FTD COM INC, 424B4, 1999-09-29

FTD COM INC
424B4, 1999-09-29
BUSINESS SERVICES, NEC

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<PAGE>

FILED PURSUANT TO RULE 424(b)(4)
REGISTRATION NUMBER 333-78857

PROSPECTUS

4,500,000 Shares

[LOGO OF FTD.COM]

Class A Common Stock

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

This is the initial public offering of our Class A common stock. Our Class A
common stock has been approved for quotation on the Nasdaq National Market
under the symbol "EFTD."

Investing in our Class A common stock involves a high degree of risk. See "Risk
Factors" beginning on page 9 to read about risks that you should consider
before buying shares of our Class A common stock.

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

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

<TABLE>
<CAPTION>
Per
Share Total
----- -----------
<S> <C> <C>
Public offering price........................................ $8.00 $36,000,000
Underwriting discounts and commission........................ $0.56 $ 2,520,000
Proceeds, before expenses, to us............................. $7.44 $33,480,000
</TABLE>

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The underwriters may, under some circumstances, purchase up to an additional
675,000 shares of Class A common stock from us 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 October 4, 1999.

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

Bear, Stearns & Co. Inc.
Thomas Weisel Partners LLC
Volpe Brown Whelan & Company
E*OFFERING

The date of this prospectus is September 28, 1999.
<PAGE>

[Graphics]

[Outside front cover and outside back cover--across the outside front cover
and outside back cover is a picture of a daisy. Front inside cover--FTD.COM
logo and four pictures of flowers. Back inside cover--five pictures of products
offered by FTD.COM. In the bottom left-hand corner are the words "FTD conducts
extensive research to offer consumers a wide selection of floral designs and
specialty gifts." Gatefold-left side--FTD.COM logo, two pictures of products
offered by FTD.COM, one picture of a flower and a picture of a couple with
flowers. Gatefold-right side--one picture of product offered by FTD.COM, one
picture of flowers and three pictures of screen shots from FTD.COM's Web site.
Above the picture of the screen shots from FTD.COM's Web site are the words
"Broad selection of flowers and gifts;" "Easy search and order capabilities;"
and "Individual accounts with personalized reminder services."]

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We are not incorporating the information on our Web site into this
prospectus and we do not intend to make our Web site a part of this prospectus.
FTD(R), the Mercury Man(R) logo and the FTD logo are the property of Florists'
Transworld Delivery, Inc. This prospectus includes trademarks, trade names and
service marks of other companies. Each trademark, trade name or service mark of
any other company appearing in this prospectus is the property of its owner.

2
<PAGE>

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all of the information that you should consider
before investing in the Class A common stock. You should read the entire
prospectus carefully, especially the risks of investing in the Class A common
stock discussed under "Risk Factors." Unless we indicate otherwise in this
prospectus, references to "the Company," "FTD.COM," "we" or "our" mean FTD.COM
INC., and references to "FTDI" mean Florists' Transworld Delivery, Inc.

FTD.COM is an Internet and telephone marketer of flowers and specialty
gifts. We were founded by FTD to sell directly to consumers through our
www.ftd.com Web site and our 1-800-SEND-FTD toll-free telephone number. We
utilize a group of approximately 6,500 FTD florists who adhere to our quality
guarantee and service standards. Through this network, we can provide same-day
delivery of floral orders to over 97% of the U.S. population. We offer over 150
floral arrangements for holidays and other occasions as well as 50 specialty
gifts, such as stuffed animals and other plush toys, gourmet gift baskets,
holiday gift sets and collectible containers. Our products are available at
prices ranging from $29.99 to $176.99. For the three months ended June 30,
1999, our total revenues were $18.4 million and we received a total of 318,573
orders. Internet orders represented 60% of total customer orders during this
period.

The Internet is dramatically affecting the methods by which consumers buy
goods and services. We believe that the number of consumers who purchase
flowers and specialty gifts online and the purchasing frequency of those
consumers will increase substantially over the next few years. We expect this
growth to be driven by several factors, including the consumer's ability to
view and obtain detailed information about the products they are considering
purchasing, the convenience offered by shopping online and the ability to be
personally reminded of upcoming purchasing occasions. Forrester Research
estimates that U.S. retail consumer purchases of goods and services over the
Internet will increase from $7.8 billion in 1998 to over $108 billion in 2003.
Forrester Research also forecasts that the U.S. online market for flowers will
increase from $212 million in 1998 to $906 million in 2003 and that the U.S.
online market for specialty gifts will increase from $63 million in 1998 to
$544 million in 2003. We believe that the flower and specialty gift markets are
fragmented and that our strategies to take advantage of this market
opportunity, combined with our competitive strengths will enable us to grow our
business and build market share.

3
<PAGE>

Business Strategy

Our objective is to be the leading marketer of flowers and specialty gifts
on the Internet. We intend to pursue this objective by employing the following
strategies:

. Build brand awareness, increase our customer base and increase their
purchasing frequency. We plan to achieve this objective by capitalizing
on the FTD brand, which is among the most recognized consumer brands in
America, and significantly expanding our online and traditional
advertising, direct marketing/affinity and retention marketing efforts.
We believe that the www.ftd.com URL is commercially advantageous because
of the strength and simplicity of the FTD brand name.

. Enhance our customers' shopping experience. We plan to continue to invest
in technologies that offer customers the most convenient, user-friendly
and secure shopping experience possible.

. Continue to strengthen our fulfilling florist network. Nearly all of our
floral orders are filled by a group of approximately 6,500 FTD florists
known as our "fulfilling florists." Our fulfilling florists are required
to adhere to our program rules and service standards, including our 100%
satisfaction guarantee and same-day delivery. Our ongoing quality control
efforts include randomly placing test orders with our fulfilling florists
and monitoring customer feedback to ensure customer satisfaction.

. Promote our Web site to telephone customers. We intend to encourage
consumers who currently purchase flowers and specialty gifts over the
telephone to make their future purchases through our Web site. We believe
that our Web site provides a superior shopping experience and is a better
medium to retain and market to our customer base.

. Expand our product offerings. We currently offer a variety of products
that incorporate popular consumer brands, such as The Walt Disney
Company's Winnie The Pooh(R), M&M/Mars, Inc.'s M&M's(R) characters,
Hickory Farms(R), Vermont Teddy Bears(R) and Crabtree & Evelyn(R). We
will seek to expand our product offerings to provide our customers with
the best selection of flowers and specialty gifts.

. Provide quality customer service. By continuing to improve our Web site
and call centers and promoting our 100% customer satisfaction guarantee,
we intend to further develop and strengthen our reputation for customer
service.

. Capitalize on FTD's international fulfillment capability. The 6,500
fulfilling florists who have agreed to our service standards are a subset
of the approximately 20,000 FTD florists located in North America.
Because of our relationship with FTD, we also have access to a network of
approximately 32,000 florists located outside North America to fulfill
our orders abroad. We intend to market our international fulfillment
capabilities to North American consumers who wish to send flowers abroad.

4
<PAGE>

Ownership of FTD.COM

FTD.COM, formed in May 1999, is a subsidiary of Florists' Transworld
Delivery, Inc., or FTDI. Shortly after the formation of FTD.COM, Buena Vista
Internet Group and DBV Investments, L.P., one of MSD Capital, L.P.'s investment
partnerships, made investments in FTD.COM. Buena Vista Internet Group is a
wholly owned subsidiary of The Walt Disney Company and MSD Capital is the
private investment firm for Michael S. Dell.

The following chart illustrates the ownership structure of FTD.COM prior to
this offering:

[FTD CHART]

FTDI is the successor to Florists' Transworld Delivery Association, a non-
profit cooperative association that was founded by a group of retail florists
in the U.S. in 1910. FTDI is a wholly owned subsidiary of FTD Corporation and,
through its subsidiaries, operates all of the businesses that were conducted by
Florists' Transworld Delivery Association prior to its acquisition by FTD
Corporation in December 1994, except for various trade association activities.
Those trade association activities are conducted by FTD Association, which is a
member-owned, non-profit trade association, representing the interests of, and
providing educational and governmental lobbying services for, FTD florists.
Neither FTD Corporation nor FTDI has any ownership interest in FTD Association.

5
<PAGE>

Our principal executive office is located at 3113 Woodcreek Drive, Downers
Grove, Illinois 60515, and our telephone number is (630) 724-6200. Our Web site
address is www.ftd.com and our toll-free telephone number is 1-800-SEND-FTD. We
are not incorporating the information on our Web site into this prospectus and
we do not intend to make our Web site a part of this prospectus.

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

Unless otherwise indicated, all information in this prospectus:

. reflects the conversion of all outstanding shares of our Series A 8%
Cumulative Redeemable Convertible Preferred Stock into an aggregate
of 1,384,614 shares of Class A common stock;

. gives effect to a 12-for-1 split of our Class B common stock; and

. assumes no exercise of the underwriters' option to purchase
additional shares of Class A common stock.

6
<PAGE>

THE OFFERING

The following information assumes that the underwriters do not exercise the
option granted by us to purchase additional shares in this offering. The
following information also excludes shares of Class A common stock issuable
upon exercise of options, which vest over various periods of time, outstanding
as of the date of this prospectus.

<TABLE>
<S> <C>
Class A common stock offered
by FTD.COM................... 4,500,000 shares

Common stock to be outstanding
after the offering:
Class A common stock........ 5,884,614 shares
Class B common stock........ 40,920,000 shares

Nasdaq National Market symbol. EFTD

Use of proceeds............... We intend to use between $25.0 million and
$28.0 million of the net proceeds from the
offering for advertising, promotion and other
marketing activities. We will use approximately
$3.0 million for capital expenditures and the
remaining net proceeds for other general
corporate purposes, including working capital.
In the event that we identify suitable
acquisition candidates or investment
opportunities, we may also use a portion of the
net proceeds to acquire or invest in
complementary businesses, services or products.
We currently have no commitments or agreements
with respect to any acquisition or investment
transactions.

Voting rights................. The holders of Class A common stock have voting
rights identical to holders of Class B common
stock, except that holders of Class A common
stock are entitled to one vote per share and
holders of Class B common stock are entitled to
ten votes per share. Holders of both classes of
common stock generally will vote together as a
single class on all matters presented to the
stockholders for their vote or approval, except
as otherwise required by applicable Delaware
law.
</TABLE>

7
<PAGE>

SUMMARY FINANCIAL DATA
<TABLE>
<CAPTION>
Year ended June 30,
-------------------------
1997 1998 1999
------- ------- -------
(in thousands, except order and
per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations:

Total revenues.............................. $26,255 $30,663 $49,618

Gross profit................................ 3,972 4,339 10,770

Gross profit (%)............................ 15.1% 14.2% 21.7%

Marketing and promotion expenses............ $ 4,864 $ 5,995 $11,991

Loss from operations........................ (5,705) (6,315) (8,360)

Net loss.................................... $(3,583) $(3,895) $(5,447)

Pro forma basic and diluted net loss per
share of common stock...................... $ (.13)
Pro forma shares used in the calculation of
basic and diluted net loss per share of
common stock (1)........................... 42,305

Other Data:

Total orders................................ 513,198 602,396 856,761

Average order value (2)..................... $51.11 $50.50 $52.77

Percentage Internet orders.................. 17.2% 33.8% 53.0%
</TABLE>
- ----------
(1) Pro forma shares used in the calculation of basic and diluted net loss per
share reflects shares outstanding as of May 19, 1999, giving retroactive
effect to the 12-for-1 split of our Class B common stock discussed in note
7 of the notes to our financial statements.
(2) Average order value represents order revenues and service fees, net of
discounts divided by total orders.

<TABLE>
<CAPTION>
June 30, June 30, 1999
---------------- --------------------
1997 1998 Actual Pro Forma(1)
------- ------- ------ ------------
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash.............................. $ -- $ -- $8,205 $39,885
Working capital (deficit)......... (2,018) (2,130) 6,463 38,143
Total assets...................... 247 2,212 11,422 43,102
Total stockholders' equity
(deficit)........................ (2,018) (151) (905) 39,849
</TABLE>
- ----------
(1) On a pro forma basis giving effect to:
. the sale of the 4,500,000 shares of Class A common stock offered by this
prospectus, after deducting the underwriting discounts and commissions
and estimated offering expenses that we will pay;
. the automatic conversion of each share of Series A preferred stock into
15.3846 shares of Class A common stock upon the closing of this offering;
and
. the 12-for-1 split of the Class B common stock discussed in note 7 of the
notes to our financial statements.

8
<PAGE>

RISK FACTORS

An investment in the Class A common stock involves a high degree of risk.
You should consider carefully the following information about these risks
before buying shares of Class A common stock. The risks described below are not
the only ones facing our company. Additional risks may impair our business
operations. If any of the following risks occur, our business, results of
operations or financial condition could be adversely affected. In that case,
the trading price of our Class A common stock could decline, and you may lose
all or part of your investment. You should also refer to the other information
contained in this prospectus, including our financial statements and the notes
to those statements.

Investing in our Class A common stock may expose you to the
following risks inherent in our business.

We do not have an operating history as an independent company and our
historical financial statements do not reflect operations of an independent
company.

The historical financial statements contained elsewhere in this prospectus
include allocations for technical, human resources, accounting, administrative,
legal and other expenses incurred by FTDI for services rendered to us. These
allocations are not necessarily indicative of, and it is not practical for us
to estimate, the levels of expenses that would have resulted had we been
operating as a separate, stand-alone company. We have also relied on FTDI to
provide financing for our historical operations. As a result, our cash flows to
date are not necessarily indicative of the cash flows that would have resulted
had we been operating as an independent company during the periods presented.
In the event our actual costs as an independent company are significantly
higher than the costs reflected in our historical financial statements, our
business, results of operations and financial condition will be adversely
affected. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

We currently are not profitable and expect to record significant losses for
the foreseeable future.

We have incurred net losses in each of the past three years. We incurred an
aggregate net loss of $12.9 million for the three year period ended June 30,
1999, including net losses of $3.6 million, $3.9 million and $5.4 million for
the years ended June 30, 1997, 1998 and 1999, respectively. We expect to record
significantly greater net losses for the foreseeable future. The principal
causes of our losses have been, and are likely to continue to be, significant
brand development costs, marketing costs and systems and technology development
costs.

Our brand may not achieve the broad recognition necessary to succeed.

We believe that broader recognition and a favorable consumer perception of
the FTD.COM brand are essential to our future success. Successful positioning
of the FTD.COM brand will largely depend on the success of our advertising,
marketing and promotion efforts and our ability to continue to provide high
quality products and customer service. We

9
<PAGE>

believe that many consumers currently associate the FTD.COM brand primarily
with the sale of flowers and floral arrangements. One of our growth strategies
involves the expansion of our specialty gift business. To grow our specialty
gift business, we will need to increase awareness of the FTD.COM brand in the
specialty gift market. As a result, we intend to continue to pursue an
aggressive brand development strategy, which will include substantially larger
advertising, marketing and promotional programs than those historically
undertaken by us. These initiatives will involve significant expense. If our
brand development strategy is unsuccessful, these expenses may never be
recovered and we may be unable to generate a profit in the future.

We do not own the FTD trademark and associated logos that we use to promote
our brand.

The FTD trademark and associated logos, which we use to promote the FTD.COM
brand, are owned by FTDI and licensed to us for specific uses. The FTD
trademark and associated logos are also licensed to FTD florists, some of whom
also fulfill orders for our competitors or operate their own Web sites. Any use
of the FTD trademark and associated logos by FTDI or another third party that
creates an unfavorable perception of the FTD trademark and associated logos may
dilute our efforts to broaden recognition and enhance the perception of the
FTD.COM brand.

Market competition among our existing and potential competitors may
adversely affect our business.

Increased competition may result in lower revenues due to price reductions,
reduced gross margins and loss of market share. We cannot assure you that we
will be able to compete successfully or that competitive pressures will not
adversely affect our business. We compete with both traditional distribution
channels, other Web sites, telephone order originators and catalogs, including
1-800-FLOWERS.COM, INC., Gerald Stevens, Inc. and PC Flowers & Gifts.com Inc.
In addition, competitors who are FTD florists in good standing are not
restricted from using the FTD Clearinghouse and the network of FTD florists to
fill their orders. Some of our existing and potential competitors may have
significant competitive advantages, including larger customer bases and greater
technical expertise, brand recognition or Internet commerce experience. In
addition, some of our existing and potential competitors may be able to devote
significantly greater resources than us to marketing campaigns, attracting
traffic to their Web sites and system development. We expect competition to
continue to increase because there are few barriers to entry in the floral and
specialty gift businesses and because of the relative ease with which new Web
sites can be developed.

Our business could be adversely affected if we are unable to maintain a
significant advertising presence on high-traffic Web sites.

We depend on establishing and maintaining an advertising presence on high-
traffic Web sites, including third party portals and content sites, for a
significant portion of the visits to our Web site. We have a number of
relationships with these Web sites that expire at various times over the next
three years. There is intense competition for placement of advertising on

10
<PAGE>

these Web sites, and we may have to pay significant fees to establish or
maintain a presence on these Web sites in the future. We may be unable to enter
into relationships with these sites on commercially reasonable terms or at all.

Further, many Web sites that we may approach to establish an advertising
presence or who we already have a relationship with may also provide
advertising services for other marketers of flowers and specialty gifts. As a
result, these sites may be reluctant to enter into or maintain relationships
with us. Our business, results of operations and financial condition could be
adversely affected if we do not develop and secure sufficient online
advertising or secure an appropriate presence on commercially reasonable terms
or if these activities do not effectively attract users to our Web site and
lead to a substantial amount of sales.

Consumers may reduce discretionary purchases of flowers and specialty gifts.

We believe that consumer spending on flowers and specialty gifts is
influenced by general economic conditions and the availability of discretionary
income. Accordingly, companies that compete in these businesses, including us,
may experience sustained periods of declines in sales during future economic
downturns. Any material decline in the amount of discretionary spending could
adversely affect our business, results of operations and financial condition.

Consumers may not regularly purchase the products we offer over the Internet
or telephone.

There are many other channels through which consumers are able to purchase
flowers and specialty gifts, including retail floral shops, catalogs and
supermarkets and other mass merchants that have floral shops. The success of
our business depends to a large extent on consumers purchasing flowers and
specialty gifts over the Internet or telephone instead of through these other
channels. Our business, results of operations and financial condition would be
adversely affected if consumers purchase these products over the Internet one
or two times because of the novelty of Internet commerce, but then elect to
make future flower and specialty gift purchases through more traditional
channels.

Our business could be adversely affected if we are unable to expand our
business through our marketing arrangements.

We intend to expand our marketing various licensed products, such as
products that incorporate M&M/Mars, Inc.'s M&M's(R) characters and The Walt
Disney Company's Winnie the Pooh.(R) We believe that our business will benefit
when we have the right to market products that incorporate popular consumer
brands. These arrangements typically involve a non-exclusive license between us
or FTDI and the owner of the brand and typically last for periods of one to
four years. We expect to rely on FTDI to develop some of these licensed
products. In addition, in order to maintain these marketing arrangements, it is
important that we not take any action that the licensors believe harms their
brands. Our business could be adversely affected if we are unable to expand
these marketing arrangements with third parties.

11
<PAGE>

Our quarterly operating results are subject to fluctuations and seasonality.

Our revenues and operating results may vary from quarter to quarter due to
factors beyond our control. For example, our revenues and operating results
tend to be lower for the quarter that ends on September 30 because none of the
most popular floral holidays, which include Valentine's Day, Easter, Mother's
Day, Thanksgiving and Christmas, falls within that quarter. In addition, the
popular floral holiday of Easter sometimes falls within the quarter that ends
on March 31 and sometimes falls within the quarter that ends on June 30.

For fiscal 1999, our last completed fiscal year, we recorded 12%, 26%, 25%
and 37% of our total revenues in the quarters ended September 30, December 31,
March 31 and June 30, respectively.

As a result, comparisons of our results of operations from one quarter to
the immediately preceding quarter are of limited relevance in evaluating our
historic financial performance and predicting our future performance. It is
also possible that in some future periods our results of operations may be
below the expectations of public market analysts and investors. In this event,
the price of our Class A common stock may fall.

Our business could be adversely affected if consumers increase the frequency
of their purchases from FTD florist Web sites that are accessible through our
Web site.

FTDI's Florists Online(TM) business unit offers FTD florists the opportunity
to establish Web sites that enable consumers to place orders directly with an
FTD florist. Through an agreement with FTDI, we currently host Web sites for
approximately 2,500 FTD florists. These florist Web sites are accessible
through our Web site. Consumers may prefer to place orders directly with these
retail florists instead of placing an order through us. Although we currently
receive a monthly fee from FTDI for hosting those Web sites designed to offset
any migration of sales from our Web site to the Web sites of those retail
florists or to those retail florists directly, there can be no assurance that
these revenues will in fact offset revenue loss through this program. The
Florists Online Hosting Agreement between FTDI and us expires on June 30, 2000.

FTDI's relationship with the FTD Association limits the way we can operate
and expand our business.

Our operations are materially restricted by the following provisions of the
Mutual Support Agreement and Trademark License Agreement between FTDI and FTD
Association. Both the Mutual Support Agreement and the Trademark License
Agreement between FTDI and FTD Association expire in December 2093. Unless
timely notice is given, these agreements automatically renew for subsequent 99-
year periods. The Mutual Support Agreement requires us to fill all FTD floral
orders using only FTD florists. Accordingly, we are unable to accept
competitive bids for FTD floral order fulfillment, which may make it difficult
for us to consistently compete on price. Our business is dependent in
substantial part on the quality of services provided by FTD florists. The terms
of the Mutual Support Agreement limit our ability to control this quality by
granting FTD Association the right to determine the minimum quality standards
required for FTD membership. The Mutual

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<PAGE>

Support Agreement also grants FTD Association the initial right to enforce
these standards and discipline FTD florists for violations of these standards.
In addition, the terms of the Trademark License Agreement between FTDI and FTD
Association and the Mutual Support Agreement limit the scope of business
activities in which we are permitted to engage by prohibiting us from using the
FTD name and associated logos in the operation of a retail flower shop.
Accordingly, we may be restricted from expanding our existing business into
areas where we might otherwise wish to compete, such as owning and operating
FTD.COM retail flower shops.

Our business operations depend on the continuing contribution of our key
personnel and our ability to integrate new personnel.

Our future success depends to a significant extent on the continued service
of our key technical, sales and senior management personnel. Loss of the
services of any of Michael J. Soenen, our President and Chief Executive
Officer, Peter K. Poli, our Vice President and Chief Financial Officer,
Frederick K. Johnson, our Chief Information Officer, Brian G. Chapman, our Vice
President of Strategy and Development, or William J. Van Cleave, our Vice
President of Marketing, could have an adverse effect on our business, results
of operations and financial condition.

Mr. Poli and Mr. Chapman joined us in the second calendar quarter of 1999,
and Mr. Van Cleave joined us in the third calendar quarter of 1999. As a
result, our senior management does not have a history of working together as a
team. Failure to maintain an effective team of senior managers would adversely
affect the operation of our business. In addition, we currently anticipate
hiring at least one additional key employee in the operations area.

Our future success also depends on our ability to continue to attract,
retain and motivate highly skilled employees. Competition for employees in our
industry is intense. We may be unable to retain our key employees or attract,
assimilate or retain other highly qualified employees in the future in the
event that we lose any of our key personnel. See "Management."

Conflicts of interest may arise as a result of overlapping boards of
directors and ownership by some of our employees and officers of equity
interests in FTD Corporation.

Several of our directors also serve as directors of FTDI or FTD Corporation.
Richard C. Perry, Habib Y. Gorgi, Veronica K. Ho and Gary K. Silberberg are
each directors of FTD.COM, FTDI and FTD Corporation.

Service as both a director of FTD.COM and a director of FTDI or FTD
Corporation could create or appear to create potential conflicts of interest
when those directors are faced with decisions that could have different
implications for FTD.COM and FTDI or FTD Corporation. These decisions may
relate to potential acquisitions of businesses, our intercompany agreements
with FTDI, competition, the issuance or disposition of securities, the election
of new or additional directors, the payment of dividends by FTD.COM and other
matters.

13
<PAGE>

Michael J. Soenen, our President and Chief Executive Officer, and Frederick
K. Johnson, our Chief Information Officer, will continue to participate in FTD
Corporation's stock option plan. A number of FTD.COM's employees will continue
to hold shares of or options to purchase shares of common stock of FTD
Corporation acquired or granted prior to the employee's transfer to FTD.COM.
These employees may not yet have received comparable interests under our Equity
Incentive Plan. These substantial equity interests in FTD Corporation may
present these officers and employees with incentives potentially adverse to
FTD.COM's stockholders.

We may not be able to increase capacity or introduce enhancements to our Web
site in a timely manner or without service disruptions.

A key element of our strategy is to generate a high volume of traffic on our
Web site. Historically, during our peak usage periods, usage levels have been
approximately 70% of capacity. Each year, we evaluate our capacity limitations
and reengineer our Web site based on projected order growth. Using this
approach, we have been able to accommodate an increase of approximately 140% in
the number of orders handled by our Web site during the 12 months ended June
30, 1999 compared to the number of orders handled during the 12 months ended
June 30, 1998. If the number of orders handled by our Web site increases in
excess of available capacity, we may be unable to add additional hardware and
software in time to process the increased orders. Our inability to add
additional hardware and software to upgrade our existing technology or network
infrastructure to accommodate increased traffic as a result of unanticipated
rapid growth in user demand, may cause decreased levels of customer service and
satisfaction. Failure to implement new systems effectively or within a
reasonable period of time could adversely affect our business, results of
operations and financial condition.

If we fail to continuously improve our Web site, we may be unable to attract
or retain customers.

We intend to introduce additional or enhanced features and services to
retain current users and attract new users to our Web site. The enhancements
under consideration include modifications to the appearance of our Web site and
the manner in which customers would purchase products and access our services.
If we introduce a feature or a service that is not favorably received, our
current users may not use our Web site as frequently and we may not be
successful in attracting new users. We may also experience difficulties that
could delay or prevent us from introducing new services and features.
Furthermore, these new services or features may contain errors that are
discovered only after they are introduced. We may need to significantly modify
the design of these services or features to correct errors. If users encounter
difficulty with or do not accept new services or features, our business,
results of operations and financial condition could be adversely affected.

If our Web site and telephone service are not adequately maintained, we may
experience system failures and our revenues will decrease.

We are dependent on third parties to develop, host and maintain our Web site
and to provide telephone services to our call centers. If these third parties
experience system

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failures or fail to adequately maintain our systems, we would experience
interruptions and our customers might not continue to utilize our services. If
we do not maintain our Web site or our telephone service, we will be unable to
generate revenue. We do not have resources to maintain our Web site or our
telephone service without these or other third parties.

Our relationships with the developer of our Web site and the third-party
host for our Web site are expected to terminate in early 2000. We currently are
in the process of selecting other third parties to provide these services. If
we are unable to negotiate or implement arrangements to replace the services
currently provided by our Web site developer and host or if we are unable to do
so on commercially reasonable terms, our business, results of operations and
financial condition would be adversely affected. In addition, if we are able to
enter into arrangements with other parties to provide these services, there can
be no assurance that we will be able to effect the transition to the other
service providers without a significant disruption of our operations or
significant unanticipated costs.

The failure of computer systems on which our operations are dependent could
adversely affect us.

Our operations depend on the ability of FTDI to maintain its computer
systems and equipment in effective working order. We must also rely on FTDI's
ability to protect its computer systems against damage from fire, power loss,
water, telecommunications failures, vandalism and other malicious acts, and
similar unexpected adverse events. The continuing and uninterrupted performance
of these systems is critical to our success. Unanticipated problems affecting
those systems could cause interruptions in our services. Any damage or failure
that interrupts or delays our operations may dissatisfy our customers and could
adversely affect our business, results of operations and financial condition.
In addition, FTDI is in the process of implementing various software upgrades,
which are expected to be completed by October 31, 1999. If FTDI experiences
delays in implementing these software upgrades, we may experience interruptions
or delays that may dissatisfy our customers and could adversely affect our
business, results of operations and financial condition.

These systems, which include the Mercury Network and a Hewlett-Packard
system, are located at FTDI's Downers Grove, Illinois facility and provide
communication to our fulfilling florists and consumer order services. We may
experience disruptions or interruptions in service due to failures by this
system. In addition, our Internet customers depend on their Internet service
providers for access to our Web site. These providers have experienced
significant outages in the past and could experience outages, delays and other
difficulties in the future. These types of occurrences could cause users to
perceive our Web site as not functioning properly and therefore cause them to
stop using our services, which could adversely affect our business, results of
operations and financial condition.

We cannot assure you that all of the computer software and systems and
service providers upon which our business depends will be Year 2000 compliant.

We depend heavily upon complex computer software and systems for all phases
of our operations, including, to a significant extent, FTDI's computer systems
and, to a lesser

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extent, systems of other third parties such as our fulfilling florists and
Sprint Communications, L.P., our telecommunications provider. Many existing
computer software programs and systems use only two digits to identify a year
in the date field. These software programs and systems were designed and
developed without considering the impact of the upcoming turn of the century.
If not corrected, these computer applications could fail or create erroneous
results by or at the Year 2000. In addition to the computer software and
systems we use directly, our operations also depend on the performance of
computer software and systems used by our significant service providers,
including providers of financial, telecommunications and parcel delivery
services. We have not yet developed a contingency plan to address Year 2000
issues in the event that Year 2000 compliance is not timely achieved.

