
------------ ------------ ------------
<S> <C> <C> <C>
(UNAUDITED)
Office equipment........................................................ $ 24,274 $ 87,886 $ 574,972
Computer equipment...................................................... 153,076 374,312 111,658
Technical infrastructure................................................ 25,265 41,825 81,266
------------ ------------ ------------
Total property and equipment.......................................... 202,615 504,023 767,896
Less--Accumulated depreciation and amortization......................... (121,370) (211,245) (256,810)
------------ ------------ ------------
Property and equipment, net........................................... $ 81,245 $ 292,778 $ 511,086
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

Depreciation expense was approximately $62,832, $81,112 and $45,565,
respectively, for the years ended December 31, 1997 and 1998 and period ending
June 30, 1999 (unaudited).

F-92
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INTANGIBLES

Intangibles consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1997 1998 1999
--------- --------- -----------
<S> <C> <C> <C>
(UNAUDITED)
Goodwill..................................................................... $ 49,539 $ 52,944 $ 131,530
Less--Accumulated amortization............................................... (9,908) (21,178) (30,534)
--------- --------- -----------
Intangibles, net........................................................... $ 39,631 $ 31,766 $ 100,996
--------- --------- -----------
--------- --------- -----------
</TABLE>

Amortization expense was approximately $10,217, $10,076 and $9,356 for the
years ended December 31, 1997 and 1998 and the six months ended June 30, 1999
(unaudited), respectively.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ JUNE 30,
1997 1998 1999
----------- ----------- -------------
<S> <C> <C> <C>
(UNAUDITED)
Accounts payable......................................................... $ 100,070 $ 360,546 $ 964,373
Accrued expenses--other.................................................. 85,703 441,021 401,659
Accrued professional fees................................................ 7,926 18,001 14,092
----------- ----------- -------------
$ 193,699 $ 819,568 $ 1,380,124
----------- ----------- -------------
----------- ----------- -------------
</TABLE>

7. INCOME TAXES

The provision for income taxes is based upon the regular corporate Dutch tax
rate of 35%. The pre incorporation result (January 1, 1997--December 22, 1998)
of Twinspark Interactive People B.V. in corporation can be contributed to
Twinspark Interactive People B.V.

Income (loss) before income taxes and the provision (benefit) per taxes on
income (loss) consisted of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
ENDED
1997 1998 JUNE 30, 1999
------------ ----------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Income (loss) before income taxes:
Domestic............................................................. $ -- $ -- $ --
International........................................................ (174,193) 346,113 (754,682)
------------ ----------- --------------
$ (174,193) $ 346,113 $ (754,682)
------------ ----------- --------------
------------ ----------- --------------

Provision (benefit) for taxes on income (loss):
Current--International............................................... $ (65,437) $ 52,899 $ (49,787)
Deferred--International.............................................. -- -- --
------------ ----------- --------------
$ (65,437) $ 52,899 $ (49,787)
------------ ----------- --------------
------------ ----------- --------------
</TABLE>

F-93
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)

A reconciliation of the difference between the statutory U.S. Federal Income
Tax Rate and the Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
ENDED
1997 1998 JUNE 30, 1999
---------- ----------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Statutory federal income tax rate....................................... $ (59,226) $ 117,678 $ (256,592)
Local taxes on income (additional Dutch rate)........................... (1,742) 3,461 (7,547)
Other................................................................... 13,000 (12,000) --
Valuation allowance..................................................... 47,968 (56,240) 214,352
---------- ----------- --------------
Effective rate.......................................................... $ -- $ 52,899 $ (49,787)
---------- ----------- --------------
---------- ----------- --------------
</TABLE>

The tax effects of temporary differences that give rise to a significant
portion of the deferred income taxes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- JUNE 30,
1997 1998 1999
---------- ---------- ------------
<S> <C> <C> <C>
(UNAUDITED)
Current deferred income tax assets (liabilities) net:
Other.................................................................... $ -- $ -- $ 7,547
Noncurrent deferred income tax assets (liabilities) net:
Net operating loss....................................................... 47,968 256,592
Valuation allowance...................................................... (47,968) (214,352)
---------- ---------- ------------
Total deferred income taxes, net..................................... $ -- $ $ 49,787
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

8. STOCKHOLDERS' EQUITY

COMMON SHARES

The Company has 15,000,000 authorized shares of Common Stock, of which
15,000,000 shares were issued as of December 31, 1998 and June 30, 1999.

9. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES AND RENT COMMITMENTS

The Company is committed under operating leases, principally for office
space and cars expiring through 2002. As of December 31, 1998, the Company has a
total car lease commitment of $126,455.

F-94
<PAGE>
TWINSPARK INTERACTIVE PEOPLE B.V.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. COMMITMENTS AND CONTINGENCIES (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
ENDED
1997 1998 JUNE 30, 1999
---------- ----------- --------------
<S> <C> <C> <C>
(UNAUDITED)
</TABLE>

In February 1999, the Company signed a letter of intent to rent an office
building in Diemen for a 10- year period. The rent will start between June 1,
2000 and August 31, 2000. The total rent commitment over the 10-year period is
$5,909,618.

<TABLE>
<CAPTION>
Year ending December 31:
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
1999........................................................................... $ 30,000
2000........................................................................... 305,000
2001........................................................................... 581,000
2002........................................................................... 581,000
2003........................................................................... 551,000
Thereafter..................................................................... 3,581,000
</TABLE>

CREDIT FACILITIES

The Company has credit facilities available for an amount of $156,683 and a
5 year loan agreement with the bank of $50,380 to be repaid in 20 quarter terms,
commencing January 1, 1998. The Company pledged its office equipment and
accounts receivable. In addition the payables of the Company to related parties
at any date are subordinated against the payables of the Company to the bank.
Finally, the bank requires that the equity of the Company is at least 30% of
balance sheet total.

11. EMPLOYEE BENEFIT PLAN

The Company has a defined contribution plan covering all of its eligible
employees in The Netherlands. The Plan is effective from March 18, 1999.
Employees may begin participation on monthly enrollment dates provided that they
have reached 25 years of age and permanent employment.

12. SUBSEQUENT EVENTS

Effective January 1, 1999, all assets and liabilities related to Interactive
Products Solutions will be transferred to a newly established company called
Tridion B.V. for approximately $100,000.

In August 1999, the Company was acquired by AGENCY.COM Ltd. ("AGENCY.COM")
for $700,000 in cash and 1,057,226 shares of AGENCY.COM's common stock valued at
$4.06 per share, of which 1,047,226 shares were given to the shareholders of the
Company and 10,000 shares to employees of the Company, for a total aggregate
purchase price of $4,997,624. Employees of the Company also received 75,000
stock options to purchase shares of AGENCY.COM's common stock. Furthermore, the
purchase agreement calls for certain earn-out payments to the former
shareholders of the Company based upon the achievement of certain targeted
operating results of the Company through December 1999. These payments are
payable in the form of 168,066 shares of AGENCY.COM's common stock which are
currently held in escrow.

F-95
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial
statements as of June 30, 1999 and for the six months ended June 30, 1998 and
1999 and the year ended December 31, 1998, have been derived from the
application of pro forma adjustments to the historical consolidated financial
statements of AGENCY.COM, Eagle River Interactive, Interactive Solutions and
Twinspark Interactive People which are included elsewhere in this prospectus and
the historical financial statements of the other acquisitions, which are not
included in this prospectus. The unaudited pro forma condensed consolidated
balance sheet gives effect to the acquisition of Twinspark Interactive People as
if such transaction had occurred on June 30, 1999. The unaudited pro forma
consolidated statement of operations information for the six months ended June
30, 1999 gives effect to the acquisitions that AGENCY.COM completed in 1999 as
if such transactions had occurred on January 1, 1999. The unaudited pro forma
consolidated statements of operations information for the six months ended June
30, 1998 and for the year ended December 31, 1998, gives effect to the
acquisitions that AGENCY.COM completed in 1998 and 1999 as if such transactions
had occurred on January 1, 1998.

The unaudited pro forma condensed consolidated financial statements do not
purport to be indicative of what AGENCY.COM's actual results of operations or
financial condition would have been assuming the acquisitions that AGENCY.COM
completed in 1998 and 1999 had been completed on such dates, nor does it purport
to be indicative of results of operations or financial condition that may be
achieved in the future.

Each of the acquisitions that AGENCY.COM completed in 1998 and 1999 has been
accounted for using the purchase method of accounting. The purchase method of
accounting allocates the aggregate purchase price to the assets acquired and
liabilities assumed based upon their respective fair values. The excess purchase
price over the fair value of net assets acquired, which equals $18.507 million
for Eagle River Interactive, $1.718 million for Interactive Solutions, $4.879
million for Twinspark Interactive People and an aggregate of $2.128 million for
the other acquisitions has been allocated to goodwill. Management considers such
estimates to be reasonable.

F-96
<PAGE>
AGENCY.COM LTD.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1999

<TABLE>
<CAPTION>
PRO FORMA
AGENCY.COM ADJUSTMENTS PRO FORMA
-------------- TWINSPARK ------------ -------------
INTERACTIVE
-----------
(A)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................... $ 1,402,466 $ -- $ -- $ 1,402,466
Accounts receivable, net.................................... 10,654,529 1,040,445 -- 11,694,974
Unbilled charges............................................ 17,315,902 156,426 -- 17,472,328
Prepaid expenses and other current assets................... 2,829,070 141,399 -- 2,970,469
Income tax receivable....................................... 2,130,945 -- -- 2,130,945
Due from related parties.................................... 138,875 279,030 -- 417,905
-------------- ----------- ------------ -------------
Total current assets...................................... 34,471,787 1,617,300 -- 36,089,087
Property and Equipment, net................................... 8,639,524 511,086 -- 9,150,610
Intangibles, net (a).......................................... 50,542,365 100,996 4,879,295 55,522,656
Deferred Tax Assets........................................... 1,010,396 -- -- 1,010,396
Investments and Other Assets.................................. 2,932,325 -- -- 2,932,325
-------------- ----------- ------------ -------------
Total assets.............................................. $ 97,596,397 $ 2,229,382 $4,879,295 $ 104,705,074
-------------- ----------- ------------ -------------
-------------- ----------- ------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued expenses....................... $ 10,800,239 $ 1,380,124 $ -- $ 12,180,363
Line of credit.............................................. 11,031,371 537,392 -- 11,568,763
Income taxes payable........................................ 537,009 -- -- 537,009
Deferred revenue............................................ 5,709,919 108,982 -- 5,818,901
Current portion of capital lease obligations................ 863,548 -- -- 863,548
Due to related parties...................................... -- 32,413 -- 32,413
-------------- ----------- ------------ -------------
Total current liabilities................................. 28,942,086 2,058,911 -- 31,000,997
Long-term Liabilities:
Due to Omnicom Group, Inc................................... 46,210,850 -- 700,000 46,910,850
Deferred tax liabilities.................................... 493,021 -- -- 493,021
Capital lease obligations................................... 1,216,447 -- -- 1,216,447
Due to related parties...................................... 1,065,322 -- -- 1,065,322
Bank loans.................................................. -- 52,142 -- 52,142
Other liabilities........................................... 1,177,511 -- -- 1,177,511
-------------- ----------- ------------ -------------
Total long-term liabilities............................... 50,163,151 52,142 700,000 50,915,293
-------------- ----------- ------------ -------------
Total liabilities......................................... 79,105,237 2,111,053 700,000 81,916,290
-------------- ----------- ------------ -------------
Stockholders' Equity (b):
Common stock................................................ 25,094 755,705 (754,648) 26,151
Additional paid-in capital.................................. 19,099,786 -- 4,296,567 23,396,353
Retained earnings (deficit)................................. (601,175) (546,076) 546,076 (601,175)
Cumulative foreign translation adjustments.................. (32,545) (91,300) 91,300 (32,545)
-------------- ----------- ------------ -------------
Total stockholders' equity................................ 18,491,160 118,329 4,179,295 22,788,784
-------------- ----------- ------------ -------------
Total liabilities and stockholders' equity................ $ 97,596,397 $ 2,229,382 $4,879,295 $ 104,705,074
-------------- ----------- ------------ -------------
-------------- ----------- ------------ -------------
</TABLE>

The accompanying notes and management's assumptions to the unaudited pro forma
condensed consolidated financial statements are integral parts of this
statement.

