NETRATINGS INC, S-1/A, 1999-10-28

NETRATINGS INC
S-1/A, 1999-10-28
BUSINESS SERVICES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1999

REGISTRATION NO. 333-87717
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

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

NETRATINGS, INC.

(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 7389 77-0461990
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification
incorporation or Classification Code No.)
organization) number)
</TABLE>

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

830 HILLVIEW COURT, SUITE 225
MILPITAS, CALIFORNIA 95035
(408) 957-0699
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------------

DAVID J. TOTH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NETRATINGS, INC.
830 HILLVIEW COURT, SUITE 225
MILPITAS, CALIFORNIA 95035
(408) 957-0699

(Name, address, including zip code, and telephone number, including
area code, of agent for service)
--------------------------

PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:

<TABLE>
<S> <C>
DENNIS C. SULLIVAN, ESQ. RICHARD A. BOEHMER, ESQ.
PAUL A. BLUMENSTEIN, ESQ. GEOFFREY J. SPOLYAR, ESQ.
CHIRAG V. KARIA, ESQ. O'MELVENY & MYERS LLP
GRAY CARY WARE & FREIDENRICH LLP 400 SOUTH HOPE STREET
400 HAMILTON AVENUE LOS ANGELES, CALIFORNIA 90071-2899
PALO ALTO, CALIFORNIA 94301-1825 (213) 430-6000
(650) 833-2000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after the effective date of this registration statement.
--------------------------

If any of the securities being registered on this form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. / /

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / / ______

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / / ______

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / / ______

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
--------------------------

The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to
Section 8(a), may determine.
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- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. The
Company may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities, and it is not soliciting an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted.
<PAGE>

Subject to Completion. Dated October 28, 1999.

PROSPECTUS

4,000,000 SHARES

[LOGO]

COMMON STOCK

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

This is our initial public offering of shares of common stock. We are
offering 4,000,000 shares. No public market currently exists for our shares.

We have applied to have our common stock approved for listing on the Nasdaq
National Market under the symbol "NTRT." We expect the public offering price to
be between $12.00 and $14.00 per share.

Concurrently with the completion of this offering, Nielsen Media Research,
Inc. will exercise its right to purchase a number of shares of common stock in a
transaction that will result in Nielsen Media Research owning 54% of our
outstanding shares, assuming exercise of all outstanding options and warrants,
including the underwriters' option described below, at a price equal to the
public offering price in this offering. In this transaction, we expect to issue
10,387,068 shares to Nielsen Media Research in a private placement assuming that
none of our other stockholders exercise their rights to require Nielsen Media
Research to purchase shares from them in lieu of shares issued by us. Nielsen
Media Research has also advised us that, upon the completion of this offering,
it also intends to exercise warrants to purchase 6,000,000 shares of common
stock at an exercise price of $7.80 per share and 553,054 shares at an exercise
price of $7.20 per share.

INVESTING IN THE SHARES INVOLVES RISKS. "RISK FACTORS" BEGIN ON PAGE 7.

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<CAPTION>
Per Share Total
--------- ---------

<S> <C> <C>
Public Offering Price..................................................... $ $

Underwriting Discount..................................................... $ $

Proceeds to NetRatings.................................................... $ $
</TABLE>

We have granted the underwriters a 30-day option to purchase up to 600,000
additional shares of common stock on the same terms and conditions as set forth
above solely to cover over-allotments, if any.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Lehman Brothers expects to deliver the shares on or about , 1999.

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

LEHMAN BROTHERS

BANC OF AMERICA SECURITIES LLC

CIBC WORLD MARKETS

C. E. UNTERBERG, TOWBIN

, 1999
<PAGE>
[inside front cover]

[LOGO]

DELIVERING HIGH-QUALITY INTERNET AUDIENCE INFORMATION AND ANALYSIS TO THE GLOBAL
INTERNET MARKETPLACE

Site, advertising and e-commerce usage and audience behavior, captured by
NetRatings' Internet measurement technology in real time, is delivered online in
the Nielsen//NetRatings audience measurement services.

Nielsen//NetRatings market research and analysis services evaluate and
report on emerging Internet trends based on current audience data and e-commerce
activity.

NetRatings' strategic alliances with Nielsen Media Research and ACNielsen
enable high-quality Internet audience measurement solutions for the global
marketplace. (show logos)

[Graphic: Global sphere showing users accessing Internet along
latitude/longitude lines of the globe.

Illustration: tracking/gathering of market intelligence translated into online
reports and market analysis studies.]

[inside spread]

INFORMATION QUALITY FOR NEW MEDIA [IQ button graphic]

- Proven panel research methodology and practices based on industry accepted
Random Digit Dialing (RDD).

- Nielsen//NetRatings representative sample of the Internet user population
that meets the industry demand for accurate and reliable data.

REAL-TIME INTERNET MEASUREMENT TECHNOLOGY

- NetRatings' proprietary technology captures comprehensive data of site,
advertising and e-commerce user activity in real time.

- Daily, weekly and monthly reports are available online via a flexible,
easy-to-use interface.

[Screen shots: Top Sites Report screen with Demographic Report screen overlap
Banner Impression report screen:

- Caption: BannerTrack reports provide advertisers, site publishers and
media planners with ad banner information for use in competitive research,
media buying/selling and creative analysis.]

ANALYTICAL SERVICES

- E-commerce and Internet Investment Strategies services providing the
critical Internet market intelligence required for companies to make
business-critical decisions.

- Timely and in-depth trend analysis of emerging sectors and companies based
on high-quality Internet user behavior.

[Screen shots: Commerce Data report, Spotlights report

caption: Insightful analysis based on detailed E-commerce information including
audience traffic patterns and "look-to-book" information.

Photo: E-commerce and Investment Trend Books]

STRATEGIC PARTNERSHIPS

- [LOGO:] Through the combination of our advanced Internet measurement
technology and Nielsen Media Research's 50 years of expertise in panel
methodology, we have successfully developed and delivered
Nielsen//NetRatings research services to over 140 customers.

- [LOGO:] Leveraging our strategic relationship with ACNielsen, the world's
leading supplier of market research information, we intend to expand the
Nielsen//NetRatings services into over 30 countries worldwide, bringing
high-quality Internet audience information to the global marketplace.
<PAGE>
[inside back cover]

NIELSEN//NETRATINGS MEDIA OUTLETS

Nielsen//NetRatings audience measurement data appears regularly in major
print and online media, including Advertising Age, Bloomberg, Forbes.com, San
Jose Mercury News, Washington Post, Business 2.0 and USA Today.

[Photo of AdAge 'Netresults' data page featuring Nielsen//NetRatings data]

[Photo of Bloomberg terminal showing daily audience report]

AdAge caption:

Advertising Age, a Crain publication serving traditional and interactive
advertising agencies, publishes weekly Nielsen//NetRatings data including Top
Advertisers and Top Banners.

Bloomberg caption: Daily audience statistics for the top Internet sites are
featured on 140,000 Bloomberg terminals worldwide.

NETRATINGS STRATEGIC RELATIONSHIPS

[Logos: Nielsen Media Research, ACNielsen, Bloomberg, AdAge, AdAuction,
AdKnowledge, NetGravity]
<PAGE>
TABLE OF CONTENTS

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PAGE
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Prospectus Summary............................ 3
Risk Factors.................................. 7
Use of Proceeds............................... 20
Dividend Policy............................... 20
Capitalization................................ 21
Dilution...................................... 23
Selected Financial Data....................... 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................. 26
Business...................................... 34

<CAPTION>
PAGE
---------
<S> <C>
Management.................................... 52
Related Party Transactions.................... 60
Principal Stockholders........................ 63
Description of Capital Stock.................. 65
Shares Eligible for Future Sale............... 68
Underwriting.................................. 70
Legal Matters................................. 72
Experts....................................... 72
Where You Can Find More Information........... 72
Index to Financial Statements................. F-1
</TABLE>

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. This prospectus is not an offer to sell or a
solicitation of an offer to buy our common stock in any jurisdiction where it is
unlawful. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock.

This preliminary prospectus is subject to completion prior to this offering.

Some of the statements under the captions "Prospectus Summary," "Risk
Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" and elsewhere in this
prospectus are "forward-looking statements." These forward-looking statements
include, but are not limited to, statements about our plans, objectives,
expectations and intentions and other statements contained in the prospectus
that are not historical facts. When used in this prospectus, the words
"anticipates," "believes," "continue," "could," "estimate," "expects,"
"intends," "may," "plans," "seeks," "should," or "will" or the negative of these
terms or similar expressions are generally intended to identify forward-looking
statements. Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by these forward-looking
statements, including the factors discussed under "Risk Factors."

NetRatings, NetRatings Insight, NetRatings Online Observer, BannerTrack and
CommerceTrack are trademarks for which we have applied for registration in the
United States. Other trademarks and trade names appearing in this prospectus are
the property of their respective holders.

Until , 1999, all dealers selling shares of the common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<PAGE>
PROSPECTUS SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION REGARDING OUR COMPANY AND THE COMMON STOCK BEING SOLD IN THIS
OFFERING AND OUR FINANCIAL STATEMENTS AND NOTES TO THOSE STATEMENTS APPEARING
ELSEWHERE IN THIS PROSPECTUS.

EXCEPT AS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES
THAT THE UNDERWRITERS DO NOT EXERCISE THE OPTION GRANTED BY NETRATINGS TO
PURCHASE ADDITIONAL SHARES IN THIS OFFERING, THAT WE SELL 10,387,068 SHARES OF
COMMON STOCK TO NIELSEN MEDIA RESEARCH IN A PRIVATE PLACEMENT CLOSING
CONCURRENTLY WITH THE COMPLETION OF THIS OFFERING, THAT NIELSEN MEDIA RESEARCH
EXERCISES WARRANTS TO PURCHASE 6,553,054 OF COMMON STOCK IMMEDIATELY FOLLOWING
THE COMPLETION OF THIS OFFERING, THAT WARRANTS TO PURCHASE AN ADDITIONAL 353,471
SHARES OF COMMON STOCK ARE EXERCISED IMMEDIATELY PRIOR TO THE COMPLETION OF THIS
OFFERING, THAT ALL OF OUR OUTSTANDING PREFERRED STOCK IS CONVERTED INTO COMMON
STOCK UPON THE CLOSING OF THIS OFFERING, AND THAT A ONE-FOR-TWO REVERSE SPLIT OF
OUR COMMON STOCK IS EFFECTED BEFORE THE COMPLETION OF THIS OFFERING.

NETRATINGS

We are a leading provider of Internet audience measurement information and
analysis. Our products and services enable our customers to make informed
business-critical decisions regarding their Internet strategies. We deliver
accurate and timely Internet audience information, collected from a
representative sample of Internet users, and augment this information with
detailed, flexible reporting and in-depth analysis. In order to provide our
customers with the highest quality products and services, we have formed
strategic relationships with Nielsen Media Research, the leading source of
television audience measurement and related services in the United States and
Canada, and ACNielsen, the world's leading provider of market research
information and analysis to the consumer products and services industries.
Through these relationships, we gain access to these companies' proprietary
sampling methodologies and marketing capabilities and have the right to market
our products and services under the Nielsen//NetRatings brand. In addition,
through our joint venture with ACNielsen, we intend to launch audience
measurement services in over 30 countries outside the United States, Canada and
Japan. We introduced our line of Nielsen//NetRatings products and services in
March 1999, and we currently have more than 160 customers, including leading
e-commerce companies, advertising agencies, media companies, Internet companies
and financial institutions.

We were incorporated in July 1997 and began offering Internet audience
measurement services in March 1998. Accordingly, our operating history and
revenues derived from operations are limited. We incurred net losses of $3.9
million for the year ended December 31, 1998 and $10.7 million for the nine
months ended September 30, 1999, and as of September 30, 1999, we had an
accumulated deficit of $16.3 million. We will continue to incur significant
capital and operating expenses over the next several years in connection with
our planned marketing efforts and expansion, and we expect to continue to incur
operating losses for the foreseeable future.

As the Internet evolves and online advertising and electronic commerce
continue their dramatic growth, companies conducting business online are
continually challenged to define and reach their target audiences and to develop
increasingly sophisticated online business strategies. At the same time, the
Internet presents advertisers and online businesses with a unique global
opportunity to both target prospective consumers and to measure the return on
their advertising or marketing investment. Internet users visiting the same Web
page at the same moment can be presented with different advertisements based on
their Internet usage behavior. The Internet also makes it possible for an
advertiser or e-commerce company to track how its audience interacts with a
banner advertisement or an e-commerce site.
The unique dynamics of the Internet require that online market participants
understand their markets and quickly recognize and adapt to changing conditions
in their particular industries. In order

3
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to remain competitive, these online companies demand detailed audience
measurement information and analysis that will enable them to make informed
business decisions in a timely manner. We believe that our comprehensive product
and service offering meets the needs of this market by providing the following
benefits:

- ESTABLISHED SAMPLING METHODOLOGIES. Through our strategic relationships
with Nielsen Media Research and ACNielsen, we provide reliable,
independent information using established sampling methodologies to create
statistically representative groups of Internet users, referred to as
panels.

- PROPRIETARY MEASUREMENT TECHNOLOGY. Our proprietary activity tracking and
data collection technology gathers comprehensive and detailed information
regarding Internet site and advertising activity in real time.

- POWERFUL, FLEXIBLE REPORTING SYSTEMS. We provide a variety of daily,
weekly and monthly reports that can be modified by our customers, enabling
them to easily manipulate data to meet specific information requirements.

- TIMELY, INSIGHTFUL ANALYSIS. We augment high-quality audience behavior
information with meaningful analysis delivered on a timely basis, enabling
our customers to take decisive strategic actions.
- COMPATIBLE, PORTABLE ARCHITECTURE. All of our information is collected
using proprietary software that is compatible with devices that operate on
a Java-enabled platform permitting seamless integration with many new
Internet access devices.

Our objective is to become the standard for Internet audience measurement
and the worldwide leader in Internet market research. The key elements of our
strategy include:

- leveraging our strategic relationships by utilizing established audience
sampling methodologies developed by Nielsen Media Research and ACNielsen
and capitalizing on these companies' brand recognition by marketing our
services under the Nielsen//NetRatings brand;

- increasing the size, scope and number of our audience measurement panels
to enable us to offer more detailed and accurate information and analysis;

- developing additional products, such as new types of reports or analytical
services, to better enable our customers to evaluate Internet audience
behavior as such behavior rapidly evolves, and entering new markets, such
as analysis of business-to-business e-commerce activity, as their
significance in the overall Internet marketplace increases;

- expanding the Nielsen//NetRatings brand internationally to enable us to
reach the large proportion of Internet users and Internet-related
businesses that reside outside the U.S. and Canada; and

- positioning ourselves to capitalize on the convergence of television and
the Internet by capturing and analyzing Internet audience behavior on
devices that deliver both Internet and television content, as well as
Internet audience behavior involving combined Internet content and
television programming.

Our market is highly-competitive, and we face the risk that another
company's Internet audience measurement service will become the accepted
standard for Internet audience measurement services. Our future success is
subject to other significant risks and uncertainties, including the following:

- We may not be successful in managing future growth of our business;

- The Internet may not achieve broad acceptance as an effective advertising
medium;

4
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- Nielsen Media Research may fail to maintain the quality of its audience
sampling methodologies; and

- We may not be successful in expanding our services to include measurement
of audience behavior on new types of Internet access devices.

Nielsen Media Research has elected to exercise its right to purchase
10,387,068 additional shares of our common stock in a private placement closing
concurrently with the completion of this offering, at the public offering price,
so that Nielsen Media Research will own 54% of our issued and outstanding common
stock assuming the exercise of all outstanding options and warrants, including
the underwriters' over-allotment option.

Our principal executive offices are located at 830 Hillview Court, Suite
225, Milpitas, CA 95035. Our telephone number is (408) 957-0699. We were
incorporated in Delaware on July 2, 1997. Our Web site address is
www.netratings.com. Information on our Web site does not constitute part of this
prospectus.
THE OFFERING

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<S> <C>
Common stock offered by NetRatings........... 4,000,000 shares
Common stock to be outstanding after the
offering................................... 31,812,402 shares
Use of proceeds.............................. For general corporate purposes, including
working capital and capital expenditures. See
"Use of Proceeds."
Proposed Nasdaq National Market symbol....... NTRT
</TABLE>

The number of shares of common stock to be outstanding after the offering is
based on the number of shares outstanding as of September 30, 1999, 10,387,068
shares to be issued and sold in a private placement to Nielsen Media Research
concurrently with the completion of this offering, 6,553,054 shares that are
issuable pursuant to warrants expected to be exercised by Nielsen Media Research
following the completion of this offering, and 353,471 shares expected to be
issued upon the exercise of warrants immediately prior to the completion of this
offering and excludes:

- 2,410,000 shares issuable under our 1998 Stock Plan, consisting of:

- 1,722,000 shares issuable upon exercise of options outstanding as of
September 30, 1999, with a weighted average exercise price of $2.04 per
share;

- 150,500 shares issuable upon exercise of options issued subsequent to
September 30, 1999, with an exercise price of $8.37 per share; and

- 537,500 shares available for future grants;

- 83,468 shares issuable upon the exercise of warrants outstanding as of
September 30, 1999, at a weighted average exercise price of $1.15 per
share;

- 43,293 shares issuable upon exercise of a warrant issued subsequent to
September 30, 1999, with an exercise price of $6.24 per share; and

- 250,000 shares available for issuance under our 1999 Employee Stock
Purchase Plan.

5
<PAGE>
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table summarizes financial data regarding our business and
should be read together with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our financial statements and the
related notes included elsewhere in this prospectus. The financial results for
the nine months ended September 30, 1998 are unaudited.

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<CAPTION>
NINE MONTHS ENDED
PERIOD FROM JULY 2, YEAR ENDED SEPTEMBER 30,
1997 (INCEPTION) TO DECEMBER 31, ---------------------------
DECEMBER 31, 1997 1998 1998 1999
------------------- ------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue............................ $ -- $ 237 $ 132 $ 1,486
Gross profit (loss)................ -- (824) (230) (2,783)
Loss from operations............... (1,787) (3,768) (2,301) (10,645)
Net loss........................... (1,781) (3,879) (2,358) (10,670)
Basic and diluted net loss per
common share..................... $ (2.03) $ (2.78) $ (1.79) $ (5.19)
Shares used to compute basic and
diluted net loss per common
share............................ 878 1,393 1,320 2,056
Pro forma basic and diluted net
loss per common share............ $ (1.67) $ (1.04) $ (2.31)
Shares used to compute pro forma
basic and diluted net loss per
common share..................... 2,319 2,270 4,626
</TABLE>

The following table provides a summary of our balance sheet as of September
30, 1999. The as adjusted column reflects the sale of 4,000,000 shares of common
stock in this offering at an assumed initial public offering price of $13.00 per
share, after deducting the estimated underwriting discount and offering
expenses, and the sale of the 10,387,068 shares to be sold to Nielsen Media
Research concurrently with the completion of this offering, after deducting
estimated expenses, and gives effect to the application of the net proceeds from
this offering and the sale of the shares to Nielsen Media Research.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
------------------------
ACTUAL AS ADJUSTED
----------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................................................. $ 28,650 $ 262,269
Working capital........................................................................ 24,262 257,881
Total assets........................................................................... 31,086 264,705
Current amounts due to Nielsen Media Research.......................................... 2,164 2,164
Long-term debt and capital lease obligations, less current portion..................... 320 320
Total stockholders' equity (deficit)................................................... (10,728) 258,634
</TABLE>

6
<PAGE>
RISK FACTORS

ANY INVESTMENT IN OUR COMMON STOCK INVOLVES A SIGNIFICANT DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS AS WELL AS THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS. IF ANY OF THE FOLLOWING RISKS ACTUALLY
OCCUR, OUR BUSINESS WOULD BE HARMED, THE TRADING PRICE OF OUR COMMON STOCK COULD
DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.

WE HAVE INCURRED LOSSES SINCE INCEPTION AND WE MAY BE UNABLE TO ACHIEVE
PROFITABILITY

We have experienced operating losses in each quarterly and annual period
since inception. We incurred net losses of $3.9 million for the year ended
December 31, 1998 and $10.7 million for the nine months ended September 30,
1999, and as of September 30, 1999, our accumulated deficit was $16.3 million.
We intend to make significant expenditures related to panel development and
maintenance, marketing, hiring of additional personnel and further development
of our technology and infrastructure. As a result, we will need to generate
significant revenue to achieve and maintain profitability. Although our revenue
has grown in recent periods, we may not be able to achieve significant revenue
growth in the future. Our operating results for future periods are subject to
numerous uncertainties, and we may not achieve sufficient revenue to become
profitable.

OUR LIMITED OPERATING HISTORY IN THE EVOLVING MARKET FOR INTERNET AUDIENCE
MEASUREMENT INCREASES THE POSSIBILITY THAT THE VALUE OF YOUR INVESTMENT WILL
DECLINE

We were incorporated in July 1997 and did not start generating revenue until
the quarter ended March 31, 1998. We introduced our Nielsen//NetRatings Internet
audience measurement service in the quarter ended March 31, 1999. Accordingly,
we are still in the early stages of development and have only a limited
operating history upon which you can evaluate our business. You should evaluate
our likelihood of financial and operational success in light of the risks,
uncertainties, expenses, delays and difficulties associated with an early-stage
business in an evolving market, many of which may be beyond our control,
including:

- the risk that a competing company's Internet audience measurement service
will become the accepted standard for Internet audience measurement;

- our potential inability to successfully manage any significant growth we
achieve in the future;

- our potential inability to develop our brand; and

- the risks associated with our international expansion.

FLUCTUATIONS IN OUR QUARTERLY REVENUES AND OPERATING RESULTS MIGHT LEAD TO
REDUCED PRICES FOR OUR STOCK

Due to our limited operating history and the evolving nature of the market
in which we compete, our future revenue is difficult to forecast. Factors that
may cause fluctuations in our revenues or operating results on a quarterly basis
include the following, many of which are beyond our control:

- the amount and timing of operating costs and capital expenditures related
to the expansion of our business;

- the amount and timing of costs related to changes in the size or
composition of our panel, particularly as a result of turnover among panel
members;

- changes in demand for our products and services due to the announcement or
introduction of new products and services by us or our competitors;

- changes in the pricing of our products and services in light of the
services and pricing offered by our competitors;

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- the impact of possible acquisitions both on our operations and on our
reported operating results due to associated accounting charges; and

- technical difficulties or service interruptions that significantly harm
our ability to deliver our products and services on schedule.

BECAUSE OUR EXPENSE LEVELS ARE BASED IN LARGE PART ON OUR ESTIMATES OF FUTURE
REVENUES, AN UNEXPECTED SHORTFALL IN REVENUE WOULD SIGNIFICANTLY HARM OUR
OPERATING RESULTS

Our expense levels are based largely on our investment plans and estimates
of future revenue. We may be unable to adjust our spending to compensate for an
unexpected shortfall in revenue. Accordingly, any significant shortfall in
revenue relative to our planned expenditures in a particular quarter would harm
our results of operations and could cause our stock price to fall sharply,
particularly following quarters in which our operating results fail to meet the
expectations of securities analysts or investors.

THE MARKET FOR INTERNET AUDIENCE MEASUREMENT AND ANALYSIS IS HIGHLY COMPETITIVE,
AND IF WE CANNOT COMPETE EFFECTIVELY, OUR REVENUES WILL DECLINE

The market for Internet audience measurement and analysis is new, rapidly
evolving and becoming increasingly competitive. In the market for Internet
audience measurement services, our principal competitor is Media Metrix, which
we believe to be the leading provider of Internet audience measurement services,
based on annual revenues. We are not aware of any other significant competitors
in this market, although we expect competition to intensify in the future. With
respect to the provision of analytical services, we compete with companies such
as Forrester Research, Gartner Group, International Data Corporation and Jupiter
Communications that provide Internet market research and industry analysis based
on data derived from surveys.

We believe that the market for Internet audience measurement services will
eventually gravitate toward a uniform standard, based on data collected by a
single service provider, that will allow companies to make meaningful decisions
regarding online advertising. We therefore believe that one leading provider is
likely to emerge in the market for Internet audience measurement services. Media
Metrix has provided Internet audience measurement services since 1995 and, as
the "first mover" in this market, has a head start in becoming the industry
standard for such services.

We believe that the principal competitive factors in our market are:

- the development of independent, reliable measurement panels that are
representative of the entire target audience;

- the timeliness of reported results;

- the breadth and depth of measurement services offered and their
flexibility and ease of use;

- the ability to provide quality analytical services derived from Internet
audience measurement information;

- the ability to offer products and services in international markets; and

- pricing.

Most of our competitors have longer operating histories, larger customer
bases, greater brand recognition and significantly greater financial and
marketing resources than we have. In addition, some of our competitors may be
able to:

- devote greater resources to marketing and promotional campaigns;

- adopt more aggressive pricing policies; or

8
<PAGE>
- devote more resources to technology and systems development.

In light of these factors, we may be unable to compete successfully in our
market.

WE ARE DEPENDENT ON NIELSEN MEDIA RESEARCH FOR THE DEVELOPMENT AND MAINTENANCE
OF PANELS OF INTERNET USERS IN THE UNITED STATES AND CANADA AND ON ACNIELSEN FOR
THE DEVELOPMENT AND MAINTENANCE OF SUCH PANELS IN INTERNATIONAL MARKETS

Our audience measurement data is collected from randomly-selected groups of
Internet users that are generally referred to as audience measurement panels.
Our at-home Internet audience measurement panel in the United States is, and in
Canada will be, developed and maintained by Nielsen Media Research as part of
our strategic relationship with that company. Similarly, our Internet audience
measurement panels and other sampling methodologies which we intend to employ in
geographic locations outside of the United States, Canada and Japan will be
developed and maintained by ACNielsen as part of our joint venture with that
company. Any failure on the part of Nielsen Media Research or ACNielsen to
devote adequate resources to the development or maintenance of such panels or
other sampling methodologies, or to maintain the overall quality of these
methodologies, will harm our business. In August 1999, Nielsen Media Research
agreed to be acquired by VNU N.V., a Netherlands-based international publishing
company. Should this acquisition result in significant changes in the
composition of Nielsen Media Research's management team or its business
strategies, our relationship with Nielsen Media Research could be harmed. In
addition, Nielsen Media Research may terminate its obligations with respect to
Internet audience measurement panels in the event it no longer holds at least 5%
of our outstanding stock on a fully-diluted basis.

WE EXPECT NIELSEN MEDIA RESEARCH TO ACQUIRE A MAJORITY OF OUR OUTSTANDING STOCK
AFTER THE COMPLETION OF THIS OFFERING

Nielsen Media Research has advised us that, following the completion of this
offering, it will exercise its warrants to purchase 6,553,054 shares of our
common stock, after which it will own a majority of our outstanding stock.
Therefore, Nielsen Media Research will have sufficient voting power to control
the direction and policies of NetRatings, including the election of our board of
directors, amendment of our certificate of incorporation and decisions regarding
mergers, consolidations, and the sale of all or substantially all of our assets.
This control may have the effect of discouraging certain types of transactions
involving a change of control, including transactions in which the other holders
of our common stock might otherwise receive a premium for their shares over the
then current market price. We are currently obligated to use our best efforts to
elect a person designated by Nielsen Media Research to serve as a member of our
Board of Directors. After Nielsen Media Research exercises its warrants, we will
be obligated to use our best efforts to elect a second designee.

BECAUSE THE CORPORATE PARENT OF NIELSEN MEDIA RESEARCH WILL BE REQUIRED TO
CONSOLIDATE OUR OPERATING RESULTS WITH ITS OWN, NIELSEN MEDIA RESEARCH MAY
ATTEMPT TO INFLUENCE OUR EXPENDITURES IN ORDER TO LIMIT OUR LOSSES IN THE SHORT
TERM TO THE DETRIMENT OF OUR LONG-TERM STRATEGIES

After exercising its warrants, Nielsen Media Research will own a majority of
our outstanding stock. During any time that Nielsen Media Research is a majority
stockholder, its parent company, VNU N.V., will be required to consolidate our
operating results with its own for financial reporting purposes. Our business
strategy will require us to incur significant losses as we attempt to establish
our brand by increasing our marketing efforts and establishing strategic
relationships. Incurring large expenses for these purposes may conflict with the
interests of VNU in maximizing its net earnings, and VNU, acting through Nielsen
Media Research may therefore attempt to influence our expenditures in order to
limit our losses in the short term to the detriment of our long-term strategies.

9
<PAGE>

WE CANNOT FORECAST THE RATE AT WHICH SUBSCRIPTIONS FOR OUR SERVICES MAY BE
RENEWED, AND WE MAY NOT ACHIEVE SUFFICIENTLY-HIGH RENEWAL RATES TO BECOME
PROFITABLE

We derive substantially all of our revenue from annual subscriptions for our
services. As our business becomes more established, we expect subscription
renewals to account for an increasing proportion of our revenue. Any
unexpectedly-low renewal rates would harm our operating results and could
prevent us from becoming profitable. Because of our limited operating history,
our historical renewal rates are not meaningful, and accordingly, we have no
historical basis for projecting the rate at which our customers will renew their
subscriptions. Additionally, because most Internet-related businesses are still
in the early stages of development, consolidations in our customer base or the
failure of a significant number of our customers could cause a decline in
renewal rates for our products and services.

WE MAY NOT BE SUCCESSFUL IN DEVELOPING OUR BRAND, WHICH COULD PREVENT US FROM
REMAINING COMPETITIVE

We believe that our future success will depend on our ability to maintain
and strengthen the Nielsen//NetRatings brand, which will depend, in turn,
largely on the success of our marketing efforts and our ability to provide our
customers with high-quality products. To promote the Nielsen// NetRatings brand,
we intend to increase our marketing expenses, and we may incur other types of
expenses in order to create and maintain brand loyalty among our clients.
However, we cannot assure you that our efforts will succeed in maintaining and
strengthening our brand. If we fail to successfully promote and maintain our
brand, or incur excessive expenses attempting to promote and maintain our brand,
our business will be harmed.

OUR BRAND IS DEPENDENT ON THE REPUTATIONS OF THIRD PARTIES OVER WHICH WE HAVE NO
CONTROL

The strength of the Nielsen//NetRatings brand is also closely dependent on
the reputations of Nielsen Media Research and ACNielsen and the strength of
their brands. Therefore, any negative publicity generated by Nielsen Media
Research or ACNielsen, whether or not directly related to any
Nielsen//NetRatings-branded products or services, as well as any erosion of the
strength of either of their brands, will adversely affect our own brand
identity.

COSTS TO DEVELOP AND MAINTAIN ACCURATE AUDIENCE MEASUREMENT PANELS ARE
SIGNIFICANT AND MAY INCREASE

The expense of recruiting and maintaining our audience measurement panels
comprises the bulk of the cost of revenue reported on our financial statements
and, therefore, any increase in this expense will result in a corresponding
decrease in our gross margin. We believe that the expansion of the number of our
panels as well as the size and scope of our panels is critical to the success of
our business. This expansion is likely to increase our expenses for recruiting
and maintaining our panels. The costs of recruiting and maintaining our panels
are dependent on many factors beyond our control, including the cooperation rate
of potential panel members and turnover among existing panel members, and
accordingly we cannot control these costs to match increases or decreases in
revenue. To the extent that such additional expenses are not accompanied by
increased revenue, our results of operations will be harmed.