A software or systems Year 2000 compliance failure with respect to FTDI's
internal software and systems, or that of a third party service provider,
could prevent us from being able to process or fulfill orders from our
customers or could disrupt our financial and management controls and reporting
systems. Any of these failures could adversely affect our business, results of
operations and financial condition.

In addition, the vast majority of purchases of merchandise from FTD.COM are
made with credit cards, and our business, results of operations and financial
condition could be adversely affected to the extent our customers are unable
to use their credit cards due to Year 2000 issues that are not rectified by
the customers' credit card vendors or third party credit card transaction
processors.

Our dependence on third parties who fulfill our orders and deliver goods
and services to our customers may adversely affect our business operations.

Our business depends, in large part, on the ability of the network of
independent FTD florists who fulfill the majority of our orders to do so at
high quality levels. Failure of the network of FTD florists to fill our orders
at an acceptable quality level and within the required timeframe would
adversely affect our business, results of operations and financial condition.

We also depend upon a number of third parties to deliver goods and services
to our customers. For example, we rely on third party shippers, including
United Parcel Service and Federal Express, to ship various non-floral
merchandise to our customers. Strikes or other service interruptions affecting
our shippers would have an adverse effect on our ability to deliver
merchandise on a timely basis.

Our success is dependent upon the intellectual property that we use in our
business.

We regard our Internet domain name, copyrights, service marks, trademarks,
trade secrets and similar intellectual property that we use in our business as
critical to our success. We rely on a combination of copyright, trademark and
trade secret laws, confidentiality procedures, contractual provisions and
license and other agreements with employees, customers and others to protect
our intellectual property rights. In addition, we may also rely

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on the third party owners of the intellectual property rights we license to
protect those rights. Since 1994, FTDI has applied for the registration of and
been granted registration rights in more than 175 trademarks and service marks
used in FTDI's and our businesses in the U.S. and various foreign countries.
Under our Trademark License Agreement with FTDI, FTDI has the sole right to
protect our rights in the intellectual property that we license from FTDI.
Effective Internet domain name, copyright, service mark, trademark and trade
secret protection may not be available in every country in which our products
and services are made available online. The steps taken by us, FTDI and other
third parties to protect our intellectual property rights may not be adequate,
and third parties may infringe or misappropriate the intellectual property and
similar proprietary rights used in our business, which could have an adverse
effect on our business, results of operations and financial condition.

We are also subject to the risk of adverse claims and litigation alleging
infringement of the intellectual property rights we use. The resolution of any
infringement claims may result in lengthy and costly litigation. Moreover,
resolution of a claim may require us to obtain a license to use those
intellectual property rights or possibly to cease using those rights
altogether. Any of those events could have a material adverse effect on our
business, results of operations and financial condition.

We may be unable to effectively market our international fulfillment
capabilities to U.S. consumers and our business may be adversely affected if
the quality of orders sent abroad suffers.

Although less than 5% of our sales for the year ended June 30, 1999 were
orders that were delivered to consumers who live outside North America, we
intend to market FTD's affiliation with 32,000 florists outside of North
America to North American consumers who may be interested in sending flowers to
relatives, friends and business associates living abroad. This international
aspect of our business is subject to the risk of inconsistent quality of
merchandise and disruptions or delays in delivery because these florists do not
necessarily adhere to the same quality control standards as the FTD florists
who fulfill our orders domestically. Our business could also be adversely
affected if North American consumers choose not to place subsequent domestic
orders with us because they were not satisfied with the results of an order
they sent to someone living abroad.

Our business may be adversely affected by the following risks
related to our relationship with FTDI.

Control by FTDI and its principal stockholders may adversely affect the
market price of our Class A common stock.

FTDI owns, and will continue to own after the close of this offering, all of
the shares of our Class B common stock, which, after the close of this
offering, will represent 98.6% of the voting power of our common stock. As a
result of its stock ownership and the other rights described in this
prospectus, FTDI will be able to elect a majority of the members of our board
of directors. This concentration of ownership and other rights could also delay
or prevent a change of control.

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Also, FTDI is a wholly owned subsidiary of FTD Corporation, which in turn is
controlled by a group of principal stockholders. The principal stockholders of
FTD Corporation are Perry Acquisition Partners, L.P. and a group of investment
funds and related persons affiliated with Bain Capital, Inc. Perry Acquisition
Partners and Bain Capital and its affiliates currently own 60.2% and 21.6%,
respectively, of the voting power of FTD Corporation. Pursuant to an agreement
among FTD Corporation's primary stockholders, Perry Acquisition Partners and
Bain Capital and its affiliates have the right to designate six and two
members, respectively, of the boards of directors of FTDI and FTD.COM. In
addition, under this agreement, the following actions submitted to our board of
directors must be approved by the affirmative vote of the directors appointed
by the Bain Capital entities:

. amendments to our certificate of incorporation or bylaws;
. increases or decreases in the number of our directors;
. issuances or sales of our securities;
. mergers, consolidations or other significant business combination
transactions involving us;
. repurchases, exchanges or redemptions of our securities; and
. other transactions outside the ordinary course of business.

As a result of their stock ownership of FTD Corporation and the provisions of
that stockholders' agreement, Perry Acquisition Partners and the Bain Capital
entities will be able to control FTD.COM in the same manner that FTDI is able
to control us. See "Transactions with Management and Others--Rights to
Designate Directors."

FTDI could elect to sell all or a substantial portion of its equity interest
in FTD.COM to a third party. In the event of a sale of FTDI's interest to a
third party, that third party may be able to control FTD.COM in the same manner
that FTDI is able to control us. That sale may adversely affect the market
price of our Class A common stock and could adversely affect our business,
financial condition and results of operations. For so long as FTDI maintains a
significant interest in FTD.COM, the market price of the Class A common stock
also may be adversely affected by events relating to FTDI that are unrelated to
us.

In addition, under FTDI's credit agreement, all of the Class B common stock
owned by FTDI is pledged to the lenders as security for FTDI's obligations
under that agreement.

Our intercompany arrangements with FTDI may not have been the result of
arm's-length negotiations.

We have entered or will enter into a series of intercompany agreements with
FTDI. Because FTDI currently owns nearly all of our stock, these agreements may
not have been the result of arm's-length negotiations. Although we believe the
terms of the intercompany agreements are no less favorable to us than those
that we could obtain from unaffiliated third parties, we cannot assure you that
this is the case. We anticipate using a portion of the proceeds of this
offering to make payments to FTDI each year for the foreseeable future under
the Intercompany Agreements. See "Transactions with Management and Others--
Intercompany Agreements."

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We have a non-exclusive license from FTDI to use trademarks and logos that
are material to our business.

Pursuant to the Trademark License Agreement between FTDI and us, FTDI
licenses to us, on a non-exclusive basis, the FTD and Mercury Man trademarks
and logos and related content in connection with the sale of flowers and
specialty gifts to consumers on the Internet, in our toll-free telephone
business, in our catalogs and in our advertising. The FTD and Mercury Man
trademarks and logos and related content are critical to our marketing and
brand-building activities.

Under the Trademark License Agreement, FTDI can demand that we remove from
our Web site or catalog any content that bears one of FTDI's trademarks that
FTDI determines conflicts with, interferes with or is detrimental to its
reputation or business or for limited other reasons. If FTDI makes this demand,
we are required to remedy the offensive situation, cease using the content in
question or remove FTDI's trademarks. We are also required to conform to FTDI's
guidelines for the use of its trademarks. FTDI has the right to approve all
materials, such as marketing materials, that include any of FTDI's trademarks.
These restrictions may prevent us from marketing our services in the same way
we would if we owned these trademarks.

In addition, under the Trademark License Agreement, we have agreed not to
enter into any business currently being conducted by FTDI. FTDI currently is in
the business of providing subscribing florists with the ability to send and
receive floral orders and transaction clearing services. FTDI also develops
branded floral and gift products that florists can purchase from FTDI. If we
make an acquisition that includes a business that FTDI is engaged in, we must
offer to sell that business to FTDI. If FTDI does not deliver to us an offer to
acquire the prohibited business, we must cease operation or dispose of the
prohibited business. This restriction may prevent us from expanding our
existing business into areas where we might otherwise wish to compete, such as
developing a line of FTD.COM floral products. See "Transactions with Management
and Others--Trademark License Agreement."

FTDI can terminate the Trademark License Agreement between FTDI and us in
some circumstances if 20% or more of the voting control of FTD.COM is acquired
by a person or group.

In the event 20% or more of the voting control of FTD.COM is acquired by any
person, other than an affiliate of FTD Corporation, FTDI has the right to
terminate the Trademark License Agreement between FTDI and us. If the Trademark
License Agreement is terminated, we would need to change the Internet domain
name of our Web site and devote substantial resources toward building new brand
names. These events would have an adverse effect on our business, results of
operations and financial condition. In addition, these provisions are likely to
have the effect of delaying, deferring or preventing a non-consensual change in
control or may adversely affect the market price of our Class A common stock.

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If FTDI fails to adequately perform services for us or we are unable to
satisfactorily perform these services, our business could be adversely
affected.

Pursuant to the Intercompany Services Agreement between FTDI and us, we rely
on FTDI for technical, human resources, accounting, administrative, legal and
other services we request. In particular, substantially all of our sales
currently are processed through FTDI's systems, including the Mercury Network
and the FTD Clearinghouse. If FTDI fails to provide these services
satisfactorily, we would be required to obtain these services from another
provider or perform these services. If we choose to obtain these services from
another provider, we may incur additional costs and we may be unable to obtain
these services on commercially reasonable terms. If we choose to perform these
services ourself, we may not be able to perform them adequately. In either
case, our business, results of operations and financial condition could be
adversely affected. The service obligations under the Intercompany Services
Agreement can be terminated by FTDI under circumstances similar to those giving
rise to a right to terminate the Trademark License Agreement. In addition, FTDI
can terminate the Intercompany Services Agreement in the event FTDI ceases to
own any of our stock.

Contingent liability for tax and pension obligations resulting from our
relationship with FTDI and FTD Corporation may adversely affect our financial
condition.

For so long as FTDI continues to own at least 80% of the voting and economic
interest in FTD.COM, we will be included in FTD Corporation's consolidated
group for federal income tax purposes. Under the Tax Sharing Agreement, as
amended, as long as we are included in FTD Corporation's consolidated group, we
will pay our proportionate share of FTD Corporation's income tax liability
computed as if we were filing a separate federal income tax return or FTD
Corporation will refund any tax loss benefit attributable to us if the benefit
would have been realized by us had we filed our own federal income tax return.
By virtue of its controlling ownership and the Tax Sharing Agreement, as
amended, FTD Corporation effectively will control all of our tax decisions.
Under the Tax Sharing Agreement, as amended, as long as FTD.COM is included in
FTD Corporation's consolidated group, FTD Corporation will have sole authority
to respond to and conduct all tax proceedings and tax audits relating to us, to
file all income tax returns on our behalf and to determine the amount of our
liability to or entitlement to payment from FTD Corporation. Notwithstanding
the Tax Sharing Agreement, as amended, federal law provides that each member of
a consolidated group is liable for the group's entire tax obligation. As a
result, if FTD Corporation or other members of its consolidated group fail to
make any federal income tax payments required by law, we would be liable for
the shortfall. Similar principles apply for state income tax purposes in many
states. See "Transactions with Management and Others--Income Taxes."

As long as FTDI continues to own at least 80% of the voting power or value
of FTD.COM's capital stock, we also will be jointly and severally liable,
together with all other members of FTD Corporation's "control group," for
pension funding, termination and excise taxes and for other pension-related
matters in the event FTD Corporation fails to fully

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satisfy its legally required pension obligations. Because the Class B common
stock held by FTDI is entitled to ten votes per share, we expect that FTDI will
retain at least an 80% voting interest for the foreseeable future. We believe
that none of these liabilities was outstanding as of August 31, 1999.

The Intercompany Indemnification Agreement provides that FTDI and FTD
Corporation will indemnify us for specific tax and pension liabilities
resulting from our relationship with FTDI and FTD Corporation, including the
costs of defending against any assertion of claims against FTD.COM. We cannot
assure you that FTDI or FTD Corporation will be able to fulfill its obligations
under that agreement. In the event we are required to satisfy a significant
obligation for any of these costs, our business, results of operations and
financial condition could be adversely affected.

If the transfer of assets by FTDI to us in connection with our formation by
FTDI was considered a fraudulent conveyance, our business and financial
condition could be adversely affected.

Pursuant to the Formation Agreement between FTDI and us, and in exchange for
an ownership interest in us, FTDI transferred to us all of its assets and
liabilities associated with its business of selling flowers and specialty gifts
directly to consumers through our Web site and toll-free telephone number. If,
as a result of a lawsuit filed against FTD Corporation or FTDI by any of their
creditors, a court were to find under applicable provisions of federal
bankruptcy law and state fraudulent conveyance statutes that, pursuant to the
formation of FTD.COM or the transfer of assets to FTD.COM under the Formation
Agreement, FTD Corporation or FTDI:

.intended to hinder, delay or defraud any present or future creditor; or

. received less than reasonably equivalent value in exchange for the debt
incurred or the distribution made,

and that FTD Corporation or FTDI:

. was insolvent at the time of the transaction;

. was rendered insolvent by reason of the transaction;

. was engaged or about to engage in a business or transaction for which its
remaining assets constituted unreasonably small capital; or

. intended to incur, or believed that it would incur, debts beyond its
ability to pay those debts as they matured,

the court could void the transactions effected pursuant to the Formation
Agreement as a fraudulent transfer, conveyance or obligation. If these
transactions are voided, the court could order us to return the property we
received from FTDI, which includes a large percentage of the assets we rely on
to sell flowers and specialty gifts directly to consumers through our Web site
and toll-free telephone number, or pay FTDI the fair value of the property we
received in connection with the formation transaction. As a result, our assets
could be used to satisfy obligations of FTDI and FTD Corporation and our
business could be adversely affected.

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Potential competition with FTD Corporation or FTDI may adversely affect our
business.

FTDI currently is in the business of providing subscribing florists with the
ability to send and receive floral orders and transaction clearing services.
FTDI also has an extensive product development department, the FTD Marketplace,
that develops branded floral and gift products that florists can purchase at
wholesale from FTDI for resale to consumers. Pursuant to the Trademark License
Agreement, we have agreed to refrain from engaging in activities involving any
business currently conducted by FTDI and FTDI has agreed, on behalf of itself
and its affiliates other than us but including FTD Corporation and its other
subsidiaries, to refrain from engaging in the business of directly selling or
marketing flowers or specialty gifts to consumers. In addition, if we make an
acquisition that includes a business currently conducted by FTDI, we have
agreed to offer to sell that business, or the competitive component, to FTDI or
otherwise dispose of that business or the competitive component. Beyond these
obligations, and except as otherwise required by applicable Delaware law,
neither FTDI nor FTD Corporation is under any obligation to refrain from
competing with us or to share with us any future business opportunities
available to it. As a result, our business could be adversely affected if FTDI
or FTD Corporation engages in any activity that is similar to our business but
is not otherwise prohibited by the Trademark License Agreement or Delaware law.

The ability of FTDI and FTD Corporation to utilize potential FTD.COM
corporate opportunities could adversely affect our business.

Pursuant to the terms of our certificate of incorporation:

. FTDI, FTD Corporation and their respective officers, directors,
affiliates and employees will not be liable to FTD.COM or our
stockholders for breach of any fiduciary duty by reason of any activities
of FTDI or FTD Corporation in competition with FTD.COM;

. FTDI and FTD Corporation will not have any duty to communicate or offer
corporate opportunities to FTD.COM and will not be liable for breach of
any fiduciary duty as a stockholder of FTD.COM in connection with those
opportunities; and

. if a director or officer of FTD.COM who also is a director or officer of
FTDI or FTD Corporation learns of a matter that may be a corporate
opportunity for FTD.COM, FTDI or FTD Corporation, that director or
officer will not be liable to FTD.COM or our stockholders for breach of
any fiduciary duty or duty of loyalty or failure to act in the best
interests of FTD.COM if the director or officer offers the corporate
opportunity to FTDI or FTD Corporation rather than us.

A "corporate opportunity" is the chance for a business to expand, strengthen
or otherwise improve the business it is conducting or proposes to conduct at
the time the opportunity arises and for which it has the financial resources.
For example, if a third party offered one of our directors the opportunity to
acquire a business that markets gardening tools directly to consumers over the
Internet, that potential acquisition could be considered a

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"corporate opportunity" to us. Under Delaware law, that director could be
obligated to offer the acquisition opportunity to us before the director could
engage in the potential business. The provisions of our certificate of
incorporation summarized above, however, provide that that director would have
no liability to us or our stockholders if he or she was also a director or
officer of FTDI or FTD Corporation and offered the "corporate opportunity" to
FTDI or FTD Corporation instead of FTD.COM.

Any loss of a "corporate opportunity" of this sort to FTDI or FTD
Corporation could adversely affect our business and our stock price.

The following risks inherent in doing business over the Internet
could adversely affect our business.

Our success is dependent on continued growth of Internet commerce.

Our ability to generate a profit in the future depends substantially upon
the widespread acceptance and use of the Internet as an effective medium of
commerce by consumers. Rapid growth in commercial online businesses is a recent
phenomenon. We cannot assure you that a sufficiently broad base of consumers
will visit, or continue to visit, our Web site. Demand for recently introduced
services and products over the Internet is subject to a high level of
uncertainty. The development of the Internet as a viable means of marketing
products directly to consumers is subject to a number of factors, including
continued growth in the number of users of such services, concerns about
transaction security, continued development of the necessary technological
infrastructure, and the development of complementary services and products.
Failure of the Internet and online businesses to become a viable means of
marketing products directly to consumers would adversely affect our business,
results of operations and financial condition.

Concerns related to collection of personal information about our users and
other privacy concerns could adversely affect our business.

Our Web site places "cookies" on a user's hard drive, often without the
user's knowledge or consent. Cookies are data retrieval devices designed to
collect personal identifying information from individuals who access our Web
site. We use cookies for a variety of reasons, including the collection of data
derived from the user's Internet activity. The Federal Trade Commission has
proposed regulations regarding the collection and use of personal identifying
information obtained from individuals when accessing Web sites, with particular
emphasis on access by minors. In addition, other governmental authorities have
proposed regulations to govern the collection and use of personal information
that may be obtained from customers or visitors to Web sites. These regulations
may include requirements that we establish procedures to disclose and notify
users of privacy and security policies, obtain consent from users for
collection and use of information and provide users with the ability to access,
correct or delete personal information stored by us. These regulations may also
include enforcement and redress provisions. Moreover, even in the absence of
these regulations, the Federal Trade Commission has begun investigations into

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the privacy practices of other companies that collect information on the
Internet. One investigation resulted in a consent decree pursuant to which an
Internet company agreed to establish programs to implement the principles
discussed above. We may become subject to a similar investigation, or the
Federal Trade Commission's regulatory and enforcement efforts may adversely
affect our ability to collect demographic and personal information from users,
which could adversely affect our marketing efforts.

Online security breaches could harm our business.

The secure transmission of confidential information over the Internet is
essential in maintaining consumer confidence in our Web site. Substantial or
ongoing security breaches on our system or other Internet-based systems could
significantly harm our business. While we have not experienced any security
breaches, any penetration of our network security or other misappropriation of
our users' personal information could subject us to liability. We may be liable
for claims based on unauthorized purchases with credit card information,
impersonation or other similar fraud claims. Claims could also be based on
other misuses of personal information, such as for unauthorized marketing
purposes. These claims could result in litigation and financial liability.
Security breaches also could damage our reputation and expose us to a risk of
loss or litigation and possible liability. We rely on licensed encryption and
authentication technology to effect secure transmission of confidential
information, including credit card numbers. It is possible that advances in
computer capabilities, new discoveries or other developments could result in a
compromise or breach of the technology used by us to protect customer
transaction data.

We may incur substantial expense to protect against and remedy security
breaches and their consequences. A party that is able to circumvent our
security systems could steal proprietary information or cause interruptions in
our operations. Our insurance policies' limits may not be adequate to reimburse
us for losses caused by security breaches. We cannot guarantee that our
security measures will prevent security breaches.

Because the liabilities that may arise out of the operation of an Internet
commerce business are uncertain, our insurance policies may not provide
coverage for some potential losses.

Although we maintain insurance coverage of the types and scope that we
believe to be adequate for our business, the liabilities that may arise out of
the operation of an Internet commerce business are uncertain. In addition,
there is limited experience regarding the adequacy of the scope of insurance
coverage for liabilities relating to the operation of an Internet commerce
business. As a result, our insurance policies may not provide adequate coverage
for losses that arise out of the operation of our business.

Our operating results could be adversely affected if we experience
significant credit card fraud.

A failure to adequately control fraudulent credit card transactions would
reduce our net sales and gross margins because we do not carry insurance
against this risk. We have

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suffered losses previously as a result of orders placed with fraudulent credit
card data even though the associated financial institution approved payment for
the orders. The losses that we have suffered to date have not had a material
effect on our business, results of operations or financial condition, however,
we would be adversely affected if we experience significant credit card fraud
in the future.

Government regulation and legal uncertainties relating to the Internet and
online commerce could negatively impact our business operations.

Online commerce is new and rapidly changing, and federal and state
regulation relating to the Internet and online commerce is evolving. Currently,
there are few laws or regulations directly applicable to the Internet or online
commerce on the Internet, and the laws governing the Internet that exist remain
largely unsettled. The most recent session of the U.S. Congress resulted in
Internet laws regarding online children's privacy, copyrights and taxation.
This or similar legislation could dampen growth in use and acceptance of the
Internet. Due to the increasing popularity of the Internet, it is possible that
additional laws and regulations may be enacted with respect to the Internet,
covering issues such as user privacy, pricing, taxation, content, copyrights,
distribution, antitrust and quality of products and services. In addition,
applicability to the Internet of existing laws governing issues such as
property ownership, copyrights and other intellectual property issues,
taxation, libel, obscenity and personal privacy is uncertain. The vast majority
of those laws were adopted prior to the advent of the Internet and related
technologies and, as a result, do not contemplate or address the unique issues
of the Internet and related technologies. Further, growth and development of
online commerce may prompt calls for more stringent consumer protection laws,
both in the U.S. and abroad. We also may be subject to regulation not
specifically related to the Internet, including laws affecting direct marketers
and advertisers. The adoption or modification of laws or regulations applicable
to the Internet could adversely affect our business operations.

In addition, several telecommunications carriers have requested the Federal
Communications Commission to regulate telecommunications over the Internet. Due
to the increasing use of the Internet and the burden it has placed on the
current telecommunications infrastructure, telephone carriers have requested
the FCC to regulate Internet service providers and impose access fees on those
providers. If the FCC imposes access fees, the costs of using the Internet
could increase dramatically. This could result in the reduced use of the
Internet as a medium for commerce, which could adversely affect our business
operations.

We may incur liability for information displayed on and communicated through
our Web sites.

We provide links to Web sites operated by other businesses and we may be
subjected to claims for defamation, negligence, copyright or trademark
infringement or based on other theories relating to the information we publish
on our Web site. These types of claims have been brought, sometimes
successfully, against Internet companies as well as print publications in the
past. Based on links we provide to other Web sites, we could also be

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subjected to claims based upon online content we do not control that is
accessible from our Web site.

Our inability to secure and protect our Internet domain name may adversely
affect our business operation.

The www.ftd.com Internet domain name is our brand on the Internet. The
acquisition and maintenance of Internet domain names generally is regulated by
governmental agencies and their designees. Until recently, Network Solutions,
Inc. was the exclusive registrar for the ".com," ".net" and ".org" generic top-
level Internet domains in the U.S. In April 1999, however, the Internet
Corporation for Assigned Names and Numbers, or ICANN, a new global non-profit
corporation formed to oversee a set of the Internet's core technical management
functions, opened the market for registering Internet domain names to an
initial group of five companies. Network Solutions, Inc. still maintains the
registry containing all the registrations in the generic top-level Internet
domains. The market for registering these Internet domain names in the U.S. and
in foreign countries is expected to undergo further changes in the near future.
We expect the requirements for registering Internet domain names also to be
affected. The relationship between regulations governing Internet domain names
and laws protecting trademarks and similar proprietary rights is unclear. We
may be unable to prevent third parties from acquiring Internet domain names
that are similar to, infringe upon or otherwise decrease the value of our
Internet domain name, the trademarks and other intellectual property rights
used by us and we may need to protect our rights through litigation. If we are
unable to adequately protect our Internet domain name, our trademarks and other
intellectual property rights or incur substantial costs in doing so, it could
have an adverse effect on our business, results of operations and financial
condition.

Changing technology could adversely affect the operation of our Web site.

The Internet, online commerce and online advertising markets are
characterized by rapidly changing technologies, evolving industry standards,
frequent new product and service introductions and changing customer
preferences. Our future success will depend on our ability to adapt to rapidly
changing technologies and address our customers' changing preferences, however,
we may experience difficulties that delay or prevent our being able to do so.

Investors in our Class A common stock are subject to the following risks
associated with this offering.

The market price for our Class A common stock is likely to be highly
volatile because the market for Internet-related and technology companies in
particular has been highly volatile.

Investors may not be able to resell their shares of our Class A common stock
following periods of volatility because the market reacts adversely to
volatility. The trading prices of many technology and Internet-related
companies' stocks reached historical highs within the last 52 weeks and reflect
relative valuations that are substantially above historical levels.

26
<PAGE>

During the same period, these companies' stocks also have recorded lows well
below historical highs. We cannot assure you that our stock will trade at the
same levels of other Internet stocks or that we can sustain our Class A common
stock's trading price.

Many of the factors that might cause volatility in the market price of our
Class A common stock are beyond our control. These factors may materially
adversely affect the market price of our Class A common stock, regardless of
how we operate.

Our management's broad discretion in the use of the proceeds of this
offering may adversely affect your investment.

Our management can spend most of the proceeds from this offering in ways
with which our stockholders may not agree. We intend to use between $25.0
million and $28.0 million of the net proceeds from the offering for
advertising, promotion and other marketing activities. We also intend to use a
portion of the net proceeds for capital expenditures. We expect that the
remaining net proceeds will be available for general corporate purposes,
including working capital. We may, however, also use a portion of the net
proceeds to acquire or invest in complementary business, services or products,
although we currently have no commitments or agreements with respect to
transactions of that type. See "Use of Proceeds."

A substantial number of our shares will be available for sale in the public
market after the offering and sales of those shares could adversely affect our
stock price.

Sales of a substantial number of shares of Class A common stock into the
public market after this offering, or the perception that those sales could
occur, could adversely affect our stock price or could impair our ability to
obtain capital through an offering of equity securities. After the offering, we
will have outstanding 5,884,614 shares of Class A common stock (6,559,614
shares if the underwriters' option to purchase additional shares is exercised
in full). We will also have outstanding 40,920,000 shares of Class B common
stock that are convertible into shares of Class A common stock on a one-for-one
basis, all of which shares are owned by FTDI. Of these shares, the shares sold
in this offering will be freely transferable without restriction or further
registration under the Securities Act, except for any shares purchased by our
affiliates as defined in Rule 144 under the Securities Act.

We have entered into registration rights agreements with FTDI, DBV
Investments, L.P. and Buena Vista Internet Group that enables those parties to
require us to register an aggregate of 42,304,614 shares of our Class A common
stock, including shares of Class B common stock that are convertible into Class
A common stock on a one-for-one basis. These registration rights agreements
also require us to include those shares in registrations of common stock made
by us in the future.

The value of your investment will be diluted upon the consummation of the
initial public offering.

Purchasers of Class A common stock offered hereby will experience an
immediate dilution in net tangible book value of $7.19 per share of Class A
common stock purchased

27
<PAGE>

or $7.09 per share if the underwriters' option to purchase additional shares of
Class A common stock is exercised in full. This dilution reflects the automatic
conversion of each outstanding share of our Series A preferred stock into
15.3846 shares of our Class A common stock upon the closing of this offering.
To the extent outstanding options to purchase Class A common stock are
exercised, there may be further dilution. See "Dilution."

Provisions in our corporate documents may make it more difficult for a third
party to acquire us.

Our certificate of incorporation and bylaws contain several provisions that
may be deemed to have anti-takeover effects and may discourage, delay or
prevent a takeover attempt that a stockholder might consider in its best
interest. These provisions include a requirement that:

. the number of directors not be more than 14; and

. with respect to annual stockholders' meetings, stockholders must comply
with the timing and procedural requirements of the federal proxy rules in
order for a stockholder proposal to be included in our proxy statement.

Our board of directors has the authority to authorize the issuance of
preferred stock. The issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of our company, and may
adversely affect the voting and other rights of the holders of our capital
stock.

Investors should not purchase our Class A common stock with the expectation
of receiving cash dividends.

We currently intend to retain any future earnings for funding growth and, as
a result, do not expect to pay any cash dividends in the foreseeable future.
See "Dividend Policy."

