JUPITER COMMUNICATIONS INC, 424B1, 1999-10-08

JUPITER COMMUNICATIONS INC
424B1, 1999-10-08
BUSINESS SERVICES, NEC

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<PAGE> 1
Filed pursuant to Rule 424(b)(1)
Registration No. 333-84175

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PROSPECTUS
OCTOBER 8, 1999

[JUPITER COMMUNICATIONS LOGO]

[ONLINE INTELLIGENCE LOGO]

3,125,000 SHARES OF COMMON STOCK

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JUPITER COMMUNICATIONS, INC.:

- - We provide research on Internet commerce.

SYMBOL & MARKET:

- - JPTR/Nasdaq National Market
THE OFFERING:

- - We are offering 3,125,000 shares of our common stock.

- - The underwriters have an option to purchase an additional 133,750 shares from
us and 335,000 shares from existing shareholders to cover over-allotments.

- - This is our initial public offering, and no public market currently exists for
our shares.

- - Closing: October 14, 1999.

<TABLE>
<CAPTION>
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PER SHARE TOTAL
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<S> <C> <C>
Public offering price: $21.00 $65,625,000
Underwriting fees: 1.47 4,593,750
Proceeds to Jupiter Communications: 19.53 61,031,250
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</TABLE>

THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 8.

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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. NOR HAVE THEY MADE, NOR WILL THEY MAKE, ANY
DETERMINATION AS TO WHETHER ANYONE SHOULD BUY THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

DONALDSON, LUFKIN & JENRETTE
DEUTSCHE BANC ALEX. BROWN
THOMAS WEISEL PARTNERS LLC
DLJdirect Inc.
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary..................... 3
Risk Factors........................... 8
Forward-Looking Statements............. 16
Use of Proceeds........................ 17
Dividend Policy........................ 17
Capitalization......................... 18
Dilution............................... 19
Selected Financial and Operating
Data................................. 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 23
Business............................... 31
</TABLE>

<TABLE>
<CAPTION>
PAGE
<S> <C>
Management............................. 45
Transactions With Directors and
Principal Stockholders............... 53
Principal Stockholders................. 54
Description of Capital Stock........... 56
Shares Eligible for Future Sale........ 58
Underwriting........................... 60
Legal Matters.......................... 63
Experts................................ 63
Where You Can Find Additional
Information.......................... 63
Index to Financial Statements.......... F-1
</TABLE>
<PAGE> 3

PROSPECTUS SUMMARY

The information below is only a summary of more detailed information
included in other sections of this prospectus. This summary may not contain all
the information that is important to you or that you should consider before
buying shares in the offering. The other information is important, so please
read this entire prospectus carefully. Information contained on our Web site is
not part of this prospectus.

JUPITER COMMUNICATIONS, INC.

OUR BUSINESS

We provide research on Internet commerce. Senior executives at client
companies utilize our research to make informed business decisions in a complex
and rapidly changing Internet economy. Our research, which is focused solely on
the Internet economy, provides our clients with comprehensive views of industry
trends, forecasts and best practices. Our analysis, supported by proprietary
data, emphasizes specific, actionable findings. Our research services are
provided primarily through our continuous subscription product, Strategic
Planning Services, which we call SPS. SPS is a combination of proprietary
written analysis, supporting data and access to our analysts. We also produce a
wide range of conferences which offer senior executives the opportunity to hear
first-hand the insights of our analysts and the leading decision makers in the
Internet and technology industries.

OUR OPERATING AND FINANCIAL RESULTS

As of June 30, 1999, we had 654 SPS contracts, an increase from 421 on
December 31, 1998 and 145 on December 31, 1997. Our revenues have increased from
$8.5 million in 1997 to $14.8 million in 1998, and from $5.9 million in the six
months ended June 30, 1998 to $14.4 million in the six months ended June 30,
1999. We have a limited operating history, however, and we have incurred net
losses since our formation. As of June 30, 1999, we had an accumulated deficit
of $5.8 million. We expect to incur significant expenditures in the future
associated with our domestic and international expansion strategies. As a
result, we will need to achieve significant revenue increases to achieve and
maintain profitability.

MARKET OPPORTUNITY

We believe that the growth of the Internet, and the growth of Internet
commerce in particular, will continue to expand rapidly for the foreseeable
future both in the United States and abroad. A recent report by University of
Texas' Center for Research in Electronic Commerce estimated that the Internet
economy generated approximately $300 billion in U.S. revenue and was responsible
for 1.2 million jobs as of 1998. A recent study by the Organization for Economic
Cooperation and Development predicted that worldwide Internet commerce may grow
to $1 trillion by 2005. In addition, billion dollar markets are emerging on the
Internet for many different industry sectors. Specifically, for the U.S. we
project that by 2003 the online travel industry will grow to approximately $17
billion, online advertising will grow to approximately $12 billion, overall
consumer online shopping will grow to approximately $43 billion and that total
assets held in online brokerage accounts will grow to approximately $3 trillion.

The rapid growth of Internet commerce and the related increase in
innovative products, services and technologies have made it difficult for
companies to understand and evaluate the steps they should take to engage in and
expand their Internet commerce activities, promote their online businesses and
compete effectively. Thus, demand is growing for timely and credible research to
assist companies in identifying revenue models and success criteria, analyzing
consumer adoption trends, developing effective sales and marketing strategies,
assessing market trends and analyzing the competitive landscape. Demand for
research, analysis and advice is also expected to increase as the growth in
Internet commerce and consumer use of new technologies impacts more industries
and expands into other geographic areas.

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OUR STRATEGY

Our objective is to be the premier global research company focusing on
Internet commerce. Key elements of our business strategy include the following:

- Providing innovative research on Internet commerce;

- Increasing our client base in the United States and abroad;

- Increasing the level of sales to existing clients;

- Pursuing international opportunities;

- Continuing to strengthen the Jupiter brand;

- Increasing the number of conferences that we produce; and

- Enhancing our Web delivery platform.

OUR HISTORY

Our business was formed on December 1, 1994 with the creation of Jupiter
Communications, LLC, a New York limited liability company. Upon the closing of
this offering, Jupiter Communications, LLC will change its structure from a
limited liability company to a "C" corporation. This change will be made by
merging Jupiter Communications, LLC with and into Jupiter Communications, Inc.,
a Delaware corporation. Membership units in Jupiter Communications, LLC will be
exchanged in the merger for shares of common stock of Jupiter Communications,
Inc.

Our principal executive offices are located at 627 Broadway, New York, New
York 10012. Our telephone number is (212) 780-6060. Our Web site is www.jup.com.
References in this prospectus to "Jupiter," "Jupiter Communications," "we,"
"our" and "us" refer to Jupiter Communications, Inc. and its predecessor
entities.

We have applied for or received trademark and/or service mark registration
for, among others, the marks "Jupiter," "Jupiter Communications," "SPS" and
"Internet Business Report." Any other trademark, trade name or service mark of
any other company appearing in this prospectus belongs to its holder.

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

Unless otherwise indicated, all information in this prospectus:

- reflects the merger of Jupiter Communications, LLC with and into Jupiter
Communications, Inc., which will be completed upon the closing of this
offering; and

- assumes no exercise of the underwriters' over-allotment option.

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THE OFFERING

Common stock offered by Jupiter.... 3,125,000 shares

Common stock to be outstanding
after the offering................. 14,327,327 shares

Use of proceeds.................... We plan to use the proceeds from this
offering for product development,
international expansion, research, sales
and marketing expansion, leasehold and
technology improvements, potential
acquisitions and general corporate
purposes.

Nasdaq National Market symbol...... JPTR

The outstanding share information is based on our shares outstanding as of
October 6, 1999. This information excludes 2,711,275 shares of common stock
issuable upon the exercise of stock options outstanding under our option plan as
of October 6, 1999, with a weighted average exercise price of $3.98 per share.
In addition, this information excludes 7,500 shares of common stock issuable
upon the exercise of non-plan options, with a weighted average exercise price of
$3.00 per share.

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SUMMARY FINANCIAL AND OPERATING DATA

The following tables summarize financial and operating data for our
business. The summary financial and operating data set forth below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our financial statements and related
notes included elsewhere in this prospectus.

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<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------- --------------------
1995 1996 1997 1998 1998 1999
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Strategic Planning Services.................... $ 237 $ 566 $ 1,850 $ 6,183 $ 1,995 $ 8,166
Conferences.................................... 2,024 2,686 3,426 4,890 1,979 4,553
Other.......................................... 1,439 3,000 3,246 3,729 1,939 1,681
------ ------ ------- ------- ------- -------
Total revenues............................... 3,700 6,252 8,522 14,802 5,913 14,400
Cost of services and fulfillment................. 2,893 4,687 6,259 9,676 4,282 6,854
------ ------ ------- ------- ------- -------
Gross profit................................... 807 1,565 2,263 5,126 1,631 7,546
Other operating expenses:
Sales and marketing............................ 254 514 1,558 3,173 1,313 4,008
General and administrative..................... 1,025 1,664 2,955 4,090 1,918 3,668
------ ------ ------- ------- ------- -------
Total other operating expenses............... 1,279 2,178 4,513 7,263 3,231 7,676
------ ------ ------- ------- ------- -------
Net loss......................................... $ (472) $ (613) $(2,250) $(2,137) $(1,600) $ (130)
====== ====== ======= ======= ======= =======
Pro forma basic and diluted net loss per common
share(1)....................................... $ (0.21) $ (0.16) $ (0.01)
======= ======= =======
Pro forma weighted average common shares
outstanding(1)................................. 10,318 10,318 10,455
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF JUNE 30,
----------------------------------- --------------------
1995 1996 1997 1998 1998 1999
<S> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Number of SPS contracts.......................... 13 66 145 421 219 654
Total contract value (in thousands).............. $ 315 $ 923 $ 2,509 $11,666 $ 5,089 $22,138
SPS deferred revenue (in thousands).............. $ 78 $ 313 $ 614 $ 5,639 $ 2,272 $11,486
Number of employees.............................. 18 61 88 142 117 194
Capital expenditures (in thousands).............. $ 99 $ 199 $ 207 $ 838 $ 258 $ 2,263
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 1,554 $ 1,554 $61,485
Working capital (4)......................................... (4,972) (4,972) 54,959
Total assets................................................ 15,051 15,051 74,983
Members'/stockholders' equity (deficiency).................. (1,884) (1,884) 58,047
</TABLE>

(Footnotes
on following page)

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(1) Pro forma basic and diluted net loss per common share is computed by
dividing net loss by the pro forma weighted average number of shares of
common stock. Pro forma weighted average number of shares of common stock
gives effect to our reorganization from an LLC to a "C" corporation as
though the reorganization had occurred as of January 1, 1998. Pro forma
weighted average shares do not include any common stock equivalents because
inclusion of common stock equivalents would have been anti-dilutive.

(2) The pro forma balance sheet data give effect to our reorganization from an
LLC to a "C" corporation as though the reorganization had occurred as of
June 30, 1999.

(3) Pro forma as adjusted amounts reflect the sale of 3,125,000 shares of common
stock in this offering, assuming an initial public offering price of $21.00
per share, after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us.

(4) Our working capital balances are typically negative because of the timing of
cash collections from clients. SPS contracts are typically annual and paid
in advance. Accordingly, a substantial portion of our billings is initially
recorded as deferred revenue and amortized into revenue during the term of
the contract to which such billings relate.

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RISK FACTORS

Any investment in our common stock involves a high degree of risk. You
should consider carefully the following information about these risks, together
with the other information contained in this prospectus, before you decide to
buy our common stock. If any of the following events actually occurs, our
business and financial results may suffer. In this case, the market price of our
common stock could decline, and you could lose all or part of your investment in
our common stock.

IF WE ARE UNABLE TO ATTRACT AND RETAIN EXPERIENCED PERSONNEL, THE QUALITY OF OUR
RESEARCH PRODUCTS AND SERVICES MAY DECLINE, AND OUR ABILITY TO SELL OUR PRODUCTS
AND SERVICES MAY BE HARMED.

Our success depends in large part on the continued contributions of our
senior management team, research analysts and sales representatives. As of June
30, 1999, we had 38 research analysts and 40 sales representatives. We expect to
increase our hiring of research analysts and sales representatives significantly
in the next few years. We face intense competition in hiring and retaining
personnel from, among others, technology and Internet companies, market research
and consulting firms, print and electronic publishing companies and financial
services companies. Many of these firms have substantially greater financial
resources than we do to attract and retain qualified personnel from a limited
pool of attractive candidates. In addition, some people that we may attempt to
hire could be subject to non-competition agreements that could impede our
recruitment efforts. To the extent that we are unable to retain our existing
management, research analysts or sales representatives or that we are unable to
increase the number of research analysts and sales representatives that we hire,
our business and financial results may suffer.

BECAUSE WE HAVE RECENTLY INTRODUCED MANY OF OUR PRODUCTS AND SERVICES, YOU HAVE
LIMITED INFORMATION UPON WHICH YOU CAN EVALUATE OUR BUSINESS.

We have recently launched many of the practices and market modules that we
offer. As a result, we have a limited operating history upon which you can
evaluate our business and the products and services that we offer. Due to our
limited operating history, it is difficult or impossible for us to predict
future results of operations. Moreover, due to our limited operating history,
any evaluation of our business and prospects must be made in light of the risks
and uncertainties frequently encountered by companies in new and rapidly
evolving markets such as ours. Many of these risks and uncertainties are
discussed elsewhere in this section. We cannot assure you that we will be
successful in addressing these risks and uncertainties. Our failure to do so
could cause our business and financial results to suffer.

RAPID GROWTH IN OUR BUSINESS COULD STRAIN OUR MANAGERIAL, OPERATIONAL AND
FINANCIAL RESOURCES.

The anticipated future growth of our business will place a significant
strain on our managerial, operational and financial resources. We had 61
employees at December 31, 1996, 88 employees at December 31, 1997, 142 employees
at December 31, 1998 and 194 employees at June 30, 1999. We anticipate hiring a
substantial number of research analysts, sales representatives and other
employees in the foreseeable future to expand our product and service offerings
and to expand our sales of such products and services. We may also decide to
open additional offices in the United States and abroad. As we expand, we expect
that we will need to continually improve our financial and managerial controls,
billing systems, reporting systems and procedures. In addition, as we expand we
will also need to increase our employee training efforts. If we are unable to
manage our growth effectively, our business and financial results may suffer.

WE HAVE A HISTORY OF OPERATING LOSSES WHICH MAY CONTINUE FOR THE FORESEEABLE
FUTURE.

We have incurred substantial costs to create, market and distribute our
products and services, to retain qualified personnel, including management,
research analysts and sales representatives, and to grow our business. As a
result, we incurred net losses of approximately $613,000 in 1996, $2.3 million
in 1997, $2.1 million in 1998 and $130,000 for the six month period ended June
30, 1999. As a percentage of total
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revenues, our net losses equaled 9.8% in 1996, 26.4% in 1997, 14.4% in 1998 and
0.9% for the six month period ended June 30, 1999. As of June 30, 1999, our
accumulated deficit totaled $5.8 million.

We intend to invest heavily in new products and services, leasehold and
technology improvements, new research and sales personnel and international
expansion. As a result, we will need to achieve significant revenue increases to
achieve and maintain profitability. The number of clients for our research
products and services, as well as the number of attendees to our conferences,
may grow more slowly than we anticipate or may even decrease in the future. In
addition, even if we become profitable, we may not sustain or increase our
profits on a quarterly or annual basis in the future.

OUR OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS, WHICH MAY CAUSE
VOLATILITY OR A DECLINE IN THE PRICE OF OUR STOCK.

Our revenues, expenses and operating results have varied in the past and
may fluctuate significantly in the future due to a variety of factors that are
outside of our control. These factors include, among others:

- the level and timing of new business and renewals of subscriptions to our
research products and services;

- changes in the market demand for research products or analysis regarding
Internet commerce;

- the levels of attendance at our Internet conferences; and

- the extent to which we experience increased competition.

The above factors could affect our quarterly as well as long-term financial
results. In particular, changes in the demand for our products, competition or
the levels of attendance at our Internet conferences each could have both
short-term and long-term adverse effects on our business.

Our revenues, expenses and operating results may also fluctuate
significantly in the future as a result of business decisions made by us. These
decisions include, among others:

- the timing of the introduction and marketing of our new research products
and services;

- the timing of our conferences;

- changes in operating expenses; and

- the timing of acquisitions and the impact on our operations and our
operating results.

The sales of our research products and services and the success of our
conferences are difficult to forecast accurately. If our revenues fall short of
expectations, we may not be able to adjust our fixed expenses, which represented
approximately 45% of our total expenses for the six months ended June 30, 1999,
to compensate for this shortfall on a timely basis. Further, as a strategy for
remaining competitive, we may have to make pricing, service or marketing
decisions that could cause our business and financial results to suffer.

Due to all the foregoing factors and other risks discussed in this section,
you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance. It is possible that in some
future periods our results of operations may be below the expectations of
investors. In this event, the price of our common stock is likely to fall.

BECAUSE OUR REVENUES ARE SUBSTANTIALLY DEPENDENT ON THE SALE OF OUR STRATEGIC
PLANNING SERVICES, OUR BUSINESS MAY SUFFER IF WE HAVE DIFFICULTY IN ACQUIRING OR
RETAINING SUBSCRIBERS TO THIS PROGRAM.

Our business and financial results are dependent on our ability to attract
and retain clients for our Strategic Planning Services. In addition, our
business model assumes that we will be able to increase the level of SPS sales
over time to our existing clients. Revenues from subscriptions to SPS, as a
percentage of our total revenues, were 41.8% in 1998 and 56.7% in the six months
ended June 30, 1999.
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<PAGE> 10

Our ability to acquire and retain SPS clients and our ability to increase
sales to existing clients is subject to a number of risks, including the
following:

- We may be unsuccessful in delivering high-quality and timely research
analysis to our clients;

- We may be unsuccessful in anticipating and understanding market trends
and the changing needs of our clients;

- The use of the Internet as a medium for commerce, both in the United
States and abroad, may not continue to grow as we currently anticipate;

- Our marketing programs designed to attract and retain clients may not
succeed; and

- We may not be able to hire and retain a sufficiently large number of
research and sales personnel in a very competitive job market.

If we are unable to retain existing clients, increase sales to existing
clients or attract a significant number of new SPS clients, our business and
financial results may suffer.

OUR BUSINESS MAY SUFFER IF WE PROVE UNABLE TO ANTICIPATE MARKET TRENDS OR IF WE
FAIL TO PROVIDE INFORMATION THAT IS USEFUL TO OUR CLIENTS.

Our success depends in large part on our ability to anticipate, research
and analyze rapidly changing technologies and industries and on our ability to
provide this information in a timely and cost-effective manner. If we are unable
to continue to provide credible and reliable information that is useful to
companies engaged in online commerce, our business and financial results may
suffer.

Our research products and services, as well as our conferences, focus on
Internet commerce. Internet commerce is relatively new and is undergoing
frequent and dramatic changes, including the introduction of new products and
the obsolescence of others, shifting business strategies and revenue models, the
formation of numerous new companies and high rates of growth. Because of these
rapid and continuous changes in the Internet commerce markets, we face
significant challenges in providing timely analysis and advice. Many of the
industries and areas on which we focus are relatively new, and it is very
difficult to provide predictions and projections as to the future marketplace,
revenue models and competitive factors. In addition, many companies have not
embraced the use of the Internet as a medium for commerce and are unclear as to
how to allocate corporate resources effectively. As a result, some companies may
conclude that our research products are not useful to their businesses. Further,
the need to continually update our research requires the commitment of
substantial financial and personnel resources.

If our predictions or projections prove to be wrong, or if we are unable to
continually update our information, our reputation may suffer and demand for our
research products and services may decline. In addition, if companies do not
agree with our analysis of market trends and the areas on which we choose to
focus our efforts, our business and financial results may suffer.

WE FACE INTENSE COMPETITION IN PROVIDING OUR RESEARCH PRODUCTS AND SERVICES, AS
WELL AS IN PRODUCING CONFERENCES, AND SUCH COMPETITION IS LIKELY TO INCREASE IN
THE FUTURE.

We may not be able to compete successfully against current or future
competitors, and the competitive pressures that we face may cause our business
and financial results to suffer. Our principal current competitor is Forrester
Research, Inc. Recently Gartner Group, Inc. announced its intention to compete
directly in providing research products related to Internet commerce. A number
of other companies compete with us in providing research and analysis related to
a specific industry or geographic area. In addition, our competitors include
information technology research firms, business consulting and accounting firms,
electronic and print publishing companies and equity analysts employed by
financial services companies.

Our ability to compete both in the United States and abroad depends upon
many factors, many of which are outside of our control. We believe that the
primary competitive factors determining success in
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our markets include the quality and timeliness of our research and analysis, our
ability to offer products and services that meet the changing needs of our
customers, the prices we charge for our various research products and general
economic conditions.

Our current and potential competitors include many companies that have
substantially greater financial, information gathering and marketing resources
than we have. For example, Gartner Group, Forrester Research and META Group,
Inc. each had higher revenues than we did during 1998, and each currently has
greater marketing resources than we have. This may allow them to devote greater
resources than we can to the promotion of their brand and to the development and
sale of their products and services. We cannot assure you that we will be able
to compete successfully against current and future competitors.

WE EXPECT GARTNER GROUP, OUR LARGEST SHAREHOLDER, WHICH HAS BEEN PROVIDED WITH
CONFIDENTIAL AND PROPRIETARY INFORMATION, TO COMPETE DIRECTLY WITH US AND
POSSIBLY TO USE ITS VOTING POWER IN A WAY THAT WOULD NEGATIVELY AFFECT OUR
ABILITY TO OPERATE OUR BUSINESS.

Gartner Group, which historically has focused on information technology
research, has recently announced its intention to begin offering broader
research products and services related to Internet commerce. These products and
services are likely to compete directly with the products and services that we
offer. Under the operating agreement governing Jupiter Communications, LLC,
Gartner Group has the right to appoint two of the five representatives of the
board of members and has the right to consent to various actions taken by us.
Following the closing of this offering, Gartner Group will not retain the right
to appoint a member of our board of directors or any other specific rights,
other than piggyback registration rights and limited indemnification rights.
Following this offering, Gartner Group will be our largest shareholder, owning
approximately 28.1% of our outstanding common stock. However, for a period of
one year following the closing of this offering, Gartner Group and its
affiliates may not acquire, directly or indirectly, any additional common stock,
if the acquisition would cause Gartner Group and its affiliates to own more than
32% of our common stock.

Although Gartner Group has not been actively involved in our day-to-day
operations since it first invested in our company in October 1997, it has been
provided with our confidential and proprietary data during most of this period.
As a result, Gartner Group could use our confidential and proprietary data in
developing and marketing competing products and services. Gartner Group could
also use its voting power in a way that would negatively affect our ability to
operate our business or have the effect of delaying, deterring or preventing a
change in control, or impeding a merger, consolidation, takeover or other
business combination. Gartner Group has substantially greater financial
resources than we do, which may allow it to devote greater resources than we can
to the development and sale of their Internet commerce research.

IF INTERNET USAGE DOES NOT CONTINUE TO GROW, OUR BUSINESS AND FINANCIAL RESULTS
MAY SUFFER.

Our future success depends on continued growth in the use of the Internet.
We cannot be certain that Internet usage will continue to grow at or above its
historical rates. Internet usage may be inhibited for a number of reasons,
including:

- inadequate network infrastructure;

- inconsistent quality of service; and

- lack of availability of cost-effective, high-speed service.

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OUR BUSINESS MAY SUFFER IF THE USE OF THE INTERNET AS A COMMERCIAL MARKETPLACE
DOES NOT CONTINUE TO GROW.