THE DEVELOPMENT OF HIGH-QUALITY AT-WORK MEASUREMENT PANELS IS PARTICULARLY
DIFFICULT, AND IF WE ARE UNABLE TO DEVELOP SUCH A PANEL, WE MAY BE UNABLE TO
COMPETE WITH OTHER INTERNET AUDIENCE MEASUREMENT SERVICES

A significant percentage of Internet usage takes place at the workplace, and
as such, our customers are increasingly requiring audience measurement
information from this user segment. In order to measure and analyze this usage,
we must develop high-quality panels of at-work Internet users. Our principal
competitor, Media Metrix, currently has an at-work panel. We recently began the
development

10
<PAGE>

of our initial at-work measurement panel and expect to recruit more than 3,000
panel members by the end of 1999. However, we may encounter difficulties in the
development of these panels. Participation in our audience measurement panels
requires that the panel member install our data collection software on the
member's PC. Information technology managers are often reluctant to permit
employees to install software obtained outside the workplace due to concerns
about exposing the employer's network to computer viruses and concerns about
incompatibilities between such software and the existing configuration of
hardware and software on employees' personal computers. Employers may also
object to their employees providing us with data regarding their Internet usage
because such data could compromise the confidentiality of sensitive activities
that involve Internet research.

OUR MANAGEMENT AND INTERNAL SYSTEMS MAY BE INADEQUATE TO HANDLE THE POTENTIAL
GROWTH OF OUR BUSINESS

To manage future growth, our management must continue to improve our
operational, sales and financial systems and expand, train, retain and manage
our employee base. Our management may not be able to manage our growth
effectively. If our systems, procedures and controls are inadequate to support
our operations, our expansion would be halted. Any inability to manage growth
effectively may harm our business.

WE MAY NOT BE ABLE TO RECRUIT OR RETAIN QUALIFIED PERSONNEL

Our future success depends on our ability to attract, retain and motivate
highly skilled employees. Competition for employees in Internet-related
industries, particularly management, technical, sales and marketing personnel,
is intense. Although we provide compensation packages that include stock
options, cash incentives and other employee benefits, we may be unable to retain
our key employees or to attract, assimilate and retain other highly qualified
employees in the future, which would harm our business.

OUR PLANNED INTERNATIONAL EXPANSION COULD FAIL

Our current strategy includes expansion of our services to measure Internet
audiences outside the United States and Canada. Through our joint venture with
ACNielsen, we plan to develop audience measurement panels in Australia, Ireland,
New Zealand, Singapore and the United Kingdom in the first quarter of 2000 and
in other major markets in Europe, Asia and Latin America by the end of 2001. Our
expansion into international markets will require management attention and
resources. In addition, there can be no assurance of the continued growth of
Internet usage in international markets. The international markets for audience
measurement services have historically been localized and difficult to
penetrate. The success of our international expansion will depend on our ability
to:

- recruit and maintain at-home and at-work panels that are representative of
a geographic area;

- control costs and effectively manage foreign operations; and

- effectively develop, market and sell new products and services in new,
unfamiliar markets.

In addition, if we are successful in establishing our international
operations, we will be subject to a number of inherent risks, including:

- changes in regulatory requirements;

- deficiencies in the telecommunications infrastructure in some countries;

- reduced protection for intellectual property rights in some countries;

- more rigorous levels of privacy protection in some countries;

- potentially adverse tax consequences;

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<PAGE>
- economic and political instability; and

- fluctuations in currency exchange rates.

THE SUCCESS OF OUR INTERNATIONAL EXPANSION WILL BE LARGELY DEPENDENT ON THE
EFFORTS OF ACNIELSEN AND OUR WORKING RELATIONSHIP WITH ACNIELSEN

The challenges we face in expanding internationally require skills and
expertise in foreign countries that we do not currently have. To enable us to
expand globally in a rapid timeframe, we have entered into a joint venture with
ACNielsen, which will control 80.1% of the joint venture. If we encounter
significant problems in our working relationship with ACNielsen, or if our joint
venture is ineffectively managed, our international expansion is likely to fail.

WE MIGHT NOT BE SUCCESSFUL IN THE DEVELOPMENT OR INTRODUCTION OF NEW PRODUCTS
AND SERVICES TO KEEP UP WITH THE PROLIFERATION OF ALTERNATIVE INTERNET ACCESS
DEVICES AND TECHNOLOGIES RELATED TO THE EXPECTED CONVERGENCE OF THE INTERNET AND
TELEVISION

We believe that an increasing proportion of Internet use will involve
alternative Internet access devices such as Web-enabled phones and that there
will eventually be a convergence of Internet content and television programming.
Accordingly, in order to continue to provide information about audience behavior
throughout all major segments of the Internet, we will be required to develop
new products and services that address these evolving technologies. We may be
unsuccessful in identifying new product and service opportunities or in
developing or marketing new products and services in a timely or cost-effective
manner. In addition, product innovations may not achieve the market penetration
or price stability necessary for profitability. Finally, we may not be
successful in adapting our data collection software to evolving types of
Internet access devices or content. If we are unable to provide audience
measurement information regarding any significant segments of Internet use,
demand for our product and service offerings may suffer.

BECAUSE THE INTERNET AUDIENCE MEASUREMENT INDUSTRY IS IN ITS INFANCY, THE
PRICING AND ACCEPTANCE OF OUR PRODUCTS AND SERVICES IS UNCERTAIN

Because our industry is still in its infancy, the pricing of our products
and services is subject to rapid and frequent change. We may be forced for
competitive or technical reasons to reduce prices for some of our products or
services or to offer them free of charge. Such circumstances would reduce our
revenue and could harm our business. Additionally, our market is still evolving,
and we have little basis to assess demand for different types of products or
services or to evaluate whether our products and services will be accepted by
the market. If our products and services do not gain broad market acceptance,
our business may fail.

THE ACCEPTANCE AND EFFECTIVENESS OF INTERNET ADVERTISING IS UNCERTAIN, AND IF
THE MARKET FOR INTERNET ADVERTISING FAILS TO DEVELOP OR DEVELOPS MORE SLOWLY
THAN WE EXPECT, OUR BUSINESS WILL SUFFER

Our future success will depend in part on an increase in the use of the
Internet as an advertising medium. The Internet advertising market is new and
rapidly evolving, and the effectiveness of Internet advertising is uncertain. As
a result, there is also uncertainty about the demand and market acceptance for
Internet advertising. Many of our current or potential customers have little or
no experience using the Internet for advertising purposes. The adoption of
Internet advertising, particularly by entities that have historically relied on
traditional media for advertising, requires the acceptance of a new way of
conducting business. These companies may find Internet advertising to be less
effective than traditional advertising for promoting their products and
services. In addition, most current and potential publishers of content on the
Internet have little or no experience in generating revenue from the sale of
advertising space on their Internet sites. Because of the foregoing factors,
among others, the market for

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<PAGE>
Internet advertising may not continue to emerge or become sustainable. If the
market for Internet advertising fails to develop or develops more slowly than we
expect, our business will suffer.

FOLLOWING THIS OFFERING, OUR OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS WILL
BENEFICIALLY OWN 75.5% OF OUR COMMON STOCK AND, ACCORDINGLY, MAY EXERT
SUBSTANTIAL INFLUENCE OVER US

Our executive officers and directors and entities affiliated with them,
including Nielsen Media Research, will, in the aggregate, beneficially own
approximately 75.5% of our common stock following this offering. These
stockholders acting together will have the ability to control 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
or consolidation, takeover or other business combination.

A SALE BY NIELSEN MEDIA RESEARCH OF ITS STAKE IN NETRATINGS COULD ADVERSELY
AFFECT OUR STOCK PRICE AS A RESULT OF A CHANGE IN CONTROL OF NETRATINGS

Other than a 180-day lock-up agreement entered into with the underwriters,
there are no contractual restrictions on the ability of Nielsen Media Research
to sell shares of our common stock, although sales in the public market will be
subject to the volume limitations of SEC Rule 144. Pursuant to these volume
limitations, a controlling stockholder may sell shares under Rule 144 only if
the shares to be sold, together with the shares sold during the past three
months, do not exceed the greater of 1% of the issuer's outstanding shares or
the average weekly trading volume of the issuer's shares during the preceding
four calendar weeks. Nielsen Media Research and several of our other
stockholders have the right, under certain circumstances, to require us to
register their stock for sale on the public market. Should Nielsen Media
Research decide to sell its stake in NetRatings, it could adversely affect our
stock price. Additionally, as a majority stockholder, Nielsen Media Research
will have the ability to transfer control of NetRatings, possibly at a premium
over the then-current market price. Because Nielsen Media Research will have the
ability to effect such a transfer of control unilaterally, other stockholders
could be denied an opportunity to participate in the transaction and receive a
premium for their shares.

OUR BUSINESS MAY BE HARMED IF WE SUPPLY INACCURATE INFORMATION TO OUR CUSTOMERS

If we furnish inaccurate information to our customers, our brand may be
harmed. The information in our databases, like that in any database, may contain
inaccuracies that our customers may not accept. Any dissatisfaction by our
customers with our measurement methodologies or databases could have an adverse
effect on our ability to attract new customers and retain existing customers and
could ultimately harm our brand. Our customer contracts generally provide that
each customer must indemnify us for any damages arising from the use of data,
reports or analyses by the customer or the performance of any consulting,
analytic or other services by us. However, we cannot be certain that our
contract provisions provide sufficient protection. Any liability that we incur
or any harm to our brand that we suffer because of irregularities or
inaccuracies in the data we supply to our customers could harm our business. To
date, we have not been notified of any liability claims or customer
dissatisfaction relating to such problems with our data.

OUR BUSINESS COULD SUFFER IF WE LOSE THE SERVICES OF SENIOR MANAGEMENT

Our future success depends to a significant extent on the continued service
of our senior management. The loss of the services of any of our executive
officers or other key employees could harm our business. We have no employment
agreements with any of our key personnel, and should we

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<PAGE>
enter into such agreements in the future, they may be ineffective in preventing
a key employee from leaving our company.

SYSTEM FAILURES OR DELAYS MAY HARM OUR BUSINESS, AND OUR FACILITIES AND INTERNAL
COMPUTER OPERATIONS ARE VULNERABLE TO NATURAL DISASTERS AND OTHER UNEXPECTED
LOSSES

Our success depends on the efficient and uninterrupted operation of our
computer and communications systems. A failure of our network could impede the
processing of data, customer orders and day-to-day management of our business
and could result in the corruption or loss of data. To date, we have not
experienced any significant system failures.

Our internal computer operations are located in leased facilities in San
Jose, California, in an area that is susceptible to earthquakes. We do not have
a backup facility to provide redundant network capacity in the event of a system
failure. Accordingly, if this location experienced a system failure, our online
services would become unavailable to our customers until we were able to bring
an alternative facility online, a process which could take several weeks. These
systems are also vulnerable to damage from fire, floods, power loss,
telecommunications failures, break-ins and similar events. If we seek to
replicate our systems at other locations, we will face a number of technical
challenges, particularly with respect to database replications, which we may not
be able to address successfully. Although we carry property and business
interruption insurance, our coverage may not be adequate to compensate us for
all losses that may occur. Our servers may also be vulnerable to computer
viruses, physical or electronic break-ins and similar disruptions.

A DELAY OR DISCONTINUATION OF OUR SERVER HOSTING SERVICE COULD HARM OUR BUSINESS

The servers on which we collect panel members' data are maintained by
AboveNet at its facilities located in San Jose, California. AboveNet continually
monitors our current utilization rate and the extent of our system capacity
needs. We believe we are currently operating at utilization levels that do not
require additional capacity. Accordingly, our ability to collect Internet
audience data in real time is dependent upon the efficient and uninterrupted
operation of AboveNet's computer and communications hardware and software
systems. Despite any precautions we may take, the occurrence of a natural
disaster or other unanticipated problems at AboveNet's facility could result in
interruptions in the flow of data to our servers. In addition, any failure by
AboveNet to provide our required data communications capacity could result in
interruptions in our service. In the past, we have experienced occasional minor
interruptions in service from AboveNet, although we have never experienced a
significant interruption in service. In the event of a delay in the delivery of
data from AboveNet, or if AboveNet should discontinue its services to us, we
would be required to transfer our data collection operations to an alternative
provider of server hosting services. Such a transfer could result in significant
delays in our ability to deliver our products and services to our customers,
which could damage our reputation and harm our business.

WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS

We regard our intellectual property as critical to our success. We rely on
patent, trademark, copyright and trade secret laws to protect our proprietary
rights. Notwithstanding these laws, we may be unsuccessful in protecting our
intellectual property rights or in obtaining patents or registered trademarks
for which we apply. We have applied for U.S. patents with respect to our
BannerTrack advertising tracking technology. We have applied to register the
NetRatings, NetRatings Insight, NetRatings Online Observer, BannerTrack and
CommerceTrack trademarks in the United States. We have not undertaken any
actions to protect our trademarks, servicemarks or tradenames outside of the
United States, nor have we registered our copyrights. Our patent applications or
trademark registrations may not be approved or, even if approved, could be
challenged by others or invalidated through administrative process or
litigation. If our patent applications or trademark registrations are

14
<PAGE>

not approved because third parties own rights to the technology we are trying to
patent or the trademarks we are trying to register, our use of such technology
or trademark would be restricted unless we enter into arrangements with the
third-party owners, which might not be possible on commercially reasonable terms
or at all.

WE MIGHT FACE INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS THAT MIGHT BE COSTLY TO
RESOLVE

We may from time to time be subject to claims of infringement of other
parties' proprietary rights or claims that our own trademarks, patents or other
intellectual property rights are invalid. To date, we have not been subject to
any such claims. However, any claims of this type, with or without merit, could
be time-consuming to defend, result in costly litigation, divert management
attention and resources or require us to enter into royalty or license
agreements. License agreements may not be available on reasonable terms, if at
all, and the assertion or prosecution of any infringement claims could
significantly harm our business.

WE MIGHT NEED ADDITIONAL CAPITAL IN THE FUTURE, AND SUCH ADDITIONAL CAPITAL
MIGHT NOT BE AVAILABLE UPON ACCEPTABLE TERMS

We believe that our existing balances of cash and cash equivalents, together
with the net proceeds from this offering and our available credit facilities,
will be sufficient to meet our cash needs for working capital and capital
expenditures for at least the next 18 months. Without the proceeds of this
offering, we believe that these resources will be sufficient to meet our cash
needs for working capital and capital expenditures for at least the next 12
months. We may need to raise additional funds through public or private debt or
equity financing if we were to experience greater-than-expected losses from
operations or in order to:

- take advantage of opportunities, including more rapid international
expansion or acquisitions of complementary businesses or technologies;

- develop new products or services; or

- respond to competitive pressures.

Any additional financing we may need may not be available on terms favorable to
us, if at all. If we raise additional funds through the sale of equity or
convertible debt securities, your percentage ownership of our company will be
reduced, and the value of your stock may be diluted. Additionally, we may have
to issue securities that may have rights, preferences and privileges senior to
our common stock. If adequate funds are not available or are not available on
acceptable terms, we might not be able to take advantage of unanticipated
opportunities, develop new products or services, or otherwise respond to
unanticipated competitive pressures, and our business could be harmed.

ANY MISAPPROPRIATION OF PERSONAL INFORMATION ABOUT OUR PANELISTS THAT IS STORED
ON OUR COMPUTERS COULD HARM OUR REPUTATION OR EXPOSE US TO CLAIMS ARISING FROM
DAMAGES SUFFERED BY THOSE PANELISTS

Personal information regarding our panelists is included in the data that
our software captures from a panelist's Internet use. Our panel data are
released only in an aggregated format or in a form that is not identifiable on
an individual basis. However, if a person were to penetrate our network security
or otherwise misappropriate sensitive data about our panel members, our
reputation could be harmed or we could be subject to claims or litigation
arising from damages suffered by panel members as a result of such
misappropriation.

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<PAGE>
ANY ACQUISITIONS THAT WE UNDERTAKE COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR
BUSINESS, DILUTE STOCKHOLDER VALUE OR HARM OUR OPERATING RESULTS

We may acquire or make investments in complementary businesses,
technologies, services or products if appropriate opportunities arise. The
process of integrating any acquired business, technology, service or product
into our business and operations may result in unforeseen operating difficulties
and expenditures. Integration of an acquired company also may consume much of
our management's time and attention that would otherwise be available for
ongoing development of our business. Moreover, the anticipated benefits of any
acquisition may not be realized. We currently do not have any understandings,
commitments or agreements with respect to any acquisition, and we are not
currently pursuing any acquisition. We may be unable to identify, negotiate or
finance future acquisitions successfully, or to integrate successfully any
acquisitions with our current business. Future acquisitions could result in
potentially dilutive issuances of equity securities or the incurrence of debt,
contingent liabilities or amortization expenses related to goodwill and other
intangible assets, any of which could harm our business.

DEMAND FOR OUR PRODUCTS AND SERVICES MIGHT DECREASE IF GROWTH IN THE USE OF THE
INTERNET OR E-COMMERCE DECLINES

Our future success depends in part upon the continued growth in the use of
the Internet or e-commerce. Rapid growth in the use of the Internet and
e-commerce is a recent phenomenon and may not continue, or the Internet may not
be adopted as a medium of commerce by a broad base of consumers. If the Internet
does not continue to grow, or if e-commerce is not adopted as a medium of
commerce by a broad base of consumers, our business may not grow or may grow at
a slower rate.

GOVERNMENTAL REGULATION OF THE INTERNET MIGHT HARM OUR BUSINESS

The applicability to the Internet of existing laws governing issues such as
property ownership, libel and personal privacy is uncertain. In addition,
governmental authorities in various countries may seek to further regulate the
Internet with respect to issues such as user privacy, pornography, acceptable
content, e-commerce, taxation, and the pricing, characteristics and quality of
products and services. Finally, the global nature of the Internet could subject
us to the laws of a foreign jurisdiction in an unpredictable manner. Any new
legislation regulating the Internet could inhibit the growth of the Internet and
decrease the acceptance of the Internet as a communications and commercial
medium, which might harm our business.

TELEPHONE CARRIERS MAY PERSUADE THE GOVERNMENT TO REGULATE THE INTERNET AND
IMPOSE USAGE FEES ON INTERNET SERVICE PROVIDERS, WHICH COULD IMPEDE THE GROWTH
OF THE INTERNET

The growing use of the Internet has burdened the existing telecommunications
infrastructure and has caused interruptions in telephone service. Telephone
carriers have petitioned the government to regulate the Internet and impose
usage fees on Internet service providers. Any regulations of this type could
increase the costs of using the Internet and impede its growth, which could in
turn decrease the demand for our services or otherwise harm our business.

POTENTIAL YEAR 2000 RISKS MIGHT HARM OUR BUSINESS

Many existing computer programs and installed computer systems include
computer code that uses only two digits to identify a year. These systems could
fail to function or produce delayed or erroneous results if they interpret "00"
to mean 1900 rather than 2000. As a result of this problem, commonly referred to
as the "year 2000" problem, older computer programs or systems may need to be
upgraded or replaced. Any failure of our internal systems or the PCs from which
our panel members access the Internet could harm our business.

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<PAGE>

We rely on third-party equipment and software that may not be year 2000
compliant. The failure of such equipment or software to properly process dates
for the year 2000 could cause us to incur unanticipated expenses. In addition,
PCs used by our panel members to access the Internet may not be year 2000
compliant. As a result, we may encounter difficulties in gathering and
accurately measuring data from our panel, or data collected from some of these
users may contain inaccuracies.

In light of our evaluation of the risks of any year 2000 problems we are
likely to encounter and the available alternatives for preparing for these
risks, we have not developed a contingency plan to address such risks, and we do
not intend to implement any such contingency plan.

MANAGEMENT WILL HAVE DISCRETION OVER THE USE OF THE PROCEEDS OF THIS OFFERING
AND COULD SPEND OR INVEST THOSE PROCEEDS IN WAYS WITH WHICH INVESTORS MIGHT NOT
AGREE

The net proceeds to us from this offering are estimated to be approximately
$47.4 million after deducting the underwriting discount and estimated offering
expenses, or $233.6 million after the exercise by Nielsen Media Research of its
warrants and other purchase rights concurrently with or following the completion
of this offering. We currently have no specific plans for our net proceeds from
this offering. Consequently, our management will have the discretion to allocate
the net proceeds to uses that some stockholders may not deem desirable.
Management's allocation of the proceeds of this offering may not benefit our
business, and we may not be able to obtain a significant return on any use of
the proceeds of this offering.

FUTURE SALES OF SHARES BY EXISTING STOCKHOLDERS COULD AFFECT OUR STOCK PRICE

Sales of substantial amounts of our common stock in the public market after
this offering could reduce the prevailing market prices for our common stock. Of
the 31,812,402 shares of common stock to be outstanding upon the closing of this
offering, the 4,000,000 shares offered hereby will be freely tradable without
restriction or further registration, other than shares purchased by our
officers, directors or other "affiliates" within the meaning of Rule 144 under
the Securities Act of 1933, which will be restricted from sale until 180 days
after the date of this prospectus pursuant to agreements between these
affiliates and the underwriters. The remaining 27,812,402 shares of our common
stock held by existing stockholders upon the completion of this offering will
become eligible for resale in the public market as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES/PERCENT
OUTSTANDING AFTER THE
OFFERING DATE WHEN SHARES BECOME AVAILABLE IN THE PUBLIC MARKET
- ------------------------ ------------------------------------------------------------
<C> <S>
3,807,333/12.0%......... 180 days after the date of this prospectus pursuant to
agreements between the stockholders and the underwriters or
NetRatings, provided that the underwriters can waive this
restriction at any time. 3,127,500 of these shares will also
be subject to sales volume restrictions under Rule 144 under
the Securities Act.
27,734,109/87.2%........ Upon expiration of applicable one-year holding periods under
Rule 144, which will expire between July 23, 2000 and
November 22, 2000, subject to sales volume restrictions
under Rule 144.
</TABLE>

In addition, we intend to file a registration statement on Form S-8 under the
Securities Act approximately 90 days after the date of this offering to register
an aggregate of 2,661,167 shares of common stock issued or reserved for issuance
under our various stock plans.

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<PAGE>

WE HAVE ISSUED A LARGE NUMBER OF OPTIONS AT EXERCISE PRICES SUBSTANTIALLY BELOW
THE INITIAL PUBLIC OFFERING PRICE, AND THESE OPTIONS COULD BE HIGHLY DILUTIVE TO
INVESTORS IN THIS OFFERING IF THEY ARE EXERCISED OR IF WE BEGIN REPORTING
EARNINGS PER SHARE

During the nine months ended September 30, 1999, we issued options to
purchase an aggregate of 1,456,000 shares of common stock with a
weighted-average exercise price of $2.45 per share. As of September 30, 1999, we
had outstanding options to purchase an aggregate of 1,722,000 shares of common
stock with a weighted-average exercise price of $2.04 per share. The exercise of
these options could significantly decrease the equity ownership of other
stockholders. Additionally, because we have incurred net losses since inception,
the outstanding shares we have used in determining our net loss per share have
not included any of the shares issuable upon exercise of these options. If and
when we begin reporting earnings per share, a portion of the shares issuable
upon exercise of these options will be included in the outstanding shares shown
in our financial statements and therefore will dilute our reported earnings per
share.

COMPENSATION EXPENSES RELATED TO PAST OPTION GRANTS AND THE NIELSEN MEDIA
RESEARCH WARRANTS WILL REDUCE OUR EARNINGS OVER THE NEXT FOUR YEARS

Options granted to our employees have historically had exercise prices equal
to the fair market value of our common stock on the date of grant, as determined
by our board of directors at the time of grant. Recently, however, we have
reviewed the terms of our past option grants and determined that the fair value
of our common stock at the time of these grants was greater than the exercise
prices of these options. In addition, in connection with a preferred stock
financing in August 1999, we issued warrants to Nielsen Media Research to
purchase 6,553,054 shares of our common stock. We have recorded a deferred
charge in the quarter ended September 30, 1999 of $22.6 million representing the
value of these warrants. Accordingly, we have recorded non-cash stock-based
compensation charges of $254,000 for the year ended December 31, 1998 and $26.5
million for the nine months ended September 30, 1999, representing the
difference between the exercise price of these options and the fair value of our
common stock plus the value of the Nielsen Media Research warrants as of the
date of grant. These amounts are amortized as the related options vest and over
the lives of the warrants, resulting in our recognition of a compensation
expense during each amortization period, which reduces our reported earnings
during these periods. We recognized stock-based compensation expenses of $25,000
in the year ended December 31, 1998 and $2.3 million in the nine months ended
September 30, 1999. In light of the compensation charges that have not yet been
amortized, we may recognize stock-based compensation charges of as much as $1.8
million, $6.1 million, $5.2 million, $4.8 million, $4.5 million and $3.0 million
in the period from October 1 to December 31, 1999 and the years ended December
31, 2000, 2001, 2002, 2003 and 2004, respectively. The amount of compensation
that we ultimately recognize will be lower to the extent that the options
associated with these expenses are terminated before they vest.

DELAWARE LAW AND OUR CHARTER DOCUMENTS CONTAIN PROVISIONS THAT COULD DISCOURAGE
OR PREVENT A POTENTIAL TAKEOVER OF OUR COMPANY THAT MIGHT OTHERWISE RESULT IN
OUR STOCKHOLDERS RECEIVING A PREMIUM OVER THE MARKET PRICE OF THEIR SHARES

Provisions of Delaware law and our certificate of incorporation and bylaws
could make more difficult the acquisition of us by means of a tender offer, a
proxy contest, or otherwise, and the removal of incumbent officers and
directors.These provisions include:

- Section 203 of the Delaware General Corporation Law, which prohibits a
merger with a 15%-or-greater stockholder, such as a party that has
completed a successful tender offer, until three years after that party
became a 15%-or-greater stockholder;

18
<PAGE>

- the authorization in the certificate of incorporation of undesignated
preferred stock, which could be issued without stockholder approval in a
manner designed to prevent or discourage a takeover; and

- provisions in our bylaws eliminating stockholders' rights to call a
special meeting of stockholders and requiring advance notice of any
stockholder nominations of director candidates or any stockholder proposal
to be presented at an annual meeting, which could make it more difficult
for stockholders to wage a proxy contest for control of our board or to
vote to repeal any of the antitakeover provisions contained in our
certificate of incorporation and bylaws.

INVESTORS IN THIS OFFERING WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION

The initial public offering price is substantially higher than the pro forma
net book value per share of the outstanding common stock. As a result, investors
purchasing common stock in this offering will incur immediate substantial
dilution in the amount of $4.88 per share. In addition, we have issued options
and warrants to acquire common stock at prices significantly below the initial
public offering price. To the extent these outstanding options and warrants are
exercised, there will be further dilution to investors in this offering.

19
<PAGE>
USE OF PROCEEDS

We estimate the net proceeds from this offering to be approximately $47.4
million, or approximately $54.6 million if the underwriters' exercise their
over-allotment option in full, based on an assumed initial public offering price
of $13.00 per share and after deducting the estimated underwriting discount and
offering expenses.

Concurrently with the completion of this offering, Nielsen Media Research,
Inc. will exercise its right to purchase 10,387,068 shares of our common stock
from us in a private placement that will result in Nielsen Media Research owning
54% of our outstanding shares, assuming exercise of all outstanding options and
warrants, including the underwriters' over-allotment option, at a price equal to
the public offering price in this offering. The exercise of this right will be
subject to the expiration or early termination of the required waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Nielsen Media
Research has also advised us that, upon the completion of this offering, it also
intends to exercise its warrants to purchase 6,000,000 shares of common stock at
an exercise price of $7.80 per share and 553,054 shares at an exercise price of
$7.20 per share. The aggregate proceeds from these sales of stock to Nielsen
Media Research will be $135,031,888 based on an assumed initial public offering
price of $13.00 per share.

We intend to use the net proceeds of this offering and the private placement
sale of shares to Nielsen Media Research for general corporate purposes,
including working capital and capital expenditures. We may also use a portion of
the net proceeds to acquire or invest in complementary businesses or products or
to obtain the right to use complementary technologies. However, we have no
current commitments or agreements with respect to any of these types of
acquisitions or investments. Pending these uses, we intend to invest the net
proceeds from this offering in short-term, investment-grade, interest-bearing
securities.

DIVIDEND POLICY

We have never paid cash dividends on our capital stock. We currently intend
to retain future earnings, if any, to finance the growth and development of our
business, and we do not anticipate paying any cash dividends in the foreseeable
future. Any future determination to pay cash dividends will be at the discretion
of our board of directors and will depend upon our financial condition,
operating results, capital requirements and other factors the board deems
relevant.

20
<PAGE>
CAPITALIZATION

The following table sets forth our actual capitalization as of September 30,
1999. Our capitalization is also presented:

- on a pro forma basis to give effect to the automatic conversion of all
outstanding shares of redeemable convertible preferred stock, including
the shares of our Series A, Series B, Series C and Series D preferred
stock, into an aggregate of 6,626,471 shares of common stock which will
occur prior to the closing of this offering; and

- on a pro forma as adjusted basis to reflect an increase in the authorized
number of shares of common stock and preferred stock and the sale
of 4,000,000 shares of common stock in this offering, at an assumed
initial public offering of $12.09 per share, after deducting the estimated
underwriting discount and offering expenses, and our receipt and
application of the net proceeds, the sale of 10,387,068 shares of common
stock to Nielsen Media Research in private placement closing concurrently
with the completion of this offering, resulting in proceeds to us of
$135,032,000, the exercise of warrants to purchase 706,950 shares of
Series B preferred stock immediately prior to the completion of this
offering, resulting in proceeds to us of $445,000, the automatic
conversion of those shares of preferred stock into 353,471 shares of
common stock upon the closing of this offering and the exercise of
warrants to purchase 6,553,054 shares of common stock by Nielsen Media
Research following the completion of this offering, resulting in proceeds
to us of $50,782,000.

<TABLE>
<CAPTION>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
--------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Long-term debt and capital lease obligations, less current
portion.................................................... $ 320 $ 320 $ 320
--------- ----------- -----------
Redeemable convertible preferred stock:
Authorized shares--15,571,162
Issued and outstanding shares--14,679,000 actual, none pro
forma and none pro forma as adjusted....................... 35,743 -- --
Stockholders' equity (deficit):
Preferred stock, $0.001 par value; 1,900,000 shares
authorized, none issued or outstanding, actual; none
issued or outstanding, pro forma and pro forma as
adjusted; 5,000,000 shares authorized, pro forma as
adjusted................................................. -- -- --
Common stock, $0.001 par value; 86,851,438 shares
authorized, 3,892,333 shares issued and outstanding,
actual; 10,518,809 shares issued and outstanding, pro
forma; 200,000,000 shares authorized, 31,812,402 shares
issued and outstanding, pro forma as adjusted............ 4 11 32
Additional paid-in capital................................. 31,144 66,880 300,478
Deferred compensation...................................... (3,196) (3,196) (3,196)
Deferred service costs..................................... (22,225) (22,225) (22,225)
Note receivable from stockholder........................... (125) (125) (125)
Accumulated deficit........................................ (16,330) (16,330) (16,330)
--------- ----------- -----------
Total stockholders' equity (deficit)..................... (10,728) 25,015 258,634
--------- ----------- -----------
Total capitalization................................... $ 25,335 $ 25,335 $ 258,954
--------- ----------- -----------
--------- ----------- -----------
</TABLE>

21
<PAGE>

The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding as of September 30, 1999 and
excludes:

- 2,410,000 shares issuable under our 1998 Stock Plan consisting of:

- 1,722,000 shares issuable upon exercise of options outstanding at
September 30, 1999, with a weighted average exercise price of $2.04 per
share;

- 150,500 shares issuable upon exercise of options granted subsequent to
September 30, 1999, with an exercise price of $8.37 per share; and

- 537,500 shares available for future grants;

- 83,468 shares issuable upon exercise of warrants outstanding as of
September 30, 1999 with a weighted average exercise price of $1.15 per
share;

- 43,293 shares issuable upon exercise of a warrant issued subsequent to
September 30, 1999, with an exercise price of $6.24 per share;

- 250,000 shares available for issuance under our 1999 Employee Stock
Purchase Plan.