F-97
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED

BALANCE SHEET

(a) In August 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Twinspark Interactive for $700,000 in cash and
1,057,226 shares of the AGENCY.COM's common stock valued at $4.06 per share,
of which 1,047,226 shares were given to the shareholders of Twinspark and
10,000 shares to former employees of Twinspark for a total aggregate
purchase price of $4,997,624. The Company also granted 75,000 stock options
to former employees of Twinspark at an exercise price equal to the then fair
market value of the Company's common stock. This acquisition has been
accounted for under the purchase method of accounting and, accordingly, the
purchase price has been allocated to the tangible and intangible assets
acquired and liabilities assumed on the basis of their respective fair
values on the acquisition date. Furthermore, the purchase agreement calls
for certain earn-out payments to the former shareholders of Twinspark based
upon the achievement of certain targeted operating results of Twinspark
through December 1999. These payments are payable in the form of 168,066
shares of the Company's common stock which are currently held in escrow.
Future payments, if any, will be recorded as additional purchase price and,
accordingly, an adjustment to goodwill.

Set forth below is AGENCY.COM's allocation of the purchase price of the
Twinspark Interactive acquisition:

<TABLE>
<S> <C>
Aggregate purchase price....................................................... $4,997,624
----------
Less net book value of assets acquired....................................... 118,329
----------
Excess of cost over net book value of assets acquired.......................... $4,879,295
----------
----------
Allocation of excess of cost over net book value of assets acquired:
Goodwill..................................................................... $4,879,295
----------
----------
</TABLE>

The allocation of excess cost over net book value of assets acquired to the
intangible assets relating to Twinspark Interactive will be amortized over a
useful life of three years.

F-98
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED

BALANCE SHEET

(b) Reflects the adjustments to shareholders' equity as follows:

<TABLE>
<CAPTION>
ACQUISITIONS
-------------
<S> <C>
Elimination of Twinspark Interactive Common Stock.................................................. $ (755,705)
Issuance of Common Stock in connection with the acquisition of Twinspark Interactive............... 1,057
-------------
Subtotal....................................................................................... (754,648)
-------------
Additional paid-in capital:
Elimination of Twinspark Interactive additional paid-in capital.................................. --
Additional paid-in capital from issuance of Common Stock......................................... 4,296,567
Subtotal....................................................................................... 4,296,567
-------------
Retained earnings:
Elimination of Twinspark Interactive historical retained earnings................................ 546,076
-------------
Cumulative foreign translation adjustment:
Elimination of Twinspark Interactive historical cumulative foreign translation adjustment........ 91,300
-------------
Total.......................................................................................... $ 4,179,295
-------------
-------------
</TABLE>

The following summarizes how the amounts relating to the issuance of shares
in connection with the Twinspark acquisition were determined:

<TABLE>
<S> <C> <C>
Total Common Stock issued.......................................... 1,057,226
Fair market value of Common Stock per share........................ $ 4.06
----------
Total value of Common Stock issued................................. $4,297,624
Total Common Stock issued.......................................... 1,057,226
Par value of Common Stock.......................................... $ 0.001
----------
Adjustment to Common Stock......................................... (1,057)
----------
Adjustment to additional paid-in capital........................... $4,296,567
----------
----------
</TABLE>

F-99
<PAGE>
AGENCY.COM LTD.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
PRO FORMA
AGENCY.COM ADJUSTMENTS
-------------- EAGLE RIVER INTERACTIVE TWINSPARK DIGITAL ------------
INTERACTIVE SOLUTIONS INTERACTIVE VISION
----------- ----------- ----------- -------------
(A) (B) (C) (D)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................... $ 30,389,175 $ 5,072,000 $ 3,598,106 $2,417,259 $ 325,800 $ --
Direct salaries and costs.............. 15,072,391 2,885,000 2,207,841 1,467,849 306,106 --
-------------- ----------- ----------- ----------- ------------- ------------
Gross profit........................... 15,316,784 2,187,000 1,390,265 949,410 19,694 --
General and administrative............. 10,654,234 2,452,000 1,509,291 1,524,269 231,200 --
Sales and marketing.................... 1,254,112 602,000 39,898 94,000 125,108 --
Amortization of goodwill............... 727,161 1,081,000 1,279,996 -- -- 404,690(g)
Depreciation and amortization.......... 1,984,074 -- 96,942 79,659 5,949
-------------- ----------- ----------- ----------- ------------- ------------
Income (loss) from operations........ 697,203 (1,948,000) (1,535,862) (748,518) (342,563) (404,690)
Interest income (expense), net......... (1,055,095) (382,000) (210,000) (6,164) (17,680) (54,158)(j)
-------------- ----------- ----------- ----------- ------------- ------------
Income (loss) before income taxes.... (357,892) (2,330,000) (1,745,862) (754,682) (360,243) (458,848)
-------------- ----------- ----------- ----------- ------------- ------------
Provision (benefit) for income taxes... 53,238 (811,000) (453,502) (49,787) -- --
-------------- ----------- ----------- ----------- ------------- ------------
Net income (loss).................... $ (411,130) $(1,519,000) $(1,292,360) $(704,895) $ (360,243) $ (458,848)
-------------- ----------- ----------- ----------- ------------- ------------
-------------- ----------- ----------- ----------- ------------- ------------
Per share information:
Net loss per share--.................
Basic.................................. $ (0.02)
--------------
--------------
Diluted................................ $ (0.02)
--------------
--------------
Weighted average common shares
outstanding--........................
Basic.................................. 21,135,108
--------------
--------------
Diluted................................ 21,135,108
--------------
--------------

PRO FORMA
-------------

<S> <C>
Revenues............................... $ 41,802,340
Direct salaries and costs.............. 21,939,187
-------------
Gross profit........................... 19,863,153
General and administrative............. 16,370,994
Sales and marketing.................... 2,115,118
Amortization of goodwill............... 3,492,847
Depreciation and amortization.......... 2,166,624
-------------
Income (loss) from operations........ (4,282,430)
Interest income (expense), net......... (1,725,097)
-------------
Income (loss) before income taxes.... (6,007,527)
-------------
Provision (benefit) for income taxes... (1,261,051)
-------------
Net income (loss).................... $ (4,746,476)
-------------
-------------
Per share information:
Net loss per share--.................
Basic.................................. $ (0.18)
-------------
-------------
Diluted................................ $ (0.18)
-------------
-------------
Weighted average common shares
outstanding--........................
Basic.................................. 26,148,511(m)
-------------
-------------
Diluted................................ 26,148,511(m)
-------------
-------------
</TABLE>

The accompanying notes and management's assumptions to the unaudited pro forma
condensed consolidated financial statements are integral parts of this
statement.

F-100
<PAGE>
AGENCY.COM LTD.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
PRO FORMA
AGENCY.COM ADJUSTMENTS
-------------- EAGLE RIVER INTERACTIVE TWINSPARK OTHER ------------
INTERACTIVE SOLUTIONS INTERACTIVE ACQUISITIONS
----------- ----------- ----------- ------------
(A) (B) (C) (D)(E)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................... $ 12,585,418 $11,184,330 $ 6,257,091 $ 746,270 $3,215,711 $ --
Direct salaries and costs.............. 6,101,964 5,698,390 3,918,898 582,120 1,902,942 --
-------------- ----------- ----------- ----------- ------------ ------------
Gross profit........................... 6,483,454 5,485,940 2,338,193 164,150 1,312,769 --
General and administrative............. 5,176,039 6,020,274 2,481,076 150,920 879,949 --
Sales and marketing.................... 198,628 869,009 226,158 -- 142,804 --
Amortization of goodwill............... 99,576 2,161,888 719,400 -- -- 749,914(h)
Depreciation and amortization.......... 532,009 -- 147,638 34,300 10,689 --
-------------- ----------- ----------- ----------- ------------ ------------
Income (loss) from operations........ 477,202 (3,565,231) (1,236,079) (21,070) 279,327 (749,914)
Interest income (expense), net......... (94,214) (763,377) (217,169) (6,370) (13,009) (196,070)(k)
Minority interests..................... (281,559) -- -- -- -- --
-------------- ----------- ----------- ----------- ------------ ------------
Income (loss) before income taxes.... 101,429 (4,328,608) (1,453,248) (27,440) 266,318 (945,984)
Provision (benefit) for income taxes... 40,572 (1,311,101) (603,297) -- 87,000 --
-------------- ----------- ----------- ----------- ------------ ------------
Net income (loss).................... $ 60,857 $(3,017,507) $ (849,951) $ (27,440) $ 179,318 $ (945,984)
-------------- ----------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ----------- ------------ ------------
Per share information:
Net loss per share--
Basic.................................. $ 0.00
--------------
--------------
Diluted................................ $ 0.00
--------------
--------------
Weighted average common shares
outstanding--........................
Basic.................................. 16,285,269
--------------
--------------
Diluted................................ 16,927,887
--------------
--------------

PRO FORMA
-----------

<S> <C>
Revenues............................... $33,988,820
Direct salaries and costs.............. 18,204,314
-----------
Gross profit........................... 15,784,506
General and administrative............. 14,708,258
Sales and marketing.................... 1,436,599
Amortization of goodwill............... 3,730,778
Depreciation and amortization.......... 724,636
-----------
Income (loss) from operations........ (4,815,765)
Interest income (expense), net......... (1,290,209)
Minority interests..................... (281,559)
-----------
Income (loss) before income taxes.... (6,387,533)
Provision (benefit) for income taxes... (1,786,826)
-----------
Net income (loss).................... $(4,600,707)
-----------
-----------
Per share information:
Net loss per share--
Basic.................................. $ (0.18)
-----------
-----------
Diluted................................ $ (0.18)
-----------
-----------
Weighted average common shares
outstanding--........................
Basic.................................. 25,254,579(n)
-----------
-----------
Diluted................................ 25,254,579(n)
-----------
-----------
</TABLE>

The accompanying notes and management's assumptions to the unaudited pro forma
condensed consolidated financial statements are integral parts of this
statement.