Because our company focuses solely on Internet commerce, our future success
depends on the continued development and acceptance of the Internet as a viable
commercial medium. However, the continued development and acceptance of the
Internet as a widely-used medium for commerce and communication is uncertain. A
number of factors could prevent such continued development and acceptance,
including the following:

- unwillingness of companies and consumers to shift their purchasing from
traditional vendors to online vendors;

- security and authentication concerns with respect to the transmission of
confidential information, such as credit card numbers, over the Internet;

- privacy concerns, including those related to the ability of Web sites to
gather user information without the user's knowledge or consent; and

- significant uncertainty about the demand and market acceptance for
Internet advertising and the lack of standards to measure the
effectiveness of Internet advertising.

LAWS AND REGULATIONS COULD SLOW THE GROWTH OF THE INTERNET AND NEGATIVELY AFFECT
THE ACCEPTANCE OF THE INTERNET AS A COMMERCIAL MEDIUM.

Laws and regulations regarding Internet companies and commercial
transactions conducted over the Internet could slow the growth in use of the
Internet generally and decrease the acceptance of the Internet as a commercial
medium. For example, as the popularity and use of the Internet increases, it is
possible that a number of laws and regulations may be adopted in the United
States or in other countries covering issues such as taxation, intellectual
property matters, advertising and other areas. We cannot predict the impact, if
any, that future laws or regulations may have on our business.

WE COULD FACE ADDITIONAL RISKS AND CHALLENGES IF WE CONTINUE TO EXPAND
INTERNATIONALLY.

Our business plan calls for increased international growth. Expansion into
new geographic territories requires considerable management and financial
resources and may negatively impact our near-term results of operations.

Our current international operations, as well as any future international
operations, are subject to numerous challenges and risks, including, but not
limited to, the following:

- political and economic conditions in various jurisdictions;

- fluctuations in currency exchange rates;

- tariffs and other trade barriers;

- adverse tax consequences; and

- difficulties in protecting intellectual property rights in international
jurisdictions.

We cannot assure you that one or more of these factors would not harm any
current or future international operations.

OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO MAINTAIN OR ENHANCE AWARENESS OF THE
JUPITER BRAND OR IF WE INCUR EXCESSIVE EXPENSES ATTEMPTING TO PROMOTE THE
JUPITER BRAND.

We expect to use a portion of the proceeds of this offering to expand our
marketing activities to promote and strengthen the Jupiter brand. Promoting and
strengthening the Jupiter brand is critical to our efforts to attract and retain
clients for our research products, as well as to increase attendance at our
conferences. We believe that the importance of brand recognition will likely
increase due to the increasing
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number of competitors entering our markets. In order to promote the Jupiter
brand, in response to competitive pressures or otherwise, we may find it
necessary to increase our marketing budget, hire additional marketing and public
relations personnel or otherwise increase our financial commitment to creating
and maintaining brand loyalty among our clients. If we fail to effectively
promote and maintain the Jupiter brand, or incur excessive expenses attempting
to promote and maintain the Jupiter brand, our business and financial results
may suffer.

WE FACE POTENTIAL LIABILITY FOR INFORMATION THAT WE PUBLISH, PROVIDE AT
CONFERENCES OR DISSEMINATE THROUGH OUR RESEARCH ANALYSTS.

As a publisher and distributor of original research, market projections and
trend analyses, we face potential liability based on a variety of theories,
including defamation, negligence, copyright or trademark infringement or other
legal theories based on the nature, publication or distribution of this
information. Such claims, whether brought in the United States or abroad, would
likely divert management time and attention and result in significant cost to
investigate and defend, regardless of the merit of any such claims. The filing
of any such claims may also damage our reputation as a high-quality provider of
unbiased, timely analysis and result in client cancellations or overall
decreased demand for our products and services. In addition, if we become
subject to these types of claims and are not successful in our defense, we may
be forced to pay substantial damages. Our insurance may not adequately protect
us against these claims.

DISRUPTION OF OUR WEB SITE DUE TO SECURITY BREACHES AND SYSTEM FAILURES COULD
HARM OUR BUSINESS AND RESULT IN CLIENT CANCELLATIONS.

Our infrastructure and the infrastructure of our service providers are
vulnerable to security breaches, computer viruses or similar disruptive problems
and system failures. These systems are also subject to telecommunications
failures, power loss and various other events. Any of these events, whether
intentional or accidental, could lead to interruptions or disruptions in the
general operation of our business. In addition, any of these events could also
lead to interruptions, delays or cessation of operation of our Web site, which
provides access to and distribution of many of our research products and
services. For example, many of our SPS clients pay us so that their employees
can read our research solely on our Web site. As a result, providing unimpeded
access to our Web site is critical to servicing our clients and providing
superior customer service. Our inability to provide continuous access to our Web
site could cause some of our clients to discontinue purchasing our research
products and services, prevent or deter some people from purchasing our research
products and services and harm our business reputation.

WE ARE DEPENDENT ON KEY MANAGEMENT PERSONNEL FOR OUR FUTURE SUCCESS.

Our future success will depend in part on the continued service of a number
of key management personnel. We do not carry key person life insurance on any of
our management personnel. The loss of key management personnel, in particular
Gene DeRose, our Chief Executive Officer, or Kurt Abrahamson, our President and
Chief Operating Officer, could harm our business and financial results.

IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY OR FACE A CLAIM OF
INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, WE MAY LOSE OUR
INTELLECTUAL PROPERTY RIGHTS AND BE LIABLE FOR SIGNIFICANT DAMAGES.

We provide our proprietary research products to hundreds of different
companies throughout the world, including some companies that compete with us in
some manner. As a result, any protective steps we have taken may be inadequate
to protect our intellectual property and to deter misappropriation of the
original research and analysis that we develop. We also may be unable to detect
the unauthorized use of our intellectual property or take appropriate steps to
enforce our intellectual property rights. Moreover, effective trademark,
copyright and trade secret protection may not be available in every country in
which we offer our research products and services to the extent these
protections are available in the United States.
12
<PAGE> 14

Our failure to adequately protect our intellectual property, either in the
United States or abroad, could harm the Jupiter brand or our trademarks, devalue
our proprietary research and analysis and affect our ability to compete
effectively. Defending our intellectual property rights could result in the
expenditure of significant financial and managerial resources, which could harm
our financial results.

Furthermore, other parties may assert claims against us that we have
misappropriated a trade secret or infringed a patent, copyright, trademark or
other proprietary right belonging to them. Any infringement or related claims,
even if not meritorious, could be costly and time consuming to litigate, may
distract management from other tasks of operating the business and may result in
the loss of significant rights and the loss of our ability to operate our
business.

WE MAY NOT BE ABLE TO SUCCESSFULLY MAKE ACQUISITIONS OF OTHER COMPANIES,
SERVICES OR PRODUCTS.

We have limited experience in acquiring other companies, services or
products. Although we have no present understanding or agreement relating to any
acquisition, we do anticipate making acquisitions in the future. We cannot
assure you, however, that we will be able to complete future acquisitions
successfully or to integrate an acquired entity with our current business. In
addition, the key personnel of the acquired company may decide not to work for
us. If we make other types of acquisitions, we could have difficulty
assimilating the acquired services or products. These difficulties could disrupt
our current business, distract our management and employees, increase our
expenses and adversely affect our results of operations. Furthermore, we may
incur debt or issue equity securities to pay for any future acquisitions. The
issuance of equity securities could be dilutive to our existing shareholders.

OUR DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS WILL EXERCISE SIGNIFICANT
CONTROL OVER US FOLLOWING THIS OFFERING.

Upon completion of this offering, our officers, directors and existing
stockholders who own greater than 5% of the outstanding common stock before this
offering, and entities affiliated with them, will, in the aggregate,
beneficially own approximately 74.5% of our common stock. In particular, Gartner
Group will own approximately 28.1% of our outstanding common stock. These
stockholders acting together will be able to exert substantial influence over
all matters requiring approval by our stockholders. These matters include the
election and removal of directors and any merger, consolidation or sale of all
or substantially all of our assets. In addition, they may dictate the management
of our business and affairs. This concentration of ownership could have the
effect of delaying, deferring or preventing a change in control, or impeding a
merger, consolidation, takeover or other business combination.

PROBLEMS RESULTING FROM THE YEAR 2000 PROBLEM COULD REQUIRE US TO INCUR
UNANTICIPATED EXPENSES AND COULD DIVERT MANAGEMENT'S TIME AND ATTENTION.

The Year 2000 problem could harm our business and financial results. Many
currently installed computer systems and software products are coded to accept
or recognize only two-digit entries in the date code field. These systems may
interpret the date code "00" as the year 1900 rather than the year 2000. As a
result, computer systems and/or software used by many companies and governmental
agencies may need to be upgraded or replaced to comply with Year 2000
requirements or risk system failure or miscalculations causing disruptions of
normal business activities. Our failure to correct a Year 2000 problem could
result in an interruption in, or a failure of, aspects of our normal business
activities or operations. Any significant Year 2000 problem could require us to
incur significant unanticipated expenses to remedy these problems and could
divert management's time and attention. We consider the reasonably likely
worst-case scenario to be interruptions in telecommunications networks,
including the Internet. Due to our reliance on the Internet and other
telecommunications networks to keep in contact with our clients and for general
business uses, these interruptions could cause our business to suffer. We have
not developed a contingency plan to address Year 2000 issues. Please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Year 2000 Compliance" for detailed information on our state of
readiness and potential risks regarding the Year 2000 issue.
13
<PAGE> 15

FUTURE SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE.

Following this offering, we will have a large number of shares of common
stock outstanding and available for resale beginning at various points of time
in the future. Our largest stockholder, Gartner Group, may be able to sell as
many as 3,515,624 shares of our common stock in the public market beginning 90
days after the date of this prospectus. In addition, in the event that the
over-allotment option is not exercised, one of our non-management stockholders
may be able to sell up to 235,000 shares of our common stock in the public
market. The market price of our common stock could decline as a result of sales
of a large number of shares of our common stock in the market following this
offering, or the perception that such sales could occur. In addition, these
sales also might make it more difficult for us to sell equity securities in the
future at a price that we think is appropriate, or at all. Please see "Shares
Eligible for Future Sale."

THERE HAS BEEN NO PRIOR MARKET FOR OUR COMMON STOCK, AND OUR STOCK MAY
EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS.

The stock market has experienced extreme price and volume fluctuations. The
market prices of the securities of Internet-related companies have been
especially volatile. Prior to this offering, there has been no public market for
our common stock. We cannot predict the extent to which investor interest in
Jupiter will lead to the development of an active trading market or how liquid
that market might become. The market price of the common stock may decline below
the initial public offering price. The initial public offering price for the
shares will be determined by negotiations between us and the representatives of
the underwriters and may not be indicative of prices that will prevail in the
trading market. Please see "Underwriting."

In the past, companies that have experienced volatility in the market price
of their stock have been the object of securities class action litigation. If we
were the object of securities class action litigation, it could result in
substantial costs and a diversion of our management's attention and resources.

WE WILL HAVE BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM THIS OFFERING,
WHICH WE MAY NOT USE EFFECTIVELY.

Our management will have broad discretion over the allocation of the net
proceeds from this offering as well as over the timing of our expenditures.
Investors may not agree with the way our management decides to spend these
proceeds. Please see "Use of Proceeds."

WE CANNOT PREDICT OUR FUTURE CAPITAL NEEDS, AND WE MAY NOT BE ABLE TO SECURE
ADDITIONAL FINANCING.

We may need to raise additional funds in the future to fund our operations,
to expand or enhance the range of products and services we offer or to respond
to competitive pressures and/or perceived opportunities. We cannot be sure that
additional financing will be available on terms favorable to us, or at all. If
adequate funds are not available when required or on acceptable terms, we may be
forced to cease our operations, and even if we are able to continue our
operations, our business and financial results may suffer.

WE HAVE ANTI-TAKEOVER PROVISIONS WHICH MAY MAKE IT DIFFICULT FOR A THIRD PARTY
TO ACQUIRE US.

Provisions of our certificate of incorporation, our bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
might be beneficial to our stockholders. Please see "Description of Capital
Stock."

INVESTORS IN THIS OFFERING WILL SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION.

Investors purchasing shares in this offering will suffer immediate and
substantial dilution in net tangible book value per share. To the extent
outstanding options to purchase common stock are exercised, there will be
further dilution. Please see "Dilution."
14
<PAGE> 16

WE DO NOT PLAN TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

We have not declared or paid any cash dividends on our capital stock since
inception. We intend to retain any future earnings to finance the operation and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements which involve risks and
uncertainties. These forward-looking statements are usually accompanied by words
such as "believes," "anticipates," "plans," "expects" and similar expressions.
Our actual results could differ materially from those expressed or implied by
these forward-looking statements as a result of various factors, including the
risk factors described above and elsewhere in this prospectus.

15
<PAGE> 17

USE OF PROCEEDS

The net proceeds from the sale of the 3,125,000 shares of common stock
offered by us will be approximately $59.9 million, after deducting underwriting
discounts and commissions and estimated offering expenses. If the underwriters
exercise their over-allotment option in full, our net proceeds will be $62.5
million.

As of the date of this prospectus, we have not made any specific
expenditure plans with respect to the proceeds of this offering. Therefore, we
cannot specify with certainty the particular uses for the net proceeds to be
received upon completion of this offering. Accordingly, our management will have
significant flexibility in applying the net proceeds of the offering.

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

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We
currently anticipate that we will retain any future earnings for the development
and operation of our business. Accordingly, we do not anticipate declaring or
paying any cash dividends in the foreseeable future.

16
<PAGE> 18

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 1999 on an
actual basis, on a pro forma basis to reflect our reorganization from an LLC to
a "C" corporation and on a pro forma as adjusted basis to reflect the sale of
3,125,000 shares of common stock by us in this offering at an initial public
offering price of $21.00 per share, after deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by us. Please
see "Use of Proceeds."

The following table should be read in conjunction with our financial
statements and the notes to those statements included in this prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
-----------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Members' equity (deficiency):
Additional paid-in capital............................. $ 3,881 -- --
Accumulated deficit.................................... (5,765) -- --
------- ------- --------
Total members' equity (deficiency)..................... $(1,884) -- --
Stockholders' equity (deficiency):
Common stock, $0.001 par value: 100,000,000 shares
authorized on a pro forma basis, 10,819,335 shares
outstanding on a pro forma basis, and 13,944,335
shares outstanding on a pro forma as adjusted
basis............................................... -- 11 14
Additional paid-in capital............................. -- (1,895) 58,033
Accumulated deficit.................................... -- -- --
------- ------- --------
Total stockholders' equity (deficiency)................ -- (1,884) 58,047
------- ------- --------
Total capitalization........................... $(1,884) $(1,884) $ 58,047
======= ======= ========
</TABLE>

The table above excludes 2,386,856 shares of common stock issuable upon the
exercise of stock options outstanding as of June 30, 1999, with a weighted
average exercise price of $2.41 per share. See "Management -- 1997 Option Plan."
In addition, this table excludes 174,492 shares of common stock issuable upon
the exercise of non-plan options, with a weighted average exercise price of
$0.85 per share.

17
<PAGE> 19

DILUTION

Our net tangible book value (deficit) as of June 30, 1999 was approximately
$(1,924,060), or $(0.18) per share of common stock. Net tangible book value per
share is determined by dividing the amount of our total tangible assets less
total liabilities by the weighted average pro forma number of shares of common
stock outstanding at that date. The pro forma weighted average number of shares
of common stock outstanding gives effect to the Company's reorganization from an
LLC to a "C" corporation as though the reorganization had occurred as of June
30, 1999. Dilution in net tangible book value per share represents the
difference between the amount per share paid by purchasers of shares of common
stock in this offering and the net tangible book value per share of common stock
immediately after the completion of this offering.

After giving effect to the issuance and sale of the shares of common stock
offered by us at an estimated initial public offering price of $21.00 per share
and after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us, and the application of the estimated
net proceeds from this offering, our pro forma net tangible book value as of
June 30, 1999 would have been $58,007,190 or $4.16 per share. This represents an
immediate increase in pro forma net tangible book value to our existing
stockholders of $4.34 per share and an immediate dilution to purchasers in this
offering of $16.84 per share. If the initial public offering price is higher or
lower, the dilution to purchasers in this offering will be greater or less,
respectively.

The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $21.00
Net tangible book value per share at June 30, 1999........ $(0.18)
Increase in pro forma net tangible book value per share
attributable to this offering.......................... 4.34
------
Pro forma net tangible book value per share after this
offering.................................................. 4.16
------
Dilution per share to new investors......................... $16.84
======
</TABLE>

Assuming the exercise in full of the underwriters' over-allotment option,
our adjusted pro forma net tangible book value at June 30, 1999 would have been
approximately $4.21 per share, representing an immediate increase in pro forma
net tangible book value of $4.39 per share to our existing stockholders and an
immediate dilution in pro forma net tangible book value of $16.79 per share to
purchasers in this offering.

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 us,
the aggregate cash consideration paid to us and the average price per share paid
by existing stockholders and new investors purchasing shares of common stock in
this offering. The calculation below is based on an assumed initial public
offering price of $21.00 per share, before deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by us:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
-------------------- --------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing stockholders.......... 10,819,335 77.6% $ 4,179,067 6.0% $ 0.39
New investors.................. 3,125,000 22.4 65,625,000 94.0% 21.00
---------- ----- ----------- ------ ------
Total.......................... 13,944,335 100.0% $69,804,067 100.0% $ 5.01
========== ===== =========== ====== ======
</TABLE>

If the underwriters exercise their over-allotment option in full, the
number of shares of common stock held by existing stockholders will be reduced
to 10,484,335 or 74.5% of the total number of shares of common stock to be
outstanding after this offering. In addition, the number of shares of common
stock held by the new investors will be increased to 3,593,750 or 25.5% of the
total number of shares of common stock to be outstanding immediately after this
offering.
18
<PAGE> 20

This discussion and table assume no exercise of any stock options
outstanding as of June 30, 1999. As of June 30, 1999, there were options
outstanding to purchase a total of 2,386,856 shares of common stock with a
weighted average exercise price of $2.41 per share. This discussion and table
also exclude 174,492 shares of common stock issuable upon the exercise of
non-plan options, with a weighted average exercise price of $0.85 per share. To
the extent that any of these options are exercised, there will be further
dilution to new investors. Please see "Capitalization."

19
<PAGE> 21

SELECTED FINANCIAL AND OPERATING DATA

The selected balance sheet data as of December 31, 1997 and 1998 and the
selected statement of operations data for the years ended December 31, 1996,
1997 and 1998 have been derived from our audited financial statements included
in this prospectus. The selected balance sheet data as of December 31, 1995 and
1996, and the statement of operations data for 1995, have been derived from our
audited financial statements not included in this prospectus. The selected
balance sheet data as of December 31, 1994 and selected statement of operations
data for the period from December 1, 1994 (inception) to December 31, 1994 have
not been presented as this information is considered to be immaterial. The
selected balance sheet data as of June 30, 1999 and the selected statement of
operations data for the six months ended June 30, 1998 and 1999 are derived from
unaudited financial statements included in this prospectus. In the opinion of
management, the interim data have been prepared on the same basis as the audited
financial statements appearing in this prospectus and include all necessary
adjustments, consisting only of normal recurring adjustments, we believe to be
necessary for a fair presentation of the data. You should read these selected
financial data in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," our financial statements and the
notes to those statements included in the prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------- -----------------
1995 1996 1997 1998 1998 1999
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Strategic Planning Services.............. $ 237 $ 566 $ 1,850 $ 6,183 $ 1,995 $ 8,166
Conferences.............................. 2,024 2,686 3,426 4,890 1,979 4,553
Other.................................... 1,439 3,000 3,246 3,729 1,939 1,681
------ ------ ------- ------- ------- -------
Total revenues........................ 3,700 6,252 8,522 14,802 5,913 14,400
Cost of services and fulfillment........... 2,893 4,687 6,259 9,676 4,282 6,854
------ ------ ------- ------- ------- -------
Gross profit.......................... 807 1,565 2,263 5,126 1,631 7,546
Other operating expenses:
Sales and marketing...................... 254 514 1,558 3,173 1,313 4,008
General and administrative............... 1,025 1,664 2,955 4,090 1,918 3,668
------ ------ ------- ------- ------- -------
Total other operating expenses........ 1,279 2,178 4,513 7,263 3,231 7,676
------ ------ ------- ------- ------- -------
Net loss................................... $ (472) $ (613) $(2,250) $(2,137) $(1,600) $ (130)
====== ====== ======= ======= ======= =======
Pro forma basic and diluted net loss per
common share (1)......................... $ (0.21) $ (0.16) $ (0.01)
======= ======= =======
Pro forma weighted average common shares
outstanding (1).......................... 10,318 10,318 10,455
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF JUNE 30,
----------------------------------- -----------------
1995 1996 1997 1998 1998 1999
<S> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Number of SPS contracts.................... 13 66 145 421 219 654
Total contract value (in thousands)........ $ 315 $ 923 $ 2,509 $11,666 $ 5,089 $22,138
SPS deferred revenue (in thousands)........ $ 78 $ 313 $ 614 $ 5,639 $ 2,272 $11,486
Number of employees........................ 18 61 88 142 117 194
Capital expenditures (in thousands)........ $ 99 $ 199 $ 207 $ 838 $ 258 $ 2,263
</TABLE>

20
<PAGE> 22

<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, JUNE 30,
------------------------------------- ------------
1995 1996 1997 1998 1999
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents..................... $ 4 $ 8 $1,614 $ 216 $ 1,554
Working capital (2)........................... (572) (1,166) (553) (3,376) (4,972)
Total assets.................................. 907 1,474 3,463 6,867 15,051
Members'/stockholders' equity (deficiency).... (405) (714) 9 (2,129) (1,884)
</TABLE>

- ------------------------------
(1) Pro forma basic and diluted net loss per common share is computed by
dividing net loss by the pro forma weighted average number of shares of
common stock. Pro forma weighted average number of shares of common stock
gives effect to our reorganization from an LLC to a "C" corporation as
though the reorganization had occurred as of January 1, 1998. Pro forma
weighted average shares do not include any common stock equivalents because
inclusion of common stock equivalents would have been anti-dilutive.

(2) Our working capital balances are typically negative because of the timing of
cash collections from clients. SPS contracts are typically annual and paid
in advance. Accordingly, a substantial portion of our billings is initially
recorded as deferred revenue and amortized into revenue during the term of
the contract to which such billings relate.

21
<PAGE> 23

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

You should read the following discussion of our financial condition and
results of operations together with our financial statements, the notes to those
statements and the other information in this prospectus. This discussion
contains forward-looking statements that involve risks and uncertainties. Please
see "Risk Factors."

OVERVIEW

We provide research on Internet commerce. Senior executives at our client
companies utilize our research to make informed business decisions in a complex
and rapidly changing Internet economy. Our research, which is focused solely on
the Internet economy, provides our clients with comprehensive views of industry
trends, forecasts and best practices. Our analysis, supported by proprietary
data, emphasizes specific, actionable findings.

Our revenues consist of SPS, conferences and other revenues. For the six
months ended June 30, 1999, SPS represented approximately 56.7% of our total
revenues. SPS is a combination of proprietary written analysis, supporting data
and access to our analysts. We typically bill clients annually in advance and
deliver the products and services over the term of the contract. We also produce
a wide range of conferences which offer senior executives the opportunity to
hear first-hand the insights of our analysts and the leading decision makers in
the Internet and technology industries. Conference revenues consist of revenues
from individual attendees, sponsors, which display their logo in our conference
program and/or host a reception, and exhibitors, which receive a booth to
promote their companies. For the six months ended June 30, 1999, conferences
represented approximately 31.6% of our total revenues. Other revenues, which
consist primarily of book-length studies, newsletters and custom research,
represented approximately 11.7% of our total revenues for the six months ended
June 30, 1999.