See "Management--Stock Plans," "Description of Capital Stock" and Notes 3
and 4 of Notes to Financial Statements.

22
<PAGE>
DILUTION

The pro forma net tangible book value of our common stock as of September
30, 1999 was $24.6 million, or $2.34 per share. Pro forma net tangible book
value per share represents the amount of our total assets, excluding net
intangible assets, less our total liabilities, divided by the total number of
shares of common stock outstanding, after giving effect to the conversion of all
outstanding shares of preferred stock into common stock. Dilution in pro forma
net tangible book value per share represents the difference between the amount
per share paid by investors in this offering and the pro forma net tangible book
value per share of our common stock immediately after the offering. After giving
effect to the sale of 4,000,000 shares of common stock in this offering, at an
assumed initial public offering price of $13.00 per share, and after deducting
the estimated underwriting discount and offering expenses payable by us,
10,387,068 shares to be issued and sold in a private placement to Nielsen Media
Research concurrently with the completion of this offering, 6,553,054 shares
that are to be issued upon Nielsen Media Research exercising warrants
immediately following the completion of this offering, and 353,471 shares to be
issued upon the exercise of warrants immediately prior to the completion of this
offering, the pro forma net tangible book value of our common stock would have
been $258.2 million, or $8.12 per share. This represents an immediate increase
in pro forma net tangible book value of $5.78 per share to existing stockholders
and an immediate dilution of $4.88 per share to new investors. The following
table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................. $ 13.00
---------
Pro forma net tangible book value per share as of September
30, 1999.................................................... $ 2.34
Increase attributable to private placement of shares.......... $ 3.16
Increase in pro forma net tangible book value attributable to
new public investors........................................ $ 2.62
---------
Pro forma net tangible book value per share after the
offering...................................................... $ 8.12
---------
Dilution per share to new public investors...................... $ 4.88
---------
---------
</TABLE>

If the underwriters' over-allotment option were exercised in full, the pro
forma net tangible book value per share after the offering would be $8.19 per
share. The increase in pro forma net tangible book value per share to existing
stockholders would be $5.85 per share, and the dilution in pro forma net
tangible book value to new investors would be $4.81 per share.

The following table summarizes, as of September 30, 1999 the difference
between the total consideration paid and the average price per share paid by the
existing stockholders and the new investors with respect to the number of shares
of common stock purchased from us based upon an assumed offering price of $13.00
per share:

<TABLE>
<CAPTION>
TOTAL
SHARES PURCHASED CONSIDERATION
------------------------- --------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Shares purchased in the offering.................. 4,000,000 12.6% $ 52,000,000 18.9% $ 13.00
Shares purchased in private placement............. 17,293,593 54.4% 186,259,000 67.8% 10.77
Shares owned by existing stockholders............. 10,518,809 33.0% 36,665,000 13.3% 3.48
------------ ----- -------------- -----
Total......................................... 31,812,402 100.0% $ 274,924,000 100.0%
------------ ----- -------------- -----
------------ ----- -------------- -----
</TABLE>

The information in the above table excludes:

- 2,410,000 shares issuable under our 1998 Stock Plan consisting of:

- 1,722,000 shares issuable upon exercise of options outstanding at
September 30, 1999, with a weighted average exercise price of $2.04 per
share;

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<PAGE>

- 150,500 shares issuable upon exercise of options granted subsequent to
September 30, 1999, with an exercise price of $8.37 per share; and

- 537,500 shares available for future grants;

- 83,468 shares issuable upon exercise of warrants outstanding at September
30, 1999, with a weighted average exercise price of $1.15 per share;

- 43,293 shares issuable upon exercise of a warrant issued subsequent to
September 30, 1999, with an exercise price of $6.24 per share; and

- 250,000 shares available for issuance under our 1999 Employee Stock
Purchase Plan.

24
<PAGE>
SELECTED FINANCIAL DATA

You should read the following selected financial data in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and the notes thereto included
elsewhere in this prospectus. The statement of operations data set forth below
for the period from July 2, 1997 (inception) to December 31, 1997, the year
ended December 31, 1998 and the nine months ended September 30, 1999 and the
balance sheet data as of December 31, 1997 and 1998 and September 30, 1999 are
derived from, and are qualified by reference to, our audited financial
statements included elsewhere in this prospectus. The statement of operations
data set forth below for the nine month periods ended September 30, 1998 are
derived from, and are qualified by reference to, our unaudited financial
statements included elsewhere in this prospectus. The unaudited financial
statements include all normal recurring adjustments that we consider necessary
for a fair presentation of our financial position and the results of our
operations. The results of operations for the nine months ended September 30,
1999 are not necessarily indicative of the results that may be expected for the
full fiscal year ending December 31, 1999, or any other future period. See the
Notes to Financial Statements for an explanation of the method used to determine
the number of shares used in computing basic and diluted loss per share.

<TABLE>
<CAPTION>
PERIOD FROM
JULY 2, 1997 NINE MONTHS ENDED
(INCEPTION) YEAR ENDED SEPTEMBER 30,
TO DECEMBER DECEMBER 31, ---------------------
31, 1997 1998 1998 1999
------------- ------------- --------- ----------
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Revenue.................................................... $ -- $ 237 $ 132 $ 1,486
Cost of revenue............................................ -- 1,061 362 4,269
------------- ------------- --------- ----------
Gross profit (loss)........................................ -- (824) (230) (2,783)
------------- ------------- --------- ----------
Operating expenses:
Research and development................................. 994 1,185 821 1,806
Sales and marketing...................................... 452 1,134 837 2,559
General and administrative............................... 341 600 413 1,170
Stock-based compensation................................. -- 25 -- 2,327
------------- ------------- --------- ----------
Total operating expenses............................... 1,787 2,944 2,071 7,862
------------- ------------- --------- ----------
Loss from operations....................................... (1,787) (3,768) (2,301) (10,645)
Interest income (expense), net............................. 6 (111) (57) (25)
------------- ------------- --------- ----------
Net loss................................................... $ (1,781) $ (3,879) $ (2,358) $ (10,670)
------------- ------------- --------- ----------
------------- ------------- --------- ----------
Basic and diluted net loss per common share................ $ (2.03) $ (2.78) $ (1.79) $ (5.19)
------------- ------------- --------- ----------
------------- ------------- --------- ----------
Shares used to compute basic and diluted net loss per
common share............................................. 878 1,393 1,320 2,056
------------- ------------- --------- ----------
------------- ------------- --------- ----------

Pro forma basic and diluted net loss per common share...... $ (1.67) $ (1.04) $ (2.31)
------------- --------- ----------
------------- --------- ----------
Shares used to compute pro forma basic and diluted net loss
per common share......................................... 2,319 2,270 4,626
------------- --------- ----------
------------- --------- ----------
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
-------------------- SEPTEMBER 30,
1997 1998 1999
--------- --------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................................................. $ 551 $ 1,343 $ 28,650
Working capital (deficit).................................................. 78 (2,791) 24,262
Total assets............................................................... 980 1,965 31,086
Current amounts due to Nielsen Media Research.............................. -- 2,539 2,164
Long-term debt and capital lease obligations, less current portion......... -- 130 320
Total stockholders' equity (deficit)....................................... 472 (2,448) (10,728)
</TABLE>

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

THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER SUBSTANTIALLY FROM
THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF MANY
FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS
PROSPECTUS. THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH OUR FINANCIAL
STATEMENTS AND RELATED NOTES THERETO INCLUDED ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

We are a leading provider of Internet audience measurement information and
analysis. We were incorporated in July 1997. From our founding through the
launch of our initial NetRatings service offering in March 1998, we were
primarily engaged in research activities, developing our initial products and
services, raising capital and building our business infrastructure. Our initial
service offering utilized a Web-based panel selection methodology, a relatively
small audience panel and an early version of our data collection software. In
October 1998, we established our strategic relationship with Nielsen Media
Research. Through this relationship, we began developing an expanded Internet
audience panel based on the Nielsen Media Research audience sampling methodology
and enhanced versions of our software. In March 1999, we launched our
Nielsen//NetRatings brand of product and service offerings.

In June 1999, we commenced our international expansion efforts by
establishing a joint venture, NetRatings KK, in which we currently hold a 32%
ownership interest with several Japanese investors holding the remaining
interests. NetRatings KK is responsible for building and maintaining a Japanese
audience measurement panel and introducing our products and services to the
Japanese market. In September 1999, we entered into a joint venture with
ACNielsen to develop and maintain Internet audience measurement panels and to
market products and services under the Nielsen//NetRatings brand in other key
international markets. We anticipate that the joint venture, in which we
currently hold a 19.9% ownership interest, will commence the introduction of
localized versions of our products and services in over 30 countries.

We generate revenue from the sale of our Internet audience measurement
products and services. Through September 30, 1999, our information and
analytical products and services, which include our audience measurement
service, e-commerce service and Internet investment strategy service, have
accounted for substantially all of our revenue. We primarily sell these products
and services pursuant to one-year subscription agreements and bill our customers
in advance, typically on a quarterly or annual basis. We recognize revenue from
the sale of our information and analytical products and services ratably over
the term of the subscription agreement. Prepaid subscription fees are recorded
as deferred revenue until earned. We also derive revenue from the sale of custom
research services. Revenue from these services are recognized in the period in
which the service is provided. We sell our products and services to customers in
a wide range of industries. Our customer base has increased from 53 customers as
of December 31, 1998 to 163 as of September 30, 1999. To date, substantially all
of our sales have been made to customers in North America. In future periods, we
also expect to derive royalties and other revenue from our joint ventures as
they begin their operations in international markets.

Cost of revenue currently consists primarily of expenses related to the
recruitment and maintenance of our audience measurement panels. Accordingly,
cost of revenue is not directly related to revenue or subscriptions generated in
a given period and is higher in periods in which we are involved in significant
panel development activities. We believe that the continued development and
enhancement of high-quality audience panels is essential to the long-term
expansion of our business, and therefore we expect to continue to incur
significant cost of revenue. We are currently working with Nielsen Media
Research to expand the scope and size of our existing panel of at-home Internet
users.

26
<PAGE>
In addition, we are developing a panel of at-work users. We expect to incur
significant costs relating to these development activities.

Research and development expenses consist primarily of compensation and
related costs for personnel associated with our product development activities.
These costs are expensed as incurred. We believe that continued investment in
product development is essential to our future success. We also anticipate that
additional development resources will be required to support the planned
international activities of our joint ventures. Accordingly, we expect that
research and development expenses will increase in future periods as we hire
additional personnel.

Sales and marketing expenses consist primarily of salaries, benefits and
commissions to our salespeople and commissions paid to Nielsen Media Research,
as well as costs related to seminars, promotional materials and other sales and
marketing programs. We intend to expand our sales force in conjunction with our
domestic expansion and to support our international joint ventures. We also
intend to increase our marketing activities to enhance brand awareness of our
products and services. We therefore expect that sales expenses will increase in
future periods.

General and administrative expenses consist primarily of salaries and
related costs for finance, accounting, and other administrative personnel, in
addition to professional fees, provisions for doubtful accounts and other
general corporate expenses. We expect that general and administrative expenses
will increase in the future as we add personnel to support expanding operations,
incur additional costs related to the growth of our business and assume the
reporting requirements of a public company.

In connection with the grant of certain stock options to employees and
consultants, we recorded non-cash stock-based compensation charges of $254,000
for the year ended December 31, 1998 and $3.9 million for the nine months ended
September 30, 1999, representing the difference between the exercise price of
these options and the deemed fair value of our common stock as of the date of
grant. These amounts are being amortized over the respective vesting periods of
the options using a graded vesting method. In connection with the issuance of
warrants to Nielsen Media Research, we recorded non-cash stock-based
compensation charges of $22.6 million for the nine months ended September 30,
1999 representing the value of these warrants based on the Black-Scholes
valuation model. We recognized non-cash amortization of these deferred stock
compensation charges of $25,000 in the year ended December 31, 1998 and $2.3
million in the nine months ended September 30, 1999. As of September 30, 1999,
the remaining deferred compensation was scheduled to be amortized at the rate of
approximately $1.8 million, $6.1 million, $5.2 million, $4.8 million, $4.5
million and $3.0 million in the period from October 1 to December 31, 1999 and
the years ended December 31, 2000, 2001, 2002, 2003 and 2004, respectively. The
actual amount of stock-based compensation expense to be recognized in future
periods could decrease if options for which accrued compensation has been
recorded are terminated before they vest.

We have recorded no provision for federal or state income taxes for any
period since our inception as we have incurred losses in each period. As of
September 30, 1999, we had approximately $11.9 million of net operating loss
carryforwards for federal and state income tax purposes, available to reduce
future taxable income, expiring in 2005. Utilization of the net operating loss
and tax credit carryforwards may be subject to a substantial annual limitation
due to the ownership change limitations provided by the Internal Revenue Code of
1986, as amended, and similar state provisions. The annual limitation may result
in the expiration of the net operating loss and tax credit carryforwards before
utilization. See Note 11 of Notes to Financial Statements.

We have a limited operating history upon which investors may evaluate our
business and prospects. We incurred net losses of $1.8 million for the period
from July 2, 1997 (inception) through December 31, 1997; $3.9 million for the
year ended December 31, 1998; and $10.7 million for the nine months ended
September 30, 1999. Our accumulated deficit at September 30, 1999 was $16.3
million. We intend to invest heavily to expand our audience panels, strengthen
our direct sales force and

27
<PAGE>
enhance our product and service offerings. As a result, we expect to continue to
incur net losses for the foreseeable future. In view of the rapidly evolving
nature of our business and our limited operating history, we believe that
period-to-period comparisons of our operating results are not necessarily
meaningful and should not be relied upon as an indication of our future
performance. See "Risk Factors--We have incurred losses since inception, and we
may be unable to achieve profitability."

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1999

REVENUE. Revenue increased from $132,000 for the nine months ended
September 30, 1998 to $1.5 million for the nine months ended September 30, 1999.
Sales of our information and analytical products and services accounted for
substantially all of the revenue for each of the nine-month periods. The
increase in revenue was primarily due to the introduction of our
Nielsen//NetRatings service in March 1999 and the introduction of additional
product and service offerings that resulted in a substantial increase in the
number of our customers.

COST OF REVENUE. Cost of revenue increased from $362,000 for the nine
months ended September 30, 1998 to $4.3 million for the nine months ended
September 30, 1999. This increase primarily reflected costs incurred in 1999
relating to the development of the Nielsen//NetRatings audience measurement
panel, which is significantly larger than our prior panel and was more costly to
develop due to the sampling methodology employed.

RESEARCH AND DEVELOPMENT. Research and development expenses increased 120%
from $821,000 for the nine months ended September 30, 1998 to $1.8 million for
the nine months ended September 30, 1999. This increase was primarily due to a
three-fold increase in the number of employees engaged in research and
development.

SALES AND MARKETING. Sales and marketing expenses increased 206% from
$837,000 for the nine months ended September 30, 1998 to $2.6 million for the
nine months ended September 30, 1999. This increase was primarily attributable
to a three-fold increase in the number of direct sales and marketing employees.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
185% from $413,000 for the nine months ended September 30, 1998 to $1.2 million
for the nine months ended September 30, 1999. This increase was primarily
related to an increase in the number of administrative personnel to support our
expanded operations and non-recurring legal fees.

INTEREST INCOME (EXPENSE), NET. Interest expense, net, decreased 56% from
$57,000 for the nine months ended September 30, 1998 to $25,000 for the nine
months ended September 30, 1999 due to interest paid to Nielsen Media Research
under short-term promissory notes, interest paid under promissory notes issued
in 1998 and increased borrowings under our credit facilities offset by increases
in interest income resulting from increases in cash balances.

NET LOSS. Net loss increased 353% from $2.4 million for the nine months
ended September 30, 1998 to $10.7 million for the nine months ended September
30, 1999. This increase was primarily due to costs associated with the
development of the Nielsen//NetRatings audience measurement panel, a three-fold
increase in headcount to support our expanded operations, and an increase in
stock based compensation expenses.

PERIOD FROM JULY 2, 1997 (INCEPTION) TO DECEMBER 31, 1997 COMPARED TO YEAR
ENDED DECEMBER 31, 1998

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<PAGE>
REVENUE. We had no revenue in the period from July 2, 1997 (inception) to
December 31, 1997, or the "inception period." In the year ended December 31,
1998 we had revenue of $237,000 from sales of our initial NetRatings Internet
audience measurement products and services.

COST OF REVENUE. We had no cost of revenue in the inception period. In the
year ended December 31, 1998, our cost of revenue was $1.1 million, representing
panel development expenses related to the introduction of our initial NetRatings
Internet audience measurement products and services and, beginning in November
1998, initial panel development expenses related to our Nielsen//NetRatings
product and service offerings.

RESEARCH AND DEVELOPMENT. Research and development expenses increased 19%
from $994,000 in the inception period to $1.2 million in the year ended December
31, 1998. This increase was primarily due to a full year of operations in 1998.

SALES AND MARKETING. Sales and marketing expenses increased 151% from
$452,000 in the inception period to $1.1 million in the year ended December 31,
1998. This increase was primarily attributable to increased marketing and
promotion of our initial NetRatings Internet audience measurement service as
well as an increase in the number of direct sales and marketing employees. In
addition, sales and marketing expenses during 1998 reflected a full year of
operations.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
76% from $341,000 in the inception period year to $600,000 in the year ended
December 31, 1998. This increase was due to an increase in the number of
administrative personnel to support our expanded operations. In addition,
general and administrative expenses during 1998 reflected a full year of
operations.

INTEREST INCOME (EXPENSE), NET. Interest income, net, was $6,000 in the
inception period. Interest expense, net, of $111,000 in the year ended December
31, 1998 was primarily the result of interest paid on promissory notes issued in
1998, which were converted to preferred stock in July 1999 and amortization of
the fair value of the warrants issued in conjunction with those promissory
notes.

NET LOSS. Net loss increased 118% from $1.8 million in the inception period
to $3.9 million for the year ended December 31, 1998. This increase was
primarily due to costs associated with panel development initiated in 1998 as
well as one full year of operations.

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain unaudited statement of operations
data for the seven quarters ended September 30, 1999. This information has been
derived from our unaudited interim financial statements. In management's
opinion, this unaudited information has been prepared on the same basis as our
annual financial statements and includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the
information for the quarters presented. This information should be read in
conjunction with the financial statements and notes thereto included elsewhere
in this prospectus. Historical results for any quarter are not necessarily
indicative of the results to be expected for any future period.

<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1998 1998 1998 1998 1999 1999 1999
----------- ----------- ----------- --------- ----------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue.............................. $ 3 $ 51 $ 77 $ 106 $ 166 $ 476 $ 844
Cost of revenue...................... 103 97 161 700 1,031 1,125 2,113
----- ----- ----- --------- ----------- --------- ---------
Gross profit (loss).................. (100) (46) (84) (594) (865) (649) (1,269)
----- ----- ----- --------- ----------- --------- ---------
Operating expenses:
Research and development........... 323 250 247 365 428 695 683
Sales and marketing................ 283 282 273 296 490 883 1,186
General and administrative......... 154 137 120 189 256 253 661
Stock-based compensation........... -- -- -- 25 71 1,068 1,188
----- ----- ----- --------- ----------- --------- ---------
Total operating expenses......... 760 669 640 875 1,245 2,899 3,718
----- ----- ----- --------- ----------- --------- ---------
Loss from operations................. (860) (715) (724) (1,469) (2,110) (3,548) (4,987)
Interest income (expense), net....... -- (25) (35) (51) (67) (55) 97
----- ----- ----- --------- ----------- --------- ---------
Net loss............................. $ (860) $ (740) $ (759) $ (1,520) $ (2,177) $ (3,603) $ (4,890)
----- ----- ----- --------- ----------- --------- ---------
----- ----- ----- --------- ----------- --------- ---------
</TABLE>

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We introduced our first products and services in March 1998, and our revenue
increased through the balance of 1998 as we expanded our customer base and
introduced additional products and services. The substantial increases in
revenue in the quarters ended June 30, 1999 and September 30, 1999 were the
result of increased sales to new and existing customers following the
introduction of our Nielsen//NetRatings products and services in March 1999.

Cost of revenue increased substantially in the quarters ended December 31,
1998, March 31, 1999 and September 30, 1999 primarily reflecting audience panel
recruitment expenses incurred in connection with the recruitment of our
household panel beginning in November of 1998 as well as the initial recruitment
activities of our business panel in September 1999. Quarterly increases in
operating expenses over the past four quarters reflected the continued expansion
of our operations.

Our operating results have fluctuated in the past, and we expect them to
fluctuate in future quarters as a result of a variety of factors, many of which
are outside of our control. See "Risk Factors--Fluctuations in our quarterly
revenues and operating results might lead to reduced prices for our stock."

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have funded our operations primarily through private
sales of equity securities. In May and November 1998, we raised a total of
$935,000, net of offering costs, from the issuance of promissory notes that were
converted into redeemable preferred stock in July 1999. Between November 1998
and April 1999, we received $3.0 million from the issuance of promissory notes
to Nielsen Media Research. These notes were converted into redeemable preferred
stock in August 1999 in connection with a preferred stock financing in which we
raised $19.5 million, net of offering costs. In September 1999, we completed an
additional redeemable preferred stock financing of $15.2 million, net of
estimated offering costs.

We have a total $1.2 million equipment line of credit with Venture Lending &
Leasing and Venture Lending & Leasing II. Borrowings under the line of credit
are secured by all of our tangible assets and bear interest at an annual rate of
8%. In addition, we have a $1 million commercial line of credit with Heritage
Bank of Commerce. Borrowings under this line are secured by our business assets
other than those securing our equipment loans and bear interest at the bank's
prime interest rate, which was 8.25% as of September 30, 1999. We also have a
$350,000 line of credit with Heritage Bank of Commerce to fund equipment
purchases. Any advances under this equipment line mature 36 months following
funding and bear interest at the bank's prime rate. Our credit agreement with
Heritage Bank contains certain financial covenants, including minimum liquidity
at or above $5 million, tangible net worth of $10 million, and debt to tangible
net worth ratio of 1-to-1. As of September 30, 1999, we were in compliance with
all of these covenants.

As of September 30, 1999 we had utilized approximately $500,000 under the
equipment line of credit with Venture Lending & Leasing and Venture Lending &
Leasing II.

As of September 30, 1999, our principal source of liquidity was $28.7
million in cash and cash equivalents and $2.1 million available remaining under
our lines of credit.

Net cash used in operating activities was $1.3 million in 1997, $2.9 million
in 1998 and $5.5 million in the nine months ended September 30, 1999. Net cash
used in operating activities in 1997 reflected a net loss of $1.8 million offset
principally by increases in accounts payable and accrued liabilities totaling
$508,000. Net cash used in operating activities in 1998 reflected a net loss of
$3.9 million and an increase of $158,000 in accounts receivable offset by
depreciation and amortization of $200,000, an increase in accrued expenses of
$333,000 and an increase in deferred revenue of $280,000. Net cash used in
operating activities in the nine months ended September 30, 1999 reflected a net
loss of $10.7 million and an increase of $1.2 million in accounts receivable
offset by non-cash stock-based

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compensation charges totaling $2.3 million, an increase of $1.7 million in
deferred revenue and an increase of $763,000 in accrued expenses.

Since our inception, our investing activities have consisted primarily of
purchases of fixed assets, principally computer hardware and software for our
growing number of employees. Capital expenditures totaled $391,000 in 1997,
$173,000 in 1998 and $328,000 in the nine months ended September 30, 1999.
Although we had no material capital expenditure commitments as of September 30,
1999, we expect that capital expenditures will increase with our anticipated
growth in operations, infrastructure and personnel both domestically and
internationally. We do not expect to incur significant costs to make our
software or internal information systems year 2000 compliant because we believe
this software and these information systems are designed to function properly
through and beyond year 2000.

Net cash provided by financing activities totaled $2.3 million in 1997, $3.9
million in 1998 and $33.1 million in the nine months ended September 30, 1999.
Net cash provided by financing activities primarily consisted of the proceeds of
issuances of preferred stock and promissory notes in each of these periods and,
in 1998 and the nine months ended September 30, 1998, included proceeds from the
equipment line of credit.

We believe that our existing balances of cash and cash equivalents and our
available credit facilities will be sufficient to meet our cash needs for
working capital and capital expenditures for at least the next 12 months,
although we could elect to seek additional funding prior to that time. We could
require additional capital prior to the end of this period if, for example, we
were to experience greater than expected losses from operations or if we were to
pursue one or more business acquisitions or investments. We cannot be certain
that additional financing will be available when required, on favorable terms or
at all. If we are not successful in raising additional capital as required, our
business could be harmed. If additional funds are raised through the issuance of
equity securities, the percentage ownership of our then-current stockholders
would be reduced.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." SFAS No. 133 requires all derivative instruments to be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designed as part of a hedge
transaction and, if so, the type of hedge transaction. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133," which
amends SFAS No. 133 to be effective for all fiscal quarters or all fiscal years
beginning after June 15, 2000, or January 1, 2001 for us. We do not expect that
the adoption of this statement will have a material impact on our reported
results of operations.

MARKET RISK

The following discussion analyzes our exposure to market risk related to
changes in interest rates and foreign currency exchange rates.

FOREIGN CURRENCY EXCHANGE RATE RISK

To date, substantially all of our recognized revenue has been denominated in
U.S. dollars and generated primarily from customers in the United States, and
our exposure to foreign currency exchange rates has been immaterial. We expect,
however, that future product and service revenue may also be derived from
international markets and may be denominated in the currency of the applicable
market. As a result, our operating results may become subject to significant
fluctuations based upon

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changes in exchange rates of certain currencies in relation to the U.S. dollar.
Furthermore, to the extent that we engage in international sales denominated in
U.S. dollars, an increase in the value of the U.S. dollar relative to foreign
currencies could make our products and services less competitive in
international markets. Although we will continue to monitor our exposure to
currency fluctuations, and, when appropriate, may use financial hedging
techniques in the future to minimize the effect of these fluctuations, we cannot
assure you that exchange rate fluctuations will not adversely affect our
financial results in the future.

INTEREST RATE RISK

As of September 30, 1999, we had cash and cash equivalents of $28.7 million
consisting of cash and highly liquid, short-term investments. Our short-term
investments will decline by an immaterial amount if market interest rates
increase, and therefore, our exposure to interest rate changes has been
immaterial. Declines of interest rates over time will, however, reduce our
interest income from our short-term investments. Our outstanding notes payable
and capital lease obligations are all at fixed interest rates and therefore have
minimal exposure to interest rates.

YEAR 2000 COMPLIANCE

We are aware of the issues surrounding the year 2000 and problems relating
to computers and computer software incorrectly distinguishing between 21st and
20th century dates. Year 2000 issues could affect our products and services as
well as our internal management control systems.

We are currently conducting a year 2000 readiness review of our proprietary
software which is utilized to collect panel data and generate our Internet
audience measurement information products and services. This review includes:

- assessment and quality assurance testing of our proprietary software;

- implementation, including remediation, upgrading and replacement of
non-compliant product versions;

- validation testing; and

- contingency planning.

We have completed all phases of our review, except for validation testing
and contingency planning, as it relates to the current version of our software.

We have designed all of our proprietary software to be year 2000 compliant.
We define "year 2000 compliant" as the ability to:

- correctly handle date information needed for the December 31, 1999 to
January 1, 2000 date change;

- function according to the product documentation provided for this date
change, without changes in operation resulting from the advent of a new
century, assuming correct configuration;

- where appropriate, respond to two-digit date input in a way that resolves
the ambiguity as to a century in a disclosed, defined, and predetermined
manner;

- store and provide output of date information in ways that are unambiguous
as to century if the date elements in interfaces and data storage specify
the century; and

- recognize the year 2000 as a leap year.

We have tested our data collection software and our internal programs and,
based on these tests, we believe that our software is year 2000 compliant. We
are currently testing licensed software and freeware, obtained from third
parties that is incorporated into our software, and have received written

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assurances from our primary vendors that this licensed software is year 2000
compliant. We therefore do not expect to expend significant resources to resolve
year 2000 errors in our software. However, we can not be certain that our test
procedures will uncover all possible year 2000 errors in our software. If our
tests and design measures have failed to discover and resolve all year 2000
problems in our data collection software and we fail to provide or inaccurately
provide services under the terms of a subscription agreement, our reputation
could be harmed.

Our internal systems include both our computer and network systems and other
systems. We have initiated an assessment of our most important computer and
network systems. To the extent we are not able to assess the technology provided
by third-party vendors, we are seeking assurances from them that their systems
are year 2000 compliant. We have received written assurances from our primary
vendor that their systems are year 2000 compliant. Although we are not currently
aware of any material operational issues or costs associated with preparing
these systems for the year 2000, we may experience unanticipated problems and
costs caused by undetected errors or defects in the technology used in these
systems.

We have funded our year 2000 compliance plan from available cash and have
not separately accounted for these costs. To date, these costs have not been
material. We expect to incur additional costs related to the year 2000
compliance plan for:

- administrative personnel to manage the project;

- outside contractor assistance; and

- product engineering and customer satisfaction.

We expect to complete our assessment and resolution of all year 2000
problems that we are capable of addressing before December 31, 1999. However, we
believe that it is not possible to determine with complete certainty that all
year 2000 problems affecting us have been identified and corrected. Furthermore,
some year 2000 problems are beyond our control.

We believe that our most likely worst-case scenario related to the year 2000
problem is a failure of a significant number of our panelists' computer systems
to operate correctly. Were this to occur, our ability to collect data could be
adversely affected and our sample size reduced resulting in inaccuracies in our
reports and damage to our reputation.

We have not developed a contingency plan to address situations that may
result if we are unable to achieve year 2000 readiness of our critical
operations and do not anticipate the need to do so. The cost of developing and
implementing a plan may itself be material. We are also subject to external
forces that might generally affect industry and commerce, such as year 2000
problems affecting utilities, Internet service providers or banks. A prolonged
Internet, telecommunications or electrical failure, could prevent us from
receiving data from our panel, processing the data and providing reports to our
clients and could have a material adverse effect on our business, results of
operations and financial condition.

