DESKTOP DATA INC, S-4, 1998-01-26

DESKTOP DATA INC
S-4, 1998-01-26
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 1998

REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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DESKTOP DATA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 7375 04-3016142
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

80 BLANCHARD ROAD, BURLINGTON, MASSACHUSETTS 01803
(781) 229-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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DONALD L. MCLAGAN
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
80 BLANCHARD ROAD
BURLINGTON, MASSACHUSETTS 01803
(781) 229-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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COPIES TO:
LAWRENCE S. WITTENBERG, ESQ. JONATHAN L. KRAVETZ, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND
HIGH STREET TOWER POPEO, P.C.
125 HIGH STREET ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02110 BOSTON, MASSACHUSETTS 02110

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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: Upon
consummation of the Merger described herein.

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If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] .
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] .

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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(2)(3)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par 8,415,598
value per share....... shares $4.078 $68,639,721 $20,248.72
</TABLE>
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(1) Represents the number of shares of the Common Stock of the Registrant
which may be issued to former stockholders of Individual, Inc. pursuant to
the Merger described herein. Such number includes 413,000 shares issuable
upon the exercise of currently exercisable employee stock options if such
options are exercised prior to the Effective Time.
(2) Each share of Individual, inc. will be converted into one-half of one
share of Common Stock of the Registrant pursuant to the Merger described
herein. Pursuant to Rule 457(f) under the Securities Act of 1933, as
amended, the registration fee has been calculated as of January 16, 1998.
The number shown is rounded from 4.078125.
(3) The amount of the registration fee includes $12,244.50 previously paid
pursuant to Section 14(g) of the Securities Exchange Act of 1934, as
amended, in connection with the filing by the Registrant and Individual,
Inc. of a Preliminary Prospectus/Joint Proxy Statement related to the
proposed Merger. In accordance with Rule 0-11(c)(2) under the Securities
Exchange Act of 1934, as amended, and Section 6(b) under the Securities
Act of 1933, as amended, the balance of the filing fee is being submitted
herewith.

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

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[LOGO OF DESKTOP] [LOGO OF INDIVIDUAL]

PROSPECTUS/JOINT PROXY STATEMENT

8,415,598 SHARES

DESKTOP COMMON STOCK

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This Prospectus/Joint Proxy Statement constitutes the Prospectus of Desktop
Data, Inc., a Delaware corporation ("Desktop"), with respect to up to
8,415,598 shares of its common stock, par value $0.01 per share ("Desktop
Common Stock"), to be issued in connection with the proposed merger (the
"Merger") of Individual, Inc., a Delaware corporation ("Individual"), with and
into Desktop, pursuant to the terms set forth in the Agreement and Plan of
Merger and Reorganization dated as of November 2, 1997 between Desktop and
Individual (the "Agreement"). As used herein, the term "Combined Company"
means Desktop and Individual and their respective subsidiaries as a
consolidated entity following the Merger and references to the products,
business, results of operations or financial condition of the Combined Company
should be considered to refer to Desktop and Individual, unless the context
otherwise requires. The shares of Desktop Common Stock after the Merger are
referred to herein as the "Combined Company Common Stock" and the common
stock, par value $.01 per share, of Individual is herein referred to as
"Individual Common Stock." As a result of the Merger, each outstanding share
of Individual Common Stock, other than shares held in the treasury of
Individual, Desktop or any wholly owned subsidiary of Desktop or Individual,
will be converted into the right to receive one-half ( 1/2) of one share of
Desktop Common Stock (the "Exchange Ratio") and each outstanding option,
warrant or right to purchase Individual Common Stock pursuant to then
outstanding warrants and under the Individual Amended and Restated 1989 Stock
Option Plan, as amended, the Individual 1996 Non-Employee Director Stock
Option Plan, the Individual Amended and Restated 1996 Stock Plan, the
Individual 1996 Stock Option Plan, and the Individual 1995 Incentive Stock
Option Plan (collectively, the "Individual Stock Option Plans") and under the
Individual 1996 Employee Stock Purchase Plan (the "Individual Stock Purchase
Plan") will be assumed by Desktop and will become an option, warrant or right
to purchase Combined Company Common Stock, with appropriate adjustments to the
number of shares issuable thereunder and the exercise price thereof to reflect
the Exchange Ratio.

This Prospectus/Joint Proxy Statement also constitutes the Proxy Statements
of Desktop and Individual with respect to the Special Meeting of Stockholders
of Desktop scheduled to be held on February 24, 1998 (the "Desktop Meeting")
and the Special Meeting of Stockholders of Individual scheduled to be held on
February 24, 1998 (the "Individual Meeting").

This Prospectus/Joint Proxy Statement and the accompanying form of proxy are
first being mailed to the stockholders of Desktop and Individual on or about
January 28, 1998.

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

SEE "RISK FACTORS" AT PAGE 16 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY DESKTOP AND INDIVIDUAL STOCKHOLDERS IN EVALUATING THE PROPOSALS
TO BE VOTED ON AT THE DESKTOP MEETING AND AT THE INDIVIDUAL MEETING AND THE
ACQUISITION OF THE SECURITIES OFFERED HEREBY.

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

NEITHER THIS TRANSACTION NOR THE SECURITIES OF DESKTOP OFFERED HEREBY HAVE
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/JOINT PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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THE DATE OF THIS PROSPECTUS/JOINT PROXY STATEMENT IS JANUARY 28, 1998.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
AVAILABLE INFORMATION..................................................... 1
TRADEMARKS................................................................ 1
FORWARD-LOOKING STATEMENTS................................................ 1
SUMMARY................................................................... 2
SELECTED HISTORICAL AND SELECTED PRO FORMA COMBINED FINANCIAL DATA........ 13
COMPARATIVE PER SHARE DATA................................................ 15
RISK FACTORS.............................................................. 16
INTRODUCTION.............................................................. 24
DESKTOP DATA, INC. SPECIAL MEETING........................................ 24
Date, Time and Place of Desktop Meeting................................. 24
Purpose................................................................. 24
Record Date and Outstanding Shares...................................... 24
Vote Required........................................................... 24
Proxies................................................................. 25
Solicitation of Proxies; Expenses....................................... 25
Recommendations of Desktop Board of Directors........................... 25
INDIVIDUAL, INC. SPECIAL MEETING.......................................... 26
Date, Time and Place of Individual Meeting.............................. 26
Purpose................................................................. 26
Record Date and Outstanding Shares...................................... 26
Vote Required........................................................... 26
Proxies................................................................. 26
Solicitation of Proxies; Expenses....................................... 27
Appraisal Rights........................................................ 27
Recommendations of Individual Board of Directors........................ 27
APPROVAL OF THE MERGER AND RELATED TRANSACTIONS........................... 28
Joint Reasons For the Merger............................................ 28
Desktop's Reasons For the Merger........................................ 29
Individual's Reasons For the Merger..................................... 30
Background of the Merger................................................ 31
Opinion of BT Alex. Brown, Financial Advisor to Desktop................. 34
Opinion of BancAmerica Robertson Stephens, Financial Advisor to
Individual............................................................. 40
Certain Federal Income Tax Considerations............................... 45
Governmental and Regulatory Approvals................................... 47
Accounting Treatment.................................................... 47
TERMS OF THE MERGER....................................................... 48
Effective Time.......................................................... 48
Manner and Basis of Converting Shares................................... 48
Stock Ownership Following the Merger.................................... 48
Conduct of Combined Company Following the Merger........................ 49
Conduct of Desktop's and Individual's Business Prior to the Merger...... 50
No Solicitation......................................................... 51
Break Up Fees; Expenses................................................. 52
Conditions to the Merger................................................ 52
Termination of the Agreement............................................ 54
Option Agreements....................................................... 55
Participation Agreements................................................ 56
Affiliate Agreements.................................................... 56
Interests of Certain Persons............................................ 56
</TABLE>