SPS contracts are renewable contracts, typically annual, and payable in
advance. Accordingly, a substantial portion of our billings is initially
recorded as deferred revenue and amortized into revenue over the term of the
contract. Commission expense related to SPS is also initially deferred and
amortized into expense over the contract period in which the related revenues
are earned and amortized to income. Our contracts are non-cancelable and
non-refundable. Billings attributable to our conferences and other products and
services are initially recorded as deferred revenue and recognized upon the
completion of the event or project.

We have experienced rapid growth since our organization, and particularly
since our decision in late 1996 to focus our business on SPS. Between 1995 and
1998, our total revenues have grown from $3.7 million to $14.8 million, a
compound annual growth rate of 59.2%. For the six months ended June 30, 1999,
our revenues were $14.4 million, representing an increase of 143.5% over
revenues of $5.9 million for the six months ended June 30, 1998. The number of
our SPS contracts has increased from 145 as of December 31, 1997 to 654 as of
June 30, 1999. Our total contract value has increased from $2.5 million on
December 31, 1997 to $22.1 million on June 30, 1999. We believe that total
contract value is a meaningful measure of the volume of our business. Total
contract value represents the annualized value of all outstanding SPS contracts
without regard to the remaining duration of such contracts. Total contract
value, however, does not necessarily correlate to deferred revenue. Deferred
revenue represents unamortized revenue remaining on all outstanding and billed
contracts. As of June 30, 1999, deferred revenue related to SPS contracts
totaled $11.5 million, which was 51.9% of our total contract value as of such
date.

To date, a substantial portion of expiring SPS contracts have been renewed
for an equal or higher amount. Approximately 73% of contracts expiring during
the 12 months ended June 30, 1999 were renewed and approximately 96% of these
contracts were renewed for an equal or larger dollar amount.

22
<PAGE> 24

With this high customer renewal rate, we believe we have a growing base of
recurring revenues from SPS. However, this renewal rate is not necessarily
indicative of the rate of future retention of our revenue base.

Cost of services and fulfillment represents the costs associated with
production and delivery of our products and services, including the costs of
salaries, bonuses and related benefits for our research and conference
personnel, all associated editorial, travel and support services, and the costs
of producing our conferences. Sales and marketing expenses include salaries,
bonuses, employee benefits, travel expenses, promotional costs, sales
commissions and other costs incurred in marketing and selling our products and
services. General and administrative expenses include the costs of our finance
and technology groups and other administrative functions.

We will record deferred compensation of approximately $577,000,
representing the difference between the exercise price of unit options granted
in July 1999 and the fair value for accounting purposes of the underlying units
at the date of grant, assuming a fair value of our units on the date of grant of
$11.00 per share. The $577,000 deferred compensation cost will be amortized over
the vesting period of the options.

We have incurred net losses since our formation. Our net loss was $613,000
in 1996, $2.3 million in 1997, $2.1 million in 1998 and $130,000 for the six
months ended June 30, 1999. We expect to incur a net loss for the full year
1999. As of June 30, 1999, we had an accumulated deficit of $5.8 million. We
expect to incur significant expenditures in the future associated with our
domestic and international expansion strategies. In particular, we intend to
continue to expand our research and sales personnel, and we intend to continue
to invest in technology, leasehold improvements and the development of
additional research practices and modules.

RESULTS OF OPERATIONS

The following table sets forth our results of operations for the years
ended December 31, 1996, 1997 and 1998 and the six months ended June 30, 1998
and 1999, expressed as a percentage of revenue:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------- -----------------
1996 1997 1998 1998 1999
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Strategic Planning Services.................. 9.0% 21.7% 41.8% 33.7% 56.7%
Conferences.................................. 43.0 40.2 33.0 33.5 31.6
Other........................................ 48.0 38.1 25.2 32.8 11.7
----- ----- ----- ----- -----
Total revenues....................... 100.0 100.0 100.0 100.0 100.0
Cost of services and fulfillment............... 75.0 73.4 65.4 72.4 47.6
----- ----- ----- ----- -----
Gross profit................................. 25.0 26.6 34.6 27.6 52.4
Other operating expenses:
Sales and marketing.......................... 8.2 18.3 21.4 22.2 27.8
General and administrative................... 26.6 34.7 27.6 32.4 25.5
----- ----- ----- ----- -----
Total other operating expenses....... 34.8 53.0 49.0 54.6 53.3
----- ----- ----- ----- -----
Net loss....................................... (9.8)% (26.4)% (14.4)% (27.0)% (0.9)%
===== ===== ===== ===== =====
</TABLE>

23
<PAGE> 25

COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999 AND 1998

Revenues. Total revenues increased 143.5% to $14.4 million in the six
months ended June 30, 1999 from $5.9 million in the six months ended June 30,
1998. SPS revenues increased 309.3% to $8.2 million in the six months ended June
30, 1999 from $2.0 million in the six months ended June 30, 1998. This increase
is attributable primarily to an increase in the number of SPS contracts to 654
at June 30, 1999 from 219 at June 30, 1998 and an increase in average contract
value to $33,850 at June 30, 1999 from $23,235 at June 30, 1998. These increases
reflect an increase in the number of users at, and research services purchased
by, our client companies. Total contract value increased to $22.1 million at
June 30, 1999 from $5.1 million at June 30, 1998. The SPS deferred revenue
related to the contract value at June 30, 1999 and June 30, 1998 was $11.5
million and $2.3 million, respectively.

Conference revenues increased 130.1% to $4.6 million in the six months
ended June 30, 1999 from $2.0 million in the six months ended June 30, 1998.
These revenues reflect the results of four conferences in the six months ended
June 30, 1998 and five conferences in the six months ended June 30, 1999. The
increase is attributable to an increase in attendee, sponsor and exhibitor
revenues and the production of an additional conference in the six months ended
June 30, 1999.

Other revenues decreased 13.3% to $1.7 million in the six months ended June
30, 1999 from $1.9 million in the six months ended June 30, 1998. This decrease
reflects our decision to focus our business on SPS.

Cost of Services and Fulfillment. Cost of services and fulfillment
increased 60.1% to $6.9 million in the six months ended June 30, 1999 from $4.3
million in the six months ended June 30, 1998. The increase in this period was
attributable to the overall growth of our business, in particular the increased
research staffing for new and existing research practices. Gross margin
increased to 52.4% in the six months ended June 30, 1999 from 27.6% in the six
months ended June 30, 1998 because the growth in our client base and new
business exceeded the growth in the cost of providing our research services and
conferences.

Sales and Marketing. Sales and marketing expenses increased 205.2% to $4.0
million in the six months ended June 30, 1999 from $1.3 million in the six
months ended June 30, 1998. As a percentage of total revenues, these expenses
increased to 27.8% in the six months ended June 30, 1999 from 22.2% in the six
months ended June 30, 1998. The increase in this period was primarily
attributable to an increased number of sales personnel and the corresponding
commission costs associated with increased revenues.

General and Administrative. General and administrative expenses increased
91.2% to $3.7 million in the six months ended June 30, 1999 from $1.9 million in
the six months ended June 30, 1998. The increase in this period was primarily
attributable to increased personnel for the finance, human resources and
operations areas, as well as costs associated with our new London office and
higher costs for staff travel and professional fees. As a percentage of total
revenues, these expenses decreased to 25.5% in the six months ended June 30,
1999 from 32.4% in the six months ended June 30, 1998. This decrease reflects
the fact that some of these expenses, such as leasehold expenses, did not
increase at the same rate as our revenues.

COMPARISON OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

Revenues. Total revenues increased 73.7% to $14.8 million in 1998 from
$8.5 million in 1997 and 36.3% to $8.5 million in 1997 from $6.3 million in
1996. SPS revenues increased by 234.2% to $6.2 million in 1998 from $1.9 million
in 1997. This increase is attributable primarily to an increase in the number of
SPS contracts to 421 at December 31, 1998 from 145 at December 31, 1997 and an
increase in average contract value to $27,700 at December 31, 1998 from $17,300
at December 31, 1997. SPS revenues increased by 227.1% to $1.9 million in 1997
from $566,000 in 1996. This increase is attributable primarily to an increase in
the number of SPS contracts to 145 at December 31, 1997 from 66 at December 31,
1996 and an increase in average contract value to $17,300 at December 31, 1997
from $14,000 at December 31, 1996.

24
<PAGE> 26

The increase in SPS revenues in these periods reflects an increase in the
number of users at, and research services purchased by, our client companies.
Total contract value increased to $11.7 million at December 31, 1998 from $2.5
million at December 31, 1997 and $923,000 at December 31, 1996. The SPS deferred
revenue related to the contract value at December 31, 1998, December 31, 1997
and December 31, 1996 was $5.6 million, $614,000 and $313,000, respectively.

Conference revenues increased 42.7% to $4.9 million in 1998 from $3.4
million in 1997 and 27.6% to $3.4 million in 1997 from $2.7 million in 1996.
These increases are attributable to an increase both in the number of
conferences and in average attendee, sponsor and exhibitor revenues.

Other revenues increased 14.9% to $3.7 million in 1998 from $3.2 million in
1997. This increase reflects an increase in revenues from custom research and
book-length studies, offset in part by a small decrease in newsletter revenues.
Other revenues increased 8.2% to $3.2 million in 1997 from $3.0 million in 1996.
This increase reflects an increase in revenues from book-length studies and
newsletter subscriptions, offset in part by a decrease in custom research.

Cost of Services and Fulfillment. Cost of services and fulfillment
increased 54.6% to $9.7 million in 1998 from $6.3 million in 1997. The increase
in this period was attributable to the overall growth of our business, in
particular the increased research staffing for new and existing research
practices. These expenses increased 33.5% to $6.3 million in 1997 from $4.7
million in 1996. The increase in this period was attributable to increased costs
for producing conferences and other direct products, and for increases in
research staffing. Gross margin increased to 34.6% in 1998 from 26.6% in 1997
and increased to 26.6% in 1997 from 25.0% in 1996 because the growth in our
client base and new business exceeded the growth in the cost of providing our
research services and conferences.

Sales and Marketing. Sales and marketing expenses increased 103.7% to $3.2
million in 1998 from $1.6 million in 1997. The increase in this period was
primarily attributable to an increased number of sales personnel and the
corresponding commission costs associated with increased revenues. Sales and
marketing expenses increased 202.7% to $1.6 million in 1997 from $514,000 in
1996. The expense increase in this period was primarily attributable to
increased personnel in the marketing area to support an increased direct mail
effort. As a percentage of total revenues, these expenses increased to 21.4% in
1998 from 18.3% in 1997 and increased to 18.3% in 1997 from 8.2% in 1996.

General and Administrative. General and administrative expenses increased
38.4% to $4.1 million in 1998 from $3.0 million in 1997 and 77.7% to $3.0
million in 1997 from $1.7 million in 1996. The increase in these periods was
primarily attributable to increased staffing for the finance, human resources
and operations areas, as well as increased expenses associated with basic office
operations, including rent, utilities, travel and printing. As a percentage of
total revenues, these expenses decreased to 27.6% in 1998 from 34.7% in 1997 due
to revenues increasing at a greater rate and increased to 34.7% in 1997 from
26.6% in 1996 due to revenues increasing at a slower rate.

INCOME TAXES

No provision or benefit for federal or state income taxes, actual or pro
forma, has been recorded for the net operating losses we incurred in the years
ended December 31, 1996, 1997 and 1998. In addition, no net operating losses
incurred in 1999 prior to the closing of this offering will be recorded on our
federal or state tax returns. Because our company was a limited liability
company for tax purposes during these periods, and will continue to be until the
closing of this offering, all taxable losses were, and will be, allocated to the
members for reporting on their income tax returns. As a result, we will not be
able to offset future taxable income, if any, against losses incurred prior to
the closing of this offering.

QUARTERLY RESULTS OF OPERATIONS DATA

The following tables sets forth unaudited quarterly statement of operations
data for each of the six quarters ended June 30, 1999 and such data expressed as
a percentage of total revenues. We believe that

25
<PAGE> 27

we have prepared these data on the same basis as our audited financial
statements in this prospectus, and have included all necessary adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of our results of operations for these interim periods. You should
read these interim financial data together with our audited financial statements
and the notes to those statements in this prospectus. Our historical results of
operations do not necessarily indicate the results of operations we will achieve
in the future, and our results of operations for interim periods do not
necessarily indicate the results of operations for any future period. Our
results of operations may fluctuate significantly in the future as a result of a
variety of factors, many of which are beyond our control. See "Risk Factors--Our
operating results may fluctuate in future periods which may cause volatility or
a decline in the price of our stock."

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30,
1998 1998 1998 1998 1999 1999
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Strategic Planning Services.... $ 762 $1,233 $1,757 $2,431 $3,447 $4,719
Conferences.................... 888 1,091 2,354 557 1,724 2,829
Other.......................... 959 980 1,014 776 848 833
------- ------ ------ ------ ------ ------
Total revenues......... 2,609 3,304 5,125 3,764 6,019 8,381
Cost of services and
fulfillment.................... 2,091 2,191 3,127 2,267 2,955 3,899
------- ------ ------ ------ ------ ------
Gross profit................... 518 1,113 1,998 1,497 3,064 4,482
Other operating expenses:
Sales and marketing............ 611 702 842 1,018 1,750 2,258
General and administrative..... 911 1,007 1,132 1,040 1,635 2,033
------- ------ ------ ------ ------ ------
Total other operating
expenses............. 1,522 1,709 1,974 2,058 3,385 4,291
------- ------ ------ ------ ------ ------
Net income (loss)................ $(1,004) $ (596) $ 24 $ (561) $ (321) $ 191
======= ====== ====== ====== ====== ======
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30,
1998 1998 1998 1998 1999 1999
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Strategic Planning Services.... 29.2% 37.3% 34.3% 64.6% 57.3% 56.3%
Conferences.................... 34.0 33.0 45.9 14.8 28.6 33.7
Other.......................... 36.8 29.7 19.8 20.6 14.1 10.0
------- ------ ------ ------ ------ ------
Total revenues......... 100.0 100.0 100.0 100.0 100.0 100.0
Cost of services and
fulfillment.................... 80.2 66.3 61.0 60.2 49.1 46.5
------- ------ ------ ------ ------ ------
Gross profit................... 19.8 33.7 39.0 39.8 50.9 53.5
Other operating expenses:
Sales and marketing............ 23.4 21.2 16.4 27.1 29.0 26.9
General and administrative..... 34.9 30.5 22.1 27.6 27.2 24.3
------- ------ ------ ------ ------ ------
Total other operating
expenses............. 58.3 51.7 38.5 54.7 56.2 51.2
------- ------ ------ ------ ------ ------
Net income (loss)................ (38.5)% (18.0)% 0.5% (14.9)% (5.3)% 2.3%
======= ====== ====== ====== ====== ======
</TABLE>

26
<PAGE> 28

SEASONALITY

Our conference revenues historically have been strongest during the third
quarter of the year, in which the largest number of our events are held. We also
have experienced a significant increase in SPS sales during the fourth quarter
of the year due primarily to the budget cycles of our SPS clients, the renewal
dates of existing SPS contracts and the effect of our annual sales quotas.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations since our organization on December 1, 1994
with a total of $4.2 million in member contributions. This includes $3.0 million
in private equity from Gartner Group in October 1997.

Net cash provided by (used in) operating activities was $14,000 for the
year ended December 31, 1996, $(1.1) million for the year ended December 31,
1997, $(557,000) for the year ended December 31, 1998 and $3.2 million for the
six months ended June 30, 1999.

Net cash used in investing activities was $257,000 in 1996, $232,000 in
1997, $838,000 in 1998 and $2.3 million for the six months ended June 30, 1999.
Investments were primarily in computer equipment, furniture and leasehold
improvements.

Net cash provided by (used in) financing activities was $246,000 for the
year ended December 31, 1996, $2.9 million for the year ended December 31, 1997,
$(3,000) for the year ended December 31, 1998 and $375,000 for the six months
ended June 30, 1999. Cash provided by financing activities for the year ended
December 31, 1997 primarily resulted from the placement of private equity with
Gartner Group. In addition, during the six months ended June 30, 1999 two equity
members exercised unit investment options for $375,000.

As of June 30, 1999, we had $1.6 million in cash and cash equivalents. We
have a $3.0 million committed line of credit, secured by substantially all of
our assets, under which there were no outstanding balances as of June 30, 1999.

We expect to spend approximately $4 million in 1999 and $7 million in 2000
on technology, including Web site enhancements, leasehold improvements,
expansion of operations and telecommunications upgrades. We anticipate that we
will continue to increase our capital expenditures and lease commitments
consistent with our anticipated growth in operations, infrastructure and
personnel. We also anticipate that we will continue to experience growth in our
operating expenses to support our revenue growth, including the continued
introduction of new practices and modules. While we are not dependent on the
proceeds of this offering to fund our operations for the next 12 months, we
believe that the proceeds of this offering will be necessary to fund the
long-term growth of our company.

Our financial exposure due to the effects of fluctuations in foreign
currency rates is not material.

YEAR 2000 COMPLIANCE

The Year 2000 problem is the result of computer programs being written
using two digits rather than four to identify a given year. Computer programs
that have time-sensitive software may interpret the date code "00" as the year
1900 rather than the year 2000. This could result in a disruption of operations
including a temporary inability to process transactions, send invoices or engage
in other normal business activities. We maintain a significant number of
computer software systems and operating systems across our entire organization
which are potentially subject to Year 2000 problems.

Our Year 2000 concerns cover internal and external application and database
production software, internal and external production hardware, internal
infrastructure and external agents.

Internal and external application and database production software includes
all software used either directly by our clients or indirectly in support of our
clients. We have upgraded or replaced all of these

27
<PAGE> 29

systems. All of the systems are designed to pass Year 2000 compliance tests.
System testing for Year 2000 compliance is anticipated to be completed by the
end of the third quarter of 1999.

Internal and external production hardware includes the hardware that we use
to directly host our Web site, our internal servers and network hardware and our
desktop systems. We have upgraded or replaced all hardware in direct support of
our Web site. We will upgrade or replace all internal servers, network hardware
and desktop systems by the end of the third quarter of 1999.

Internal infrastructure consists of all hardware and software not described
above which is used in support of our internal staff. This includes all printers
and modems, the phone and voicemail systems and any common office automation
devices, including faxes and copiers. We upgraded the phone system in the second
quarter of 1999 and we will replace the voicemail system in the third quarter of
1999. We have upgraded or replaced all printers and modems. We will upgrade or
replace common office automation devices by the end of the third quarter of
1999.

External agents includes all critical hardware, software and related
systems provided by third parties. Beginning in the second quarter of 1999, we
identified critical suppliers and equipment that we depend on for our day to day
business and surveyed these external vendors as to their Year 2000 compliance.
All of our critical external vendors have responded to our Year 2000 compliance
inquiries. 85% of these external vendors have indicated that they are Year 2000
compliant, 10% have indicated that they are in the process of upgrading or
replacing their systems and 5% have indicated that they are in the process of
assessing whether their systems are Year 2000 compliant. We keep a copy of all
third party Year 2000 compliance statements that we obtain.

We expect that our employees will perform all significant work for the Year
2000 projects described above. We do not anticipate hiring any additional
employees nor do we anticipate incurring any significant consulting expenses for
the Year 2000 project. The cost of software tools and consulting expenses used
for detection of Year 2000 problems is not currently expected to exceed
$100,000.

Contingency planning has not yet begun for all categories. We believe that
all critical systems are Year 2000 compliant as of September 1, 1999.

The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, various normal business activities or
operations. Such failures could materially and adversely affect our results of
operations, liquidity and financial condition, and subject us to the risk of
litigation. Due to the general uncertainty inherent in the Year 2000 problem,
resulting in part from the uncertainty of the Year 2000 readiness of third-party
suppliers and customers, we are unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on our results of
operations, liquidity or financial condition.

In addition, we cannot assure you that governmental agencies, utility
companies, internet access companies, third party service providers and others
outside our control will be Year 2000 compliant. The failure by those entities
to be Year 2000 compliant could result in a systematic failure beyond our
control, such as prolonged internet, telecommunications or electrical failure,
which could prevent us from providing our services or prevent users from
accessing our services.

RECENT ACCOUNTING PRONOUNCEMENTS

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"), which provides
guidance for determining whether computer software is internal-use software and
on accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 will be effective for our
fiscal year ending December 31, 1999. The adoption of SOP 98-1 is not expected
to have a material impact on our financial statements.

28
<PAGE> 30

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"), which provides guidance on the financial reporting of
start-up costs and organization costs. It requires costs of start-up activities
and organization costs to be expensed as incurred. SOP 98-5 will be effective
for our fiscal year ending December 31, 1999. The adoption of SOP 98-5 is not
expected to have a material impact on our financial statements.

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 131, "Disclosures About Segments
of an Enterprise and Related Information" ("SFAS No. 131"), which establishes
standards for the way that a public enterprise reports information about
operating segments in annual financial statements, and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas and major
customers. SFAS No. 131 is effective for fiscal years beginning after December
15, 1997, and requires restatement of earlier periods presented. In the initial
year of application, comparative information for earlier years must be restated.
We have determined that we do not have any separately reportable business
segments.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"), which establishes standards for the reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements. Comprehensive income generally represents all
changes in shareholders' equity during the period except those resulting from
investments by, or distributions to, shareholders. SFAS No. 130 is effective for
fiscal years beginning after December 15, 1997 and requires restatement of
earlier periods presented. The adoption of this standard has had no impact on
our financial statements. Accordingly, our comprehensive net loss is equal to
our net loss for all periods presented.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"), which establishes
accounting and reporting standards for derivative instruments, including
derivative instruments embedded in other contracts, and for hedging activities.
SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. This statement is not expected to affect us as we currently
do not engage or plan to engage in derivative instruments or hedging activities.

29
<PAGE> 31

BUSINESS

OVERVIEW

Our research services are provided primarily through our continuous
subscription product, Strategic Planning Services, which we call SPS. SPS is a
combination of proprietary written analysis, supporting data and access to our
analysts. We typically bill clients annually in advance and deliver the products
and services over the term of the contract. We generate our research through
eight focused teams of research analysts and associates. Our proprietary
research is informed and supported by a dedicated data research group. We
increasingly deliver our products via the Internet.

We have a highly diversified client base, including companies in the
Internet, media, telecommunications, technology, financial services, retail,
travel, consumer products and professional services industries. We have
successfully increased the number of SPS clients and our total contract value,
which is the annualized value of all SPS contracts at a given point in time. As
of June 30, 1999, we had 654 SPS contracts, an increase from 421 on December 31,
1998 and 145 on December 31, 1997. Our total contract value has increased from
$2.5 million on December 31, 1997, to $11.7 million on December 31, 1998 and to
$22.1 million on June 30, 1999. The SPS deferred revenue related to the contract
value at December 31, 1997, December 31, 1998 and June 30, 1999 was $614,000,
$5.6 million and $11.5 million, respectively. In addition, approximately 73% of
the SPS contracts that expired during the 12 months prior to June 30, 1999 were
renewed.

We also produce a wide range of conferences which offer senior executives
the opportunity to hear first-hand the insights of our analysts and the leading
decision makers in the Internet and technology industries. Because over 75% of
the attendees are not SPS clients, these conferences provide a unique
opportunity to promote our SPS research to potential clients. These conferences
also allow us to increase the public profile of our analysts, generate favorable
press and otherwise promote the Jupiter brand.

Our revenues have increased from $8.5 million in 1997 to $14.8 million in
1998, and from $5.9 million in the six months ended June 30, 1998 to $14.4
million in the six months ended June 30, 1999. We have a limited operating
history, however, and have incurred net losses since our formation. As of June
30, 1999, we had an accumulated deficit of $5.8 million.