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BUSINESS

We are a leading provider of Internet audience measurement information and
analysis. Our products and services enable our customers to make informed
business-critical decisions regarding their Internet strategies. We deliver
accurate and timely Internet audience information, collected from a
representative sample of Internet users, and augment this information with
detailed, flexible reporting and in-depth analysis. Our customers include
leading e-commerce companies, advertising agencies, media companies, Internet
companies and financial institutions. We have formed strategic relationships
with Nielsen Media Research, the leading source of television audience
measurement and related services in the United States and Canada, and ACNielsen,
the world's leading provider of market research information and analysis to the
consumer products and services industries. We believe that these relationships
allow us to offer the most accurate Internet audience information currently
available. Our proprietary activity tracking and data collection technology
gathers comprehensive and detailed information regarding Internet user behavior,
including both site and advertising activity. We began providing Internet
audience measurement products and services under the brand name Nielsen//
NetRatings in March 1999. Our high-quality Internet sampling methodologies, our
real-time data collection technology, our powerful, flexible reporting systems,
and our strong strategic relationships position us for leadership in the market
for global Internet audience measurement and analysis.

INDUSTRY BACKGROUND

GROWTH IN GLOBAL INTERNET USAGE, E-COMMERCE AND ONLINE ADVERTISING

The Internet has emerged as a significant global medium for communications,
information and commerce. It is growing dramatically, based on key measures,
including total number of users, total number of Web sites, e-commerce
transaction volume and online advertising dollars.

Both content and e-commerce on the Internet are growing dramatically.
According to International Data Corporation, or IDC, the number of individual
Web site addresses, commonly referred to as "URLs," on the Internet has grown
from approximately 18 million at the end of 1995 to approximately 925 million at
the end of 1998, and is expected to grow to approximately 13 billion in 2003.
Also, according to IDC, the number of users buying goods and services on the
Internet has grown from approximately 3 million in 1995 to approximately 31
million in 1998, and is expected to grow to approximately 183 million in 2003.
IDC estimates that the total annual value of goods and services purchased over
the Internet has grown from approximately $296 million in 1995 to approximately
$50 billion in 1998, and is expected to grow to over $1.3 trillion by 2003.

As the Internet attracts larger numbers of users, spending for Internet
advertising is expected to increase. According to Forrester Research, global
annual online advertising expenditures are projected to increase from
approximately $1.5 billion in 1998 to approximately $24 billion in 2003.

In addition to the increasing number of Internet users, there has also been
a significant increase in the number of devices that can access the Internet.
While such devices originally consisted only of personal computers, there has
been a recent emergence of a number of alternative devices to access the
Internet, including television set-top boxes, handheld computing devices,
Web-enabled phones and Internet gaming devices. According to IDC, the number of
devices worldwide that are capable of accessing the Internet has grown from
approximately 14 million at the end of 1995 to approximately 150 million at the
end of 1998 and is expected to grow to approximately 722 million by the end of
2003.

UNIQUE CHARACTERISTICS OF ONLINE COMMERCE AND ADVERTISING

The Internet also presents advertisers and online businesses with a unique
opportunity to target prospective consumers and to measure the return on their
advertising or marketing investment. Using

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traditional media, such as television, an advertiser must broadcast its
advertisements to an entire audience for a given program in a given market, even
though the advertiser may have desired to target only a portion of the overall
audience. With the Internet, on the other hand, users visiting the same Web page
at the same moment can be presented with different advertisements based on their
Internet usage behavior. In addition, while an advertiser using traditional
media cannot directly measure how an individual audience member reacts to an
advertisement, the Internet makes it possible for an advertiser or e-commerce
company to track how its audience interacts with an advertisement or an
e-commerce site.

THE EXPECTED CONVERGENCE OF TELEVISION AND THE INTERNET

We believe that the convergence of television programming with Internet
content and interactivity represents a significant emerging trend. Today,
considerable advertising is being conducted in traditional media, such as
television, in order to drive traffic and commercial activity to Internet sites.
For example, a Victoria's Secret advertisement aired during the 1999 Super Bowl
was designed to draw people to an online fashion show conducted on the
Victoria's Secret Web site. We believe that this trend toward the convergence of
television and the Internet will continue. For example, we believe that, in the
future, television content and advertising will include Internet links on which
viewers can click to make a direct response, such as making an online purchase.
As this convergence takes place, the ability to track television audiences as
they use the Internet will become an increasingly critical requirement for all
major advertisers and their agencies as they seek to capitalize on these
cross-media opportunities.

THE NEED FOR INTERNET AUDIENCE MEASUREMENT AND ANALYSIS

As the Internet continues to evolve and online advertising and electronic
commerce continue their dramatic growth, companies conducting business online
are continually challenged to define and reach their target audiences as well as
develop sophisticated online business strategies. The unique dynamics of the
Internet require that online market participants understand their markets and
quickly recognize and adapt to changing conditions in their particular
industries. In order to remain competitive, these online companies demand
detailed audience measurement information and analysis that will enable them to
make informed business decisions in a timely manner. These companies are seeking
a trusted third party source for information that can provide them with the
following:

- ACCURATE AND TIMELY INFORMATION. To be useful, information derived from
audience samples must accurately reflect the size and behavior of the
overall Internet audience. Accordingly, such information must be gathered
from a large, representative sample using statistical methods that
eliminate as much bias as possible. The information must also be timely;
the faster the information can be analyzed and reported, the more
efficiently an online business can adapt to its target audience's changing
characteristics and preferences.

- DETAILED, FLEXIBLE REPORTING AND ANALYSIS. The usefulness of Internet
audience information can be significantly enhanced by detailed analysis
presented in a flexible format that allows customers to manipulate the
information to meet their unique requirements. Presenting information and
analysis in this way could enable a customer to:

- track the demographic profiles and behavior of users that visit a
particular site or click on a particular banner advertisement, in order
to target advertising at users matching particular demographic
profiles;

- correlate user behavior on a site with the user's behavior on the
Internet before entering and after leaving the site, tracking other
sites visited and how the user behaved on those sites;

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- track users' interactions with Web sites, such as the duration and
frequency of visits to a site and the proportion of visitors to a site
that make purchases during their visits, referred to as the
"look-to-book" ratio;

- track users' interactions with advertisements, such as the proportion
of clicks on a banner advertisement compared to the number of times the
advertisement appears, referred to as the "click-through rate," and the
proportion of users that make a purchase after clicking on a particular
advertisement, referred to as the "click-to-conversion" ratio;

- evaluate banner advertisements to compare the effectiveness of
different advertisements or to track a competitor's advertisement
placements; and

- identify significant trends relating to online companies and Internet
usage.

- CROSS-MEDIA AND CROSS-PLATFORM MEASUREMENT CAPABILITIES. To obtain a
comprehensive measurement of Internet audience usage, companies conducting
business online will require an Internet audience measurement solution
that is capable of capturing data from both television and Internet users
and across a wide range of Internet access devices. This requires
specialized technologies and expertise to adapt audience measurement
techniques to disparate emerging platforms. The data collection method
must not only be capable of operating on different types of devices, but
must also be capable of collecting and transmitting comparable streams of
data regardless of the device.

- A UNIFORM STANDARD OF MEASUREMENT. Internet audience measurement
statistics are of limited use, unless Internet site and advertisement
activity can be measured according to a common "yardstick." As has been
the case with Nielsen Media Research in the market for television audience
measurement and with Arbitron in the market for radio audience
measurement, we believe that the company that provides the highest quality
audience measurement information and analysis will eventually emerge as
the industry standard.

We believe that no standard has yet emerged because most companies offering
Internet measurement services have been unable to provide a comprehensive
solution that includes accurate and timely information, as well as detailed and
flexible reporting and analysis. Accordingly, a significant market opportunity
exists for a company that can provide customers with products and services that
meet these needs.

THE NETRATINGS SOLUTION

We deliver meaningful and timely information that enables our customers to
make informed business-critical decisions regarding their Internet strategies.
Our products, services and technology provide accurate Internet audience
information combined with detailed and flexible reporting and in-depth analysis.
We believe that our solution will enable us to become the standard for measuring
the size, profile and behavior of Internet audiences. Our solution, marketed
under the Nielsen//NetRatings brand, includes the following key components:

ESTABLISHED SAMPLING METHODOLOGIES. Our solution is designed to provide
reliable, independent information that customers need to make critical business
decisions. We believe that our strategic relationship with Nielsen Media
Research allows us to offer the most accurate Internet audience sampling
methodology currently available. Nielsen Media Research has set the standard for
television audience measurement over the past 50 years, utilizing an established
sampling methodology that is widely used throughout the major segments of the
audience measurement and media research industry. Nielsen Media Research
develops our panel using the same sampling methodology that it uses in
developing television audience panels. In addition, through our joint venture
with ACNielsen, we intend to offer solutions in international markets utilizing
ACNielsen's established audience sampling methodologies based upon its 76 years
of experience in consumer market research.

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PROPRIETARY MEASUREMENT TECHNOLOGY. Our proprietary activity tracking and
data collection technology gathers comprehensive and detailed information
regarding Internet user behavior, including sites and pages visited, time spent
on each site, advertising exposure and effectiveness, e-commerce transactions
executed, and streaming media usage. The software also collects key information
regarding activity on America Online's proprietary service. All of our data is
collected from the entire panel and transmitted to our central database in
real-time. The information is linked to demographic profiles of Internet users
to provide comprehensive products and services for measuring Internet usage
behavior. Once installed, our software requires virtually no panelist
intervention and software updates are automatic.

POWERFUL, FLEXIBLE REPORTING SYSTEMS. Our solution provides customers with
a variety of daily, weekly and monthly reports that can be modified by our
customers, enabling them to easily manipulate data to meet their specific
information requirements. Our easy-to-use interface provides immediate access to
various levels of detailed information and enables custom queries on selected
information. Our service provides customers with two levels of information
access, which are available in weekly and monthly reports based on data that has
been uploaded to our database from our panel members' computers in real time.
Our Quick Looks feature provides customers with comprehensive pre-defined
Internet user behavior and demographic information. We also provide Select
Views, which are powerful, easy-to-use, menu-driven queries that respond to
specific information requests.

TIMELY, INSIGHTFUL ANALYSIS. Our solution delivers insightful analysis
based upon detailed Internet audience information. We augment our high-quality
audience behavior information with meaningful analysis delivered on a timely
basis, enabling our customers to take decisive action. The analytical services
we provide are structured to deliver information and commentary on a weekly,
monthly and quarterly timeframe. Additionally, we provide timely event-based
reports, such as Internet activity during the Super Bowl. Customers purchasing
our analytical services are entitled to a fixed number of consulting hours,
during which they can have private access to our analysts for strategic
consultation or custom analysis.

COMPATIBLE, PORTABLE ARCHITECTURE. All of our information is collected
using proprietary software that is compatible with devices that operate on a
Java-enabled platform. Therefore, we believe that our architecture will
seamlessly integrate with most new types of Internet access devices, enabling us
to obtain useful data from most Internet users regardless of the access device
they use.

STRATEGY

Our objective is to become the standard for Internet audience measurement
and the worldwide leader in Internet market research. We intend to establish
this leadership position through the following key strategies:

LEVERAGE OUR STRATEGIC RELATIONSHIPS. We intend to continue to leverage our
key strategic relationships with Nielsen Media Research and ACNielsen by using
their brands and industry relationships to facilitate the rapid deployment of
our service with leading companies. Since March 1999, we have marketed our
services under the Nielsen//NetRatings brand, and, combining our sales and
marketing efforts with those of Nielsen Media Research, we have deployed our
products and services with over 160 customers. We believe that the continued
adoption of our products and services by leading companies will help facilitate
the broad market acceptance of the Nielsen//NetRatings service as the industry
standard for Internet audience measurement. Similarly, we intend to leverage our
strategic relationship with ACNielsen to deploy our products and services into
multiple international markets.

INCREASE THE SIZE, SCOPE AND NUMBER OF OUR AUDIENCE MEASUREMENT PANELS. We
intend to expand the size, scope and number of our audience measurement panels
in order to increase the depth of

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information that we can provide our customers. We believe that expanding our
panels will enable us to provide more detailed information regarding e-commerce
trends, as well as more accurate information regarding smaller Internet sites
and more focused advertising campaigns. A significant percentage of Internet
usage takes place at the workplace, and our customers are increasingly requiring
audience measurement information from this user segment. Accordingly, we are
currently working to build an at-work panel through a number of initiatives
including recruiting companies directly and leveraging our current strategic
relationships.

CAPITALIZE ON OUR ACCESS TO INFORMATION TO DEVELOP NEW PRODUCTS AND ENTER
NEW MARKETS. We plan to continually innovate and introduce new products that
will capitalize on our access to the extensive Internet activity data that we
collect for our audience measurement products and services. We believe that our
current technological and analytical capabilities allow us to offer the most
accurate, complete and timely information on Internet usage available. As the
volume and complexity of Internet usage increases, we believe that users will
demand increasingly flexible and robust audience measurement products and
services. We intend to continue to devote significant resources to developing
additional technologies that will allow us to create solutions that meet these
requirements. Additionally, we believe that analysis of data is becoming
increasingly important to customers who use Internet audience information, and
we intend to continue to develop new ways to analyze and present the information
we collect. During the past year, we have created advanced reports and analyses
specifically targeted to the investment community and e-commerce providers, and
we intend to introduce similar products for the media segment and online
business-to-business customers. We also intend to leverage our analytical
capabilities to expand and enhance our specialized consulting services.

EXPAND INTERNATIONALLY. We intend to capitalize on the global demand for
Internet usage information by establishing panels in major international markets
and expanding our customer base to include international companies. In June
1999, we formed NetRatings KK, a Japanese joint venture, to allow us to provide
our products and services to the Japanese market. In September 1999, we entered
into a joint venture with ACNielsen to develop and maintain Internet audience
measurement panels and to market Nielsen//NetRatings products and services in
other key international markets with a goal of establishing operations in over
30 countries. Through this joint venture, we plan to develop audience
measurement panels in Australia, Ireland, New Zealand, Singapore and the United
Kingdom in the first quarter of 2000 and to develop panels in other key
international markets in Europe, Asia and Latin America by the end of 2001. We
believe that our Internet measurement solution will provide global companies
with the highest-quality information on worldwide Internet usage and flexible
tools to use this information to make critical business decisions.

POSITION OURSELVES TO CAPITALIZE ON THE CONVERGENCE OF TELEVISION AND THE
INTERNET. We intend to position ourselves to become the audience measurement
standard for the converging market for television programming and the Internet.
We believe that the continued convergence of television and the Internet will
require sophisticated products and services that provide meaningful information
about usage behavior. We believe that we will be uniquely positioned for this
convergence through our relationship with Nielsen Media Research, with its
experience and expertise in television audience measurement, combined with our
own Internet measurement technology. We intend to devote substantial resources
and to work with Nielsen Media Research to develop the technologies and research
methodologies that will allow us to be the audience measurement standard for
this convergence.

STRATEGIC RELATIONSHIPS

STRATEGIC RELATIONSHIP WITH NIELSEN MEDIA RESEARCH

For nearly 50 years Nielsen Media Research's core business has been to
provide high-quality, comprehensive audience viewing information on the
television industry. The Nielsen ratings are vital to

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<PAGE>
television program production, distribution and scheduling decision making, and
are the currency for transactions between buyers and sellers of television
advertising time.

In October 1998, we began a strategic relationship with Nielsen Media
Research to develop and market Internet audience measurement products and
services in the United States and Canada using our technology combined with
Nielsen Media Research's proprietary panel methodology. Through this
relationship, we began developing an expanded Internet audience panel based on
the Nielsen Media Research audience sampling methodology and enhanced versions
of our software, to be marketed under the Nielsen//NetRatings brand. In March
1999, we launched our Nielsen//NetRatings product and service offerings. In
August 1999, Nielsen Media Research made an equity investment in NetRatings.

Under the operating agreement governing the relationship, which was entered
into in August 1999, Nielsen Media Research is responsible for the development
and maintenance of the at-home panel that generates the data for the
Nielsen//NetRatings audience measurement service. We are responsible for the
management, support and ongoing development of the data collection and reporting
system. Nielsen Media Research is responsible for marketing the service to
traditional media customers, advertising agencies and to other mutually-agreed
customers in the United States and Canada. We are responsible for selling to
publishers, Internet-based businesses, Fortune 2000 corporations and financial
institutions. We receive 100% of customer billings derived from sales of all of
our products and services and pay Nielsen Media Research a commission of 35% of
our billings for products and services sold by them. For the nine months ended
September 30, 1999, we derived 18% of our total revenue from Nielsen Media
Research generated billings. In the future, we expect this percentage to
decrease, as we increase the size of our sales force and further expand into
international markets.

We will pay Nielsen Media Research ongoing fees for the costs of maintaining
the at-home panel and the costs associated with any expansion of the panel.
These fees will be charged at the same rates that Nielsen Media Research charges
its own internal divisions.

We have agreed not to sell advertising measurement data in the U.S. or
Canada in conjunction with any product or service provided by any third party
other than Nielsen Media Research. This restriction will terminate if Nielsen
Media Research fails to meet certain annual sales goals that are to be mutually
determined within one year after the date of the operating agreement and
annually thereafter.

The relationship may be terminated in the event of any of the following:

- mutual agreement of the parties;

- a material breach of the agreement by either party; or

- Nielsen Media Research's equity ownership of NetRatings falling below 5%
of NetRatings' outstanding Common Stock, assuming full exercise or
conversion of all outstanding options, warrants and convertible
securities.

Upon a termination of our strategic relationship other than by mutual
consent of the parties or as a result of our breach of the agreement, Nielsen
Media Research will be obligated to provide panel maintenance services for up to
one year thereafter. In addition, in such event, we will continue to have access
to Nielsen Media Research's panel methodology for purposes of maintaining our
at-home panel and the right to use Nielsen Media Research's trademarks for
purposes of marketing our Internet audience measurement products and services
for up to one year following the termination.

JOINT VENTURE WITH ACNIELSEN

Since its founding 76 years ago, ACNielsen has become the leading provider
of media research services outside North America. It is also the global leader
in providing business information, analysis and insights to consumer packaged
goods companies, their brokers and retail organizations. ACNielsen

39
<PAGE>
offers services to customers in over 100 countries. Although ACNielsen and
Nielsen Media Research were originally part of the same corporate organization,
the two companies are no longer related.

In September 1999, we entered into a joint venture with ACNielsen to develop
and maintain audience measurement panels and to market Nielsen//NetRatings
products and services in international markets. Through the joint venture, in
which we hold a 19.9% interest, we plan to launch audience measurement services
in over 30 countries.

The joint venture's products and services will be based on data collected
from Internet measurement panels that are established and maintained using
ACNielsen's proprietary sampling methodology. Panel members will collect and
deliver their Internet usage data using our proprietary collection software. The
joint venture or ACNielsen will be responsible for establishing and maintaining
the joint venture's audience measurement panels.

The joint venture has exclusive rights to market its Internet audience
measurement services in countries outside the United States, Canada and Japan.
We have exclusive rights to market these services in the United States, Canada
and Japan. Under this operating agreement, we have agreed not to offer any
Internet audience measurement service in countries outside the United States,
Canada and Japan. In addition, the joint venture and ACNielsen have agreed not
to offer any competing Internet audience measurement service anywhere in the
world. Notwithstanding the foregoing, the joint venture will have the right to
offer such a service in Japan should it not gain access to the Japanese Internet
usage data to which we have access, on the same terms to which we are subject.

The joint venture pays us a fee of 10% of its gross revenues from the sale
of products and services based on data collected from Internet measurement
panels, subject to a minimum of $7.5 million and maximum of $15 million over
five years. Revenue from the joint venture's Internet audience measurement
services will allocated between us and the joint venture depending on the
location of the customer and the location of the panel whose data is used in the
service:

- The joint venture retains 100% of any revenue from services that the joint
venture sells to customers outside the United States and Canada based on
data from panels outside those countries.

- We and the joint venture each retain 50% of any revenue from services that
we sell to customers in the United States and Canada based on data from
panels outside those countries or services that the joint venture sells to
customers outside the United States and Canada based on panel data from
those countries.

- The joint venture retains 35% of any revenue from services that the joint
venture sells to customers inside the United States and Canada based on
data from panels inside those countries, and we retain 65% of any revenue
from such services.

- If either we or the joint venture sells services based on data from a
combination of panels located both inside and outside the United States
and Canada, the allocation of revenue is determined by an operating
committee consisting of two representatives of each company, with any
decisions requiring a unanimous vote of those present, which must include
at least one representative of each company.

To initially capitalize the joint venture, ACNielsen has agreed to
contribute cash and we have granted an exclusive license with respect to our
data collection technology for the covered territory, subject to specified
performance criteria. We have entered into a stockholders agreement with
ACNielsen setting forth procedures for funding the ongoing operations of the
joint venture. The initial start-up costs of the joint venture, including the
costs incurred to establish Internet audience measurement panels in each of the
countries, are the responsibility of ACNielsen. In general, the

40
<PAGE>

ongoing capital requirements of the joint venture are the responsibility of both
companies in proportion to their relative equity ownership of the joint venture.

After the funding of the initial roll-out costs, the board of directors of
the joint venture may make capital calls on the outstanding shares. If either
company defaults on its capital contribution, then the joint venture will issue
to the other company shares of a senior class of preferred stock having a value
equal to that company's capital contribution. After the third anniversary of the
date of the agreement, we have the right to require a capital call if we can
demonstrate that such capital is necessary in order for the joint venture to
exploit commercial opportunities that would be in the best interests of the
joint venture partners. Such a capital call is subject to the default provisions
described above, except that if these provisions would result in ACNielsen
having insufficient equity ownership to include the joint venture in its
consolidated tax returns during 2003 or 2004, then ACNielsen can require that we
receive convertible debt securities in lieu of the senior class of preferred
stock.

Under the stockholders agreement, ACNielsen has a right of first refusal to
purchase any shares of the joint venture that we wish to sell to a third party.
If the joint venture does not effect an initial public offering within five
years, we have the right to require ACNielsen to purchase our equity interest at
its fair market value at that time.

PRODUCTS AND SERVICES

Our products and services provide our customers with the ability to
accurately track and analyze Internet audience behavior, in addition to in-depth
research reports across a variety of Internet-related subjects. Our products and
services, which are marketed under the Nielsen//NetRatings brand, include:

- INFORMATION SERVICES. These services provide information such as
comprehensive traffic measures for Web sites, audience exposure and
response to advertising banners and audience demographics linked directly
to site and advertising data;

- ANALYTICAL SERVICES. These services are comprised of market research
reports and analysis for specific markets such as the e-commerce and
investment communities, and related analyst consultation; and

- CUSTOM RESEARCH. This research is performed on an as-requested basis in
support of customers' special projects.

INFORMATION SERVICES

We provide a range of syndicated weekly and monthly Internet audience
measurement reports that can be accessed online. We currently offer two
categories of reports. Our Quick Looks reports provide customers with
comprehensive, pre-defined Internet user behavior and demographic information.
Our Select Views reports provide customers with specific audience information
generated by a powerful, menu-driven interface.

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QUICK LOOKS REPORTS

- WEB SITE REPORTS. These reports provide key measures of Internet users'
site activity. Each report contains information on the size and
demographic composition of the unique audience, the percent of the total
Internet audience that can be reached at each site, the sites ranked by
audience size or other criteria, total page views, and pages viewed and
time spent per person.

<TABLE>
<CAPTION>
REPORT DESCRIPTION
- ------------------------------------------------------------------------
<S> <C>
Top Web Sites by Property Reports key information for all Web sites
owned by the same entity. For example, a
report for Time Warner would include all
activity information for all of the Time
Warner-owned properties including Warner
Brothers and CNN Web Sites.
- ------------------------------------------------------------------------
Top Web Sites by Domain Reports key information for activity on
individual domains. For example,
www.yahoo.com is considered one domain, and
may consist of numerous individual Web Sites.
- ------------------------------------------------------------------------
Top Web Sites by Unique Site Reports key information by individual site
and top pages within a site. For example,
www.quote.yahoo.com is a unique site within
the www.yahoo.com domain.
- ------------------------------------------------------------------------
Top Web Sites by Category Categorizes sites and domains by content
groupings such as sports, finance, news and
information, allowing comparison of similar
sites.
- ------------------------------------------------------------------------
Custom Property Provides alternative customized site
consolidations based on client requests.
- ------------------------------------------------------------------------
</TABLE>

- BANNERTRACK REPORTS. These reports provide detailed audience information
about Internet banner advertising for use in competitive research,
advertising and creative analysis, as well as an overall view of current
advertisers and where they are advertising. These reports allow
advertising planners to evaluate the creative content of advertising and
how effectively advertising reaches various audiences. Key measures
include the number of actual advertising images, banner rank, unique
audience size and demographic composition, percent of the Internet
audience that can be reached by each advertisement and click rate.

<TABLE>
<CAPTION>
REPORT DESCRIPTION
- ------------------------------------------------------------------------
<S> <C>
Top Banner Advertisements by Ranks the top viewed banner advertisements
Impression and sponsorship buttons.
- ------------------------------------------------------------------------
Advertising by Domain Ranks the top advertising sites with detailed
information showing the advertisers and their
respective advertising that appeared on
individual sites.
- ------------------------------------------------------------------------
Advertising by Company Ranks the top advertisers with detailed
information showing the sites on which they
advertised and identifying their top
advertisements.
- ------------------------------------------------------------------------
</TABLE>

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<PAGE>
- AUDIENCE SUMMARY REPORTS. These reports provide a comprehensive profile
of the entire Internet audience including size and demographic composition
of the unique audience, total page views, number of usage sessions and
time spent per person.

<TABLE>
<CAPTION>
REPORT DESCRIPTION
- ------------------------------------------------------------------------
<S> <C>
Audience Profile Displays overview information for the total
U.S. Internet population.
- ------------------------------------------------------------------------
Daily/Hourly Traffic Details Audience Profile report information
by specific day and hour.
- ------------------------------------------------------------------------
Average Usage Displays summary statistics on overall
Internet usage.
- ------------------------------------------------------------------------
AOL Audience Displays audience size, audience demographic
composition and average time spent within the
America Online proprietary service.
- ------------------------------------------------------------------------
</TABLE>

SELECT VIEWS REPORTS

Our Select Views reports provide customers with the ability to pinpoint
specific audience information via easy-to-use, menu-driven queries into the
Nielsen//NetRatings database.

<TABLE>
<CAPTION>
REPORT DESCRIPTION
- ------------------------------------------------------------------------
<S> <C>
Site Reports
- ------------------------------------------------------------------------
Demographic Targeting Allows customers to identify the best sites
to reach a specific demographic population on
the Web. Information includes the size of the
audience and the percent of the audience at a
given site meeting the demographic targeting
criteria.
- ------------------------------------------------------------------------
Audience Profile Provides a detailed side-by-side demographic
comparison of audiences at different sites.
- ------------------------------------------------------------------------
Unduplicated Audience Provides an analysis of the audience overlap
across multiple sites. Details the size and
demographic composition of the site's shared
and exclusive audience.
- ------------------------------------------------------------------------
Trend Allows graphical comparison of audience
statistics for multiple sites across
user-selected time periods.
- ------------------------------------------------------------------------
BannerTrack Advertising
Reports
- ------------------------------------------------------------------------
Demographic Targeting Allows customers to identify which
advertising has been the most effective in
reaching particular demographic groups.
- ------------------------------------------------------------------------
Audience Profile Allows customers to compare the audience size
and demographic composition for selected
advertisements in the same campaign, or
across different advertisers.
- ------------------------------------------------------------------------
</TABLE>

ANALYTICAL SERVICES

We leverage the information gathered in our core database by offering
analysis that places the data into context, geared toward the specific research
needs of the e-commerce and investment communities.

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<PAGE>
Subscribers to our analytical services also receive direct access to a
NetRatings analyst for a specific number of hours of private consultation. Our
analytical services include:

E-COMMERCE STRATEGIES SERVICE

This series of reports focuses on strategic opportunities with an emphasis
on success factors in particular segments of the e-commerce market.

<TABLE>
<CAPTION>
REPORT DESCRIPTION
- ------------------------------------------------------------------------
<S> <C>
Commerce Data Published periodically, analyzes e-commerce
activity, including audience traffic patterns
and "look-to-book" data.
- ------------------------------------------------------------------------
Spotlights Published weekly, offers both qualitative and
quantitative perspectives to identify major
changes by industry sectors and individual
companies. Compares and contrasts relative
Internet usage of related companies.
- ------------------------------------------------------------------------
Hot & Not Published monthly, looks at significant
trends in Internet usage affecting specific
industry sectors and individual companies.
- ------------------------------------------------------------------------
Trends Published quarterly, contains in-depth
analysis of key industry sectors and their
participants.
- ------------------------------------------------------------------------
</TABLE>

INTERNET INVESTMENT STRATEGIES SERVICE

This series of reports provides research information for the investment
community, geared to meet the specific needs of market analysts, institutional
investors, brokers and venture capitalists.

<TABLE>
<CAPTION>
REPORT DESCRIPTION
- ------------------------------------------------------------------------
<S> <C>
SnapShots On-demand reports provide a timely view of a
profiled company's Internet usage with
qualitative commentary and brief historical
overview.
- ------------------------------------------------------------------------
Spotlights Published weekly, offers both qualitative and
quantitative perspectives to identify major
changes by industry sectors and individual
companies. Compares and contrasts relative
Internet usage of related companies.
- ------------------------------------------------------------------------
Hot & Not Published monthly, looks at significant
trends in Internet usage affecting specific
industry sectors and individual companies.
- ------------------------------------------------------------------------
Trends Published quarterly, contains in-depth
analysis of key industry sectors and their
participants.
- ------------------------------------------------------------------------
</TABLE>

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<PAGE>
CUSTOM RESEARCH

We make research services available to our customers on an as-requested
basis. Because we utilize real-time data collection, we can provide overnight
analysis on a custom basis. In one custom research project, for example, we
analyzed the usage activities of visitors to a selected group of portal sites in
order to learn the percentage of a particular portal's audience that also
visited the other portals. Another custom project studied differences in online
behavior between a site's registered users and unregistered users.

AUDIENCE MEASUREMENT METHODOLOGY

Our Internet measurement products and services extend to the Internet the
Nielsen Media Research sampling methodology for television audiences by
collecting, aggregating and correlating Internet usage data with demographic
profiles of panel members. The resulting information is organized in a manner
consistent with traditional media research data so that the advertiser or
marketer can integrate Nielsen//NetRatings information into the development of
comprehensive media, marketing and product plans. Our panel of at-home Internet
users is currently more than 36,000 persons, and we are in the process of
increasing the size of this panel.

We believe that the quality of information derived from a sample is directly
related to the quality of the sample. To assure quality, our panel sampling
methodology includes the following critical components:

ENUMERATION. Enumeration studies are conducted to determine the total size
and demographic makeup of the Internet user population and are used as the basis
for ensuring that sample behaviors are representative of the total audience
population. Our principal competitor in the market for Internet audience
measurement services conducts enumeration studies on a quarterly basis. In order
to more accurately gauge the size and shape of the rapidly changing Internet
user universe, we conduct our enumeration studies on a monthly basis.

SAMPLE DESIGN. For a sample to be representative of the total Internet user
population, the selection process must be random. In addition, the higher the
cooperation rate among selected individuals, the more representative the sample
and the more reliable the sample data. Our at-home panel is constructed using a
process called random digit dialing, which involves recruiting panel members by
calling randomly selected telephone numbers. Telephone numbers are randomly and
systematically selected with equal probability, with adjustments made to account
for households with more than one phone number. To maximize the cooperation
rate, households are called up to 15 times in an attempt to make contact.
Eligible households, namely, those with a PC and Internet access, are recruited
to participate in the panel. Those that agree to participate are mailed a
membership packet that includes tracking software and installation instructions
and are given a small savings bond for their participation. Eligible households
that decline to participate in the panel, households without Internet access,
non-residential telephone numbers and non-working or non-contacted telephone
numbers are called again at six-month intervals.