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<TABLE>
<CAPTION>
PAGE
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<S> <C>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION.............. 58
Financial Statements.................................................... 58
Combined Company Following the Merger................................... 62
ADDITIONAL MATTERS BEING SUBMITTED TO A VOTE OF ONLY DESKTOP
STOCKHOLDERS............................................................. 63
Amendment to Amended and Restated Certificate of Incorporation to Change
Name................................................................... 63
Amendment to Amended and Restated Certificate of Incorporation to
Increase the number of authorized shares of Common Stock............... 63
Amendment of the 1995 Stock Plan........................................ 64
Amendments of the 1995 Employee Stock Purchase Plan..................... 67
DESKTOP................................................................... 72
Desktop Business........................................................ 72
Desktop Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 78
Desktop Certain Transactions............................................ 83
Desktop Stock Information............................................... 84
Desktop Management and Executive Compensation........................... 87
INDIVIDUAL................................................................ 91
Individual Business..................................................... 91
Individual Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 102
Individual Stock Information............................................ 110
Individual Management and Executive Compensation........................ 113
DESCRIPTION OF CAPITAL STOCK.............................................. 119
EXPERTS................................................................... 122
LEGAL MATTERS............................................................. 122
FINANCIAL STATEMENTS...................................................... F-1
Index to Financial Statements........................................... F-1
Report of Arthur Andersen LLP (Desktop)................................. F-2
Report of Coopers & Lybrand L.L.P. (Individual)......................... F-22
ANNEX A--Agreement and Plan of Merger and Reorganization, dated as of
November 2, 1997, between Desktop Data, Inc. and Individual, Inc......... A-1
ANNEX B--Stock Option Agreement dated as of November 2, 1997 between
Desktop Data, Inc. and Individual, Inc. (Individual Option).............. B-1
ANNEX C--Stock Option Agreement dated as of November 2, 1997 between
Desktop Data, Inc. and Individual, Inc. (Desktop Option)................. C-1
ANNEX D--Opinion of BT Alex. Brown Incorporated........................... D-1
ANNEX E--Opinion of BancAmerica Robertson Stephens........................ E-1
</TABLE>

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AVAILABLE INFORMATION

Desktop and Individual are subject to the information reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith file reports, proxy statements and other information
with the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048, and
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60601-2511. Copies of such material may be obtained by mail from the Public
Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC also maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC at the address
"http://www.sec.gov." Desktop Common Stock and Individual Common Stock are
quoted on the Nasdaq National Market ("Nasdaq"), and such reports, proxy
statements and other information can also be inspected at the offices of
Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.

Desktop has filed with the SEC a registration statement on Form S-4 (herein,
together with all amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus/Joint Proxy Statement does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the SEC. For
further information, reference is hereby made to the Registration Statement.
Copies of the Registration Statement and the exhibits and schedules thereto
may be inspected, without charge, at the offices of the SEC, or obtained at
prescribed rates from the Public Reference Section of the SEC at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THESE
MATTERS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY DESKTOP OR INDIVIDUAL. NEITHER THE
DELIVERY HEREOF NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
FACTS HEREIN SET FORTH SINCE THE DATE HEREOF. THIS PROSPECTUS/JOINT PROXY
STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO
BUY THE SECURITIES OFFERED BY THIS PROSPECTUS/JOINT PROXY STATEMENT WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.

TRADEMARKS

NewsEDGE(R), LinkEDGE(R) and NewsOBJECTS(R) are registered trademarks of
Desktop. Desktop Data and the NewsEDGE logo are trademarks of Desktop.
ClariNet, ClariNews, CompanyLink, First!, HeadsUp, Hoover, NewsPage,
Individual, the Individual Logo and Topic Selector are trademarks of
Individual. This Prospectus/Joint Proxy Statement also includes trademarks and
tradenames of companies other than Desktop and Individual. All other
trademarks and tradenames referred to in this Prospectus are the property of
their respective owners.

FORWARD-LOOKING STATEMENTS

This Prospectus/Joint Proxy Statement contains forward-looking statements.
Actual results could differ materially from those projected in the forward-
looking statements as a result of certain factors, including those set forth
below in "Risk Factors." Reference is made to the particular discussions set
forth under "Desktop--Desktop Managements' Discussion and Analysis of
Financial Condition and Results of Operations" and "Individual--Individual
Management's Discussion and Analysis of Financial Condition and Results of
Operations." In connection with forward-looking statements which appear in
these disclosures, stockholders should carefully review the factors set forth
in this Prospectus/Joint Proxy Statement under "Risk Factors."

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SUMMARY

The following contains a summary of certain information contained elsewhere
in this Prospectus/Joint Proxy Statement. This summary does not contain a
complete statement of all material elements of the proposals to be voted on and
is qualified in its entirety by the more detailed information appearing
elsewhere in this Prospectus/Joint Proxy Statement and in the information and
documents annexed hereto.

THE COMPANIES

Desktop Data, Inc.

Desktop is the leading independent provider of customized, real-time news and
information. Desktop operates as a value-added news integrator to
organizations. Desktop's unique combination of diverse, authoritative content,
innovative on-line delivery technologies, and customization and support
services empower its customers to transform news and information into a
centrally-managed, competitive business resource. Desktop's primary service,
NewsEDGE, is used by approximately 169,000 business professionals in over 410
corporations, financial institutions and government offices worldwide.

Desktop was incorporated in the State of Delaware in July 1988. Desktop's
principal executive offices are located at 80 Blanchard Road, Burlington,
Massachusetts 01803 and its telephone number is (781) 229-3000.

Individual, Inc.

Individual develops and markets a suite of customized news and information
services that provide knowledge workers with daily personalized current
awareness reports, while offering information providers and advertisers new
ways to reach targeted audiences. Utilizing its knowledge processing systems
and editorial knowledge bases, Individual's intelligent software agents search
each day through approximately 10,000 to 20,000 stories drawn from
approximately 600 broad and specialized information sources, and prepare for
each user a highly relevant daily news briefing with full-text retrieval
options. In addition, Individual's Hoover Business Intelligence Service
("Hoover"), acquired in October 1996, integrates and organizes news and
information from internal and external sources and provides real-time and
archival electronic services to organizations. In June 1997, Individual
acquired ClariNet Communications Corp., the publisher of ClariNews, a business
news service provided to over 1.5 million Internet subscribers and sold
primarily to internet service providers, corporations and universities.
Individual delivers its information services to more than approximately 700,000
users across a range of delivery platforms, including facsimile, electronic
mail, groupware, intranets and the Internet.

Individual was incorporated in the State of Delaware in January 1989.
Individual's principal executive offices are located at 8 New England Executive
Park West, Burlington, Massachusetts 01803, and its telephone number is (781)
273-6000.