28
<PAGE>

USE OF PROCEEDS

The net proceeds to us from the sale of the 4,500,000 shares of Class A
common stock offered by this prospectus will be approximately $31.7 million
($36.7 million if the underwriters' option to purchase additional shares is
exercised in full), and after deducting the underwriting discounts and
commissions and estimated offering expenses that we will pay. We intend to use
between $25.0 million and $28.0 million of the net proceeds for advertising,
promotion and other marketing activities. We also intend to use approximately
$3.0 million of the net proceeds for capital expenditures, including technology
and physical infrastructure. We expect to use any remaining net proceeds to
fund general corporate purposes, including working capital. In the event that
we identify suitable acquisition candidates or investment opportunities in
complementary businesses, services or products, we may use a portion of the net
proceeds for transactions of that type. We currently have no commitments or
agreements with respect to any possible acquisitions or investments.

Pending use, the net proceeds will be invested in direct or guaranteed
obligations of the U.S. government.

DIVIDEND POLICY

We currently intend to retain all of our earnings to finance our operations
and we do not anticipate paying any cash dividends on our capital stock in the
foreseeable future. We may incur indebtedness in the future that may prohibit
or effectively restrict the payment of cash dividends.

29
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of FTD.COM as of June 30,
1999:

(1) on an actual basis; and

(2) on a pro forma basis giving effect to:

. the sale of the 4,500,000 shares of Class A common stock offered by
this prospectus, after deducting the underwriting discounts and
commissions and estimated offering expenses that we will pay; and

. the automatic conversion of each share of Series A preferred stock
into 15.3846 shares of Class A common stock upon the closing of this
offering.

This table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and the notes to those statements included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
June 30, 1999
----------------
Pro
Actual Forma
------- -------
(in thousands,
except share
data)
<S> <C> <C>
Series A 8% Cumulative Redeemable Convertible Preferred
Stock, $.01 par value; 90,000 shares issued and outstanding
actual; no shares issued and outstanding pro forma......... $ 9,074 $ --
------- -------

Stockholders' equity (deficit):

Preferred stock, $.01 par value; 5,000,000 shares
authorized; 90,000 shares issued and outstanding as Series
A 8% Cumulative Redeemable Convertible Preferred Stock
actual; no shares issued and outstanding pro forma (1)..... -- --

Class A common stock, $.01 par value; 250,000,000 shares
authorized; no shares issued and outstanding actual;
5,884,614 shares issued and outstanding pro forma (2)...... -- 59

Class B common stock, $.01 par value; 100,000,000 shares
authorized; 40,920,000 shares issued and outstanding actual
and pro forma as retroactively adjusted.................... 409 409

Additional paid-in capital.................................. -- 40,621

Retained deficit............................................ (1,314) (1,240)
------- -------

Total stockholders' equity (deficit)...................... (905) 39,849
------- -------

Total capitalization.................................... $ 8,169 $39,849
======= =======
</TABLE>
- ----------
(1) Pursuant to the terms of the outstanding shares of preferred stock, each
share will automatically convert into 15.3846 shares of Class A common
stock upon the closing of this offering.
(2) Excludes 2,258,300 shares of Class A common stock issuable upon the
exercise of options outstanding as of the close of the offering with a
weighted average exercise price of $10.54 per share. Assumes the conversion
of the outstanding shares of preferred stock into Class A common stock.

30
<PAGE>

DILUTION

The following discussion and table assumes no exercise of any stock options
and the automatic conversion of all outstanding shares of our Series A
preferred stock into 1,384,614 shares of Class A common stock upon the closing
of this offering. As of the close of this offering, options to purchase a total
of 2,258,300 shares of Class A common stock at a weighted average exercise
price of $10.54 per share will be outstanding.

The pro forma net tangible book value of FTD.COM as of June 30, 1999 was
approximately $6.5 million, or $0.15 per share of common stock. Pro forma net
tangible book value per share represents the amount of total tangible assets
less total liabilities, divided by the pro forma shares of common stock
outstanding as of June 30, 1999. After giving effect to the issuance and sale
of the shares of Class A common stock offered by this prospectus, after
deducting underwriting discounts and commissions and estimated offering
expenses that we will pay, the pro forma net tangible book value of FTD.COM as
of June 30, 1999 would have been $38.1 million, or $0.81 per share. This
represents an immediate increase in pro forma net tangible book value of $0.66
per share to existing stockholders and an immediate dilution of $7.19 per share
to new investors. The following table illustrates this per share dilution
assuming the underwriters' option to purchase additional shares of Class A
common stock is not exercised:

<TABLE>
<S> <C> <C>
Initial public offering price per share............................ $8.00

Pro forma net tangible book value per share at June 30, 1999....... $0.15

Increase in pro forma net tangible book value per share
attributable to new investors..................................... 0.66

Pro forma net tangible book value per share after offering......... 0.81
-----

Dilution per share to new investors................................ $7.19
=====
</TABLE>

The following table summarizes, on a pro forma basis, as of June 30, 1999,
the differences between the number of shares of common stock purchased from
FTD.COM, the aggregate cash consideration paid and the average price per share
paid by existing stockholders and new investors purchasing shares of Class A
common stock in this offering:

<TABLE>
<CAPTION>
(in thousands, except per share data)
--------------------------------------------
Shares Total
Purchased Consideration
-------------- --------------- Average Price
Number Percent Amount Percent Per Share
------ ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders.............. 42,305 90.4% $ 9,000 20.0% $0.21

New investors...................... 4,500 9.6 36,000 80.0 8.00
------ ----- ------- -----

Total.......................... 46,805 100.0% $45,000 100.0%
====== ===== ======= =====
</TABLE>

31
<PAGE>

SELECTED FINANCIAL DATA

FTD.COM was formed in May 1999 to own and operate the Internet and telephone
flower and specialty gift business of FTDI. The telephone business was
previously operated by FTD Direct Access, Inc., a wholly owned subsidiary of
Florists' Transworld Delivery Association, which was acquired by FTD
Corporation on December 18, 1994. FTD Direct Access, Inc. continued to operate
this business as a wholly owned subsidiary of FTDI until May 31, 1995 when FTD
Direct Access, Inc. was dissolved and the results of its operations and its
financial position were subsequently accounted for as the consumer floral order
business unit of FTDI.

The following table sets forth selected historical data of FTD Direct
Access, Inc., the Predecessor Company, until its May 31, 1995 dissolution date
and for FTDI's consumer floral order business unit for the period June 1, 1995
to March 31, 1999. Although FTD.COM was not formed as a subsidiary until May
1999, the financial statements present the operations of the businesses owned
and operated by FTD.COM as if it had been a separate entity since June 1, 1995.

The statement of operations presented below for the year ended June 30, 1995
and the selected balance sheet data as of June 30, 1995 and 1996 are derived
from unaudited financial statements not included in this prospectus. The
statement of operations presented below for the year ended June 30, 1996 and
the selected balance sheet data as of June 30, 1997 are derived from audited
financial statements not included in this prospectus. The statement of
operations presented below for the years ended June 30, 1997, 1998 and 1999 and
the balance sheet data as of June 30, 1998 and 1999 are derived from our
audited financial statements included elsewhere in this prospectus. The
selected financial data is qualified by reference to, and should be read in
conjunction with, our financial statements and the notes to those statements
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this prospectus.

32
<PAGE>

<TABLE>
<CAPTION>
Predecessor
Company
-----------
Year ended June 30,
-----------------------------------------------------------
1995 1996 1997 1998 1999
----------- ----------- ----------- ----------- -------
(unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations:

Order revenues and
service fees, net of
discounts.............. $14,574 $18,490 $26,230 $30,423 $45,212

Commissions from FTDI... -- -- -- -- 4,148

Other................... -- 51 25 240 258
----------- ----------- ----------- ----------- -------
Total revenues....... 14,574 18,541 26,255 30,663 49,618

Fulfillment and
processing services.... 9,629 15,431 22,283 26,324 38,848
----------- ----------- ----------- ----------- -------

Gross profit............ 4,945 3,110 3,972 4,339 10,770

Operating Expenses:

Marketing and
promotion............. 2,668 4,188 4,864 5,995 11,991

Technology
development........... 232 1,251 1,546 1,420 2,156

General and
administrative........ 4,082 2,955 3,267 3,239 4,983
----------- ----------- ----------- ----------- -------
Total operating
expenses............ 6,982 8,394 9,677 10,654 19,130
----------- ----------- ----------- ----------- -------
Loss from operations.... (2,037) (5,284) (5,705) (6,315) (8,360)

Interest expense, net... 245 226 267 177 142
----------- ----------- ----------- ----------- -------

Loss before income
taxes.................. (2,282) (5,510) (5,972) (6,492) (8,502)

Income tax benefit...... 913 2,204 2,389 2,597 3,055
----------- ----------- ----------- ----------- -------

Net loss................ (1,369) (3,306) (3,583) (3,895) (5,447)

Preferred dividends..... -- -- -- -- 74

Net loss available for
common stockholders.... $(1,369) $(3,306) $(3,583) $(3,895) $(5,521)
=========== =========== =========== =========== =======
Pro forma basic and
diluted net loss per
share.................. $(.13)
=======
Pro forma shares used in
the calculation of
basic and diluted net
loss per share (1)..... 42,305
=======

Selected Statement of
Operations Percentages: (unaudited)
Total revenues.......... 100.0% 100.0% 100.0% 100.0% 100.0%

Gross profit............ 33.9 16.8 15.1 14.2 21.7

Marketing and promotion. 18.3 22.6 18.5 19.6 24.2

Technology and
development............ 1.6 6.7 5.9 4.6 4.3

General and
administrative......... 28.0 15.9 12.4 10.6 10.0

Balance Sheet Data: (unaudited) (unaudited)

Total assets............ $141 $148 $247 $2,212 $11,422

Total liabilities....... 1,769 1,719 2,265 2,363 12,327

Stockholders' equity
(deficit).............. (1,628) (1,571) (2,018) (151) (905)
</TABLE>
- ---------
(1)Gives effect to the 12-for-1 split of our Class B common stock discussed in
note 7 of the notes to our financial statements.

33
<PAGE>

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

The following discussion should be read in conjunction with the financial
statements and the notes to those statements that appear elsewhere in this
prospectus. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ from
those discussed in the forward-looking statements. Factors that could cause or
contribute to any differences include, but are not limited to, those discussed
below and elsewhere in this prospectus, particularly in "Risk Factors."

Overview

We began selling our products directly to consumers through our 1-800-SEND-
FTD toll-free telephone number in 1993 and through our www.ftd.com Web site in
1994. Prior to May 19, 1999, our business was conducted through a business unit
of FTDI. As a business unit of FTDI, we relied on FTDI to provide all financing
for our operations.

FTD.COM was formed in May 1999 to own and operate the Internet and telephone
flower and specialty gift business of FTDI. The Internet and telephone business
was previously operated by FTDI.

The historical financial statements included elsewhere in this prospectus
and discussed below reflect various assumptions relating to the allocation of
revenues and expenses attributable to our business and the other businesses of
FTDI. These assumptions may not be indicative of the financial results that
would have resulted if we had been an independent company during the periods
presented. The cash flows reflected as contribution from FTDI in the statements
of cash flows represent contributions from FTDI to finance our operations.
These cash flows are not indicative of the cash flows that would have resulted
had we been operating as a separate stand-alone company during the periods
presented. Furthermore, the historical financial information indicates that we
have incurred significant net losses.

As we seek to expand our business, we believe that our operating expenses
will significantly increase as a result of the financial commitments related to
increased advertising, marketing and promotional activities and expenditures
designed to enhance our brand and Web site. We expect that we will continue to
incur losses and generate negative cash flow from operations for the
foreseeable future.

In view of the rapidly changing nature of our business, our limited
operating history and the seasonality of our business, we believe that
comparisons of our operating results for any period with those of the preceding
period are not necessarily meaningful and should not be relied upon as an
indication of future performance. Our revenues and operating results may vary
from quarter to quarter due to a number of factors, some of which are beyond
our control. This fluctuation primarily is attributable to increased sales and
advertising expenditures during the popular floral holiday seasons in the
fiscal quarters ending March 31, June 30 and December 31.

34
<PAGE>

Product inventory is maintained by our fulfilling florists and other third
party manufacturers or distributors. As a result, we offer a large selection of
merchandise without the investment in inventory, the ongoing expense related to
the management of that inventory or the risk of product obsolescence or
spoilage.

Total revenues include order revenues and service fees, net of discounts;
commissions from FTDI; and other revenues. Order revenues and service fees, net
of discounts, represent revenues attributable to the sale of products through
our Web site and 1-800-SEND-FTD, and the service fees charged to our customers
for each order. These service fees are $6.99 for most orders placed through our
Web site and $9.99 for most orders placed through 1-800-SEND-FTD. Commissions
represent a $5.00 commission paid to us by FTDI since July 1998 for each order
that we clear through the FTD Clearinghouse. FTDI will continue to pay us these
commissions pursuant to a three-year agreement expiring on June 30, 2002.
Effective June 30, 1999, we began to earn fees in connection with our hosting
of Florists Online Web sites. Until May 2000, FTDI will pay us a monthly
service fee of $50.00 for each Web site hosted. The monthly service fee under
this agreement will be reviewed, and possibly adjusted, on an annual basis in
the event we agree to continue to provide these hosting services.

We have a 100% customer satisfaction guarantee. This means that if any of
our customers are unhappy with a purchase, we will credit the customer for the
full amount of the purchase, send a replacement floral arrangement or specialty
gift or give the customer a gift certificate for the full amount of the
purchase. For the years ended June 30, 1998 and 1999, total refunds as a
percentage of total revenues were 1.7% and 1.0%, respectively.

Costs and expenses related to our revenues consist of fulfillment and
processing services. Fulfillment costs primarily consist of costs of fulfilling
orders and related delivery charges. For orders fulfilled by an FTD florist, we
historically paid FTDI between 73% and 80% of the sales price of the order for
fulfillment. Effective June 30, 1999, this payment was decreased from 80% to
73% of the sales price of the order. For orders that are not fulfilled by an
FTD florist, such as holiday gift baskets, the cost of fulfillment is based on
a prenegotiated price for the product and is paid to the manufacturer or third
party distributor who fulfills the order. Processing services costs primarily
consist of salaries and related expenses of processing service employees, fees
due to FTDI for credit card processing services, a fee of 7% of the sales price
of an order that we pay FTDI for orders that are cleared through the FTD
Clearinghouse and amounts due to the third party call center that processes
orders through our toll-free telephone number.

Marketing and promotion expenses primarily consist of costs related to
advertising and affinity programs. In future periods, we expect that these
expenditures will increase significantly. In addition, in the historical
periods, marketing and promotion expenses included cost allocations from FTDI's
expenditures related to shared advertising and publicity. These allocations
will not be charged in the future. Technology development consists of fees due
to the developer of our Web site, allocated information technology costs

35
<PAGE>

from FTDI related to shared systems and personnel. General and administrative
expenses primarily consist of direct corporate expenses; customer service
costs; royalty expenses; and amounts charged to us in connection with services
provided to us by FTDI related to the utilization of resources, including
executive, accounting and administrative personnel, space and equipment rental,
facilities expenses, recruiting expenses, professional fees and other corporate
expenses.

Interest expense for all periods was allocated using FTDI's weighted average
interest rate applied to average stockholder's deficit which represents FTDI's
cumulative funding of our cash requirements and results of operations until our
date of incorporation.

We have entered into an amendment to FTDI's and FTD Corporation's Tax
Sharing Agreement pursuant to which our operating results will be included in
the consolidated tax returns of FTD Corporation, our ultimate parent. We will
pay our proportionate share of FTD Corporation's tax liability computed as if
we were filing a separate federal income tax return or FTD Corporation will
refund any tax loss benefit attributed to us if the benefit would have been
realized by us had we filed our own federal income tax return. The tax
provisions are based upon management's estimate of our annualized effective tax
rate, which approximates a tax provision computed on a stand-alone basis as if
we filed a separate tax return. Income tax benefit for each of the years ended
June 30, 1997, 1998 and 1999 was $2.4 million, $2.6 million and $3.1 million,
respectively.

We will incur costs associated with some of our Intercompany Agreements.
Pursuant to our Trademark Licensing Agreement, we will pay FTDI a royalty equal
to 1% of our order revenues and service fees, net of discounts, in exchange for
the right to use FTDI's trademarks in connection with the sale of goods and
services on the Internet, through catalogs and over the telephone. The
Intercompany Services Agreement will require FTDI to provide us with various
corporate services and space sharing. In exchange for FTDI's provision of
corporate services, we will pay FTDI an amount equal to 105% of FTDI's
allocated costs associated with these services. FTDI will allow us to use a
portion of its offices at a cost equal to an estimate of the prevailing market
rate for such space and including 105% of operating expenses. For a more
complete discussion of these Intercompany Agreements, see "Transactions with
Management and Others--Intercompany Agreements."

Results of Operations

Year ended June 30, 1998 compared to year ended June 30, 1999.

Total revenues increased by $18.9 million, or 62%, from $30.7 million for
the year ended June 30, 1998 to $49.6 million for the year ended June 30, 1999.
The increase in total
revenues was attributable to a significant increase in the number of orders, as
well as an increase in average order value.

Order revenues and service fees, net of discounts, increased by $14.8
million, or 49%, from $30.4 million for the year ended June 30, 1998 to $45.2
million for the year ended

36
<PAGE>

June 30, 1999. The increase from the prior year was primarily the result of an
increase in Internet order volume as well as an increase in order value and
service fees. During the year ended June 30, 1998, 67% of our order revenues
and service fees were generated by telephone orders and 33% through the
Internet compared to 46% by telephone and 54% through the Internet during the
year ended June 30, 1999.

Commission revenue was $4.1 million for the year ended June 30, 1999. We did
not generate any commission revenue during the year ended June 30, 1998. The
increase from the corresponding period of the prior year was the result of the
commencement in July 1998 of an incentive program to gather orders for FTDI.
Commission revenue was 8.3% of total revenues for the year ended June 30, 1999.

Other revenues increased by $18,000 from $240,000 for the year ended June
30, 1998 to $258,000 for the year ended June 30, 1999. Other revenues were less
than 1% of total revenues for the years ended June 30, 1998 and 1999,
respectively.

Cost of fulfillment and processing services increased by $12.5 million, or
48%, from $26.3 million at June 30, 1998 to $38.8 million for the year ended
June 30, 1999. This was the result of increased order volume, which was
primarily attributable to the increase in Internet sales discussed above. In
addition, we realized cost reductions that resulted from improvements in order
processing operations. As a percentage of total revenues, cost of fulfillment
and processing services decreased from 86% for the year ended June 30, 1998 to
78% for the year ended June 30, 1999. This decrease was principally due to the
increase in commission revenue for the year ended June 30, 1999.

Marketing and promotion expenses increased by $6.0 million, or 100%, from
$6.0 million for the year ended June 30, 1998 to $12.0 million for the year
ended June 30, 1999. The increase was primarily due to an increase in Internet
advertising, promotion and customer acquisition marketing.

Technology development expenses increased by $0.8, or 57%, from $1.4 million
for the year ended June 30, 1998 to $2.2 million for the year ended June 30,
1999. The increase was primarily due to costs related to Web site maintenance
and enhancements required to handle the increased volume on our site as well as
to improve the speed of order processing.

General and administrative expenses increased by $1.8 million, or 56%, from
$3.2 million for the year ended June 30, 1998 to $5.0 million for the year
ended June 30, 1999. The increase was primarily due to our increased expenses
required to handle the growth in Internet sales.

Year ended June 30, 1997 compared to year ended June 30, 1998.

Total revenues increased by $4.4 million, or 17%, from $26.3 million for the
year ended June 30, 1997 to $30.7 million for the year ended June 30, 1998. The
increase in total revenues was attributable to a significant increase in the
number of orders and was partially offset by a decline in average order value.

37
<PAGE>

Order revenues and service fees, net of discounts, increased by $4.2
million, or 16%, from $26.2 million for the year ended June 30, 1997 to $30.4
million for the year ended June 30, 1998. The increase from the corresponding
period of the prior year was primarily the result of an increase of Internet
order volume as well as an increase in order value and service fees. During the
year ended June 30, 1997, 83% of our order revenues and service fees were
generated by telephone orders and 17% through the Internet compared to 67% by
telephone and 33% through the Internet during the year ended June 30, 1998.

Other revenues increased by $215,000 for the year ended June 30, 1998 from
$25,000 for the year ended June 30, 1997. Other revenues were less than 1% of
total revenues for the years ended June 30, 1997 and 1998, respectively.

Cost of fulfillment and processing services increased by $4.0 million, or
18%, from $22.3 million for the year ended June 30, 1997 to $26.3 million for
the year ended June 30, 1998. This increase was the result of increased order
volume, which was primarily attributable to the increase in Internet sales
discussed above, as well as higher product costs attributable to an increase in
the percentage of the floral order value due to florists who fulfill the
orders. As a percentage of total revenues, cost of fulfillment and processing
services was 85% for the year ended June 30, 1997 and 86% for the year ended
June 30, 1998.

Marketing and promotion expenses increased $1.1 million, or 22%, from $4.9
million for the year ended June 30, 1997 to $6.0 million for the year ended
June 30, 1998. The increase was primarily due to an increase in Internet
advertising, and customer acquisition marketing.

Technology development expenses decreased $126,000, or 8%, from $1.5 million
for the year ended June 30, 1997 to $1.4 million for the year ended June 30,
1998. The decrease was primarily due to a decrease in general information
technology expenses from FTDI as a result of a decrease in their expenditures
as well as a new contract with our Web site developer that reduced the variable
expenses for their services.

General and administrative expenses decreased slightly from $3.3 million for
the year ended June 30, 1997 to $3.2 million for the year ended June 30, 1998.

38
<PAGE>

Quarterly Results of Operations and Seasonality

The following table sets forth unaudited quarterly statement of operations
for the eight quarters ended June 30, 1999. This unaudited quarterly
information has been derived from our unaudited financial statements and, in
the opinion of management, includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the information of
the periods covered. The quarterly data should be read in conjunction with the
financial statements and the notes to those statements that appear elsewhere in
this prospectus. The operating results for any quarter are not necessarily
indicative of the operating results for any future period.

<TABLE>
<CAPTION>
Three months ended
-----------------------------------------------------------------------------------------------
September 30, December 31, March 31, June 30, September 30, December 31, March 31, June 30,
1997 1997 1998 1998 1998 1998 1999 1999
------------- ------------ --------- -------- ------------- ------------ --------- --------
(unaudited, in thousands except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations:

Order revenues and
service fees, net of
discounts.............. $3,383 $8,031 $7,658 $11,351 $5,574 $11,566 $11,380 $16,692

Commissions from FTDI... -- -- -- -- 530 1,056 1,010 1,552

Other................... 2 7 1 230 1 66 -- 191
------ ------- ------- ------- ------ ------- ------- -------

Total revenues......... 3,385 8,038 7,659 11,581 6,105 12,688 12,390 18,435

Fulfillment and
processing services.... 2,990 7,075 6,736 9,523 4,860 9,870 9,789 14,329
------ ------- ------- ------- ------ ------- ------- -------

Gross profit............ 395 963 923 2,058 1,245 2,818 2,601 4,106

Operating expenses:

Marketing and promotion. 532 1,464 1,618 2,381 1,585 3,115 3,097 4,194

Technology development.. 364 393 262 401 473 396 573 714

General and
administrative......... 559 760 783 1,137 803 1,087 1,290 1,803
------ ------- ------- ------- ------ ------- ------- -------

Total operating
expenses............... 1,455 2,617 2,663 3,919 2,861 4,598 4,960 6,711
------ ------- ------- ------- ------ ------- ------- -------

Loss from operations.... (1,060) (1,654) (1,740) (1,861) (1,616) (1,780) (2,359) (2,605)

Interest expense........ 84 81 5 7 30 75 26 11
------ ------- ------- ------- ------ ------- ------- -------

Loss before income
taxes.................. (1,144) (1,735) (1,745) (1,868) (1,646) (1,855) (2,385) (2,616)

Income tax benefit...... 458 694 698 747 658 742 954 701
------ ------- ------- ------- ------ ------- ------- -------

Net loss................ (686) (1,041) (1,047) (1,121) (988) (1,113) (1,431) (1,915)
Preferred dividends..... -- -- -- -- -- -- -- 74
Net loss available for
common stockholders.... $ (686) $(1,041) $(1,047) $(1,121) $ (988) $(1,113) $(1,431) $(1,989)
====== ======= ======= ======= ====== ======= ======= =======

Pro forma basic and
diluted net loss per
share.................. $(.02) $(.02) $(.02) $(.03) $(.02) $(.03) $(.03) $(.05)
====== ======= ======= ======= ====== ======= ======= =======

Pro forma shares used in
the calculation of
basic and diluted net
loss per share (1)..... 42,305 42,305 42,305 42,305 42,305 42,305 42,305 42,305
====== ======= ======= ======= ====== ======= ======= =======
<CAPTION>
Three months ended
-----------------------------------------------------------------------------------------------
September 30, December 31, March 31, June 30, September 30, December 31, March 31, June 30,
1997 1997 1998 1998 1998 1998 1999 1999
------------- ------------ --------- -------- ------------- ------------ --------- --------
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations:

Order revenues and
service fees, net of
discounts.............. 100.0% 99.9% 100.0% 98.0% 91.3% 91.2% 91.8% 90.6%

Other................... -- 0.1 -- 2.0 -- 0.5 -- 1.0
------ ------- ------- ------- ------ ------- ------- -------
Commissions from FTDI... -- -- -- -- 8.7 8.3 8.2 8.4

Total revenues......... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Fulfillment and
processing services.... 88.3 88.0 88.0 82.2 79.6 77.8 79.0 77.7
------ ------- ------- ------- ------ ------- ------- -------

Gross profit............ 11.7 12.0 12.0 17.8 20.4 22.2 21.0 22.3

Operating expenses:

Marketing and promotion. 15.7 18.2 21.1 20.5 26.0 24.5 25.0 22.7

General and
administrative......... 16.5 9.5 10.2 9.8 13.1 8.6 10.4 9.8
------ ------- ------- ------- ------ ------- ------- -------
Total operating
expenses............... 43.0 32.6 34.7 33.8 46.9 36.2 40.0 36.4
------ ------- ------- ------- ------ ------- ------- -------
Technology development.. 10.8 4.9 3.4 3.5 7.8 3.1 4.6 3.9

Interest expense........ 2.5 1.0 0.1 0.1 0.5 0.6 0.2 0.1
------ ------- ------- ------- ------ ------- ------- -------

Loss from operations.... (31.3) (20.6) (22.7) (16.0) (26.5) (14.0) (19.0) (14.1)

Income tax benefit...... 13.5 8.6 9.4 6.3 10.8 5.8 7.7 3.8
------ ------- ------- ------- ------ ------- ------- -------

Loss before income
taxes.................. (33.8) (21.6) (22.8) (16.1) (27.0) (14.6) (19.2) (14.2)

Net loss................ (20.3) (13.0) (13.4) (9.8) (16.2) (8.8) (11.5) (10.4)
Preferred dividends..... -- -- -- -- -- -- -- 0.4
Net loss available for
common stockholders.... (20.3)% (13.0)% (13.4)% (9.8)% (16.2)% (8.8)% (11.5)% (10.8)%
====== ======= ======= ======= ====== ======= ======= =======
</TABLE>

- ---------
(1) Gives effect to the 12-for-1 split of our Class B common stock discussed in
note 7 of the notes to our financial statements.

39
<PAGE>

Liquidity and Capital Resources

Our liquidity requirements primarily are for capital expenditures and
working capital needs, including substantially increased advertising, promotion
and other marketing expenses. In the fiscal years ended June 30, 1998 and 1999,
we made capital expenditures of $2.5 million and $2.0 million, respectively
relating to the purchase of distribution agreements for use in interactive
advertising. We expect that the net proceeds of this offering and cash flow
from operations will be sufficient to fund anticipated capital expenditures and
working capital needs through December 31, 2000.

Cash used in operating activities was $3.3 million for the year ended June
30, 1998, compared to cash used in operating activities of $3.5 million for the
year ended June 30, 1999. Amortization expense was $500,000 and $2.3 million
for the years ended June 30, 1998 and 1999, respectively. The increase in cash
used in operating activities is primarily due to the net loss for the period
and the recording of deferred offering expenses in the fourth quarter of fiscal
1999, partially offset by an increase in amortization and accounts payable for
the year ended June 30, 1999.

Cash used in investing activities was $2.5 million and $2.0 million for the
years ended June 30, 1998 and 1999, respectively. During the years ended June
30, 1999 and 1998, cash used in investing activities primarily consisted of
capital expenditures relating to the purchase of additional distribution
agreements.

Cash provided by financing activities was $5.8 million for the year ended
June 30, 1998 compared to cash provided by financing activities of $13.8
million for the year ended June 30, 1999. The increase in cash provided by
financing activities is primarily attributable to the issuance of Series A
preferred stock totaling $9.0 million.