SAMPLE MANAGEMENT. Given the continuing rapid growth of the Internet, the
online population changes in size and composition faster than audiences of other
major media. Our sample management process strives for ongoing cooperation from
existing panel members. We also recontact previous non-Internet households to
ensure that new telephone numbers are included in the random sampling process.

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<PAGE>
TECHNOLOGY

Through the use of our proprietary tracking software, we developed the
following audience measurement capabilities:

- daily and weekly activity reports made possible by collection of user
activity data in real time;

- advertising banner tracking and reporting by banner, advertiser and
domain; and

- tracking e-commerce purchase activity and related audience behavior.

NetRatings audience tracking software has the following characteristics:

- collects real-time, comprehensive Web activity and AOL proprietary online
service activity;

- collects the same data in the same way, regardless of whether the user is
accessing the Internet via a PC, Macintosh, UNIX or other platform, and
provides portability to non-PC Internet access devices such as television
set-top boxes and Internet gaming devices;

- automatically measures banner advertisement viewing and clicking,
e-commerce activity, cached page views and page loading times;

- requires virtually no panelist intervention once installed and can be
automatically upgraded, allowing functional enhancement without panelist
interaction; and

- automatically encrypts all panelist activity data prior to transmission.

We have also designed the NetRatings reporting system for flexibility of
information delivery and ease of use. We publish weekly as well as monthly data.
Our reporting schedule is 72 hours after the end of the period for weekly data
and 10 days after the end of the period for monthly data. Information is
organized in consistently formatted, easy-to-use tables with extensive
drill-down capabilities and search utilities. Additional "self-service" custom
queries are supported via the menu-driven interface. Online help accompanies all
tables. The Web-based design ensures continual access to information regardless
of the user's location.

CUSTOMERS

More than 160 customers currently use our services for a wide range of
purposes including planning, buying and selling Internet-based advertising;
planning and developing e-commerce strategies; gaining competitive intelligence;
understanding Internet user behavior; and analyzing and tracking

47
<PAGE>
Internet investment opportunities. The following table is a list of six of our
top ten customers in each of our principal customer sectors.

<TABLE>
<CAPTION>
CUSTOMER SECTOR REPRESENTATIVE CUSTOMERS
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Advertising Agencies BBDO J. Walter Thompson
DDB Needham Ogilvy & Mather
Hal Riney & Partners TBWA/Chiat/Day
- ------------------------------------------------------------------------

Advertisers and E-Commerce Amazon.com Gateway
Companies Autobytel Land's End
Drugstore.com Procter & Gamble
- ------------------------------------------------------------------------

Media Companies Bloomberg USA Today
Reuters Viacom
Time Warner The Weather Channel
- ------------------------------------------------------------------------

Internet Companies Alta Vista Microsoft
America Online Women.com Networks
Lycos Yahoo!
- ------------------------------------------------------------------------

Financial Services Companies Banc of America Securities CIBC World Markets
C.E. Unterberg, Towbin Fidelity Investments
Chase Manhattan Lehman Brothers
- ------------------------------------------------------------------------
</TABLE>

SALES AND MARKETING

Nielsen//NetRatings products and services are sold by NetRatings and Nielsen
Media Research in their respective markets. Under the operating agreement
governing our strategic relationship with Nielsen Media Research, NetRatings has
responsibility for selling to publishers, Internet-based business, Fortune 2000
corporations and financial institutions. As of September 30, 1999, we had 15
sales representatives located in Milpitas, California and Chatham, New Jersey.
The Nielsen Media Research sales effort is focused on its traditional customers:
advertising agencies, television and cable networks, and local station
affiliates. Nielsen Media Research is also responsible for selling to companies
with whom it has strategic relationships, including such companies as Procter &
Gamble, America Online, Microsoft and Viacom. NetRatings sales representatives
receive a base salary and are eligible for commissions based on revenue and
sales goals. Nielsen Media Research is paid a commission for its sales of the
Nielsen//NetRatings services.

Our primary marketing objective is to leverage and build upon the
brand-awareness of the Nielsen//NetRatings name throughout our target audiences.
We use public relations activities to gain extensive mention of our products and
services as well as use of, and/or reference to, our data by both traditional
and Internet press, and financial and industry analysts. Further company and
product visibility is gained through speaking engagements and participation at
industry events by our executive officers. In addition, we provide daily updates
on unique audience size at top Internet sites to the Bloomberg service that
distributes online financial information to 140,000 terminals worldwide. Each
week, Advertising Age magazine features an entire page of audience and
advertising data from our service. We generate additional brand-awareness by
providing our data for the acknowledgement of ownership through partnerships
with other publishers, media services and Internet companies such as AdAuction,
AdKnowledge, NetGravity and Reuters.

INTERNATIONAL OPERATIONS

In June 1999, we commenced our international expansion by establishing a
joint venture, NetRatings KK, in which we currently hold a minority interest
with several Japanese investors holding the remaining interests. NetRatings KK
is responsible for building and maintaining a Japanese audience

48
<PAGE>
measurement panel and introducing our products and services to the Japanese
market. We have licensed our data collection and reporting technology to
NetRatings KK for use in Japan. NetRatings KK is currently modifying this
technology for use in Japan and is in the process of recruiting a Japan-market
panel. The initial audience measurement service is scheduled to be available in
the first quarter of 2000.

In September 1999, we entered into a joint venture with ACNielsen to develop
and maintain Internet audience measurement panels and to market products and
services under the Nielsen//NetRatings brand in other key international markets.
See "--Strategic Relationships--Joint Venture with ACNielsen."

RESEARCH AND DEVELOPMENT

We believe that our future success and our ability to become the standard
for Internet audience measurement information and analysis will depend in large
part on our ability to continually develop new and enhanced products and
services. Accordingly, we are committed to the investment of significant
resources in research and product development activities. Our research and
development activities are organized into three functional areas: measurement
and data collection technology development, reporting systems development and
operations, and panel operations and support.

During 1997, 1998 and the nine months ended September 30, 1999, our research
and development expenses were $994,000, $1.2 million and $1.8 million,
respectively. As of September 30, 1999, we had 18 employees engaged in research
and development activities.

INTELLECTUAL PROPERTY

Our success and ability to compete is dependent in part on the protection of
our proprietary technology and information. We rely on a combination of patent,
copyright, trademark and trade secret laws, as well as confidentiality
agreements and licensing arrangements, to establish and protect our proprietary
rights. Although we have filed for a patent on certain aspects of our
technology, we cannot assure you that a patent will issue as a result of this
pending application or that any patent that may be issued will be upheld.
Despite our efforts to protect our proprietary rights, existing patent,
copyright, trademark and trade secret laws afford only limited protection, and
there can be no assurance that our intellectual property rights, if challenged,
will be upheld as valid or will be adequate to protect our proprietary
technology and information. In addition, the laws of some foreign countries may
not protect our proprietary rights to the same extent as do the laws of the
United States. Attempts may be made to copy or reverse engineer aspects of our
technology or to obtain and use information that we regard as proprietary.
Litigation may be necessary in the future to enforce our intellectual property
rights or to determine the validity and scope of the proprietary rights of
others. This litigation could result in substantial costs and diversion of
resources and could significantly harm our business.

To date, we have not been notified that our technology infringes the
proprietary rights of third parties. However, in the future third parties may
assert patent, copyright, trademark and other intellectual property rights to
technologies that are important to our business. Any claims asserting that our
products infringe or may infringe proprietary rights of third parties, if
determined adversely to us, could significantly harm our business. Any claims,
with or without merit, could be time-consuming, result in costly litigation,
divert the efforts of our technical and management personnel or require us to
enter into royalty or licensing agreements, any of which could significantly
harm our business. Royalty or licensing agreements, if required, may not be
available on terms acceptable to us, if at all. In the event a claim against us
was successful and we could not obtain a license to the relevant technology on
acceptable terms or license a substitute technology to avoid infringement, our
business would be significantly harmed.

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<PAGE>
COMPETITION

The market for Internet audience measurement and analysis is new and rapidly
evolving and becoming increasingly competitive. In the market for Internet
audience measurement services, our principal competitor is Media Metrix, which
we believe to be the leading provider of such services, based on annual
revenues. We are not aware of any other significant competitors in this market,
although we expect competition in this market to intensify in the future. With
respect to provision of analytical services, we compete with companies such as
Forrester Research, Gartner Group, International Data Corporation and Jupiter
Communications that provide Internet market research and industry analysis based
on data derived from surveys.

We believe that the principal competitive factors in our market are:

- the development of independent, reliable measurement panels that are
representative of the entire target audience;

- the timeliness of reported results;

- the breadth and depth of measurement services offered and their
flexibility and ease of use;

- the ability to provide quality analytical services derived from Internet
audience measurement information;

- the ability to offer products and services in international markets; and

- pricing.

- devote greater resources to marketing and promotional campaigns;

- adopt more aggressive pricing policies; or

- devote more resources to technology and systems development.

In light of these factors, we may be unable to compete successfully in our
market.

EMPLOYEES

As of September 30, 1999, we had 50 full-time employees, with:

- 18 in research and development;

- 27 in sales and marketing; and

- 5 in general and administration.

Our employees are not covered by a collective bargaining agreement. We have
never experienced an employment-related work stoppage and consider our employee
relations to be good.

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FACILITIES

Our corporate headquarters are located in Milpitas, California. We lease
approximately 9,734 square feet for our headquarters which includes research and
development, sales and marketing and general and administrative operations,
under leases expiring between January 2000 and September 2000. We also lease a
sales office in Chatham, New Jersey.

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MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND OTHER MEMBERS OF SENIOR MANAGEMENT

The following table sets forth our directors, executive officers and other
members of senior management, their ages and the positions held by them as of
October 27, 1999:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------- --------- ------------------------------------------------------------------
<S> <C> <C>
David J. Toth (1)...................... 43 President, Chief Executive Officer and Director
Jack R. Lazar (1)...................... 34 Vice President, Chief Financial Officer and Secretary
Frank Sammann (1)...................... 57 Executive Vice President of Worldwide Sales
Charles L. ("Tim") Meadows (1)......... 45 Senior Vice President of Marketing
Simon Chen (1)......................... 50 Vice President of Engineering
Stephen J. Gross....................... 44 Vice President of Finance and Controller
Robert L. Hooven....................... 46 Vice President and General Manager of International Operations
Barbara D. Jarzab...................... 42 Vice President of Research
William C. Schaub...................... 53 Vice President of Business Panel Development
Allen P. Weiner........................ 46 Vice President of Analytical Services
David A. Norman (2)(3)................. 63 Chairman of the Board
Jack T. Serfass (3).................... 36 Director
James J. Geddes, Jr. (2)(3)............ 49 Director
David H. Harkness (2).................. 55 Director
Michael P. Connors..................... 44 Director
</TABLE>

- ------------------------
(1) Executive Officer
(2) Member of Audit Committee
(3) Member of Compensation Committee

DAVID J. TOTH co-founded NetRatings in July 1997 and has served as our
President and Chief Executive Officer and a member of our board of directors
since our inception. From November 1992 to June 1997, Mr. Toth was employed by
the Network Products Group of Hitachi Computer Products, Inc., as a Director
from November 1992 to October 1993 and as Vice President from October 1993 to
June 1997. Mr. Toth holds a B.S. in Electrical Engineering from the University
of Pittsburgh.

JACK R. LAZAR has served as our Vice President, Chief Financial Officer and
Secretary since August 1999. From January 1996 to August 1999, Mr. Lazar was
Vice President, Chief Financial Officer and Secretary of Apptitude, Inc., a
developer and manufacturer of network management solutions. From June 1992 to
December 1995, Mr. Lazar was employed by Electronics For Imaging, Inc., a
developer of color servers and color management software, first as Financial
Planning Manager and later as Controller and Principal Financial and Accounting
Officer. From September 1987 to June 1992, Mr. Lazar worked in various audit
positions at Price Waterhouse (now PricewaterhouseCoopers LLP). Mr. Lazar holds
a B.S.C. from Santa Clara University and is a certified public accountant.

FRANK SAMMANN has served as our Executive Vice President of Worldwide Sales
since October 1999. From February 1999 to October 1999, Mr. Sammann was
President and Chief Executive Officer of Decisive Technology, a customer
satisfaction survey provider. From July 1998 through January 1999, Mr. Sammann
was employed as a recruiter for Montgomery West, an executive search firm. Mr.
Sammann served as Vice President of Corporate Accounts for JTS Corporation, a
disk drive manufacturer, from February 1996 to June 1998. From August 1992 to
February 1996, Mr. Sammann was Vice President of Far East Sales and Marketing
for Conner Peripherals, a manufacturer of disk drives. Mr. Sammann was also
Senior Vice President of Sales for Dataquest, a market research company, for
over 10 years. Mr. Sammann holds a B.S. in Journalism and Marketing from the
University of Oregon.

CHARLES L. ("TIM") MEADOWS co-founded NetRatings in July 1997 and has served
as our Senior Vice President of Marketing since September 1999. He also served
as our Vice President of Marketing

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<PAGE>

from our inception to September 1999 and as a member of our board of directors
from our inception to August 1999. From May 1996 to July 1997, Mr. Meadows was
self-employed as a marketing consultant. From July 1991 to May 1996, Mr. Meadows
was employed by Cornerstone Imaging, Inc., a document imaging company, initially
as Director of Marketing and later as Vice President, Marketing. From September
1988 to July 1991, Mr. Meadows was Director of Strategic Planning at Hitachi
Computer Products, Inc. Mr. Meadows holds a B.S. in Business Administration and
an M.B.A. from the University of California at Berkeley.

SIMON CHEN co-founded NetRatings in July 1997 and has served as our Vice
President of Engineering since our inception. From September 1989 through June
1997, Mr. Chen was employed as a Senior Software Development Manager for Hitachi
Computer Products, Inc. Mr. Chen holds an M.S. in Electronic Engineering from
the South Dakota School of Mines and Technology and an M.B.A. from the
University of San Diego.

STEPHEN J. GROSS has served as our Vice President of Finance and Controller
since February 1999. From June 1998 to January 1999, Mr. Gross was employed as
Vice President of Finance and Controller of Globalcast Communications, Inc., a
software company. From October 1997 to May 1998, Mr. Gross was engaged as a
consultant to Informix Software, Inc., Inhale Therapeutic Systems and
Softbankforums. From September 1987 to October 1997, Mr. Gross was a Senior Vice
President of Operations and Corporate Controller for Koll-Dove Global
Disposition Services, LLC, an auction services company. From July 1982 to
September 1987, Mr. Gross was a partner in the firm of Gross & Gralitzer,
Certified Public Accountants. Mr. Gross holds a B.S. degree from California
State University at Northridge.

ROBERT L. HOOVEN has served as our Vice President and General Manager of
International Operations since October 1999. He served as our Vice President of
Sales and Business Development from August 1997 to October 1999. From July 1993
to August 1997, Mr. Hooven was employed by Cornerstone Imaging, Inc. and its
affiliated companies in a variety of sales and management positions, most
recently Vice President of Worldwide Sales. Mr. Hooven holds a B.S. in Business
Administration from Norwich University.

BARBARA D. JARZAB has served as our Vice President of Research since
December 1997. From December 1994 to December 1997, Ms. Jarzab was employed as a
Senior Vice President of the Analytic Consulting and Testing Division of
Information Resources, Inc. From December 1991 to December 1994, Ms. Jarzab was
a Vice President, InfoScan Household Panel Product Management Group for
Information Resources, Inc. Ms. Jarzab holds a B.S. in Sociology and Economics
from DePaul University and an M.A. in Sociology from the University of Chicago.

WILLIAM C. SCHAUB has served as our Vice President of Business Panel
Development since May, 1999. From January 1998 to April 1999, Mr. Schaub was
Vice President of Computer Research at the Gartner Group. From December 1995 to
December 1997, Mr. Schaub was the Director of Computer Research at Dataquest,
Inc., a market research company. From May, 1993 to December, 1995, Mr. Schaub
was a Sales Executive at Dataquest. Mr. Schaub holds a B.S. in Business from
California State University, Sacramento and an M.B.A. from St. Mary's College.

ALLEN P. WEINER has served as our Vice President of Services since March
1999. From December 1994 to March 1999, Mr. Weiner was employed as Vice
President/Chief Analyst for Dataquest, Inc. From June 1993 to November 1994, Mr.
Weiner was a Manager in the Electronic Information Services Department of the
Chronicle Publishing Company/San Francisco Newspaper Agency. From June 1993 to
September 1993, Mr. Weiner was an Operations Manager for Chronicle CityLine.
From June 1990 to June 1993, Mr. Weiner was Editor of Interactive World for
Virgo Publishing, Inc. Mr. Weiner holds a B.A. in American Studies from
Muhlenberg College and an M.A. in Communications and Theater from Temple
University.

53
<PAGE>

DAVID A. NORMAN has served as a member of our board of directors since
December 1997 and as our Chairman since November 1998. Since February 1998, Mr.
Norman has been a private investor in high technology companies. From March 1994
to February 1998, Mr. Norman was Chairman and CEO of Technically Elite, Inc., a
computer networking company. Mr. Norman was the founder, President and Chief
Executive Officer of Businessland, Inc. Mr. Norman also founded Dataquest, a
market research company. Mr. Norman is also a director of FVC.com, Inc. and a
number of private companies. Mr. Norman holds a B.S. in Mechanical Engineering
from the University of Minnesota and an M.S. in Industrial Engineering from
Stanford University.

JACK T. SERFASS has served as a member of our Board of Directors since
August 1997. Mr. Serfass is a co-founder and co-chairman of Bowstreet Software,
Inc., a web services automation company. From April 1990 to June 1997, Mr.
Serfass was CEO and President of Preferred Systems, Inc., a network management
company of which he was a co-founder. Mr. Serfass holds a B.S. degree in
Management Information Systems from the University of Rhode Island.

JAMES J. GEDDES, JR. has served as a member of our Board of Directors since
August 1999. Since September 1995, Mr. Geddes has been a Managing Director of
Trans Cosmos U.S.A. Inc., a venture capital investing company. From November
1992 to September 1995, Mr. Geddes was President and Chief Executive Officer of
InVision Systems Corporation, a video conferencing software company. Mr. Geddes
also serves as a director of several private companies. Mr. Geddes holds a B.S.
in Electrical Engineering from the University of Maryland.

DAVID H. HARKNESS has served as a member of our Board of Directors since
September, 1999. Mr. Harkness has been employed by Nielsen Media Research, Inc.
since 1975, most recently as Senior Vice President of Planning and Development.
Mr. Harkness holds a B.A. in Chemistry from Bates College and an M.B.A. in
Marketing and Finance from the University of Connecticut.

MICHAEL P. CONNORS has served as a member of our Board of Directors since
September 1999. Since May 1996, Mr. Connors has been the Vice Chairman and a
Director of ACNielsen. From April 1995 to November 1996, he was a Senior Vice
President and Chief Human Resources Officer of The Dun & Bradstreet Corporation,
a business information company. From 1989 to May 1995, Mr. Connors was Senior
Vice President for American Express Travel Related Services. Mr. Connors holds a
B.S. in Business Administration and Finance from the University of Kansas and an
M.A. in Human Resource Management from Central Michigan University.

BOARD COMPOSITION

Our board of directors is currently fixed at six directors. Each of our
executive officers is elected by the board of directors and serves at its
discretion. Each of our officers and directors, other than nonemployee
directors, devotes his full time to the affairs of NetRatings. Our nonemployee
directors devote such time to our affairs as is necessary to discharge their
duties. There are no family relationships among any of our directors, officers
or key employees.

Pursuant to a stockholders agreement among NetRatings, Nielsen Media
Research and the other holders of our preferred stock, we have agreed to use our
best efforts to cause a representative of Nielsen Media Research to be elected
to our board of directors at each annual meeting of stockholders. In the event
Nielsen Media Research exercises both of its warrants in full we will be
obligated to use our best efforts to cause two such representatives to be
elected at each annual meeting. See "Related Party Transactions--Strategic
Relationships--Strategic Alliance With Nielsen Media Research."

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<PAGE>
BOARD COMMITTEES

The audit committee of our board of directors recommends the appointment of
our independent auditors, reviews our internal accounting procedures and
financial statements and consults with and reviews the services provided by our
independent auditors, including the results and scope of their audit. The audit
committee currently consists of Messrs. Geddes, Harkness and Norman.

The compensation committee of our board of directors reviews and recommends
to the board the compensation and benefits of all executive officers of
NetRatings, and establishes and reviews general policies relating to
compensation and benefits of NetRatings employees. The compensation committee
currently consists of Messrs. Norman, Geddes and Serfass.

COMPENSATION OF DIRECTORS

Directors of NetRatings do not receive cash compensation for their services
as directors or members of committees of the board of directors. We reimburse
directors for their reasonable expenses incurred in attending meetings of the
board of directors.

In June 1998, we issued to Messrs. Norman and Serfass options to purchase
210,000 shares of common stock and 42,500 shares of common stock, respectively,
at an exercise price of $0.10. In June 1999, we issued to Mr. Norman an option
to purchase 210,000 shares of common stock at an exercise price of $0.50. In
August 1999, we issued to Mr. Geddes an option to purchase 25,000 shares of
common stock at an exercise price of $6.22 per share. Each of these options
vests at the rate of 1/4 of the shares after one year and 1/48 of the shares
monthly thereafter. Each option is fully-exercisable, subject to our right to
repurchase any unvested shares at the original purchase price in the event that
the optionee no longer is a director.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Our compensation committee currently consists of Messrs. Norman, Geddes and
Serfass. In May 1998, Mr. Norman made a loan to us of $100,000, bearing interest
at 9% per year. In July 1999, Mr. Norman cancelled this indebtedness in exchange
for 165,206 shares of our Series B preferred stock. In connection with these
transactions, we also issued to Mr. Norman a warrant to purchase 78,989 shares
of Series B preferred stock at an exercise price of $0.63 per share. In August
1999, we issued to Mr. Norman two full-recourse promissory notes having an
aggregate principal amount of $125,160 in connection with the exercise of stock
options. The notes bear interest at 5% per annum and are due in August 2002. See
"Related Party Transactions--Financing Transactions" and "--Loans to Director."

55
<PAGE>
EXECUTIVE COMPENSATION

SUMMARY COMPENSATION INFORMATION

The following table sets forth information regarding compensation received
during the year ended December 31, 1998 by our Chief Executive Officer and the
two other executive officers whose total salary and bonus earned during the
fiscal year ended December 31, 1998 exceeded $100,000:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL NUMBER OF
COMPENSATION SECURITIES
------------- UNDERLYING
NAME AND PRINCIPAL POSITION SALARY OPTIONS
- -------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
David J. Toth....................................................... $ 151,731 --
President and Chief Executive Officer
Charles L. ("Tim") Meadows.......................................... $ 141,615 173,000
Vice President of Marketing
Simon Chen.......................................................... $ 107,914 129,750
Vice President of Engineering
</TABLE>

OPTION GRANTS

The following table sets forth information regarding grants of stock options
to each of the executive officers named in the Summary Compensation Table during
the year ended December 31, 1998. All of these options were granted under our
1998 Stock Plan. The percentage of total options set forth below is based on an
aggregate of 567,750 options granted to employees during the year ended December
31, 1998. All options were granted at the fair market value of our common stock,
as determined by the Board of Directors, on the date of grant. Potential
realizable values are net of exercise price, but before taxes associated with
exercise. Amounts representing hypothetical gains are those that could be
achieved for the options if exercised at the end of the option term. The assumed
5% and 10% rates of stock price appreciation are provided in accordance with
rules of the SEC, based on a common stock value of $0.10 at the beginning of the
option term, and do not represent NetRatings' estimate or projection of the
future stock price.

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<PAGE>
OPTIONS GRANTED IN YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SHARE) DATE
- -------------------------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
David J. Toth................... -- -- -- --
Charles L. ("Tim") Meadows...... 173,000 30.5% $ 0.10 6/5/08
Simon Chen...................... 129,750 22.9 $ 0.10 6/5/08

POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM
--------------------------------
NAME 5% 10%
- -------------------------------- -------------- ---------------
<S> <C> <C>
David J. Toth................... -- --
Charles L. ("Tim") Meadows...... $ 1,087,988 $ 2,757,174
Simon Chen...................... $ 815,991 $ 2,067,881
</TABLE>

OPTION EXERCISES AND FISCAL YEAR-END HOLDINGS

The table below sets forth the number of shares of common stock acquired and
the value and the number of shares of common stock subject to exercisable and
unexercisable options held as of December 31, 1998 by each of the executive
officers named in the Summary Compensation Table. No executive officers
exercised any options during that year.

AGGREGATE OPTION EXERCISES IN FISCAL 1998 AND VALUES AT DECEMBER 31, 1998

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
12/31/98 12/31/98(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
David J. Toth...................... -- -- -- --
Charles L. ("Tim") Meadows......... 97,312 75,688 -- --
Simon Chen......................... 72,984 56,766 -- --
</TABLE>

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

(1) None of these options was in-the-money at this date.

STOCK PLANS

1998 STOCK PLAN

NetRatings' 1998 Stock Plan was adopted by the board of directors and
approved by the stockholders on January 30, 1998. NetRatings is authorized to
issue up to 2,965,000 shares of common stock under this plan. The 1998 Stock
Plan is currently being administered by the board of directors. The plan allows
grants of incentive stock options, within the meaning of Section 422 of the
Internal Revenue Code, to employees, including officers and employee directors.
In addition, it allows grants of nonstatutory options and stock purchase rights
to employees, non-employee directors and consultants. The plan expires in
January 2008, but may be terminated sooner by the board of directors.

The exercise price of incentive stock options granted under the 1998 Stock
Plan must not be less than the fair market value of a share of the common stock
on the date of grant. In the case of nonstatutory stock options, the exercise
price must not be less than 85% of the fair market value of a share of the
common stock on the date of grant. With respect to any optionee who owns stock
representing more than 10% of the voting power of all classes of NetRatings'
outstanding capital stock, the exercise price of any incentive stock option must
be equal to at least 110% of the fair market value of a share of the common
stock on the date of grant, and the term of the option may not exceed five
years. The terms of all other options may not exceed ten years. The aggregate
fair market value (determined as of the date of option grant) of the common
stock for which an incentive stock option may become exercisable for the first
time may not exceed $100,000 in any calendar year. Rights to

57
<PAGE>
acquire restricted stock may also be granted under the 1998 Stock Plan. Stock
purchase rights generally are granted subject to a repurchase option in favor of
NetRatings that expires pursuant to a vesting schedule. The purchase price of
these awards must be less than 85% of the fair market value of a share of common
stock on the grant date. The Board of Directors or any committee administering
the 1998 Stock Plan has discretion to determine vesting schedules and exercise
requirements, if any, of all awards granted under the plan. However, the plan
provides that in connection with a change in control, if the acquiring
corporation fails to assume the plan's outstanding awards or replace them with
substantially equivalent new awards, all awards will become immediately
exercisable in full.

As of September 30, 1999, 555,000 shares of common stock had been issued
pursuant to the 1998 Stock Plan, options to purchase 1,722,000 shares of common
stock, with a weighted average exercise price of $2.04, were outstanding, and
688,000 shares remained available for future grants.

1999 EMPLOYEE STOCK PURCHASE PLAN

NetRatings' 1999 employee stock purchase plan was adopted by the Board of
Directors in October 1999 and approved by the stockholders in 1999. A
total of 250,000 shares of common stock are reserved for issuance under the
plan. This plan, which is intended to qualify under Section 423 of the Internal
Revenue Code, will be administered by the Board of Directors. Employees,
including officers and employee directors, are eligible to participate in the
plan if they are employed by NetRatings for more than 20 hours per week, do not
beneficially own more than 5% or more of the Company's stock (treating shares
subject to outstanding options as beneficially owned) and work 6 months or more
per calendar year. The plan will be implemented during sequential six-month
offering periods, the first of which will commence on the effective date of this
offering and will terminate on July 31, 2000. After the effective date of this
offering, offering periods under the plan will generally begin on February 1 and
August 1 of each year.

The employee stock purchase plan permits eligible employees to purchase
NetRatings common stock through payroll deductions, which may not exceed 15% of
the employee's base salary. Stock may be purchased under the plan at a price
equal to 85% of the fair market value of NetRatings common stock on either the
first or the last day of the offering period, whichever is lower. Employees may
end their participation in the offering at any time during the offering period,
and participation ends automatically on termination of a participant's
employment with NetRatings. Participants may not purchase shares of common stock
having a value, measured at the beginning of the offering period, greater than
$25,000 in any calendar year or more than 2,500 shares in any offering period.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY

Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit indemnification under some
circumstances for liabilities, including reimbursement for expenses incurred,
arising under the Securities Act of 1933.

As permitted by the Delaware General Corporation Law, NetRatings has adopted
provisions in its certificate of incorporation which provide that its directors
shall not be personally liable for monetary damages to NetRatings or its
stockholders for a breach of fiduciary duty as a director, except liability for:

- a breach of the director's duty of loyalty to NetRatings or its
stockholders;

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

- an act related to our unlawful stock repurchase or payment of a dividend
under Section 174 of the Delaware General Corporation Law; or

58
<PAGE>
- transactions from which the director derived an improper personal benefit.

These limitations of liability do not affect the availability of equitable
remedies such as injunctive relief or rescission. NetRatings' certificate of
incorporation also authorizes NetRatings to indemnify its officers, directors
and other agents to the full extent permitted under Delaware law.

As permitted by the Delaware General Corporation Law, NetRatings' bylaws
provide that:

- NetRatings is required to indemnify its directors and officers to the
fullest extent permitted by the Delaware General Corporation Law, subject
to limited exceptions;

- NetRatings is required to advance expenses, as incurred, to its directors
and officers in connection with a legal proceeding to the fullest extent
permitted by the Delaware General Corporation Law, subject to limited
exceptions; and

- the rights provided in the bylaws are not exclusive.

NetRatings intends to enter into separate indemnification agreements with
each of its directors and officers which may be broader than the specific
indemnification provisions contained in the Delaware General Corporation Law.
These indemnification agreements require NetRatings, among other things, to
indemnify its officers and directors against liabilities that may arise by
reason of their status or service as directors or officers, other than
liabilities arising from willful misconduct. These indemnification agreements
also require NetRatings to advance any expenses incurred by the directors or
officers as a result of any proceeding against them as to which they could be
indemnified and to obtain directors' and officers' insurance if available on
reasonable terms.

At present, there is no pending litigation or proceeding involving any of
NetRatings' directors, officers, employees or agents where indemnification by
NetRatings is sought. In addition, NetRatings is not aware of any threatened
litigation or proceeding which may result in a claim for indemnification.

NetRatings maintains directors' and officers' liability insurance and
intends to continue to maintain this insurance in the future.

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<PAGE>
RELATED PARTY TRANSACTIONS

FINANCING TRANSACTIONS

Since our inception, we have issued common stock and preferred stock to our
directors, executive officers and our 5%-or-greater stockholders in a series of
financing transactions. Shares of our Series B, Series C and Series D preferred
stock are convertible into common stock at the rate of one share of common stock
for every two shares of preferred stock. All outstanding shares of our preferred
stock will be automatically converted into common stock immediately prior to the
closing of this offering.