SPECIAL MEETING OF THE STOCKHOLDERS OF DESKTOP

Time, Date, Place and Purpose

A Special Meeting of Stockholders of Desktop will be held at the offices of
Testa, Hurwitz & Thibeault, LLP, High Street Tower, 125 High Street, Boston,
Massachusetts 02110 on Tuesday, February 24, 1998 at 10:00 a.m. (the "Desktop
Meeting"). The purpose of the Desktop Meeting is (i) to approve and adopt the
Agreement, the Merger and the issuance of shares of Desktop Common Stock to the
stockholders of Individual pursuant to the Agreement, (ii) to approve an
amendment to the Amended and Restated Certificate of Incorporation of Desktop
(the "Certificate") to change the corporate name of Desktop to "NewsEDGE
Corporation," subject to and upon consummation of the Merger, (iii) to approve
an amendment to the Certificate to increase the number of authorized shares of
Desktop Common Stock from 15,000,000 shares to 35,000,000 shares, subject to
and

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upon consummation of the Merger, (iv) to approve an amendment to the Desktop
1995 Stock Plan to increase the number of shares of Desktop Common Stock to be
reserved for issuance thereunder from 1,625,000 shares to 4,125,000 shares,
subject to and upon consummation of the Merger, and (v) to approve amendments
to the Desktop 1995 Employee Stock Purchase Plan, including the increase in the
number of shares of Desktop Common Stock reserved for issuance thereunder from
175,000 shares to 500,000 shares, subject to and upon consummation of the
Merger. See "Desktop Data, Inc. Special Meeting--Date, Time and Place of
Desktop Meeting," and "--Purpose."

Record Date and Vote Required

Only Desktop stockholders of record at the close of business on January 9,
1998 (the "Desktop Record Date") are entitled to notice of and to vote at the
Desktop Meeting. Under Delaware law, the charter documents of Desktop and the
rules of Nasdaq, approval and adoption of the Agreement and the Merger, and the
amendments of the Certificate require the affirmative vote of holders of a
majority of the outstanding shares of Desktop Common Stock. All other proposals
require the affirmative vote of a majority of the total votes cast regarding
such proposal. See "Desktop Data, Inc. Special Meeting--Record Date and
Outstanding Shares" and "--Vote Required."

As of the Desktop Record Date, there were 115 stockholders of record of
Desktop Common Stock and 8,690,852 shares of Desktop Common Stock outstanding,
each of which will be entitled to cast one vote per share on each matter to be
acted upon at the Desktop Meeting. Desktop's directors and executive officers,
and their affiliates, have agreed to vote their shares in favor of the
Agreement and in favor of the issuance of shares in connection with the
Agreement. See "Desktop Data, Inc. Special Meeting--Vote Required" and "Terms
of the Merger--Participation Agreements."

Recommendation of Desktop Board of Directors

Desktop's Board of Directors (the "Desktop Board") has unanimously approved
the Agreement and the transactions contemplated thereby and has determined that
the Merger is fair and in the best interests of Desktop and its stockholders.
After careful consideration, the Desktop Board unanimously recommends a vote in
favor of (i) the approval and adoption of the Agreement, the Merger and the
issuance of shares of Desktop Common Stock pursuant to the Agreement, (ii) an
amendment of the Certificate to change the corporate name of Desktop to
"NewsEDGE Corporation," subject to and upon consummation of the Merger, (iii)
the approval of an amendment to the Certificate to increase the number of
authorized shares of Desktop Common Stock from 15,000,000 shares to 35,000,000
shares, subject to and upon consummation of the Merger, (iv) the approval of an
amendment to the Desktop 1995 Stock Plan to increase the number of shares of
Desktop Common Stock reserved for issuance thereunder from 1,625,000 shares to
4,125,000 shares, subject to and upon consummation of the Merger, and (v) the
approval of amendments to the Desktop 1995 Employee Stock Purchase Plan
including the increase in the number of shares of Desktop Common Stock reserved
for issuance thereunder from 175,000 shares to 500,000 shares, subject to and
upon consummation of the Merger. See "Desktop Data, Inc. Special Meeting--
Recommendations of Desktop Board of Directors" and "Approval of the Merger and
Related Transactions--Joint Reasons for the Merger," "--Desktop's Reasons for
the Merger" and "--Background of the Merger."

SPECIAL MEETING OF STOCKHOLDERS OF INDIVIDUAL

Time, Date, Place and Purpose

A Special Meeting of Stockholders of Individual will be held at Testa,
Hurwitz & Thibeault, LLP, High Street Tower, 125 High Street, Boston,
Massachusetts 02110 on Tuesday, February 24, 1998 at 10:00 a.m. (the

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"Individual Meeting"). The purpose of the Individual Meeting is to approve and
adopt the Agreement and the Merger. See "Individual, Inc. Special Meeting--
Date, Time and Place of Individual Meeting," and "--Purpose."

Record Date and Vote Required

Only Individual stockholders of record at the close of business on January 9,
1998 (the "Individual Record Date") are entitled to notice of and to vote at
the Individual Meeting. Under Delaware law, the charter documents of Individual
and the rules of Nasdaq, approval and adoption of the Agreement and the Merger
requires the affirmative vote of holders of a majority of the outstanding
shares of Individual Common Stock. See "Individual, Inc. Special Meeting--
Record Date and Outstanding Shares" and "--Vote Required."

As of the Individual Record Date, there were 181 stockholders of record of
Individual Common Stock and 16,418,196 shares of Individual Common Stock
outstanding, each of which will be entitled to cast one vote per share on each
matter to be acted upon at the Individual Meeting. Individual's directors and
certain executive officers, and their affiliates, have agreed to vote their
shares in favor of the Agreement. See "Individual, Inc. Special Meeting--Vote
Required" and "Terms of the Merger--Participation Agreements."

Recommendation of Individual Board of Directors

Individual's Board of Directors (the "Individual Board") has unanimously
approved the Agreement and the transactions contemplated thereby and has
determined that the Merger is fair and in the best interests of Individual and
its stockholders. After careful consideration, the Individual Board unanimously
recommends a vote in favor of the approval and adoption of the Agreement and
the Merger. Stockholders should read this Prospectus/Joint Proxy Statement
carefully before voting. See "Individual, Inc. Special Meeting --
Recommendations of Individual Board of Directors" and "Approval of the Merger
and Related Transactions--Joint Reasons for the Merger," "--Individual's
Reasons for the Merger" and "Background of the Merger."

RISK FACTORS

THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED BY STOCKHOLDERS IN CONNECTION
HEREWITH: (I) THE EXPECTED LONG-TERM STRATEGIC BENEFITS OF THE MERGER ARE
DEPENDENT UPON THE SUCCESSFUL COMBINATION AND INTEGRATION OF THE TWO COMPANIES,
AND THERE CAN BE NO ASSURANCE THAT THIS WILL OCCUR; (II) INDIVIDUAL HAS A
HISTORY OF OPERATING LOSSES, AND THERE CAN BE NO ASSURANCE THAT THE INDIVIDUAL
BUSINESS WILL BE PROFITABLE; (III) THE FLUCTUATION OF STOCK PRICES, AND THE
FIXED NATURE OF THE EXCHANGE RATIO, MAY CAUSE THE VALUE RECEIVED BY INDIVIDUAL
STOCKHOLDERS TO DECLINE PRIOR TO THE EFFECTIVE TIME; (IV) THERE IS NO ASSURANCE
THAT THE INTEGRATION OF INDIVIDUAL'S AND DESKTOP'S BUSINESS OPERATIONS WILL NOT
INVOLVE UNEXPECTED COSTS; (V) THERE IS NO ASSURANCE THAT THE BUYING PATTERNS OF
DESKTOP'S AND INDIVIDUAL'S CUSTOMERS WILL NOT BE AFFECTED BY THE MERGER; (VI) A
NUMBER OF FACTORS MAY RESULT IN UNANTICIPATED FLUCTUATIONS IN QUARTERLY
RESULTS; (VII) CHANGING TECHNOLOGY AND MARKET REQUIREMENTS INVOLVE CERTAIN
INHERENT RISKS, INCLUDING THE POTENTIAL DIFFICULTY IN SUCCESSFULLY INTRODUCING
NEW PRODUCTS; (VIII) THE COMBINED COMPANY WILL BE DEPENDENT ON THE RETENTION
AND ATTRACTION OF KEY PERSONNEL; (IX) THE MARKET FOR CUSTOMIZED ELECTRONIC NEWS
DELIVERY IN WHICH THE COMBINED COMPANY'S PRODUCTS WILL COMPETE IS HIGHLY
COMPETITIVE; (X) THE COMBINED COMPANY WILL BE DEPENDENT ON ITS COOPERATIVE
MARKETING RELATIONSHIPS AND ITS RELATIONSHIPS WITH NEWS PROVIDERS AND NEWS
TRANSMISSION SOURCES; AND (XI) THE COMBINED COMPANY WILL BE DEPENDENT ON
PROPRIETARY TECHNOLOGY, WHICH IT MAY NOT BE ABLE TO FULLY PROTECT. SEE "RISK
FACTORS."