Cash used by operating activities was $3.1 million for the year ended June
30, 1997 compared to cash used by operating activities of $3.3 million for the
year ended June 30, 1998. Amortization expense was $521,000 for the year ended
June 30, 1998. There were no assets to amortize during the prior year ended
June 30, 1997. Factors contributing to the increase in cash used in operating
activities were the net loss for the period and a decrease in accounts payable
offset by amortization and an increase in accrued expenses.

Cash used by investing activities was $2.5 million for the year ended June
30, 1998. There was no cash used by investing activities for the year ended
June 30, 1997. As discussed above, cash used by investing activities during the
year ended June 30, 1998 consisted of the purchase of a distribution license
for use in interactive advertising.

Cash provided by financing activities, which reflects contributions from
FTDI, was $3.1 million for the year ended June 30, 1997 compared to $5.8
million for the year ended June 30, 1998.

From the date of incorporation until the completion of this offering, we
will utilize the proceeds from the sale of shares of our Series A preferred
stock to meet our liquidity requirements. At June 30, 1999 we are committed
under existing distribution agreements to make future payments in excess of
$7.7 million. Upon completion of this offering, we intend to utilize a portion
of the remaining offering proceeds to fund our liquidity needs. We expect that
the remaining proceeds from the offering will be sufficient to meet our short-
term and long-term liquidity requirements through December 31, 2000.

40
<PAGE>

Year 2000 Issues

Most of our information technology (IT) functions are performed by FTDI
pursuant to the Intercompany Agreements. Accordingly, we have relied on FTDI to
assist us in assessing Year 2000 issues related to FTDI and us. The information
supplied with respect to these matters has been provided by FTDI. FTDI
conducted a review of our computer systems, as well as those of FTDI, and
identified the systems (IT systems, as well as non-IT systems) that could be
affected by the "Year 2000" issue. The Year 2000 issue is the result of
computer programs being written using two digits rather than four to define the
applicable year. Any of the computer programs used by us that have time-
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000. This could result in a major system failure or miscalculation.
The Year 2000 issue is believed to affect virtually all companies and
organizations, which would include us and FTDI, as well as systems and
applications of our vendors or customers. FTDI identified various IT systems,
such as those internal systems that reside on FTDI's mainframe, that are
considered "mission critical" and have developed a plan for converting these
computer systems for Year 2000 compliance.

FTDI has contracted with an outside consulting firm, which has assisted us
in the evaluation and selection of a compatible software package based on our
IT system requirements and those of FTDI. FTDI is currently in the
implementation and training process for this new software package. There are
three phases to the software implementation process. Phase 1 consists of the
software implementation for the general ledger and accounts payable systems.
Phase 2 consists of the software implementation for FTD Marketplace
distribution, floral order processing and accounts receivable. Phase 3 consists
of the software implementation for credit card processing and directory
publications. Phase 1 and Phase 2 have been completed and tested. FTDI expects
Phase 3 of the project to be completed and tested by October 31, 1999. This new
software package will allow FTDI to improve its execution and efficiency in
recording financial and operational information in addition to providing a
solution to the Year 2000 issue with respect to our IT computer systems.

In addition to the computer systems and software we use directly, our
operations also depend on the performance of computer systems and software used
by our significant service providers, including providers of financial,
telecommunications and parcel delivery services. We also cannot assure you that
our service providers have, or will have, operating software and systems that
are Year 2000 compliant.

As part of our Year 2000 compliance efforts with FTDI, our plan includes
contacting suppliers and other third parties whose business interruption could
have a significant impact on our business. Together with FTDI, we have not
completed the assessment of the Year 2000 issue as it relates to these
suppliers and third party vendors and suppliers. However, it should be noted
that there are over 19,000 FTD florists generally available to fulfill our
orders, none of which individually accounts for a material portion of our
revenues or profits. With respect to vendors and suppliers, FTDI has begun
contacting key third parties in order to secure appropriate representation of
Year 2000 compliance and to address the

41
<PAGE>

compatibility of systems. These vendors and suppliers include financial
institutions and communication and transportation providers with whom FTD.COM
and FTDI do business. FTDI's business is not significantly dependent on any one
vendor or supplier. As of June 30, 1999, FTDI has received representation of
Year 2000 compliance from approximately 44% of the vendors and suppliers that
FTD.COM and FTDI use. FTDI and FTD.COM intend to establish alternative sources
or strategies in the event that a vendor or supplier is unable to provide
appropriate representations of Year 2000 compliance.

In addition, the vast majority of purchases of merchandise from FTD.COM are
made with credit cards, and our business, results of operations and financial
condition may be adversely affected to the extent our customers are unable to
use their credit cards due to Year 2000 issues that are not rectified by the
customers' credit card vendors or third party credit card transaction
processors.

FTDI has indicated that it has included in its Year 2000 compliance efforts
FTDI products such as Mercury 2000, 3000 and 4000 terminals, Mercury Interface
Box, Mercury Wings and Advantage (Solaris and SCO) computer systems. These
products are sold and leased by FTDI to FTD florists as elements of the Mercury
Network that links FTDI and FTD florists. FTDI has advised FTD.COM that it will
complete its efforts to test these systems by the end of the third calendar
quarter of 1999 and intends to remedy these systems, if necessary. In the event
that appropriate Year 2000 readiness is not achieved for a service or product
identified by us or FTDI as Year 2000 compliant, FTDI will use commercially
reasonable efforts to repair the affected portion of the service or product.

FTDI has undertaken a review of the non-IT systems that we use and that rely
on embedded computer technology and are in the process of implementing a
remediation program with respect to those systems. The non-IT systems on which
we rely primarily consist of those systems relating to the building and
facilities and are not expected to adversely affect our operations. FTDI has
completed the process of replacing any of these systems that are not Year 2000
compliant.

To date, we have not been allocated any significant costs incurred by FTDI
in connection with its Year 2000 compliance efforts. Although we expect our
Year 2000 compliance costs to be immaterial, we expect that any Year 2000
compliance costs that we incur after the closing of this offering will be
funded from operating cash flow. The Year 2000 budget has not required the
diversion of funds from or the postponement of the implementation of other
planned IT projects. If FTDI and we are unsuccessful in implementing the
software or if the software does not function as it is expected to, the related
potential effect is expected to adversely affect our business, financial
condition and results of operations. As of June 30, 1999, all scheduled
implementation dates have been met, and we expect that the implementation will
be completed by October 31, 1999. We intend to develop by October 31, 1999 and
implement, if necessary, appropriate contingency plans to mitigate, to the
extent possible, any significant Year 2000 areas of noncompliance. We will also
assess the scope of Year 2000 issues relating to our Web site by October 31,
1999 and, if necessary, we will implement appropriate contingency plans to
mitigate any significant Year 2000 areas of noncompliance.

42
<PAGE>

The economy in general may be adversely affected by risks associated with
the Year 2000 issue. Our business, financial condition and results of
operations could be adversely affected if systems on which we rely, including
systems that are operated by other parties with whom we do business, are not
Year 2000 compliant in time. There can be no assurance that these third party
systems will continue to properly function and interface and will otherwise be
Year 2000 compliant. Although we are not aware of any threatened claims related
to the Year 2000, we may be subject to litigation arising from such claims and,
depending on the outcome, such litigation could adversely affect our business.

Based on the reviews and analysis done to date by us and FTDI, we believe
that the reasonably likely worst-case scenario with respect to the Year 2000
issues could result in difficulty for customers placing orders should the Year
2000 problem disrupt power or communication facilities. Although these events
could have an adverse affect on our business in the short-term, we do not
believe that Year 2000 issues will materially and adversely affect our
business, results of operations or financial condition over the long-term. No
assurances can be given that our expectations will be realized.

The expected costs and completion dates for the Year 2000 project and our
expectations regarding likely outcomes are forward-looking statements based on
management's best estimates, that were derived using numerous assumptions of
future events, including the continued availability of resources, third party
modification plans and other factors. Actual results could differ from these
estimates as a result of factors that include the availability and cost of
trained personnel, the ability to locate and correct all relevant computer
codes, and similar uncertainties.

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosure About Segments of an Enterprise and Related Information, which is
effective for fiscal years beginning after December 15, 1997. SFAS No. 131
requires that public companies report certain information about operating
segments in their annual financial statements and in subsequent condensed
financial statements of interim periods issued to shareholders. This statement
also requires that public companies report certain information about their
products and services, the geographic areas in which they operate and their
major customers. We have determined that the adoption of this new standard does
not have a material effect on our disclosure for all periods presented because
we currently operate in one segment.

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

This prospectus contains various "forward-looking statements" that are based
on our current expectations, assumptions, estimates and projections about
FTD.COM and our industry. These forward-looking statements involve risks and
uncertainties. Our actual results could differ from those anticipated in the
forward-looking statements as a result of the factors described in this section
and elsewhere in this prospectus.

43
<PAGE>

BUSINESS

FTD.COM is an Internet and telephone marketer of flowers and specialty
gifts. We began selling our products directly to consumers through our 1-800-
SEND-FTD toll-free telephone number in 1993 and electronically to consumers
through our www.ftd.com Web site in 1994. We offer same-day delivery of floral
orders to over 97% of the U.S. population. The majority of our floral orders
are fulfilled by a group of approximately 6,500 FTD florists who adhere to our
quality guarantee and service standards. We believe that the process of
purchasing flowers and specialty gifts is significantly enhanced through the
use of the Internet. We also believe that our Web site offers convenience and a
superior shopping experience compared to traditional telephone ordering by
allowing consumers to view pictures of the flowers and specialty gifts they are
considering purchasing and to be personally reminded of upcoming purchasing
occasions. We believe the strength of the FTD brand, our easy-to-remember URL,
our fulfilling florist network and our marketing relationships with The Walt
Disney Company, M&M/Mars, Inc., Hickory Farms, Inc., The Vermont Teddy Bear
Company and Crabtree & Evelyn, Ltd. will enable us to significantly grow our
business and build market share.

FTD was founded in 1910, and we believe that the FTD brand and the Mercury
Man logo are among the most recognized consumer brands in America. Our product
offerings vary by season and holiday. On average, we offer over 150 floral
arrangements designed by FTD's floral designers for holidays and other
occasions. We also offer over 50 specialty gifts, including stuffed animals and
other plush toys, gourmet gift baskets, holiday gift sets and collectible
containers. Our product offerings are available at prices ranging from $29.99
to $176.99. For the three months ended June 30, 1999, our total revenues were
$18.4 million and we received a total of 318,573 orders. Internet orders
represented 60% of total customer orders during this period.

Industry Background

Growth of online commerce. The Internet is dramatically affecting the
methods by which consumers buy goods and services. The Internet provides online
merchants with the ability to reach a broad audience and to operate with
minimal infrastructure, reduced overhead and greater economies of scale, while
providing consumers with a broad selection, detailed product information and
unparalleled convenience. As a result, a growing number of parties are
transacting business on the Internet. In November 1998, Forrester Research
estimated that U.S. retail consumer purchases of goods and services over the
Internet will increase from approximately $7.8 billion in 1998 to over $108
billion in 2003. According to Forrester Research, almost 9 million households,
or approximately 30% of all current online households in the U.S., made at
least one online purchase in 1998. By 2003, this figure is expected to grow to
over 40 million households, or over 75% of all projected online households in
the U.S., as Internet use becomes more convenient through higher-speed access
and more common through the use of alternative Internet access devices.

44
<PAGE>

Online floral and specialty gift market. The floral and specialty gift
markets are large and growing markets that are both well suited for e-commerce.
According to an October 1997 United States Department of Agriculture Economic
Research Service study, the U.S. retail market for cut flowers and cut greens
was $6.5 billion in 1996 and has grown at a compound annual growth rate of
approximately 5% from 1993 to 1996. In November 1998, Forrester Research
forecasted that the U.S. online market for flowers will increase from $212
million in 1998 to $906 million in 2003 and that the U.S. online market for
specialty gifts will increase from $63 million in 1998 to $544 million in 2003.
In addition, according to a June 1998 report published by the World Conference
on Horticultural Research, the U.S. ranked 13th worldwide in per capita retail
expenditures for cut flowers and cut greens. As a result, we believe that there
are significant opportunities to increase the number of online flower purchases
in the U.S. and that increased advertising and the superior shopping experience
afforded by the Internet will be catalysts for this growth.

Competitive Strengths

We benefit from our ability to utilize the FTD brand. According to an April
1999 Market Facts, Inc. research study commissioned for FTD, the FTD brand is
regarded as the floral industry leader in several key categories, including
first choice when ordering flowers over the Internet, brand awareness, customer
service and convenience. Our URL, www.ftd.com, is commercially attractive and
easy to access. To stimulate brand awareness and increase traffic to our Web
site, we advertise on several high-traffic Web sites, such as Yahoo!, the Go
NetworkTM, Netscape Netcenter, MSN.com and others. We also sell a number of
floral and specialty gift products utilizing other popular consumer brands such
as Winnie The Pooh(R), M&M's(R), Vermont Teddy Bear(R), Hickory Farms(R) and
Crabtree & Evelyn(R).

We believe that our fulfilling florist network and quality control standards
are a significant competitive strength. Through a network of approximately
6,500 FTD florists, who fill the majority of our orders, we can provide same-
day delivery of flowers to 97% of the U.S. population, if the order is received
by 1:00 p.m. in the recipient's time zone. To fulfill our customers' orders,
florists must adhere to our service standards, including our 100% satisfaction
guarantee. We continuously monitor our fulfilling florists by placing random
test orders and monitoring customer feedback to ensure customer satisfaction.
We provide customer service through our call centers and online.

The technologies integrated in our Web site allow us to retain and analyze
customer, sales and Web site activity. Our Web site provides our customers with
a fast and convenient way to shop. It also allows our customers to obtain
detailed information about our products and to be personally reminded of
upcoming purchasing occasions.

Business Strategy

We intend to build further brand awareness and increase our customer base
and purchasing frequency by significantly expanding our advertising, direct
marketing/affinity and retention marketing efforts. We plan to implement a
targeted television, radio and print advertising campaign focused on increasing
customer usage of FTD.COM. In addition, we

45
<PAGE>

intend to increase our advertising presence on highly-trafficked Web sites to
encourage consumers to visit our Web site. We will also continue to utilize a
direct marketing campaign designed to acquire new customers. To date, we have
developed affinity programs with a variety of companies, including Citibank,
MBNA and United Airlines. These programs involve monthly statement inserts, e-
mails and catalogs that market our products to their customers and often offer
discounts or frequent flier mileage awards for purchases of our products.

We also intend to strengthen our retention marketing programs. We currently
utilize our customer information to provide a personalized e-mail reminder
service. This voluntary reminder service enables customers to choose to be
reminded of significant flower or gift purchasing occasions, including events
identified by the particular customer such as birthdays and anniversaries. We
also send printed catalogs and offer other incentives designed to increase
purchasing frequency.

We plan to expand our product offerings to continue to provide our customers
with the best selection of flowers and specialty gifts. While our major focus
is and will continue to be selling flowers, we believe that our specialty gifts
complement our floral product offerings. We believe that the strength of the
FTD brand will allow us to continue to enhance our product offerings through
relationships with other popular consumer brands.

We intend to provide quality customer service by continuing to offer our
100% satisfaction guarantee and by investing in our technology platforms. Under
our 100% satisfaction guarantee policy, customers are entitled to a full refund
or a replacement at no additional cost if they are unsatisfied for any reason.
By making additional investments in technology to share information between our
call centers and Web site environments, we believe that we will be able to
continue to enhance our reputation for customer service.

We plan to capitalize on our relationship with FTD. We believe that this
relationship provides us with significant advantages, including our access to
quality-tested fulfilling florists, our ability to use the FTD brand name and
the www.ftd.com URL and the substantial experience of FTD's management.

Our relationship with FTD also allows us access to FTD's international
fulfillment capability. One of FTD's unique capabilities is its affiliation
with approximately 32,000 florists outside North America. These florists,
through their membership in Interflora, a licensing partner of FTD, have agreed
to receive floral orders transmitted by FTD. There are many people living in
North America who may be interested in sending flowers and specialty gifts to
relatives, friends and business associates living abroad. We intend to market
FTD's international fulfillment capabilities to these consumers.

46
<PAGE>

Product Offerings

We sell both floral arrangements whose designs have been created by FTD as
well as traditional floral arrangements that are chosen by the customer. Our
specialty gift products include plush toys, gourmet gift baskets and
collectible containers. These products are available at a wide range of price
points. The following table illustrates a sample of current product offerings.

<TABLE>
<CAPTION>
Retail Price
Product Type Product Examples Range
------------ ---------------- ------------
<S> <C> <C>
FTD Branded Products FTD Anniversary Bouquet $34.99 to $84.99
FTD Thanks A Bunch(R) Bouquet
FTD Birthday Party(R) Bouquet

FTD Licensed Products Winnie The Pooh(R) bouquets $39.99 to $94.99
M&M's(R) character bouquets
Mickey Mouse(R) bouquets
(beginning in late 1999)

Traditional Floral Arrangements Roses and other mixed flower bouquets $29.99 to $176.99

Specialty Gifts Hickory Farms(R) products $34.99 to $89.99
NFL(TM) gift baskets
Crabtree & Evelyn(R) products
</TABLE>

FTD branded products. Each year, FTD designs floral and specialty gift
products for significant occasions, such as birthdays and anniversaries, and
major holidays, including the most popular floral holidays of Valentine's Day,
Easter, Mother's Day, Thanksgiving and Christmas. We typically offer
approximately 15 products in this category at any one time. FTD begins
developing new products well in advance of their expected release dates. Each
component of these new products, including the container, the flower
arrangement and any other product enhancement, is designed by individual third
party professional floral designers who work in conjunction with employees of
FTDI on a project-by-project basis. After the product design phase is
completed, FTDI conducts extensive research with florists and consumers to help
ensure the success of these new products.

FTD licensed products. FTD also seeks to enter into licensing arrangements
with other popular consumer brands with the goal of developing new and
innovative products. In this regard, FTDI has developed relationships with
companies that have well recognized brand names, such as The Walt Disney
Company, M&M/Mars, Inc., Hickory Farms, Inc., The Vermont Teddy Bear Company
and Crabtree & Evelyn, Ltd. We typically offer approximately four products in
this category at any one time and introduce new products for specific holidays.
To date, these arrangements have not resulted in a material portion of our
revenues.

Traditional floral arrangements. Consumers can also purchase traditional
floral arrangements, such as roses and mixed flower bouquets. We typically
offer over 100 products in this category at any one time.

Specialty gifts. We also offer specialty gift products in key categories
such as plush toys, gourmet food, health and beauty and candles/aromatherapy.
These offerings include products from Hickory Farms, Inc. and licensees of the
National Football League, and we typically offer approximately 50 products in
this category at any one time. FTD continuously seeks to add strong brands to
include in this category of product offerings. These products

47
<PAGE>

are developed in a relatively short period of time and are shipped directly
from the vendor's manufacturing facilities or the vendor's third party
distributor to the consumer.

Transaction Execution

The execution of an order consists of the following steps illustrated below:

Order placement

. Internet orders--Once a customer has selected a product, our Web site
prompts the customer to enter a credit card number and provide other
relevant information, including the address of the recipient and any
special delivery instructions; this information is then transmitted
over the Internet to the servers that process our orders and
communicate with the Mercury Network.

. Telephone orders--A sales representative collects the relevant order
and credit card payment information; this information is then
transmitted to the servers that process our orders and communicate with
the Mercury Network.

Order fulfillment

. Orders fulfilled by florists--The fulfilling florist fills the order by
delivering the floral or specialty gift order directly to the
recipient.

. Orders fulfilled by manufacturers or third party distributors--The
manufacturer or third party distributor of the specialty gift order
sends the specialty gift order to the recipient through an express
delivery service such as United Parcel Service or Federal Express;
these items typically arrive in one to two days depending on the
delivery method chosen by the customer.

Transaction Economics

Orders placed through our Web site or 1-800-SEND-FTD typically are paid for
using a credit card. For each order generated by us that is fulfilled by an FTD
florist, we pay FTDI a percentage of the sales price of the order. This payment
is allocated between FTDI and the fulfilling florist. A commission of $5.00 is
paid to us by FTDI for each order that we clear through the FTD Clearinghouse.
For orders that are not fulfilled by an FTD florist, such as holiday gift
baskets, we pay a prenegotiated price for the product to the manufacturer or
third party distributor. We do not receive a commission from FTDI for these
orders. In addition, our customers pay us a service fee of $6.99 for most
orders placed through our Web site and $9.99 for most orders placed through 1-
800-SEND-FTD.

Marketing and Promotion

To date, we have focused our marketing and promotion strategy on purchasing
advertising on high-traffic Web sites. We also have conducted a marketing
campaign that targets our proprietary database of customers through the use of
seasonal e-mail solicitations and printed catalogs. We intend to significantly
expand our advertising and marketing efforts with the predominant portion of
proceeds raised from this offering through the development of new online and
traditional advertising.

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<PAGE>

Online advertising. We believe that we are one of the floral and specialty
gift industries' leaders in establishing a substantial online advertising
presence. We have established an advertising presence on several high-traffic
Web sites, including Yahoo!, the Go NetworkTM, Netscape Netcenter, MSN.com,
Disney.com, Infoseek, Excite, Hotbot and Lycos. The agreements governing those
advertising relationships expire at various times over the next three years. We
intend to continue to seek new opportunities to expand this presence within
top-tier portal sites and highly trafficked content sites.

Traditional advertising. We intend to actively pursue a variety of
traditional advertising channels to promote the FTD.COM brand. Our efforts in
this area will focus on promoting our brand through television, radio and print
advertisements. While we have not spent significant marketing dollars in this
area in the past, we expect to significantly increase our traditional
advertising campaign in the future.

Direct marketing/affinity programs. Through an aggressive direct marketing
campaign designed to acquire new customers, we develop relationships with many
companies that have large consumer databases, including United Airlines and
credit card issuers such as Citibank and MBNA. We utilize statement inserts,
e-mail and printed catalogs to market to these consumers and often offer
discounts or frequent flier mileage awards for purchases.

Retention marketing. We use our extensive database of customer information
to enhance our customer retention efforts. For example, we allow our Internet
customers to establish an account with us that stores an address book, credit
card numbers and ordering preferences and allows customers to review their
previous purchases. We intend to continue to expand these efforts.

In addition, FTDI utilizes a variety of advertising channels to promote the
FTD brand and the Mercury Man logo, including television and print
advertisements. FTD has utilized football Hall-of-Famer and actor Merlin Olsen
as a spokesman since 1983. FTDI also has an active sponsorship campaign,
featuring a float in the annual Tournament of RosesTM Parade and sponsorship of
the Champions on IceTM professional ice skating tour.

Technology and Systems

Our Internet technology utilizes FTDI's systems and technology licensed from
other parties, enabling us to offer our customers a convenient and user-
friendly online shopping experience. The overall mix of technologies and
applications that we use allows us to support a distributed, scalable and
secure e-commerce environment.

We use server technology in a fully redundant configuration to power our Web
site. Our hosting location has the ability to handle increases in usage levels
by utilizing data communication links that can add capacity in excess of
historical levels.

Our relationships with the developer of our Web site and our Web site host
are expected to terminate in early 2000. We currently are in the process of
selecting other third parties to provide these services.

Our transaction system primarily is supported by fully redundant processors,
which FTDI owns. The term "redundant processors" means that we have back-up
servers that remain idle or run non-critical tasks when the system is working
properly. If one of the

49
<PAGE>

primary processors goes down, then a back-up processor will start-up and begin
to handle customer transactions. These processors accept and validate floral
and non-floral orders, assess product availability, handle credit card
transaction processing and automated customer communications and facilitate
florist selection. With respect to these orders, the processors communicate
with the Mercury Network, which is a scalable, redundant network that
facilitates communication with and among FTD florists, manufacturers and third
party distributors. With respect to the Mercury Network, the term "redundant
network" means that several checks and balances exist to ensure that a customer
order is processed in a timely manner. The Mercury Network automatically routes
an order to a florist based on location and activity levels. The connection at
the florist's shop either electronically accepts, rejects or does not respond.
If no electronic response occurs then a manual call is placed to alert the
florist to the condition. If the florist cannot immediately rectify the
problem, then the order is automatically electronically routed to another
suitable florist.

Orders generated through 1-800-SEND-FTD are processed by call centers
operated by APAC TeleServices, Inc. and, to a lesser degree, by us. We pay APAC
a per minute fee for call center coverage. This fee is highest during the 14
days prior to Christmas, Valentine's Day and Mother's Day. Under the agreement
between APAC and us, we paid APAC approximately $2.3 million, $1.6 million and
$1.8 million for the years ended June 30, 1997, 1998 and 1999, respectively.
The amount of our total revenues attributable to this agreement was
approximately $19.5 million, $17.2 million and $17.1 million for the years
ended June 30, 1997, 1998 and 1999, respectively. These amounts represent
approximately 74%, 56% and 34%, respectively, of total revenues during these
periods. The agreement renews for subsequent one year periods unless either
party gives the other party 90 days prior notice that it wishes to terminate
the agreement. Our agreement with APAC currently is scheduled to expire on
September 30, 2000. This agreement also entitles either party to terminate the
agreement at any time upon 180 days prior written notice to the other party.
The sales representatives at APAC's customer call centers in Cedar Rapids and
Waterloo, Iowa and LaCrosse, Wisconsin, which provide 24-hour phone services,
and our customer call center, collect the billing and order information for
each order generated through 1-800-SEND-FTD. Having access to both an in-house
and independent call center gives us the flexibility to allocate calls during
peak hours, facilitates call center expansion capabilities during the holiday
periods without additional capital expenditures and ensures that we will have
adequate call center coverage.

Customer Service

We believe that our ability to establish and maintain long-term
relationships with our customers and encourage repeat visits and purchases
depends, in part, on the strength of our customer service. The Internet allows
nearly instant user feedback, which we use to promptly address customer
requests and needs. In addition, we value frequent communication with and
feedback from our customers to continually improve our services.

50
<PAGE>

As noted above, we have outsourced the processing of orders generated
through 1-800-SEND-FTD to APAC. The material provisions of our agreement with
APAC provide that:

. during each month of the agreement, APAC service representatives must
answer at least 97% of the total number of calls placed to 1-800-SEND-FTD
that are routed to those service representatives;

. APAC must increase its staffing so that its service representatives are
capable of handling seasonal increases in volume of FTD calls, which
typically occur during the two weeks prior to popular floral holidays
such as Mother's Day;

. APAC must respond in writing to every customer service inquiry within
five days after it receives that inquiry;

. APAC must train its representatives so that those representatives are
knowledgeable about the products we offer and are prepared to answer
questions our customers may have about their orders; and

. APAC must ensure that its systems are able to adequately process our
customers' orders.

We also operate customer service centers that provide problem resolution
services. These customer service centers operate Monday through Friday, 7:00
a.m. through 7:00 p.m., and Saturday, 7:00 a.m. through 5:00 p.m., Central
time. During holiday periods, customer service is also available Sunday, 8:00
a.m. through 3:00 p.m., Central time. Our customer service personnel are
responsible for handling general customer inquiries, answering customer
questions about the ordering process and investigating the status of orders,
shipments and payments. In addition, we license software that enables us to
provide online, automated customer service support and reduce our customer
service costs.

Competition

The consumer markets for flowers and specialty gifts are highly competitive
and highly fragmented, and there are few barriers to entry in the markets in
which we compete. The number of e-commerce Web sites competing for consumers'
attention has increased rapidly during the past several years. We compete with
marketers of flowers and specialty gifts who sell through various channels,
including retail stores, the Internet, the telephone and catalogs. Our
competitors may have greater resources or more established customer bases than
ours. Our principal competitors are 1-800-FLOWERS.COM, Inc., Gerald Stevens,
Inc. and PC Flowers & Gifts.com Inc.

We believe that the primary competitive factors in our markets are trust in
the brand, brand recognition, site content, ease of use, price, fulfillment
capabilities, customer service and reliability. Our success will depend heavily
on our ability to continue to provide a satisfactory shopping experience. Other
factors that will affect our success include our continued ability to attract
experienced marketing, technology, operations and management talent. We are
aware that some of our competitors have and may continue to adopt aggressive
pricing and marketing strategies. Increased competition may adversely affect

51
<PAGE>

operating margins and result in loss of market share and a diminished brand
franchise. The nature of the Internet as an electronic marketplace, which may,
among other things, lower barriers to entry for our competitors and facilitate
comparison shopping, may render it inherently more competitive than traditional
retailing formats.

Intellectual Property

We regard our Internet domain name, copyrights, service marks, trademarks,
trade secrets and similar intellectual property as critical to our success.
Much of our intellectual property is licensed from third parties, principally
FTDI. These license arrangements include our Trademark License Agreement with
FTDI, pursuant to which we license the right to use the FTD name, including the
use of the FTD trademark and associated logos as part of our Internet domain
name and our toll-free telephone number. In addition, a substantial portion of
the technology incorporated in our Web site is based on technology licensed
from our third party Web site developer, including our database and Internet
server software and the associated source code. To protect our intellectual
property rights, we rely on a combination of copyright, trademark and trade
secret laws, confidentiality procedures, contractual provisions and agreements
with employees, customers, strategic partners and others. We also depend on the
third party owners of the intellectual property rights we license to protect
those rights.