F-101
<PAGE>
AGENCY.COM LTD.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
EAGLE
RIVER INTERACTIVE
INTERACTIVE SOLUTIONS PRO FORMA
AGENCY.COM ----------- ----------- ADJUSTMENTS
-------------- (A) (B) TWINSPARK OTHER ------------
INTERACTIVE ACQUISITIONS
----------- ------------
(C) (D)(F)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................. $ 26,452,191 $23,442,000 $15,370,470 $2,690,816 $3,974,145 $(1,348,436)(p)
Direct salaries and costs............ 15,930,029 11,782,000 9,659,366 1,771,878 2,255,687 (1,348,436)(p)
-------------- ----------- ----------- ----------- ------------ ------------
Gross profit......................... 10,522,162 11,660,000 5,711,104 918,938 1,718,458 --
General and administrative........... 10,944,441 12,022,000 6,220,344 469,545 1,107,540 --
Sales and marketing.................. 595,886 1,958,000 482,952 -- 306,521 --
Amortization of goodwill............. 316,514 4,322,000 1,953,783 -- -- 1,413,822
Depreciation and amortization........ 1,141,305 -- 295,274 91,189 16,958 --
-------------- ----------- ----------- ----------- ------------ ------------
Income (loss) from operations........ (2,475,984) (6,642,000) (3,241,249) 358,204 287,439 (1,413,822)
Interest income (expense), net....... (359,761) (1,611,000) (599,003) (12,091) (17,422) (256,667)(l)
Minority interests................... (281,559) -- -- -- -- --
-------------- ----------- ----------- ----------- ------------ ------------
Income (loss) before income taxes.... (3,117,304) (8,253,000) (3,840,252) 346,113 270,017 (1,670,489)
Provision (benefit) for income
taxes.............................. (1,309,633) (2,862,000) (1,603,476) 52,899 87,000 --
-------------- ----------- ----------- ----------- ------------ ------------
Net income (loss).................... $ (1,807,671) $(5,391,000) $(2,236,776) $ 293,214 $ 183,017 $(1,670,489)
-------------- ----------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ----------- ------------ ------------
Per share information:
Net loss per share--
Basic................................ $ (0.11)
--------------
--------------
Diluted.............................. $ (0.11)
--------------
--------------
Weighted average common shares
outstanding--
Basic 16,854,499
--------------
--------------
Diluted 16,854,499
--------------
--------------

PRO
FORMA
------------

<S> <C>
Revenues............................. $ 70,581,186
Direct salaries and costs............ 40,050,524
------------
Gross profit......................... 30,530,662
General and administrative........... 30,763,870
Sales and marketing.................. 3,343,359
Amortization of goodwill............. 8,006,119
Depreciation and amortization........ 1,544,726
------------
Income (loss) from operations........ (13,127,412)
Interest income (expense), net....... (2,855,944)
Minority interests................... (281,559)
------------
Income (loss) before income taxes.... (16,264,915)
Provision (benefit) for income
taxes.............................. (5,635,210)
------------
Net income (loss).................... $(10,629,705)
------------
------------
Per share information:
Net loss per share--
Basic................................ $ (0.41)
------------
------------
Diluted.............................. $ (0.41)
------------
------------
Weighted average common shares
outstanding--
Basic 25,823,809(o)
------------
------------
Diluted 25,823,809(o)
------------
------------
</TABLE>

The accompanying notes and management's assumptions to the unaudited pro forma
condensed consolidated financial statements are integral parts of this
statement.

F-102
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

(a) EAGLE RIVER INTERACTIVE INC.

In April 1999, the Company acquired all of the issued and outstanding shares
of capital stock of Eagle River Interactive from the Eagle River Interactive
shareholder, Omnicom, in exchange for an aggregate of 3,659,548 shares of
AGENCY.COM's common stock and a warrant to purchase 4,328,752 shares of
AGENCY.COM's common stock at a purchase price of $0.005 per share. Such warrant
was valued at $0.80 per share and the fair value of the Company's common stock
on the date of purchase was $1.23 per share, each as determined by an
independent third-party valuation. In addition, 13,322 shares of AGENCY.COM's
common stock were issued to certain participants of the Eagle River Interactive
Key Executive Incentive Program in settlement of all obligations due under the
program and 80,690 shares were issued to an executive of Eagle River
Interactive. These shares have been considered additional purchase price. This
acquisition has been accounted for under the purchase method of accounting and,
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. The acquisition is effective as
of March 31, 1999, and accordingly, the operating results of Eagle River since
March 31, 1999 have been included in AGENCY.COM's consolidated financial
statements.

(b) INTERACTIVE SOLUTIONS INCORPORATED AND QUADRIS CONSULTING, INC.

In April 1999, the Company acquired all of the issued and outstanding shares
of capital stock of Interactive Solutions from the Interactive Solutions
shareholders (including Communicade Inc., a wholly owned subsidiary of Omnicom)
in exchange for an aggregate of 4,171,846 shares of AGENCY.COM's common stock
and a warrant to purchase 3,071,248 shares of AGENCY.COM's common stock at a
purchase price of $0.005 per share. Such warrant was valued at $0.80 per share
and the fair value of the AGENCY.COM's common stock on the date of purchase was
$1.23 per share, each as determined by an independent third-party valuation.

Immediately, prior to the acquisition of Interactive Solutions, Interactive
Solutions acquired all of the issued and outstanding shares of capital stock of
Quadris Consulting from the Quadris Consulting shareholders in exchange for an
aggregate of 1,869,528 shares of Interactive Solutions common stock. Prior to
both acquisitions, Communicade sold 485,999.64 shares of Interactive Solutions
common stock to certain of the AGENCY.COM's shareholders for an aggregate price
of $412,492.

Outstanding stock options under the stock option plans of Interactive
Solutions and Quadris Consulting were converted into approximately 1,402,382
options to purchase the AGENCY.COM's common stock. Certain of these options were
converted at excercise prices that were lower than the fair market value of the
Company's common stock at the date of grant. Accordingly, the Company has
recorded additional purchase price for the difference between the excercise
price and the fair market value of the underlying common shares relating to
these options.

These acquisitions have been accounted for under the purchase method of
accounting and, accordingly, the purchase price has been allocated to the
tangible and intangible assets acquired and liabilities assumed on the basis of
their respective fair values on the acquisition dates. These acquisitions are
effective as of March 31, 1999, and accordingly, the operating results of
Interactive since March 31, 1999 have been included in AGENCY.COM's consolidated
financial statements.

F-103
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

In August 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Twinspark Interactive for $700,000 in cash and
1,057,226 shares of the AGENCY.COM's common stock valued at $4.06 per share, of
which 1,047,226 shares were given to the shareholders of Twinspark and 10,000
shares to former employees of Twinspark, for a total aggregate purchase price of
$4,997,624. The Company also granted 75,000 stock options to former employees of
Twinspark at an exercise price equal to the then fair market value of the
Company's common stock. This acquisition has been accounted for under the
purchase method of accounting and, accordingly, the purchase price has been
allocated to the tangible and intangible assets acquired and liabilities assumed
on the basis of their respective fair values on the acquisition date.
Furthermore, the purchase agreement calls for certain earn-out payments to the
former shareholders of Twinspark based upon the achievement of certain targeted
operating results of Twinspark through December 1999. These payments are payable
in the form of 168,066 shares of the Company's common stock which are currently
held in escrow. Future payments, if any, will be recorded as additional purchase
price and, accordingly, an adjustment to goodwill.

(d) OTHER ACQUISITIONS:

DIGITAL VISION

On May 13, 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Digital Vision for $1,100,000 in cash. This
acquisition has been accounted for under the purchase method of accounting and,
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. The acquisition is effective as
of May 31, 1999, and accordingly, the operating results of Digital Vision since
May 31, 1999 have been included in AGENCY.COM's consolidated financial
statements.

KETCHUM ADVERTISING

On April 1, 1998, the Company acquired certain assets and assumed certain
liabilities from Ketchum Advertising. Ketchum was a subsidiary of the Omnicom,
which is a significant shareholder of AGENCY.COM's common stock both directly
and through a wholly owned subsidiary. In consideration for the net assets
acquired, the AGENCY.COM paid approximately $643,000 in cash. This acquisition
has been accounted for under the purchase method of accounting and, accordingly,
the purchase price has been allocated to the tangible and intangible assets
acquired and liabilities assumed on the basis of their respective fair values on
the acquisition date. As a result of this acquisition, the AGENCY.COM has
recorded goodwill of approximately $643,000, which is being amortized over a
period of twenty years. The acquisition is effective as of March 31, 1998, and
accordingly, the operating results of Ketchum Advertising since March 31, 1998
have been included in AGENCY.COM's consolidated financial statements.

PRIMARY GROUP

On August 31, 1998, AGENCY.COM acquired certain assets from Primary Group
and assumed certain liabilities. In consideration for the net assets acquired,
the Company paid approximately $53,220 in cash. This acquisition has been
accounted for under the purchase method of accounting

F-104
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

and, accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. As a result of this acquisition,
the Company has recorded goodwill of approximately $50,845, which is being
amortized over a period of twenty years. The acquisition is effective as of
August 31, 1998, and accordingly, the operating results of the Primary Group
since August 31, 1998 have been included in AGENCY.COM's consolidated financial
statements.

(e) Set forth below are the unaudited results of operations of the other
acquisitions for the period of January 1, 1998 through June 30, 1998:

<TABLE>
<CAPTION>
QUADRIS KETCHUM PRIMARY DIGITAL TOTAL OTHER
CONSULTING ADVERTISING GROUP VISION ACQUISITIONS
------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Revenues................................... $ 1,727,391 $ 680,000 $ 130,035 $ 678,285 $ 3,215,711
Direct salaries and costs.................. 1,144,664 353,600 102,584 302,094 1,902,942
------------- ----------- ----------- ----------- -------------
Gross profit........................... 582,727 326,400 27,451 376,191 1,312,769
General and administrative................. 362,872 251,600 65,596 199,881 879,949
Sales and marketing........................ 1,577 27 -- 141,200 142,804
Amortization of goodwill................... -- -- -- -- --
Depreciation and amortization.............. -- 14 2,902 7,773 10,689
------------- ----------- ----------- ----------- -------------
Income (loss) from operations.......... 218,278 74,759 (41,047) 27,337 279,327
Interest income (expense), net............. (1,925) -- -- (11,084) (13,009)
Minority interests......................... -- -- -- -- --
------------- ----------- ----------- ----------- -------------
Income (loss) before income taxes...... 216,353 74,759 (41,047) 16,253 266,318
Provision (benefit) for income taxes..... 87,000 -- -- -- 87,000
------------- ----------- ----------- ----------- -------------
Net income (loss)...................... $ 129,353 $ 74,759 $ (41,047) $ 16,253 $ 179,318
------------- ----------- ----------- ----------- -------------
------------- ----------- ----------- ----------- -------------
</TABLE>

F-105
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

(f) Set forth below are the unaudited results of operations of the other
acquisitions for the period of January 1, 1998 through December 31, 1998:

<TABLE>
<CAPTION>
QUADRIS KETCHUM PRIMARY DIGITAL TOTAL OTHER
CONSULTING ADVERTISING GROUP VISION ACQUISITIONS
------------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues................................. $ 1,727,391 $ 680,000 $ 167,057 $ 1,399,697 $ 3,974,145
Direct salaries and costs................ 1,144,664 353,600 131,790 625,633 2,255,687
------------- ----------- ----------- ------------- -------------
Gross profit......................... 582,727 326,400 35,267 774,064 1,718,458
General and administrative............... 362,872 251,600 120,392 372,676 1,107,540
Sales and marketing...................... 1,577 27 -- 304,917 306,521
Amortization of goodwill................. -- -- -- -- --
Depreciation and amortization............ -- 14 3,869 13,075 16,958
------------- ----------- ----------- ------------- -------------
Income (loss) from operations........ 218,278 74,759 (88,994) 83,396 287,439
Interest income (expense), net........... (1,925) -- -- (15,497) (17,422)
Minority interests....................... -- -- -- -- --
------------- ----------- ----------- ------------- -------------
Income (loss) before income taxes.... 216,353 74,759 (88,994) 67,899 270,017
Provision (benefit) for income taxes..... 87,000 -- -- -- 87,000
------------- ----------- ----------- ------------- -------------
Net income (loss).................... $ 129,353 $ 74,759 $ (88,994) $ 67,899 $ 183,017
------------- ----------- ----------- ------------- -------------
------------- ----------- ----------- ------------- -------------
</TABLE>

(g) Amortization of intangibles for the six months ended June 30, 1999, for the
following acquisitions, based upon a useful life of twenty years:

<TABLE>
<S> <C>
Eagle River Interactive........................................ $ 231,332
Interactive Solutions.......................................... 21,481
Twinspark Interactive.......................................... 121,982
Digital Vision................................................. 29,895
----------
Total pro forma goodwill adjustments....................... $ 404,690
----------
----------
</TABLE>

(h) Amortization of intangibles for the six months ended June 30, 1998, for the
following acquisitions, based upon a useful life of twenty years:

<TABLE>
<S> <C>
Eagle River Interactive........................................ $ 462,664
Interactive Solutions.......................................... 42,962
Twinspark Interactive.......................................... 121,982
Digital Vision................................................. 35,874
Quadris Consulting............................................. 77,123
Ketchum Advertising............................................ 8,038
Primary Group.................................................. 1,271
----------
Total pro forma goodwill adjustments....................... $ 749,914
----------
----------
</TABLE>

F-106
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

(i) Amortization of intangibles for year ended December 31, 1998, for the
following acquisitions, based upon a useful life of twenty years:

<TABLE>
<S> <C>
Eagle River Interactive........................................ $ 925,329
Interactive Solutions.......................................... 85,923
Twinspark Interactive.......................................... 243,965
Digital Vision................................................. 71,748
Quadris Consulting............................................. 77,123
Ketchum Advertising............................................ 8,887
Primary Group.................................................. 847
----------
Total pro forma goodwill adjustments....................... $1,413,822
----------
----------
</TABLE>

(j) Interest expense (income), net

The following reflects additional interest expense for AGENCY.COM for
borrowings made from Omnicom to fund acquisitions. The funding would have been
in accordance with AGENCY.COM's Shareholders Agreement with Omnicom whereby
AGENCY.COM is to receive funding for the acquisition of "new media" companies at
the same interest rate charged by Omnicom to its subsidiaries under the Omnicom
cash management system. Interest on such loans is payable quarterly in equal
installments over a five-to-ten-year period.

Additional interest expense to fund acquisitions for the six months ended
June 30, 1999 based upon an average interest rate of 6%:

<TABLE>
<S> <C>
Twinspark Interactive............................................ $ 23,450
Digital Vision................................................... 30,708
---------
Total pro forma interest expense adjustments................. $ 54,158
---------
---------
</TABLE>

(k) Interest expense (income), net

Additional interest expense to fund acquisitions for the six months ended
June 30, 1998 based upon an average interest rate of 6%:

<TABLE>
<S> <C>
Ketchum Advertising.............................................. $ 10,770
Primary Group.................................................... 1,782
Quadris Consulting............................................... 123,218
Twinspark Interactive............................................ 23,450
Digital Vision................................................... 36,850
---------
Total pro forma interest expense adjustments................. $ 196,070
---------
---------
</TABLE>

F-107
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

(l) Interest expense (income), net

Additional interest expense to fund acquistions for the year ended December
31, 1998 based upon an average interest rate of 6%:

<TABLE>
<S> <C>
Ketchum Advertising.............................................. $ 10,770
Primary Group.................................................... 2,379
Quadris Consulting............................................... 123,218
Twinspark Interactive............................................ 46,900
Digital Vision................................................... 73,700
---------
Total pro forma interest expense adjustments................. $ 256,967
---------
---------
</TABLE>

(m) Set forth below are the weighted average shares of Common Stock outstanding
during the periods for the basic and diluted computation for the six months
ended June 30, 1999:

<TABLE>
<S> <C>
Basic:
Historical AGENCY.COM basic.................................. 21,135,108
Shares issued in acquisition of Eagle River Interactive...... 1,870,254
Shares issued in acquisition of Interactive Solutions........ 2,085,923
Shares issued in acquisition of Twinspark Interactive........ 1,057,226
----------
Pro forma basic............................................ 26,148,511
----------
----------
Diluted:
Historical AGENCY.COM diluted................................ 21,135,108
Shares issued in acquisition of Eagle River Interactive...... 1,870,254
Shares issued in acquisition of Interactive Solutions........ 2,085,923
Shares issued in acquisition of Twinspark Interactive........ 1,057,226
----------
Pro forma diluted.......................................... 26,148,511
----------
----------
</TABLE>

The historical AGENCY.COM diluted weighted average shares of Common stock
outstanding for the six months ended June 30, 1999 does not include the impact
of stock options and warrants then outstanding, as the effect of their inclusion
would be antidilutive.

F-108
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

(n) Set forth below are the weighted average shares of Common Stock outstanding
during the periods for the basic and diluted computation for the six months
ended June 30, 1998:

<TABLE>
<S> <C>
Basic:
Historical AGENCY.COM basic................................. 16,285,269
Shares issued in acquisition of Eagle River Interactive..... 3,740,238
Shares issued in acquisition of Interactive Solutions....... 4,171,846
Shares issued in acquisition of Twinspark Interactive....... 1,057,226
-----------
Pro forma basic........................................... 25,254,579
-----------
-----------
Diluted:
Historical AGENCY.COM diluted............................... 16,285,269
Shares issued in acquisition of Eagle River Interactive..... 3,740,238
Shares issued in acquisition of Interactive Solutions....... 4,171,846
Shares issued in acquisition of Twinspark Interactive....... 1,057,226
-----------
Pro forma diluted......................................... 25,254,579
-----------
-----------
</TABLE>

The historical AGENCY.COM diluted weighted average shares of Common stock
outstanding for the six months ended June 30, 1998 does not include the impact
of stock options then outstanding, as the effect of their inclusion would be
antidilutive.

(o) Set forth below are the weighted average shares of Common Stock outstanding
during the periods for the basic and diluted computation for the year ended
December 31, 1998:

<TABLE>
<S> <C>
Basic:
Historical AGENCY.COM basic................................. 16,854,499
Shares issued in acquisition of Eagle River Interactive..... 3,740,238
Shares issued in acquisition of Interactive Solutions....... 4,171,846
Shares issued in acquisition of Twinspark Interactive....... 1,057,226
-----------
Pro forma basic........................................... 25,823,809
-----------
-----------
Diluted:
Historical AGENCY.COM diluted............................... 16,854,499
Shares issued in acquisition of Eagle River Interactive..... 3,740,238
Shares issued in acquisition of Interactive Solutions....... 4,171,846
Shares issued in acquisition of Twinspark Interactive....... 1,057,226
-----------
Pro forma diluted......................................... 25,823,809
-----------
-----------
</TABLE>

The historical AGENCY.COM diluted weighted average shares of Common stock
outstanding for the year ended December 31, 1998 does not include the impact of
stock options then outstanding, as the effect of their inclusion would be
antidilutive.

(p) Revenue/Direct salaries and costs

Reflects the elimination of revenues earned and costs incurred totaling
$996,666 between AGENCY.COM and Eagle River Interactive in the fourth quarter of
1998, totaling $240,928 between

F-109
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)

Interactive Solutions and AGENCY.COM for the year ended December 31, 1998 and
totaling $110,842 between Interactive Solutions and Eagle River Interactive for
the year ended December 31, 1998, respectively.

F-110
<PAGE>
UNDERWRITING

AGENCY.COM and the underwriters named below have entered into an
underwriting agreement with respect to the shares being offered. Subject to the
conditions in the underwriting agreement, each underwriter has severally agreed
to purchase the number of shares indicated in the following table. Goldman,
Sachs & Co., Salomon Smith Barney Inc. and Hambrecht & Quist LLC are the
representatives of the underwriters.

<TABLE>
<CAPTION>
Underwriters Number of Shares
- --------------------------------------------------------- -----------------
<S> <C>
Goldman, Sachs & Co......................................
Salomon Smith Barney Inc. ...............................
Hambrecht & Quist LLC....................................
-----------------
Total..................................................
-----------------
-----------------
</TABLE>

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

If the underwriters sell more shares than the total number set forth in the
table above, the underwriters have an option to buy up to an additional
shares from AGENCY.COM to cover such sales. They may exercise that option
for 30 days. If any shares are purchased pursuant to this option, the
underwriters will severally purchase shares in approximately the same proportion
as set forth in the table above.

AGENCY.COM will sell the shares to the underwriters at a per share price of
$ , which represents a $ discount from the initial public offering price
set forth on the cover page of this prospectus. This discount is the
underwriters' compensation. The following table shows the per share and total
underwriting discounts and commissions to be paid to the underwriters by
AGENCY.COM. Such amounts are shown assuming both no exercise and full exercise
of the underwriters' option to purchase additional shares.

<TABLE>
<CAPTION>
Paid by AGENCY.COM
-------------------------
<S> <C> <C>
Full
No Exercise Exercise
----------- ------------
Per Share..... $ $
Total......... $ $
</TABLE>

Shares sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $ per share from the initial public offering price. Any such
securities dealers may resell any shares purchased from the underwriters to
certain other brokers or dealers at a discount of up to $ per share
from the initial public offering price. If all the shares are not sold at the
initial offering price, the representatives may change the offering price and
the other selling terms.

AGENCY.COM and its directors, officers and substantially all of its
stockholders have agreed with the underwriters not to dispose of or hedge any of
their common stock or securities convertible into or exchangeable for shares of
common stock during the period from the date of this prospectus continuing
through the date 180 days after the date of this prospectus, except with the
prior written consent of the representatives. This agreement does not apply to
any existing employee benefit plans. Please see "Shares Eligible for

U-1
<PAGE>
Future Sale" for a discussion of transfer restrictions.

At AGENCY.COM's request, the underwriters have reserved up to shares
of the common stock offered by this prospectus for sale, at the initial public
offering price, to certain of AGENCY.COM's directors, employees and associates
of AGENCY.COM through a directed share program. The number of shares available
for sale to the general public will be reduced to the extent these persons
purchase the reserved shares. There can be no assurance that any of the reserved
shares will be so purchased. Any reserved shares not so purchased will be
offered to the general public on the same basis as the other shares offered by
this prospectus.

Prior to the offering, there has been no public market for the shares. The
initial public offering price will be negotiated among AGENCY.COM and the
representatives. The primary factors to be considered in determining the initial
public offering price of the shares, in addition to prevailing market
conditions, will be AGENCY.COM's historical performance, estimates of the
business potential and earnings prospects of AGENCY.COM, an assessment of
AGENCY.COM's management and the consideration of the above factors in relation
to market valuation of companies in related businesses.