SERIES B PREFERRED STOCK FINANCING

In May and November 1998, we borrowed a total of $895,000 from a group of
lenders to whom we issued promissory notes bearing interest at the annual rate
of 9%. These notes provided that all outstanding principal and accrued interest
would be automatically converted into Series B preferred stock in the next
equity financing. In July 1999, we sold a total of 1,477,151 shares of Series B
preferred stock to a group of investors at a purchase price of $0.63 per share,
or $935,037 in the aggregate. At this time, the May 1998 promissory notes were
converted into shares of Series B preferred stock and each lender received a
warrant to purchase additional shares of Series B preferred stock, at an
exercise price of $0.63 per share, in an amount having an aggregate exercise
price equal to 50% of the amount lent by the lender. Persons who participated in
these transactions included the following:

<TABLE>
<CAPTION>
INVESTOR LOAN AMOUNT SERIES B SHARES WARRANTS
- ------------------------------------------ ------------- --------------- -----------
<S> <C> <C> <C>
David A. Norman........................... $ 100,000 165,206 78,989
David J. Toth............................. $ 50,000 82,603 39,495
Charles L. ("Tim") Meadows................ $ 25,000 41,302 19,748
Simon Chen................................ $ 25,000 41,302 19,748
</TABLE>

Mr. Norman is chairman of our board of directors and the beneficial owner of
5.1% of our outstanding common stock. Mr. Toth is our President and Chief
Executive Officer, a member of our board of directors and the beneficial owner
of 17.6% of our outstanding common stock. Messrs. Meadows and Chen are executive
officers of our company and the beneficial owners of 6.3% and 4.2%,
respectively, of our outstanding common stock.

SERIES C PREFERRED STOCK FINANCING

In August 1999, we sold an aggregate of 6,413,751 shares of Series C
preferred stock at a purchase price of $3.12 per share, or $20,000,000 in the
aggregate, to the following investors:

<TABLE>
<CAPTION>
SERIES C
INVESTOR SHARES
- -------------------------------------------------------------- ------------
<S> <C>
Trans Cosmos.................................................. 3,527,563
Nielsen Media Research........................................ 2,886,188
</TABLE>

Trans Cosmos and Nielsen Media Research are the beneficial owners of 19.3% and
48.0%, respectively, of our outstanding common stock.

In connection with this financing transaction, we entered into additional
agreements with Nielsen Media Research superseding the term sheet that had
previously governed our strategic relationship and issued warrants entitling
Nielsen Media Research to purchase shares of common stock after the completion
of this offering. Also in connection with this financing transaction, Trans
Cosmos made a cash investment in our Japanese joint venture. See "--Strategic
Relationships--Strategic Relationship

60
<PAGE>

with Nielsen Media Research," "--Strategic Relationships--Japanese Joint
Venture" and "Business-- Strategic Relationships--Strategic Relationship with
Nielsen Media Research."

SERIES D PREFERRED STOCK FINANCING

In September 1999, we sold an aggregate of 4,887,050 shares of Series D
preferred stock at a purchase price of $3.14 per share, or $15,342,893 in the
aggregate, to the following investors:

<TABLE>
<CAPTION>
INVESTOR SERIES D SHARES
- --------------------------------------------------------------- ---------------
<S> <C>
ACNielsen...................................................... 3,992,454
Trans Cosmos................................................... 492,029
Nielsen Media Research......................................... 402,567
</TABLE>

ACNielsen, Trans Cosmos and Nielsen Media Research are the beneficial owners of
19.0%, 19.3% and 48.0%, respectively, of our outstanding common stock.

LOANS TO DIRECTOR

In August 1999, we issued to Mr. Norman two full-recourse promissory notes
having an aggregate principal amount totaling $125,160 in connection with the
exercise of stock options. The notes bear interest at 5% per annum and are due
in August 2002.

STRATEGIC RELATIONSHIPS

STRATEGIC RELATIONSHIP WITH NIELSEN MEDIA RESEARCH

In August 1999, simultaneous with our sale of Series C preferred stock to
Nielsen Media Research, the beneficial owner of 48.0% of our outstanding common
stock, we entered into additional agreements with Nielsen Media Research
superseding the term sheet that had previously governed our strategic
relationship. In connection with this transaction, we granted Nielsen Media
Research two warrants to purchase our common stock. The first warrant is
exercisable for 553,054 shares of common stock at an exercise price of $7.20 per
share, and the second is exercisable for 6,000,000 shares of common stock at an
exercise price of $12.00 per share or 60% of the price at which our common stock
is sold in this offering, whichever is lower. These warrants become exercisable
upon the effectiveness of the registration statement related to this offering
and expire on December 31, 2001, in the case of the first warrant, and December
31, 2004, in the case of the second warrant.

We also granted Nielsen Media Research the right to purchase additional
shares of our common stock in connection with this offering, at the public
offering price. Nielsen Media Research has the right to purchase a sufficient
number of shares of our common stock to enable it to own 54% of our outstanding
common stock, assuming the exercise of all outstanding options and warrants
(including the warrants it holds) immediately following this offering. If
Nielsen Media Research elects to exercise this right and purchase all or a
portion of the stock it is entitled to purchase, our other stockholders will be
entitled to sell to Nielsen Media Research a pro rata portion of the shares it
has elected to purchase. If the shares tendered by our other stockholders are
not sufficient to satisfy Nielsen Media Research's election to purchase
additional shares, then Nielsen Media Research will have the right to purchase
the excess directly from us.

In addition, we entered into a stockholders agreement with Nielsen Media
Research and the other holders of our preferred stock which, among other things,
grants Nielsen Media Research the right to nominate one director for election to
our board of directors. In the event that Nielsen Media Research exercises both
of its warrants in full, it will have the right to nominate two directors. We
are required to use our best efforts to cause Nielsen Media Research's nominees
to be elected. These rights will

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<PAGE>
terminate when Nielsen Media Research ceases to own at least 5% of our
outstanding stock, assuming the exercise of all outstanding options and
warrants. See "Risk Factors--Our officers, directors and principal stockholders
may exert substantial control over us" and "Business--Strategic Relationships--
Strategic Alliance With Nielsen Media Research."

JOINT VENTURE WITH ACNIELSEN

In September 1999, we established a joint venture with ACNielsen to develop
and maintain audience measurement panels and to market our products and services
in key international markets. In connection with the formation of this joint
venture, we licensed our data collection and reporting technology to the joint
venture and ACNielsen licensed its panel development methodology to the joint
venture and agreed to contribute cash to fund the joint venture's start-up
costs. See "Business-- Strategic Relationships--Joint Venture with ACNielsen."

JAPANESE JOINT VENTURE

In June 1999, we and several Japanese investors established a joint venture,
NetRatings KK, to which we licensed our data collection and reporting technology
and the other investors contributed cash. In August 1999, Trans Cosmos, a
beneficial owner of 19.3% of our common stock, invested approximately $2.3
million in NetRatings KK. See "Business--International Operations."

ASSET PURCHASE FROM HITACHI

We purchased our original data collection technology from Hitachi in January
1998 in exchange for cash in the amount of $100,000. At the time of this
transaction, Hitachi owned more than 5% of our outstanding stock.

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<PAGE>
PRINCIPAL STOCKHOLDERS

The table below sets forth information known to us regarding the beneficial
ownership of our common stock as of September 30, 1999, and as adjusted to
reflect the sale of the common stock offered hereby, by:

- each stockholder who is known by us to beneficially own more than 5% of
our outstanding common stock;

- each of our executive officers listed on the Summary Compensation Table
under "Management;"

- each of our directors; and

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

The address for Messrs. Toth, Meadows and Norman is c/o NetRatings, Inc.,
830 Hillview Court, Suite 225, Milpitas, CA 95035.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
BEFORE THE OFFERING(1) AFTER THE OFFERING(1)
------------------------- -------------------------
BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ------------------------------------------------------------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
5% STOCKHOLDERS:
David H. Harkness(2)............................................... 8,197,431 48.0% 18,408,336 58.4%
Nielsen Media Research, Inc.(2)
299 Park Avenue
New York, NY 10171
James J. Geddes, Jr.(3)............................................ 2,034,795 19.3 2,034,795 6.4
Trans Cosmos U.S.A. Inc.
777 108th Avenue N.E.
Bellevue, WA 98004
ACNielsen Corporation.............................................. 1,996,227 19.0 1,996,227 6.3
177 Broad Street
Stamford, CT 06901
EXECUTIVE OFFICERS AND DIRECTORS:
David J. Toth(4)................................................... 1,858,543 17.6 1,858,543 5.8
Charles L. ("Tim") Meadows(5)...................................... 667,483 6.3 667,483 2.1
David A. Norman(6)................................................. 542,097 5.1 542,097 1.7
Simon Chen(7)...................................................... 445,743 4.2 445,743 1.4
Jack T. Serfass(8)................................................. 105,000 * 105,000 *
Jack R. Lazar...................................................... -- -- -- --
Frank Sammann...................................................... -- -- -- --
Michael P. Connors................................................. -- -- -- --
All executive officers and directors as a group (9 persons)(9)..... 13,851,092 79.5 24,061,997 75.5
</TABLE>

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

* Less than 1%.

(1) The number of shares beneficially owned and the percentage of shares
outstanding are based on (a) 10,518,803 shares outstanding as of September
30, 1999 and (b) 31,812,402 shares outstanding after completion of this
offering, assuming no exercise of the underwriters' over-allotment option,
and assuming that Nielsen Media Research purchases 10,387,068 shares from us
concurrently with the completion of this offering and exercises warrants for
6,553,054 shares upon completion of this offering, and that warrants for an
additional 353,471 shares (including all of the warrants held by the persons
shown on this table) and exercised immediately prior to the completion of
this

63
<PAGE>

offering. Beneficial ownership is determined in accordance with the rules of
the SEC and generally includes voting or investment power with respect to
securities. All shares of common stock subject to options exercisable within
60 days following September 30, 1999 are deemed to be outstanding and
beneficially owned by the person holding those options for the purpose of
computing the number of shares beneficially owned and the percentage of
ownership of that person. They are not, however, deemed to be outstanding
and beneficially owned for the purpose of computing the percentage ownership
of any other person. Except as indicated in the other footnotes to the table
and subject to applicable community property laws, based on information
provided by the persons named in the table, these persons have sole voting
and investment power with respect to all shares of the common stock shown as
beneficially owned by them.

(2) Consists of 1,644,377 shares held of record by Nielsen Media Research and
6,553,054 shares issuable upon exercise of warrants held by Nielsen Media
Research that are currently exercisable or are exercisable within 60 days
after September 30, 1999. Mr. Harkness is an executive officer of Nielsen
Media Research and may be deemed to share voting or investment control with
respect to these shares. Mr. Harkness disclaims beneficial ownership of
these shares.

(3) Includes 2,009,796 shares held of record by Trans Cosmos and 25,000 shares
issuable upon exercise of options held by Mr. Geddes that are currently
exercisable. Mr. Geddes is a Managing Director of Trans Cosmos and may be
deemed to share voting or investment control with respect to these shares.
Mr. Geddes disclaims beneficial ownership of these shares.

(4) Includes 19,742 shares issuable upon exercise of warrants that are currently
exercisable.

(5) Includes 153,000 shares issuable upon exercise of options that are currently
exercisable or will become exercisable within 60 days after September 30,
1999 and 9,874 shares issuable upon exercise of warrants that are currently
exercisable.

(6) Includes 39,494 shares issuable upon exercise of warrants that are currently
exercisable.

(7) Includes 114,750 shares issuable upon exercise of options that are currently
exercisable or will become exercisable within 60 days after September 30,
1999 and 9,874 shares issuable upon exercise of warrants that are currently
exercisable.

(8) Includes 42,500 shares issuable upon exercise of options that are currently
exercisable.

(9) Includes shares held of record by Nielsen Media Research and Trans Cosmos.
See footnotes 2 and 3. Also includes 272,176 shares issuable upon exercise
of options that are currently exercisable or will become exercisable within
60 days after September 30, 1999 and 6,632,038 shares issuable upon exercise
of warrants that are currently exercisable.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

Upon the closing of this offering, NetRatings' authorized capital stock will
consist of 200,000,000 shares of common stock, $0.001 par value per share, and
5,000,000 shares of preferred stock, $0.001 par value per share.

The following is a summary of the material terms of NetRatings' common stock
and preferred stock. Please see NetRatings' certificate of incorporation, filed
as an exhibit to the registration statement of which this prospectus is a part,
for more detailed information.

COMMON STOCK

As of September 30, 1999, there were 3,892,332 shares of NetRatings common
stock outstanding, after giving effect to the proposed one-for-two reverse split
of the common stock, held of record by 24 stockholders. The holders of
NetRatings common stock are entitled to one vote for each share held of record
on all matters submitted to a vote of stockholders. Upon the closing of this
offering, 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. Subject to preferences applicable to any outstanding preferred stock,
holders of common stock are entitled to receive ratably any dividends declared
by the board out of funds legally available therefor. See "Dividend Policy." In
the event of a liquidation, dissolution or winding up of NetRatings, holders of
common stock are entitled to share ratably in the assets remaining after payment
of liabilities and the liquidation preferences of any outstanding preferred
stock. Holders of NetRatings common stock have no preemptive, conversion or
redemption rights. Each outstanding share of common stock is, and all shares of
common stock to be outstanding upon the closing of this offering will be, fully
paid and non-assessable.

PREFERRED STOCK

Upon the closing of this offering, all NetRatings preferred stock
outstanding will be converted into an aggregate of 6,626,471 shares of common
stock. Thereafter, up to 5,000,000 shares of undesignated preferred stock will
be authorized for issuance. NetRatings' Board of Directors has the authority,
without further action by its stockholders, to issue preferred stock in one or
more series. In addition, the Board may fix the rights, preferences and
privileges of any preferred stock it determines to issue. Any or all of these
rights may be superior to the rights of the common stock. Preferred stock could
thus be issued quickly with terms calculated to delay or prevent a change in
control of NetRatings or to make removal of management more difficult.
Additionally, the issuance of preferred stock may decrease the market price of
NetRatings' common stock. At present, NetRatings has no plans to issue any
shares of preferred stock.

WARRANTS

As of September 30, 1999, after giving effect to the one-for-two reverse
split of the common stock and the conversion of all outstanding shares of
preferred stock into common stock, there were outstanding warrants to purchase
common stock as follows:

- warrants to purchase an aggregate of 353,471 shares at an exercise price
of $1.27 per share, which expire upon the closing of this offering;

- a warrant to purchase 553,054 shares at an exercise price of $7.20 per
share, expiring in December 2001;

- a warrant to purchase 6,000,000 shares at an exercise price of the lower
of $12.00 per share or 60% of the initial public offering price of the
shares sold in this offering, expiring in December 2004;

- warrants to purchase 47,618 shares at an exercise price of $0.42, expiring
in December 2006;

- warrants to purchase 9,434 shares at an exercise price of $2.12, expiring
in December 2006;

65
<PAGE>

- a warrant to purchase 26,415 shares at an exercise price of $2.12,
expiring in April 2008; and

- a warrant to purchase 43,293 shares at an exercise price of $6.24 per
share, expiring in September 2004.

REGISTRATION RIGHTS

Under the Second Restated Rights Agreement dated as of September 23, 1999,
by and among NetRatings and various NetRatings stockholders, holders of an
aggregate of 13,607,034 shares of NetRatings common stock have registration
rights with respect to their shares of common stock.

Beginning six months after the date of this prospectus, these holders have
the right to require NetRatings, on not more than two occasions, to file a
registration statement under the Securities Act to register their shares at
NetRatings' expense. Demand for this registration must be made by holders of at
least 50% of the shares that are entitled to this registration. NetRatings may,
under some circumstances, defer this registration for up to 180 days, and the
underwriters of the offering under that registration have the right, subject to
some limitations, to limit the number of shares included. These holders also
have the right to demand not more than two registrations during any twelve-month
period on Form S-3, provided that the reasonably anticipated aggregate offering
price would exceed $500,000.

If NetRatings proposes to register any of its securities under the
Securities Act for NetRatings' own account or for the account of other security
holders, these holders are entitled to notice of that registration and have the
right to include some or all of their shares of common stock in that
registration, at NetRatings' expense, subject to marketing and other
limitations.

ANTITAKEOVER PROVISIONS

DELAWARE LAW

NetRatings will be subject to Section 203 of the Delaware General
Corporation Law regulating corporate takeovers, which prohibits a Delaware
corporation from engaging in any business combination with an "interested
stockholder," for a period of three years following the time that such
stockholder became an interested stockholder unless:

- prior to the date of the transaction, the board of directors of the
corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;

- upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the
number of shares outstanding (a) shares owned by persons who are directors
and also officers, and (b) shares owned by employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer; or

- on or subsequent to the date of the transaction, the business combination
is approved by the board and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least 66-2/3% of the outstanding voting stock which is not owned by the
interested stockholder.

Except as otherwise specified in Section 203, an "interested stockholder" is
defined to include (a) any person that is the owner of 15% or more of the
outstanding voting securities of the corporation, or is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within three years immediately prior
to the date of determination and (b) the affiliates and associates of any such
person.

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<PAGE>
CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS

Provisions of NetRatings' certificate of incorporation and bylaws, which
will become effective upon the closing of this offering, may have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from attempting to acquire, control of NetRatings. These provisions
could cause the price of NetRatings common stock to decrease. Some of these
provisions allow NetRatings to issue preferred stock without any vote or further
action by the stockholders, eliminate the right of stockholders to act by
written consent without a meeting and eliminate cumulative voting in the
election of directors. These provisions may make it more difficult for
stockholders to take specific corporate actions and could have the effect of
delaying or preventing a change in control of NetRatings.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock is Continental Stock
Transfer & Trust Company, 2 Broadway, New York, NY 10004, (212) 509-4000.

LISTING

We have applied to have our common stock approved for listing on the Nasdaq
National Market under the trading symbol "NTRT."

67
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market
following the offering could cause the market price of our common stock to fall
and could affect our ability to raise capital on terms favorable to us.

Of the 31,812,402 shares to be outstanding after the offering, assuming that
the underwriters do not exercise their over-allotment option, only the 4,000,000
shares of common stock sold in this offering will be freely tradable without
restriction in the public market, unless the shares are held by "affiliates," as
that term is defined in Rule 144(a) under the Securities Act of 1933. For
purposes of Rule 144, an "affiliate" of an issuer is a person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by or
is under common control with, the issuer. The remaining 27,812,402 shares of
common stock that will be outstanding after the offering are "restricted
securities" under the Securities Act and may be sold in the public market upon
the expiration of the holding periods under Rule 144, described below, subject
to the volume, manner of sale and other limitations of Rule 144.

In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares for at least one year, including an "affiliate," is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of:

- 1% of the then outstanding shares of our common stock (approximately
318,124 shares immediately following the offering); or

- the average weekly trading volume during the four calendar weeks preceding
filing of notice of the sale of shares of common stock.

Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about us.
A stockholder who is deemed not to have been an "affiliate" of ours at any time
during the three months preceding a sale, and who has beneficially owned
restricted shares for at least two years, would be entitled to sell shares under
Rule 144(k) without regard to the volume limitations, manner of sale provisions
or public information requirements.

Based on the foregoing, the shares of restricted stock that will be
outstanding after the offering will become eligible for resale in the public
market as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES/PERCENT
OUTSTANDING AFTER THE OFFERING DATE WHEN SHARES BECOME AVAILABLE IN THE PUBLIC MARKET
- ------------------------------ ---------------------------------------------------------------------------------
<C> <S>
3,807,333/12.0%............... 180 days after the date of this prospectus pursuant to agreements between the
stockholders and the underwriters or NetRatings, provided that the underwriters
can waive this restriction at any time. 3,127,500 of these shares will also be
subject to sales volume restrictions under Rule 144 under the Securities Act.
27,734,109/87.2%.............. Upon expiration of applicable one-year holding periods under Rule 144, which will
expire between July 23, 2000 and November 22, 2000, subject to sales volume
restrictions under Rule 144.
</TABLE>

In addition, as of September 30, 1999, there were outstanding warrants to
purchase 6,679,816 shares of common stock and options to purchase 1,722,000
shares of common stock, of which options for 355,000 shares were fully vested.
An additional 688,000 shares are reserved for issuance under our 1998 Stock
Plan. We intend to register the shares of common stock issuable or reserved for
issuance under this plan as soon as practicable following the date of this
prospectus.

Holders of warrants to purchase 706,942 shares of preferred stock and
holders of 6,626,471 shares of common stock issuable upon conversion of the
preferred stock are entitled to registration rights with respect to these shares
for resale under the Securities Act. If these holders, by exercising their

68
<PAGE>
registration rights, cause a large number of shares to be registered and sold in
the public market, these sales could harm the market price for our common stock.
These registration rights may not be exercised prior to the expiration of 180
days from the date of this prospectus. See "Description of Capital
Stock--Registration Rights."

LOCK-UP ARRANGEMENTS

Along with our officers and directors, all holders of our preferred stock,
common stock, warrants and options have agreed not to sell or otherwise dispose
of any shares of common stock for a period of 180 days after the date of this
prospectus without the prior written consent of Lehman Brothers.

69
<PAGE>
UNDERWRITING

Under the underwriting agreement, which is filed as an exhibit to the
registration statement relating to this prospectus, Lehman Brothers Inc., Banc
of America Securities LLC, CIBC World Markets Corp. and C. E. Unterberg Towbin
are acting as representatives of each of the underwriters named below. Under the
underwriting agreement, each of the underwriters has agreed to purchase from us
the respective number of shares of common stock shown opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------------------------------------------------------------------------- -------------
<S> <C>
Lehman Brothers Inc............................................................
Banc of America Securities LLC.................................................
CIBC World Markets Corp........................................................
C. E. Unterberg, Towbin........................................................
-------------
Total......................................................................
-------------
-------------
</TABLE>

The underwriting agreement provides that the underwriters' obligations to
purchase shares of common stock depend on the satisfaction of the conditions
contained in the underwriting agreement and that, if any of the shares of common
stock are purchased by the underwriters under the underwriting agreement, all of
the shares of common stock that the underwriters have agreed to purchase under
the underwriting agreement, must be purchased. The conditions contained in the
underwriting agreement include the requirement that the representations and
warranties made by us to the underwriters are true, that there is no material
change in the financial markets and that we deliver to the underwriters
customary closing documents.

The following table shows the underwriting fees to be paid to the
underwriters by us in connection with this offering. These amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares of common stock. This underwriting fee is the
difference between the public offering price and the amount the underwriters pay
to us to purchase the shares from us. On a per share basis, the underwriting fee
is 7% of the initial public offering price.

<TABLE>
<CAPTION>
NO FULL
EXERCISE EXERCISE
------------ ------------
<S> <C> <C>
Per share......................................................... $ 0.91 $ 0.91
Total............................................................. $ 3,640,000 $ 4,186,000
</TABLE>

The representatives have advised us that the underwriters propose to offer
the shares of common stock directly to the public at the public offering price
set forth on the cover page of this prospectus, and to dealers, who may include
the underwriters, at this public offering price less a selling concession not in
excess of $ per share. The underwriters may allow, and the dealers may
reallow, a concession not in excess of $ per share to brokers and dealers.
After the offering, the underwriters may change the offering price and other
selling terms.

We have granted to the underwriters an option to purchase up to an aggregate
of additional shares of common stock, exercisable solely to cover
over-allotments, if any, at the public offering price less the underwriting
discounts shown on the cover page of this prospectus. The underwriters may
exercise this option at any time until 30 days after the date of the
underwriting agreement. If this option is exercised, each underwriter will be
committed, so long as the conditions of the underwriting agreement are
satisfied, to purchase a number of additional shares of common stock
proportionate to the underwriter's initial commitment as indicated in the table
above and we will be obligated, under the over-allotment option, to sell the
shares of common stock to the underwriters.

70
<PAGE>
We have agreed that, without the prior consent of Lehman Brothers, we will
not, directly or indirectly, offer, sell or otherwise dispose of any shares of
common stock or any securities that may be converted into or exchanged for any
shares of common stock for a period of 180 days from the date of this
prospectus. All of our executive officers and directors and stockholders holding
all of the shares of our capital stock, including all of the holders of the
preferred stock and the warrants, have agreed under lock-up agreements that,
without prior written consent, they will not, directly or indirectly, offer,
sell or otherwise dispose of any shares of common stock or any securities that
may be converted into or exchanged for any shares of common stock for the period
ending 180 days after the date of this prospectus. See "Shares Eligible for
Future Sale."

Prior to the offering, there has been no public market for the shares of
common stock. The initial public offering price has been negotiated between the
representatives and us. The material factors considered in determining the
initial public offering price of the common stock, in addition to prevailing
market conditions, were:

- our historical performance and capital structure;

- estimates of our business potential and earning prospects;

- an overall assessment of our management; and

- the above factors in relation to market valuations of companies in related
businesses.

We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the trading symbol "NTRT."

We have agreed to indemnify the underwriters against liabilities under the
Securities Act and liabilities arising from breaches of the representations and
warranties contained in the underwriting agreement, and to contribute to
payments that the underwriters may be required to make for these liabilities.

Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters and
selling group members to bid for and purchase shares of common stock. As an
exception to these rules, the representatives are permitted to engage in
transactions that stabilize the price of the common stock. These transactions
may consist of bids or purchases for the purposes of pegging, fixing or
maintaining the price of the common stock.

The underwriters may create a short position in the common stock in
connection with the offering, which means that they may sell more shares than
are set forth on the cover page of this prospectus. If the underwriters create a
short position, then the representatives may reduce that short position by
purchasing common stock in the open market. The representatives also may elect
to reduce any short position by exercising all or part of the over-allotment
option.

The representatives also may impose a penalty bid on underwriters and
selling group members. This means that, if the representatives purchase shares
of common stock in the open market to reduce the underwriters' short position or
to stabilize the price of the common stock, they may reclaim the amount of the
selling concession from the underwriters and selling group members that sold
those shares as part of the offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of these purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
an offering.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor any of the underwriters makes any representation that the

71
<PAGE>
representatives will engage in these transactions or that these transactions,
once commenced, will not be discontinued without notice.

Any offers in Canada will be made only under an exemption from the
requirements to file a prospectus in the relevant province of Canada in which
the sale is made.

Purchasers of the shares of common stock offered in this prospectus may be
required to pay stamp taxes and other charges under the laws and practices of
the country of purchase, in addition to the offering price listed on the cover
page of this prospectus.

The representatives have informed us that they do not intend to confirm the
sales of shares of common stock offered by this prospectus to any accounts over
which they exercise discretionary authority.

At our request, the underwriters have reserved up to 320,000 shares or 8% of
the common stock offered by this prospectus for sale to our officers, directors,
members of employees' families, customers and other persons with whom NetRatings
has strategic relationships through a directed share program at the initial
public offering price set forth on the cover page of this prospectus. These
persons must commit to purchase no later than the close of business on the day
following the date of this prospectus. The number of shares available for sale
to the general public will be reduced to the extent these persons purchase the
reserved shares.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Gray Cary Ware & Freidenrich LLP, Palo Alto, California. Certain legal
matters relating to the offering will be passed upon for the underwriters by
O'Melveny & Myers LLP, Los Angeles, California. As of the date of this
prospectus, Gray Cary Ware & Freidenrich LLP and its partners beneficially own
an aggregate of 15,000 shares of our common stock.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our financial
statements at December 31, 1997 and 1998 and September 30, 1999 and for the
period from July 2, 1997 (inception) through December 31, 1997, the year ended
December 31, 1998 and the nine months ended September 30, 1999, as set forth in
their report. We have included our financial statements in this prospectus and
elsewhere in the registration statement in reliance on Ernst & Young LLP's
reports, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1, including
the exhibits and schedules thereto, under the Securities Act with respect to the
shares to be sold in this offering. This prospectus does not contain all the
information set forth in the registration statement. For further information
about NetRatings and the shares to be sold in this offering, please refer to the
registration statement. Statements contained in this prospectus as to the
contents of any contract, agreement or other document referred to, are not
necessarily complete, and in each instance please refer to the copy of the
contract, agreement or other document filed as an exhibit to the registration
statement, each statement being qualified in all respects by this reference.

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

72
<PAGE>
NETRATINGS, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Ernst & Young LLP, Independent Auditors..................................... F-2

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

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

Statements of Stockholders' Equity (Deficit).......................................... F-5

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

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

F-1
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
NetRatings, Inc.

We have audited the accompanying balance sheets of NetRatings, Inc. as of
December 31, 1997 and 1998 and September 30, 1999, and the related statements of
operations, stockholders' equity (deficit), and cash flows for the period from
July 2, 1997 (inception) to December 31, 1997, for the year ended December 31,
1998 and for the nine months ended September 30, 1999. These financial
statements are the responsibility of NetRatings, Inc.'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 NetRatings, Inc. at December
31, 1997 and 1998 and September 30, 1999, and the results of its operations and
its cash flows for the period from July 2, 1997 (inception) to December 31,
1997, for the year ended December 31, 1998 and for the nine months ended
September 30, 1999, in conformity with generally accepted accounting principles.

Palo Alto, California
October 12, 1999

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

The foregoing report is in the form that will be signed upon the
effectiveness of the stock split as described in Note 5 to the financial
statements.

/s/ ERNST & YOUNG LLP

Palo Alto, California
October 27, 1999

F-2
<PAGE>
NETRATINGS, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1997 1998 1999
----------- ----------- -------------
PRO FORMA
STOCKHOLDERS'
EQUITY AT
SEPTEMBER
30,
1999
------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents... $ 551,000 $ 1,343,000 $ 28,650,000
Accounts receivable, net.... -- 133,000 1,069,000
Other current assets........ 35,000 16,000 294,000
----------- ----------- -------------
Total current assets...... 586,000 1,492,000 30,013,000

Property and equipment net.... 367,000 394,000 593,000

Deferred financing costs...... -- -- 369,000

Other assets.................. 27,000 79,000 111,000
----------- ----------- -------------
$ 980,000 $ 1,965,000 $ 31,086,000
----------- ----------- -------------
----------- ----------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
CURRENT LIABILITIES:
Accounts payable............ $ 93,000 $ 353,000 $ 328,000
Accrued liabilities......... 415,000 210,000 973,000
Deferred revenue............ -- 280,000 2,010,000
Capital lease obligations,
current portion........... -- 77,000 162,000
Notes payable............... -- -- 114,000
Amounts due to Nielsen Media
Research.................. -- 2,539,000 2,164,000
Convertible notes payable... -- 824,000 --
----------- ----------- -------------
Total current
liabilities............... 508,000 4,283,000 5,751,000

Capital lease obligations,
long-term portion........... -- 130,000 204,000
Notes payable, long-term
portion..................... -- -- 116,000

Commitments and
contingencies...............
Redeemable convertible
preferred stock:
Authorized
shares--15,571,000 shares
Issued and outstanding
shares--None in 1997 and
1998 and 14,678,000 in
1999, and none pro forma
(liquidation preference
of $36,628,000 at
September 30, 1999 and
none at December 31,
1997 and 1998).......... -- -- 35,743,000 --

STOCKHOLDERS' EQUITY
(DEFICIT):
Convertible preferred stock,
$0.001 par value, Series
A: Authorized shares:
1,900,000
Issued and outstanding
shares: 1,900,000 at
December 31, 1998 and
none at September 30,
1999 and none pro forma
(aggregate liquidation
preference of $350,000
at December 31, 1998)... -- 2,000 -- --
Common stock, par value
$0.001:
Authorized shares:
86,851,000
Issued and outstanding
shares: 3,875,000 at
December 31, 1997,
3,113,000 at December
31, 1998, 3,893,000 at
September 30, 1999 and
10,519,000 pro forma.... 4,000 3,000 4,000 $ 11,000
Additional paid-in
capital................... 2,249,000 3,436,000 31,144,000 66,880,000
Deferred compensation....... -- (229,000) (3,196,000) (3,196,000 )
Deferred service costs...... -- -- (22,225,000) (22,225,000 )
Notes receivable from
stockholder............... -- -- (125,000) (125,000 )
Accumulated deficit......... (1,781,000) (5,660,000) (16,330,000) (16,330,000 )
----------- ----------- ------------- ------------
Total stockholders' equity
(deficit)................. 472,000 (2,448,000) (10,728,000) $25,015,000
----------- ----------- ------------- ------------
------------
$ 980,000 $ 1,965,000 $ 31,086,000
----------- ----------- -------------
----------- ----------- -------------
</TABLE>

See accompanying notes to the financial statements.