Employees

We currently employ 41 people who devote all or substantially all of their
time to our business. In addition, approximately 130 of FTDI's employees
provide services to us pursuant to an intercompany agreement with FTDI. None of
our employees is represented by a union, and we consider relations with our
employees to be good.

Legal Proceedings

We are not involved in any legal proceeding that management believes would
adversely affect our business, results of operations or financial condition.

Facilities

Our principal offices are located at 3113 Woodcreek Drive, Downers Grove,
Illinois 60515, and have historically been shared with FTDI, which owns the
property. Following this offering, we expect to continue to use a portion of
this property under a space-sharing arrangement with FTDI. As we expand, we
expect that suitable additional space will be available on commercially
reasonable terms, although no assurance can be made in this regard. We do not
own any real estate.

52
<PAGE>

MANAGEMENT

Executive Officers and Directors

Our board of directors consists of five directors, all of whom are elected
for one-year terms at each annual meeting of stockholders. Our executive
officers are elected annually by our board of directors, however, they may be
removed from office at any time by our board of directors.

The following table sets forth, as of August 31, 1999, the name, age and
position within FTD.COM of each of our executive officers and directors. Each
of the individuals identified in the following table other than Messrs. Chapman
and Van Cleave has served in his or her position within FTD.COM since May 19,
1999. Their respective backgrounds are described following the table.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Richard C. Perry........ 44 Chairman of the Board

Michael J. Soenen....... 29 President, Chief Executive Officer and Director

Peter K. Poli........... 37 Vice President and Chief Financial Officer

Frederick K. Johnson.... 52 Chief Information Officer

Brian G. Chapman........ 34 Vice President of Strategy and Development

William J. Van Cleave... 35 Vice President of Marketing

Habib Y. Gorgi.......... 42 Director

Veronica K. Ho.......... 39 Director

Gary K. Silberberg...... 39 Director
</TABLE>

Some of the current members of our board of directors have been appointed
pursuant to various parties' contractual rights to designate directors under an
FTD Corporation stockholders' agreement. Mr. Perry, Ms. Ho and Mr. Silberberg
are designees of Perry Acquisition Partners, L.P.; and Mr. Gorgi is a designee
of the investment funds and related persons affiliated with Bain Capital, Inc.
These rights to designate directors are more fully described under the caption
"Transactions with Management and Others--Rights to Designate Directors."

Richard C. Perry is the President and Managing Member of Perry Capital LLC,
founded in 1998, and President of Perry Corp., both of which are private money
management firms. He founded Perry Corp. in 1988. Mr. Perry had been an Adjunct
Associate Professor at New York University's Stern School of Business. Mr.
Perry serves as Chairman of the Board of FTDI and FTD Corporation. He is also a
director of Radio & Records, Inc. and Uniplast Industries Co. and a trustee of
the Allen Stevenson School and the National Advisory Board of Facing History
and Ourselves. Mr. Perry received a B.S. from the Wharton School of the
University of Pennsylvania in 1977 and an M.B.A. from New York University's
Stern School of Business in 1980.

Michael J. Soenen is the President and Chief Executive Officer and a
director of FTD.COM. He was Vice President--Marketing of FTDI prior to joining
FTD.COM in May 1999. From January 1997 until August 1998, he was Director of
Sales Promotion for FTDI. Mr. Soenen was an associate at Perry Corp. from
August 1996 to December 1996. From July 1993 to July 1996, Mr. Soenen worked
for Salomon Brothers Inc, an investment banking

53
<PAGE>

firm. Mr. Soenen received a B.A. from Kalamazoo College in 1992. Mr. Soenen was
not elected to our board pursuant to an arrangement or understanding with any
party.

Peter K. Poli is the Vice President and Chief Financial Officer of FTD.COM.
Prior to joining us in April 1999, Mr. Poli was Chief Financial Officer of
Discover Brokerage Direct, Inc., an Internet brokerage firm that is a wholly
owned subsidiary of Morgan Stanley Dean Witter & Co., from March 1997 to April
1999. He was also a director of Discover Brokerage Direct from July 1998 to
April 1999. From 1987 until he joined Discover Brokerage Direct, Mr. Poli
served in various capacities at Dean Witter Reynolds Inc., an investment
banking firm. Mr. Poli received an A.B. from Brown University in 1983 and an
M.B.A. from Harvard Business School in 1987.

Frederick K. Johnson is the Chief Information Officer of FTD.COM. He was the
Executive Vice President Technology of FTDI from July 1997 until joining
FTD.COM. Prior to July 1997, Mr. Johnson was Senior Vice President--MIS for
Fabri-Centers of America, Inc., a retail chain of fabric and craft stores that
is now known as Jo-Ann Stores, Inc., for more than five years. Mr. Johnson
received a B.S. from Case Institute of Technology in 1969 and an M.B.A. from
Case Western Reserve University in 1977.

Brian G. Chapman is the Vice President of Strategy and Development of
FTD.COM. Prior to joining us in June 1999, Mr. Chapman was a director of VIA
International, a management consulting firm, from April 1997 to May 1999. From
March 1990 to April 1997, Mr. Chapman was a management consultant with Towers
Perrin, an international consulting firm. Mr. Chapman received a B.S. from
Northwestern University in 1986.

William J. Van Cleave is the Vice President of Marketing of FTD.COM. Prior
to joining us in August 1999, Mr. Van Cleave was Marketing Director of
americangreetings.com, the Internet marketing division of American Greetings
Corporation, from November 1995 to July 1999. American Greetings Corporation
designs, manufactures and sells seasonal greeting cards and other social
expression products. From August 1990 to October 1995, Mr. Van Cleave served in
various other capacities at American Greetings Corporation. Mr. Van Cleave
received a B.S. from Miami University in 1986 and an M.B.A. from Case Western
Reserve University in 1990.

Habib Y. Gorgi is President of Fleet Private Equity Co. Inc., a subsidiary
of Fleet Financial Group, Inc. He was Executive Vice President of Fleet Private
Equity Co. Inc. from 1993 until he became President in January 1996. Mr. Gorgi
serves as a director of FTDI and FTD Corporation. He is also a director of
several privately-held companies. Mr. Gorgi received an A.B. from Brown
University in 1978 and an M.B.A. from Columbia University in 1983.

Veronica K. Ho is a Managing Director and Member of Perry Capital LLC and
has been a Managing Director of Perry Corp. since 1993. Ms. Ho serves as a
director of FTDI and FTD Corporation. She is also a director of Radio &
Records, Inc., AT Plastics Inc. and Uniplast Industries Co., and a member of
the New York Advisory Board of Facing History and Ourselves. Ms. Ho received an
A.B. from Brown University in 1982 and an M.B.A. from Harvard Business School
in 1986. Ms. Ho is married to Mr. Silberberg.

54
<PAGE>

Gary K. Silberberg is a Managing Director and Member of Perry Capital LLC
and has been a Managing Director of Perry Corp. since 1994. Mr. Silberberg
serves as a director of FTDI and FTD Corporation. He is also a director of
Uniplast Industries Co. Mr. Silberberg received an Sc.B. from Brown University
in 1982 and a J.D. from Yale Law School in 1985. Mr. Silberberg is married to
Ms. Ho.

Additional Directors

Within 90 days following the closing of this offering, we plan to add to our
board of directors two independent directors who are not affiliated with
FTD.COM, FTDI, FTD Corporation or any other party that has a right to designate
a member or members of our board of directors.

Board Committees

Prior to or immediately following the closing of this offering, our board of
directors will establish an audit committee and a compensation committee. The
audit committee will be responsible for reviewing our audited financial
statements and accounting practices, and considering and recommending the
employment of, and approving the fee arrangements with, independent accountants
for both audit functions and for advisory and other consulting services. The
compensation committee will review and approve the compensation and benefits
for our key executive officers, administer our employee benefit plans and make
recommendations to our board of directors regarding those matters.

Director Compensation

Directors who are not employees or affiliates of FTD.COM, FTDI or FTD
Corporation will be paid for each board or committee meeting attended and are
entitled to reimbursement for all reasonable out-of-pocket expenses incurred in
connection with their attendance at those meetings. Currently, there are no
unaffiliated members of our board of directors. We expect to establish the
initial compensation for these unaffiliated directors prior to the time they
are appointed or elected.

Compensation Committee Interlocks and Insider Participation

Historically, all compensation decisions relating to our executive officers
have been made by the full board of directors of FTDI. Following the closing of
this offering, the compensation committee will make all compensation decisions
regarding our executive officers. No interlocking relationship exists between
the compensation committee and the board of directors or compensation committee
of any other company, and no such relationship existed in the past.

Executive Compensation

Prior to the offering, all compensation paid to our executive officers was
paid by FTDI and was attributable, at least in part, to services provided to
FTDI's Internet and telephone floral and specialty gift business.

55
<PAGE>

The following table sets forth information concerning the compensation
during our fiscal year ended June 30, 1999 for our Chief Executive Officer and
the other most highly compensated executive officer of the Company whose total
salary and bonus (as determined in accordance with Securities and Exchange
Commission rules) exceeded $100,000.

Summary Compensation Table

<TABLE>
<CAPTION>
1999 Annual Long-Term
Compensation Compensation Awards
-------------------- ---------------------------
Restricted Securities
Name and Principal Stock Underlying All Other
Position Salary ($) Bonus ($) Awards ($) Options (#)(1) Compensation ($)
- ------------------ ---------- --------- ---------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Michael J. Soenen....... 153,846 -- 105,000(2) 20,000 1,592(3)
President and Chief
Executive Officer
Frederick K. Johnson.... 235,039 -- -- 10,000 37,746(4)
Chief Information
Officer
</TABLE>
- ----------
(1) Represents options to purchase shares of Class A common stock of FTD
Corporation.
(2) As of June 30, 1999, Mr. Soenen held 10,000 restricted shares of Class A
common stock of FTD Corporation with an aggregate value of $105,000. These
restricted shares vest in three equal installments beginning on August 27,
2000.
(3) Represents flexible dollars for use in connection with FTD Corporation's
benefit plans.
(4) Represents $19,831 in compensation for moving expenses and $1,856 in
flexible dollars for use in connection with FTD Corporation's benefit
plans.

FTD Corporation Option Grants in Last Fiscal Year

The following information sets forth information concerning grants of
options to purchase shares of Class A common stock of FTD Corporation to the
named executive officers during our fiscal year ended June 30, 1999.

FTD Corporation Option Grants in Last Fiscal Year

<TABLE>
<CAPTION>
Individual Grants
------------------------------------------
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Number of % of Total Price
Securities Options Appreciation for
Underlying Granted to Option Term
Options Employees Exercise -----------------
Granted in Fiscal Price Expiration 5% 10%
Name (#) Year ($/sh) Date ($)(2) ($)(2)
- ---- ---------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Soenen....... 20,000(1) 12.3% 10.50 08/27/08 $132,068 $334,686
Frederick K. Johnson.... 10,000(1) 6.2% 10.50 08/27/08 66,034 167,340
</TABLE>
- ----------
(1) Options vest in five equal installments beginning on August 1, 1999.
(2) The 5% and 10% rates of appreciation were set by the Securities and
Exchange Commission and are not intended to forecast future appreciation,
if any, of the Class A common stock of FTD Corporation.

56
<PAGE>

FTD Corporation Option Exercises in Last Fiscal Year and Year-End Option Values

The following table sets forth information concerning option exercises with
respect to FTD Corporation Class A common stock by our executive officers named
in the table above during our fiscal year ended June 30, 1999.

Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Values

<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-The-Money Options at
Shares Acquired Value Year-End (#) Fiscal Year-End ($)
Name on Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- --------------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Michael J. Soenen....... 0 0 5,000/25,000 13,750/13,750
Frederick K. Johnson.... 0 0 25,000/85,000 34,375/103,125
</TABLE>
- ----------
(1) Value was calculated by subtracting the exercise price from the fair market
value, which was last determined by the FTD Corporation board of directors
to be $10.50.

Employment Agreements

Pursuant to an offer of employment, we agreed to pay Peter K. Poli an annual
salary of $150,000 to serve as our Vice President and Chief Financial Officer.
We also agreed to pay Mr. Poli a severance payment of one year's salary in the
event his employment is terminated. In accordance with the terms of his offer
of employment and as of the close of the offering, Mr. Poli will be granted
options to purchase 306,900 shares of our Class A common stock at an exercise
price per share equal to the initial public offering price and the same number
of shares at an exercise price of two times the initial public offering price.
See "--Stock Option Grants as of the Offering."

Pursuant to an offer of employment with substantially similar provisions as
Mr. Poli's, we agreed to pay Brian G. Chapman an annual salary of $150,000 to
serve as our Vice President of Strategy and Development, and as of the close of
the offering Mr. Chapman will be granted options to purchase 204,600 shares of
our Class A common stock at an exercise price per share equal to the initial
public offering price. See "--Stock Option Grants as of the Offering."

Pursuant to an offer of employment with substantially similar provisions as
Mr. Poli's and Mr. Chapman's, we agreed to pay William J. Van Cleave an annual
salary of $150,000 to serve as our Vice President of Marketing, and as of the
close of the offering Mr. Van Cleave will be granted options to purchase
204,600 shares of our Class A common stock at an exercise price equal to the
initial public offering price. See "--Stock Option Grants as of the Offering."

We intend to enter into agreements governing the employment of Michael J.
Soenen, our President and Chief Executive Officer, and Frederick K. Johnson,
our Chief Information Officer, following the closing of this offering.

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<PAGE>

Equity Incentive Plan

The following description of our 1999 Equity Incentive Plan is a summary and
is qualified in its entirety by reference to the text of the 1999 Equity
Incentive Plan, which will be filed as an exhibit to the registration statement
of which this prospectus is a part.

On July 30, 1999, our board of directors unanimously approved and adopted
the FTD.COM INC. 1999 Equity Incentive Plan, subject to the approval of FTDI,
our sole stockholder with voting rights, which was obtained the same day. The
plan affords our board of directors the ability to design compensatory awards
that are responsive to our needs, and includes authorization for stock options,
appreciation rights, restricted shares, deferred shares, stock payments,
performance shares and performance units. The plan will supplement our current
compensation programs available to eligible employees.

Principal purposes of the plan. The principal purposes of the plan are to
attract and retain directors, officers, consultants and other employees of
FTD.COM, FTDI and FTD Corporation and their subsidiaries and to provide to
those people incentives and rewards for superior performance.

Available shares of Class A common stock. Subject to adjustment as provided
in the plan, the number of shares of our Class A common stock that may be
issued or transferred under the plan will not in the aggregate exceed 4,500,000
shares of our Class A common stock, plus any shares relating to awards that
expire, are forfeited or are transferred, surrendered or relinquished upon the
payment of any option price or upon satisfaction of any withholding amount.
These shares may be shares of original issuance or treasury shares or a
combination thereof.

Directors, officers, consultants and other employees of FTD.COM, FTDI or FTD
Corporation and their subsidiaries may be selected by our board of directors to
receive awards under the plan.

Option rights. Option rights may be granted under the plan that will entitle
the plan participant to purchase shares of Class A common stock at a price that
may not be less than the market value per share on the date of grant. Each
grant of option rights will be evidenced by an agreement between FTD.COM and
the plan participant containing terms and provisions that are consistent with
the plan and approved by our board of directors.

Each grant of option rights will specify whether the option price is
payable:

. in cash or by check acceptable to FTD.COM;

. by the tender to FTD.COM of shares of Class A common stock owned by the
plan participant for at least six months having a value at the time of
exercise equal to the option price;

. by delivery of irrevocable instructions to a financial institution or
broker to deliver promptly to FTD.COM sale or loan proceeds with respect
to the shares sufficient to pay the total option price; or

. by any combination of those payment methods.

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<PAGE>

On or after the date of grant of any option rights, our board of directors
may provide for the automatic grant of reload option rights to a plan
participant upon the exercise of option rights, including reload option rights,
using shares of Class A common stock or other consideration specified in the
plan. Reload option rights are additional option rights granted automatically
to a plan participant upon the exercise of option rights. Reload option rights
will cover up to the number of shares of our Class A common stock, deferred
shares, stock payments, option rights or performance shares or the number of
shares of our Class A common stock having a value equal to the value of any
performance units surrendered to FTD.COM upon any such exercise in payment of
the option price or to meet any withholding obligations. Reload option rights
may have an option price that is less than the applicable market value per
share at the time the reload option right is granted and will be on the other
terms specified by our board of directors, which may be the same as or
different from those of the original option rights.

Option rights granted under the plan may be options that are intended to
qualify as incentive stock options, options that are not intended to so qualify
or combinations of these alternatives.

Our board of directors may, on or after the date of grant of any option
rights, other than the grant of an incentive stock option, provide for the
payment of dividend equivalents to the plan participant on a current, deferred
or contingent basis or may provide that any of those equivalents be credited
against the option price.

No option right will be exercisable more than ten years from the date of
grant. Each grant will specify the period of continuous service with FTD.COM,
FTDI or FTD Corporation or any subsidiary or other conditions, including the
achievement of management objectives, that must be satisfied before the option
rights will become exercisable and may provide for the earlier exercise of
those option rights in the case of a change in the control of FTD.COM or other
events. Successive grants may be made to the same plan participant whether or
not option rights previously granted to that plan participant remain
unexercised.

Appreciation rights. An appreciation right is a right to receive from
FTD.COM an amount determined by our board of directors, which will be expressed
as a percentage of the amount, not to exceed 100 percent, at the time of
exercise. If an appreciation right is granted in tandem with an option right,
it is only exercisable if the option right has not been exercised or
terminated. Any grant may specify that the amount payable upon exercise of an
appreciation right may be paid by FTD.COM in cash, in Class A common stock or
in any combination thereof, and may grant either to the plan participant or our
board of directors the right to elect among those alternatives.

Any grant may specify that the amount payable upon exercise of an
appreciation right may not exceed a maximum specified by our board of directors
at the date of grant. Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.

Any grant may specify that the appreciation right may be exercised only in
the event of, or earlier in the event of, a change in the control FTD.COM or
other event. Any grant may

59
<PAGE>

provide for the payment to the plan participant of dividend equivalents on the
grant in cash or shares of our Class A common stock on a current, deferred or
contingent basis. Any grant of appreciation rights may specify management
objectives that must be achieved as a condition to exercise those rights.

Any grant of tandem appreciation rights will provide that the tandem
appreciation rights may be exercised only at a time when the related option
rights are also exercisable and the spread is positive, and by surrender of the
related option rights for cancellation.

Each grant will specify in respect of each free-standing appreciation right
a base price, which will be equal to or greater or less than the market value
per share on the date of grant. Successive grants may be made to the same plan
participant regardless of whether any free-standing appreciation rights
previously granted to the plan participant remain unexercised. No free-standing
appreciation right granted under the plan may be exercised more than ten years
from the date of grant.

Each grant of appreciation rights will be evidenced by an agreement between
FTD.COM and the plan participant containing terms and provisions that are
consistent with the plan and approved by our board of directors.

Restricted shares. A grant of restricted shares involves the immediate
transfer by FTD.COM to a plan participant of ownership of a specific number of
shares of our Class A common stock in consideration of the performance of
services. The plan participant is immediately entitled to voting, dividend and
other ownership rights in those shares. The transfer may be made without
additional consideration or in consideration of a payment by the plan
participant that is at or less than the market value per share at the date of
grant. However, any grant of restricted shares made for consideration paid at
the time of grant, including the foregoing of compensation owed by FTD.COM to a
plan participant, will not be counted for purposes of the limit on the
permitted number of restricted shares.

Restricted shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Internal Revenue Code for a period to
be determined by our board of directors at the date of grant. An example would
be a provision that the restricted shares would be forfeited if the plan
participant ceased to serve FTD.COM as an officer or key employee during a
specified period of years. In order to enforce these forfeiture provisions, the
transferability of restricted shares will be prohibited or restricted in a
manner and to the extent prescribed by our board of directors at the date of
grant. Our board of directors may provide for a shorter period during which the
forfeiture provisions apply in the case of a change in the control of FTD.COM
or other events.

Any grant of restricted shares may specify management objectives that, if
achieved, will result in termination or early termination of the restrictions
applicable to such shares. Each grant may specify in respect of those
management objectives a minimum acceptable level of achievement. The grant may
set forth a formula for determining the number of restricted shares on which
restrictions will terminate if performance is at or above the minimum level,
but below full achievement of the specified management objectives.

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<PAGE>

Any grant or sale of restricted shares may require that any or all dividends
or other distributions paid on the restricted shares during the period of a
risk of forfeiture and restrictions on transfer be automatically deferred and
reinvested in additional restricted shares, which may be subject to the same
restrictions as the underlying award.

Each grant of restricted shares will be evidenced by an agreement between
FTD.COM and the plan participant containing terms and provisions that are
consistent with the plan and approved by our board of directors.

Deferred shares. A grant of deferred shares constitutes an agreement by
FTD.COM to deliver shares of our Class A common stock to the plan participant
in the future in consideration of the performance of services and subject to
the fulfillment of the conditions, if any, as our board of directors may
specify during the applicable deferral period. Our board of directors may
provide for a shorter deferral period in the case of a change in the control of
FTD.COM or other event. During the deferral period, the plan participant has no
rights of ownership in the deferred shares, no right to vote those shares and,
except as provided under the plan, no right to transfer any rights under the
award. However, our board of directors may, at or after the date of grant,
authorize the payment of dividend equivalents on those shares on a current,
deferred or contingent basis, in either cash or in additional shares of Class A
common stock. Awards of deferred shares may be made without additional
consideration or in consideration of a payment by the plan participant that is
at or less than the market value per share at the date of grant.

Each grant of deferred shares will be evidenced by an agreement between
FTD.COM and the plan participant containing terms and provisions that are
consistent with the plan and approved by our board of directors.

Stock payments. A stock payment is an agreement by us to:

. deliver shares of our Class A common stock to the plan participant as
payment or

. permit a plan participant to exercise an election or other right to
receive or purchase shares of our Class A common stock instead of, or in
addition to, all or any portion of the compensation that would otherwise
become payable to a plan participant in the form of cash.

A stock payment may consist of the transfer by FTD.COM to a plan participant of
shares of our Class A common stock as additional compensation for services to
FTD.COM, without other payment for the stock payment. The number of shares to
be issued pursuant to stock payments will be determined by our board of
directors, and may be based upon criteria determined to be appropriate by our
board of directors on the date that stock payment is granted or on any later
date.

Prior to the receipt of shares of Class A common stock in satisfaction of a
stock payment, a plan participant will not have any rights of ownership in
those shares, will not have any right to vote those shares and, except as
otherwise provided by the plan, will not have any right to transfer any rights
under his or her award. At or after the date of grant, our

61
<PAGE>

board of directors may, however, authorize the payment of dividend equivalents
with respect to the stock payment on a current, deferred or contingent basis,
in either cash or shares of Class A common stock.

Each stock payment will be evidenced by an agreement executed between
FTD.COM and the plan participant containing terms and provisions that are
consistent with the plan and approved by our board of directors.

Performance shares and performance units. A performance share is a
bookkeeping unit that records the equivalent of one share of our Class A common
stock and a performance unit is a bookkeeping unit that records the equivalent
of $100. Any grant of performance shares or performance units will specify
management objectives that, if achieved during a specified performance period,
will result in payment or early payment of the award. Each grant may specify in
respect of those specified management objectives a minimum acceptable level of
achievement and a formula for determining the number of performance shares or
performance units that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified management
objectives. Each grant of performance shares or performance units must specify
that, before the performance shares or performance units are deemed earned and
paid, FTD.COM or a committee of outside directors must certify that the
management objectives have been satisfied.

In addition, any grant of performance shares or performance units may
specify that the amount payable with respect thereto may not exceed a maximum
specified by our board of directors at the date of grant. To the extent earned,
the performance shares and performance units will be paid to the plan
participant at the time and in the manner determined by our board of directors
in cash, shares of our Class A common stock or any combination thereof. The
grant may provide for the payment of dividend equivalents thereon in cash or in
shares of our Class A common stock on a current, deferred or contingent basis.

Each grant of performance shares or performance units will be evidenced by
an agreement between FTD.COM and the plan participant containing terms and
provisions that are consistent with the plan and approved by our board of
directors.

Management objectives. The plan requires that our board of directors
establish "management objectives" for purposes of performance shares and
performance units. When so determined by our board of directors, option rights,
appreciation rights, restricted shares and dividend credits may also specify
management objectives. Management objectives may be described in terms of
either company-wide objectives or objectives that are related to the
performance of the individual plan participant or the subsidiary, division,
department, region or function within the company in which the plan participant
is employed. Management objectives may be made relative to the performance of
other corporations. Management objectives applicable to any award to a plan
participant who is, or is determined by our board of directors likely to
become, a "covered employee" within the meaning of Section 162(m) of the
Internal Revenue Code will be limited to specified levels of, or growth in, the
following criteria: market value; book value; earnings per share; market share;
operating

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<PAGE>

profit; net income; cash flow; return on capital; return on assets; return on
equity; margins; product volume growth; earnings, including earnings before
interest, taxes, depreciation and other non-cash items; debt/capital ratio;
costs or expenses; net assets; revenues; total return to shareholders; and
customer satisfaction.

Except where a modification would result in an award to a "covered employee"
no longer qualifying as performance-based compensation within the meaning of
Section 162(m) of the Internal Revenue Code, the plan administrator may modify
those management objectives or the related minimum acceptable level of
achievement, in whole or in part, as the plan administrator deems appropriate
and equitable in the light of various events and circumstances, such as changes
in FTD.COM business, operations, corporate structure or capital structure.

Transferability. Except as otherwise determined by our board of directors
but subject to the provisions of the plan, no option right, appreciation right
or other derivative security granted under the plan is transferable by a plan
participant other than by will or the laws of descent and distribution. Except
as otherwise determined by our board of directors, option rights and
appreciation rights are exercisable during the plan participant's lifetime only
by the plan participant or the plan participant's guardian or legal
representative. Notwithstanding the foregoing, but subject to prior board
authorization, option rights, appreciation rights and other awards granted
under the plan may be transferred by a plan participant, without payment of
consideration therefor, to some members of the plan participant's immediate
family or trusts for the benefit of, or entities consisting solely of, members
of the plan participant's immediate family, provided that no such transfer will
be effective unless:

. the plan participant has provided us with reasonable notice thereof;

. the transfer is thereafter effected in accordance with any terms and
conditions that have been made applicable by us or our board of
directors; and

. the transferee has agreed to be subject to the same terms and conditions
under the plan as the plan participant.

Our board of directors may specify at the date of grant that part or all of
the shares of Class A common stock that are to be issued or transferred by
FTD.COM upon exercise of option rights or appreciation rights, upon termination
of the deferral period applicable to deferred shares or upon payment under any
grant of performance shares, performance units or stock payments are no longer
subject to the substantial risk of forfeiture and restrictions on transfer
referred to in the plan, will be subject to further restrictions on transfer.

Adjustments. Our board of directors will make or provide for adjustments in
the numbers of shares of Class A common stock covered by outstanding option
rights, appreciation rights, deferred shares, stock payments and performance
shares, the prices per share applicable thereto, and the kind of shares or
other securities covered thereby, as our board of directors in its sole
discretion and in good faith determines is required to prevent dilution or
expansion of plan participants' rights that otherwise would result in the event
of:

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<PAGE>

stock dividends; stock splits; combinations of shares; capitalizations;
mergers; consolidations; spin-offs; reorganizations; liquidations; issuances of
rights or warrants; and similar events. In the event of any of those
transactions or events, our board of directors, at its discretion, may provide
in substitution for any or all outstanding awards under the plan alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require the surrender of all awards so replaced. Our
board of directors will also make or provide for those adjustments in the
numbers of shares available for issuance under the plan as it may determine
appropriate to reflect any transaction or event described above.

Administration. The plan is to be administered by our board of directors,
except that our board of directors has the authority under the plan to delegate
any or all of its powers under the plan to a committee of the board, or
subcommittee thereof, consisting of not less than two non-employee directors.
Notwithstanding the foregoing, the grant of any award intended to qualify as
performance-based compensation under Section 162(m) of the Internal Revenue
Code, and any administrative determinations made in connection therewith, must
be carried out only by a committee of the board, or subcommittee thereof,
consisting of not less than two "outside directors," as defined under Section
162(m), in a manner consistent with the rules governing performance-based
compensation under Section 162(m). Our board of directors is authorized to
interpret the plan and related agreements and other documents.

Amendments. Our board of directors may amend the plan from time to time in
whole or in part without further approval by our stockholders except where
stockholder approval is otherwise required by applicable law or the rules of
the principal exchange or automated quotation system on which the shares of
Class A common stock are then trading.

Federal income tax consequences. The following is a brief summary of some of
the federal income tax consequences of various transactions under the plan
based on federal income tax laws in effect on the date hereof. This summary is
not intended to be complete and does not describe state or local tax
consequences.

Section 162(m) considerations. Section 162(m) of the Internal Revenue Code
disallows a publicly held corporation's deduction for compensation in excess of
$1.0 million per taxable year paid to the corporation's chief executive officer
and other four most highly compensated executives unless various exceptions are
satisfied. One of these exceptions allows for the deduction of performance-
based compensation in excess of $1.0 million where a number of criteria are
satisfied. These criteria include:

. payment only on satisfaction of one or more pre-established, non-
discretionary, objective performance goals;

. awards being granted at the discretion of a compensation committee
comprised of two or more "outside directors," as defined under Section
162(m);

. stockholder approval after disclosure of material terms; and

. payment of awards only after certification by the compensation committee
that material terms were satisfied.