Application has been made for quotation of the common stock on the Nasdaq
National Market under the symbol "ACOM".

In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the common stock while
the offering is in progress.

The representatives, on behalf of the underwriters, also may impose a
penalty bid. This occurs when a particular underwriter repays to the other
underwriters a portion of the underwriting discount received by it because the
representatives have repurchased shares sold by or for the account of such
underwriter in stabilizing or short covering transactions.

These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
underwriters at any time. These transactions may be effected on the Nasdaq
National Market, in the over-the-counter market or otherwise.

The underwriters do not expect sales to discretionary accounts to exceed
five percent of the total number of shares offered.

AGENCY.COM estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$ .

AGENCY.COM has agreed to indemnify the several underwriters against various
liabilities, including liabilities under the Securities Act of 1933.

AGENCY.COM has in the past provided Internet professional services to
Salomon Smith Barney Inc., one of the Underwriters. Please see "Certain
Transactions--Agreement with underwriter".

U-2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospected is an offer to
sell only the shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 8
Forward Looking Statements................................................ 18
Use of Proceeds........................................................... 19
Dividend Policy........................................................... 20
Capitalization............................................................ 21
Dilution.................................................................. 22
Selected Consolidated Financial Data...................................... 23
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 27
Business.................................................................. 45
Management................................................................ 62
Certain Relationships and Related Party Transactions...................... 73
Principal Stockholders.................................................... 77
Description of Capital Stock.............................................. 80
Shares Eligible for Future
Sale.................................................................... 83
Validity of Common Stock.................................................. 84
Experts................................................................... 85
Changes in Accountants.................................................... 85
Where You Can Find More Information....................................... 85
Index to Financial Statements............................................. F-1
Underwriting.............................................................. U-1
</TABLE>

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

Through and including , 1999 (the 25(th) day after the date of this
prospectus), 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 a dealer's obligation to deliver a prospectus when acting
as an underwriter and with respect to an unsold allotment or subscription.

5,900,000 Shares

AGENCY.COM LTD.

Common Stock

-------------
[LOGO]

-------------
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
HAMBRECHT & QUIST

Representatives of the Underwriters

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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 the
underwriting discounts and commissions, payable by the registrant in connection
with the issuance and distribution of the 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>
<CAPTION>
AMOUNT TO
BE PAID
-------------
<S> <C>
SEC registration fee........................................................... $ 22,635
NASD filing fee................................................................ 8,642
Nasdaq National Market listing fee............................................. 95,000
Legal fees and expenses........................................................ 500,000
Accounting fees and expenses................................................... 1,500,000
Printing and engraving......................................................... 300,000
Blue sky fees and expenses (including legal fees).............................. 15,000
Transfer Agent and Registrar fees and expenses................................. 15,000
Miscellaneous.................................................................. 43,723
-------------
Total........................................................................ $ 2,500,000
-------------
-------------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant's Amended and Restated Certificate of Incorporation in effect
as of the date hereof (the "Certificate") provides that, except to the extent
prohibited by the Delaware General Corporation Law, as amended (the "DGCL"), the
Registrant's directors shall not be personally liable to the Registrant or its
stockholders for monetary damages for any breach of fiduciary duty as directors
of the Registrant. Under the DGCL, the directors have a fiduciary duty to the
Registrant which is not eliminated by this provision of the Certificate and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available. In addition, each director will
continue to be subject to liability under the DGCL for breach of the director's
duty of loyalty to the Registrant, for acts or omissions which are found by a
court of competent jurisdiction to be not in good faith or involving intentional
misconduct, for knowing violations of 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 prohibited by the DGCL. This provision
also does not affect the directors' responsibilities under any other laws, such
as the Federal securities laws or state or Federal environmental laws. The
Registrant has applied for liability insurance for its officers and directors.

Section 145 of the DGCL empowers a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers, provided that this provision
shall not eliminate or limit the liability of a director: (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) arising under Section 174 of the DGCL, or (iv)
for any transaction from which the director

II-1
<PAGE>
derived an improper personal benefit. The DGCL provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's bylaws, any agreement, a vote of stockholders or otherwise. The
Certificate eliminates the personal liability of directors to the fullest extent
permitted by Section 102(b)(7) of the DGCL and provides that the Registrant may
fully indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) by reason of the fact
that such person is or was a director or officer of the Registrant, or is or was
serving at the request of the Registrant as a director or officer of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Certificate. The Registrant is not aware of any
threatened litigation or proceeding that may result in a claim for such
indemnification.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The Registrant has sold and issued the following securities since July 1,
1996:

In July 1998, as a result of Online Magic acquisition, the Registrant issued
an aggregate of 745,185 shares of its common stock in exchange for all of the
outstanding shares of Online Magic to Eamonn Wilmott and Andrew Hobsbawm, of
which 246,750 shares are being held in escrow pending financial results for
1999. Such shares of common stock were sold in reliance upon an exemption from
registration under the Securities Act of 1933 pursuant to Section 4(2) thereof.

In July 1998, Spiral Media merged with and into the Registrant (the "Spiral
Media Merger"). As a result of the Spiral Media Merger, the Registrant issued an
aggregate of 480,625 shares of its common stock in exchange for all outstanding
shares of Spiral Media to Arthur Williams, Mitchell Golden, Bradford Justus,
Thomas Lanzetta, Ralph Seaman, Eric Vallinsky and Pall Walton. Such shares of
common stock were sold in reliance upon an exemption from registration under the
Securities Act of 1933 pursuant to Section 4(2) thereof.

In April 1999, Interactive Solutions Incorporation merged with and into the
Registrant (the "Interactive Solutions Merger"), the Registrant issued an
aggregate of 1,568,070 shares of common stock in exchange for all outstanding
shares of Interactive Solutions to Lawrence Krakauer, Andrew Kerr, Jeffrey
Richman, Michael Benyo, John Morgan, Barry Goldberg, David Janowski, Jerry
Newmark, Priya Ramanathan, James Ronan, David Seitelmen, Lee Tuttle, Ting Tang
Wu and Betsy January, Christian Leland, Thomas Rohrer, Chan Suh, Kyle Shannon,
Kenneth Trush, Eamonn Wilmott, Janet Ambrosi Wertman, David Krunnfusz, Arthur
Williams, Andrew Hobsbawm, Aaron Sugarman, Rosemary Haefner, Monica Fried and
Peter Kestenbaum. In addition, in connection with the mergers, the Registrant
issued to Communicade, 2,596,452 shares of common stock. Communicade also
received a 20-year warrant to purchase 3,071,248 shares of the Registrant's
common stock at an exercise price of $0.005 per share. Such shares of common
stock were sold in reliance upon an exemption from registration under the
Securities Act of 1933 pursuant to Section 4(2) thereof.

II-2
<PAGE>
In April 1999, Eagle River Interactive merged with and into the Registrant
(the "Eagle River Merger"), the Registrant issued an aggregate of 80,690 shares
of common stock to Kevin Rowe and 3,659,548 shares of common stock to Omnicom
and a 20-year warrant to purchase 4,328,752 shares of the Registrant's common
stock at an exercise price of $0.005 per share. Such shares of common stock were
sold in reliance upon an exemption from registration under the Securities Act of
1933 pursuant to Section 4(2) thereof.

In July 1999, Twinspark Interactive People B.V. merged with and into the
Registrant (the "Twinspark Merger"). As a result of the Twinspark Merger, the
Registrant issued 1,047,226 shares of its common stock to Topics Interactive
Factory B.V. and 10,000 shares of its common stock to former employees of
Twinspark Interactive in exchange for all outstanding shares of Twinspark
Interactive. Such shares of common stock were sold in reliance upon an exemption
from registration under the Securities Act of 1933 pursuant to Section 4(2)
thereof.

OPTIONS. The Registrant from time to time has granted stock options to
employees in reliance upon exemption from registration pursuant to either (i)
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) Rule 701 promulgated under the Securities Act. The following table sets
forth certain information regarding such grants:

<TABLE>
<CAPTION>
NUMBER OF EXERCISE
SHARES PRICES
----------- ------------
<S> <C> <C>
January 1, 1996 to December 31, 1996.............................. 99,500 $0.86
January 1, 1997 to December 31, 1997.............................. 836,930 $ 0.80-1.12
January 1, 1998 to December 31, 1998.............................. 1,918,934 $ 0.41-1.23
January 1, 1999 to present........................................ 3,873,346 $ 0.41-1.23
</TABLE>

No underwriters were involved in connection with the sales of securities
referred to in this Item 15.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<S> <C>

1.1+ Form of underwriting agreement.

3.1+ Amended and restated certificate of incorporation.

3.2* Form of amended and restated certificate of incorporation to be in effect upon the closing of the
offering.

3.3+ By-laws.

3.4* Form of amended and restated by-laws to be in effect upon the closing of this offering.

4.1* Specimen common stock certificate.

4.2 See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Certificate of Incorporation and By-laws of the
Registrant defining the rights of holders of Common Stock of the Registrant.
</TABLE>

II-3
<PAGE>

4.4+ Warrant Agreement, as amended, dated April 28, 1999, by and between Communicade, Inc. and the
Registrant.

5.1* Opinion of Brobeck, Phleger & Harrison LLP.

10.1+ 1999 Stock Option/Stock Issuance Plan.

10.2+ Interactive Solutions Incorporated 1996 Stock Option Plan.

10.3+ 1998 Quadris Consulting, Inc. Equity Incentive Plan.

10.4+ Employment Agreement, dated April 28, 1999, by and between Chan Suh and the Registrant.

10.5+ Employment Agreement, dated April 28, 1999, by and between Kyle Shannon and the Registrant.

10.6+ Employment Agreement, dated April 28, 1999, by and between Kevin Rowe and the Registrant.

10.7+ Employment Agreement, dated April 28, 1999, by and between Kenneth Trush and the Registrant.

10.8+ Employment Agreement, dated April 28, 1999, by and between Eamonn Wilmott and the Registrant.

10.9+ Employment Agreement, dated April 28, 1999, by and between Lawrence Krakauer and the Registrant.

10.10+ Employment Agreement, dated April 28, 1999, by and between Janet Ambrosi Wertman and the Registrant.

10.11+ Restricted Stock Agreement, dated April 16, 1999, by and between Kevin Rowe and the Registrant.

10.12* Credit Agreement dated as of _____, 1999 between Omnicom Finance Inc. and the Registrant and Subsidiary
Guarantors.

10.13+ Agreement and Plan of Merger, dated April 28, 1999, by and between Interactive Solutions Incorporated
and Quadris Consulting, Inc.

10.14 Agreement and Plan of Merger, dated April 28, 1999, by and between Interactive Solutions Incorporated
and the Registrant.

10.15+ Agreement and Plan of Merger, dated April 28, 1999, by and between Eagle River Interactive Inc. and the
Registrant.

10.16+ Agreement, dated April 27, 1999, by and between Jeffrey Rayport and the Registrant.

10.17+ Stock Purchase Agreement, dated July 23, 1999, by and between Topics Interactive Factory B.V. and the
Registrant, as amended.
</TABLE>

II-4

<PAGE>

11.1+ Statement re: Supplemental Net Loss Per Share.

16.1+ Letter from Ernst & Young LLP re Change in Certifying Accountants.

21.1+ Subsidiaries of the Registrant.