F-3
<PAGE>
NETRATINGS, INC.

STATEMENTS OF OPERATIONS

Cost of revenue................... -- 1,061,000 362,000 4,269,000
-------------- ------------ ----------- -----------
Gross profit (loss)............... -- (824,000) (230,000) (2,783,000)
-------------- ------------ ----------- -----------
Operating expenses:
Research and development........ 994,000 1,185,000 821,000 1,806,000
Sales and marketing............. 452,000 1,134,000 837,000 2,559,000
General and administrative...... 341,000 600,000 413,000 1,170,000
Stock-based compensation........ -- 25,000 -- 2,327,000
-------------- ------------ ----------- -----------
Total operating expenses...... 1,787,000 2,944,000 2,071,000 7,862,000
-------------- ------------ ----------- -----------

Loss from operations.............. (1,787,000) (3,768,000) (2,301,000) (10,645,000)
Interest income (expense), net.... 6,000 (111,000) (57,000) (25,000)
-------------- ------------ ----------- -----------
Net loss.......................... $(1,781,000) $(3,879,000) $(2,358,000) $(10,670,000)
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------

Basic and diluted net loss per
common share.................... $ (2.03) $ (2.78) $ (1.79) $ (5.19)
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------

Shares used to compute basic and
diluted net loss per common
share........................... 878,000 1,393,000 1,320,000 2,056,000
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------

Pro forma basic and diluted net
loss per common share
(unaudited)..................... $ (1.67) $ (1.04) $ (2.31)
------------ ----------- -----------
------------ ----------- -----------

Shares used to compute pro forma
basic and diluted net loss per
common share (unaudited)........ 2,319,000 2,270,000 4,626,000
------------ ----------- -----------
------------ ----------- -----------
</TABLE>

See accompanying notes to the financial statements.

F-4
<PAGE>
NETRATINGS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
CONVERTIBLE
PREFERRED STOCK COMMON STOCK ADDITIONAL
----------------- ---------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT CAPITAL
--------- ------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock to founders at $0.002 per
share in July 1997 for
cash............................................ -- $ -- 3,200,000 $ 3,000 $ 3,000
Issuance of common stock at $0.002 per share to
employees and consultants for cash in 1997...... -- -- 675,000 1,000 1,000
Contribution to capital........................... -- -- -- -- 2,245,000
Net loss from July 2, 1997 (inception)............ -- -- -- -- --
--------- ------ ---------- ---------- ------------
Balances at December 31, 1997..................... -- -- 3,875,000 4,000 2,249,000
Repurchase of common stock from founders and
employees at $0.002 per share................... -- -- (762,000) (1,000) (1,000)
Issuance of Series A convertible preferred stock
at $0.18 per share in January 1998 for cash, net
of issuance costs of $21,000.................... 1,900,000 2,000 -- -- 327,000
Issuance of warrant in conjunction with issuance
of convertible notes payable.................... -- -- -- -- 106,000
Contribution to capital........................... -- -- -- -- 501,000
Deferred compensation related to grant of stock
options......................................... -- -- -- -- 254,000
Amortization of deferred compensation............. -- -- -- -- --
Net loss.......................................... -- -- -- -- --
--------- ------ ---------- ---------- ------------
Balances at December 31, 1998..................... 1,900,000 2,000 3,113,000 3,000 3,436,000
Exercise of common stock options and warrant...... -- -- 780,000 1,000 155,000
Compensation related to stock options granted to
consultants..................................... -- -- -- -- 970,000
Issuance of warrant in conjunction with financing
agreement....................................... -- -- -- -- 177,000
Issuance of warrant in connection with Series C
redeemable convertible preferred stock.......... -- -- -- -- 184,000
Deferred compensation related to grant of stock
options......................................... -- -- -- -- 3,949,000
Amortization of deferred compensation............. -- -- -- --
Deferred service costs............................ -- -- -- -- 22,600,000
Amortization of deferred service costs............ -- -- -- -- --
Reclassification of Series A convertible preferred
stock to redeemable convertible preferred stock
due to addition of mandatory redemption features
(Note 4)........................................ (1,900,000) (2,000) -- -- (327,000)
Net loss.......................................... -- -- -- -- --
--------- ------ ---------- ---------- ------------
Balances at September 30, 1999.................... -- $ -- 3,893,000 $ 4,000 $ 31,144,000
--------- ------ ---------- ---------- ------------
--------- ------ ---------- ---------- ------------

<CAPTION>
NOTE TOTAL

RECEIVABLE STOCKHOLDERS'

FROM DEFERRED DEFERRED ACCUMULATED EQUITY

STOCKHOLDER COMPENSATION SERVICE COSTS DEFICIT (DEFICIT)

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

<S> <C> <C> <C> <C> <C>
Issuance of common stock to founders at $0.002 per
share in July 1997 for
cash............................................ -- $ -- -- $ -- $ 6,000

Issuance of common stock at $0.002 per share to
employees and consultants for cash in 1997...... -- -- -- -- 2,000

Contribution to capital........................... -- -- -- -- 2,245,000

Net loss from July 2, 1997 (inception)............ -- -- -- (1,781,000) (1,781,000)

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

Balances at December 31, 1997..................... -- -- -- (1,781,000) 472,000

Repurchase of common stock from founders and
employees at $0.002 per share................... -- -- -- -- (2,000)

Issuance of Series A convertible preferred stock
at $0.18 per share in January 1998 for cash, net
of issuance costs of $21,000.................... -- -- -- -- 329,000

Issuance of warrant in conjunction with issuance
of convertible notes payable.................... -- -- -- -- 106,000

Contribution to capital........................... -- -- -- -- 501,000

Deferred compensation related to grant of stock
options......................................... -- (254,000) -- -- --

Amortization of deferred compensation............. -- 25,000 -- -- 25,000

Net loss.......................................... -- -- -- (3,879,000) (3,879,000)

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

Balances at December 31, 1998..................... -- (229,000) -- (5,660,000) (2,448,000)

Exercise of common stock options and warrant...... (125,000) -- -- -- 31,000

Compensation related to stock options granted to
consultants..................................... -- -- -- -- 970,000

Issuance of warrant in conjunction with financing
agreement....................................... -- -- -- -- 177,000

Issuance of warrant in connection with Series C
redeemable convertible preferred stock.......... -- -- -- -- 184,000

Deferred compensation related to grant of stock
options......................................... -- (3,949,000) -- -- --

Amortization of deferred compensation............. 982,000 -- -- 982,000

Deferred service costs............................ -- -- (22,600,000) -- --

Amortization of deferred service costs............ -- -- 375,000 -- 375,000

Reclassification of Series A convertible preferred
stock to redeemable convertible preferred stock
due to addition of mandatory redemption features
(Note 4)........................................ -- -- -- -- (329,000)

Net loss.......................................... -- -- (10,670,000) $(10,670,000)

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

Balances at September 30, 1999.................... $ (125,000) $(3,196,000) $ (22,225,000) (16,330,000) $(10,728,000)

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

</TABLE>

See accompanying notes to the financial statements.

F-5
<PAGE>
NETRATINGS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
JULY 2, 1997 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, ------------------------
1997 1998 1998 1999
-------------- ------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.............................. $(1,781,000) $(3,879,000) $(2,358,000) $(10,670,000)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization....... 24,000 200,000 158,000 277,000
Provision for doubtful accounts..... -- 25,000 10,000 220,000
Stock-based compensation............ -- 25,000 -- 2,327,000
Amortization of discount associated
with warrants issued on
convertible notes payable......... -- 35,000 22,000 26,000
Amortization of deferred financing
costs............................. -- -- -- 39,000
Changes in operating assets and
liabilities:
Accounts receivable............... -- (158,000) (72,000) (1,156,000)
Other current assets.............. (35,000) 19,000 16,000 (278,000)
Other assets...................... (27,000) (85,000) (78,000) (57,000)
Accounts payable.................. 93,000 260,000 111,000 (301,000)
Accrued liabilities............... 415,000 (205,000) (281,000) 763,000
Amounts due to Nielsen Media
Research........................ -- 539,000 -- 1,625,000
Deferred revenue.................. -- 280,000 211,000 1,730,000
-------------- ------------ ----------- -----------
Net cash used in operating activities... (1,311,000) (2,944,000) (2,261,000) (5,455,000)
-------------- ------------ ----------- -----------
INVESTING ACTIVITIES
Acquisition of property and
equipment........................... (391,000) (173,000) (28,000) (328,000)

FINANCING ACTIVITIES
Proceeds from issuance of (repurchase
of) common stock.................... 8,000 (2,000) (2,000) 31,000
Proceeds from issuance of convertible
notes payable....................... -- 895,000 875,000 --
Proceeds from issuance of convertible
notes payable to Nielsen Media
Research............................ -- 2,000,000 -- 1,000,000
Proceeds from equipment financing and
notes payable....................... -- 221,000 242,000 410,000
Principal payments on capital lease
obligations......................... -- (35,000) (25,000) (99,000)
Proceeds from issuance of preferred
stock............................... -- 329,000 329,000 31,748,000
Contribution to capital............... 2,245,000 501,000 501,000 --
-------------- ------------ ----------- -----------
Net cash provided by financing
activities............................ 2,253,000 3,909,000 1,920,000 33,090,000
-------------- ------------ ----------- -----------
Net increase (decrease) in cash and
cash equivalents.................... 551,000 792,000 (369,000) 27,307,000
Cash and cash equivalents at beginning
of period............................. -- 551,000 551,000 1,343,000
-------------- ------------ ----------- -----------
Cash and cash equivalents at end of
period................................ $ 551,000 $ 1,343,000 $ 182,000 $28,650,000
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for interest.................. $ -- $ 85,000 $ 58,000 $ 131,000
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------
SUPPLEMENTAL DISCLOSURE OF NON-CASH
TRANSACTIONS
Property and equipment acquired
under capital lease obligations..... $ -- $ 21,000 $ 21,000 $ 123,000
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------
Conversion of notes payable
into redeemable convertible
preferred stock..................... $ -- $ -- $ -- $ 3,895,000
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------
Issuance of common stock
for note receivable................. $ -- $ -- $ -- $ 125,000
-------------- ------------ ----------- -----------
-------------- ------------ ----------- -----------
</TABLE>

See accompanying notes to the financial statements.

F-6
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NETRATINGS

NetRatings, Inc. ("NetRatings") was incorporated in Delaware on July 2, 1997
and is engaged in the development and sale of Internet audience measurement
information and analysis services. Proprietary technology and data gathering
techniques enable NetRatings to offer its customers comprehensive, timely and
reliable information through an easy-to-use software interface. NetRatings
markets and sells its products and services under the Nielsen//NetRatings brand.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents, which consist of cash and highly liquid
short-term investments with insignificant interest-rate risk and original
maturities of three months or less at date of purchase, are carried at cost,
which approximates fair value. Interest income was $6,000, $18,000, $10,000 and
$132,000 for the period July 2, 1997 (inception) to December 31, 1997, the year
ended December 31, 1998, and the nine months ended September 30, 1998 and 1999.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, net of accumulated depreciation
and amortization. Property and equipment are depreciated on a straight-line
basis over the estimated useful lives of the assets, generally three to five
years.

PURCHASED TECHNOLOGY

Purchased technology consists of the costs of purchased product technology
which are amortized using the straight-line method over periods not exceeding
three years. Purchased technology is included in other assets in the
accompanying balance sheets. Management evaluates the future realization of
purchased technology quarterly and writes down any amounts that management deems
unlikely to be recovered through future product sales. No write downs have been
recorded through September 30, 1999.

STOCK-BASED COMPENSATION

NetRatings accounts for stock-based awards to employees under the intrinsic
value method in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and has adopted the
disclosure-only alternative of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("FAS 123").

REVENUE RECOGNITION

Revenue for recurring services are recognized ratably over the term of the
related contract as services are provided. Revenue for nonrecurring services is
recognized in the period in which the product is delivered. Billings rendered in
advance of services being performed are recorded as deferred revenue in the
accompanying balance sheet.

F-7
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Barter transactions are recorded at the lower of estimated fair value of
services provided or the estimated fair value of goods and services received.
Revenue from barter transactions is recognized ratably over the period for which
services are performed. Barter expenses are expensed as incurred. Barter revenue
and expenses were $0 for the period from July 2, 1997 (inception) to December
31, 1997 and $38,000 and $55,000 for the year ended December 31, 1998. Barter
revenue and expenses were $22,000 and $55,000 and $61,000 and $90,000 for the
nine month periods ended September 30, 1998 and 1999.

PANEL COSTS

Costs of establishing and maintaining a panel (a statistically selected
group of Internet users) are expensed as incurred and are included in cost of
revenue.

ADVERTISING EXPENSE

All advertising costs are expensed as incurred. Advertising costs, which are
included in sales and marketing expense, were $0 for the period from July 2,
1997 (inception) to December 31, 1997 and $36,000 for the year ended December
31, 1998 and $24,000 and $424,000 for the nine months ended September 30, 1998
and 1999.

INCOME TAXES

NetRatings accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("FAS
109"), which requires the use of the liability method in accounting for income
taxes. Under FAS 109, deferred tax assets and liabilities are measured based on
differences between the financial reporting and tax bases of assets and
liabilities using enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

IMPAIRMENT OF LONG-LIVED ASSETS

NetRatings evaluates its long-lived assets 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.

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK

The carrying value of NetRatings' financial instruments, including cash and
cash equivalents, accounts receivable and notes payable approximates fair value.
Cash and cash equivalents and accounts receivable approximate fair market value
due to their short term nature. Notes payable approximate fair value as interest
rates on these notes approximate market rates.

F-8
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Financial instruments which subject NetRatings to concentrations of credit
risk consist primarily of cash and cash equivalents and trade accounts
receivable. NetRatings maintains its cash in a domestic financial institution
with a high credit standing and performs periodic evaluations of the relative
credit standing of this institution. NetRatings conducts business with companies
in various industries throughout the United States and performs ongoing credit
evaluations of its customers. Reserves are maintained for potential credit
losses. At December 31, 1998 and September 30, 1999, the allowance for doubtful
accounts totalled $25,000 and $245,000, respectively.

COMPREHENSIVE INCOME

Effective January 1, 1998, NetRatings adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("FAS 130"). FAS
130 establishes new rules for the reporting and display of comprehensive income
and its components in a full set of general purpose financial statements. There
is no difference in NetRatings historic net losses as reported and the
comprehensive net losses under the provision of FAS 130 for any periods
presented.

COMPUTATION OF NET LOSS PER COMMON SHARE

NetRatings computes net loss per share based on Financial Accounting
Standards Board Statement No. 128, "Earnings Per Share" ("FAS 128"). In
accordance with FAS 128, basic net loss per share is calculated as net loss
divided by the weighted-average number of common shares outstanding less shares
subject to repurchase. Diluted net loss per share is computed using the
weighted-average number of common shares outstanding and dilutive common stock
equivalents outstanding during the period. Common equivalent shares from stock
options and warrants (using the treasury stock method) and convertible preferred
stock and notes payable have been excluded from the calculation of net loss per
share as their effect is antidilutive.

Pro forma net loss per share has been computed as described above and also
gives effect, under Securities and Exchange Commission guidance, to the
conversion of preferred shares not included above that will automatically
convert to common shares upon completion of the NetRatings' initial public
offering, using the if-converted method (Note 6).

INTERIM FINANCIAL INFORMATION

The interim financial information at September 30, 1998 and for the nine
month period ended September 30, 1998 is unaudited but, in the opinion of
management, includes all adjustments, consisting only of normal recurring
adjustments, which NetRatings considers necessary for a fair presentation of the
financial position and results of operations for the interim periods. The
results of operations for the nine months ended September 30, 1999 are not
necessarily indicative of the results to be expected for the full fiscal year.

F-9
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES

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

RECENT PRONOUNCEMENTS

As of January 1998, the Company adopted FASB Statement No. 131, DISCLOSURES
ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION ("FAS 131"). FAS 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. FAS 131 also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The adoption of FAS 131 did not affect results of operations, financial position
or disclosure of segment information. NetRatings conducts business in one
operating segment. NetRatings is engaged in the development and sale of Internet
audience measurement information and analytical services. NetRatings' management
has determined the operating segment based upon how the business is managed and
operated.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("FAS 133"). FAS 133 requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designed as part of a
hedge transaction, and, if so, the type of hedge transaction. In June 1999, the
FASB issued FAS 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133" ("FAS
137"), which amends FAS 133 to be effective for all fiscal quarters or all
fiscal years beginning after June 15, 2000 or January 1, 2001 for NetRatings.
Management does not currently expect that adoption of FAS 137 will have a
material impact on NetRatings' financial position or results of operations.

F-10
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 2: BALANCE SHEET DETAILS

Details of balance sheet items are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1997 1998 1999
---------- ------------ -------------
<S> <C> <C> <C>
Computer equipment and software..................... $ 360,000 $ 547,000 $ 957,000
Office equipment, furniture, and fixtures........... 17,000 19,000 40,000
Leasehold improvements.............................. 14,000 19,000 39,000
---------- ------------ -------------
391,000 585,000 1,036,000
Less accumulated depreciation and amortization...... (24,000) (191,000) (443,000)
---------- ------------ -------------
Property and equipment, net......................... $ 367,000 $ 394,000 $ 593,000
---------- ------------ -------------
---------- ------------ -------------
</TABLE>

As of December 31, 1998 and September 30, 1999, property and equipment
includes amounts held under capital leases of $242,000 and $356,000
respectively, and related accumulated amortization of $74,000 and $163,000,
respectively.

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- SEPTEMBER 30,
1997 1998 1999
--------- ------------ -------------
<S> <C> <C> <C>
Purchased technology, net............................. $ -- $ 66,000 $ 42,000
Other non-current assets.............................. 27,000 13,000 69,000
--------- ------------ -------------
Other assets...................................... $ 27,000 $ 79,000 $ 111,000
--------- ------------ -------------
--------- ------------ -------------
</TABLE>

Amortization of purchased technology for the year ended December 31, 1998
was $33,000 and for the nine months ended September 30, 1999 was $25,000.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1997 1998 1999
---------- ------------ -------------
<S> <C> <C> <C>
Accrued compensation................................ $ 31,000 $ 88,000 $ 141,000
Accrued legal fees.................................. 2,000 10,000 340,000
Other accrued liabilities........................... 382,000 112,000 492,000
---------- ------------ -------------
Accrued liabilities............................. $ 415,000 $ 210,000 $ 973,000
---------- ------------ -------------
---------- ------------ -------------
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1997 1998 1999
---------- ------------ -------------
<S> <C> <C> <C>
Accrued amounts payable to Nielsen Media Research... $ -- $ 539,000 $ 2,164,000
Convertible notes payable--Nielsen Media Research... -- 2,000,000 --
---------- ------------ -------------
Amounts due to Nielson Media Research............... $ -- $ 2,539,000 $ 2,164,000
---------- ------------ -------------
---------- ------------ -------------
</TABLE>

F-11
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 3: NOTES PAYABLE

In January 1998, NetRatings entered into a $500,000 equipment loan under a
master equipment financing agreement of which $242,000 and $500,000 had been
utilized as of December 31, 1998 and September 30, 1999 respectively. The
equipment financing bears interest at an annual rate of 8% and is secured by the
assets purchased with the borrowings. Borrowings and interest are due in
installments over 42 months. The drawdowns under this equipment financing
agreement have been classified as capital leases.

In connection with the equipment financing, NetRatings issued warrants to
purchase 48,000 shares of common stock at an exercise price $0.42 per share. The
warrant has a contractual term of nine years. The value of these warrants at the
date of issuance was not material and no value was attributed to them in the
accompanying financial statements. None of these warrants had been exercised as
of September 30, 1999.

In March 1999, NetRatings borrowed an additional $258,000 to fully utilize
the above facility. As of September 30, 1999, there was $366,000 due under the
agreement. In conjunction with these additional borrowings, NetRatings issued
warrants to purchase 9,000 shares of common stock at an exercise price of $2.12
per share. The warrants have a contractual term of seven years. At the date of
grant, the fair value ascribed to the warrants was approximately $45,000, based
on a Black-Scholes valuation model, was recorded as a discount to the capital
leases and is being amortized as additional interest expense over the term of
capital leases.

In March 1999, NetRatings entered into a $244,000 payment plan agreement
with a vendor. Approximately $156,000 of the total amount under this agreement
bears interest at an annual effective rate of 8.62%. The payment plan amounts
including the interest-free portion and the interest are repayable in twelve
quarterly installments of $22,000 each. Future maturities under this payment
plan for years ending December 31 are as follows:

F-12
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 4: REDEEMABLE CONVERTIBLE PREFERRED STOCK

<TABLE>
<CAPTION>
ISSUED AND OUTSTANDING LIQUIDATION
DESIGNATED SHARES SHARES PREFERENCE
----------------- --------------------------- -------------
<S> <C> <C> <C>
Series A redeemable
convertible preferred stock
("Series A")...................................... 1,900,000 1,900,000 $ 0.18
Series B redeemable
convertible preferred stock
("Series B")...................................... 2,184,000 1,477,000 $ 0.63
Series C redeemable
convertible preferred stock
("Series C")...................................... 6,600,000 6,414,000 $ 3.11
Series D redeemable
convertible preferred stock
("Series D")...................................... 4,887,000 4,887,000 $ 3.14
----------------- -----------
Total............................................... 15,571,000 14,678,000
----------------- -----------
----------------- -----------
</TABLE>

SERIES A

In January 1998, NetRatings issued 1,900,000 shares of Series A at a price
of $0.18 per share for cash for a total purchase price of $350,000. Series A
shares were originally not redeemable and were convertible into shares of common
stock using conversion ratio of one share of common stock for two shares of
Series A preferred stock, subject to certain adjustments for dilution, if any,
resulting from future stock issuances and accordingly were included in
stockholders' equity as of December 31, 1998. Upon issuance of Series C shares
the Series A conversion ratio was changed to one share of common stock for eight
shares of Series A preferred stock and in addition holders of Series A were
granted the redemption features described below.

SERIES B

In July 1999, the holders of $895,000 in convertible notes payable converted
their promissory notes to 1,477,000 shares of Series B at approximately $0.63
per share. The 1,477,000 shares of Series B represented the $895,000 in
principal from the convertible notes payable, plus approximately $40,000 in
interest accrued through November 1998. The remaining $55,000 in accrued
interest due to the holders of the convertible notes payable at the time of
conversion was paid by NetRatings. Each share of Series B is convertible into
shares of common stock at the option of the holder using the conversion ratio of
one share of common stock for two shares of Series B preferred stock and has the
redemption features described below.

SERIES C

In August 1999, NetRatings issued 6,414,000 shares of Series C at a price of
$3.11 per share for a total purchase price of $20,000,000. Nielsen Media
Research converted $3.0 million in notes payable into Series C shares and
NetRatings received cash proceeds from the sale of Series C shares of

F-13
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 4: REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)

$17 million. Issuance costs related to Series C are $620,000 including the value
of warrants granted to a financial advisor to purchase 43,000 shares at $6.24
per share. The value of the fully vested warrants issued to the financial
advisor using the Black-Scholes valuation model is $184,000. These warrants are
fully vested and expire in 2005. Each share of Series C is convertible into
shares of common stock at the option of the holder using the conversion ratio of
one share of common stock for two shares of preferred stock and has the
redemption features described below.

In connection with the Series C offering, NetRatings also issued two
warrants to Nielsen Media Research, one of the Series C investors, to purchase
shares of common stock. The other Series C investor did not receive warrants.
The first warrant entitles Nielsen Media Research to purchase 553,000 shares of
common stock at the per share exercise price of $7.20. The second warrant
entitles Nielsen Media Research to purchase 6,000,000 shares of common stock at
the exercise price of $12.00 per share or 60% of NetRatings' per share price at
its initial public offering, whichever is lower. The first warrant which expires
on December 31, 2001 becomes exercisable at the earlier of January 1, 2000 or
the effective date of NetRatings' initial public offering. The second warrant
which expires on December 31, 2004 becomes exercisable at the earlier of January
1, 2002 or the effective date of
NetRatings' initial public offering. NetRatings recorded a deferred charge in
August 1999 totaling $22,600,000 representing the value of these warrants based
on a Black-Scholes valuation model. The deferred charge is being amortized to
operating expense, through December 31, 2004, the final expiration date of the
second warrant. Amortization expense is $375,000 for the nine months ended
September 30, 1999 and is included in stock-based compensation in the
accompanying statement of operations.

In connection with the Series C financing transaction, NetRatings also
granted Nielsen Media Research the right to purchase additional shares of
NetRatings' common stock in connection with NetRatings' initial public offering,
at the initial public offering price. Nielsen will have the right to purchase a
sufficient number of shares of NetRatings common stock to enable Nielsen to own
54% of NetRatings' outstanding fully diluted shares immediately following
NetRatings initial public offering. If Nielsen Media Research elects to purchase
all or a portion of the stock it is entitled to purchase, each existing
preferred and common stockholder will be entitled to offer its shares to Nielsen
at the initial public offering price subject to certain limitations that are to
be agreed to by NetRatings and the underwriters.

NetRatings also entered into a stockholders agreement with Nielsen that
grants Nielsen the right to nominate a single director to NetRatings' board,
which increases to two directors in the event that Nielsen exercises both of the
warrants described above. The stockholders agreement also provides that, for a
period of five years after the date of the agreement, NetRatings will not sell
or solicit proposals for the sale of NetRatings to a third party. After this
five-year period, NetRatings may sell their business subject to Nielsen's right
of first refusal. This right of first refusal terminates on the effective date
of a NetRatings' initial public offering.

SERIES D

In September 1999, NetRatings issued 4,887,000 shares of Series D to
ACNielsen and Series C stockholders at a price of $3.14 per share for cash for a
purchase price of $15,238,000 (net of issuance

F-14
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 4: REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)

costs of $105,000). Each share of Series D is convertible into shares of common
stock at the option of the holder and using the conversion ratio of one share of
common stock for two shares of preferred stock and has the redemption features
described below.

CONVERSION

Each share of Series A, B, C and D redeemable convertible preferred stock
is, at the option of the holder, convertible into shares of common stock using
the applicable conversion ratio. The outstanding shares of redeemable
convertible preferred stock automatically convert into common stock immediately
prior to the closing of an underwritten public offering of common stock under
the Securities Act of 1933 in which NetRatings receives at least $15,000,000 in
gross proceeds and the price per share is at least $4.00 per share in case of
Series A and Series B and at least $8.00 per share for Series C and Series D.

DIVIDENDS

Holders of Series A, B, C and D redeemable convertible preferred stock are
entitled to receive noncumulative dividends of $0.06, $0.06, $0.21 and $0.19 per
share respectively. Dividends are to be paid when declared by the board of
directors out of legally available funds. No dividends have been declared or
paid.

VOTING RIGHTS

Series A, B, C and D stockholders are entitled to the number of votes equal
to the number of shares of common stock into which such shares of the respective
series could be converted and have the voting rights and powers of the common
stock, voting together as a single class. In addition, the Series D stockholders
also have special rights under which so long as at least 1,000,000 shares of
Series D remain outstanding, NetRatings could not authorize, issue or obligate
itself to issue any other equity security on parity with the Series D as to the
dividend, redemption right, liquidation preference, conversion rights and voting
rights senior to or on a parity with the Series D. Also NetRatings is not able
to affect a merger or consolidation with any other entity where the stockholders
of NetRatings would hold less than 50% of the surviving entity and the per share
consideration to be received by the Series D stockholders would be less than
$5.16.

REDEMPTION

At any time after the respective fifth anniversary of the original issuance
of the Series D, upon the affirmative vote or written consent of the holders of
at least two-thirds of the outstanding shares of Series A, B, C or D, NetRatings
shall redeem all issued, outstanding, and unconverted shares at the respective
redemption price. The redemption price for each share of Series A, B, C and D
shall be $0.18, $0.63, $3.11 and $3.14 respectively and any declared but unpaid
dividends.

LIQUIDATION PREFERENCE

Series A, B, C and D stockholders are entitled to receive, upon liquidation,
an amount equal to the sum of their respective liquidation preference and all
declared but unpaid dividends. Thereafter the

F-15
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 4: REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)

remaining assets and funds, if any shall be distributed pro rata among the
preferred and common shareholders until the Series A, B, C and D stockholders
have received $0.36, $1.26, $9.35 and $9.42, respectively. Thereafter, any
remaining funds shall be distributed pro rata among the common shareholders. In
the event that the assets and funds to be distributed among the holders of
Series A, B, C and D are insufficient to permit payment of the full preferential
amount, then the entire assets and funds shall be distributed ratably among such
holders in proportion to the preferential amount each such holder is otherwise
entitled to receive.

NOTE 5: STOCKHOLDERS' EQUITY (DEFICIT)

CONVERTIBLE NOTES PAYABLE

In May and November 1998, NetRatings issued convertible notes payable for
total cash proceeds of $895,000. The notes were convertible in shares of Series
B stock at approximately $0.63 per share. The notes had an original maturity
date of May 2000 and bear interest at 9% per annum. The notes and a portion of
accrued but unpaid interest were converted into shares of Series B redeemable
convertible preferred stock in July 1999 (Note 4). In conjunction with this debt
issuance, NetRatings issued to the holders of the notes warrants to purchase
707,000 shares of NetRatings' Series B convertible preferred stock at an
exercise price of $0.63 per share. The warrants have a contractual term of five
years. At the date of grant, the value ascribed to the warrants was
approximately $106,000, based on a Black-Scholes valuation model. This amount
was recorded as discount to the convertible notes payable and up until the time
of conversion was being amortized as additional interest expense over the term
of the convertible notes payable. Accordingly, NetRatings recorded additional
interest expense of $35,000 in the year ended December 31, 1998 and $26,000 in
the nine months ended September 30, 1999. The effective interest rate on the
convertible notes, as adjusted for the ascribed value of the convertible note
warrants, was approximately 14.9% per annum. None of the above warrants had been
exercised as of September 30, 1999.