MARKET OPPORTUNITY

The Growth of Internet Commerce

The Internet has emerged as a global medium that allows hundreds of
millions of people worldwide to obtain information, communicate and conduct
business electronically. The continued growth in Internet usage will be driven
by:

- the large and growing number of personal computers installed in homes and
offices;

- easier, faster, more reliable and less expensive access to the Internet;

- the availability of more and better content on the Internet;

- improvements in network infrastructure; and

- the increasing ability to access the Internet with devices like
television and telephones.

As the use of the Internet grows, businesses are increasing the breadth and
depth of their Internet products and services geared to consumers and other
businesses. Companies are also increasingly utilizing the Internet for functions
critical to their core business strategies and operations, such as sales and
marketing, customer service, supply chain management and overall project
coordination. As a result, numerous companies, including software development
firms, telecommunications and technology vendors and marketing and advertising
agencies, have developed products, services and technologies which support
consumers and businesses seeking to expand their use of the Internet or increase
their business efficiency.

30
<PAGE> 32

The unique interactive nature of the Internet has also led to its rapid
emergence as a convenient vehicle to buy and sell products and services.
Internet commerce can be fast, inexpensive and convenient, and a growing number
of users have used the Internet to trade securities, purchase goods and services
and pay bills. Retailers, advertisers and marketers have embraced the Internet
because it offers them the ability to:

- reach broad, global audiences, thereby overcoming the limitations of
brick-and-mortar businesses;

- access new revenue streams;

- target and cost-effectively market to consumers with specific sets of
interests and desirable demographic characteristics; and

- improve efficiencies in global corporate communications, supply chain
management, technology implementation and overall operating expenses.

The graphs below illustrate our growth projections for various domestic
Internet markets. Our projections are based on a variety of research techniques,
including monthly tracking of online and non-online consumers, surveys of
leading executives at numerous Internet and technology companies, consumer
buying patterns in traditional retail markets and the historical development of
other markets and distribution channels. The figures for travel represent the
amount spent on online travel purchases, including airline tickets and hotels.
The figures for advertising represent the amount spent by businesses for
advertising on the Internet. The figures for shopping represent the amount spent
for online purchases of consumer goods such as books, music and toys.

EXPECTED GROWTH OF DOMESTIC INTERNET MARKETS

<TABLE>
<S> <C>
SELECTED INTERNET INDIVIDUAL ONLINE
COMMERCE MARKETS INVESTING MARKET
</TABLE>

[Expected Growth of Domestic Internet Markets Bar Graph]

Source: Jupiter Communications

31
<PAGE> 33

The Need for Timely, Unbiased and Affordable Advice

The rapid growth of Internet commerce and the related increase of
innovative products, services and technologies have made it very difficult for
companies to keep pace with technological changes, to compete against new types
of companies and to generate research internally. Over the past few years,
numerous companies have been formed which focus solely on the delivery of
Internet access and online services, Internet commerce solutions and selling
products and services directly over the Internet. The emergence of these
Internet companies and the competitive challenges they pose have forced many
traditional companies, including financial services, telecommunications, media,
retail and consumer products companies, to make significant investments in
developing Internet-related businesses, services and strategies.

There is tremendous uncertainty and anxiety among all of these types of
companies as to the future growth of Internet commerce and how it will affect
day-to-day decision-making and business development efforts. This uncertainty
and anxiety is not limited to technology personnel but is increasingly shared by
marketing and sales personnel, business development staff, senior executives and
boards of directors. Many companies do not have the technological knowledge or
the financial resources or personnel to research these issues and developments
internally. In addition, the abundance of conflicting information and
predictions regarding the growth of the Internet and the future marketplace are
very difficult for even experienced executives to decipher. Consequently, demand
is growing for timely and credible advice to assist companies in identifying
revenue models and success criteria, analyzing consumer adoption trends and
activity, developing effective sales and marketing operations, assessing market
trends and analyzing the competitive landscape and industry outlook. We expect
that demand for timely and credible advice will increase as use of the Internet
impacts new industries and expands into other geographic areas.

THE JUPITER SOLUTION

We address the growing demand around the world for advisory research and
analysis on Internet commerce. All of our research is designed to help senior
executives at large and small companies in a wide range of industries make
difficult, complex and informed business decisions in the rapidly changing
Internet economy. Our research identifies revenue models and success criteria;
defines competitive landscapes; analyzes consumer demand for specific products
or Web sites; provides industry forecasts, markets projections and trend
analyses; and assesses the value of strategic partnerships and/or acquisitions.
Our Strategic Planning Services are provided on a subscription basis and
structured as a continuing information service for senior executives focused on
marketing, advertising, media and retail related to Internet commerce.

Our solution provides the following key advantages:

- OUR RESEARCH ENABLES SENIOR EXECUTIVES TO MAKE DIFFICULT AND COMPLEX
BUSINESS DECISIONS. Our research products and services enable companies
to understand the rapid changes related to the growth of Internet
commerce and to evaluate the steps they should take to promote their
businesses and compete effectively. Our primary goal is to provide
clients with prescriptive advice and practical business solutions. We
support our research and analysis with extensive proprietary data,
including market forecasts, executive surveys and surveys of Internet
users and households. Our clients also have access to our research
analysts to address specific business concerns, which enables them to
make more informed business decisions and allows us to better understand
and respond to their changing needs. We believe this interaction also
allows us to sustain a high client retention rate and identify new
research needs among our clients.

- WE FOCUS SOLELY ON THE RAPIDLY EVOLVING INTERNET ECONOMY. Our goal has
been to position our company as the definitive proprietary resource for
all Internet development efforts. Unlike companies that focus primarily
on information technology research, our research addresses the business
and marketing strategies of companies grappling with Internet commerce.
We typically cover the impact of new technology on traditional business
models, the rate of return-on-investment and projections of consumer
spending, not vendor selection or cost of implementation alone. As a
result, our prospects and clients include chief executive officers and
other senior executives, including sales, marketing, business
development, operations and strategic planning executives.

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<PAGE> 34

- OUR RESEARCH ANALYSTS ARE EXPERTS ON INTERNET COMMERCE. Our analysts
have years of relevant experience and are recruited from a variety of
different industries, including management consulting and research firms,
financial services, publishing, entertainment and advertising. Our
analysts are frequently quoted in articles on the Internet and Internet
commerce that appear in major newspapers, magazines and industry
periodicals. In addition, our analysts are asked to speak at hundreds of
non-Jupiter industry and corporate events. Because of their expertise,
our analysts also have personal access to the leading decision makers in
the Internet economy. We believe that the experience and prominence of
our analysts allow us to provide original and prescriptive research.

- WE SUPPLEMENT OUR CORE PRACTICES WITH SPECIALIZED MARKET MODULES. We
supplement our eight core practices, which offer broad prescriptive
advice relevant to all online ventures, with sixteen market modules that
target specific industries or geographic areas. By addressing market
forecasts, competitive landscapes and business practices relating to
specific industries and geographic areas, we are able to offer
specialized insights to guide senior executives in their daily decision
making.

- WE PROVIDE DESKTOP ACCESS TO JUPITER RESEARCH THROUGH OUR WEB SITE. Our
Web site is an interactive platform that enables clients to access our
products and services in a customized, easy-to-use manner. Our Web site
allows users to search through our research and data libraries, send
e-mails to client service representatives, access special content
packages and register for conferences. In addition, our Web site offers
analyst presentations and audio archives of analyst conference calls
addressing the research reports that we publish.

OUR STRATEGY

Our objective is to be the premier global research company focusing on
Internet commerce. Key elements of our business strategy include the following:

- PROVIDING INNOVATIVE RESEARCH ON INTERNET COMMERCE. We intend to
continuously update, expand and refine our practices, market modules and
data research capabilities to anticipate and meet the changing needs of
business executives. We expect to continue to add new practices and
market modules in the future. We also expect to continue to increase the
number of our analysts and other research professionals.

- INCREASING OUR CLIENT BASE IN THE UNITED STATES AND ABROAD. We are
committed to expanding our client base in the United States and abroad
even further by expanding our research products and services, increasing
our sales and marketing initiatives and personnel and focusing on client
service. We intend to hire additional sales representatives who will be
located in the targeted sales regions, as well as additional strategic
account managers who specifically focus on sales to multinational
companies. We also expect that the rapid changes in the Internet markets
and our increased international focus will enable us to attract
additional clients from new industries and geographic areas.

- INCREASING THE LEVEL OF SALES TO EXISTING CLIENTS. We are committed to
increasing the total sales to our existing clients, as well as increasing
the renewal rates for our SPS contracts. As Internet commerce continues
to expand around the world, we expect that our existing clients will
continue to need our research and advice and that they will purchase more
of our research products. In addition, we intend to actively market all
of our new practices and market modules to the executives already
purchasing our products and services and to other executives at our
current clients.

- PURSUING INTERNATIONAL OPPORTUNITIES. The growth of Internet commerce in
foreign countries will present numerous opportunities for us to expand
our international operations. We intend to add market modules and
conferences that focus on specific geographic markets. We also expect to
expand our London office which focuses on the European market, and we may
open additional offices in foreign cities. We expect to enter into
additional international distribution deals and strategic partnerships,
and we will consider acquisitions of research firms to extend our
international presence and research coverage.

- CONTINUING TO STRENGTHEN THE JUPITER BRAND. While we believe we have
developed a strong brand name, we intend to engage in extensive public
relations and marketing efforts to promote our

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<PAGE> 35

business in the United States and abroad. These efforts will include an
advertising campaign, continued enhancements to our Web site and an
increase in the number of marketing events we sponsor for potential
clients. We will also focus on expanding our press coverage and the
exposure of our research analysts on television and at industry events.

- INCREASING THE NUMBER OF CONFERENCES THAT WE PRODUCE. We expect to
expand the number of conferences that we produce, as well as update and
refine our topics as the marketplace changes. We are currently exploring
adding four additional conferences in the United States and abroad in
2000, including new events and regional versions of existing conferences.
Our conferences offer excellent opportunities to showcase our research to
potential clients, increase the public profile of our analysts, generate
favorable press and otherwise promote the Jupiter brand.

- ENHANCING OUR WEB DELIVERY PLATFORM. We plan to continually upgrade our
Web site to enable users to more easily access data, increase
interactivity and enhance customization of delivery. In the fourth
quarter of 1999, we plan to upgrade our Web site on a new platform which
will enable clients to create more personalized views of their content
and to search across all services more effectively. Our enhanced Web site
will allow us to more effectively target specific research to clients,
measure demand for our research and improve our customer service
capabilities.

STRATEGIC PLANNING SERVICES

Strategic Planning Services provides our clients with a wide range of
proprietary research, data and advisory analysis and is structured as a
continuous information service. We have designed our SPS research to enable
companies to make intelligent business decisions about Internet commerce and
consumer use of the Internet and related technologies. The core components of
our Strategic Planning Services are eight practices, which focus on issues vital
to all online ventures, and sixteen market modules, which focus on discrete
industries and geographic areas. SPS contracts are renewable on an annual basis.
We also recently introduced our MindShare Senior Executive Program which is
targeted at chief executive officers and other senior executives. MindShare is
structured to combine forward-looking, broad strategic advice with focused
strategy sessions with our analysts. These research products and services
identify revenue models and success criteria, analyze consumer adoption trends
and provide advice, forecasts and industry trends for senior executives focused
on technology, content, advertising, entertainment and merchandising related to
Internet commerce.

A key component of our Strategic Planning Services is access to our
research analysts for discussions and questions related to their published
reports. Our clients typically seek advice or have questions regarding new
business or marketing initiatives, best practices, new opportunities or
competitive threats, market forecasts and/or the value of mergers and strategic
partnerships. Clients submit inquiries to our dedicated client inquiry staff via
telephone, e-mail or our Web site. The client inquiry staff, which consists of
trained research professionals who are familiar with all of our products and
services, coordinates the responses and actively manages access to the analysts.

The size of our SPS contracts varies depending on the number of practices
and market modules that are purchased and the number and type of users at the
client company. Some users have interactive access to our research and analysts
and receive hard copies of our research reports while other users only have the
ability to read research reports by accessing our Web site. Each Strategic
Planning Services contract includes at least one practice and passes to our
conferences. Additional practices, market modules and conference passes can be
added at a graduated cost. Participation in our MindShare program is purchased
separately for an annual fee.

We have successfully expanded the number of clients for our Strategic
Planning Services, retained these clients when their contracts expire and
increased the level of sales to our clients. The number of SPS contracts has
increased from 145 on December 31, 1997, to 421 on December 31, 1998 and to 654
on June 30, 1999. In addition, 73% of the contracts that expired during the 12
months prior to June 30, 1999 were renewed and approximately 96% of these
contracts were renewed for an equal or larger dollar amount. Furthermore, the
average size of our contracts with clients has increased as well. Our average
contract value was approximately $17,300 on December 31, 1997, approximately
$27,700 on December 31,

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<PAGE> 36

1998 and approximately $33,850 on June 30, 1999. For our fifty largest clients,
the average contract value as of June 30, 1999 was $108,961.

Practices

Our practices focus on broad issues, strategies and challenges facing all
companies engaged in Internet commerce. The following is a description of the
practices in our SPS program and a sampling of recent reports published by each
practice:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PRACTICE RECENT REPORTS
- --------------------------------------------------------------------------------------------
<S> <C>
DIGITAL COMMERCE STRATEGIES: Generating - Determining the Value of Portal Tenancies
Consumer Transactions. Analyzes the - Auctions: From Bidding to Billing
business models of transaction-based sites - Minipayments: Implementing Transactions
and services, as well as their supporting for Small Purchases
technologies. Focusing on the impact that
interactivity will have on consumer
transactions, this practice provides
actionable advice concerning consumer
marketing, cost/revenue expectations and
competitive positioning.
- --------------------------------------------------------------------------------------------
CONSUMER CONTENT STRATEGIES: Programming - Online Distribution: Partnering with the
and Distributing Online Media. Analyzes AOL Behemoth
the integration of content, navigation, - Online Events: Exploiting Marquee Value
communications, community and utility for Audience Acquisition
features for maximum audience acquisition - Navigation: Creating an Intuitive
and retention. Analysts delve into Interface
programming and distribution strategies,
with a special focus on the transition of
traditional assets, e.g., text, audio,
video and commodity data, into the
interactive space.
- --------------------------------------------------------------------------------------------
ONLINE ADVERTISING STRATEGIES: Buying and - Emerging Ad Platforms: Anticipating the
Selling Interactive Media. Provides Next Generation of Advertising
analysis of both the business and practice - Mining the Clickstream for Competitive
of interactive advertising. Analysts Advantage
deliver insight and advice that help - Agency Relationships: Developing Cost-
advertisers maximize return on investment Effective Compensation
from their online efforts, publishers
generate ad revenues and technology
vendors and service providers best
position themselves to prospective
clients.
- --------------------------------------------------------------------------------------------
SITE OPERATION STRATEGIES: Managing the - Customer Support: Metrics for Cost and
New Media Enterprise. Analyzes the Performance
planning, development and management - Testing Tools and Methodologies for a
problems that plague all organizations Failure-Proof Site
running online businesses. The practice - Site Hosting: Evaluating Outsourcing
provides cost metrics, vendor evaluation Options
models, management strategies, best
practices and case studies. This research
is designed to help business managers
understand how technology and operations
affect the bottom line and solve the
problems that they face today.
- --------------------------------------------------------------------------------------------
</TABLE>

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<PAGE> 37

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PRACTICE RECENT REPORTS
- --------------------------------------------------------------------------------------------
<S> <C>
WEB TECHNOLOGY STRATEGIES: Positioning for - The Net-Enabled PC: Evolving Features,
Advanced Digital Platforms. Examines Emerging Business Opportunities
consumer adoption of new technologies and - Browser Evolution: Developing Sites for
the advent of new development the Post-Browser-War World
architectures that directly impact the - Web Media: Serving Sizzle in the Bandwidth
consumer experience. Offering practical Drizzle
advice about where executives should focus
their investment dollars, this practice
features examples of how sites are
developing applications to leverage the
emergence of advanced technologies and
predicts which vendors stand to win the
standards and licensing wars.
- --------------------------------------------------------------------------------------------
BANDWIDTH & ACCESS STRATEGIES: Leveraging - Bandwidth: Consumer Access Implications of
Internet Communications Evolution. the Fight for Fiber
Analyzes the dynamics of the consumer - ISP Partnerships: Driving Value Through
market for enhanced, broadband Web-Based Services
communications, specifically as it is - Unified Messaging: Reducing Complexity to
impacted by the emergence of the Internet. Generate Mass-Market Demand
This practice also provides essential
advice for a range of online initiatives
affected by the evolving communications
landscape, as well as for traditional
telecommunications providers, vendors and
application developers.
- --------------------------------------------------------------------------------------------
EUROPEAN INTERNET STRATEGIES: Competing - Personalization: Confronting European
for Emerging Online Markets. Advises new Privacy Challenges
media players on responding to consumer - Digital Television: Preparing for the
interest in the Internet in Europe. Based Internet's Sister Medium
in London, our analysts provide - The Euro: Meeting the Challenges of a
perspectives on in-country and European Unified Currency
developments, from the implications of
set-top devices and emerging broadband
solutions to the potential for advertising
revenue and commerce transactions.
- --------------------------------------------------------------------------------------------
</TABLE>

We recently launched a new practice, Commerce Infrastructure Strategies,
and continually evaluate the market demand for additional practices. We seek out
and receive input from our research analysts, the sales representatives that are
in constant contact with existing and potential clients and our marketing staff
as to the demand for specific research and our ability to provide coverage. We
also examine a variety of empirical data, including breadth of applicability,
uniqueness of the offering, competitive value and ease of communication.

The SPS program is designed to provide business executives with the most
up-to-date research and analysis. We provide written reports on a regular basis
as well as ongoing access to our research analysts in order to answer specific
questions or clarify information relating to the practice topic. Specifically,
clients in any of the eight practices receive the following:

- Monthly Analyst Reports. Each monthly report examines a different
industry, trend, product segment or business model relating to the
specific practice.

- Analyst Access. Clients have access to Jupiter's research analysts for
discussion, debate and additional advice. This service is available by
phone or e-mail.

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<PAGE> 38

- Weekly Analyst Notes. Each week, clients receive a one-page briefing
that analyzes topical issues related to the practice.

- Digital Access. Clients have password-only access to current research
and a fully-searchable archive, which includes research, company profiles
and slides from analyst presentations. Digital access to our Web site
also includes a weekly "JupMail" e-mail that updates clients on recent
research and upcoming events.

- Monthly Teleconferences. Each month, the research analysts from each of
the practices conduct a "JupTel" telephone conference call that outlines
the key findings from a recent monthly analyst report.

- Conference Passes. Clients are entitled to a specified number of passes
to our conferences.

MARKET MODULES

In mid-1998, we began selling market modules which are designed to help
executives understand how the Internet is transforming the competitive landscape
and business practices in specific industries or geographic areas. As with our
practices, we provide subscribers with both written reports and access to our
research analysts for inquiries and insights. Specifically, subscribers to any
of the sixteen market modules receive two semi-annual research reports, a
two-page monthly analyst note, access to our research analysts and digital
access to our Web site. The semi-annual research reports provide both an
overview of the key trends and business developments as well as comprehensive
reference materials, market forecasts, identification of key competitors and
information relating to strategic partnerships and acquisitions. The monthly
note highlights recent key trends or developments in the industry or country.

Our market modules provide us with an excellent opportunity to market our
research to new clients and industries, as well as the ability to market new
products to our existing clients. The following is a list of the sixteen market
modules in our SPS program, eight of which relate to specific industries and
eight of which relate to specific geographic areas:

<TABLE>
<CAPTION>
INDUSTRIES GEOGRAPHIC AREAS
---------- ----------------
<S> <C>
Consumer Goods France
Financial Services Germany
Health United Kingdom
Music Canada
Shopping Australia
Television Latin America
Travel Japan
Classifieds Nordic
</TABLE>

As other industries and countries are affected by the growth of the
Internet, we anticipate expanding the number of our market modules which focus
on industries and geographic areas. As with our practices, we examine on an
ongoing basis the demand for new market modules.

MINDSHARE SENIOR EXECUTIVE PROGRAM

In February 1999, we launched our MindShare Senior Executive Program, which
is specifically targeted at chief executive officers and other senior executives
across all industries. This program combines forward-looking, broad strategic
advice with focused strategy sessions with our analysts. MindShare is designed
to enable these executives to better position and focus their companies,
prioritize business development opportunities, assess long-term competitive
threats and successfully integrate new technologies with Internet commerce.

The cornerstone of our MindShare program is two half-day strategy sessions
with two research analysts per session at a location selected by the client. Our
MindShare clients also receive written reports that contain extensive
forward-looking research related to trends, changes and developments in the
Internet

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<PAGE> 39

commerce marketplace. These quarterly reports are supplemented by monthly
briefings that focus on topical issues and major industry developments.
Furthermore, MindShare clients are invited to participate in our annual
executive forum, which is an invitation-only event targeted at a select group of
senior executive officers and technology leaders.

In addition to providing significant value for our clients, MindShare helps
us to establish strong relationships with top executives at client companies. We
expect MindShare to enable us to bolster retention rates for SPS and to
strengthen our relationships with clients. We expect that the number of
MindShare clients will increase as we continue to expand the marketing of this
program and as the value of the products and services becomes more widely known.

JUPITER CONFERENCES

We produce a wide range of conferences which provide comprehensive coverage
of issues relating to Internet commerce. These conferences offer senior
executives the opportunity to hear first-hand the insights of our analysts and
the leading decision makers in the Internet and technology industries. Our
events, which typically run for two to three days, provide an excellent
opportunity to showcase our research to current and potential clients, increase
the public profile of our research analysts, generate favorable press and
otherwise promote the Jupiter brand. Since over 75% of the attendees at our
conferences are not SPS clients, these events provide a unique opportunity to
promote our research products and services to potential customers. As a result,
our marketing staff and sales representatives attend each of our events and
conduct continuous promotional and direct sales efforts targeted at potential
clients. We believe that our events and the sales and marketing efforts at these
events have resulted in numerous SPS contracts.

Our conferences, located in the United States and in Europe, are notable
for the senior level of attendees from all sectors of the online and media
industries. We produced eight conferences in 1997 and nine conferences in 1998.
We have scheduled ten conferences for calendar year 1999, six of which are large
events and four of which are small events. Paid attendance at our large events
typically ranges from 800-1,200 participants, while paid attendance at our small
events typically ranges from 400-600 participants. We also solicit sponsors and
exhibitors for each of our events. Exhibitors receive a booth at the conference
to promote their companies and are also listed in the conference program.
Sponsors receive prominent display of their corporate logos in the conference
program and the main meeting hall of the conference, and may host a reception
during the conference. We typically have approximately 50-75 sponsors and
exhibitors at our large events and 25 sponsors and exhibitors at our small
events.

We have successfully increased attendance at our various conferences over
the past few years. For example, paid attendance at our seven conferences held
through August 1999 was 5,279, 95% above total paid attendance for all nine of
our conferences held in 1998. In addition, paid attendance at the six
conferences held so far in 1999 that were also held in 1998 has increased by
101%.

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<PAGE> 40

The following is a list of the ten events scheduled for 1999, nine of which
are located in the United States and one of which will take place in London, and
the year the conference was first held:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONFERENCE TOPIC
- -------------------------------------------------------------------------------- YEAR FIRST HELD
<S> <C> <C>

[Jupiter Consumer Online NYC Logo] Internet Strategies for Mainstream Media 1994
- --------------------------------------------------------------------------------

[Digital Kids Logo] Marketing to the Post-Modern Kid 1995
- --------------------------------------------------------------------------------

[Jupiter Consumer Online Europe
Logo] The European Internet Economy 1995
- --------------------------------------------------------------------------------

[Plug.In Logo] The Jupiter Music Forum 1996
- --------------------------------------------------------------------------------

[Jupiter Advertising Online] Online in the Media Mix 1996
- --------------------------------------------------------------------------------

[@ Travel Logo] Strategies for Destination-Based Commerce 1997
- --------------------------------------------------------------------------------

[Jupiter Shopping Logo] Reinventing Retail 1998
- --------------------------------------------------------------------------------

[Jupiter Financial Services Logo] Portals for Consumer Finance 1998
- --------------------------------------------------------------------------------

[Mindshare Logo] The Jupiter Executive Forum 1999
- --------------------------------------------------------------------------------

[Jupiter Entertainment Forum Logo] Hollywood and the Internet 1999
- --------------------------------------------------------------------------------
</TABLE>

As Internet commerce continues to grow, we anticipate that we will expand
the number of events that we produce as well as attract higher attendance at our
conferences. We also expect to devote more resources to promoting events outside
the United States or events with more of an international focus. Specifically,
in addition to the ten conferences described above, we plan to produce four
additional events during calendar year 2000, including conferences on health
care, European shopping and Latin America.