23.1 Consent of Arthur Andersen LLP--New York, New York.

23.2 Consent of Arthur Andersen LLP--Denver, Colorado.

23.3 Consent of Arthur Andersen--Rotterdam, The Netherlands.

23.4* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).

24.1+ Powers of attorney.

27.1+ Financial Data Schedule.

99.1+ Consent of Director Nominee Jeffrey Rayport.
</TABLE>

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

* To be supplied by amendment.

+ Previously filed.

(b) Financial Statement Schedules.

<TABLE>
<S> <C>
Schedule II -- Schedule of Valuation and Qualifying Accounts (AGENCY.COM Ltd. and
Subsidiaries)

Schedule II -- Schedule of Valuation and Qualifying Accounts (Eagle River Interactive)

Schedule II -- Schedule of Valuation and Qualifying Accounts (Eagle River Interactive Inc.)

Schedule II -- Schedule of Valuation and Qualifying Accounts (Interactive Solutions, Inc.
and Subsidiary)

Schedule II -- Schedule of Valuation and Qualifying Accounts (Twinspark Interactive People
B.V.)
</TABLE>

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the underwriters at
the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, 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 of 1933, shall be deemed to be part of this
registration statement as of the time it was declared effective.

II-5
<PAGE>
(2) For the purpose of determining any liability under the Securities Act
of 1933, 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 such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such 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 such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-6
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on this 13th day of
October, 1999.

<TABLE>
<S> <C> <C>
AGENCY.COM LTD.

By: /s/ Kenneth Trush
-----------------------------------------
Name: Kenneth Trush
Title:Executive Vice President, Chief
Financial Officer, Treasurer and
Director
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on October 13, 1999:

<TABLE>
<CAPTION>
SIGNATURE TITLE(S)
- -------------------------------------------- ----------------------------------------------
<C> <S>
* President and Chief Executive Officer, and
- ------------------------------------------- Chairman of the Board of Directors
Chan Suh (principal executive officer)

*
- ------------------------------------------- Chief Creative Officer and Director
Kyle Shannon
/s/ Kenneth Trush Executive Vice President, Chief Financial
- ------------------------------------------- Officer, Treasurer and Director
Kenneth Trush (principal financial and accounting officer)

*
- ------------------------------------------- Director
Gerald Bruce Redditt

*
- ------------------------------------------- Director
John D. Wren
</TABLE>

<TABLE>
<S> <C> <C> <C>
*By: /s/ Kenneth Trush
-------------------------
Kenneth Trush
Attorney-in-fact
</TABLE>

II-7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To AGENCY.COM Ltd.:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of AGENCY.COM Ltd. and subsidiaries included
in this registration statement and have issued our report thereon dated October
11, 1999. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of valuation and qualifying
accounts is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commissions rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

New York, New York
October 11, 1999

S-1
<PAGE>
SCHEDULE II

AGENCY.COM LTD. AND SUBSIDIARIES

SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO
BEGINNING OF COSTS AND OTHER BALANCE AT
YEAR EXPENSES ACCOUNTS DEDUCTIONS END OF YEAR
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
For the fiscal year ended December 31, 1996
Allowance for doubtful accounts..................... $ -- $ 15 $ -- $ -- $ 15
----- ----- ----- ----- -----
----- ----- ----- ----- -----
For the fiscal year ended December 31, 1997
Allowance for doubtful accounts..................... $ 15 $ 143 $ -- $ 115 $ 43
----- ----- ----- ----- -----
----- ----- ----- ----- -----
For the fiscal year ended December 31, 1998
Allowance for doubtful accounts..................... $ 43 $ 785 $ -- $ 2 $ 826
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

S-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Eagle River Interactive:

We have audited in accordance with generally accepted auditing standards,
the financial statements of Eagle River Interactive included in this
registration statement and have issued our report thereon dated July 19, 1999.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule of valuation and qualifying accounts
is the responsibility of the management of Eagle River Interactive Inc. and is
presented for purposes of complying with the Securities and Exchange Commissions
rules and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Denver, Colorado
July 19, 1999

S-3
<PAGE>
EAGLE RIVER INTERACTIVE

SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS

(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO
BEGINNING COSTS AND OTHER BALANCE AT
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS END OF YEAR
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
For the fiscal year ended December 31, 1996
Allowance for doubtful accounts..................... $ -- $ -- $ -- $ -- $ --
----- ----- ----- ----- -----
----- ----- ----- ----- -----
For the period January 1, 1997 through September 26,
1997
Allowance for doubtful accounts..................... $ -- $ 980 $ -- $ -- $ 980
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

S-4
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Eagle River Interactive Inc.:

We have audited in accordance with generally accepted auditing standards, the
financial statements of Eagle River Interactive Inc. included in this
registration statement and have issued our report thereon dated July 19, 1999.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule of valuation and qualifying accounts
is the responsibility of the Company's management and is presented for purposes
of complying with the Securities and Exchange Commissions rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

New York, New York
July 19, 1999

S-5
<PAGE>
SCHEDULE II

EAGLE RIVER INTERACTIVE INC.
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO
BEGINNING COSTS AND OTHER BALANCE AT
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS END OF YEAR
------------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
For the period from inception
(September 26, 1997) through
December 31, 1997
Allowance for doubtful accounts..................... $ 140 $ 44 $ -- $ -- $ 184
----- ----------- ----- ----- ------------
----- ----------- ----- ----- ------------
For the fiscal year ended December 31, 1998
Allowance for doubtful accounts..................... $ 184 $ 2,600 $ -- $ -- $ 2,784
----- ----------- ----- ----- ------------
----- ----------- ----- ----- ------------
</TABLE>

S-6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Interactive Solutions, Inc. and Subsidiary:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of Interactive Solutions, Inc. and Subsidiary
included in this registration statement and have issued our report thereon dated
July 16, 1999. Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule of valuation and
qualifying accounts is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange Commissions
rules and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

New York, New York
July 16, 1999

S-7
<PAGE>
SCHEDULE II

INTERACTIVE SOLUTIONS, INC. AND SUBSIDIARY
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO
BEGINNING COSTS AND OTHER BALANCE AT
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS END OF YEAR
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
For the fiscal year ended December 31, 1996
Allowance for doubtful accounts..................... $ -- $ 6 $ -- $ -- $ 6
----- ----- ----- ----- -----
----- ----- ----- ----- -----
For the fiscal year ended December 31, 1997
Allowance for doubtful accounts..................... $ 6 $ 86 $ -- $ 55 $ 37
----- ----- ----- ----- -----
----- ----- ----- ----- -----
For the fiscal year ended December 31, 1998
Allowance for doubtful accounts..................... $ 37 $ 273 $ -- $ -- $ 310
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

S-8
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Twinspark Interactive People B.V.:

We have audited in accordance with generally accepted auditing standards, the
financial statements of Twinspark Interactive People B.V. included in this
registration statement and have issued our report thereon dated August 9, 1999.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule of valuation and qualifying accounts
is the responsibility of the Company's management and is presented for purposes
of complying with the Securities and Exchange Commissions rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN

New York, New York
August 9, 1999

S-9
<PAGE>
SCHEDULE II

TWINSPARK INTERACTIVE PEOPLE B.V.
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO
BEGINNING COSTS AND OTHER BALANCE AT
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS END OF YEAR
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
For the fiscal year ended December 31, 1997
Allowance for doubtful accounts..................... $ -- $ -- $ -- $ -- $ --
----- ----- ----- ----- -----
----- ----- ----- ----- -----
For the fiscal year ended December 31, 1998
Allowance for doubtful accounts..................... $ -- $ 44 $ -- $ -- $ 44
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

S-10
<PAGE>
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1+ Form of underwriting agreement.
3.1+ Amended and restated certificate of incorporation.
3.2* Form of amended and restated certificate of incorporation to be in effect upon the closing of the
offering.
3.3+ By-laws.
3.4* Form of amended and restated by-laws to be in effect upon the closing of this offering.
4.1* Specimen common stock certificate.
4.2 See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Certificate of Incorporation and By-laws of the
Registrant defining the rights of holders of Common Stock of the Registrant.
4.3+ Warrant Agreement, as amended, dated April 28, 1999, by and between Omnicom Group Inc. and the
Registrant.
4.4+ Warrant Agreement, as amended, dated April 28, 1999, by and between Communicade, Inc. and the
Registrant.
5.1* Opinion of Brobeck, Phleger & Harrison LLP.
10.1+ 1999 Stock Option/Stock Issuance Plan.
10.2+ Interactive Solutions Incorporated 1996 Stock Option Plan.
10.3+ 1998 Quadris Consulting, Inc. Equity Incentive Plan.
10.4+ Employment Agreement, dated April 28, 1999, by and between Chan Suh and the Registrant.
10.5+ Employment Agreement, dated April 28, 1999, by and between Kyle Shannon and the Registrant.
10.6+ Employment Agreement, dated April 28, 1999, by and between Kevin Rowe and the Registrant.
10.7+ Employment Agreement, dated April 28, 1999, by and between Kenneth Trush and the Registrant.
10.8+ Employment Agreement, dated April 28, 1999, by and between Eamonn Wilmott and the Registrant.
10.9+ Employment Agreement, dated April 28, 1999, by and between Lawrence Krakauer and the Registrant.
10.10+ Employment Agreement, dated April 28, 1999, by and between Janet Ambrosi Wertman and the Registrant.
10.11+ Restricted Stock Agreement, dated April 16, 1999, by and between Kevin Rowe and the Registrant.
10.12* Credit Agreement dated as of _____, 1999 between Omnicom Finance Inc. and the Registrant and Subsidiary
Guarantors.
10.13+ Agreement and Plan of Merger, dated April 28, 1999, by and between Interactive Solutions Incorporated
and Quadris Consulting, Inc.
10.14 Agreement and Plan of Merger, dated April 28, 1999, by and between Interactive Solutions Incorporated
and the Registrant.
10.15+ Agreement and Plan of Merger, dated April 28, 1999, by and between Eagle River Interactive Inc. and the
Registrant.
10.16+ Agreement, dated April 27, 1999, by and between Jeffrey Rayport and the Registrant.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
10.17+ Stock Repurchase Agreement, dated July 23, 1999, by and between Topics Interactive Factory B.V. and the
Registrant, as amended.
10.18* Registration Rights Agreement, dated October , 1999, by and among the Registrant and Omnicom.
11.1+ Statement re: Computation of Supplemental Net Loss Per Share.
16.1+ Letter from Ernst & Young LLP re Change in Certifying Accountants.
21.1+ Subsidiaries of the Registrant.
23.1 Consent of Arthur Andersen LLP--New York, New York
23.2 Consent of Arthur Andersen LLP--Denver, Colorado
23.3 Consent of Arthur Andersen--Rotterdam, The Netherlands
23.4* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.1+ Powers of Attorney.
27.1+ Financial Data Schedule.
99.1+ Consent of Jeffrey Rayport.
</TABLE>

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

* To be supplied by amendment.

+ Previously filed.

<PAGE>

Exhibit 10.14

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") dated April 28, 1999
(the "EXECUTION DATE") by and between AGENCY.COM LTD., a New York corporation
("AGENCY") and INTERACTIVE SOLUTIONS INCORPORATED, a Massachusetts corporation
("ISI").