NetRatings entered into a strategic alliance with Nielsen Media Research in
October 1998 to develop and market Internet audience measurement products and
services in the United States and Canada using NetRatings technology and Nielsen
Media Research's proprietary panel selection methodology. Also, in October 1998,
NetRatings issued a convertible note payable to Nielsen Media Research for cash
proceeds of $2,000,000. The note had an original maturity date of December 31,
1999 and bears interest at 6%, to be paid semiannually in arrears.

In April 1999, NetRatings issued another convertible note payable to Nielsen
Media Research for cash proceeds of $1,000,000. This note was interest free and
was also payable on December 31, 1999. Both the notes were convertible into
shares of NetRatings' next issuance of preferred stock at the per share price of
that financing. Nielsen Media Research converted both the notes into shares of
Series C convertible redeemable preferred stock at a price of $3.11 per share.
(Note 4).

COMMON STOCK WARRANTS

In connection with the sale of Series A preferred stock, NetRatings issued
warrants for the purchase of 225,000 shares of common stock at an exercise price
of $0.02 per share. The warrants became exercisable upon the issuance of the
Series B preferred stock in July 1999. The value of these

F-16
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 5: STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)

warrants at the date of issuance was not material and no value was attributed to
them in the accompanying financial statements. These warrants were exercised in
September 1999.

COMMON STOCK

In September 1997, under a stock purchase agreement, NetRatings issued
3,200,000 shares of common stock to founders at a price of $0.002 per share. In
May 1998, the terms of this agreement were amended and NetRatings repurchased
590,000 common shares at cost. Following the amendment, all of the remaining
outstanding shares are subject to repurchase rights which expire ratably over
the 48 months following September 1, 1996. At September 30, 1999, 653,000 shares
were subject to repurchase.

NetRatings has issued 675,000 shares of common stock to employees and
consultants under stock purchase agreements. These shares are subject to
repurchase rights which expire ratably over 48 months. Upon termination of
service, any unvested shares may be repurchased by NetRatings at the issuance
price. Shares subject to repurchase totaled 596,000 at December 31, 1997,
269,000 at December 31, 1998 and 229,000 at September 30, 1999. In July 1998,
NetRatings repurchased at cost 172,000 shares of common stock from employees
upon their termination.

NOTE RECEIVABLE FROM STOCKHOLDER

In August, 1999, NetRatings issued $125,000 in promissory notes to a member
of the Board of Directors of NetRatings in connection with the exercise of stock
options. The notes bear interest at 5% per annum, are due in three years and
NetRatings has full recourse against the holder.

CONTRIBUTION TO CAPITAL

Contributions to capital represent funds received in connection with the
formation and development of NetRatings. These funds were utilized to perform
market research, write the business plan, and commence product development.

PROPOSED PUBLIC OFFERING OF COMMON STOCK

On September 21, 1999, the Board of Directors authorized NetRatings to
proceed with an initial public offering of its common stock. If the offering is
consummated as presently anticipated, all of the outstanding redeemable
convertible preferred stock will automatically convert to common stock. The
unaudited pro forma stockholders' equity at September 30, 1999 gives effect to
the conversion of all outstanding shares of redeemable convertible preferred
stock at that date into 6,626,000 shares of common stock upon the completion of
the offering.

STOCK SPLIT

On September 21, 1999, the Board of Directors approved, subject to
stockholder approval, a one-for-two reverse stock split of issued and
outstanding common stock to be effective prior to the completion of the initial
public offering of its common stock. The accompanying financial statements have
been retroactively restated to give effect to the reverse stock split.

F-17
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 5: STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)

1998 STOCK PLAN

In April 1998, NetRatings adopted the 1998 Stock Plan (the "Plan"). Under
the Plan, up to 1,215,000 shares of NetRatings' common stock was reserved for
issuance under the terms of the Plan. Through September 30, 1999, an additional
1,750,000 shares were reserved for issuance under the Plan. Options may be
granted at no less than 85% of the fair value on the date of the grant (110% of
fair value in certain instances), as determined by the board of directors.
Options generally vest over a four-year period and have a maximum term of ten
years.

Information with respect to stock option activity is summarized as follows:

<TABLE>
<CAPTION>
OPTIONS OPTIONS OUTSTANDING
AVAILABLE -------------------------- WEIGHTED-
FOR NUMBER OF PRICE PER AVERAGE
GRANT SHARES SHARE EXERCISE PRICE
------------ ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Authorized................................. 1,215,000 -- -- --
Granted.................................... (868,000) 868,000 $0.10 $ 0.10
------------ ----------- -------------
Balance at December 31, 1998............. 347,000 868,000 $0.10 $ 0.10
Authorized................................. 1,750,000 -- -- --
Granted.................................... (1,456,000) 1,456,000 $.10-$8.40 $ 2.45
Exercised.................................. -- (555,000) $0.10-$.50 $ 0.27
Canceled................................... 47,000 (47,000) $0.10 $ 0.10
------------ ----------- -------------
Balance at September 30, 1999............ 688,000 1,722,000 $0.10-$8.40 $ 2.04
------------ ----------- -------------
------------ ----------- -------------
</TABLE>

The weighted-average remaining contractual life of all outstanding options
is 8.96 years. The weighted-average fair value of options granted was $0.02 and
$5.84 during the year ended December 31, 1998 and the nine months ended
September 30, 1999, respectively.

The following table summarizes information concerning options outstanding
and exercisable at September 30, 1999.

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------------------------------ OPTIONS EXERCISABLE
WEIGHTED-AVERAGE ------------------------------
NUMBER OF WEIGHTED-AVERAGE REMAINING NUMBER OF WEIGHTED-AVERAGE
EXERCISE PRICE SHARES EXERCISE PRICE CONTRACTUAL LIFE SHARES EXERCISE PRICE
- ---------------------------------- ---------- ----------------- ----------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
$0.10............................. 580,000 $ 0.10 8.42 295,000 $ 0.10
$0.50............................. 629,000 $ 0.50 9.51 104,000 $ 0.50
$5.30............................. 271,000 $ 5.30 9.27 31,000 $ 5.30
$6.22............................. 33,000 $ 6.22 9.81 -- --
$6.28............................. 36,000 $ 6.28 10.00 -- --
$7.20............................. 150,000 $ 7.20 10.00 -- --
$8.40............................. 23,000 $ 8.40 10.00 -- --
---------- -----------
1,722,000 355,000
---------- -----------
---------- -----------
</TABLE>

F-18
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 5: STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)

SHARES RESERVED FOR FUTURE ISSUANCE

NetRatings has reserved shares of common stock for future issuance as
follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
Redeemable convertible preferred stock, including effect of
preferred stock warrants...................................... 1,303,000 6,980,000
Stock options outstanding....................................... 868,000 1,722,000
Stock options, available for grant.............................. 347,000 688,000
Warrants to purchase common stock............................... 273,000 6,680,000
</TABLE>

DEFERRED COMPENSATION

NetRatings has recorded deferred stock compensation charges of $0, $254,000,
$69,000, and $3,949,000 during the period from July 2, 1997 (inception) to
December 31, 1997, for the year ended December 31, 1998 and for the nine months
ended September 30, 1998 and 1999, respectively, representing the difference
between the exercise price of the option and the deemed fair value of common
stock as of the date of grant. These amounts are being amortized by charges to
operations, using the graded method, over the vesting periods of the individual
stock options, which are four years.

OPTIONS ISSUED TO CONSULTANTS

On June 1, 1999 and August 19, 1999, NetRatings granted options to purchase
135,000 and 100,000 shares of common stock to consultants at an exercise price
of $0.50 and $5.30 per share respectively. These options were granted in
exchange for consulting services performed and were fully vested upon grant.
NetRatings valued these options at their deemed fair value and recorded a charge
to operations of $970,000 for the nine months ended September 30, 1999.

PRO FORMA DISCLOSURES OF THE EFFECT OF STOCK-BASED COMPENSATION

NetRatings has elected to follow APB 25 and related interpretations in
accounting for its employee stock options. The alternative fair value accounting
provided for under Financial Accounting Standards Board Statement No. 123,
"Accounting for Stock-Based Compensation" ("FAS 123"), requires use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, when the exercise price of NetRatings' employee stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

Pro forma information regarding net income (loss) is required by FAS 123,
which also requires that the information be determined as if NetRatings has
accounted for its employee stock options under the fair value method of FAS 123.
The fair value of these options was estimated at the date of grant using a
Black-Scholes option pricing valuation model with the following weighted-average
assumptions: volatility of 0.80; risk-free interest rates of 4.57% to 5.92% for
the year ended December 31, 1998 and the nine months ended September 30, 1999; a
dividend yield of 0%; and a weighted-average expected life of the option of four
years.

F-19
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 5: STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)

The option valuation models were developed for use in estimating the fair
value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected life of the option. Because
NetRatings' employee stock options have characteristics significantly different
from those of traded options and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

Had compensation cost for NetRatings' stock-based compensation plans been
determined using the fair value at the grant dates for awards under those plans
calculated using the minimum value method of FAS 123, NetRatings' historical net
loss applicable to common stockholders and basic and diluted net loss per share
would have been increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
PERIOD FROM
JULY 2, 1997
(INCEPTION) NINE MONTHS
TO YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
------------- ------------- --------------
<S> <C> <C> <C>
Pro forma net loss applicable to
common stockholders................. $ (1,781,000) $ (3,885,000) $ (11,752,000)
------------- ------------- --------------
------------- ------------- --------------
Pro forma net loss per common share... $ (2.03) $ (2.79) $ (5.72)
------------- ------------- --------------
------------- ------------- --------------
</TABLE>

The pro forma impact of options on the net loss for the year ended December
31, 1998 and the nine months ended September 30, 1999 is not representative of
the effects on net income (loss) for future years, as future years will include
the effects of additional years of stock option grants.

F-20
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 6: NET LOSS PER SHARE OF COMMON STOCK

The calculation of historical and pro forma basic and diluted net loss per
share is as follows:

<TABLE>
<CAPTION>
PERIOD FROM NINE MONTHS ENDED
JULY 2, 1997 SEPTEMBER 30,
(INCEPTION) TO YEAR ENDED ------------------------------
DECEMBER 31, DECEMBER 31, 1998
1997 1998 -------------- 1999
-------------- -------------- (UNAUDITED) --------------
<S> <C> <C> <C> <C>
HISTORICAL:
Net loss....................................... $ (1,781,000) $ (3,879,000) $ (2,358,000) $ (10,670,000)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Weighted-average shares of common stock
outstanding.................................. 3,777,000 3,395,000 3,490,000 3,256,000
Less: weighted-average shares subject to
repurchase................................... 2,899,000 2,002,000 2,170,000 1,200,000
-------------- -------------- -------------- --------------
Weighted-average shares of common stock
outstanding used in computing basic and
diluted net loss per share................... 878,000 1,393,000 1,320,000 2,056,000
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Basic and diluted net loss per common share.... $ (2.03) $ (2.78) $ (1.79) $ (5.19)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
PRO FORMA:
Net loss....................................... $ (3,879,000) $ (2,358,000) $ (10,670,000)
-------------- -------------- --------------
-------------- -------------- --------------
Weighted-average shares used in computing basic
and diluted net loss per common share........ 1,393,000 1,320,000 2,056,000
Adjustment to reflect the effect of the assumed
conversion of preferred stock from the date
of issuance.................................. 926,000 950,000 2,570,000
-------------- -------------- --------------
Weighted-average shares used in computing pro
forma basic and diluted net loss per common
share (unaudited)............................ 2,319,000 2,270,000 4,626,000
-------------- -------------- --------------
-------------- -------------- --------------
Pro forma basic and diluted net loss per common
share (unaudited)............................ $ (1.67) $ (1.04) $ (2.31)
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

If NetRatings had reported net income, the calculation of historical and pro
forma diluted earnings per share would have included approximately an additional
736,000, 848,000 and 2,771,000 common equivalent shares related to outstanding
stock options and warrants not included above (determined using the treasury
stock method) for the years ended December 31, 1998, and the nine months ended
September 30, 1998 and 1999 respectively. In addition, if NetRatings had
reported net income the calculation of historical diluted earnings per share
would have included approximately an additional 1,800,000, 1,500,000, and
4,252,000 common equivalent shares related to the conversion of preferred shares
and convertible notes payable using the if-converted method for the year ended
December 31, 1998 and the nine months ended September 30, 1998 and 1999.

F-21
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 7: JOINT VENTURE WITH ACNIELSEN

In September 1999, NetRatings entered into a joint venture with ACNielsen to
develop and maintain audience measurement panels and to market NetRatings
products and services in key international markets. Through the joint venture,
in which NetRatings holds a 19.9% minority interest, NetRatings plans to launch
audience measurement services in over 30 countries.

The joint venture pays NetRatings a fee based on a percentage of the joint
venture's sales, subject to a minimum of $7.5 million and maximum of $15 million
over five years. Revenue from the joint venture's Internet audience measurement
services will be allocated between NetRatings and the joint venture depending on
the location of the customer and the location of the panel whose data is used in
the service:

- The joint venture retains 100% of any revenue from services that the joint
venture sells to customers outside North America based on data from panels
outside North America.

- NetRatings and the joint venture each retain 50% of any revenues from
services that NetRatings sells to customers in North America based on data
from panels outside North America or services that the joint venture sells
to customers outside North America based on North American panel data.

- If either NetRatings or the joint venture sells services based on data
from a combination of panels located both inside and outside North
America, the allocation of revenues is determined by an operating
committee consisting of two representatives of each company, with any
decisions requiring a unanimous vote of those present, which must include
at least one representative of each company.

NetRatings did not receive any revenue from the joint venture for the nine
months ended September 30, 1999.

To initially capitalize the joint venture, ACNielsen contributed cash and
NetRatings granted an exclusive license with respect to its data collection
technology for the covered territory subject to specified performance criteria.
NetRatings entered into a stockholders agreement with ACNielsen setting forth
procedures for funding the ongoing operations of the joint venture. Panel
development costs related to the initial roll out of the Nielsen//NetRatings
service in over 30 countries covered by the joint venture will be funded in its
entirety by ACNielsen. In general, the ongoing capital requirements of the joint
venture are the responsibility of both companies in proportion to their relative
equity ownership of the joint venture. Under the stockholders agreement,
ACNielsen has a right of first refusal to purchase any shares of the joint
venture that NetRatings wishes to sell to a third party. In addition, if the
joint venture does not effect an initial public offering within five years,
NetRatings has the right to require ACNielsen to purchase the NetRatings equity
stake at its then current fair market value.

NOTE 8: RELATED PARTY TRANSACTIONS

Concurrent with the sale of Series A preferred stock, NetRatings and a
related party entered into a technology transfer agreement which assigned and
transferred to NetRatings all ownership interest in

F-22
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 8: RELATED PARTY TRANSACTIONS (CONTINUED)

NetRatings' core products and technology. In January 1998, in consideration of
these technology assignments and transfers, NetRatings paid to the related party
$100,000 in cash.

In April 1999, NetRatings entered into a barter transaction under which an
annual subscription to a NetRatings service valued at $50,000 was exchanged for
web site design services provided by a company, one of whose officers is a
member of the NetRatings board of directors. The subscription was valued at its
fair value using NetRatings normal pricing and terms.

As described in Note 5, in August 1999, Nielsen Media Research converted its
notes payable into shares of Series C preferred stock and purchased $6 million
of Series C preferred stock. NetRatings also entered into an operating agreement
covering its relationship with Nielsen Media Research. Under the terms of the
operating agreement, NetRatings pays Nielsen Media Research a commission for
selling services to certain customers. These commissions total $334,000 for the
nine months ended September 30, 1999 and are included in sales and marketing
expenses in the accompanying statements of operations. NetRatings is also
charged by Nielsen Media Research for costs of maintaining the panel at the
rates. Nielsen Media Research charges its own internal divisions. These costs
total $3,883,000 for the nine months ended September 30, 1999 and are included
in cost of revenue in the accompanying statements of operations.

NOTE 9: COMMITMENTS AND CONTINGENCIES

LEASES

As of September 30, 1999, minimum payments under all noncancelable lease
agreements were as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
---------- ----------
<S> <C> <C>
October to December 31, 1999.......................................... $ 35,000 $ 64,000
Year ending December 31, 2000......................................... 208,000 131,000
Year ending December 31, 2001......................................... 159,000 --
Year ending December 31, 2002......................................... 65,000 --
---------- ----------
Total minimum lease payments.......................................... 467,000 $ 195,000
----------
----------
Less amount representing interest................................. (101,000)
----------
Present value of minimum lease payments............................... 366,000
Less current portion.............................................. (162,000)
----------
Long-term capital lease obligations................................... $ 204,000
----------
----------
</TABLE>

NetRatings leases its facility under an operating lease agreement which
expires in September 2000.

Rent expense was $32,000 for the period from July 2, 1997 (inception) to
December 31, 1997, $103,000 for the year ended December 31, 1998 and was $72,000
and $142,000 for the nine months ended September 30, 1998 and 1999.

In June 1999, NetRatings entered into a loan and security agreement under
which the lender committed to equipment financing up to a principal amount of
$700,000 at an interest rate of 8% per annum. This facility expires on April 30,
2000. As of September 30, 1999, no borrowings were

F-23
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 9: COMMITMENTS AND CONTINGENCIES (CONTINUED)

outstanding under this facility. In conjunction with the availability of this
equipment financing commitment, NetRatings issued warrants to purchase 26,000
shares of common stock at an exercise price of $2.12 per share. The warrant has
a term of nine years. At the date of grant, the fair value ascribed to the
warrants was approximately $132,000, based on a Black-Scholes valuation model
and was recorded as deferred financing costs and is being amortized over the
term of the facility.

BANK LINE OF CREDIT

In September 1999, NetRatings secured a $1,000,000 bank line of credit
expiring in one year with interest at the prime rate. The line of credit also
has an additional $350,000 available to NetRatings to fund fixed asset
purchases. Draws on the fixed asset facility are due over a 36 month period with
interest at the prime rate. The line of credit requires that NetRatings maintain
compliance with certain restrictive financial covenants. No borrowings have been
made under this agreement.

CONTINGENCIES

NetRatings is a party to claims and assessments arising from the normal
course of business activities. In management's opinion, resolution of these
matters is not expected to have a material adverse impact on NetRatings' results
of operations or its financial position. However, depending on the amount and
timing, an unfavorable resolution of a matter could materially affect
NetRatings' future results of operations or cash flows in a particular period.

NOTE 10: EMPLOYEE BENEFIT PLAN

NetRatings has a 401(k) plan which stipulates that all full-time employees
can elect to contribute to the 401(k) plan, subject to certain limitations, up
to 15% of salary on a pretax basis. NetRatings has the option to provide
matching contributions but has not done so to date.

NOTE 11: INCOME TAXES

No income tax expense was recorded for the period from July 2, 1997
(inception) to December 31, 1997, the year ended December 31, 1998, or the nine
months ended September 30, 1999 due to net operating losses.

The difference between the provision for income taxes and the amount
computed by applying the federal statutory income tax rate to income before
taxes is explained below:

<TABLE>
<CAPTION>
PERIOD FROM
JULY 2, 1997
(INCEPTION) NINE MONTHS
TO YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
------------ ------------- -------------
<S> <C> <C> <C>
Income tax benefit at federal statutory rate..... $ (606,000) $ (1,326,000) $(3,628,000)
Unutilized net operating losses.................. 606,000 1,326,000 3,628,000
------------ ------------- -------------
Total............................................ $ -- $ -- $ --
------------ ------------- -------------
------------ ------------- -------------
</TABLE>

F-24
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 11: INCOME TAXES (CONTINUED)

Significant components of NetRatings' deferred tax assets are as follows:

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, AS OF
------------------------ SEPTEMBER 30,
1997 1998 1999
--------- ------------- -------------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards................... $ 8,000 $ 1,500,000 $ 4,700,000
Tax credit carryforwards........................... -- 100,000 170,000
Other.............................................. -- 40,000 860,000
--------- ------------- -------------
Total deferred tax assets............................ 8,000 1,640,000 5,730,000

Valuation allowance.................................. (8,000) (1,640,000) (5,730,000)
--------- ------------- -------------
Net deferred tax assets.............................. $ -- $ -- $ --
--------- ------------- -------------
--------- ------------- -------------
</TABLE>

FASB Statement No. 109 provides for the recognition of deferred tax assets
if realization of such assets is more likely than not. Based upon the weight of
available evidence, which includes NetRatings' historical operating performance
and the reported cumulative net losses in all prior years, NetRatings has
provided a full valuation allowance against its net deferred tax assets.
NetRatings will continue to evaluate the realizability of the deferred tax
assets on a quarterly basis.

The net valuation allowance increased by $8,000 during the period July 2,
1997 (inception) to December 31, 1997, by $1,632,000 during the year ended
December 31, 1998, and by $4,090,000 for the nine months ended September 30,
1999.

As of September 30, 1999, NetRatings had net operating loss carryforwards
for federal and state income tax purposes of approximately $11.9 million.
NetRatings also had federal and state research and development tax credit
carryforwards of approximately $100,000 and $80,000 as of September 30, 1999.
The federal and state net operating loss and tax credit carryforwards will
expire at various dates beginning in 2005, if not utilized.

Utilization of the net operating loss and tax credit carryforwards may be
subject to a substantial annual limitation due to the ownership change
limitations provided by the Internal Revenue Code of 1986, as amended, and
similar state provisions. The annual limitation may result in the expiration of
the net operating loss and tax credit carryforwards before utilization.

NOTE 12: INVESTMENT IN NETRATINGS, K.K.

In June 1999, NetRatings granted a five year license for the use of its
proprietary software to NetRatings, K.K., in exchange for a 32% ownership
interest in NetRatings, K.K. The joint venture was formed to adapt, market,
service and sell interactive media and market research data in Japan. After the
initial five year period, the license is automatically renewed on a yearly basis
for no additional consideration. As NetRatings contributed technology to this
joint venture, it did not record any cost for this investment. NetRatings is
entitled to appoint one member to the six-member board of directors of
NetRatings, K.K.

F-25
<PAGE>
NETRATINGS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 IS UNAUDITED)

NOTE 13: SUBSEQUENT EVENT (UNAUDITED)

1999 Employee Stock Purchase Plan

On October 26, 1999, NetRatings' Board of Directors adopted, subject to
stockholder approval, the 1999 Employee Stock Purchase Plan to be effective upon
the completion of NetRatings' initial public offering of its common stock.
NetRatings has reserved a total of 250,000 shares of common stock for issuance
under the plan. Eligible employees may purchase common stock at 85% of the
lesser of the fair market value of the Company's common stock on the first day
of the applicable offering period or the date of purchase.

F-26
<PAGE>

4,000,000 SHARES

[NETRATINGS LOGO]

COMMON STOCK

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

PROSPECTUS
, 1999

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

LEHMAN BROTHERS
BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS
C. E. UNTERBERG, TOWBIN
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth all costs and expenses, other than the
underwriting discounts and commissions payable by the Registrant in connection
with the sale and distribution of the common stock being registered. All amounts
shown are estimates except for the Securities and Exchange Commission
registration fee, the NASD filing fee and the Nasdaq National Market application
fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 19,182
NASD filing fee................................................. 7,400
Nasdaq National Market application fee.......................... 95,000
Blue sky qualification fees and expenses........................ 5,000
Printing and engraving expenses................................. 150,000
Legal fees and expenses......................................... 425,000
Accounting fees and expenses.................................... 275,000
Transfer agent and registrar fees............................... 10,000
Miscellaneous expenses.......................................... 13,418
---------
Total....................................................... $1,000,000
---------
---------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law permits indemnification
of officers, directors and other corporate agents under certain circumstances
and subject to certain limitations. The Registrant's Certificate of
Incorporation and Bylaws provide that the Registrant shall indemnify its
directors, officers, employees and agents to the full extent permitted by
Delaware General Corporation Law, including in circumstances in which
indemnification is otherwise discretionary under Delaware law. In addition, the
Registrant intends to enter into separate indemnification agreements (Exhibit
10.1) with its directors and officers which would require the Registrant, among
other things, to indemnify them against certain liabilities which may arise by
reason of their status or service (other than liabilities arising from willful
misconduct of a culpable nature). The Registrant also intends to maintain
director and officer liability insurance, if available on reasonable terms.
These indemnification provisions and the indemnification agreements may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act.

The Underwriting Agreement (Exhibit 1.1) provides for indemnification by the
Underwriters of the Registrant and its officers and directors for certain
liabilities arising under the Securities Act, or otherwise.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

(a) Since July 2, 1997, NetRatings has issued and sold the following
unregistered securities:

1. From inception through September 30, 1999, NetRatings issued options
to purchase an aggregate of 2,324,000 shares of common stock under its 1998
Stock Plan, of which 555,080 have been exercised.

2. In December 1998, NetRatings sold 1,900,000 shares of its Series A
preferred stock to Hitachi, Ltd. at a purchase price of $0.18 per share, for
an aggregate purchase price of $350,001, and issued to Hitachi a warrant to
purchase an additional 450,000 shares of Common Stock at an exercise price
of $0.01 per share. This warrant was exercised in full in September 1999.

II-1
<PAGE>

3. In July 1999 NetRatings, sold 1,477,151 shares of its Series B
Preferred Stock to a group of accredited investors, officers and directors
of the Company and persons affiliated with them at a purchase price of $0.63
per share, for an aggregate purchase price of $935,037, and issued to these
investors warrants to purchase an additional 706,950 shares of Series B
Preferred Stock at an exercise price of $0.63 per share.

4. In August 1999, NetRatings sold an aggregate of 6,413,751 shares of
its Series C Preferred Stock to Nielsen Media Research and Trans Cosmos
U.S.A. Inc. at purchase price of $3.12 per share, for an aggregate purchase
price of $20,000,000, and issued to Nielsen Media Research a warrant to
purchase 1,106,109 shares of Common Stock at an exercise price of $3.60 per
share and a warrant to purchase 12,000,000 shares of Common Stock at an
exercise price of $6.00 per share or 60% of the public offering price in the
Company's initial public offering, whichever is lower.

5. In September 1999, NetRatings sold an aggregate of 4,887,050 shares
of its Series D Preferred Stock to Nielsen Media Research and Trans Cosmos
U.S.A. Inc. at a purchase price of $3.14 per share, for an aggregate
purchase price of $15,342,893.

There were no underwriters employed in connection with any of the
transactions set forth in this Item 15.

For additional information concerning these equity investment transactions,
see the section entitled "Related Party Transactions" in the prospectus.

The issuances described in Items 15(a)(2) through 15(a)(5) were deemed
exempt from registration under the Securities Act in reliance on Section 4(2) of
the Securities Act as transactions by an issuer not involving a public offering.
The recipients of securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the share certificates and other instruments issued in such
transactions. All recipients either received adequate information about
NetRatings or had access, through employment or other relationships, to such
information. The issuances described in Item 15(a)(1) were deemed exempt from
registration under the Securities Act in reliance on Rule 701 promulgated
thereunder as transactions pursuant to compensatory benefit plans and contracts
relating to compensation.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS.

<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement

3.1** Fourth Restated Certificate of Incorporation of Registrant

3.2* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
prior to the effectiveness of this registration statement

3.3* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
after the closing of the offering

3.4** Bylaws of Registrant

4.1** Second Restated Rights Agreement

4.2** Second Restated Stockholders Agreement

4.3* Specimen stock certificate

5.1* Opinion of Gray Cary Ware & Freidenrich LLP

10.1** Form of Indemnification Agreement between Registrant and its directors and officers
</TABLE>

II-2
<PAGE>

<TABLE>
<C> <S>
10.2** 1998 Stock Plan, including form of option agreement

10.3* 1999 Employee Stock Purchase Plan

10.4** Form of Loan Agreement and Promissory Note between Registrant and certain directors
and officers

10.5** Form of Series B Preferred Stock Warrant

10.6** Series B Preferred Stock Purchase Agreement dated as of November 15, 1998

10.7** Series C Preferred Stock Purchase Agreement dated as of August 5, 1999

10.8** Series D Preferred Stock Purchase Agreement dated as of September 22, 1999

10.9** Operating Agreement between Registrant and Nielsen Media Research dated as of
August 15, 1999

10.10** Common Stock Purchase Warrant issued to Nielsen Media Research, expiring December
31, 2001

10.11** Common Stock Purchase Warrant issued to Nielsen Media Research, expiring December
31, 2004

10.12** Common Stock Purchase Agreement between Registrant and ACNielsen eRatings.com,
dated as of September 22, 1999

10.13** Rights Agreement among Registrant, ACNielsen Corporation and ACNielsen
eRatings.com, dated as of September 22, 1999

10.14** Stockholders Agreement among Registrant, ACNielsen Corporation and ACNielsen
eRatings.com, dated as of September 22, 1999

10.15** Operating Agreement between Registrant and ACNielsen eRatings.com, dated as of
September 22, 1999

10.16** Software License Agreement between Registrant and Nielsen Media Research, dated as
of August 15, 1999

10.17** Panel Maintenance Agreement between Registrant and Nielsen Media Research, dated as
of August 15, 1999

10.18** Software License Agreement between Registrant and ACNielsen eRatings.com, dated as
of September 22, 1999

10.19 AboveNet Support Services Agreement, dated as of February 26, 1999.

23.1 Consent of Ernst & Young LLP, Independent Auditors

23.2* Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)

24.1** Power of Attorney (included on signature page)

27.1 Financial Data Schedule
</TABLE>

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

* To be filed by amendment.

** Previously filed.

(B) FINANCIAL STATEMENT SCHEDULES.

All schedules have been omitted because the information required to be set
forth therein is not applicable or is shown in the financial statements or notes
thereto.

II-3
<PAGE>
ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 14 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused Amendment No. 1 to the registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in Santa Clara, State of
California, on October 27, 1999

NETRATINGS INC.

By: /s/ DAVID J. TOTH
-----------------------------------------
David J. Toth
PRESIDENT AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>

President and Chief
/s/ DAVID J. TOTH* Executive Officer
- ------------------------------ (Principal Executive October 27, 1999
David J. Toth Officer)

/s/ DAVID A. NORMAN* Chairman of the Board
- ------------------------------ October 27, 1999
David A. Norman

Vice President, Chief
/s/ JACK R. LAZAR Financial Officer and
- ------------------------------ Secretary (Principal October 27, 1999
Jack R. Lazar Financial and Accounting
Officer)

/s/ JACK SERFASS* Director
- ------------------------------ October 27, 1999
Jack Serfass

/s/ JAMES J. GEDDES, JR.* Director
- ------------------------------ October 27, 1999
James J. Geddes, Jr.

/s/ DAVID H. HARKNESS* Director
- ------------------------------ October 27, 1999
David H. Harkness

/s/ MICHAEL P. CONNORS* Director
- ------------------------------ October 27, 1999
Michael P. Connors
</TABLE>

<TABLE>
<S> <C> <C> <C>
*By: /s/ JACK R. LAZAR
-------------------------
Jack R. Lazar
</TABLE>

II-5
<PAGE>
EXHIBIT INDEX

<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement

3.1** Fourth Restated Certificate of Incorporation of Registrant

3.2* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
prior to the effectiveness of this registration statement

3.3* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
after the closing of the offering

3.4** Bylaws of Registrant

4.1** Second Restated Rights Agreement

4.2** Second Restated Stockholders Agreement

4.3* Specimen stock certificate

5.1* Opinion of Gray Cary Ware & Freidenrich LLP

10.1** Form of Indemnification Agreement between Registrant and its directors and officers

10.2** 1998 Stock Plan, including form of option agreement