REASONS FOR THE MERGER

The Boards of Individual and Desktop have authorized the execution and
delivery of the Agreement with the expectation that the proposed Merger, by
combining the experience, financial resources, size and breadth of product
offerings of Desktop and Individual, will result in significant long-term
strategic benefits to the companies. See "Risk Factors," "Approval of the
Merger and Related Transactions--Joint Reasons for the Merger," "--Desktop's
Reasons for the Merger," and "--Individual's Reasons for the Merger."

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FAIRNESS OPINIONS

BT Alex. Brown Incorporated ("BT Alex. Brown") has delivered to the Desktop
Board its written opinion, dated November 2, 1997, to the effect that, as of
such date, the Exchange Ratio was fair from a financial point of view to
Desktop. The full text of the opinion of BT Alex. Brown, which sets forth
assumptions made and matters considered, is attached hereto as Annex D to this
Prospectus/Joint Proxy Statement and is incorporated herein by reference.
HOLDERS OF DESKTOP COMMON STOCK ARE URGED TO READ SUCH OPINION IN ITS ENTIRETY.
See "Approval of the Merger and Related Transactions--Opinion of BT Alex.
Brown, Financial Advisor to Desktop" and Annex D hereto.

BancAmerica Robertson Stephens has delivered to the Individual Board its
written opinion, dated November 2, 1997, to the effect that, as of such date,
the Exchange Ratio was fair from a financial point of view to the stockholders
of Individual. The full text of the opinion of BancAmerica Robertson Stephens,
which sets forth assumptions made and matters considered is attached hereto as
Annex E to this Prospectus/Joint Proxy Statement, and is incorporated herein by
reference. HOLDERS OF INDIVIDUAL COMMON STOCK ARE URGED TO READ SUCH OPINION IN
ITS ENTIRETY. See "Approval of the Merger and Related Transactions--Opinion of
BancAmerica Robertson Stephens, Financial Advisor to Individual" and Annex E
attached hereto.

INCOME TAX TREATMENT

The Merger is intended to qualify as a reorganization under Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), in which case no
gain or loss should generally be recognized by the holders of shares of
Individual Common Stock on the exchange of their shares of Individual Common
Stock solely for shares of Desktop Common Stock. As a condition to the
consummation of the Merger, Desktop and Individual will each receive an opinion
from their respective tax counsel that the Merger will constitute a
reorganization under Section 368(a) of the Code. HOWEVER, ALL INDIVIDUAL
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS. See "Approval of the
Merger and Related Transactions--Certain Federal Income Tax Considerations."

REGULATORY MATTERS

Desktop and Individual are aware of no material governmental or regulatory
approvals required for consummation of the Merger, other than compliance with
the federal securities laws and applicable securities and "blue sky" laws of
the various states. See "Approval of the Merger and Related Transactions--
Governmental and Regulatory Approvals."

ACCOUNTING TREATMENT

The Merger is intended to qualify as a pooling of interests for financial
reporting purposes in accordance with generally accepted accounting principles.
Desktop and Individual have each received letters dated as of November 3, 1997
from Arthur Andersen LLP, Desktop's independent auditors, and Coopers & Lybrand
L.L.P., Individual's independent auditors, as to their concurrence with Desktop
management's and Individual management's conclusions, respectively, as to the
appropriateness of pooling-of-interests accounting for the Merger under
Accounting Principles Board Opinion No. 16, if consummated in accordance with
the Agreement. Consummation of the Merger is conditioned upon receipt at the
closing of the Merger by Desktop and Individual of letters from Arthur Andersen
LLP, and Coopers & Lybrand L.L.P., respectively, reaffirming those firms'
respective opinions, both dated as of November 3, 1997. See "Approval of the
Merger and Related Transactions--Accounting Treatment."

THE MERGER

Terms of the Merger

At the Effective Time (as defined below) of the Merger, Individual will merge
with and into Desktop and Desktop will continue as the surviving corporation.
It is currently intended that the operations of Desktop and

5
<PAGE>

Individual will be combined as soon as practicable following the closing of the
Merger. As a result of the Merger, each outstanding share of Individual Common
Stock, other than shares held in the treasury of Individual, Desktop or any
wholly-owned subsidiary of Desktop or Individual, will be converted into the
right to receive one-half ( 1/2) of one share of Desktop Common Stock, and each
outstanding option, warrant or right to purchase Individual Common Stock
pursuant to outstanding warrants and under the Individual Stock Option Plans
and Individual Stock Purchase Plan will be assumed by Desktop and will become
an option, warrant or right to purchase Combined Company Common Stock, with
appropriate adjustments to be made to the number of shares issuable thereunder
and the exercise price thereof to reflect the Exchange Ratio.

No fractional shares will be issued by virtue of the Merger, but in lieu
thereof each holder of shares of Individual Common Stock (after aggregating all
fractional shares to be received by such holder) will receive from the Combined
Company an amount of cash (rounded to the nearest whole cent) equal to the
product of (i) such fraction, multiplied by (ii) the average closing price of a
share of Desktop Common Stock for the ten most recent days that Desktop Common
Stock has traded ending on the trading day immediately prior to the Effective
Time, as reported on Nasdaq. See "Terms of the Merger--Manner and Basis of
Converting Shares."

Effective Time of the Merger

The Merger will become effective upon the filing of a Certificate of Merger
(the "Certificate of Merger") with the Secretary of State of the State of
Delaware (the "Effective Time"). Assuming all conditions to the Merger are met
or waived prior thereto, it is anticipated that the Closing Date of the Merger
(the "Closing Date") and Effective Time will be on or about February 24, 1998.
See "Terms of the Merger--Effective Time."

Exchange of Individual Stock Certificates

Promptly after the Effective Time, the Combined Company, acting through
BankBoston, N.A. as its exchange agent (the "Exchange Agent"), will deliver to
each Individual stockholder of record a letter of transmittal with instructions
to be used by such stockholder in surrendering certificates which, prior to the
Merger, represented shares of Individual Common Stock. CERTIFICATES SHOULD NOT
BE SURRENDERED BY THE HOLDERS OF INDIVIDUAL COMMON STOCK UNTIL SUCH HOLDERS
RECEIVE THE LETTER OF TRANSMITTAL FROM THE EXCHANGE AGENT. At the Effective
Time, each then outstanding option, warrant, or right to purchase Individual
Common Stock, whether vested or unvested, will be assumed by Desktop without
any action on the part of the holder thereof and the number of shares issuable
thereunder and the exercise price thereof shall be appropriately adjusted to
reflect the Exchange Ratio. OPTION AGREEMENTS AND WARRANTS NEED NOT BE
SURRENDERED. See "Terms of the Merger--Manner and Basis of Converting Shares."