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<PAGE>

Under the plan, awards of performance shares and performance units generally
are intended to qualify, and awards of option rights, appreciation rights and
restricted shares may be intended to qualify, as performance-based compensation
under Section 162(m).

Non-qualified stock options. In general,

. no income will be recognized by a plan participant at the time a non-
qualified option right is granted,

. at the time of exercise of a non-qualified option right, ordinary income
will be recognized by the plan participant in an amount equal to the
difference between the option price paid for the shares and the fair
market value of the shares, if unrestricted, on the date of exercise, and

. at the time of sale of shares acquired pursuant to the exercise of a non-
qualified option right, appreciation or depreciation in value of the
shares after the date of exercise will be treated as either short-term or
long-term capital gain/loss depending on how long the shares have been
held.

Incentive stock options. No income generally will be recognized by a plan
participant upon the grant or exercise of an incentive stock option. If shares
of Class A common stock are issued to the plan participant pursuant to the
exercise of an incentive stock option, and if no disqualifying disposition of
those shares is made by that plan participant within two years after the date
of grant or within one year after the transfer of those shares to the plan
participant, then upon sale of those shares, any amount realized in excess of
the option price generally will be taxed to the plan participant as a long-term
capital gain and any loss sustained will be a long-term capital loss.

If shares of Class A common stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of either holding period
described above, the plan participant generally will recognize ordinary income
in the year of disposition in an amount equal to the excess (if any) of the
lesser of:

. the fair market value of those shares at the time of exercise and

. the amount realized on the disposition of such shares if a sale or
exchange

over the option price paid for those shares. Any further gain/loss realized by
the plan participant generally will be taxed as short-term or long-term capital
gain/loss depending on the holding period.

Appreciation rights. No income will be recognized by a plan participant in
connection with the grant of a tandem appreciation right or a free-standing
appreciation right. When the appreciation right is exercised, the plan
participant normally will be required to include as taxable ordinary income in
the year of exercise an amount equal to the amount of cash received and the
fair market value of any unrestricted shares of Class A common stock received
on the exercise.

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<PAGE>

Restricted shares. A recipient of restricted shares generally will be
subject to tax at ordinary income rates on the fair market value of the
restricted shares at the time that the shares are no longer subject to
forfeiture or restrictions on transfer for purposes of Section 83 of the
Internal Revenue Code. In determining the applicable tax, the fair market value
of the restricted shares will be reduced by any amount paid by the plan
participant for those restricted shares. However, a recipient who elects under
Section 83(b) of the Internal Revenue Code within 30 days of the date of
transfer of the shares will have taxable ordinary income on the date of
transfer of the shares equal to the excess of the fair market value of those
shares over the purchase price, if any, of those restricted shares. In
determining this amount, the fair market value of the shares will be determined
without regard to the restrictions mentioned above. If a Section 83(b) election
has not been made, any dividends received with respect to restricted shares
generally will be treated as compensation that is taxable as ordinary income to
the plan participant.

Deferred shares. No income generally will be recognized upon the award of
deferred shares. The recipient of a deferred share award generally will be
subject to tax at ordinary income rates on the fair market value of
unrestricted shares of Class A common stock on the date that those shares are
transferred to the plan participant under the award, and the capital gains/loss
holding period for those shares will also commence on that date. In determining
the applicable tax, the fair market value of unrestricted shares of Class A
common stock will be reduced by any amount paid by the plan participant for the
deferred shares.

Stock payments. The recipient of a stock payment generally will be subject
to tax at ordinary income rates on the fair market value of unrestricted shares
of Class A common stock on the date that those shares are transferred to the
plan participant, and the capital gains/loss holding period for those shares
will also commence on that date. In determining the applicable tax, the fair
market value of unrestricted shares of Class A common stock will be reduced by
any amount paid by the plan participant for the shares or previously taxable to
the plan participant.

Performance shares and performance units. No income generally will be
recognized upon the grant of performance shares or performance units. Upon
payment in respect of the earn-out of performance shares or performance units,
the recipient generally will be required to include as taxable ordinary income
in the year of receipt an amount equal to the amount of cash received and the
fair market value of any unrestricted shares of Class A common stock received.

Tax consequences to the company for which services are provided. To the
extent that a plan participant recognizes ordinary income in the circumstances
described above, FTD.COM or the company for which the plan participant performs
services will be entitled to a corresponding deduction provided that, among
other things, the income meets the test of reasonableness, is an ordinary and
necessary business expense, is not an "excess parachute payment" within the
meaning of Section 280G of the Internal Revenue Code and is not disallowed by
the $1.0 million limitation on some executive compensation under Section 162(m)
of the Internal Revenue Code.

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<PAGE>

Plan benefits. The types of awards that may be granted in the future under
the plan are subject to the discretion of our board of directors and,
therefore, cannot be determined. It is not possible to determine all amounts
that may be awarded in the future under the plan.

Stock Option Grants as of the Offering

Effective as of the close of this offering, our board of directors has made
the following stock option grants to our executive officers under our 1999
Equity Incentive Plan:

Grants to Purchase Shares of Class A Common Stock of FTD.COM

<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Exercise Price Appreciation for
Options Employees or Base Option Term
Granted in Fiscal Price Expiration -----------------------
Name (#)(1) Year ($/sh) Date 5% ($)(2) 10% ($)(2)
- ---- ---------- ---------- -------- ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Soenen....... 409,200 18% 8.00 05/19/09 2,058,749 5,217,275
409,200 18% 16.00 05/19/09 -- 1,943,675
Peter K. Poli........... 306,900 14% 8.00 05/19/09 1,544,062 3,912,956
306,900 14% 16.00 05/19/09 -- 1,457,756
Frederick K. Johnson.... 306,900 14% 8.00 09/28/09 1,544,062 3,912,956
Brian G. Chapman........ 204,600 9% 8.00 06/14/09 1,029,375 2,608,638
William J. Van Cleave... 204,600 9% 8.00 08/02/09 1,029,375 2,608,638
</TABLE>
- ----------
(1) These options will be granted as of the date the offering is completed and
will consist of non-qualified stock options.
(2) The 5% and 10% rates of appreciation were set by the Securities and
Exchange Commission and are not intended to forecast future appreciation,
if any, of our Class A common stock. If our Class A common stock does not
increase in value, then the option grants described in the table will be
valueless.

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<PAGE>

PRINCIPAL STOCKHOLDERS

FTDI beneficially owns all of the shares of our Class B common stock
outstanding as of the date of this prospectus. Following the closing of this
offering, FTDI will continue to beneficially own 100% of the Class B common
stock and, accordingly, will hold approximately 87.4% of the economic interest
in FTD.COM and 98.6% of the combined voting power of FTD.COM.

The following table sets forth information with respect to the beneficial
ownership of our common stock as of August 31, 1999 and as adjusted to reflect
the sale of the shares of Class A common stock offered under this prospectus
by:

. each person who we know owns beneficially more than 5% of our common
stock;

. each of our directors individually;

. each of our named executive officers individually; and

. all of our executive officers and directors as a group.

The information in the table assumes the underwriters' option to purchase
additional shares is not exercised and does not reflect any shares purchased in
this offering by any of the principal stockholders, directors or executive
officers listed below.

Unless otherwise indicated, to our knowledge, all persons listed below have
sole voting and investment power with respect to their shares of common stock,
except to the extent the applicable law gives spouses shared authority. Each
person listed below disclaims beneficial ownership of their shares, except to
the extent of their pecuniary interests therein. Shares of common stock that an
individual or group has the right to acquire within 60 days of August 31, 1999
pursuant to the exercise of options are deemed to be outstanding for the
purpose of computing the percentage ownership of such person or group, but are
not deemed outstanding for the purpose of calculating the percentage owned by
any other person listed.

<TABLE>
<CAPTION>
Shares of FTD Corporation
Shares of FTD.COM Common Stock Common Stock Beneficially
Beneficially Owned Owned
--------------------------------------- ---------------------------
Voting Power
-----------------
Percentage Before After Percentage Voting
Number Owned Offering Offering Number Owned Power
---------- ---------- -------- -------- --------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Principal Stockholders:

Florists' Transworld Delivery, Inc. (1). 40,920,000 100.0% 100.0% 98.6% -- -- --
3113 Woodcreek Drive
Downers Grove, Illinois 60515

Bain Capital, Inc. (2).................. 0 0 0 0 2,679,616 17.5% 21.6%

Directors and Executive Officers:

Richard C. Perry (3).................... 0 0 0 0 7,508,862 48.6 60.2

Michael J. Soenen (4)................... 0 0 0 0 25,666 * *

Frederick K. Johnson (5)................ 0 0 0 0 78,450 * *

Habib Y. Gorgi (6)...................... 0 0 0 0 1,262,082 8.2 3.5

Veronica K. Ho.......................... 0 0 0 0 0 0 0

Gary K. Silberberg...................... 0 0 0 0 0 0 0

All Directors and Executive Officers
as a Group (9 persons) (7)............. 0 0 0 0 8,875,060 57.6 71.2
</TABLE>
- ----------
* Less than 1%.

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<PAGE>

(1) The shares of our Class B common stock owned by FTDI have been pledged as
security under FTDI's credit agreement.

(2) Represents shares of FTD Corporation common stock beneficially owned by
investment partnerships and other related persons and entities that are
affiliated with Bain Capital, Inc. The address for Bain Capital and its
affiliates is Two Copley Place, Boston, Massachusetts 02116.

(3) All shares of FTD.COM common stock outstanding prior to this offering are
owned by FTDI. Perry Acquisition Partners, L.P. has sole voting and
investment power with respect to 7,458,862 shares, or 60.2% of the voting
power, of FTD Corporation common stock. Because FTDI is a wholly owned
subsidiary of FTD Corporation, Perry Acquisition Partners may be deemed to
share voting power with respect to all the shares of FTD.COM common stock
owned by FTDI. As a result, Richard C. Perry, the managing member of the
sole general partner of Perry Acquisition Partners, may be deemed to
exercise control over FTD.COM. Mr. Perry also beneficially owns 50,000
additional shares of FTD Corporation common stock. Both Perry Acquisition
Partners and Mr. Perry disclaim beneficial ownership of those shares,
except to the extent of their pecuniary interest therein. The address for
each of Perry Acquisition Partners, L.P. and Mr. Perry is 599 Lexington
Avenue, New York, New York 10022.

(4) Shares of FTD Corporation common stock beneficially owned include 9,000
shares issuable upon the exercise of options and 16,666 restricted shares
that will vest in three equal annual installments beginning on September
30, 2001.

(5) Shares of FTD Corporation common stock beneficially owned include 52,000
shares issuable upon the exercise of options and 20,000 restricted shares
that will vest in three equal annual installments beginning on June 30,
2000.

(6) Represents shares of FTD Corporation common stock beneficially owned by
Fleet Growth Resources, Inc. and affiliated investment partnerships. Mr.
Gorgi is the President of Fleet Growth Resources. Mr. Gorgi disclaims
beneficial ownership of those shares, except to the extent of his pecuniary
interest therein.

(7) Shares of FTD Corporation common stock beneficially owned include 27,500
shares issuable upon the exercise of options and 30,000 restricted shares.
Shares of FTD Corporation common stock beneficially owned also include
shares that Mr. Perry owned by Perry Acquisition Partners with respect to
which may be deemed to have voting and investment power because he is the
managing member of the general partner of Perry Acquisition Partners.

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<PAGE>

TRANSACTIONS WITH MANAGEMENT AND OTHERS

Income Taxes

FTD Corporation is a common parent of an affiliated group of companies
within the meaning of Section 1504(a) of the Internal Revenue Code, which
includes us. The Internal Revenue Code requires that FTD Corporation own at
least an 80% voting and economic ownership interest in FTD.COM to continue to
include us in its U.S. consolidated income tax returns.

In accordance with the terms of the amended Tax Sharing Agreement among
FTDI, FTD Corporation and us, as long as we remain a member of FTD
Corporation's affiliated group:

. we will pay our proportionate share of FTD Corporation's tax liability
computed as if we were filing a separate return; and
. FTD Corporation will refund any tax loss benefit attributable to us if we
would have realized the benefit had we filed our own federal income tax
return.

Historical Relationships

As a subsidiary of FTDI, we receive various services from FTDI, including
technical, human resources, accounting, administrative, legal and other
services. Prior to the closing of this offering, our financial statements have
reflected allocations for these services rendered by FTDI to us. We believe
such allocations have been made on a reasonable and consistent basis; however,
they are not necessarily indicative of, nor is it practicable for us to
estimate, the level of expenses that would have otherwise been incurred had we
operated as a separate, stand-alone company.

The following table sets forth, for each of our last three completed fiscal
years, allocations of various services rendered by FTDI to us:

<TABLE>
<CAPTION>
Year ended June 30,
--------------------------------
Expenses 1997 1998 1999
-------- ---------- ---------- ----------
<S> <C> <C> <C>
Marketing and promotion................. $1,622,056 $1,853,945 $3,700,342
Technology development.................. 1,292,546 1,153,469 1,431,457
General and administrative ............. 1,508,808 1,707,252 2,333,622
---------- ---------- ----------
Total............................... $4,423,410 $4,714,666 $7,465,421
========== ========== ==========
</TABLE>

In addition, we have also relied on FTDI to provide us with financing for
our cash flows. Our cash flows to date therefore are not necessarily indicative
of the cash flows that would have resulted had we been operating as an
independent company. We received an aggregate of $13.7 million in contributions
from FTDI for the period from July 1, 1996 until May 19, 1999, the date we were
incorporated, including contributions of $3.1 million and $5.8 million for the
years ended June 30, 1997 and 1998, respectively and $4.8 million for the
period from July 1, 1998 through May 18, 1999.

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<PAGE>

Intercompany Agreements

We have entered or will enter into several agreements with FTDI prior to the
closing of this offering. We have summarized the material terms of these
agreements. These agreements will not have been negotiated on an arm's-length
basis; however, we believe the terms of these agreements are no less favorable
to us than those that could have been obtained from an unaffiliated third
party. So long as:

. FTD Corporation beneficially owns 25% or more of the voting power of the
common stock of FTD.COM, and no other person owns a greater percentage;
or

. directors, officers or affiliates of FTD Corporation or its subsidiaries
constitute a majority of our board of directors,

any amendments to the Intercompany Agreements must be approved by a majority of
our board of directors, which majority must include at least one-half of our
independent directors. For example, if we have only two independent directors,
the majority must include at least one of those independent directors.

Trademark License Agreement. We have the non-exclusive right to use FTDI's
trademarks in connection with the sale of flowers and specialty gifts to
consumers on the Internet and telephone. We pay FTDI a royalty equal to one
percent of our order revenues and service fees, net of discounts and returns.
The agreement has a 99-year term, however, FTDI may terminate the agreement if,
among other things, any person, other than an affiliate of FTD Corporation,
acquires 20% or more of the voting control of FTD.COM, or upon various defaults
by us. FTD.COM's rights to use FTDI's trademarks will generally cease after
termination of the Trademark License Agreement.

Except with respect to the performance of the types of services contemplated
by the Florists Online Hosting Agreement, FTDI agrees, on behalf of itself and
its affiliates other than us, not to enter into a business that directly
markets flowers and specialty gifts to consumers. In addition, if FTDI makes an
acquisition that includes this type of prohibited business, it must offer to
sell that business, or component thereof, to us. Within 90 days of our receipt
of FTDI's offer, we may deliver to FTDI an offer to acquire or license the
prohibited business on the terms and conditions we decide. If we do not deliver
to FTDI an offer to acquire the prohibited business, FTDI must cease operating
or dispose of the prohibited business. If we do deliver to FTDI an offer to
acquire the prohibited business, then FTDI, within 90 days of receipt of our
offer, must accept our offer or provide us with the terms of the best bona fide
third party offer it has received to acquire or license the prohibited
business. Within 30 days following receipt of the terms of the third party
offer, we must either offer to acquire the prohibited business on the terms
described in the third party offer, or permit FTDI to proceed with the sale of
the prohibited business to the third party offeror. These obligations will
terminate:

. six months after the trademark license terminates if FTDI terminates the
license after the acquisition by a third party of 35% or more of the
voting control of FTD.COM with neither FTD Corporation nor an affiliate
of FTD Corporation owning a greater percentage;

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. one year after the trademark license terminates if FTDI terminates the
license as a result of an acquisition by a third party, other than FTD
Corporation or an affiliate of FTD Corporation, of 20% or more of the
voting control of FTD.COM;

. two years after the trademark license terminates if we terminate due to
material breach by FTDI or its bankruptcy, dissolution or insolvency; or

. when the trademark license terminates for any other reason.

We agree not to enter into any business currently being conducted by FTDI.
FTDI currently is in the business of providing subscribing florists with the
ability to send and receive floral orders and transaction clearing services.
FTDI also has an extensive product development department, the FTD Marketplace,
that develops branded floral and gift products that florists can purchase at
wholesale from FTDI for resale to consumers. In addition, if we make an
acquisition that includes a business that FTDI is engaged in, we must offer to
sell that business, or component thereof, to FTDI. Within 90 days of our
receipt of our offer, FTDI may deliver to us an offer to acquire or license the
prohibited business on the terms and conditions it decides. If FTDI does not
deliver to us an offer to acquire the prohibited business, we must cease
operating or dispose of the prohibited business. If FTDI does deliver to us an
offer to acquire the prohibited business, then we, within 90 days of receipt of
FTDI's offer, must accept FTDI's offer or provide FTDI with the terms of the
best bona fide third party offer we have received to acquire or license the
prohibited business. Within 30 days following receipt of the terms of the third
party offer, FTDI must either offer to acquire the prohibited business on the
terms described in the third party offer, or permit us to proceed with the sale
of the prohibited business to the third party offeror. These obligations will
terminate two years after termination of the trademark license if FTDI
terminates the trademark license due to our material breach or our bankruptcy,
dissolution or insolvency, and otherwise will terminate upon the termination of
the trademark license.

Intercompany Services Agreement. FTDI provides corporate and space-sharing
services to us.

FTDI currently provides corporate services to us such as technical, human
resources, accounting, administrative, legal and other services, and, following
the closing of this offering, will provide services we will require by virtue
of our status as a reporting company with the Securities and Exchange
Commission. FTDI provides these services to us at 105% of the cost allocable to
FTD.COM's use of those services. FTDI also provides us with access to the
Mercury Network, the FTD Clearinghouse, FTDI's Retrans(R) service, which is its
international sale processing system, and the FTD credit card processing
program, for which we pay an amount comparable to the fee that FTDI charges FTD
florists for these services.

FTDI permits us to use a portion of its offices. Our cost for this space
represents an estimate of the prevailing market rate for similar space,
includes a charge for our proportionate share of building expenses, such as
insurance and maintenance costs, and includes an administration fee equal to 5%
of the space sharing costs allocable to FTD.COM.

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Intercompany Indemnification Agreement. We agree to indemnify FTDI and FTD
Corporation for liabilities in respect of our businesses and FTDI and FTD
Corporation agree to indemnify us for liabilities in respect of their
businesses, and various tax and pension-related liabilities of FTDI and FTD
Corporation resulting from our participation in FTD Corporation's consolidated
tax group. See "Risk Factors--Contingent liability for tax and pension
obligations resulting from our relationship with FTDI and FTD Corporation may
adversely affect our financial condition."

Florists Online Hosting Agreement. We provide FTDI with hosting services for
its FTD Florists Online program pursuant to a Florists Online Hosting Agreement
with FTDI. Our services include hosting Web sites for participating FTD
florists within our Web site. During the term of this Agreement, FTDI is
obligated to pay us a monthly service fee of $50.00 for each florist Web site
hosted on our Web site. This agreement expires on June 30, 2000.

Commission Agreement. We receive at least a $5.00 commission on, and at
least 20% of the order value of, every order that we clear through the FTD
Clearinghouse pursuant to a Commission Agreement with FTDI. If FTDI agrees to
pay a similarly situated third party a more economically advantageous
commission fee or percentage of order value, FTDI must adjust our commission or
percentage of order value paid to us to reflect the more favorable terms. If
the percentage of order value paid by FTDI to similarly situated parties is
less than 20%, then the percentage of order value paid by FTDI to us will
decrease to the most favorable economic terms given to any such third party.
This type of commission structure has been adopted by the market over the past
several years, and we believe this arrangement is structured similarly to
commission structures currently being offered to other flower direct marketers.
The Commission Agreement expires in May 2002.

Rights to Designate Directors

Under an FTD Corporation stockholders' agreement among Perry Acquisition
Partners, L.P., a group of investment funds affiliated with Bain Capital, Inc.
and a group of investment funds affiliated with Fleet Growth Resources, Inc.
Corporation, for so long as Perry Acquisition Partners and the Bain Capital
entities own the FTD Corporation stock that they acquired in connection with
FTD Corporation's December 1994 acquisition of the old Florists' Transworld
Delivery Association, Perry Acquisition Partners has the right to designate six
members of our board of directors and Bain Capital has the right to designate
two members of our board of directors.

Perry Acquisition Partners has elected to designate Richard C. Perry,
Veronica K. Ho and Gary K. Silberberg as directors of FTD.COM. Perry
Acquisition Partners has elected not to designate the additional three
directors that it has the contractual right to designate under that
stockholders' agreement, however it may elect to designate any of those
additional directors in the future. Bain Capital has elected to designate Habib
Y. Gorgi to the board of directors of FTD.COM, but has elected not to designate
the additional director that it has the contractual right to designate under
that stockholders' agreement. Bain Capital may elect to designate that
additional director in the future.

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Under this stockholders' agreement, the directors appointed by the Bain
Capital entities have the contractual right to approve various actions
submitted to FTD Corporation's board of directors or its stockholders or any of
its subsidiaries, including us, and their stockholders. This agreement provides
that the following actions submitted to our board of directors must be approved
by the affirmative vote of the directors appointed by the Bain Capital
entities:

. amendments to our certificate of incorporation or bylaws;

. increases or decreases in the number of our directors;

. issuances or sales of our securities;

. mergers, consolidations or other significant business combination
transactions involving us;

. repurchases, exchanges or redemptions of our securities by us; and

. other transactions outside the ordinary course of our business.

In addition, under the Mutual Support Agreement, as long as we are a
controlled affiliate of FTDI, FTD Association has the contractual right to
designate up to 20% of the members of our board of directors but in no event
less than two members. FTD Association has not exercised this contractual right
to designate directors of FTD.COM, however, it may elect to designate one or
both of those directors in the future.

As discussed under the caption "Management," two independent directors will
be added to our board of directors. Neither of these directors will be
designated by Perry Acquisition Partners, Bain Capital or FTD Association.

FTDI Registration Rights Agreement

We entered into a Registration Rights Agreement with FTDI pursuant to which,
at any time after 180 days following the date of this prospectus, FTDI may
demand that we file a registration statement under the Securities Act covering
all or a portion of our securities held by FTDI, its affiliates and their
permitted transferees. However, the securities to be registered must have a
reasonably anticipated aggregate public offering price of at least $3.0
million. FTDI can effect no more than one demand registration per year.

If and when we become eligible to utilize Form S-3 to register an offering
of our securities, FTDI may request that we file a Registration Statement on
Form S-3, covering all or a portion of our securities held by FTDI, its
affiliates and their permitted transferees, provided that the aggregate public
offering price is at least $1.0 million. FTDI can request one registration on
Form S-3 per year.

These registration rights will be subject to our right to delay the filing
of a registration statement if our board of directors determines that the
filing of the registration statement would impede, delay or interfere with any
financing, offer or sale of securities, acquisition, corporate reorganization
or other similar transaction, for not more than 120 days and, if FTDI is
requesting a registration on Form S-3, not more than once in any 12-month
period.

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In addition, FTDI will have some "piggyback" registration rights. Except
pursuant to the registration rights noted above, if we propose to register any
Class A common stock under the Securities Act, FTDI may require us to include
all or a portion of our securities that it owns in that registration. However,
the managing underwriter, if any, of any such offering will have the right to
limit the number of registrable securities proposed to be included in such
registration. We will bear all registration expenses incurred in connection
with these registrations. FTDI would pay all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of its securities.
The registration rights of FTDI under the Registration Rights Agreement will
terminate when FTDI may sell all of its shares in a three-month period under
Rule 144 under the Securities Act.

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DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 250,000,000 shares of Class A
common stock, par value $.01 per share, 100,000,000 shares of Class B common
stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $.01 per share.

The following descriptions of our capital stock and various provisions of
our certificate of incorporation and bylaws are summaries and are qualified by
reference to the form of our certificate of incorporation and bylaws, copies of
which have been filed with the Securities and Exchange Commission as exhibits
to the Registration Statement of which this prospectus is a part.

Common Stock

There are 4,500,000 shares of Class A common stock being offered through
this prospectus (5,175,000 if the underwriters' option to purchase additional
shares is exercised) and 40,920,000 shares are reserved for issuance upon
conversion of Class B common stock into Class A common stock. There are
40,920,000 shares of Class B common stock outstanding, and all of those shares
are held by FTDI.

Voting rights. The holders of Class A common stock and Class B common stock
generally have identical voting rights, except that holders of our Class A
common stock are entitled to one vote per share, while holders of our Class B
common stock are entitled to ten votes per share on all matters to be voted on
by stockholders except in the case of conversion upon a tax-free spin-off.
Shares of Class B common stock also have conversion rights, which are described
below. Cumulative voting for the election of directors is not provided for in
our certificate of incorporation, which means that the holders of a majority of
the shares voted can elect all of the directors then outstanding for election.
Amendments to our certificate of incorporation that would alter or change the
powers, preferences or special rights of the Class A common stock or Class B
common stock so as to affect them adversely must be approved by a majority of
the votes entitled to be cast by the holders of the shares affected by the
amendment, voting as a separate class. For purposes of these provisions, any
provision for the voluntary, mandatory or other conversion or exchange of the
Class B common stock into or for Class A common stock will not be deemed to
adversely affect the rights of holders of the Class A common stock. Any
amendment to our certificate of incorporation to increase or decrease the
authorized shares of any class must be approved by the affirmative vote of the
holders of the majority of the voting power of the stock of FTD.COM, voting
separately as a class.

Dividends. Holders of Class A common stock and Class B common stock will
share equally on a per-share basis in any dividend declared by our Board of
Directors, subject to the preferential rights of any outstanding shares of
preferred stock. Dividends consisting of shares of Class A common stock or
Class B common stock may be paid only as follows:

. dividend shares of Class A common stock may be paid only to holders of
Class A common stock, and dividend shares of Class B common stock may be
paid only to holders of Class B common stock; and

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. shares will be paid proportionally with respect to each outstanding
share of Class A common stock and Class B common stock.

We may not subdivide or combine shares of Class A common stock or Class B
common stock without at the same time proportionally subdividing or combining
shares of the other class.

Conversion. Each share of Class B common stock is convertible, at the option
of the holder, into one share of Class A common stock at any time prior to a
tax-free spin-off of FTD.COM to the stockholders of FTD Corporation, any entity
that owns 100% of FTD Corporation's common stock or any successor to FTD
Corporation by merger or consolidation. Following a tax-free spin-off, if any
occurs, shares of Class B common stock will no longer be convertible into
shares of Class A common stock at the option of the holder.

Any shares of Class B common stock transferred to a person other than FTD
Corporation, FTDI, any of their subsidiaries or successors or a strategic
partner prior to a tax-free spin-off automatically will be converted into
shares of Class A common stock, on a one-for-one basis, upon any such transfer.
A "strategic partner" means any entity or group of affiliated entities that
acquires Class B common stock constituting, in the aggregate, at least 10% of
the number of shares of all classes of common stock outstanding and that, in
the good faith determination of a majority of our disinterested directors, as
determined prior to the acquisition of the Class B common stock by that entity
or group, is considered to be a strategic alliance in the best interests of our
business and our stockholders. Shares of Class B common stock distributed to
the stockholders of FTD Corporation pursuant to a transaction intended to
qualify as a tax-free spin-off will not convert into shares of Class A common
stock in connection with that transaction. Following a tax-free spin-off,
shares of Class B common stock will be transferable as Class B common stock,
subject to applicable laws. Shares of Class B common stock automatically will
convert into shares of Class A common stock on the fifth anniversary of the
tax-free spin-off, unless prior to the tax-free spin-off, FTD Corporation or
FTDI delivers to us an opinion of counsel reasonably satisfactory to us to the
effect that the automatic conversion could preclude FTD Corporation or FTDI
from obtaining a favorable ruling from the Internal Revenue Service that the
distribution of FTDI's Class B common stock to the stockholders of FTD
Corporation would be a tax-free spin-off. If we receive that opinion, we will
submit approval of such conversion to a vote of the holders of the common stock
as soon as practicable after the fifth anniversary of the tax-free spin-off,
unless FTD Corporation or FTDI delivers to us an opinion of counsel reasonably
satisfactory to us prior to the fifth anniversary that the vote could adversely
affect the tax-free status of the spin-off. Approval of the conversion will
require the affirmative vote of the holders of a majority of the shares of both
the Class A common stock and Class B common stock present and voting, voting
together as a single class, with each share of Class B common stock entitled to
only one vote for that purpose. We cannot assure you that the conversion will
in fact be consummated. The requirement to submit the conversion to a vote of
the holders of common stock is intended to ensure that the desired tax
treatment of the tax-free spin-off is preserved if the Internal Revenue Service
were to challenge the automatic conversion as violating the requirement that
FTDI own 80% of the voting power

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of FTD.COM's common stock immediately before the spin-off distribution. We
believe that FTDI has no current plans with respect to a tax-free spin-off of
FTD.COM.