PUBLISHING AND CUSTOM RESEARCH

We also provide other research products and services to clients, including
book-length research reports and customized research.

We annually publish approximately fifteen book-length research studies that
are available for purchase through direct mail or on our Web site. Sales of
these studies are an important way to expose new companies and executives to our
research.

We also perform customized, client-focused research projects relating to
Internet commerce on a limited basis. These projects allow our clients to take
advantage of the knowledge and experience of our research analysts and to
develop structured, detailed responses to specific issues relevant to their
business. Custom studies often form the basis to explore a new practice or
market module and, like our book-length studies, are an effective way to expose
new companies and executives to our research products and services.

CLIENTS

Our client base has rapidly expanded since we launched SPS. In addition,
our client base has diversified from primarily technology and media companies to
include large and small companies in the Internet, media, telecommunications,
technology, financial services, consumer products, retail, travel and

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<PAGE> 41

professional services industries. Many of our clients have limited experience
with Internet commerce or operating an online business. The users of our
research products and services at our client companies hold diverse positions,
demonstrating the importance of Internet commerce to a company's overall
strategy and development. In addition to chief executive officers and
presidents, our users include marketing, business development, operations,
strategic planning and information technology executives.

As of June 30, 1999, we had 654 contracts for our Strategic Planning
Services. As of June 30, 1999, our clients included 78 of the Fortune 1000
companies, 22 of the AdWeek Top 100 Megabrands, 10 of the Fortune 50 commercial
banks and 29 of Media Metrix's top 50 Web properties. Approximately 88% of these
customers are headquartered in the United States and the remainder are located
primarily in Europe. We expect that our client base will continue to expand as
we introduce new practices and market modules and increase our sales and
marketing initiatives. We also believe there is significant opportunity to
increase our penetration of large corporate clients. In addition, we expect the
number of our international clients to increase significantly as the use of the
Internet grows in other parts of the world and as we introduce additional
products and services targeted to international markets.

To date, none of our clients have accounted for more than 2% of the total
annual revenues generated from SPS.

The following is a representative list of our larger clients in terms of
revenue:

<TABLE>
<CAPTION>
PROFESSIONAL
CONSUMER BRANDS FINANCIAL SERVICES INTERNET MEDIA SERVICES
--------------- ------------------ -------- ----- ------------
<S> <C> <C> <C> <C>
Cross Pen Hartford Financial America Online BBC Agency.com
Encyclopedia Brittanica Services Inktomi Cablevision DoubleClick
Hertz J.P. Morgan MP3.com International Olympic iXL Enterprises
Toys "R" Us Putnam Investments Sportsline USA Committee Rare Medium
Vitamin Shoppe Soundview Technology Virtual Communities Landmark Strategic Interactive
Visa Communications Group
Time Warner
</TABLE>

<TABLE>
<CAPTION>
RETAIL TECHNOLOGY TELECOM TRAVEL
------ ---------- ------- ------
<S> <C> <C> <C>
Amway Compaq AT&T Continental
Cybershop Gateway British Airlines
800.com Hewlett Packard Telecom Delta Airlines
boo.com IBM France Pacific Access
Value America Intel Telecom Starwood Hotels
MediaOne Swiss Air
Sprint
</TABLE>

RESEARCH METHODOLOGY

Our research methodology enables us to deliver compelling, data-driven and
timely analysis across all eight practices and sixteen market modules. Our
research products and services are generated by a growing team of research
professionals, including research analysts, an independent data research group
and a dedicated staff to handle client inquiries. These research professionals
are supported by in-house primary research tools and proprietary databases. In
addition, we have implemented a rigorous editorial and review process to ensure
that every report is accurate, well-written and useful to our clients.

As of June 30, 1999, we employed a total of 74 research professionals,
including 38 analysts. The knowledge and experience of our research
professionals, particularly our analysts, are the crucial elements in our
ability to provide high-quality, timely and original research. Our analysts have
extensive industry experience and varied backgrounds. We recruit them from a
number of different industries, including management consulting and research
firms, financial services, publishing, entertainment and advertising. We believe
that the diverse backgrounds and experiences of our analysts allow us to provide
original and prescriptive research and analysis which frequently challenges the
conventional wisdom and viewpoints promoted by others. We expect to
significantly expand the number of our research analysts as we grow the business
and increase the number of practices and market modules.

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<PAGE> 42

The reports published by our analysts are supplemented with primary
research, data gathering, interviews and surveys of high-level industry
executives. To assist our analysts and their research activities, we have a
dedicated data research group that conducts discrete research and survey
projects, develops and maintains a series of econometric forecast models and
works with the analysts to provide a statistical foundation for their findings.

Our analysts and our data research group have access to significant
proprietary data, including the following:

- HOUSEHOLD SURVEYS. Twice a year, we field a broad benchmarking survey of
a large representative sample of United States households, including
those that are not yet online. Data from these consumer surveys are
incorporated into the body of our proprietary research products.

- ONLINE USER SURVEYS. Each month, we conduct focused, in-depth surveys of
thousands of online consumers. As with the household surveys described
above, the data from these surveys are incorporated into the body of our
proprietary research products.

- MARKET FORECASTS. Our analysts forecast the future of various online
markets to help guide clients' strategies and investments. Complementing
our qualitative predictions, these forecasts measure the expected growth
of many industry indicators and market sectors.

- EXECUTIVE SURVEYS. We conduct phone and written surveys with top
industry executives to understand their strategies, attitudes and
intentions. These data provide our research analysts with systematic and
comprehensive insight into those leaders whose actions shape the online
marketplace.

We design the large-scale household and online user surveys described above
which are conducted through our arrangement with NFO Worldwide, one of the
largest worldwide research organizations. In exchange for these surveys, we pay
NFO Worldwide a fee and provide complementary sponsorships, exhibit booths and
speaking opportunities at many of our conferences. While NFO maintains the
panels, all of the questions and surveys that we prepare and provide NFO, as
well as all of the findings and results from these survey panels, remain our
proprietary data. Our arrangement with NFO Worldwide is not memorialized in a
formal written agreement.

All of our research products are subject to a stringent editorial and
review process to ensure the highest quality. We maintain consistency among the
formats of our research reports across the practices and market modules so as to
ensure clarity and readability by all of our clients. Each research topic is
first subject to a series of discussions and meetings to define the scope of the
topic, assess the relevance and importance of the research and highlight key
themes and questions. Prior to publication, each research report is subject to
ongoing review and comment from other analysts and research management.

SALES AND MARKETING

We sell and market our research products and services primarily through our
direct sales force, which was comprised of 40 sales representatives as of June
30, 1999. This represents an increase from four sales representatives at the end
of 1997 and 21 sales representatives at the end of 1998. As with our research
analysts, our sales representatives have diverse backgrounds and experience in a
number of different industries. In addition, we have been very successful at
retaining our sales representatives. Of the 36 sales representatives hired
between January 1, 1998 and June 30, 1999, 33 are still employed with us.

Our sales representatives currently consist of strategic account managers,
who are each responsible for 20 to 30 multinational companies, and geographic
account managers, who are each responsible for specific territories. Our
strategic account managers are focused on selling a broad array of products and
services across a global enterprise. Unlike many of our direct and indirect
competitors, we try, to the extent possible, to locate our sales representatives
in the geographic territories that they cover. Specifically, as of June 30,
1999, 34 of our 40 sales representatives were located in the territories that
they cover. We believe that this allows us to develop stronger relationships
with our current and potential clients and to better understand the changing
needs of our clients. We have implemented a training program for all of our new
sales representatives and believe that this program has been effective in
enabling our sales representatives

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<PAGE> 43

to quickly and effectively solicit new clients. Sales representatives receive a
base salary and are eligible for commissions based on new business and renewals.

We expect to significantly increase the number of our sales representatives
as we grow the business and increase our international operations. In addition
to our sales representatives, we use independent sales distributors to sell our
products and services in Australia, Singapore and Israel. We are currently
exploring similar distribution arrangements in other countries and may enter
into additional agreements of this nature in the future.

We have developed a number of strategies and programs to build awareness of
the Jupiter name and to position the company as the definitive research resource
for Internet commerce. We employ an active press relations team, which responds
to hundreds of press inquiries on a weekly basis, and an in-house
promotions/advertising staff, which is responsible for developing sales
literature and direct mail campaigns and managing our advertising efforts. Our
analysts are frequently quoted in articles on the Internet and e-commerce that
appear in major newspapers, magazines and industry periodicals. In addition, we
actively encourage our research analysts to speak at non-Jupiter industry and
corporate events in order to enhance our reputation and promote our diverse
products. For example, in the first six months of 1999, our research analysts
appeared at approximately 80 non-Jupiter events, conferences and forums around
the world, and we intend to increase this activity in the future. We estimate
that our analysts addressed approximately 36,000 people at these functions. We
also host numerous breakfast forums around the world which are targeted at
potential customers and designed to enhance our visibility and reputation.
During the first six months of 1999, we hosted a total of 38 forums which
collectively had over 2,300 guests. We also devote significant resources to
promoting our numerous research products and services to the thousands of
individuals attending our conferences. Lastly, we use our Web site as a tool to
market the Jupiter name and expose potential customers to our products.

COMPETITION

We believe that the primary competitive factors determining success in our
markets include the quality and timeliness of our research and analysis, our
ability to offer products and services that meet the changing needs of our
customers, the prices we charge for our various research products and general
economic conditions. We believe that we compete favorably with respect to each
of these factors. In addition, we believe that we distinguish ourselves from our
competitors as a result of the depth and breadth of our Strategic Planning
Services, the extent to which we provide access to our research analysts, the
quality of our research analysts and sales representatives and the primary
research tools and proprietary databases that we have developed internally.

Our principal current competitor is Forrester Research. Recently Gartner
Group announced its intention to compete directly in providing research products
related to Internet commerce. A number of other companies compete with us in
providing research and analysis related to a specific industry or geographic
area. In addition, our competitors include information technology research
firms, business consulting and accounting firms, electronic and print publishing
companies and equity analysts employed by financial services companies.

We expect competition to increase because of the business opportunities
presented by the growth of Internet commerce around the world. Competition may
also intensify as a result of industry consolidation, because the markets in
which we operate face few substantial barriers to entry or because some of our
competitors may provide additional or complementary services, such as consulting
services. Our current and potential competitors include many companies that have
substantially greater financial, information gathering and marketing resources
than we have. For example, Gartner Group, Forrester Research and META Group,
Inc. each had higher revenues than we did during 1998, and each currently has
greater information gathering and marketing resources than we have. This may
allow them to devote greater resources than we can to the promotion of their
brand and to the development and sale of their products and services. We cannot
assure you that we will be able to compete successfully against current and
future competitors.

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<PAGE> 44

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

To protect our rights to our intellectual property, we rely on a
combination of trademark and copyright law, trade secret protections and
confidentiality agreements and other contractual arrangements with our employees
and third parties. We have registered the Jupiter, Jupiter Communications and
Internet Business Report marks in the United States, and we have pending
trademark applications for certain other trademarks in the United States,
including SPS. We also have pending trademark applications for the Jupiter and
Jupiter Communications marks in various foreign jurisdictions. We provide our
proprietary research products to hundreds of different companies throughout the
world, including some companies that compete with us in some manner. As a
result, the protective steps we have taken may be inadequate to protect our
intellectual property and to deter misappropriation of the original research and
analysis that we develop. We also may be unable to detect the unauthorized use
of, or take appropriate steps to enforce, our intellectual property rights.
Moreover, effective trademark, copyright and trade secret protection may not be
available in every country in which we offer our research products and services
to the extent available in the United States.

Furthermore, although we believe that our proprietary rights do not
infringe on the intellectual property rights of others, other parties may assert
claims against us that we have misappropriated a trade secret or infringed a
patent, copyright, trademark or other proprietary right belonging to them. Any
infringement or related claims, even if not meritorious, could be costly and
time consuming to litigate, may distract management from other tasks of
operating the business and may result in the loss of significant rights and the
loss of our ability to operate our business.

EMPLOYEES

As of June 30, 1999, we had 194 full-time employees, including 40 sales
representatives and 74 research staff, of which 38 were analysts. Our
compensation policy promotes employee ownership, and we believe that this policy
contributes to the high retention rates of our research analysts and sales
representatives. Specifically, as of June 30, 1999, approximately 93% of our
employees, including all of our research analysts and sales representatives,
owned options to purchase our securities.

All of our research analysts and sales representatives, as well as all of
our executive officers, have entered into agreements that prohibit them from
being employed by a competitive company for a period of one year following their
termination of employment with us. None of our employees are represented under
collective bargaining agreements. We believe that our relations with our
employees are good.

FACILITIES

Our headquarters are located in a leased facility in New York, New York,
consisting of approximately 27,700 square feet of office space. We also lease
office space in London, England, Stockholm, Sweden and San Francisco. We are in
negotiations to lease additional office space in New York, New York and in San
Francisco, California.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

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<PAGE> 45

MANAGEMENT

OUR EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The executive officers, directors and key employees of Jupiter, and their
ages and positions, are:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS:
Gene DeRose............................... 36 Chairman of the Board of Directors and
Chief Executive Officer
Kurt Abrahamson........................... 38 President, Chief Operating Officer and
Director
Jean Robinson............................. 43 Chief Financial Officer
Peter Storck.............................. 39 Senior Vice President, Research
Ken Male.................................. 34 Vice President, Global Sales
Phil Whitney.............................. 36 Vice President, Marketing
Joy Cerequas.............................. 34 Vice President, Conferences
Jeffrey Ballowe........................... 44 Director
Robert Kavner............................. 56 Director
KEY EMPLOYEES:
Ross Rubin................................ 32 Vice President and Senior Analyst
Adam Schoenfeld........................... 35 Vice President and Senior Analyst
Nicole Vanderbilt......................... 26 Vice President and Senior Analyst
Tim DeBaun................................ 43 Chief Information Officer
Phil Dwyer................................ 44 Managing Director, Europe
Jack Foreman.............................. 34 Vice President, Strategic Development
</TABLE>

GENE DEROSE has served as Chief Executive Officer of Jupiter since November
1996 and served as President of Jupiter from its inception to November 1996. He
has served as Chairman of the Board of Directors of Jupiter Communications, Inc.
since its formation in July 1999. Throughout 1994, prior to the formation of
Jupiter, Mr. DeRose was the President of the sole proprietorship which pre-dated
the formation of Jupiter. Mr. DeRose is a board member of MOUSE, a nonprofit
organization that provides volunteer technical manpower to New York City's
public schools, and also serves on the Advisory Board of the Markle Foundation's
E-mail For All campaign, an initiative that encourages the use of new
communications technologies for socially beneficial purposes. Mr. DeRose
received his B.A. from the University of Virginia. Mr. DeRose is the son-in-law
of Robert Kavner.

KURT ABRAHAMSON has served as President and Chief Operating Officer of
Jupiter since its inception. He has served as a Director of Jupiter
Communications, Inc. since its formation in July 1999. Between October 1989 and
his joining Jupiter in 1994, Mr. Abrahamson served as Principal Analyst for the
Harvey M. Rose Corporation, a management consulting firm. Mr. Abrahamson
received a B.A. from Cornell University and an M.A. from the John F. Kennedy
School of Government at Harvard University.

JEAN ROBINSON has served as Chief Financial Officer of Jupiter since March
1999. From January 1983 to January 1999, Ms. Robinson held various corporate
finance positions at J.P. Morgan & Co. Incorporated, including Vice President,
Equity Capital Markets from June 1993 to January 1999. Ms. Robinson received her
B.A. from Smith College and an M.B.A. from Columbia University.

PETER STORCK has served as Senior Vice President, Research of Jupiter since
November 1998. From June 1998 to November 1998, Mr. Storck served as Vice
President, Research of Jupiter. From July 1996 to June 1998, he served as
Jupiter's Director, Online Advertising Strategies. From July 1995 to July 1996,

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<PAGE> 46

Mr. Storck served as a consultant to Jupiter. From January 1989 to July 1995,
Mr. Storck was simultaneously a novelist, a writing instructor at Columbia
University and a compensation specialist at Guy Carpenter & Co., Inc., a
reinsurance intermediary. Prior to that, he served as a political advisor to
various campaigns and officials. Mr. Storck received his B.S. from Cornell
University and an M.F.A. from Columbia University.

KEN MALE has served as Vice President, Global Sales of Jupiter since
January 1998. From December 1995 to January 1998, he served as an Account
Manager for Giga Information Group, Inc., an information technology research
firm, and developed that company's equities research product. From June 1995 to
December 1995, Mr. Male was involved in the formation and launch of Giga
Information Group, Inc. Prior to June 1995, Mr. Male was a private consultant
and held various account manager positions at Gartner Group, Inc., Digital
Equipment Corporation and EMC Corporation. Mr. Male received his B.S. from
Boston College.

PHIL WHITNEY has served as Vice President, Marketing of Jupiter since
December 1998. From April 1997 to December 1998 he served as Vice President,
Consumer Marketing at Money Magazine, a division of Time, Inc. From May 1992 to
April 1997, Mr. Whitney held various marketing positions at Money Magazine.
Prior to 1992, he held a number of circulation and consulting positions at
Audubon Magazine and Robert Cohen Associates, a publishing management and
consulting firm. Mr. Whitney received his B.A. from Tufts University.

JOY CEREQUAS has served as Vice President, Conferences of Jupiter since
August 1998. From May 1994 to August 1998, she served as Group Show Director for
SIGS Publications, Inc., a producer of magazines, books and conferences. Prior
to working at SIGS Publications, Inc., Ms. Cerequas managed conferences and
events for the International Trademark Association and Citicorp Investment Bank.
Ms. Cerequas received B.S. degrees from both the S.I. Newhouse School of Public
Communications and the School of Management of Syracuse University.

JEFFREY BALLOWE has served as a director of Jupiter since September 1999.
From 1986 to 1997, Mr. Ballowe held various management positions at Ziff-Davis,
Inc., an international media company, culminating in a position as President of
the Interactive Media and Development Group. Mr. Ballowe is the Chairman of the
Board of Directors for deja.com and the not-for-profit Electronic Literature
Organization. He serves on the boards of drkoop.com, GiveMeTalk.com,
VerticalNet, XOOM.com, ZDTV, and the Advisory Board for the Internet Capital
Group. Mr. Ballowe received his B.A. from Lawrence University, an M.A. from the
University of Wisconsin-Madison and his M.B.A. from the University of Chicago.

ROBERT KAVNER has served as a director of Jupiter Communications, Inc.
since its formation in July 1999. Since December 1998, Mr. Kavner has served as
Vice Chairman and a General Partner of idealab!, an incubator for starting and
growing Internet businesses. From September 1996 to December 1998, he was
President and Chief Executive Officer of On Command Corporation, a supplier of
entertainment and information services to the lodging industry. From June 1994
to September 1996, he was an independent venture capitalist. From May 1984 to
June 1994, he held a number of senior level positions at AT&T Corporation,
including CEO of the Multimedia Products and Services Group and President of the
Data Systems Division. Prior to his work at AT&T, Mr. Kavner was a Partner at
Coopers & Lybrand, L.L.P. and was Co-Chairman of the firm's information industry
practice. Mr. Kavner serves on the Board of Directors of Fleet Financial Group,
Inc., Earthlink Network, Inc., Ticketmaster Online Citysearch, Inc. and
GoTo.Com, Inc. He received his B.S. from Adelphi University and attended the
Advanced Management Program at Dartmouth University. Mr. Kavner is the
father-in-law of Mr. DeRose.

ROSS RUBIN has served as Vice President and Senior Analyst of Jupiter since
April 1999. From November 1998 to April 1999, Mr. Rubin served as Senior
Research Officer of Jupiter. From January 1998 to November 1998, he served as
Jupiter's Group Director, Telecom and Technology, and from August 1996 to
January 1998, he served as Jupiter's Group Director, Consumer Internet
Technologies. From May 1996 to August 1996, Mr. Rubin was a Senior Analyst for
Jupiter. From March
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<PAGE> 47

1994 to May 1996, Mr. Rubin served as a Technology Analyst for Salomon Brothers.
From September 1991 to March 1994, he served as an Analyst for McKinsey &
Company. Mr. Rubin received his B.S. from Cornell University.

ADAM SCHOENFELD has served as Vice President and Senior Analyst of Jupiter
since February 1995. From Jupiter's inception to February 1995, Mr. Schoenfeld
served as a news director for Jupiter. From March 1992 to June 1994, he worked
as a journalist for the Associated Press. Mr. Schoenfeld attended Cornell
University.

NICOLE VANDERBILT has served as Vice President and Senior Analyst of
Jupiter since January 1999. From October 1996 to January 1999, she served as an
analyst for Jupiter and later the Practice Director of Jupiter's Digital
Commerce Strategies practice. From July 1995 to October 1996, she was an
information technology consultant at Deloitte & Touche, L.L.P. Ms. Vanderbilt
received her B.S. from Princeton University in May 1995.

TIM DEBAUN has served as Chief Information Officer of Jupiter since January
1999. From October 1993 to January 1999, Mr. DeBaun served as Vice President,
Head of Global Telecommunications for D. E. Shaw & Co., L.P., a securities and
investment firm. Mr. DeBaun received his B.A. from Marist College and did
graduate work at both the School of Computer Science of Rutgers University and
the School of Engineering of Columbia University.

PHIL DWYER has served as Jupiter's Managing Director, European Internet
Strategies since February 1998. From January 1994 to February 1998, he was a
Publisher at Centaur Publications where he helped launch several publications,
including New Media Age. Mr. Dwyer received his B.A. from London University and
an M.A. from Brunel University.

JACK FOREMAN has served as Vice President, Strategic Development of Jupiter
since February 1998. From June 1992 to February 1998, Mr. Foreman held a number
of positions at Gartner Group, Inc., including Financial Director, Vice
President of Business Operations, Interactive Systems and Vice President of
Business Products. Previously, he was a Senior Accountant at Price Waterhouse.
Mr. Foreman received his B.S. from The Wharton School at the University of
Pennsylvania and an M.B.A. from the University of Michigan.

COMPOSITION OF THE BOARD

Upon the closing of this offering, we intend to file an amended and
restated certificate of incorporation pursuant to which our board of directors
will be divided into three classes, each of whose members will serve for a
staggered three-year term. Upon the expiration of the term of a class of
directors, directors in that class will be elected for three-year terms at the
annual meeting of stockholders in the year in which their term expires. Our
board of directors has resolved that Mr. Abrahamson will be a Class I Director
whose term expires at the 2000 annual meeting of stockholders, Mr. Kavner will
be a Class II Director whose term expires at the 2001 annual meeting of
stockholders and Mr. DeRose and Mr. Ballowe will be Class III Directors whose
terms expire at the 2002 annual meeting of stockholders. With respect to each
class, a director's term will be subject to the election and disqualification of
their successors, or their earlier death, resignation or removal.

BOARD COMMITTEES

The Audit Committee of the board of directors will be established shortly
after the closing of this offering and will review, act on and report to the
board of directors with respect to various auditing and accounting matters,
including the recommendation of Jupiter's auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of Jupiter's
independent auditors and the accounting practices of Jupiter.