Form S-8 Registration Statement

No later than two business days after the Closing Date, the Combined Company
will file a Registration Statement on Form S-8 under the Securities Act
covering the shares of Combined Company Common Stock issuable upon exercise of
options to purchase Individual Common Stock to be assumed by Desktop at the
Effective Time. See "Terms of the Merger--Manner and Basis of Converting
Shares."

Stock Ownership Following the Merger

Based upon the number of shares of Individual Common Stock outstanding and
the number of shares issuable upon exercise of outstanding options or warrants
to purchase Individual Common Stock as of January 9, 1998, an aggregate of
approximately 8,209,098 shares of Desktop Common Stock will be issued to
Individual Stockholders in the Merger and Desktop will assume options and
warrants exercisable for up to approximately 2,944,350 additional shares of
Combined Company Common Stock. Based upon the number of

6
<PAGE>

shares of Desktop Common Stock issued and outstanding as of January 9, 1998,
and after giving effect to the issuance of Desktop Common Stock as described in
the previous sentence, the former holders of Individual Common Stock would
hold, and have voting power with respect to, approximately 48.6% of the
Combined Company's total issued and outstanding shares (or 53.5% of the
Combined Company's total issued and outstanding shares assuming the exercise of
options and warrants to purchase Desktop Common Stock and Individual Common
Stock outstanding as of January 9, 1998). The foregoing numbers of shares and
percentages are subject to change in the event that the capitalization of
either Desktop or Individual changes subsequent to January 9, 1998, and prior
to the Effective Time, and there can be no assurance as to the actual
capitalization of Desktop or Individual at the Effective Time or the Combined
Company at any time following the Effective Time. See "Terms of Merger--Stock
Ownership Following the Merger."

Conduct of Combined Company Following the Merger

Pursuant to the Agreement, the Board of Directors of Desktop shall recommend
to the Stockholders of Desktop and shall use all other reasonable efforts to
take all actions necessary (i) to cause the Board of Directors of the Combined
Company, immediately after the Effective Time, to consist of seven (7) persons,
four (4) of whom shall have served on the Board of Directors of Desktop
immediately prior to the Effective Time (the "Former Desktop Directors"), and
three (3) of whom shall have served on the Board of Directors of Individual
immediately prior to the Effective Time (the "Former Individual Directors"),
and (ii) to reconstitute the Board of Directors of Desktop so that two Former
Desktop Directors and one Former Individual Director will be in the class of
directors whose terms expire at the Annual Meeting of Stockholders of the
Combined Company for the third year after the Effective Time, one Former
Desktop Director and one Former Individual Director will be in the class whose
term expires two years after the Effective Time, and one Former Desktop
Director and one Former Individual Director will be in the class whose term
expires at the Annual Meeting one year after the Effective Time. If, prior to
the Effective Time, any of the Individual or Desktop designees shall decline or
be unable to serve as an Individual or Desktop director, Individual (if such
person was designated by Individual) or Desktop (if such person was designated
by Desktop) shall designate another person to serve in such person's stead,
which person shall be reasonably acceptable to the other party.

Following the Merger, the principal executive officers of the Combined
Company will be as follows: Donald L. McLagan will continue to serve as the
Chairman, Chief Executive Officer and President of the Combined Company, Edward
R. Siegfried will continue to serve as the Chief Financial Officer and Vice
President--Finance and Operations of the Combined Company, and Michael E.
Kolowich, who is currently President and Chief Executive Officer of Individual,
will become the Vice-Chairman of the Combined Company. See "Terms of the
Merger--Conduct of Combined Company Following the Merger."

No Solicitation

Under the terms of the Agreement, until the earlier of the Effective Time or
termination of the Agreement pursuant to its terms, each of Desktop and
Individual has agreed that, without the other's prior written consent, it will
not, and will instruct its respective directors, officers, employees,
representatives, investment bankers, agents and affiliates not to, directly or
indirectly, solicit or encourage the initiation or submission of any inquiries,
proposals or offers regarding any acquisition, merger, take-over bid, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transaction involving the other
party or any subsidiaries of the other party (any of the foregoing inquiries or
proposals being referred to as an "Acquisition Proposal"). Each of Desktop and
Individual has agreed to (i) notify Individual or Desktop, respectively,
immediately upon receipt of any Acquisition Proposal or any request for
nonpublic information relating to Individual or Desktop, respectively, or any
of its subsidiaries in connection with an Acquisition Proposal, and (ii)
immediately notify Individual or Desktop, respectively, regarding the identity
of the offeror and the terms and conditions of any such proposal in reasonable
detail.

7
<PAGE>

Notwithstanding the foregoing, each of Desktop and Individual may, to the
extent its Board of Directors determines, in good faith, after receiving a
written opinion of outside legal counsel to the effect that the Board of
Directors is required to do so in order to discharge properly its fiduciary
duties, participate in discussions or negotiations with, and, subject to the
execution of a confidentiality agreement and the payment of a fee of $3.5
million to the other party and the triggering of the other party's rights under
its Option Agreement (as defined below), furnish information to any person,
entity or group after such person, entity or group has delivered to either
Desktop or Individual, as the case may be, in writing, an unsolicited bona fide
Acquisition Proposal which the Board of Directors of such company in its good
faith reasonable judgment determines, after consultation with its independent
financial advisors, would result in a transaction more favorable to the
stockholders of such company from a financial point of view than the Merger (a
"Superior Proposal"). See "Terms of the Merger--Break Up Fees; Expenses."

In the event either Desktop or Individual receives a Superior Proposal, the
Board of Directors of such company may approve such Superior Proposal or
recommend such Superior Proposal to its stockholders, if such Board determines
that such action is required by its fiduciary duties under applicable law.
However, any such action could give rise to a payment of $3.5 million to the
other party and trigger the other party's rights under its Option Agreement.
See "Terms of the Merger--No Solicitation."

Market Price Data

Desktop Common Stock has been traded on the Nasdaq National Market ("Nasdaq")
under the symbol "DTOP" since Desktop's initial public offering in August 1995.
On October 31, 1997, the last trading day before the execution of the
Agreement, the closing price of Desktop Common Stock as reported on Nasdaq was
$10.34 per share. On January 9, 1998, the closing price of Desktop Common Stock
as reported on Nasdaq was $8.688. There can be no assurance as to the actual
price of Desktop Common Stock prior to, at or at any time following the
Effective Time of the Merger, or in the event the Merger is not consummated.

Individual Common Stock has been traded on the Nasdaq National Market under
the symbol "INDV" since Individual's initial public offering in March 1996. On
October 31, 1997, the last trading day before the execution of the Agreement,
the closing price of Individual Common Stock as reported on Nasdaq was $5.125
per share. Following the Merger, Individual Common Stock will no longer be
traded on Nasdaq. On January 9, 1998, the closing price of Individual Common
Stock as reported on Nasdaq was $4.063. There can be no assurance as to the
actual price of Individual Common Stock prior to, or at the Effective Time of
the Merger, or in the event the Merger is not consummated. See "Risk Factors,"
"Desktop--Desktop Stock Information," and "Individual--Individual Stock
Information."