W I T N E S S E T H :
- - - - - - - - - -

WHEREAS, the respective Boards of Directors of each of the
parties hereto have determined that it is advisable and in the best interests of
their respective corporations and their respective shareholders to consummate,
and have approved, the business combination transaction provided for herein in
which ISI would merge with and into Agency (the "MERGER") upon the terms and
subject to the conditions of this Agreement;

WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "CODE");

NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereby agree as follows:

ARTICLE I

THE MERGER

SECTION 1.1. THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2 below), ISI shall be
merged with and into Agency and the separate corporate existence of ISI shall
thereupon cease. Agency (i) shall be the successor or surviving corporation in
the Merger (sometimes herein referred to as the "SURVIVING CORPORATION"), (ii)
shall continue to be governed by the laws of the State of New York, and (iii)
the separate corporate existence of Agency with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
Merger shall have the effects specified in Ch. 156B, ss.80 of the Massachusetts
General Laws (the "MGL") and Section 906 of the New York Business Corporation
Law (the "NYBCL").

SECTION 1.2. EFFECTIVE TIME. Agency and ISI will cause (i) an executed
original of an appropriate Certificate of Merger (the "CERTIFICATE OF MERGER" )
to be filed with the Secretary of State of the State of New York pursuant to
Sections 904-A, 907 and 104 of the NYBCL, and (ii) an executed original of an
appropriate Articles of Merger of ISI into Agency to be filed with the Secretary
of State of the Commonwealth of Massachusetts, pursuant to Ch. 156B, 79 of the
MGL. The Merger shall become effective on the date on which the Certificate of
Merger has been duly filed with the Secretary of State of New York, and such
time is hereinafter referred to as the "EFFECTIVE TIME."

SECTION 1.3. CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION. The Certificate of Incorporation of the Surviving Corporation shall
be at and as of the Effective Time, the Certificate of Incorporation of Agency
immediately prior to the Effective

<PAGE>

Time. The By-laws of the Surviving Corporation shall be, at and as of the
Effective Time, the By-laws of Agency immediately prior to the Effective Time.

ARTICLE II

CONVERSION AND CANCELLATION OF SHARES AND OPTIONS

SECTION 2.1. ISI SHARES. Each share of the common stock, $0.01 par
value per share, of ISI (the "ISI Shares") issued and outstanding immediately
prior to the Effective Time of the Merger shall, by virtue of the Merger,
automatically and without any action on the part of the holder thereof, become
and be converted as follows: (a) into 0.6656917 shares of common stock, $0.001
par value per share, of Agency (the "AGENCY SHARES"), with respect to shares
held by a shareholder who prior to the conversion owned less than 50% of the
issued and outstanding ISI Shares; and (b) into 0.3049626 Agency Shares and
0.3607291 warrants to purchase Agency Shares, such warrants to be evidenced by a
warrant substantially in the form of EXHIBIT A hereto, with respect to shares
held by a shareholder who prior to the conversion owned more than 50% of the
issued and outstanding ISI Shares.

SECTION 2.2. AGENCY SHARES. Each share of common stock, $0.001 par
value per share, of Agency issued and outstanding immediately prior to the
Effective Time of the Merger shall, at the Effective Time, continue to be issued
and outstanding, be unchanged and remain as one fully paid and non-assessable
share of common stock, $0.001 par value per share, of Agency.

SECTION 2.3. SURRENDER OF ISI SHARES AND ISSUANCE OF AGENCY SHARES.
SCHEDULE 2.3 sets forth the following (i) a list of each holder of record of ISI
Shares at the Effective Time, (ii) the number of ISI Shares owned by each holder
of record of ISI Shares at the Effective Time, and (iii) the number of Agency
Shares to be received by each such holder of record of ISI Shares at the
Effective Time. At the Closing (as defined in Section 2.5 below), each holder of
record of ISI Shares at the Effective Time shall surrender the certificate(s)
representing such shares to Agency and in exchange therefor shall receive a
certificate registered in such holder's name representing that number of whole
shares of Agency Shares into which such holder's ISI Shares shall have been
converted pursuant to Section 2.1 above as set forth on SCHEDULE 2.3, provided,
however, any ISI shareholder who did not receive stock certificates evidencing
the ISI Shares issued in exchange for shares of common stock of Quadris
Consulting, Inc. ("QUADRIS") upon the merger of Quadris with and into ISI (the
"QUADRIS MERGER") shall not be required to deliver stock certificates.
Thereupon, the certificates representing the ISI Shares shall be canceled. No
fractional shares shall be issued and no cash in lieu of fractional shares shall
be paid to a holder of ISI Shares.

SECTION 2.4. ISI STOCK OPTION PLAN. At the Effective Time, (i) the ISI
1996 Stock Option Plan (the "ISI STOCK OPTION PLAN"), and all options to
purchase ISI Shares then outstanding under the ISI Stock Option Plan, and (ii)
the Quadris 1998 Incentive Stock Option Plan (the "Quadris Stock Option Plan")
and all options to purchase ISI Shares then outstanding under the Quadris Stock
Option Plan, shall be assumed by Agency. SCHEDULE 2.4 hereto sets forth (i) a
complete list as of the date hereof of all holders of outstanding options under
the ISI Stock Option Plan, (ii) a complete list as of the date hereof of all
holders of outstanding options under the Quadris Stock Option Plan assumed by
ISI and (iii) the number of ISI Shares subject to

2
<PAGE>

each such option. Each such option so assumed by Agency under this Agreement
shall continue to have, and be subject to, the same terms and conditions set
forth in the ISI Stock Option Plan or the Quadris Stock Option Plan, as
applicable, and the applicable stock option agreement immediately prior to the
Effective Time, except that (i) such option will be exercisable for that number
of whole Agency Shares equal to the product of the number of ISI Shares that
were issuable upon exercise of such option immediately prior to the Effective
Time multiplied by 0.6656917 and rounded up to the nearest whole number of
Agency Shares, and (ii) the per share exercise price for the Agency Shares
issuable upon exercise of such assumed option will be equal to the quotient
determined by dividing the exercise price per ISI Share at which such option was
exercisable immediately prior to the Effective Time by 0.6656917, rounded up to
the nearest whole cent. Consistent with the terms of the Quadris Stock Option
Plan and the documents governing the outstanding options under such Plan, the
Merger will not terminate any of the outstanding options under the Quadris Stock
Option Plan or accelerate the vesting of such options or the Agency Shares which
will be subject to those options upon Agency's assumption of the options.
Consistent with the terms of the ISI Stock Option Plan and the documents
governing the outstanding options under such Plan, the Merger will not terminate
any of the outstanding options under the ISI Stock Option Plan upon Agency's
assumption of the options. Consistent with the terms of the ISI Stock Option
Plan and the documents governing certain of the outstanding options under such
Plan, the Merger will accelerate the exercisability or vesting of certain of
such options. It is the intention of the parties that the options so assumed by
Agency qualify, to the maximum extent permissible, following the Effective Time
as incentive stock options as defined in Section 422 of the Code to the extent
such options qualified as incentive stock options prior to the Effective Time.
Within 20 business days after the Effective Time, Agency will issue to each
Person (as defined in Section 7.4 below) who, immediately prior to the Effective
Time was a holder of an outstanding option under the ISI Stock Option Plan or
the Quadris Stock Option Plan, a document evidencing the foregoing assumption of
such option by Agency.

SECTION 2.5. CLOSING. The Closing under this Agreement (the "CLOSING")
shall take place simultaneously with the execution and delivery of this
Agreement, or such other time and date agreed upon by the parties, at the
offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019. The
date of the Closing is herein referred to as the "CLOSING DATE". Notwithstanding
the foregoing, it is the intention of the parties that for the purposes of
providing Agency with an interest in the profits and losses of ISI, the
effective date of this Agreement shall be the opening of business on April 1,
1999.

ARTICLE III

REPRESENTATIONS OF ISI

ISI represents and warrants to Agency as follows:

SECTION 3.1. EXECUTION AND VALIDITY OF AGREEMENT. ISI has the full
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by ISI and the
consummation by ISI of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of ISI and the holders of all of

3
<PAGE>

the issued and outstanding ISI Shares. This Agreement has been duly and validly
executed and delivered by ISI and, assuming due authorization, execution and
delivery by Agency, constitutes the legal, valid and binding obligation of ISI
enforceable against it in accordance with its terms.

SECTION 3.2. NON-CONTRAVENTION; APPROVALS AND CONSENTS.

3.2.1. NON-CONTRAVENTION. Except as set forth on SCHEDULE 3.2, the
execution, delivery and performance by ISI of its obligations hereunder and the
consummation of the transactions contemplated hereby, will not conflict with,
result in a violation or breach of, constitute (with or without notice or lapse
of time or both) a default under, result in or give to any Person any right of
payment or reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of any mortgage, lien,
security interest, encumbrance, claim, charge and restriction of any kind or
character (collectively, "LIENS") upon any of the assets or properties of ISI
under, any of the terms, conditions or provisions of (a) the Articles of
Organization or By-laws of ISI, or (b) any statute, law, rule, regulation or
ordinance (collectively, "LAWS"), or any judgment, decree, order, writ,
citation, permit or License (collectively, "ORDERS"), of any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision (a "GOVERNMENTAL OR REGULATORY AUTHORITY"),
applicable to ISI or any of its assets or properties, or (c) any note, bond,
mortgage, security agreement, indenture, license, franchise, permit, concession,
contract, lease or other instrument, obligation or agreement of any kind
(collectively, "CONTRACTS") to which ISI is a party or by which ISI or any of
its assets or properties are bound.

3.2.2. APPROVALS AND CONSENTS. Except as set forth on SCHEDULE 3.2.2
and for the filings pursuant to the MGL and NYBCL, no consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority or
other Person is necessary or required under any of the terms, conditions or
provisions of any Law or Order of any Governmental or Regulatory Authority or
any Contract to which ISI is a party or by which ISI or any of its assets or
properties are bound for the execution and delivery of this Agreement by ISI,
the performance by ISI of its obligations hereunder or the consummation of the
transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS OF AGENCY

Agency represents and warrants to ISI as follows:

SECTION 4.1. EXECUTION AND VALIDITY OF AGREEMENT. Agency has the full
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by Agency and the
consummation by Agency of the transactions contemplated hereby have been duly
and validly authorized by all required corporate action on behalf of Agency and,
to the extent required by applicable law, its shareholders. This Agreement has
been duly and validly executed and delivered by Agency and, assuming due
authorization, execution and delivery by ISI, constitutes the legal, valid and
binding obligations of Agency enforceable against it in accordance with its
terms.

4
<PAGE>

SECTION 4.2. NON-CONTRAVENTION; APPROVALS AND CONSENTS.

4.2.1. NON-CONTRAVENTION. The execution, delivery and performance by
Agency of its obligations hereunder and the consummation of the transactions
contemplated hereby, will not conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any Person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any Lien upon any of the assets or properties of
Agency under, any of the terms, conditions or provisions of (a) the Certificate
of Incorporation or By-laws of Agency, or (b) subject to the taking of the
actions described in Section 4.2.2, any Laws or Orders of any Governmental or
Regulatory Authority, applicable to Agency or any of its assets or properties,
or (c) any Contracts to which Agency is a party or by which Agency or any of its
assets or properties are bound.