All shares of the Class B common stock automatically will convert into Class
A common stock if a tax-free spin-off has not occurred and the number of
outstanding shares of Class B common stock beneficially owned by FTDI falls
below 20% of the aggregate number of outstanding shares of all classes of
common stock. This mechanism will prevent FTDI from decreasing its economic
interest in FTD.COM to less than 20% while still retaining control of more than
50% of the voting power of our common stock. All conversions will be effected
on a share-for-share basis.

Other rights. In the event of any merger or consolidation of FTD.COM with or
into another company in connection with which our shares of common stock are
converted into or exchangeable for shares of stock, other securities or
property, including cash, of the other company, all holders of Class A common
stock and Class B common stock will be entitled to receive the same kind and
amount of shares of stock and other securities and property, including cash, of
the other company.

On liquidation, dissolution or winding up of FTD.COM, after payment in full
of the amounts required to be paid to holders of our preferred stock, if any,
all holders of Class A common stock and Class B common stock are entitled to
share ratably in any of our assets available for distribution to holders of
shares of common stock.

No shares of Class A common stock or Class B common stock are subject to
redemption or have preemptive rights to purchase additional shares of common
stock.

Upon the closing of this offering, all the outstanding shares of Class A
common stock and Class B common stock will be validly issued, fully paid and
nonassessable.

Preferred Stock

Our Board of Directors has the authority, within the limitations and
restrictions stated in our certificate of incorporation, to provide by
resolution for the issuance of shares of preferred stock, in one or more
classes or series, and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences and the number of shares
constituting any series of the designation of such series. The issuance of
preferred stock could have the effect of decreasing the market price of the
common stock, impeding or delaying a possible takeover and adversely affecting
the voting and other rights of the holders of common stock.

Stock Options

Effective as of the close of this offering:

. options to purchase a total of 2,258,300 shares of Class A common stock
will be outstanding, none of which will be vested; and

. up to 2,241,700 additional shares of Class A common stock may be subject
to options granted in the future.

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All of the options contain standard anti-dilution provisions. See "Management--
Stock Option Grants as of the Offering."

Anti-Takeover Effects of Various Provisions of Delaware Law and Our Certificate
of Incorporation and Bylaws

Upon the closing of this offering, FTD.COM will be subject to the provisions
of Section 203 of the Delaware General Corporation Law. Subject to specific
exceptions, Section 203 prohibits a publicly-held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless:

. the transaction in which such stockholder became an "interested
stockholder" is approved by the Board of Directors prior to the date the
"interested stockholder" attained that status;

. upon consummation of the transaction that resulted in the stockholder
becoming an "interested stockholder," the "interested stockholder" owned
at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding those shares owned by persons
who are directors and also officers); or

. on or subsequent to the date, the "business combination" is approved by
the board of directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least two-thirds of the
outstanding voting stock that is not owned by the "interested
stockholder."

"Business combinations" include mergers, asset sales and other transactions
resulting in a financial benefit to the "interested stockholder." Subject to
various exceptions, an "interested stockholder" is a person who, together with
his or her affiliates and associates, owns, or within three years did own, 15%
or more of the corporation's voting stock. The restrictions in this statute
would not apply to a "business combination" with FTDI or any of its
subsidiaries; however, they could prohibit or delay the accomplishment of
mergers or other takeover or change-in-control attempts with respect to FTD.COM
and, therefore, may discourage attempts to acquire FTD.COM.

In addition, various provisions of our certificate of incorporation and
bylaws, which are summarized in the following paragraphs, may be deemed to 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.

Cumulative voting. Our certificate of incorporation expressly denies
stockholders the right to cumulate votes in the election of directors.

Stockholder action; special meeting of stockholders. Our 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.

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Advance notice requirements for stockholder proposals and director
nominations. Our Bylaws 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 of that proposal or nomination in writing. To be timely, a stockholder's
notice must be delivered to or mailed and 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. However, in
the event that the annual meeting is called for a date that is not within 30
days before or after such anniversary date, 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 date on which notice of the date of the annual meeting was
mailed to stockholders or made public, whichever first occurs. 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 of the
date of the special meeting was mailed or public disclosure of the date of the
special meeting was made, whichever first occurs. Our Bylaws also specify
various requirements as to the form and content of a stockholder's notice.
These provisions may impede stockholders' ability to bring matters before an
annual meeting of stockholders or make nominations for directors at an annual
meeting of stockholders.

Limitations on liability and indemnification of officers and directors. The
Delaware General Corporation Law authorizes corporations to limit or eliminate
the personal liability of directors to corporations and their stockholders for
monetary damages for breaches of directors' applicable duties. Our certificate
of incorporation includes a provision that eliminates the personal liability of
FTD.COM's directors for monetary damages for actions taken as a director,
except for liability:

. for any breach of the director's duty of loyalty to FTD.COM or its
stockholders;

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

. under Section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; and

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

Our Bylaws provide that:

. we must indemnify our directors and officers to the fullest extent
permitted by Delaware law, subject to very limited exceptions;

. we may indemnify our other employees and agents to the same extent that
we indemnify our officers and directors, unless otherwise required by
law, our certificate of incorporation, our bylaws or other agreements;
and

. we must advance expenses, as incurred, to our directors and executive
officers in connection with legal proceedings to the fullest extent
permitted by Delaware law, subject to very limited exceptions.

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Prior to the closing of this offering, we intend to obtain directors' and
officers' insurance providing indemnification for our directors, officers and
certain employees for certain liabilities. We believe that these
indemnification provisions and insurance are necessary to attract and retain
qualified directors and executive officers.

The limitation of liability and indemnification provisions in our
certificate of incorporation and bylaws may not be enforceable against us if
someone challenges these provisions. Nonetheless, these provisions may
discourage stockholders from bringing a lawsuit against directors for breach of
their fiduciary duty. These provisions may also have the effect of reducing the
likelihood of derivative litigation against directors and officers, even though
such an action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder's investment may be adversely affected to the extent
we pay the costs of settlement and damage awards against directors and officers
pursuant to these indemnification provisions.

At present, there is no pending litigation or proceeding involving any of
our directors, officers or employees for which indemnification is sought. We
are unaware of any threatened litigation that may result in claims for
indemnification.

Authorized but unissued shares. The authorized but unissued shares of common
stock and preferred stock are available for future issuance without stockholder
approval. We may use these additional shares 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 FTD.COM by means of a
proxy contest, tender offer, merger or otherwise.

The Delaware General Corporation Law provides generally that the affirmative
vote of a majority in interest 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. Following the offering, FTDI, on its own, as
the beneficial owner of approximately 98.4% of the voting power of the
outstanding common stock, will be able to cause FTD.COM to amend its
certificate of incorporation and bylaws.

Transfer Agent and Registrar

The Transfer Agent and Registrar for our common stock is Harris Trust and
Savings Bank. Its address is 311 West Monroe Street, Chicago, IL 60606, and its
telephone number at that location is (312) 461-2121.

Listing

Our Class A common stock has been approved for quotation on the Nasdaq
National Market under the symbol "EFTD."

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SHARES ELIGIBLE FOR FUTURE SALE

General

Prior to this offering, there has been no market for our Class A common
stock. We cannot predict the effect, if any, that sales of shares or the
availability of shares for sale will have on the market price of our Class A
common stock prevailing from time to time. Sales of substantial amounts of our
Class A common stock in the public market, or the perception that such sales
may occur, could adversely affect prevailing market prices of our Class A
common stock.

After this offering, we will have 5,884,614 shares of Class A common stock
outstanding. If the underwriters exercise their over-allotment option in full,
we will have a total of 6,559,614 shares of Class A common stock outstanding.
All of the Class A common stock sold in the offering will be freely
transferable without restriction or further registration under the Securities
Act, except for shares acquired by our affiliates. FTD.COM, FTDI and our
directors and officers have agreed not to sell, or enter into a derivative
transaction that is the equivalent of a sale of, shares of Class A common
stock, including shares of Class B common stock that are convertible into
shares of Class A common stock, for a period of 180 days after the date of this
prospectus, without Bear, Stearns & Co. Inc.'s prior written consent. We can
give no assurance concerning how long these parties will continue to hold their
Class A common stock after the expiration of those restricted periods.

Shares of our common stock that are held by one of our affiliates will be
subject to the resale limitations of Rule 144 under the Securities Act. Rule
144 defines an affiliate as a person that directly or indirectly, through one
or more intermediaries, controls or is controlled by, or is under common
control with, an issuer.

After this offering, our affiliates may sell shares of our common stock:

. under an effective registration statement under the Securities Act;

. subject to the volume limitations, manner-of-sale provisions and other
conditions of Rule 144; or

. under another exemption from registration.

None of our affiliates, including FTDI, is under any contractual obligation
to retain our common stock, except during the 180-day period noted above.

Rule 144

In general, under Rule 144 as currently in effect, a person, or persons
whose shares are aggregated, who has beneficially owned shares of our Class A
common stock or our Class B common stock, which is convertible into Class A
common stock, for at least one

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year would be entitled to sell within any three-month period a number of shares
that does not exceed the greater of:

. 1% of the number of shares of Class A common stock then outstanding,
which will equal approximately 58,846 shares immediately after this
offering; or

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

Sales under Rule 144 are subject to restrictions relating to manner of sale,
notice and the availability of current public information about us. A person
who is not our affiliate at any time during the 90 days preceding a sale and
who has beneficially owned shares for at least two years, including the holding
period of any prior owner other than an affiliate, would be entitled to sell
shares immediately following this offering under Rule 144(k) without regard to
the volume limitations, manner-of-sale provisions or notice requirements of
Rule 144.

Registration Rights

Prior to the closing of this offering, we will enter into an agreement with
FTDI entitling FTDI to require us to register our shares of Class B common
stock, or shares of Class A common stock into which the Class B common stock is
convertible, after the expiration of the 180-day period above. We have also
entered into registration rights agreements with each of DBV Investments, L.P.
and Buena Vista Internet Group. These registration rights agreements entitle
DBV Investments and Buena Vista Internet Group to require us to register the
shares of Class A common stock owned by them after the date that is 180 days
after the date of this prospectus. See "Transactions with Management and
Others--FTDI Registration Rights Agreement."

Stock Options

As of the close of the offering, we have granted options to purchase
approximately 2,258,300 shares of our Class A common stock. Within 90 days
after this offering, we intend to file a registration statement on Form S-8
covering all options granted under our Equity Incentive Plan. Shares of our
Class A common stock registered under this registration statement will be
available for sale in the open market, subject to vesting restrictions. Any
sales of these shares will be subject to the volume limitations, manner-of-sale
provisions and other conditions of Rule 144.

83
<PAGE>

UNDERWRITING

Underwriting Agreement

Subject to the terms and conditions set forth in an agreement between the
underwriters and us, each of the underwriters named below, through their
representatives Bear, Stearns & Co. Inc., Thomas Weisel Partners LLC, Volpe
Brown Whelan & Company, LLC and E*OFFERING, has severally agreed to purchase
from us the aggregate number of shares of Class A common stock set forth
opposite its name below:

<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Bear, Stearns & Co. Inc..................................... 1,677,000
Thomas Weisel Partners LLC.................................. 879,000
Volpe Brown Whelan & Company, LLC........................... 639,000
E*OFFERING.................................................. 180,000
Banc of America Securities LLC.............................. 90,000
CIBC World Markets Corp..................................... 90,000
Donaldson, Lufkin & Jenrette Securities Corporation......... 90,000
Hambrecht & Quist LLC....................................... 90,000
ING Barings Furman Selz LLC................................. 90,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 90,000
SG Cowen Securities Corporation............................. 90,000
Access Financial Group...................................... 45,000
Axiom Partners Inc.......................................... 45,000
J.C. Bradford & Co.......................................... 45,000
Chatsworth Securities, LLC.................................. 45,000
Gabelli & Company, Inc...................................... 45,000
Goldis Financial Group, Inc................................. 45,000
JWGenesis Capital Markets, LLC.............................. 45,000
Kaufman Bros., L.P.......................................... 45,000
McDonald Investments Inc., a KeyCorp Company................ 45,000
Needham & Company, Inc...................................... 45,000
Tucker Anthony Incorporated................................. 45,000
---------
Total................................................... 4,500,000
=========
</TABLE>

The obligations of the underwriters under the underwriting agreement are
several and not joint. This means that each underwriter is obligated to
purchase from us only the number of shares of Class A common stock set forth
opposite its name in the table above. Except in limited circumstances set forth
in the underwriting agreement, an underwriter has no obligation in relation to
the shares of Class A common stock which any other underwriter has agreed to
purchase.

The underwriting agreement provides that the obligations of the several
underwriters are subject to approval of various legal matters by their counsel
and to various other conditions including delivery of legal opinions by our
counsel, the delivery of a letter by our independent auditors and the accuracy
of the representations and warranties made by us in the underwriting agreement.
Under the underwriting agreement, the underwriters are obliged to purchase and
pay for all of the above shares of Class A common stock if any are purchased.

84
<PAGE>

Public Offering Price

The underwriters propose to offer the shares of Class A common stock
directly to the public at the offering price set forth on the cover page of
this prospectus and at that price less a concession not in excess of $0.33 per
share of Class A common stock to other dealers who are members of the National
Association of Securities Dealers, Inc. The underwriters may allow, and those
dealers may reallow, concessions not in excess of $0.10 per share of Class A
common stock to other dealers. After the offering, the offering price,
concessions and other selling terms may be changed by the underwriters. Our
Class A common stock is offered subject to receipt and acceptance by the
underwriters and subject to other conditions, including the right to reject
orders in whole or in part. The underwriters have informed us that the
underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The following table summarizes the per share and total public offering price
of the shares of Class A common stock in the offering, the underwriting
compensation to be paid to the underwriters by us and the proceeds of the
offering, before expenses, to us. The information presented assumes either no
exercise or full exercise by the underwriters of their over-allotment option.
<TABLE>
<CAPTION>
Total
-----------------------
Without
Per Over- With Over-
Share allotment allotment
----- ----------- -----------
<S> <C> <C> <C>
Public offering price...................... $8.00 $36,000,000 $41,400,000
Underwriting discounts and commissions
payable by us............................. $0.56 $ 2,520,000 $ 2,898,000
Proceeds, before expenses, to us........... $7.44 $33,480,000 $38,502,000
</TABLE>

The underwriting discount and commission per share is equal to the public
offering price per share of Class A common stock less the amount paid by the
underwriters to us per share of Class A common stock. The underwriting
commissions and fees represent 7.0% of the public offering price per share of
Class A common stock.

The following table indicates the expenses payable by us in the offering.
All amounts are estimates other than the Securities and Exchange Commission
registration fee, the NASD fee and the Nasdaq listing fee.

<TABLE>
<S> <C>
Securities Exchange Commission registration fee............... $ 26,376
National Association of Securities Dealers, Inc. fee.......... 9,988
Nasdaq listing fee............................................ 95,000
Accounting fees and expenses.................................. 500,000
Legal fees and expenses....................................... 500,000
Printing and engraving........................................ 200,000
Transfer agent fees and expenses.............................. 1,000
Miscellaneous expenses........................................ 467,636
----------
Total..................................................... $1,800,000
==========
</TABLE>

85
<PAGE>

Over-Allotment Option to Purchase Additional Shares

We have granted a 30-day over-allotment option to the underwriters to
purchase an amount, up to an aggregate of 15% of the aggregate number of shares
appearing above, of additional shares of our Class A common stock exercisable
at the offering price less the underwriting discounts and commissions, each as
set forth on the cover page of this prospectus. If the underwriters exercise
this option in whole or in part then each of the underwriters will become
obligated, subject to various conditions, to purchase approximately the same
percentage of such additional shares as is approximately the percentage of
shares of Class A common stock that it is obligated to purchase of the total
number of shares under the underwriting agreement as shown in the table set
forth above.

Indemnification and Contribution

The underwriting agreement provides that we must indemnify the underwriters
against liabilities arising out of any alleged misstatements of fact or
omissions in this prospectus and the registration statement, including
liabilities under the Securities Act, and contribute to payments that the
underwriters may be required to make in respect of those liabilities.

Lock-up Agreements

FTD.COM, FTDI and our directors and officers have agreed not to sell, or
enter into a derivative transaction that is the equivalent of a sale of, shares
of Class A common stock, including shares of Class B common stock that are
convertible into shares of Class A common stock, for a period of 180 days after
the date of this prospectus, without Bear, Stearns & Co. Inc.'s prior written
consent.

Nasdaq National Market Quotation

Prior to the offering, there has been no public market for our Class A
common stock. Consequently, the initial offering price for the Class A common
stock will be determined by negotiations between us and the representatives of
the underwriters. Among the factors to be considered in those negotiations, the
primary factors will be our results of operations in recent periods, estimates
of our prospects and the industry in which we compete, an assessment of our
management, the general state of the securities markets at the time of the
offering and the prices of similar securities of generally comparable
companies. Our Class A common stock has been approved for quotation on the
Nasdaq National Market under the symbol "EFTD." We cannot assure you, however,
that an active or orderly trading market will develop for the Class A common
stock or that our Class A common stock will trade in the public market
subsequent to the offering at or above the initial offering price.

Stabilization, Syndicate Short Position and Penalty Bids

In order to facilitate the offering, persons participating in the offering
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Class A common stock during and after the offering. Specifically,
the underwriters may over-allot or otherwise

86
<PAGE>

create a short position in the Class A common stock for their own account by
selling more shares of Class A common stock than we have actually sold to them.
The underwriters may elect to cover any short position by purchasing shares of
Class A common stock in the open market or by exercising the over-allotment
option granted to the underwriters. In addition, the underwriters may stabilize
or maintain the price of the Class A common stock by bidding for or purchasing
shares of Class A common stock in the open market and may impose penalty bids,
under which selling concessions allowed to syndicate members or other broker-
dealers participating in the offering are reclaimed if shares of Class A common
stock previously distributed in the offering are repurchased in connection with
stabilization transactions or otherwise. The effect of these transactions may
be to stabilize or maintain the market price at a level above that which might
otherwise prevail in the open market. The imposition of a penalty bid may also
affect the price of the Class A common stock to the extent that it discourages
resales of the Class A common stock. No representation is made as to the
magnitude or effect of any of these activities.

Reserved Share Program

The underwriters have reserved for sale, at the initial public offering
price, up to 565,000 shares of Class A common stock for employees, directors
and officers of FTD.COM and FTDI and the 6,500 FTD florists who fulfill the
majority of our orders who express an interest in purchasing shares of Class A
common stock in the offering. The number of shares available for sale to the
general public in the offering will be reduced to the extent those persons
purchase these reserved shares. Purchases of reserved shares are to be made
through an account at Bear, Stearns & Co. Inc. in accordance with Bear, Stearns
& Co. Inc.'s procedures for opening an account and transacting in securities.
Any reserved shares not so purchased will be offered by the underwriters to the
general public on the same terms as the other shares offered in this offering.

Internet Distribution

E*TRADE Securities, Inc., the online retail distribution affiliate of
E*OFFERING, will distribute all shares of Class A common stock allocated to
E*OFFERING through the Internet. Those shares will be distributed to clients of
E*TRADE meeting its eligibility criteria. Only U.S. resident customers of
E*TRADE with access to the Internet will be eligible to participate in the
Internet distribution. Eligibility will also be based on a client's investment
objectives, financial background and lack of affiliation with FTD.COM or with a
brokerage or banking institution. E*TRADE has a minimum deposit requirement for
all customers of $1,000 cash or securities to open a cash account and $2,000
cash or securities to open a margin account. Shares will generally be randomly
allocated by E*TRADE among interested clients after a review of their holding
records in prior public offerings. Clients with a history of short holding
periods will receive a lesser allocation priority if demand for shares exceeds
the supply of shares available to E*TRADE to distribute.

87
<PAGE>

Other Relationships

From time to time, Bear, Stearns & Co. Inc. provides financial advisory
services to FTD.COM, FTDI, FTD Corporation and our and their affiliates and
receives customary fees for those services. James C. Cayne, the President and
Chief Executive Officer of Bear, Stearns & Co. Inc., has a limited partnership
interest in Perry Acquisition Partners, L.P., which beneficially owns 7,458,862
shares of common stock of FTD Corporation, representing 48.6% of the
outstanding common stock, and 60.2% of the voting power, of FTD Corporation.
Mr. Cayne does not have the power to vote or dispose of these shares. Richard
C. Perry, Chairman of the Board of FTD Corporation, FTDI and FTD.COM and
Managing Member of Perry Investors, LLC, the general partner of Perry
Acquisition Partners, L.P., is Mr. Cayne's nephew.

Thomas Weisel Partners LLC

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

LEGAL MATTERS

The validity of the shares of Class A common stock offered by this
prospectus will be passed upon for us by Jones, Day, Reavis & Pogue, Chicago,
Illinois. Various legal matters in connection with this offering will be passed
upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York. Some partners of Skadden, Arps, Slate, Meagher & Flom LLP have
a limited partnership interest in Bain Capital Fund IV, L.P. which has shared
investment and voting power with respect to 718,896 shares of Class A common
stock of FTD Corporation. Those partners do not have the power to vote or
dispose of those shares. In addition, Skadden, Arps, Slate, Meagher & Flom LLP
represented Perry Capital Corp. in connection with the acquisition of Florists'
Transworld Delivery Association by FTD Corporation.

EXPERTS

The financial statements of FTD.COM INC. as of June 30, 1998 and 1999, and
for each of the years in the three-year period ended June 30, 1999, have been
included herein and in the registration statement in reliance upon the report
of KPMG LLP, independent certified public accountants, appearing elsewhere
herein and upon the authority of said firm as experts in accounting and
auditing.

88
<PAGE>

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-1, including exhibits, schedules and amendments to that
registration statement, under the Securities Act with respect to the shares of
Class A common stock to be sold in this offering. This prospectus does not
contain all the information included in our Registration Statement. For further
information with respect to us and the shares of Class A common stock to be
sold in this offering, we refer you to the Registration Statement. Statements
contained in this prospectus as to the contents of any contract, agreement or
other document referred to are not necessarily complete, and in each instance
we refer you to the copy of that contract, agreement or other document to the
extent filed as an exhibit to the Registration Statement.

You may read and copy all or any portion of the Registration Statement or
any other information we file at the Securities and Exchange Commission's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You
can request copies of these documents, upon payment of a duplicating fee, by
writing to the Securities and Exchange Commission. Please call the Securities
and Exchange Commission at 1-800-SEC-0330 for further information on the
operation of the public reference room. Our Securities and Exchange Commission
filings, including the Registration Statement, are also available to you on the
Securities and Exchange Commission's Web site (http://www.sec.gov). As a result
of this offering, we will become subject to the information and reporting
requirements of the Exchange Act and, in accordance with the Exchange Act, we
will file periodic reports, proxy statements and other information with the
Securities and Exchange Commission. Those reports, proxy statements and other
information may also be inspected at the offices of Nasdaq Operations, 1735 K
Street, N.W., Washington, D.C. 20006. We intend to furnish our stockholders
with annual reports containing audited financial statements and with quarterly
reports for the first three quarters of each fiscal year containing unaudited
interim financial information.

89
<PAGE>

INDEX TO FINANCIAL STATEMENTS

FTD.COM INC.

<TABLE>
<S> <C>
Independent Auditors' Report............................................... F-2

Balance Sheets as of June 30, 1998 and 1999................................ F-3

Statements of Operations for the years ended June 30, 1997, 1998 and 1999.. F-4

Statements of Stockholders' Equity (Deficit) for the years ended June 30,
1997, 1998 and 1999...................................................... F-5

Statements of Cash Flows for the years ended June 30, 1997, 1998 and 1999.. F-6

Notes to Financial Statements.............................................. F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
FTD.COM INC.:

We have audited the accompanying balance sheets of FTD.COM INC. (a
subsidiary of Florists' Transworld Delivery, Inc.), as of June 30, 1998 and
1999, and the related statements of operations, stockholders' equity (deficit),
and cash flows for each of the years in the three-year period ended June 30,
1999. 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 FTD.COM INC. as of June 30,
1998 and 1999, and the results of its operations and its cash flows for each of
the years in the three-year period ended June 30, 1999 in conformity with
generally accepted accounting principles.

/s/ KPMG LLP

August 20, 1999
Chicago, Illinois

F-2
<PAGE>

FTD.COM INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
June 30,
-----------------------------------
1999
ASSETS 1998 1999 Pro forma
------ ---------- ---------- -----------
(note 2)
(unaudited)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................. -- 8,204,735 8,204,735
Accounts receivable....................... $ 213,725 233,678 233,678
Prepaid expenses.......................... 19,351 214,761 214,761
Deferred offering expenses................ -- 1,062,171 1,062,171
---------- ---------- ----------
Total current assets.................. 233,076 9,715,345 9,715,345
---------- ---------- ----------
Distribution agreements, net of
accumulated amortization of $520,833 and
$2,821,322 at June 30, 1998 and 1999,
respectively............................. 1,979,167 1,706,736 1,706,736
---------- ---------- ----------
Total assets.......................... $2,212,243 11,422,081 11,422,081
========== ========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
------------------------------------
<S> <C> <C> <C>
Current liabilities:
Accounts payable.......................... $1,871,720 2,174,924 2,174,924
Payable to FTDI........................... 289,000 311,161 311,161
Unearned revenue.......................... -- 128,877 128,877
Accrued liabilities....................... 202,139 637,500 637,500
---------- ---------- ----------
Total current liabilities............. 2,362,859 3,252,462 3,252,462
---------- ---------- ----------
Series A 8% Cumulative Redeemable
Convertible Preferred Stock, $.01 par
value; 90,000 shares issued and
outstanding at June 30, 1999............. -- 9,074,301 --
Stockholders' equity (deficit):
Preferred stock, $.01 par value; 5,000,000
shares authorized; 90,000 shares issued
and outstanding as Series A 8% Cumulative
Redeemable Convertible Preferred Stock at
June 30, 1999............................ -- -- --
Class A common stock, $.01 par value;
250,000,000 shares authorized; no shares
issued and outstanding at June 30, 1999.. -- -- 13,846
Class B common stock, $.01 par value;
100,000,000 shares authorized; 40,920,000
shares issued and outstanding at June 30,
1999 as retroactively adjusted........... -- 409,200 409,200
Additional paid-in capital................ -- -- 8,986,154
Stockholder's net deficit................. (150,616) -- --
Retained deficit.......................... -- (1,313,882) (1,239,581)
---------- ---------- ----------
Total stockholders' equity (deficit).. (150,616) (904,682) 8,169,619
---------- ---------- ----------
Total liabilities and stockholders'
equity (deficit)..................... $2,212,243 11,422,081 11,422,081
========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-3
<PAGE>

FTD.COM INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
June 30,
-----------------------------------
1997 1998 1999
----------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Order revenues and service fees, net of
discounts.............................. $26,230,331 30,423,315 45,212,213
Commissions from FTDI................... -- -- 4,148,080
Other revenues.......................... 25,104 239,940 257,643
----------- ---------- ----------
Total revenues............................ 26,255,435 30,663,255 49,617,936
----------- ---------- ----------
Fulfillment and processing service,
including expenses from FTDI of
$2,150,481, $2,520,176, and $3,435,935
for the years ended June 30, 1997, 1998
and 1999, respectively................. 22,283,726 26,324,568 38,848,382
----------- ---------- ----------
Gross Profit.............................. 3,971,709 4,338,687 10,769,554

Operating Expenses:
Marketing and promotions, including
expenses from FTDI of $1,622,056,
$1,853,945, and $3,700,342 for the
years ended June 30, 1997, 1998 and
1999, respectively..................... 4,863,708 5,994,464 11,990,651
Technology development, including
expenses from FTDI of $1,292,546,
$1,153,469, and $1,431,457 for the
years ended June 30, 1997, 1998 and
1999, respectively..................... 1,546,052 1,420,275 2,155,771
General and administrative, including
expenses from FTDI of $1,508,808,
$1,707,252 and $2,333,622 for the years
ended June 30, 1997, 1998 and 1999,
respectively........................... 3,267,496 3,239,296 4,982,670
----------- ---------- ----------
Total operating expenses.................. 9,677,256 10,654,035 19,129,092
----------- ---------- ----------
Loss from operations...................... (5,705,547) (6,315,348) (8,359,538)
Interest expense, net of $43,825 in
interest income in 1999................ 266,633 176,287 141,704
----------- ---------- ----------
Loss before income taxes.................. (5,972,180) (6,491,635) (8,501,242)
Income tax benefit...................... 2,388,872 2,596,654 3,054,705
----------- ---------- ----------
Net loss.................................. (3,583,308) (3,894,981) (5,446,537)
Dividends on preferred stock -- -- 74,301
----------- ---------- ----------
Net loss available for common
stockholders............................. $(3,583,308) (3,894,981) (5,520,838)
=========== ========== ==========
Pro forma basic and diluted loss per share
of common stock.......................... (0.13)
Pro forma common shares used in the
calculation of basic and diluted loss per
share of common stock.................... 42,304,614
==========
</TABLE>

See accompanying notes to financial statements.