Termination; Break-up Fees; Expenses

The Agreement may be terminated under certain circumstances, including,
without limitation, by mutual written consent of Desktop and Individual by
their respective Board of Directors; by either Desktop or Individual if the
other party commits certain breaches of any covenant or agreement contained in
the Agreement and such breach is not cured within five days; if consummation of
the Merger is restricted by an order or other action of a court of competent
jurisdiction or a governmental, regulatory or administrative agency or
commission; if the Merger is not consummated on or before April 30, 1998
(except that the Agreement cannot be terminated pursuant to this provision by a
party whose action or failure to act has been a principal cause of the failure
of the Merger to occur on or before such date where such action or failure to
act constitutes a breach of the Agreement); if the Commission determines that
Desktop may not account for the Merger as a pooling of interests; if any
representation or warranty on the part of the other party set forth in the
Agreement proves to have been untrue on the date of the Agreement and such
failure to be true is reasonably likely to have a material adverse effect with
respect to the other party; or if a material adverse effect with respect to the
other party has occurred since the date of the Agreement.

8
<PAGE>

Each of Desktop and Individual has agreed that (i) if it accepts a Superior
Proposal or if the Board of Directors of such company recommends a Superior
Proposal to the stockholders of such company, (ii) if the stockholders of such
company fail to approve the Merger and such party subsequently enters into an
Alternative Transaction (as such term is defined below), (iii) if the Board of
Directors of such company shall have withdrawn or modified, in a manner adverse
to the other party, its recommendation in favor of the Merger, (iv) if such
company breaches any covenant or agreement set forth in the Agreement, and such
breach is not cured within five days, (v) if any representation or warranty of
the other party proves untrue on the date made and such failure to be true is
reasonably likely to have a material adverse effect on such party, or (vi) if
such company delivers non-public information of such company to a third party
in connection with an Acquisition Proposal, then, subject to certain
conditions, such company will immediately pay to the other party the sum of
$3.5 million. As used in this Prospectus/Joint Proxy Statement, "Alternative
Transaction" means (x) a transaction pursuant to which any person (or group of
persons) other than Desktop or its affiliates or Individual or its affiliates,
as the case may be (a "Third Party"), acquires more than 50% of the outstanding
shares, whether from Individual or Desktop, as the case may be, pursuant to a
tender offer or exchange offer or otherwise, (y) a merger or other business
combination involving Individual or Desktop, as the case may be, pursuant to
which any Third Party acquires more than 50% of the outstanding equity
securities of Individual or Desktop, as the case may be, or the entity
surviving such merger or business combination or (z) any other transaction
pursuant to which any Third Party acquires control of assets (including for
this purpose the outstanding equity securities of subsidiaries of Individual or
Desktop, as the case may be, or of the entity surviving any merger or business
combination including any of them) of Individual or Desktop, as the case may
be, and its subsidiaries having a fair market value equal to more than 50% of
the fair market value of all the assets of Individual or Desktop, as the case
may be, and its subsidiaries taken as a whole, immediately prior to such
transaction. See "Terms of the Merger--Break Up Fees; Expenses" and "--
Termination of the Agreement."

Option Agreements

As an inducement to Individual to enter into the Agreement, Desktop entered
into a Stock Option Agreement with Individual dated November 2, 1997 (the
"Desktop Option Agreement") pursuant to which Desktop granted Individual the
right (the "Desktop Option"), under certain conditions, to purchase up to
1,726,398 shares of Desktop Common Stock by exchanging therefor shares of
Individual Common Stock at the rate of two shares of Individual Common Stock
for each share of Desktop Common Stock and/or, at Individual's election, by
paying cash of $10.34 per share (the "Desktop Exercise Price"). Subject to
certain conditions, the Desktop Option may be exercised in whole or in part by
Individual (i) upon the commencement of a tender or exchange offer for 25% or
more of any class of Desktop's capital stock, (ii) in the event the Board of
Directors of Desktop shall have withheld, withdrawn or modified, in a manner
adverse to Individual, its recommendation in favor of the Merger, (iii) in the
event Desktop shall have accepted a Superior Proposal or if the Board of
Directors of Desktop recommends a Superior Proposal to the stockholders of
Desktop, (iv) in the event the stockholders of Desktop fail to approve the
Merger or the issuance of shares of Desktop Common Stock by virtue of the
Merger and Desktop subsequently enters into an Alternative Transaction within
six months of termination of the Agreement, (v) in the event that any
representation or warranty on the part of Desktop set forth in the Agreement
proves to be untrue on the date made and such failure to be true is reasonably
likely to have a material adverse effect, or (vi) the delivery of non-public
information by Desktop to a third party in connection with an Acquisition
Proposal.

As an inducement to Desktop to enter into the Agreement, Individual entered
into a Stock Option Agreement with Desktop dated November 2, 1997 (the
"Individual Option Agreement" and together with the Desktop Option Agreement,
the "Option Agreement") pursuant to which Individual granted Desktop the right
(the "Individual Option"), under certain circumstances, to purchase up to
3,249,779 shares of Individual Common Stock by exchanging therefore shares of
Desktop Common Stock at the rate of one-half ( 1/2) of one share of Desktop
Common Stock for each share of Individual Common Stock and/or, at Desktop's
election, by paying

9
<PAGE>

cash of $5.17 per share (the "Individual Exercise Price"). Subject to certain
conditions, the Individual Option may be exercised in whole or in part by
Desktop (i) upon the commencement of a tender or exchange offer for 25% or more
of any class of Individual's capital stock, (ii) in the event the Board of
Directors of Individual shall have withheld, withdrawn or modified, in a manner
adverse to Desktop, its recommendation in favor of the Merger, (iii) in the
event Individual shall have accepted a Superior Proposal or if the Board of
Directors of Individual recommends a Superior Proposal to the stockholders of
Individual, (iv) in the event the stockholders of Individual fail to approve
the Merger and Individual subsequently enters into an Alternative Transaction
within six months of termination of the Agreement, (v) in the event that any
representation or warranty on the part of Individual set forth in the Agreement
proves to be untrue on the date made and such failure to be true is reasonably
likely to have a material adverse effect, or (vi) the delivery by Individual of
non-public information to a third party in connection with an Acquisition
Proposal. See "Terms of the Merger--Stock Option Agreements."

Conditions to the Merger

Consummation of the Merger is subject to the satisfaction of various
conditions, including approvals by the requisite vote of the stockholders of
Desktop and Individual and the receipt of confirmation by Desktop and
Individual of the conclusions contained in certain letters from their
respective independent accountants regarding the ability of the Combined
Company to account for the Merger as a pooling of interests.