The Compensation Committee of the board of directors will be established
shortly after the closing of this offering and will recommend, review and
oversee the salaries, benefits and stock option plans for

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<PAGE> 48

Jupiter's employees, consultants, directors and other individuals compensated by
Jupiter. The Compensation Committee will also administer Jupiter's compensation
plans.

DIRECTOR COMPENSATION

Other than reimbursing directors for customary and reasonable expenses of
attending board of directors or committee meetings, Jupiter does not currently
compensate its directors. Under our 1999 Stock Incentive Plan, each individual
who first joins the Jupiter board after September 17, 1999 as a non-employee
board member will automatically receive a grant of an option to purchase 50,000
shares of common stock at the time of his or her commencement of board service
or the date of the underwriting agreement for this offering, whichever is later.
In addition, on the date of each annual stockholders' meeting beginning in 2000,
each non-employee member of the board of directors who is to continue to serve
as a non-employee board member will automatically be granted an option to
purchase 5,000 shares of common stock. Please see "--1999 Stock Incentive Plan."

EMPLOYMENT AGREEMENTS

We have entered into an employment agreement with Gene DeRose, dated
October 22, 1997. The initial term of this agreement expires on December 31,
1999, although Mr. DeRose has the option to renew the agreement for two
successive one-year terms. The agreement provides for Mr. DeRose to receive an
initial base salary of $165,000 and a bonus of $30,000 for the year ended
December 31, 1997. For each year thereafter, Mr. DeRose's salary is to be
increased within a specific range based on negotiations between Jupiter and Mr.
DeRose. For each calendar year after 1997, Mr. DeRose's annual bonus is based on
Jupiter's attainment of specified revenue targets. If Mr. DeRose's employment
agreement is terminated by us for any reason other than for cause or if he
voluntarily resigns under various circumstances, he is entitled to receive 50%
of the salary and bonus payments that would have been paid to him under his
employment agreement had he continued working for us for a period of eighteen
months following the date of termination.

We have entered into an employment agreement with Kurt Abrahamson, dated
October 22, 1997. The initial term of this agreement expires on December 31,
1999, although Mr. Abrahamson has the option to renew the agreement for two
successive one-year terms. The agreement provides for Mr. Abrahamson to receive
an initial base salary of $155,000 and a bonus of $30,000 for the year ended
December 31, 1997. For each year thereafter, Mr. Abrahamson's salary is to be
increased within a specific range based on negotiations between Jupiter and Mr.
Abrahamson. For each calendar year after 1997, Mr. Abrahamson's annual bonus is
based on Jupiter's attainment of specific revenue targets. If Mr. Abrahamson's
employment agreement is terminated by us for any reason other than for cause or
if he voluntarily resigns under various circumstances, he is entitled to 50% of
the salary and bonus payments that would have been paid to him under his
employment agreement had he continued working for us for a period of eighteen
months following the date of termination.

EXECUTIVE COMPENSATION

The following table sets forth the compensation earned for all services
rendered to us in all capacities during 1998 by our Chief Executive Officer and
the other three most highly compensated executive

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<PAGE> 49

officers, other than our Chief Executive Officer, who earned more than $100,000
in 1998 and who were serving as executive officers at the end of 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION AWARDS
------------------ SHARES UNDERLYING
NAME AND PRINCIPAL POSITION SALARY BONUS OPTIONS (#)
<S> <C> <C> <C>
Gene DeRose............................................. $165,000 $50,000 --
Chief Executive Officer
Kurt Abrahamson......................................... $155,000 $50,000 --
President and Chief Operating Officer
Peter Storck............................................ $116,750 $37,000 13,500
Senior Vice President, Research
Ken Male................................................ $105,000 $96,000 100,000
Vice President, Global Sales
</TABLE>

- ------------------------------
(1) The column for "Other Annual Compensation" has been omitted because there is
no compensation required to be reported in that column. The aggregate amount
of perquisites and other personal benefits provided to each executive
officer listed above is less than the lesser of $50,000 and 10% of his total
annual salary and bonus.

OPTION GRANTS IN LAST YEAR

The following table sets forth information concerning individual grants of
options made during 1998 to each of our executive officers named in the Summary
Compensation Table. In the year ended December 31, 1998, Jupiter Communications,
LLC granted options to purchase 563,000 units, which will convert into options
to purchase 563,000 shares of common stock following the merger with Jupiter
Communications, Inc. We have never granted any stock appreciation rights.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE VALUE
------------------------------------------------ AT ASSUMED ANNUAL RATES
% OF TOTAL OF STOCK PRICE APPRECIATION
NUMBER OF OPTIONS FOR OPTION TERM(2)
SHARES GRANTED TO ---------------------------
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE PER EXPIRATION
NAME GRANTED YEAR SHARE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Gene DeRose...................... -- -- -- -- -- --
Kurt Abrahamson.................. -- -- -- -- -- --
Peter Storck..................... 13,500 2.4% $1.75 06/01/05 $ 9,618 $ 22,413
Ken Male......................... 100,000 17.8 1.75 04/14/05 71,243 166,025
</TABLE>

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

(1) Each option represents the right to purchase one share of common stock. The
options shown in these columns, which were originally granted pursuant to
Jupiter Communications, LLC's 1997 Option Plan, vest at a rate of 25% after
one year from the date of grant and 6.25% each quarter thereafter.

(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are mandated
by rules of the Securities and Exchange Commission and do not represent our
estimate or projection of our future common stock prices. These amounts
represent certain assumed rates of appreciation in the value of our common
stock from the fair market value on the date of grant. Actual gains, if any,
on stock option exercise depend on the future performance of the common
stock. The amounts reflected in the table may not necessarily be achieved.

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<PAGE> 50

AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1998 AND YEAR-END
OPTION VALUES

The following table sets forth information concerning the number and value
of unexercised options held by each of our executive officers named in the
Summary Compensation Table at December 31, 1998. None of these executive
officers exercised options during the year ended December 31, 1998. This table
assumes the conversion of Jupiter Communications, LLC to a corporate form of
organization as of December 31, 1998.

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS
1998 AT DECEMBER 31, 1998(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Gene DeRose...................................... -- -- -- --
Kurt Abrahamson.................................. 166,992 -- $375,976 --
Peter Storck..................................... 22,742 32,258 56,855 $ 63,770
Ken Male......................................... -- 100,000 -- 125,000
</TABLE>

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

(1) There was no public trading market for our common stock as of December 31,
1998. Accordingly, the values of the unexercised in-the-money options have
been calculated on the basis of the fair market value at December 31, 1998
of $3.00 per share, less the applicable exercise price, multiplied by the
number of shares acquired on exercise.

1997 OPTION PLAN

Jupiter Communications, LLC adopted the 1997 Option Plan in June 1997. A
total of 2,750,000 units have been reserved for issuance under this plan. As of
October 6, 1999, options to purchase a total of 2,711,275 units were outstanding
under the 1997 Option Plan. Upon the merger of Jupiter Communications, LLC with
and into Jupiter Communications, Inc., the plan and each outstanding option will
be assumed by Jupiter Communications, Inc. and no further options will be
granted under this plan.

Each option has a maximum term of seven years. The exercise price of each
option must be paid in cash. In the event of an acquisition of Jupiter, each
option may, at our discretion, be accelerated or assumed by the successor
corporation.

1999 STOCK INCENTIVE PLAN

The 1999 Stock Incentive Plan has been adopted by the board of directors
and approved by our stockholders. The 1999 Stock Incentive Plan will be
administered by our compensation committee.

5,000,000 shares of common stock have been authorized for issuance under
the 1999 Stock Incentive Plan. However, in no event may one participant in the
1999 Stock Incentive Plan receive option grants or direct stock issuances for
more than 500,000 shares in the aggregate per calendar year.

The 1999 Stock Incentive Plan will be divided into five separate programs:

- the discretionary option grant program under which eligible individuals
in the employ of Jupiter may be granted options to purchase shares of
common stock at an exercise price determined by the plan administrator;

- the stock issuance program under which eligible individuals may be issued
shares of common stock directly, through the purchase of these shares at
a price determined by the plan administrator or as a bonus tied to the
performance of services;

- the salary investment option grant program which may, at the plan
administrator's discretion, be activated for one or more calendar years
and, if so activated, will allow executive officers and other highly
compensated employees the opportunity to use a portion of their base
salary to acquire special below market stock option grants;

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<PAGE> 51

- the automatic option grant program under which option grants will
automatically be made at periodic intervals to eligible non-employee
board members to purchase shares of common stock at an exercise price
equal to 100% of the fair market value of those shares on the grant date;
and

- the director fee option grant program under which non-employee board
members may be given the opportunity to use a portion of any retainer fee
otherwise payable to them in cash for the year to acquire special below
market stock option grants.

The 1999 Stock Incentive Plan will include the following features:

- The exercise price for any options granted under the plan may be paid in
cash or in shares of our common stock valued at fair market value on the
exercise date. The option may also be exercised through a same-day sale
program without any cash outlay by the optionee.

- The compensation committee will have the authority to cancel outstanding
options under the discretionary option grant program in return for the
grant of new options for the same or different number of option shares
with an exercise price per share based upon the fair market value of
common stock on the new grant date.

- Stock appreciation rights may be issued under the discretionary option
grant program. Such rights will provide the holders with the election to
surrender their outstanding options for an appreciation distribution from
Jupiter equal to the fair market value of the vested shares of common
stock subject to the surrendered option less the exercise price payable
for those shares. Jupiter may make the payment in cash or in shares of
common stock.

The 1999 Stock Incentive Plan will include change in control provisions
that may result in the accelerated vesting of outstanding option grants and
stock issuances:

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

- The plan administrator may grant options which vest immediately upon an
acquisition of Jupiter or upon a hostile change of control or upon the
individual's termination of service following an acquisition that results
in a change in control.

The board will be able to amend or modify the 1999 Stock Incentive Plan at
any time, subject to any required stockholder approval. The 1999 Stock Incentive
Plan will terminate no later than September 16, 2009.

1999 EMPLOYEE STOCK PURCHASE PLAN

The 1999 Employee Stock Purchase Plan has been adopted by the board of
directors and approved by the stockholders. The plan will become effective
immediately upon the execution of the underwriting agreement for this offering.
The plan is designed to allow eligible employees of Jupiter and its
participating subsidiaries to purchase shares of our common stock, at
semi-annual intervals, through their periodic payroll deductions. A total of
500,000 shares of common stock may be issued under the plan.

The plan will have a series of successive offering periods, each with a
maximum duration of 24 months. However, the initial offering period will begin
on the day the underwriting agreement is executed in connection with this
offering and will end on the last business day in October 2001. The next
offering period will begin on the first business day in November 2001, and
subsequent offering periods will be set by our compensation committee.

A participant may contribute up to 15% of his or her cash earnings through
payroll deductions and the accumulated payroll deductions will be applied to the
purchase of shares on the participant's behalf on
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<PAGE> 52

each semi-annual purchase date (the last business day in April and October of
each year). The purchase price per share will be 85% of the lower of the fair
market value of our common stock on the participant's entry date into the
offering period or the fair market value on the semi-annual purchase date. The
first purchase date will occur on the last business day in April 2000. In no
event, however, may any participant purchase more than 850 shares, nor may all
participants in the aggregate purchase more than 125,000 shares on any one
semi-annual purchase date. Should the fair market value of the common stock on
any semi-annual purchase date be less than the fair market value on the first
day of the offering period, then the current offering period will automatically
end and a new offering period will begin, based on the lower fair market value.

The board will be able to amend or modify the plan at any time. The plan
will terminate no later than the last business day in October 2009.

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<PAGE> 53

TRANSACTIONS WITH DIRECTORS AND PRINCIPAL STOCKHOLDERS

INVESTMENT BY GARTNER GROUP

In October 1997, Gartner Group purchased 1,318,359 units from Jupiter
Communications, LLC for a total of $3.0 million. In connection with this
investment, Gartner Group was granted various rights, including, among others,
piggyback registration rights and the ability to appoint two of the five
representatives on the board of members. In addition, Gartner Group was granted
the right to approve a number of corporate actions taken by Jupiter
Communications, LLC. Gartner Group has also purchased 2,710,144 units from other
members of Jupiter Communications, LLC in a series of transactions.

Upon the closing of this offering, all of the units owned by Gartner Group
will be exchanged for shares of common stock of Jupiter Communications, Inc. In
addition, except for piggyback registration rights and limited indemnification
rights, all of the specific rights granted to Gartner Group in connection with
its investment in the company will terminate upon the closing of this offering.
Furthermore, for a period of one year following the closing of this offering,
Gartner Group and its affiliates may not acquire, directly or indirectly, any
additional common stock, if the acquisition would cause Gartner Group and its
affiliates to own more than 32% of our common stock.

RELATIONSHIP WITH FLEET FINANCIAL GROUP, INC.

Robert Kavner, one of our directors, is also a director of Fleet Financial
Group, Inc. Two affiliates of Fleet Financial Group, Inc. have SPS contracts
with us.

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<PAGE> 54

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of the common stock as of October 6, 1999, and as adjusted to reflect
the sale of the shares of common stock offered hereby, by each person or group
of affiliated persons who is known by us to beneficially own 5% or more of our
common stock, each director, each executive officer named in the Summary
Compensation Table and all our directors and executive officers as a group. As
of October 6, 1999, there were 11,202,327 shares of common stock outstanding and
held of record by 26 stockholders, assuming the merger of Jupiter
Communications, LLC with and into Jupiter Communications, Inc. Unless otherwise
indicated, the address of each beneficial owner listed below is c/o Jupiter
Communications, Inc., 627 Broadway, New York, New York 10012.

The following table gives effect to the shares of common stock issuable
within 60 days of October 6, 1999 upon the exercise of all options and other
rights beneficially owned by the indicated stockholders on that date. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting and investment power with respect to
shares. Unless otherwise indicated, the persons named in the table have sole
voting and sole investment control with respect to all shares beneficially
owned.

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
BENEFICIALLY OWNED
NUMBER OF SHARES --------------------
BENEFICIALLY BEFORE AFTER
BENEFICIAL OWNER OWNED OFFERING OFFERING
<S> <C> <C> <C>
Gartner Group, Inc.(1).................................... 4,028,503 36.0% 28.1%
Gene DeRose(2)............................................ 2,393,478 21.4 16.7
Kurt Abrahamson(3)........................................ 1,171,713 10.5 8.2
Joshua Harris(4).......................................... 1,070,595 9.6 7.5
Joshua A. Weinreich....................................... 971,221 8.7 6.8
Ernest Abrahamson(5)...................................... 845,335 7.5 5.9
Robert Kavner............................................. 200,000 1.8 1.4
Peter Storck(6)........................................... 41,618 * *
Ken Male(7)............................................... 43,625 * *
Jeffrey Ballowe(8)........................................ 5,000 * *
All directors and executive officers as a group (9
persons)(9)............................................. 3,880,434 34.3 26.9
</TABLE>

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

* Less than 1%.

(1) The address of Gartner Group, Inc. is 56 Top Gallant Road, P.O. Box 10212,
Stamford, CT 06904.

(2) This number does not include 50,000 shares issuable upon the exercise of
stock options that do not vest within 60 days of October 6, 1999.

(3) This number does not include 50,000 shares issuable upon the exercise of
stock options that do not vest within 60 days of October 6, 1999.

(4) Mr. Harris has granted the underwriters an option to purchase up to 235,000
shares to cover over-allotments. The purchase price for the shares will
equal the initial public price of this offering minus the underwriting
discounts. If this option is exercised in full, Mr. Harris will beneficially
own 835,595 shares of our common stock after this offering.

(5) Mr. Abrahamson has granted to the underwriters an option to purchase up to
100,000 shares to cover over-allotments. The purchase price for the shares
will equal the initial public price of this offering minus the underwriting
discounts. If this option is exercised in full, Mr. Abrahamson will
beneficially own 745,335 shares of our common stock after this offering.

54
<PAGE> 55

(6) All of these shares are issuable upon the exercise of options. This number
does not include 58,832 shares issuable upon the exercise of stock options
that do not vest within 60 days of October 6, 1999.

(7) All of these shares are issuable upon the exercise of options. This number
does not include 86,375 shares issuable upon the exercise of stock options
that do not vest within 60 days of October 6, 1999.

(8) All of these shares are issuable upon the exercise of options. This number
does not include 85,000 shares issuable upon the exercise of stock options
that do not vest within 60 days of October 6, 1999.

(9) Includes 115,243 shares that are issuable upon the exercise of options.

55
<PAGE> 56

DESCRIPTION OF CAPITAL STOCK
GENERAL

The following description of our common stock and preferred stock and the
relevant provisions of our amended and restated certificate of incorporation and
amended and restated bylaws as will be in effect upon the closing of this
offering are summaries thereof and are qualified by reference to our amended and
restated certificate of incorporation and the amended and restated bylaws,
copies of which have been filed with the Securities and Exchange Commission as
exhibits to our registration statement, of which this prospectus forms a part.

Upon the closing of this offering, our authorized capital stock will
consist of 100,000,000 shares of common stock, par value $0.001 per share, and
5,000,000 shares of preferred stock, par value $0.001 per share.

COMMON STOCK

Upon the closing of this offering, and giving effect to the issuance of
3,125,000 shares of common stock in this offering and the merger of Jupiter
Communications, LLC with and into Jupiter Communications, Inc., there will be
14,327,327 shares of common stock outstanding. Holders of common stock are
entitled to one vote for each share held on all matters submitted to a vote of
stockholders and do not have cumulative voting rights. Accordingly, holders of a
majority of the shares of common stock entitled to vote in any election of
directors may elect all of the directors standing for election. Holders of
common stock are entitled to receive ratably those dividends, if any, as may be
declared by the board of directors out of funds legally available therefor,
subject to any preferential dividend rights of any outstanding preferred stock.
Upon the liquidation, dissolution or winding up of Jupiter, the holders of
common stock are entitled to receive ratably the net assets of Jupiter available
after the payment of all debts and other liabilities and subject to the prior
rights of any outstanding preferred stock. Holders of the common stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of common stock are, and the shares offered by us in this offering will
be, when issued in consideration for payment thereof, fully paid and
nonassessable. The rights, preferences and privileges of holders of common stock
are subject to, and may be adversely affected by, the rights of the holders of
shares of any series of preferred stock which we may designate and issue in the
future. Upon the closing of this offering, there will be no shares of preferred
stock outstanding.

PREFERRED STOCK

Upon the closing of this offering, there will be no shares of preferred
stock outstanding. Upon the closing of this offering, the board of directors
will be authorized, without further stockholder approval, to issue from time to
time up to an aggregate of 5,000,000 shares of preferred stock in one or more
series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption, including sinking fund provisions,
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designation of series. We have no present plans to
issue any shares of preferred stock. See "--Anti-Takeover Effects of Various
Provisions of Delaware Law and Jupiter's Certificate of Incorporation and
Bylaws."

OPTIONS

Options to purchase a total of 7,750,000 shares of common stock may be
granted under the 1997 Option Plan and the 1999 Stock Incentive Plan. As of
October 6, 1999, there were outstanding options to purchase a total of 2,711,275
shares of common stock, of which options to purchase approximately 789,073 will
be exercisable upon the closing of this offering. In addition, there were
outstanding options to purchase a total of 7,500 shares of common stock upon the
exercise of non-plan options, none of which are currently exercisable. Since we
intend to file a registration statement on Form S-8 as soon as practicable
following the closing of this offering, any shares issued upon exercise of these
options will be immediately available for sale in the public market, subject to
the terms of any lock-up agreements entered into with the underwriters. See
"Management--1997 Option Plan," "Management--1999 Stock Incentive Plan" and
"Shares Eligible for Future Sale."

56
<PAGE> 57

REGISTRATION RIGHTS

Pursuant to the terms of a registration rights agreement, after the closing
of this offering the holders of 11,123,327 shares of common stock will be
entitled to piggyback registration rights with respect to the registration of
their shares under the Securities Act, subject to various limitations. These
registration rights are subject to specific conditions and limitations, among
them the right of the underwriters of an offering to limit the number of shares
of common stock held by security holders with registration rights to be included
in a registration. Registration of any shares of the shares of common stock held
by security holders with registration rights would result in shares becoming
freely tradable without restriction under the Securities Act immediately upon
effectiveness of such registration.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW AND JUPITER'S CERTIFICATE OF
INCORPORATION AND BYLAWS

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to some 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
interested stockholder attained that status with the approval of the board of
directors or unless the business combination is approved in a prescribed manner.
A "business combination" includes 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
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock. This statute could prohibit or delay the
accomplishment of mergers or other takeover or change in control attempts with
respect to Jupiter and, accordingly, may discourage attempts to acquire Jupiter.

In addition, various provisions of our amended and restated certificate of
incorporation and our amended and restated bylaws, which provisions will be in
effect upon the closing of the offering and 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.

BOARD OF DIRECTORS VACANCIES. Our amended and restated certificate of
incorporation authorizes the board of directors to fill vacant directorships or
increase the size of the board of directors. This may deter a stockholder from
removing incumbent directors and simultaneously gaining control of the board of
directors by filling the vacancies created by this removal with its own
nominees.

STOCKHOLDER ACTION; SPECIAL MEETING OF STOCKHOLDERS. Our amended and
restated certificate of incorporation provides that stockholders may not take
action by written consent, but only at duly called annual or special meetings of
stockholders. The amended and restated certificate of incorporation further
provides that special meetings of stockholders of Jupiter may be called only by
the chairman of the board of directors, the chief executive officer or a
majority of the board of directors.

AUTHORIZED BUT UNISSUED SHARES. The authorized but unissued shares of
common stock and preferred stock are available for future issuance without
stockholder approval, subject to various limitations imposed by the Nasdaq
National Market. These additional shares may be utilized for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The existence of
authorized but unissued shares of common stock and preferred stock could make
more difficult or discourage an attempt to obtain control of us 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 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.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company, New York, New York.
57
<PAGE> 58

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market could
adversely affect prevailing market prices of our common stock. Furthermore,
since few shares will be available for sale shortly after this offering because
of various contractual and legal restrictions on resale described below, sales
of substantial amounts of common stock in the public market after these
restrictions lapse could adversely affect the prevailing market price and our
ability to raise equity capital in the future.

Upon the closing of this offering, we will have outstanding an aggregate of
14,327,327 shares of our common stock, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options. Of these shares,
all shares sold in this offering will be freely tradeable without restriction or
further registration under the Securities Act unless such shares are purchased
by "affiliates" as that term is defined in Rule 144 under the Securities Act.
This leaves 11,202,327 shares eligible for sale in the public market as follows:

<TABLE>
<CAPTION>
NUMBER OF
SHARES DATE
<S> <C>
235,000 After the date of this
prospectus (only if the
over-allotment option is not
exercised).
3,863,957 After 90 days from the date of
this prospectus (subject, in
some cases, to volume limitations).
6,044,164 After 180 days from the date of
this prospectus (subject, in
some cases, to volume limitations).
1,059,206 At various times after 180 days
from the date of this
prospectus.
</TABLE>

LOCK-UP AGREEMENTS

Except as set forth below, all of our officers and directors and
substantially all of our stockholders and option holders have signed lock-up
agreements under which they agreed not to transfer or dispose of, directly or
indirectly, any shares of our common stock or any securities convertible into or
exercisable or exchangeable for shares of our common stock for 180 days after
the date of this prospectus. Transfers can be made sooner with the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation, in the case of
some transfers to affiliates, or if made as a bona fide gift.