F-4
<PAGE>

FTD.COM INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
Class A Class B Total
Common Stock Common Stock Additional stockholders'
------------------- ------------------- paid-in Stockholder's Retained equity
Shares Amount Shares Amount capital net deficit deficit (deficit)
--------- --------- ---------- -------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30,
1996................... -- $ -- -- $ -- $ -- $(1,570,869) $ -- $(1,570,869)
Contributions from FTDI. 3,136,440 3,136,440
Loss before income
taxes.................. (5,972,180) (5,972,180)
Tax benefit contributed
to FTDI................ 2,388,872 2,388,872
--------- --------- ---------- -------- --------- ----------- ----------- -----------
Balance at June 30,
1997................... -- -- -- -- -- (2,017,737) -- (2,017,737)
========= ========= ========== ======== ========= =========== =========== ===========
Contributions from FTDI. 5,762,102 5,762,102
Loss before income
taxes.................. (6,491,635) (6,491,635)
Tax benefit contributed
to FTDI................ 2,596,654 2,596,654
--------- --------- ---------- -------- --------- ----------- ----------- -----------
Balance at June 30,
1998................... -- -- -- -- -- (150,616) -- (150,616)
========= ========= ========== ======== ========= =========== =========== ===========
Contributions from FTDI. 4,766,772 4,766,772
Loss before income taxes
from July 1, 1998 to
May 18, 1999........... (7,636,761) (7,636,761)
Tax benefit contributed
to FTDI from July 1,
1998 to May 18, 1999... 3,054,705 3,054,705
Issuance of Common
Stock.................. 3,410,000 34,100 (34,100) --
Retroactive adjustment
for the 12-for-1 stock
split.................. 37,510,000 375,100 (375,100) --
Net loss from May 19,
1999 to June 30, 1999.. (864,481) (864,481)
Dividends--Series A
preferred stock........ (74,301) (74,301)
--------- --------- ---------- -------- --------- ----------- ----------- -----------
Balance at June 30,
1999................... -- $ -- 40,920,000 $409,200 $ -- $ -- $(1,313,882) $ (904,682)
========= ========= ========== ======== ========= =========== =========== ===========
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE>

FTD.COM INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
June 30,
------------------------------------
1997 1998 1999
----------- ---------- -----------
<S> <C> <C> <C>
Net loss................................. $(3,583,308) (3,894,981) (5,446,537)
Adjustments to reconcile net loss to net
cash and cash equivalents used in
operating activities:
Amortization........................... -- 520,833 2,300,489
Changes in assets and liabilities:
Accounts receivable.................. (96,406) 4,173 (19,953)
Prepaid expenses..................... (2,351) 9,873 (195,410)
Deferred offering expenses........... -- -- (1,062,171)
Accounts payable..................... 662,167 (194,872) 303,204
Payable to FTDI...................... (112,000) 177,000 22,161
Unearned revenue..................... -- -- 128,877
Accrued liabilities.................. (4,542) 115,872 435,361
----------- ---------- -----------
Net cash and cash equivalents used in
operating activities.................... (3,136,440) (3,262,102) (3,533,979)
----------- ---------- -----------
Net cash and cash equivalents used in
investing activities-- Purchases of
distribution agreements................. -- (2,500,000) (2,028,058)
----------- ---------- -----------
Net cash and cash equivalents provided by
financing activities-- Issuance of
Series A preferred stock................ -- -- 9,000,000
Contributions from Parent............... 3,136,440 5,762,102 4,766,772
----------- ---------- -----------
Net cash and cash equivalents provided by
financing activities.................... 3,136,440 5,762,102 13,766,772
----------- ---------- -----------
Net increase in cash and cash
equivalents............................. -- -- 8,204,735
Cash and cash equivalents, beginning of
year.................................... -- -- --
----------- ---------- -----------
Cash and cash equivalents, end of year... $ -- -- 8,204,735
=========== ========== ===========
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS
(1) Description of Business

FTD.COM INC. (the "Company") operates the www.ftd.com Web site and the 1-
800-SEND-FTD toll-free telephone number, both of which provide consumers with
the ability to order floral and other specialty gift products.

The Company is a subsidiary of Florists' Transworld Delivery, Inc. ("FTDI"),
which is a wholly-owned subsidiary of FTD Corporation ("FTD"). The Company was
formed by FTDI's predecessor, Florists' Transworld Delivery Association
("FTDA"), a not-for-profit association, as a wholly owned subsidiary in 1993
and was subsequently merged into FTDI in 1995. The Company was incorporated as
a Delaware corporation on May 19, 1999 in connection with the filing of the
registration statement described in note 6, and at such time began to retain
its own earnings. In consideration for the receipt of 3,410,000 shares of Class
B common stock, FTDI contributed to the Company the assets and liabilities
relating to the consumer floral order and specialty gift product business and
entered into the Intercompany Services Agreement described in note 4. The
Intercompany Services Agreement was effective as of June 1, 1999.

(2) Summary of Significant Accounting Policies

Basis of Presentation

From the Company's inception until June 1, 1999, FTDI or its predecessor
provided funding for working capital, and the Company participated in FTDI's
central cash management system. As a part of FTDI's central cash management
system, all cash generated from and cash required to support the Company's
operations was deposited and received through FTDI's corporate operating cash
accounts. As a result, there were no separate bank accounts or records for
these transactions. Accordingly, the amounts represented by the caption
"Contributions from FTDI" in the Company's statements of cash flows represent
the net effect of all cash transactions between the Company and FTDI from
inception until June 1, 1999. During June 1999, the Company funded its working
capital needs through the use of proceeds from the sale of preferred stock
described in note 6.

For all periods presented, certain expenses reflected in the financial
statements include allocations of expenses from FTDI. These allocations take
into consideration personnel, business volume or other appropriate bases and
generally include administrative expenses related to general management,
insurance, information management and other services provided to the Company by
FTDI. Interest expense shown in the financial statements reflects interest
expense associated with the Company's share of the aggregate borrowings of FTDI
for each of the periods presented. Allocations of expenses are estimates based
on management's best assessment of actual expenses incurred by the Company. It
is management's opinion that the expenses charged to the Company are
reasonable.

Effective as of June 1, 1999, expenses related to services covered by the
Intercompany Services Agreement described in note 4 were charged to the Company
pursuant to the terms

F-7
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
thereof. No interest expense was recorded for the month of June 1999 as the
Company funded its own working capital needs. At June 30, 1999, amounts owed to
FTDI pursuant to the Intercompany Services Agreement are included in the
balance sheet caption "Payable to FTDI."

The financial statements have been prepared as if the Company operated as a
stand-alone entity since its inception. The financial information included
herein may not necessarily reflect the financial position, results of
operations, or cash flows of the Company in the future or what the balance
sheets, results of operations or cash flows of the Company would have been if
it had been a separate, stand-alone, publicly-held corporation during the
periods presented.

Cash and Cash Equivalents

Cash and cash equivalents consist of deposits with banks and short-term
investments with original maturities of three months or less.

Accounts Receivable

Accounts receivable includes amounts owed from corporate customers for
purchases of floral, specialty gift products and gift certificates through the
Company's toll free number. The credit risk associated with collection of
accounts receivable is minimal due to the quality of the Company's customer
base.

Deferred Offering Expenses

Expenses associated with the Company's initial public offering described in
note 6 have been deferred at June 30, 1999. These expenses will remain deferred
until the closing of the offering, at which time they will offset the proceeds
of the offering. The net proceeds of the offering will be recorded as
additional paid-in capital. In the event that the offering is abandoned, these
deferred amounts will be reflected as expenses in the period during which the
decision to abandon the offering is made.

Distribution Agreements

FTDI, on behalf of the Company, has entered into distribution agreements
with various vendors. These distribution agreements principally relate to
Internet advertising. The costs of these agreements are being amortized over
their respective useful lives, which range from one to two years, using the
straight-line method. The Company periodically evaluates whether events and
circumstances indicate that the remaining balances of intangibles may not be
recoverable or that the remaining estimated useful lives may warrant revision.
When such factors indicate that intangibles should be evaluated for possible
impairment, the

F-8
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
Company uses an estimate of undiscounted future cash flows to measure whether
the intangibles are recoverable, and over what period. The Company has
determined that, as of June 30, 1999, there has been no impairment in the
carrying value of the distribution agreements.

Income Taxes

The Company is included in the consolidated U.S. income tax return of FTD.
The provision for income taxes of the Company has been calculated as if the
Company was a stand-alone corporation filing separate tax returns.

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes.
Cumulative taxes from the Company's inception through its incorporation on May
19, 1999 have been settled through stockholder's net deficit. For periods
subsequent to the Company's incorporation, taxes are recognized pursuant to the
terms of the amended Tax Sharing Agreement among FTDI, FTD and the Company,
which provides that the Company will pay its tax liability computed as if it
were filing a separate return. Under that agreement, FTD will refund any tax
loss benefit attributable to the Company provided that the Company would have
realized the benefit had the Company filed its own Federal income tax return.

Unaudited Pro Forma Financial Information

Pro Forma Basic and Diluted Loss Per Share

The Company computes net loss per share in accordance with the provisions of
SFAS No. 128, Earnings per Share. Under the provisions of SFAS No. 128, basic
and diluted net loss per share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding for the
period. At June 30, 1999, weighted average common shares outstanding consists
of 40,920,000 shares of common stock issued in conjunction with the
incorporation of the Company on May 19, 1999, retroactively adjusted for the
stock split described in note 7, and 1,384,614 shares of common stock issuable
upon the conversion of 90,000 shares of Series A preferred stock into Class A
common stock as described in note 6.

Pro Forma Balance Sheet

The pro forma balance sheet at June 30, 1999 assumes the conversion of the
90,000 shares of Series A preferred stock into Class A common stock as
described in note 6. The pro forma balance sheet at June 30, 1999 also has been
adjusted to reflect the stock split described in note 7.

Revenue and Cost Recognition

Order Revenues and Service Fees

The Company records revenues and costs for fulfillment and processing
services when an order is fulfilled. Generally, when a customer makes a
purchase that will be fulfilled by a

F-9
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
FTD florist, the Company receives the order, charges the customer's credit card
and transmits the order to FTDI. FTDI then transmits the order to the
fulfilling florist. The Company recognizes 100% of the order value as revenue
and recognizes associated costs for fulfillment and processing services. Orders
that are not fulfilled by an FTD florist, such as holiday gift baskets, are
fulfilled by a manufacturer or third party distributor. In addition, the
Company receives service fees for processing all orders. The service fees for
orders placed over the Internet have ranged from $4.95 to $7.99, and the
service fees for orders placed over the telephone have ranged from $8.95 to
$9.99. From time to time, discounts are offered in connection with product
promotions or holiday promotions to select customer groups. Order revenues and
service fees are reported net of discounts.

Commissions

Commissions revenue represents a fee, consistent with industry practice,
paid to the Company by FTDI for orders that are cleared through the FTD
Clearinghouse. Commissions revenue is earned pursuant to an arrangement with
FTDI that was effective as of July 1, 1998, and is recognized when the order is
fulfilled.

Unearned Revenue

Unearned revenue relates to gift certificates sold by the Company that the
Company is required to repurchase if those gift certificates are not redeemed
by July 31, 1999. Revenue is only recognized with respect to those certificates
when they are redeemed.

Marketing and Promotion Costs

Marketing and promotion costs, which principally consist of advertising
expenditures, are charged to expense as incurred and include allocations from
FTDI of $1,622,056, $1,853,945, and $3,700,342 in fiscal 1997, 1998 and 1999,
respectively. Pursuant to the Intercompany Services Agreement, effective as of
June 1, 1999, FTDI no longer charges any of its marketing and promotion costs
to the Company.

Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets, liabilities, revenues and expenses and the
disclosure of contingent assets and liabilities in connection with the
preparation of these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those estimates.

Reclassification

Certain amounts in the 1997 and 1998 financial statements have been
reclassified to conform to the 1999 presentation.

F-10
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosure About Segments of an Enterprise and Related Information, which is
effective for fiscal years beginning after December 15, 1997. SFAS No. 131
requires that public companies report certain information about operating
segments in their annual financial statements and in subsequent condensed
financial statements of interim periods issued to shareholders. This statement
also requires that public companies report certain information about their
products and services, the geographic areas in which they operate and their
major customers. The Company has determined that the adoption of this new
standard did not have an effect on the Company's disclosure for all periods
presented because the Company currently operates as one segment.

Concentration of Customer and Credit Risks

The Company's customers are comprised of consumers that utilize its Web site
or toll-free number to purchase products. Financial instruments, which
potentially subject the Company to concentrations of credit risk, principally
consist of accounts receivable. As of June 30, 1998 and 1999, there were no
significant concentrations of accounts receivable or related credit risks.

Concentration of Suppliers

The Company is dependent upon certain significant vendors to supply
products, the ability of FTDA member florists to fulfill the Company's floral
orders and the ability of third parties to fulfill the Company's specialty gift
orders. In addition, the Company utilizes the communication network of FTDI as
an important component of its operation. Although there are a limited number of
suppliers of this type of network, management believes that other suppliers
could provide a similar network on comparable terms. A change in suppliers,
however, could cause a delay in order processing and fulfillment and a possible
reduction in the quality of service, which could adversely affect operating
results.

The Company currently utilizes hardware, software and services that support
its Web site, an important component of its operation, from a third party
vendor under an operating service agreement. Although there are a limited
number of Web site service companies, management believes that other vendors
could provide the Company with these Web site services. The terms of the
current operating service agreement provide for variable payments, which are
based on the number of completed orders, and an annual term with renewal
options. The cost to the Company for these services is derived from the volume
of order transactions. A change in Web site service companies, however, could
cause a possible reduction in the quality of service, which could adversely
affect operating results.

F-11
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Fair Value of Financial Instruments

Financial instruments, including accounts receivable, accounts payable and
accrued liabilities are reflected in the financial statements at carrying or
contract value. Those values were not materially different from their fair
values.

(3) Liquidity

Operations for the current and prior years did not generate sufficient cash
flow to satisfy current obligations. FTDI has funded such obligations, and FTD
and its other subsidiaries have made a commitment to continue to provide the
Company with financing until the transaction described in note 6 is
consummated.

(4) Related Party Transactions

Transactions with FTDI

The Company engages in transactions with FTDI in the normal course of its
business. These transactions include purchases of management and administrative
services, network services, facility rental and intellectual property license
fees. These transactions are allocated as follows:

FTDI pays the Company commissions for orders that are cleared through the
FTD Clearinghouse. For these orders, FTDI also charges the Company customary
clearing fees. The Company also utilizes FTDI's credit card processing
services. FTDI charges the Company a percentage of the order value to utilize
these credit card processing services. Costs for clearing services and credit
card processing expenses are included in fulfillment and processing services,
and consisted of $2,150,481, $2,520,176 and $3,435,935 in fiscal 1997, 1998 and
1999, respectively. Effective June 1, 1999, the credit card processing fees and
clearing services are covered by the Intercompany Services Agreement.

The Company uses FTDI's trademarks in connection with the sale of goods and
services through its Web site and toll-free telephone number. The Company
expects to enter into an agreement, effective as of the consummation of the
transaction described in note 6, with FTDI that includes provisions for royalty
payments of 1% of order revenues and service fees, net of discounts, a 99-year
term and termination at FTDI's option in the event that ownership of 20% or
more of the Company is acquired by an organization not affiliated with FTDI.
Consistent with management's decision to allocate various historical costs and
expenses to the Company from FTDI, this royalty expense has been included in
general and administrative expenses. This royalty expense consisted of
$262,303, $304,233 and $454,122 in fiscal 1997, 1998, and 1999, respectively.

Administrative costs for services provided by FTDI to the Company were
determined by identifying which of FTDI's personnel performed services for the
Company. Their pay, based on the estimated number of hours of service provided,
plus benefits, was used to calculate these costs.

F-12
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The Company does not maintain separate physical facilities. It uses space of
FTDI and is charged a market rate estimate. The Company is also charged a pro-
rata share, based on square footage, of the utilities, property taxes and other
occupancy costs. Internet/telecom usage costs include an allocation of monthly
depreciation for all hardware and software based on usage by the Company, as
well as monthly rates for telecommunications expenses of the Company.

FTDI also provides the Company with various services, including technical,
human resources, accounting, administrative and legal. In consideration for
these services, FTDI has allocated a portion of its overhead costs related to
such services to the Company. The allocations were estimated using proportional
cost allocation methods.

Effective as of June 1, 1999, the Company and FTDI entered into an
Intercompany Services Agreement, which covers the administrative services,
facilities and occupancy, internet/telecom usage and other services that are
provided to the Company by FTDI. Fees under the Intercompany Services Agreement
are based on cost which is generally calculated in the same manner as described
above plus a general and administrative charge of 5%.

Operating expenses include $4,161,107, $4,410,433 and $6,693,455 in fiscal
1997, 1998, and the first eleven months of fiscal 1999, respectively, in
allocated expenses related to above-described administrative costs, facilities
and occupancy, internet/telecom usage and overhead costs related to the various
services provided by FTDI. In management's opinion, the methods to identify and
allocate costs to the Company for these services provided by FTDI are
reasonable. Operating expenses of $317,844 were incurred in June 1999 pursuant
to the terms of the Intercompany Services Agreement.

Employees of the Company are eligible for various benefits under programs
maintained by FTDI. Any related assets or liabilities are not included in the
Company's financial statements.

Transactions with Preferred Stockholders

On October 28, 1998, the Company entered into a distribution agreement with
the Buena Vista Internet Group, a holder of the Company's Series A preferred
stock, whereby the Company and the Buena Vista Internet Group agreed to create
a co-branded online flower boutique. This agreement terminates on November 30,
1999. Pursuant to terms of the agreement, the Company is required to pay the
Buena Vista Internet Group a fixed fee and a variable fee based on a percentage
of all net sales which are made through the online flower boutique. The Company
records expenses related to the agreement ratably over the contract term. As of
June 30, 1999, the Company has made payments totaling $525,000 to the Buena
Vista Internet Group.

On May 25, 1999, the Company and the Buena Vista Internet Group amended the
original agreement entered into on October 28, 1998. Under the amended
agreement, the Buena Vista Internet Group and the Company will create
additional co-branded online flower

F-13
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
boutiques. Additionally, Buena Vista will deliver a specified number of
impressions of FTD.COM promotional placements on certain Buena Vista Internet
Group sites. The amended contract term is for three years beginning on the
launch date of the first additional FTD.COM on-line flower boutique, which must
occur by July 31, 1999. Pursuant to terms of the agreement, the Company is
required to pay Buena Vista a fixed fee of $10.0 million according to a
specified payment schedule which will commence upon the launch date of the new
co-branded online flower boutiques. The fee is refundable in accordance with a
contractual calculation in the event that the Buena Vista Internet Group does
not deliver the specified number of impressions. As of June 30, 1999, the
additional on-line boutiques have not been launched, and accordingly, no
payments have been made to the Buena Vista Internet Group under the amended
contract as of June 30, 1999.

On April 13, 1999, the Company entered into a distribution agreement with
Infoseek, an affiliate of the Buena Vista Internet Group, pursuant to which the
Company will receive advertising space on the GO Network and certain portal
links to the Company's web site. Additionally, Infoseek will deliver a
specified number of impressions of FTD.COM promotional placements on the GO
Network. This agreement is effective for two years. Pursuant to terms of the
agreement, the Company is required to pay Infoseek a fixed fee of $5.4 million
and a variable fee based upon a percentage of net revenues, generated from
sales through the GO Network. The fee is refundable in accordance with a
contractual calculation in the event that Infoseek does not deliver the
specified number of impressions. The Company records expense related to the
agreement ratably over the contract term. Included in the caption "Distribution
Agreements" at June 30, 1999 is $254,196 related to this agreement.

(5) Income Taxes

At June 30, 1999, the Company had net operating loss carryforwards for
Federal tax purposes of $774,203 which are available to offset future Federal
taxable income, if any, through 2019.

Income tax benefit for the years ended June 30, 1997, 1998 and 1999 consists
of:

<TABLE>
<CAPTION>
Current Deferred Total
---------- -------- ----------
<S> <C> <C> <C>
Year ended June 30, 1997:
U.S. Federal............................ $1,929,611 $ 0 $1,929,611
State and local......................... 459,261 0 459,261
---------- --- ----------
$2,388,872 $ 0 $2,388,872
========== === ==========
Year ended June 30, 1998:
U.S. Federal............................ 2,097,447 0 2,097,447
State and local......................... 499,207 0 499,207
---------- --- ----------
$2,596,654 $ 0 $2,596,654
========== === ==========
Year ended June 30, 1999:
U.S. Federal............................ 2,467,438 0 2,467,438
State and local......................... 587,267 0 587,267
---------- --- ----------
$3,054,705 $ 0 $3,054,705
========== === ==========
</TABLE>

F-14
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Income tax benefit differed from the amounts computed by applying the U.S.
Federal income tax rate of 35% to losses before income tax expense as a result
of the net-of-tax effect of state and local income taxes and the change in the
valuation allowance.

At June 30, 1999, cumulative taxes since the acquisition of FTDA by FTD
through the Company's incorporation on May 19, 1999 of $10,700,523,
representing $10,122,744 of tax loss benefits and $577,779 of deferred taxes
associated with the distribution agreement, have been settled through
stockholder's net deficit. For periods subsequent to the Company's
incorporation, taxes are recognized pursuant to the terms of the amended Tax
Sharing Agreement among FTDI, FTD and the Company, which provides that the
Company will pay its tax liability computed as if it were filing a separate
return. Under that agreement, FTD will refund any tax loss benefit attributable
to the Company provided that the Company would have realized the benefit had
the Company filed its own Federal income tax return. At June 30, 1999, there
were no tax-related amounts due to or from FTD.

The following represent the components of the deferred tax asset:

<TABLE>
<CAPTION>
June 30,
1999
-------------
<S> <C> <C>
Deferred tax assets:
U.S. net operating loss carryforward...................... $309,681
Distribution agreements................................... 36,111
--------
Total gross deferred income tax assets...................... 345,792
Less valuation allowance.................................... (345,792)
--------
Net deferred tax assets..................................... $ --
========
</TABLE>

The net change in the total valuation allowance for the year ended June 30,
1999 was an increase of $345,792. In assessing the realizability of deferred
tax assets, the Company considers whether it is more likely than not that some
or all of these deferred tax assets will be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable
income during the period in which these temporary differences become
deductible. This assessment was performed considering projected future taxable
income. The valuation allowance of $345,792 is maintained on the deferred tax
assets that the Company has not determined to be more likely than not
realizable as of June 30, 1999. This valuation allowance will be reviewed on a
regular basis and adjustments made as appropriate.

(6) Equity

Initial Capitalization

On May 19, 1999, the Company was incorporated and was capitalized through
the authorization of 250,000,000 shares of Class A common stock and 100,000,000
shares of Class B common stock and the issuance of 3,410,000 shares of Class B
common stock to FTDI. Holders of Class A common stock are entitled to one vote
per share and holders of Class B common stock are entitled to ten votes per
share. The Company has filed a

F-15
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
registration statement and amendments thereto with the Securities and Exchange
Commission to offer shares of Class A common stock to the public. In addition,
in connection with the Company's incorporation, 5,000,000 shares of preferred
stock were authorized.

FTDI is a party to a credit agreement that imposes various restrictions on
FTDI and its subsidiaries, including restrictions that limit FTDI's ability to
incur additional debt, pay dividends or make other payments or investments,
consummate asset sales, incur liens, merge, consolidate, or dispose of
substantial assets, among other restrictions. In addition, substantially all of
the assets of FTDI and its subsidiaries are pledged as security under the
credit agreement. In connection with the capitalization of the Company, the
credit agreement has been amended to exclude the Company from these terms and
restrictions in exchange for FTDI's pledge of its shares in the Company and
other monetary consideration.

Series A Cumulative Redeemable Convertible Preferred Stock

On May 19, 1999, the Company designated 90,000 shares of preferred stock as
Series A 8% Cumulative Redeemable Convertible Preferred Stock. On May 20, 1999,
30,000 shares of this Series A preferred stock were issued and sold to an
investor for consideration of $3,000,000. On May 25, 1999, 60,000 shares of
this Series A preferred stock were issued and sold to an investor for
consideration of $6,000,000.

These shares of Series A preferred stock have a liquidation preference of
$100 per share and accrue dividends at the annual rate of 8% of the liquidation
preference. Accrued dividends are payable at the discretion of the Company's
board of directors and are manditorily payable upon liquidation or redemption.
At June 30, 1999 accrued and unpaid dividends were $74,301, or $.83 per share.

Each share of Series A preferred stock will convert into a number of shares
of Class A common stock in accordance with the conversion rate described in the
Company's certificate of incorporation, as amended. The Series A preferred
stock will automatically convert upon the closing of the public offering
contemplated by the registration statement. Conversion at the option of the
holder can occur at any time after March 20, 2000 in the event that a
qualifying public offering (as defined in the certificate of amendment to the
certificate of incorporation) is not consummated prior to that date.

In the event the public offering is not consummated prior to February 20,
2000, the Series A preferred stock will be redeemable at the option of the
Company or the holders thereof at 100% of the liquidation preference plus
accrued and unpaid dividends.

Holders of Series A preferred stock are entitled to one vote for each share
of Class A common stock into which the Series A preferred stock is convertible
at the conversion rate

F-16
<PAGE>

FTD.COM INC.

NOTES TO FINANCIAL STATEMENTS--(Concluded)
then in effect. In addition, if the Company fails to make the payments required
in connection with the holders' exercise of their optional redemption rights,
the holders of the Series A preferred stock have the right to designate one
director of the Company.

(7) Subsequent Events (Unaudited)

On July 30, 1999, the Company's Board of Directors approved a 12-for-1 stock
split of the Company's outstanding Class B common stock. The stock split has
been retroactively applied to the fiscal 1999 financial statement presentation.

The 1999 Equity Incentive Plan (the "Plan") was adopted by the Board of
Directors of the Company on July 31, 1999. Under the Plan, options to purchase
shares of the Company's common stock, stock appreciation rights, restricted
shares, deferred shares and stock payments may be granted to directors,
officers, consultants and other employees of FTD.COM, FTDI or FTD Corporation
and their subsidiaries. An aggregate of 4,500,000 shares of Class A common
stock are available for grant under the Plan. Options are required to be priced
at the market value per share on the date of grant. No options have been issued
under this Plan.

Upon the closing of the public offering of Class A common stock described in
note 6, the Company and FTDI expect to enter into certain agreements governing
various interim and ongoing relationships, including a commission agreement,
indemnification agreement and trademark license agreement. The terms of those
agreements generally provide for services to be rendered by FTDI similar to
those described in note 4.

The Company and FTDI also intend to enter into a service agreement under
which the Company will provide FTDA member florists with listings in an
Internet directory and the ability to operate Web sites within a directory for
a fee. The agreement will have a one-year term.

F-17
<PAGE>

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Prospective investors may rely only on the information contained in this
prospectus. Neither FTD.COM nor any underwriter has authorized anyone to
provide prospective investors with different or additional information. This
prospectus is not an offer to sell nor is it seeking an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted. The
information contained in this prospectus is correct only as of the date of this
prospectus, regardless of the time of the delivery of this prospectus or any
sale of these securities.

No action is being taken in any jurisdiction outside the United States to
permit a public offering of the common stock or possession or distribution of
this prospectus in any of these jurisdictions. Persons who come into possession
of this prospectus in jurisdictions outside the United States are required to
inform themselves about and to observe the restrictions of that jurisdiction
related to this offering and the distribution of this prospectus.

-----------------------
TABLE OF CONTENTS
-----------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 9
Use of Proceeds........................................................... 29
Dividend Policy........................................................... 29
Capitalization............................................................ 30
Dilution.................................................................. 31
Selected Financial Data................................................... 32
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 34
Business.................................................................. 44
Management................................................................ 53
Principal Stockholders.................................................... 68
Transactions with Management and Others................................... 70
Description of Capital Stock.............................................. 76
Shares Eligible for Future Sale........................................... 82
Underwriting.............................................................. 84
Legal Matters............................................................. 88
Experts................................................................... 88
Where You Can Find More Information....................................... 89
Index to Financial Statements............................................. F-1
</TABLE>

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

Dealer Prospectus Delivery Obligation:

Until October 23, 1999 (25 days after the date of this prospectus), all dealers
that buy, sell or trade these shares of Class A common stock, whether or not
participating in this offering, may be required to deliver a prospectus. This
is in addition to the dealers' obligation to deliver a prospectus when acting
as underwriters and with respect to their unsold allotments or subscriptions.

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4,500,000 Shares

Class A Common Stock

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

PROSPECTUS

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

Bear, Stearns & Co. Inc.

Thomas Weisel
Partners LLC

Volpe Brown Whelan
& Company

E*OFFERING

September 28, 1999

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