Consummation of the Merger is also subject to the satisfaction of the
following conditions: the Registration Statement filed with the SEC relating to
the issuance of shares of Desktop Common Stock in connection with the Merger
shall be effective and such shares shall be authorized for listing on Nasdaq;
no injunction, court order, or other legal restraint preventing consummation of
the Merger shall be in effect; and Desktop and Individual shall have received
opinions from their respective legal counsel to the effect that the Merger will
qualify as a "reorganization" within the meaning of the Code. In addition, the
obligations of Individual to consummate the Merger are subject to the following
conditions, unless waived by Individual: the representations and warranties of
Desktop contained in the Agreement shall be accurate except where any breach or
breaches did not have or would not reasonably be expected to have a material
adverse effect on Desktop; Desktop shall have performed in all material
respects the covenants required by the Agreement; Desktop shall have received
all material consents, waivers or approvals for the authorization of the
Agreement; no material adverse effect with respect to Desktop shall have
occurred; Desktop shall have received a consent required as a result of the
Merger under a third party agreement; there shall exist no proceedings, orders
or decrees seeking to prohibit or limit Individual from exercising its rights
to its ownership in the Combined Company or seeking to compel Individual to
dispose of or hold separate any material portion of its business or assets as a
result of the Merger; Individual shall have received an Affiliate Agreement
from each Desktop affiliate; and Individual shall have received a legal opinion
from counsel to Desktop. In addition, the obligations of Desktop to consummate
the Merger are subject to the following conditions, unless waived by Desktop;
the representations and warranties of Individual contained in the Agreement
shall be accurate except where any breach or breaches did not have or would not
reasonably be expected to have a material adverse effect on Individual;
Individual shall have performed in all material respects the covenants required
by the Agreement; Individual shall have received all material consents, waivers
or approvals for the authorization of the Agreement; no material adverse effect
with respect to Individual shall have occurred; Individual shall have received
the consents required as a result of the Merger under certain third party
agreements; there shall exist no proceedings, orders or decrees seeking to
prohibit or limit Desktop from exercising its rights to its ownership in the
Combined Company or seeking to compel Desktop to dispose of or hold separate
any material portion of its business or assets as a result of the Merger;
Desktop shall have received an Affiliate Agreement from each Individual
affiliate; and Desktop shall have received a legal opinion from counsel to
Individual. See "Terms of the Merger--Conditions to the Merger."

10
<PAGE>

Participation Agreements

Each of the executive officers of Desktop and the members of the Desktop
Board and their affiliates (including Donald L. McLagan, trusts for the benefit
of Mr. McLagan's children, Edward R. Siegfried, Clifford M. Pollan, Daniel F.X.
O'Reilly, John L. Moss, A. Baron Cass, III, June Rokoff, Rory J. Cowan, Ellen
Carnahan and William Blair Venture Partners III) who own an aggregate of
2,901,116 shares of Desktop Common Stock as of January 9, 1998 representing
approximately 33.38% of the votes entitled to be cast by holders of shares of
Desktop Common stock issued and outstanding as of January 9, 1998 has entered
into a Participation Agreement with Individual (the "Desktop Participation
Agreement"). Pursuant to the Desktop Participation Agreement, which is
irrevocable, each of the foregoing Desktop stockholders has agreed to vote in
favor of the Merger and against approval of any proposal made in opposition or
competition with consummation of the Merger.

Each of the members of the Individual Board and their affiliates and certain
of the executive officers of Individual (including Michael E. Kolowich, Robert
L. Lentz, Joseph A. Amram, James D. Daniell, William A. Devereaux, Jeffery S.
Galt, Elon Kohlberg, Marino R. Polestra, Gregory S. Stanger, funds managed by
Burr, Egan, Deleage & Co., The Dialog Corporation and Microsoft Corporation)
who own an aggregate of 3,869,592 shares of Individual Common Stock as of
January 9, 1998 representing approximately 23.6% of the votes entitled to be
cast by holders of shares of Individual Common Stock issued and outstanding as
of the Individual Record Date has entered into a Participation Agreement with
Desktop (the "Individual Participation Agreement"). Pursuant to the Individual
Participation Agreement which is irrevocable, each of the foregoing Individual
stockholders has agreed to vote in favor of the Merger and against approval of
any proposal made in opposition or competition with consummation of the Merger.
See "Terms of the Merger--Participation Agreements."

Affiliate Agreements

Each of the executive officers of Desktop and each of the members of the
Desktop Board of Directors, and their affiliates, has entered into agreements
restricting sales, dispositions or other transactions reducing their risk of
investment in respect of the shares of Desktop Common Stock held by them to
help ensure that the Merger will be treated as a pooling of interests for
accounting and financial reporting purposes. Each of the members of the Board
of Directors of Individual and certain officers of Individual and their
affiliates have entered into agreements restricting sales, dispositions or
other transactions reducing their risk of investment in respect of the shares
of Individual Common Stock held by them prior to the Merger and the shares of
Desktop Common Stock received by them in the Merger so as to comply with the
requirements of applicable federal securities and tax laws and to help ensure
that the Merger will be treated as a pooling of interests for accounting and
financial reporting purposes. See "Terms of the Merger--Conditions to the
Merger" and "--Affiliate Agreements."

Interests of Certain Persons in the Merger

In considering the recommendation of the Individual Board with respect to the
Agreement, holders of Individual Common Stock should be aware that members of
the Individual Board and the executive officers of Individual have certain
interests in the Merger that are in addition to the interests of holders of
Individual Common Stock generally. These include, among other things,
provisions in the Agreement relating to indemnification, the continuation of
certain employment agreements applicable to certain management personnel, the
acceleration of vesting of options issued to certain employees and members of
the Individual Board and the continuation of three of the current members of
the Individual Board as members of the Board of Directors of the Combined
Company. See "Terms of the Merger--Interests of Certain Persons."

Appraisal Rights

Holders of Desktop Common Stock and Individual Common Stock are not entitled
to appraisal rights under the Delaware General Corporation Law in connection
with the Merger.

11
<PAGE>

Anti-takeover Provisions of Delaware Law and the Combined Company's Charter
Documents

Upon consummation of the Merger, the stockholders of Individual will become
stockholders of the Combined Company, a corporation organized under the laws of
Delaware. Certain provisions of Delaware law applicable to the Combined Company
may have the effect of delaying, deterring, or preventing changes in control or
management of the Combined Company. The Certificate of the Combined Company
will contain certain additional provisions which may further this effect. The
Combined Company will be subject to the provisions of Section 203 of the
Delaware General Corporation Law, which restricts the corporation from entering
into certain "business combinations" with an "interested person" for a period
of three years. An interested person is generally defined to mean a person or
entity that has acquired in excess of 15% of the Combined Company's voting
stock. In addition, the Certificate of the Combined Company provides for a
classified Board of Directors and the authority of the Combined Company's Board
of Directors to issue up to 1,000,000 shares of preferred stock and to fix the
rights, preferences, privileges and restrictions, including voting rights, of
such shares without any further vote or action by the stockholders. The
foregoing could discourage an unsolicited attempt to take over the Combined
Company. See "Description of Capital Stock."

12
<PAGE>

SELECTED HISTORICAL AND SELECTED PRO FORMA COMBINED FINANCIAL DATA

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following selected historical financial information of Desktop and
Individual has been derived from their respective historical financial
statements, and should be read in conjunction with such consolidated financial
statements and the notes thereto, included elsewhere in this Prospectus/Joint
Proxy Statement. The selected pro forma financial information is derived from
the unaudited pro forma combined condensed financial statements, which give
effect to the Merger as a pooling of interests and should be read in
conjunction with such unaudited pro forma statements and the notes thereto
included in this Prospectus/Joint Proxy Statement. For purposes of the pro
forma operating data, Desktop's consolidated financial statements for the three
fiscal years ended December 31, 1994, 1995, and 1996, and for the nine months
ended September 30, 1996 and 1997 have been combined with the Individual
financial statements for the three fiscal years ended December 31, 1994, 1995,
and 1996, and for the nine months ended September 30, 1996 and 1997. The pro
forma information is presented for illustrative purposes only and is not
necessarily indicative of the operating results or financial position that
would have occurred if the Merger had been consummated at the beginning of the
periods indicated, nor is it necessarily indicative of future operating results
or financial position.