4.2.2. APPROVALS AND CONSENTS. Except as set forth on SCHEDULE 3.2 and
for the filings pursuant to the NYBCL and MGL, no consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority or other
Person is necessary or required under any of the terms, conditions or provisions
of any Law or Order of any Governmental or Regulatory Authority or any Contract
to which Agency is a party or by which Agency or any of its assets or properties
are bound for the execution and delivery of this Agreement by Agency, the
performance by Agency of its obligations hereunder or the consummation of the
transactions contemplated hereby.

SECTION 4.3. AGENCY SHARES. The Agency Shares to be delivered to the
shareholders of ISI pursuant to this Agreement have been duly authorized for
issuance by all requisite corporate action by Agency, and when delivered as
provided herein, will be validly issued and outstanding shares of voting common
stock of Agency, fully paid and non-assessable, and will not be subject to
preemptive rights of any Person.

SECTION 4.4. CAPITALIZATION. Agency has an authorized capitalization
consisting of 25,000,000 shares of common stock, $0.001 par value per share,
issued and subject to issuance as follows:

(i) Immediately prior to the transactions contemplated by this
Agreement, there were issued and outstanding 8,712,909 shares, and there were
allocated to the 1999 Agency.Com Stock Option/Stock Issuance Plan (the "1999
AGENCY PLAN"), an aggregate of 4,800,589 shares (of which options to purchase an
aggregate of 426,456 shares are outstanding under the 1999 Agency Plan as a
result of grants under predecessor plans of Agency, and options to purchase an
aggregate of 1,116,550 shares were granted since the adoption of the 1999 Agency
Plan, such that options to purchase an aggregate of 1,543,006 were outstanding
under the 1999 Agency Plan).

(ii) In connection with the Quadris Merger and ISI Merger, Agency will
issue a total of 2,085,923 shares and warrants to purchase 1,535,624 shares. In
addition, it will assume outstanding options under the Quadris Stock Option Plan
and the ISI Stock Option Plan, which will result in 701,191 Agency Shares being
issued upon the exercise of such assumed options.

5
<PAGE>

(iii) In connection with the merger of Eagle River Interactive with and
into Agency pursuant to a Merger Agreement of even date herewith (the "ERI
MERGER AGREEMENT"), Agency will issue a total of 1,870,119 shares and warrants
to purchase 2,164,376 shares.

(iv) As a result of all such transactions, there will be issued and
outstanding 12,668,951 shares, warrants to purchase an aggregate of 3,700,000
shares, and there will be 2,244,197 shares issuable upon the exercise of
outstanding options.

No other class of capital stock or series of any class of capital stock or
securities convertible into capital stock of Agency is authorized or
outstanding. Except for the Agency Shares and warrants to be issued and
delivered pursuant to this Agreement, the merger agreement relating to the
Quadris Merger, the ERI Merger Agreement, and except for the options outstanding
under the 1999 Agency Plan and the options assumed pursuant to this Agreement,
the merger agreement relating to the Quadris Merger and the ERI Merger
Agreement, there are no (a) outstanding subscriptions, options, warrants, rights
(including "phantom" stock rights), calls, preemptive rights, or other
contracts, commitments, understandings or arrangements, including any right of
conversion or exchange under any outstanding security, instrument, plan or
agreement (collectively, "OPTIONS"), obligating Agency to issue or sell any
shares of the capital stock of Agency, or to grant, extend or enter into any
Option with respect thereto, or (b) outstanding Options providing for settlement
in cash. Agency has sufficient shares reserved for issuance upon exercise of all
outstanding options under the ISI Stock Option Plan and the Quadris Stock Option
Plan.

ARTICLE V

ACTIONS AT CLOSING BY ISI

Simultaneously herewith:

SECTION 5.1. CERTIFIED RESOLUTIONS. ISI shall have delivered to Agency
a copy of the resolutions of its Board of Directors and shareholders authorizing
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby, certified by an officer of ISI.

SECTION 5.2. INVESTMENT REPRESENTATION CERTIFICATE. Each of the
shareholders of ISI shall have executed and delivered an Investment
Representation Certificate substantially in the form of EXHIBIT B hereto.

SECTION 5.3. RIGHT TO INDEMNIFICATION. Communicade and Agency shall
have entered into an agreement relating to certain indemnification rights
substantially in the form of EXHIBIT C hereto.

SECTION 5.4. EMPLOYMENT AGREEMENTS. Lawrence A. Krakauer shall have
entered into an Employment Agreement with Agency substantially in the form of
EXHIBIT E hereto.

SECTION 5.5. NON-SOLICITATION/NON-SERVICING AGREEMENT. Each of the
persons listed on EXHIBIT D-1 hereto shall have executed and delivered a
Non-Solicitation/Non-Servicing Agreement with Agency substantially in the forms
of EXHIBITS D-2 through D-6 hereto.

6
<PAGE>

ARTICLE VI

ACTIONS AT CLOSING BY AGENCY

Simultaneously herewith:

SECTION 6.1. CERTIFIED RESOLUTIONS. Agency shall have delivered to ISI
a copy of the resolutions of the Boards of Directors and shareholders of Agency
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby, certified to by the Secretary of Agency.

SECTION 6.2. EMPLOYMENT AGREEMENTS. Each of Chan W. Suh and Kyle S.
Shannon shall have entered into an Employment Agreement with Agency
substantially in such forms as agreed to by them and Agency.

SECTION 6.3. NON-SOLICITATION/NON-SERVICING AGREEMENT. Each of Chan W.
Sub and Kyle S. Shannon shall have executed and delivered a
Non-Solicitation/Non-Servicing Agreement with Agency substantially in the forms
of EXHIBITS F-1 and F-2 hereto.

ARTICLE VII

MISCELLANEOUS

SECTION 7.1. SURVIVAL. Notwithstanding any right of any party hereto
fully to investigate the affairs of any other party, and notwithstanding any
knowledge of facts determined or determinable pursuant to such investigation or
right of investigation, each party hereto shall have the right to rely fully
upon the representations, warranties, covenants and agreements of any other
party contained in this Agreement or in any Schedule furnished by another party
or in any certificate delivered at the Closing by any other party. The
respective representations and warranties of ISI and Agency contained in this
Agreement or in any Schedule, or in any certificate delivered at the Closing,
shall expire with, and be terminated and extinguished by, the Merger, and
thereafter, neither ISI nor Agency, nor any officer, director or shareholder
thereof shall be under any liability with respect to any such representation or
warranty or condition or covenant. This Section 7.1 shall have no effect upon
any other obligation of the parties hereto, whether to be performed before or
after the Closing.

SECTION 7.2. EXPENSES. Agency and ISI shall pay all of their own
expenses relating to the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of their respective counsels,
financial advisors and accountants.

SECTION 7.3. GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of New York without reference to its conflict of laws provisions.

SECTION 7.4. "PERSON" DEFINED. "PERSON" shall mean and include an
individual, a partnership, a joint venture, a corporation, a limited liability
company, a trust, an unincorporated organization and a government or other
department or agency thereof.

7
<PAGE>

SECTION 7.5. CAPTIONS. The Article and Section captions used herein are
for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.

SECTION 7.6. PUBLIC ANNOUNCEMENTS. Agency and ISI will consult with
each other and Omnicom Group Inc. ("OMNICOM") before issuing any press releases
or otherwise making any public statements with respect to this Agreement or any
of the transactions contemplated hereby and shall not issue any such press
release or make any public statement without the prior consent of the other
party and Omnicom which shall not be unreasonably withheld, except as may be
required by Law or by obligations pursuant to any listing agreements with any
national securities exchange to which Omnicom or Agency is a party.

SECTION 7.7. PARTIES IN INTEREST. This Agreement and the rights and
obligations of the parties hereunder shall not be assignable to any Person
without the written consent of all parties.

SECTION 7.8. SEVERABILITY. In the event any provision of this Agreement
is found to be void and unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall nevertheless be binding upon the
parties with the same effect as though the void or unenforceable part had been
severed and deleted.

SECTION 7.9. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one instrument.

SECTION 7.10. ENTIRE AGREEMENT. This Agreement, including the Schedules
and Exhibits, and other documents referred to herein which form a part hereof,
contains the entire understanding of the parties hereto with respect to the
subject matter contained herein and therein. This Agreement supersedes all prior
oral and written agreements and understandings between the parties with respect
to such subject matter.

SECTION 7.11. AMENDMENT. This Agreement and the Schedules heretofore
delivered may be amended, supplemented or modified by the parties hereto only by
an agreement in writing signed on behalf of each of the parties hereto following
due authorization at any time.

SECTION 7.12. THIRD PARTY BENEFICIARIES. Each party hereto intends that
this Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto and their respective
successors and assigns as permitted under Section 7.7 and for purposes of
Section 7.6, Omnicom.

8
<PAGE>

IN WITNESS WHEREOF, Agency and ISI have each caused its corporate name
to be hereunto subscribed by its officer thereunto duly authorized on the day
and year first above written.

AGENCY.COM LTD.

By: /s/ Kenneth Trush
-------------------------------
Kenneth Trush
Chief Financial Officer

INTERACTIVE SOLUTIONS
INCORPORATED

By: /s/ Jerry Neumann
-------------------------------
Jerry Neumann
Vice President

<PAGE>
Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports dated September 2, 1999 for AGENCY.COM Ltd. and subsidiaries, July 19,
1999 for Eagle River Interactive Inc., July 16, 1999 for Interactive Solutions,
Inc., July 16, 1999 for Quadris Consulting included in or made a part of this
registration statement.

ARTHUR ANDERSEN LLP

New York, New York
October 13, 1999

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report July 19, 1999 for Eagle River Interactive included in or made a
part of this registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
October 13, 1999

<PAGE>

Exhibit 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report August 9, 1999 for Twinspark Interactive People B.V. included in
or made a part of this registration statement.

ARTHUR ANDERSEN

Rotterdam, The Netherlands
October 13, 1999

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS OF AGENCY.COM LTD. AND SUBSIDIARIES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 JUN-30-1999
<CASH> 769,358 1,402,466
<SECURITIES> 0 0
<RECEIVABLES> 5,483,941 14,714,944
<ALLOWANCES> 825,576 4,060,415
<INVENTORY> 0 0
<CURRENT-ASSETS> 8,108,382 34,471,787
<PP&E> 5,842,525 15,293,578
<DEPRECIATION> 1,627,397 6,654,054
<TOTAL-ASSETS> 25,483,095 97,596,397
<CURRENT-LIABILITIES> 6,789,656 28,942,086
<BONDS> 0 0
0 0
0 0
<COMMON> 17,178 25,094
<OTHER-SE> 2,698,917 18,488,566
<TOTAL-LIABILITY-AND-EQUITY> 25,483,095 97,596,397
<SALES> 26,452,191 30,389,175
<TOTAL-REVENUES> 26,452,191 30,389,175
<CGS> 15,930,029 15,072,391
<TOTAL-COSTS> 15,930,029 15,072,391
<OTHER-EXPENSES> 12,998,146 14,619,581
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 359,761 (1,055,095)
<INCOME-PRETAX> (3,117,304) (357,892)
<INCOME-TAX> (1,309,633) 53,238
<INCOME-CONTINUING> (1,807,671) (411,130)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,807,671) (411,130)
<EPS-BASIC> (0.11) (0.02)
<EPS-DILUTED> (0.11) (0.02)

</TABLE>