Our largest stockholder, Gartner Group, has not signed a similar lock-up
agreement. The Company believes, however, that Gartner Group may be deemed an
"affiliate" as that term is defined in Rule 144 and therefore may not sell any
shares held by it until 90 days from the date of this prospectus and thereafter
may sell shares subject only to the Rule 144 volume limitations discussed below.
Gartner Group has advised us that it does not believe it will be an "affiliate"
following the closing of this offering. In the event Gartner Group is deemed not
to be an "affiliate" after this offering, it will be able to sell as many as
3,515,624 shares of our common stock in the public market without regard to
volume limitations beginning 90 days after the date of this prospectus, which
could adversely affect the price of our stock. In addition, in the event that
the over-allotment option is not exercised by the underwriters, one of our non-
management stockholders may be able to sell up to 235,000 shares of our common
stock in the public market immediately.

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned shares of our
common stock for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of 1% of
the number of shares of common stock then outstanding, which will equal
approximately 143,273 shares immediately after the offering, or the average
weekly trading volume of the common stock on the Nasdaq
58
<PAGE> 59

National Market during the four calendar weeks preceding the filing of a notice
on Form 144 with respect to such sale. Sales under Rule 144 are also subject to
specific manner-of-sale provisions, notice requirements and the availability of
current public information about us.

RULE 144(k)

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

RULE 701

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

REGISTRATION RIGHTS

After this offering, the holders of at least 11,123,327 shares of our
common stock will be entitled to various rights with respect to the registration
of those shares under the Securities Act. See "Description of Capital
Stock--Registration Rights." After such registration, these shares of our common
stock become freely tradeable without restriction under the Securities Act.
These sales could have a material adverse effect on the trading price of our
common stock.

STOCK OPTIONS

Immediately after this offering, we intend to file a registration statement
under the Securities Act covering 8,257,500 shares of common stock reserved for
issuance under our 1997 Option Plan, our 1999 Stock Incentive Plan, our Employee
Stock Purchase Plan and the shares reserved for issuance upon exercise of
outstanding non-plan options. We expect this registration statement to be filed
and to become effective as soon as practicable after the effective date of this
offering.

As of October 6, 1999, options to purchase 2,718,775 shares of common stock
were issued and outstanding. All of these shares will be eligible for sale in
the public market from time to time, subject to vesting provisions, Rule 144
volume limitations applicable to our affiliates and, in the case of some
options, the expiration of lock-up agreements.

59
<PAGE> 60

UNDERWRITING

Subject to the terms and conditions contained in an underwriting agreement,
dated October 7, 1999, the underwriters named below, who are represented by
Donaldson, Lufkin & Jenrette Securities Corporation, Deutsche Bank Securities
Inc., Thomas Weisel Partners LLC and DLJdirect Inc., have severally agreed to
purchase from us the number of shares set forth opposite their names below.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS: SHARES
------------- ---------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......... 1,168,650
Deutsche Bank Securities Inc................................ 679,725
Thomas Weisel Partners LLC.................................. 536,625
DLJdirect Inc. ............................................. 100,000
Robertson Stephens Inc. .................................... 80,000
Hambrecht & Quist LLC....................................... 80,000
Lehman Brothers Inc. ....................................... 80,000
J.P. Morgan & Co. .......................................... 80,000
Adams, Harkness & Hill, Inc. ............................... 40,000
William Blair & Company, L.L.C. ............................ 40,000
J.C. Bradford & Co. ........................................ 40,000
First Albany Corporation.................................... 40,000
Friedman, Billings, Ramsey.................................. 40,000
Hanifen, Imhoff Inc. ....................................... 40,000
Pacific Crest Securities.................................... 40,000
Volpe Brown Whelan & Company, LLC........................... 40,000
---------
Total............................................. 3,125,000
=========
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of the shares included in this
offering are subject to approval of specific legal matters by their counsel and
to various other conditions. The underwriters are obligated to purchase and
accept delivery of all the shares, other than those covered by the
over-allotment option described below, if they purchase any of the shares.

The underwriters propose to initially offer some of the shares directly to
the public at the public offering price set forth on the cover page of this
prospectus and some of the shares to various dealers at the public offering
price less a concession not in excess of $0.89 per share. The underwriters may
allow, and such dealers may re-allow, a concession not in excess of $0.10 per
share on sales to other dealers. After the initial offering of the shares to the
public, the representatives may change the public offering price and such
concessions. The underwriters do not intend to confirm sales to any accounts
over which they exercise discretionary authority. An electronic prospectus is
available on the Web site maintained by DLJdirect Inc.

60
<PAGE> 61

The following table shows the underwriting fees to be paid to the
underwriters by us and the selling stockholders in connection with this
offering. These amounts are shown assuming both no exercise and full exercise of
the underwriters' over-allotment option described below.

<TABLE>
<CAPTION>
PAID BY SELLING
PAID BY JUPITER STOCKHOLDERS
------------------------ --------------------
NO FULL NO FULL
EXERCISE EXERCISE EXERCISE EXERCISE
<S> <C> <C> <C> <C>
Per Share............................. $ 1.47 $ 1.47 $-- $ 1.47
Total................................. 4,593,750 4,790,363 -- 492,450
</TABLE>

We will pay the offering expenses, estimated to be approximately $1.1
million.

We and the selling stockholders have granted to the underwriters an option,
exercisable for 30 days after the date of this prospectus, to purchase up to
468,750 additional shares at the public offering price less the underwriting
fees. The underwriters may exercise such option solely to cover over-allotments,
if any, made in connection with this offering. To the extent that the
underwriters exercise such option, each underwriter will become obligated,
subject to various conditions, to purchase a number of additional shares
approximately proportionate to that underwriter's initial purchase commitment.

We have agreed to indemnify the underwriters against various civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments that the underwriters may be required to make in respect
of any of those liabilities.

Except as set forth below, we, all of our executive officers and directors
and substantially all of our stockholders and option holders have agreed, for a
period of 180 days from the date of this prospectus, not to, without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation: offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any shares
of our common stock or any securities convertible into or exercisable or
exchangeable for our common stock; or enter into any swap or other arrangement
that transfers all or a portion of the economic consequences associated with the
ownership of any common stock, regardless of whether any of these transactions
is to be settled by the delivery of common stock, or such other securities, in
cash or otherwise. Gartner Group, our largest shareholder has not signed a
similar lock-up agreement. In addition, in the event that the over-allotment
option is not exercised by the underwriters, one of our non-management
stockholders may be able to sell shares in the public market immediately. See
"Shares Eligible For Future Sale." In addition, during this 180-day period, we
have also agreed not to file any registration statement with respect to, and
each of our executive officers, directors, stockholders and option holders has
agreed not to make any demand for, or exercise any right with respect to, the
registration of any shares of common stock or any securities convertible into or
exercisable or exchangeable for common stock without the prior written consent
of Donaldson, Lufkin & Jenrette Securities Corporation.

Outside the United States, neither we nor the underwriters have taken any
action that would permit a public offering of the shares of common stock
included in this offering in any jurisdiction that requires action for that
purpose. The shares included in this offering may not be offered or sold,
directly or indirectly, nor may this prospectus or any other offering material
or advertisement in connection with the offer and sale of any of these shares be
distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that
jurisdiction. We advise persons who receive this prospectus to inform themselves
about and to observe any restrictions relating to the offering of the common
stock and the distribution of this prospectus. This prospectus is not an offer
to sell or a solicitation of an offer to buy any shares of our common stock
included in this offering in any jurisdiction where that would not be permitted
or legal.

In connection with this offering, some underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common stock. Specifically, the underwriters may overallot this offering,
creating a syndicate short position. The underwriters may bid for and purchase
shares of our common stock in the open market to cover syndicate short positions
or to stabilize the price of the

61
<PAGE> 62

common stock. The underwriting syndicate may reclaim selling concessions if the
syndicate repurchases previously distributed common stock in syndicate covering
transactions, in stabilizing transactions or in some other way or if Donaldson,
Lufkin & Jenrette Securities Corporation receives a report that indicates
clients of such syndicate members have "flipped" the common stock. These
activities may stabilize or maintain the market price of the common stock above
independent market levels. The underwriters are not required to engage in these
activities and may end any of these activities at any time.

We sell our research products and services to numerous financial services
companies, including each of the underwriters of this offering.

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 43 filed
public offerings of equity securities, of which 25 have been completed, and has
acted as a syndicate member in an additional 19 public offerings of equity
securities. Thomas Weisel Partners does not have any material relationship with
us or any of our officers, directors or other controlling persons, except with
respect to its contractual relationship with us pursuant to the underwriting
agreement entered into in connection with this offering.

DLJdirect Inc. will make all allocations of securities distributed in this
offering through the use of the Internet. Approximately two to three weeks prior
to the scheduled offering date, DLJdirect will post on its Web site
(www.dljdirect.com) a brief description of the offering which contains only the
information permitted under Rule 134. At this time, DLJdirect will also send an
e-mail to all DLJdirect account holders with $100,000 or more in assets in their
accounts advising them of the offering. These account holders will have access
to the preliminary prospectus by links on the DLJdirect Web site. DLJdirect will
allocate the shares it has underwritten based on its judgment of what is in the
best interest of the issuer, considering the following criteria with respect to
the account holders expressing an interest in the offering: asset level of the
account, investment objectives of the account holder, trading history of the
account, tenure of the account at DLJdirect and post-offering activity in
previous offerings.

Prior to this offering, there has been no established trading market for
our common stock. We negotiated with the underwriters regarding the initial
public offering price for the shares of common stock offered by this prospectus.
In determining the initial public offering price, the factors we and the
underwriters considered included:

- the history of and the prospects for the industry in which we compete;

- our past and present operations;

- our historical results of operations;

- our prospects for future earnings;

- the recent market prices of securities of generally comparable companies;
and

- the general condition of the securities markets at the time of the
offering.

At our request, the underwriters have reserved for sale at the initial
public offering price up to 7.5% of the shares of common stock to be sold in
this offering for sale to our employees, friends and persons having business
relationships with us. Our employees who purchase more than 100 shares of common
stock in the initial public offering will sign lock-up agreements in connection
with purchases over 100 shares in the initial public offering. To the extent
these persons purchase the reserved shares, the number of shares available for
sale to the general public will be reduced. The underwriters will offer any
reserved shares not so purchased on the same basis as the other shares offered
by this prospectus.

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<PAGE> 63

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Brobeck, Phleger & Harrison LLP, New York, New York. Various legal matters in
connection with the offering will be passed upon for the underwriters by Hale
and Dorr LLP, Boston, Massachusetts.

EXPERTS

The balance sheets of Jupiter Communications, LLC as of December 31, 1998
and 1997 and the related statements of operations, members' equity (deficiency)
and cash flows for each of the years in the three-year period ended December 31,
1998 have been included in reliance on the reports of KPMG LLP, independent
accountants, given on the authority of that firm as experts in auditing and
accounting.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1, including exhibits, schedules and amendment filed with
the registration statement, under the Securities Act with respect to the common
stock to be sold in this offering. This prospectus does not contain all of the
information set forth in this registration statement. For further information
about us and the shares of common stock to be sold in the offering, please refer
to this registration statement. For additional information, please refer to the
exhibits that have been filed with our registration statement on Form S-1.

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 about the public
reference rooms. Our Securities and Exchange Commission filings, including the
registration statement, will also be available to you on the Securities and
Exchange Commission's Web site (http://www.sec.gov).

We intend to furnish our stockholders with annual reports containing
audited financial statements and to make available quarterly reports containing
unaudited financial information.

63
<PAGE> 64

JUPITER COMMUNICATIONS, LLC

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report................................ F-2
Balance Sheets as of December 31, 1997 and 1998, and June
30, 1999 (unaudited)...................................... F-3
Statement of Operations for the years ended December 31,
1996, 1997 and 1998, and for the six months ended June 30,
1998 (unaudited) and 1999 (unaudited)..................... F-4
Statements of Members' Equity (Deficiency) for the years
ended December 31, 1996, 1997 and 1998, and for the six
months ended June 30, 1999 (unaudited).................... F-5
Statements of Cash Flows for the years ended December 31,
1996, 1997 and 1998, and for the six months ended June 30,
1998 (unaudited) and 1999 (unaudited)..................... F-6
Notes to Financial Statements............................... F-7
</TABLE>

F-1
<PAGE> 65

INDEPENDENT AUDITORS' REPORT

The Board of Members and Members
Jupiter Communications, LLC:

We have audited the accompanying balance sheets of Jupiter Communications,
LLC as of December 31, 1997 and 1998, and the related statements of operations
and members' equity (deficiency), and cash flows for each of the years in the
three-year period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Jupiter Communications, LLC
as of December 31, 1997 and 1998, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1998, in
conformity with generally accepted accounting principles.

/s/ KPMG LLP

New York, New York
March 18, 1999

F-2
<PAGE> 66

JUPITER COMMUNICATIONS, LLC

BALANCE SHEETS
DECEMBER 31, 1997, 1998 AND JUNE 30, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA AS ADJUSTED
(SEE NOTE 2(A)) (SEE NOTE 2(A))
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
----------------------- ----------- --------------- ---------------
1997 1998 1999 1999 1999
---------- ---------- ----------- --------------- ---------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...... $1,614,050 $ 216,144 $ 1,553,525 $ 1,553,525 $61,484,775
Accounts receivable, less
allowance for doubtful
accounts of $51,483, $37,915
and $28,934 in 1997, 1998,
and 1999, respectively....... 1,136,230 4,579,856 8,485,017 8,485,017 8,485,017
Prepaid expenses and other
assets....................... 141,062 797,168 1,752,473 1,752,473 1,752,473
---------- ---------- ----------- ----------- -----------
Total current assets......... 2,891,342 5,593,168 11,791,015 11,791,015 71,722,265

Property and equipment, net...... 396,805 1,071,432 3,032,566 3,032,566 3,032,566
Intangible assets, net........... 84,791 54,791 39,791 39,791 39,791
Investment in Methodfive LLC .... 48,740 26,510 -- -- --
Security deposits................ 41,531 121,120 187,961 187,961 187,961
---------- ---------- ----------- ----------- -----------
Total assets................. $3,463,209 $6,867,021 $15,051,333 $15,051,333 $74,982,583
========== ========== =========== =========== ===========

LIABILITIES AND MEMBERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable............... $1,203,578 $1,241,618 $ 812,616 $ 812,616 $ 812,616
Accrued expenses............... 329,411 208,843 729,122 729,122 729,122
Accrued compensation........... 135,915 841,624 1,029,417 1,029,417 1,029,417
Deferred revenue............... 1,775,003 6,677,233 14,191,842 14,191,842 14,191,842
---------- ---------- ----------- ----------- -----------
Total current liabilities.... 3,443,907 8,969,318 16,762,997 16,762,997 16,762,997

Deferred rent.................... 10,695 26,477 172,605 172,605 172,605
Common stock, $0.001 par value:
100,000,000 shares authorized
on a pro forma basis,
10,819,335 shares outstanding
on a pro forma basis, and
13,944,335 shares outstanding
on a pro forma, as adjusted,
basis.......................... -- -- -- 10,819 13,944
Additional paid-in capital....... 3,506,265 3,506,265 3,881,265 (1,895,088) 58,033,037
Accumulated deficit.............. (3,497,658) (5,635,039) (5,765,534) -- --
---------- ---------- ----------- ----------- -----------
Total stockholders'/members'
equity (deficiency)............ 8,607 (2,128,774) (1,884,269) (1,884,269) 58,046,981
Commitments and contingencies.... -- -- -- -- --
---------- ---------- ----------- ----------- -----------
Total liabilities and
stockholders'/members'
equity (deficiency)....... $3,463,209 $6,867,021 $15,051,333 $15,051,333 $74,982,583
========== ========== =========== =========== ===========
</TABLE>

See accompanying notes to financial statements.
F-3
<PAGE> 67

JUPITER COMMUNICATIONS, LLC

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
AND FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
AND JUNE 30, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------- -------------------------
1996 1997 1998 1998 1999
---------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Strategic Planning Services.... $ 565,555 $ 1,850,154 $ 6,183,188 $ 1,994,980 $ 8,166,289
Conferences.................... 2,685,834 3,426,079 4,889,703 1,979,021 4,552,796
Other.......................... 3,000,593 3,245,919 3,729,440 1,939,045 1,680,723
---------- ----------- ----------- ----------- -----------
Total revenues.............. 6,251,982 8,522,152 14,802,331 5,913,046 14,399,808
Cost of services and
fulfillment.................... 4,686,993 6,259,433 9,675,838 4,281,976 6,853,869
---------- ----------- ----------- ----------- -----------
Gross profit................ 1,564,989 2,262,719 5,126,493 1,631,070 7,545,939
Other operating expenses:
Sales and marketing expenses... 514,548 1,557,676 3,173,368 1,313,430 4,008,079
General and administrative
expenses.................... 1,663,565 2,955,340 4,090,506 1,918,220 3,668,355
---------- ----------- ----------- ----------- -----------
Total other operating
expenses.................. 2,178,113 4,513,016 7,263,874 3,231,650 7,676,434
---------- ----------- ----------- ----------- -----------
Net loss.................... $ (613,124) $(2,250,297) $(2,137,381) $(1,600,580) $ (130,495)
========== =========== =========== =========== ===========
Pro forma basic and diluted net
loss per common share.......... $ (0.21) $ (0.16) $ (0.01)
=========== =========== ===========
Pro forma weighted average common
shares outstanding............. 10,318,359 10,318,359 10,454,736
=========== =========== ===========
</TABLE>

See accompanying notes to financial statements.
F-4
<PAGE> 68

JUPITER COMMUNICATIONS, LLC

STATEMENTS OF MEMBERS' EQUITY (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
AND FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK
--------------------- ADDITIONAL TOTAL
NUMBER PAR PAID-IN ACCUMULATED MEMBERS'
OF SHARES VALUE CAPITAL DEFICIT EQUITY (DEFICIENCY)
----------- ------- ----------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
Balance as of December 31,
1995......................... -- $ -- $ 228,794 $ (634,237) $ (405,443)
Contributions made by
members...................... -- -- 325,000 -- 325,000
Distributions paid to
members...................... -- -- (20,743) -- (20,743)
Net loss for the year ended
December 31, 1996............ -- -- -- (613,124) (613,124)
----------- ------- ----------- ----------- -----------
Balance as of December 31,
1996......................... -- -- 533,051 (1,247,361) (714,310)
Contributions made by members,
net of offering costs of
$254,098..................... -- -- 2,996,175 -- 2,996,175
Distributions paid to
members...................... -- -- (22,961) -- (22,961)
Net loss for the year ended
December 31, 1997............ -- -- -- (2,250,297) (2,250,297)
----------- ------- ----------- ----------- -----------
Balance as of December 31,
1997......................... -- -- 3,506,265 (3,497,658) 8,607
Net loss for the year ended
December 31, 1998............ -- -- -- (2,137,381) (2,137,381)
----------- ------- ----------- ----------- -----------
Balance as of December 31,
1998......................... -- -- 3,506,265 (5,635,039) (2,128,774)
Exercise of unit investment
options (unaudited).......... -- -- 375,000 -- 375,000
Net loss for the six months
ended June 30, 1999
(unaudited).................. -- -- -- (130,495) (130,495)
----------- ------- ----------- ----------- -----------
Balance as of June 30, 1999
(unaudited).................. -- $ -- $ 3,881,265 $(5,765,534) $(1,884,269)
----------- ------- ----------- ----------- -----------
Pro forma adjustments (Note
2(a)):
Issuance of shares for member
interests (unaudited)...... 10,819,335 10,819 (5,776,353) 5,765,534 --
----------- ------- ----------- ----------- -----------
Pro forma balance as of June
30, 1999 (unaudited)......... 10,819,335 $10,819 $(1,895,088) $ -- $(1,884,269)
----------- ------- ----------- ----------- -----------
Issuance of common stock in
connection with the
Company's IPO, net of
offering expenses
(unaudited)................ 3,125,000 3,125 59,928,125 -- 59,931,250
----------- ------- ----------- ----------- -----------
Pro forma, as adjusted, balance
as of June 30, 1999
(unaudited).................. 13,944,335 $13,944 $58,033,037 -- $58,046,981
=========== ======= =========== =========== ===========
</TABLE>

See accompanying notes to financial statements.
F-5
<PAGE> 69

JUPITER COMMUNICATIONS, LLC

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
AND FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
AND JUNE 30, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------- -------------------------
1996 1997 1998 1998 1999
--------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss............................................. $(613,124) $(2,250,297) $(2,137,381) $(1,600,580) $ (130,495)
Adjustments to reconcile net loss to net cash used in
operating activities:
Equity loss from investment in Methodfive LLC ..... -- 35,000 22,230 11,116 26,510
Depreciation and amortization...................... 74,816 99,751 193,410 96,706 316,987
Provision for allowance for doubtful accounts...... 26,000 25,483 (13,568) 1,282 (8,981)
Changes in operating assets and liabilities:
Increase in accounts receivable.................. (290,022) (328,142) (3,430,058) (697,198) (3,896,180)
(Increase) decrease in inventory................. (14,615) 24,035 -- -- --
Increase in prepaid expenses and other assets.... (77,035) (10,962) (656,106) (444,472) (955,305)
(Increase) decrease in security deposits......... (24,938) 3,815 (79,589) (80,790) (66,841)
Increase (decrease) in accounts payable.......... 417,505 397,337 38,040 23,412 (429,002)
Increase in accrued expenses..................... 87,357 298,300 606,858 374,731 708,072
Increase in deferred revenue..................... 432,776 657,280 4,902,230 2,089,257 7,514,609
(Decrease) increase in deferred rent............. (4,262) (13,138) (3,016) 5,808 146,128
--------- ----------- ----------- ----------- -----------
Net cash provided by (used in) operating
activities.................................. 14,458 (1,061,538) (556,950) (220,728) 3,225,502
--------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures................................. (198,651) (206,842) (838,037) (258,078) (2,263,121)
Investment in Methodfive LLC ........................ (58,594) -- -- -- --
Investment in Internet Content Report................ -- (25,000) -- -- --
--------- ----------- ----------- ----------- -----------
Net cash used in investing activities......... (257,245) (231,842) (838,037) (258,078) (2,263,121)
--------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Member contributions................................. 325,000 3,250,273 -- -- --
Exercise of unit investment options.................. -- -- -- -- 375,000
Offering costs....................................... -- (254,098) -- -- --
Distributions paid to members........................ (20,743) (22,961) -- -- --
Repayment of notes payable........................... (55,000) (70,000) -- -- --
Principal payments under capital lease obligation.... (2,841) (3,447) (2,919) -- --
--------- ----------- ----------- ----------- -----------
Net cash provided by (used in) financing
activities.................................. 246,416 2,899,767 (2,919) -- 375,000
--------- ----------- ----------- ----------- -----------
Increase (decrease) in cash and cash
equivalents................................. 3,629 1,606,387 (1,397,906) (478,806) 1,337,381
Cash and cash equivalents at beginning of period....... 4,034 7,663 1,614,050 1,614,050 216,144
--------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period............. $ 7,663 $ 1,614,050 $ 216,144 $ 1,135,244 $ 1,553,525
========= =========== =========== =========== ===========
Supplemental cash flow information:
Cash paid during the period for:
Interest........................................... $ -- $ 8,694 $ 11,855 $ -- $ --
========= =========== =========== =========== ===========
Supplemental noncash operating and financing
activities:
Fair value of barter transactions.................... $ 105,974 $ 18,120 $ -- $ -- $ 25,000
========= =========== =========== =========== ===========
</TABLE>

See accompanying notes to financial statements.
F-6
<PAGE> 70

JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

(1) ORGANIZATION

Jupiter Communications, LLC ("Jupiter" or the "Company") was organized in
New York on December 1, 1994. Jupiter is a new media research firm that helps
companies make intelligent business decisions about consumer interactivity. The
Company's information services encompass Strategic Planning Services,
conferences, newsletters, book-length studies, and custom research reports and
provide clients and customers with focused research and strategic planning
support as they develop interactive products and services.

(2) SIGNIFICANT ACCOUNTING POLICIES

(a) UNAUDITED INTERIM FINANCIAL INFORMATION AND UNAUDITED PRO FORMA BALANCE
SHEET

The interim financial statements of the Company for the six months ended
June 30, 1998 and 1999 included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the SEC. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations relating to interim
financial statements.

In the opinion of management, the accompanying unaudited interim financial
statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial position of the Company
at June 30, 1999 and the results of its operations and its cash flows for the
six months ended June 30, 1998 and 1999.

The accompanying pro forma balance sheet as of June 30, 1999 gives effect
to the Company's pending reorganization from a limited liability company to a
"C" corporation (see Note 2(f)) as though the reorganization had occurred as of
June 30, 1999. The Company has determined that a deferred tax asset would result
upon the reorganization to a "C" corporation. The deferred tax asset will not be
presented as a pro forma adjustment because the Company would have provided for
a valuation allowance since utilization of the deferred tax asset is uncertain
based on the Company's history of net losses.

The accompanying pro forma as adjusted balance sheet as of June 30, 1999
gives effect to the sale of 3,125,000 shares of common stock related to the
Company's proposed initial public offering ("IPO") (see Note 14 regarding the
proposed IPO) at an assumed initial public offering price of $21.00 per share
(less estimated underwriting discounts and offering expenses) as though the IPO
had occurred as of June 30, 1999.

(b) CASH AND CASH EQUIVALENTS

Cash equivalents of $1,613,015, $211,681 and $1,470,060 at December 31,
1997, December 31, 1998 and June 30, 1999, respectively, consist of a money
market account with an initial term of less than three months. For purposes of
the statements of cash flows, the Company considers all highly liquid debt
instruments with original maturities of three months or less to be cash
equivalents.

Prepaid expenses and other assets primarily consist of prepaid Strategic
Planning Services commissions and prepaid conference costs.

(d) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided by the
straight-line method over the estimated useful lives of the respective assets,
which range from three to five years. Leasehold improvements are amortized on a
straight-line basis over the shorter of the lease term or their estimated useful
life. Additions and major improvements are capitalized, whereas the cost of
maintenance and repairs is charged to operations as incurred.

F-7
<PAGE> 71
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

(e) INTANGIBLE ASSETS

Intangible assets are stated at cost and are amortized over their useful
lives. The net book value of intangible assets is periodically evaluated by
management as to the realizability by the Company with any permanent impairment
in such value charged to operations in the year so determined.

(f) INCOME TAXES

Until completion of the proposed IPO (see Note 14 regarding the proposed
IPO), the Company will remain a New York limited liability company. Accordingly,
income or loss attributed to the Company's operations prior to the closing of
the IPO will be allocated to its members to be reported on their personal tax
returns. As a result, Jupiter will not be able to offset future taxable income,
if any, against losses incurred prior to the closing of the IPO.

Upon completion of the proposed IPO, the Company's LLC status will be
terminated as a result of the Company reorganizing to a "C" corporation for tax
purposes. Effective on this date, income taxes will be accounted for under the
asset and liability method. Under this method, deferred tax assets and
liabilities are recognized for future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
results of operations in the period that the tax change occurs. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized.

(g) REVENUE AND COMMISSION EXPENSE RECOGNITION

Strategic Planning Services revenues are deferred and then reflected
proportionally in operations over the term of the service period, which is
generally up to one year. Conference revenues are reflected in operations when
the conference occurs. Newsletter subscriptions are deferred and then reflected
proportionally in operations over the term of the subscription, which is
generally up to one year. Book-length studies and custom research are reflected
in operations when the product is shipped.

Deferred revenue is composed of prepaid Strategic Planning Services fees to
be earned in the future over the term of the service period, prepaid conference
sponsorship/exhibition fees to be earned from conferences held after the balance
sheet date, and prepaid newsletter subscriptions to be earned in the future over
the term of the subscriptions.

The Company records prepaid commissions related to Strategic Planning
Services upon the signing of the contract and amortizes this corresponding
prepaid commission expense over the contract period in which the related
revenues are earned and amortized to income.

(h) CONCENTRATION OF RISK

The Company's customers are concentrated in the United States. The Company
performs ongoing credit evaluations of its customers' financial condition and
generally does not require collateral and establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of customers, historical
trends and other information. To date, such losses have been within management's
expectations.

For each of the years in the three-year period ended December 31, 1998, no
customer accounted for more than 10% of revenues generated by the Company, or of
accounts receivable at December 31, 1998, 1997 and 1996.

F-8
<PAGE> 72
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

(i) USE OF ESTIMATES

The accompanying financial statements are prepared in accordance with U.S.
generally accepted accounting principles (GAAP). In preparing financial
statements in conformity with GAAP, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenue and expenses during the reporting period. Actual results
could differ from those estimates.

(j) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents, accounts payable and
accrued expenses approximated fair value because of the relatively short
maturity of these instruments.

(k) STOCK-BASED COMPENSATION

The Company adopted Statement of Financial Accounting Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation," which permits entities to
recognize the fair value of all stock-based awards on the date of grant as
expense over the vesting period. Alternatively, SFAS No. 123 also allows
entities to continue to apply the provisions of APB Opinion No. 25, "Accounting
for Stock Issued to Employees," and provide pro forma net loss disclosures for
employee unit option grants made as if the fair value-based method defined in
SFAS No. 123 had been applied.

Under APB Opinion No. 25, compensation expenses would be recorded on the
date of grant only if the current market price of the underlying units exceeded
the exercise price. The Company has elected to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.

(l) PRO FORMA BASIC AND DILUTED NET LOSS PER COMMON SHARE

Pro forma basic and diluted net loss per common share is computed by
dividing net loss by the pro forma weighted average number of shares of common
stock. Pro forma weighted average number of shares of common stock gives effect
to the Company's pending reorganization from a limited liability company to a
corporation (see Note 2(f)). Pro forma weighted average number of shares of
common stock does not include any common stock equivalents because inclusion of
common stock equivalents would have been anti-dilutive.

(m) IMPAIRMENT OF LONG-LIVED ASSETS TO BE DISPOSED OF

The Company applies the provisions of SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
which requires that long-lived assets and certain identifiable intangibles be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell. Adoption of this Statement
did not have a material impact on the Company's financial position, results of
operations or liquidity.

(n) RECENT ACCOUNTING PRONOUNCEMENTS

F-9
<PAGE> 73
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

software and on accounting for the proceeds of computer software originally
developed or obtained for internal use and then subsequently sold to the public.
It also provides guidance on capitalization of the costs incurred for computer
software developed or obtained for internal use. SOP 98-1 will be effective for
the Company's fiscal year ending December 31, 1999. The adoption of SOP 98-1 is
not expected to have a material impact on the Company's financial statements.

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") which provides guidance on the financial reporting of
start-up costs and organization costs. It requires costs of start-up activities
and organization costs to be expensed as incurred. SOP 98-5 will be effective
for the Company's fiscal year ending December 31, 1999. The adoption of SOP 98-5
is not expected to have a material impact on the Company's financial statements.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" which establishes standards for the reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. Comprehensive income generally represents all changes in
shareholders' equity during the period except those resulting from investments
by, or distributions to, shareholders. SFAS No. 130 is effective for fiscal
years beginning after December 15, 1997 and requires restatement of earlier
periods presented. The adoption of this standard has had no impact on the
Company's financial statements. Accordingly, the Company's comprehensive net
loss is equal to its net loss for all periods presented.

In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information" which establishes standards for the way
that a public enterprise reports information about operating segments in annual
financial statements, and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. SFAS No. 131 is
effective for fiscal years beginning after December 15, 1997, and requires
restatement of earlier periods presented. In the initial year of application,
comparative information for earlier years must be restated. The Company has
determined that it does not have any separately reportable business segments.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments, including derivative instruments embedded
in other contracts, and for hedging activities. SFAS No. 133 is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. This
statement is not expected to affect the Company as it currently does not engage
or plan to engage in derivative instruments or hedging activities.

(3) PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------- ------------
1997 1998 1999
-------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Deferred SPS commissions................................... $ -- $632,406 $1,313,315
Prepaid conference expenses................................ 125,159 101,974 296,634
Other...................................................... 15,903 62,788 142,524
-------- -------- ----------
$141,062 $797,168 $1,752,473
======== ======== ==========
</TABLE>

F-10
<PAGE> 74
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

(4) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------- -----------
1997 1998 1999
--------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Computer equipment....................................... $ 367,759 $ 758,428 $1,954,597
Furniture and fixtures................................... 90,689 178,892 572,872
Office equipment......................................... 52,812 96,623 164,955
Leasehold improvements................................... 70,249 385,603 990,243
--------- ---------- ----------
581,509 1,419,546 3,682,667
Less accumulated depreciation and amortization........... (184,704) (348,114) (650,101)
--------- ---------- ----------
$ 396,805 $1,071,432 $3,032,566
========= ========== ==========
</TABLE>

(5) INTANGIBLE ASSETS

In June 1995, the Company acquired substantially all of the assets of the
Internet Business Report ("IBR") in exchange for a $140,000 promissory note,
payment of which was completed during 1997. The purchase price of $140,000 was
allocated as follows: $62,500 to the IBR subscriber list; $62,500 to the IBR
trademark; and $15,000 for the editorial costs which were subsequently written
off.

In September 1997, the Company purchased the rights and interests in the
trademark "Internet Content Report" for $25,000. This included a subscriber list
with information regarding current and former subscribers. The purchase price
was allocated equally between the subscriber list and the trademark.

Intangible assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------- ----------- AMORTIZATION
1997 1998 1999 PERIOD IN YEARS
-------- -------- ----------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Internet Content Report:
Subscriber list......................... $ 12,500 $ 12,500 $ 12,500 5
Trademark............................... 12,500 12,500 12,500 5
-------- -------- ---------
25,000 25,000 25,000
Internet Business Report:
Subscriber list......................... 62,500 62,500 62,500 5
Trademark............................... 62,500 62,500 62,500 5
-------- -------- ---------
125,000 125,000 125,000
Less accumulated amortization............. (65,209) (95,209) (110,209)
-------- -------- ---------
$ 84,791 $ 54,791 $ 39,791
======== ======== =========
</TABLE>

(6) INVESTMENT IN METHODFIVE LLC

Jupiter has an investment in Methodfive LLC ("Methodfive"), formerly the
Myriad Agency, LLC, a Web site design and consulting company. For the years
ended December 31, 1997 and 1998, Methodfive experienced a net loss from
operations and the Company recorded its share of the loss in the accompanying
statements of operations and members' equity (deficiency). Jupiter's cumulative
interest in Methodfive as of December 31, 1997 and 1998 was approximately 17.4%
and has been accounted for under the equity method.

F-11
<PAGE> 75
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

As of June 30, 1999 the Company has written down its investment as a result
of the current financial position and recurring losses of Methodfive. The
Company has no future funding responsibilities with respect to Methodfive and
has a 17.4% passive interest.

(7) MEMBERS' EQUITY

The Company has three classes of members' equity: Class A, Class B and
Class C. Class A, Class B and Class C equity members own respectively 33.5%,
29.2% and 37.3% of the Company, as of December 31, 1998. All equity members have
substantially the same rights and privileges, except that Class B equity members
do not participate in the day-to-day management of the business. Class C equity
members, as well, do not participate in the day-to-day management of the
business; however, certain actions, as defined in the operating agreement,
require the consent of Class C equity members.

During October 1997, Gartner Group, Inc. ("acquiror") purchased 3,515,624
Class C units of the Company for $8.0 million from both the Company and existing
members. The Company amended its operating agreement to allow current members to
sell all or part of their units to the acquiror. During 1997, existing members
sold 2,197,265 units for $5.0 million, and 1,318,359 units were purchased from
the Company for $3.0 million and recorded as capital contributions by the
Company, less $254,098 in offering costs. Class A and Class B units sold by
existing members to the acquiror automatically converted to Class C units upon
transfer on a one-for-one basis to the acquiror. Three members sold 100% of
their units to the acquiror. In addition, during 1997 capital contributions of
$250,273 were made by existing Class A and B equity members. During 1998, an
existing member sold 333,333 units for $1.25 million to the acquiror. After
completion of the transactions, the acquiror owned 37.3% of all outstanding
units as of December 31, 1998, and had two seats on the board of members.

Profits and losses are shared by all members based on their respective
percentage ownership interests. No member shall be liable for any debts of the
Company or be required to contribute any additional capital related to deficits
incurred.

(8) OPTIONS

During 1997, the Company established the 1997 Employee Unit Option Plan
(the "Plan"). Under the Plan, 1,590,000 Class B units shall be available for
grant. On March 1, 1999, the equity members authorized an increase in the number
of units reserved for issuance under the Plan from 1,590,000 to 2,500,000 (see
Note 14). Unit options may be granted to key employees of the Company upon
selection by the managing members. The exercise price of a unit option shall be
equal to the established fair market value of the unit at the time of grant, in
accordance with the provisions of the Plan. These options vest ratably over a
four-year period.

All unit options have a fixed term determinable by the managing members,
but no option shall be exercisable more than seven years after the date of
grant. Option exercisability is subject to the terms and conditions as
determined by the managing members. All unit options were granted with an
exercise price equal to the fair market value on the date of grant.

F-12
<PAGE> 76
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

Unit option activity under the Plan is as follows:

<TABLE>
<CAPTION>
WEIGHTED
UNIT AVERAGE
OPTIONS EXERCISE
GRANTED PRICE
--------- --------
<S> <C> <C>
Outstanding at December 31, 1996............................ --
Granted..................................................... 704,738 $ .50
Exercised................................................... --
Canceled.................................................... --
---------
Outstanding at December 31, 1997............................ 704,738 $ .50
---------
Granted..................................................... 563,000 $2.08
Exercised................................................... --
Canceled.................................................... --
---------
Outstanding at December 31, 1998............................ 1,267,738 $1.20
---------
Granted (unaudited)......................................... 1,163,650 $3.72
Exercised (unaudited)....................................... --
Canceled (unaudited)........................................ (44,532) $2.38
---------
Outstanding at June 30, 1999 (unaudited).................... 2,386,856 $2.41
=========
Vested at December 31, 1997................................. 217,912 $0.50
=========
Vested at December 31, 1998................................. 499,155 $0.50
=========
Vested at June 30, 1999 (unaudited)......................... 672,723 $0.67
=========
</TABLE>

The fair value of each unit option granted to employees during 1998 and
1997 is estimated using the Black-Scholes Option Pricing Model with the
following assumptions: 1998-dividend yield 0%, risk-free interest rate 6% and an
expected life of four years; 1997-dividend yield 0%, risk-free interest rate 8%
and an expected life of four years. As permitted under the provision of SFAS No.
123, and based on the historical lack of a public market for the Company's
units, no factor for volatility has been reflected in the unit option pricing
calculation.

The following table summarizes information about unit options outstanding
under the Plan at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------------------- ---------------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
RANGE OF NUMBER REMAINING AVERAGE EXERCISE NUMBER AVERAGE EXERCISE
EXERCISE PRICE OUTSTANDING CONTRACTUAL LIFE PRICE OUTSTANDING PRICE
- -------------- ----------- ---------------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
$ 0.50 704,738 5.4 years $ 0.50 499,155 $ 0.50
$ 1.75 412,500 6.4 $ 1.75 -- $ 0.00
$ 3.00 150,500 6.9 $ 3.00 -- $ 0.00
-------- -------------
1,267,738 499,155
======== =============
</TABLE>

At December 31, 1998, the range of exercise prices and weighted-average
remaining contractual life of outstanding unit options under the Plan was
$0.50-$3.00 and 5.91 years, respectively.

The Company applies APB Opinion No. 25 in accounting for its Plan and,
accordingly, no compensation cost has been recognized for its unit options in
the accompanying financial statements.

F-13
<PAGE> 77
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

The pro forma effect on the Company's net loss, had such options been
accounted for at fair value at the date of grant, is as follows:

<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
Net Loss:
As Reported............................................... $(2,250,297) $(2,137,381)
=========== ===========
Pro Forma................................................. $(2,269,149) $(2,216,536)
=========== ===========
</TABLE>

In addition to the units granted under the Plan, during November 1996, the
Company granted unit investment options to three equity members in conjunction
with contributions made by those equity members. A total of 667,968 unit
investment options were granted at a weighted average exercise price of $0.75.
All unit options were granted with an exercise price equal to the fair market
value on the date of grant. The unit investment options were immediately vested
and are exercisable at any time during the period ending on the earlier of (a)
October 31, 2001 or (b) the closing of an initial public offering.

During May 1999, two of the equity members exercised 500,976 unit
investment options at a weighted average exercise price of $0.75. As a result,
166,992 unit investment options remain outstanding related to one equity member
at a weighted average exercise price of $0.75.

(9) DEFERRED REVENUE

Deferred revenue consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------ ------------
1997 1998 1999
---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Strategic Planning Services........................... $ 614,472 $5,638,847 $11,486,016
Conferences........................................... 359,337 783,912 2,540,442
Newsletter subscriptions.............................. 801,194 254,474 165,384
---------- ---------- -----------
$1,775,003 $6,677,233 $14,191,842
========== ========== ===========
</TABLE>

(10) OTHER REVENUES

Other revenues consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------------------ -------------------------
1996 1997 1998 1998 1999
---------- ---------- ---------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Book length studies.................. $1,488,705 $1,518,545 $1,681,114 $ 884,859 $ 831,582
Newsletter subscriptions............. 1,130,377 1,492,000 1,470,380 853,597 337,890
Other................................ 381,511 235,374 577,946 200,589 511,251
---------- ---------- ---------- ---------- ----------
$3,000,593 $3,245,919 $3,729,440 $1,939,045 $1,680,723
========== ========== ========== ========== ==========
</TABLE>

F-14
<PAGE> 78
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

(11) BARTER TRANSACTIONS

During 1997, the Company entered into barter transactions by exchanging its
products for advertising. Barter revenue and expenses are recorded at the fair
market value of services provided or received, whichever is more determinable in
the circumstances. The value of these transactions was $105,974 and $18,120 for
the years ended December 31, 1996 and 1997, respectively. No such transactions
were entered into by the Company during 1998.

(12) 401(k) PROFIT SHARING PLAN

The Company has a 401(k) profit sharing plan for its employees. Employees
who have completed one year of service and attained age 21 are eligible to
participate. The Company makes a matching contribution equal to 50% for every
one dollar of each participant's contribution and applies such matching
percentage to the participant's salary reduction, up to 6% of the participant's
compensation. During 1996, 1997 and 1998, the Company's matching contribution
was $10,639, $12,435 and $38,882, respectively.

(13) COMMITMENTS AND CONTINGENCIES

(a) OFFICE LEASES

The Company leases office space in New York City and London. The future
minimum annual rental commitments under the leases are:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1999...................................................... $ 515,113
2000...................................................... 625,536
2001...................................................... 734,024
2002...................................................... 655,491
2003...................................................... 677,844
2004 and thereafter....................................... 218,318
----------
$3,426,326
==========
</TABLE>

Rent expense for the years ended December 31, 1996, 1997 and 1998 was
$111,433, $335,063 and $303,061, respectively.

During April 1998, the Company entered into a seven-year operating lease
agreement for office space in London. The lease agreement calls for monthly
payments with no scheduled increase in succeeding periods.

During January 1999, the Company terminated its existing New York operating
lease agreements that were due to expire in May 2000 and December 2001 and
signed a new five-year operating lease agreement with the same landlord. The new
lease agreement covers the same office space as the terminated lease agreement
as well as additional office space. In connection with this lease agreement, the
Company received two months of free rent. The agreement also calls for scheduled
increases in succeeding periods. As such, the Company records rent expense on a
straight-line basis. The future payments related to this new lease agreement are
reflected in the above schedule, and the deferred rent balance as of June 30,
1999 reflects the impact of the new lease.

F-15
<PAGE> 79
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

(b) EQUIPMENT LEASE

Future minimum lease payments under noncancellable operating leases as of
December 31, 1998 are:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1999...................................................... $ 42,370
2000...................................................... 47,956
2001...................................................... 47,956
2002...................................................... 38,671
2003...................................................... 18,840
Thereafter................................................ 4,710
--------
Total.................................................. $200,503
========
</TABLE>

(14) SUBSEQUENT EVENTS (UNAUDITED)

a) INITIAL PUBLIC OFFERING

In July 1999, the Class A equity members authorized the filing of a
registration statement with the Securities and Exchange Commission ("SEC") that
would permit the Company to sell shares of its common stock in connection with
the proposed IPO.

Upon the completion of the proposed IPO, the Company will be reorganized
from a limited liability company (LLC) to a corporation, which will be treated
as a "C" corporation for tax purposes. All of the members of the LLC will
exchange their respective member interests in the LLC for shares of common stock
in the corporation.

After the IPO, the members no longer retain the rights granted to them as
part of the Company's Operating Agreement, other than piggyback registration
rights and, with respect to the Class C equity member, limited indemnification
rights.

b) LINE OF CREDIT

During March 1999, the Company entered into an agreement for a line of
credit of $750,000 with the Silicon Valley Bank. Any unpaid balance is payable
on demand and bears an interest rate of prime plus 1%. All of the Company's
assets were listed as collateral in the event of default. No amounts were
outstanding as of March 31, 1999.

During September 1999, the Company increased this line of credit to $3.0
million. Any unpaid balance is payable on demand and bears an interest rate of
prime plus 1 1/2%. In the event that the Company raises an additional $3 million
of equity financing, the interest rate on the $3 million line of credit will be
reduced to prime plus 3/4%.

c) ADVERTISING COMMITMENTS

In 1999, the Company entered into certain advertising contracts and has
future advertising commitments with a publishing company in the amount of
approximately $500,000.

d) UNIT OPTION PLAN

In March 1999, the equity members authorized an increase in the number of
units reserved for issuance under the Plan from 1,590,000 to 2,500,000.

F-16
<PAGE> 80
JUPITER COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

In July 1999, the equity members authorized an additional increase in the
number of units reserved for issuance under the Plan from 2,500,000 to
2,750,000.

e) CLASS B (NON-VOTING) UNITS

In July 1999, the equity members authorized the Company to issue Class B
(Non-Voting) units which shall provide Jupiter with, among other things,
flexibility in the issuance of units in connection with mergers, acquisitions
and/or similar transactions and in the exercise of options. Holders of Class B
(Non-Voting) units shall have the same rights and privileges as holders of Class
B units, except for certain specified rights.

f) ACQUISITION OF INTELLIGENCE SE AB

In July 1999, the Company acquired all of the stock of Intelligence SE AB,
a Swedish research company, in exchange for 137,000 Class B (Non-Voting) units
at an aggregate value of $808,000.

g) SALE OF UNITS BY MEMBERS

On May 25, 1999, two equity members sold a total of 254,238 units to other
existing equity members.

h) NON-PLAN OPTIONS

During 1999, the Company issued options to purchase 7,500 Class B units
outside of the Plan to third parties for services rendered at a fair value
exercise price of $3.00.

i) Compensation expense

In July 1999, the Company granted 113,125 unit options below fair value.
The Company will record compensation expense of approximately $577,000 over the
vesting period of these options, which represents the difference between the
fair value of $11.00 at the date of grant and the exercise price.

F-17
<PAGE> 81

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

OCTOBER 8, 1999

[JUPITER COMMUNICATIONS LOGO]

[ONLINE INTELLIGENCE LOGO]

3,125,000 SHARES OF COMMON STOCK

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

PROSPECTUS
-------------------------

DONALDSON, LUFKIN & JENRETTE
DEUTSCHE BANC ALEX. BROWN
THOMAS WEISEL PARTNERS LLC

DLJdirect INC.
- --------------------------------------------------------------------------------

We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of Jupiter
Communications, Inc. have not changed since the date hereof.
- --------------------------------------------------------------------------------

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

Until November 2, 1999 (25 days after the date of this prospectus) all dealers
that effect transactions in these shares of common stock may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.
- --------------------------------------------------------------------------------