DESKTOP SELECTED HISTORICAL FINANCIAL INFORMATION

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------- ---------------
1992 1993 1994 1995 1996 1996 1997
------ ------ ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL CONDENSED
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Revenues................ $4,207 $7,660 $14,358 $23,186 $33,779 $24,102 $31,313
Income (loss) from
operations............. (1,425) (1,296) (384) 1,423 3,303 2,079 1,511
Income (loss) before
provision for income
taxes.................. (1,434) (1,262) (287) 2,320 5,199 3,449 3,151
Net income (loss)....... (1,434) (1,262) (287) 2,137 4,585 3,065 2,044
Net income (loss) per
common and common
equivalent share(1).... -- -- (0.06) 0.43 0.52 0.35 0.23
Common and common
equivalent shares used
in per share
computations........... -- -- 6,670 7,519 8,778 8,811 8,750
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
----------------------------------------- SEPTEMBER 30,
1992 1993 1994 1995 1996 1997
------ ------- ------- ------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
HISTORICAL CONSOLIDATED
BALANCE SHEET DATA:
Working capital
(deficit).............. $ (506) $(1,967) $(4,664) $22,578 $17,502 $26,453
Total assets............ 3,706 4,875 8,220 38,879 48,327 55,545
Redeemable preferred
stock.................. 3,845 4,195 4,545 -- -- --
Total stockholders'
equity (deficit)....... (3,841) (5,464) (6,077) 24,605 29,985 32,173
</TABLE>
- --------
(1) Net income (loss) per common and common equivalent share includes the net
effect of the discount on redemption of preferred stock and accretion of
dividends on Preferred Stock of $0, $0, $(135), $1,131, $0, $0, and $0 for
the years ended December 31, 1992, 1993, 1994, 1995, 1996, and the nine
months ended September 30, 1996 and 1997, respectively. See "Audited
Consolidated Financial Statements of Desktop" included elsewhere in this
Prospectus/Joint Proxy Statement.

13
<PAGE>

INDIVIDUAL SELECTED HISTORICAL FINANCIAL INFORMATION(1)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
------ ------ ------- ------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL CONDENSED
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Revenues................ $2,183 $4,589 $10,111 $18,936 $28,059 $ 19,771 $ 26,430
Net loss................ (1,715) (3,010) (4,234) (6,374) (50,900) (44,713) (13,783)
Supplemental net loss
per share(2)........... (0.60) (3.65) (3.34) (0.86)
Shares used in per share
computation............ 10,702 10,704 10,707 10,719 13,942 13,375 16,011
</TABLE>

SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED
------------------------- SEPTEMBER 30,
1994 1995 1996 1997
------- ------- ------- -----------------
<S> <C> <C> <C> <C>
UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENT OF
OPERATIONS DATA:
Revenues......................... $24,469 $42,122 $61,838 $57,743
Loss from operations............. (4,504) (4,707) (47,374) (13,027)
Loss before provision for income
taxes........................... (4,517) (4,031) (45,606) (10,632)
Net loss......................... (4,521) (4,237) (46,315) (11,739)
Net loss per share(3)............ (0.39) (0.25) (2.98) (0.70)
Shares used in per share
computation..................... 12,024 12,669 15,543 16,653
</TABLE>

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
1997
-------------
<S> <C>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DATA:
Working capital(4)................................................ $25,709
Total assets...................................................... 88,343
Total stockholders' equity(4)..................................... 36,404
</TABLE>
- --------
(1) Individual's Selected Historical Financial Information gives retroactive
effect to the acquisition of ClariNet Communications Corp. by Individual in
June 1997, which was accounted for as a pooling of interests.
(2) See Note 3 to "Audited Consolidated Financial Statements of Individual"
included elsewhere in this Prospectus/Joint Proxy Statement.
(3) Pro forma combined net loss per share includes the net effect of the
discount on redemption of preferred stock and accretion of dividends on
preferred stock of $(135), $1,131, $0 and $0 for the years ended December
31, 1994, 1995 and 1996, and the nine months ended September 30, 1997,
respectively. See "Audited Consolidated Financial Statements of Desktop"
included elsewhere in this Prospectus/Joint Proxy Statement.
(4) Desktop and Individual estimate they will, together, incur aggregate direct
transaction costs of approximately $4 million associated with the Merger,
which will be charged to operations of the Combined Company upon
consummation of the Merger. In addition, it is expected that after the
Merger, the Combined Company will incur an additional significant charge to
operations, which is not currently reasonably estimable, to reflect costs
associated with integrating the two companies. Pro forma combined working
capital and stockholders' equity gives effect to the estimated direct
transaction costs as if such costs had been incurred as of the respective
balance sheet date, but does not include the additional significant charge
relating to integrating the two companies. These costs and charges are not
included in the pro forma combined net loss per share data. See "Unaudited
Pro Forma Combined Condensed Financial Information" and accompanying notes
thereto.

14
<PAGE>

COMPARATIVE PER SHARE DATA

The following table sets forth certain historical per share data of Desktop
and Individual (see Note 5) and combined per share data on an unaudited pro
forma basis after giving effect to the Merger on a pooling of interests basis
of accounting assuming that one-half ( 1/2) of one share of Desktop Common
Stock will be issued in exchange for one share of Individual Common Stock in
the Merger. This data should be read in conjunction with the selected
historical financial data, the unaudited pro forma combined condensed financial
information and the separate historical financial statements of Desktop and
Individual (see Note 5) and notes thereto, included elsewhere in this
Prospectus/Joint Proxy Statement. The pro forma combined financial data are not
necessarily indicative of the operating results that would have been achieved
had the Merger been consummated as of the beginning of the periods presented
and should not be construed as representative of future operations.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------- --------------
1994 1995 1996 1996 1997
-------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
HISTORICAL--DESKTOP:
Net income (loss) per share....... $ (0.06) $ 0.43 $ 0.52 $ 0.35 $ 0.23
Book value per share(1)........... 3.48 3.71
HISTORICAL--INDIVIDUAL(5):
Net loss per share................ (0.40) (0.60) (3.65) (3.34) (0.86)
Book value per share(1)........... 1.43 0.50
PRO FORMA COMBINED NET LOSS PER
SHARE(2):
Per Desktop share................. (0.39) (0.25) (2.98) (2.73) (0.70)
Equivalent per Individual
share(3)......................... (0.19) (0.12) (1.49) (1.37) (0.35)
</TABLE>

<TABLE>
<CAPTION>
AS OF
--------------------------
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
PRO FORMA COMBINED BOOK VALUE PER SHARE(2)(4):
Per Desktop share.................................... $3.20 $2.40
Equivalent per Individual share(3)................... 1.60 1.20
</TABLE>
- --------
(1) Desktop and Individual historical book value per share is computed by
dividing stockholders' equity by the number of shares of common stock and
preferred stock, on an as if converted basis, outstanding at the end of
each period.
(2) Desktop and Individual estimate they will, together, incur aggregate direct
transaction costs of approximately $4 million associated with the Merger,
which will be charged to operations of the Combined Company upon
consummation of the Merger. In addition, it is expected that after the
Merger, the Combined Company will incur an additional significant charge to
operations, which is not currently reasonably estimable, to reflect costs
associated with integrating the two companies. The pro forma combined book
value per share data gives effect to the estimated direct transaction costs
as if such costs had been incurred as of the respective balance sheet date,
but does not include the additional significant charge relating to
integrating the two companies. These costs and charges are not included in
the pro forma combined net loss per share data. See "Unaudited Pro Forma
Combined Condensed Financial Information" and accompanying notes thereto.
(3) The Individual equivalent pro forma combined per share amounts are
calculated by multiplying the Desktop combined pro forma per share amounts
by the Exchange Ratio.
(4) The pro forma combined book value per share is computed by dividing pro
forma stockholders' equity by the pro forma number of shares of common
stock outstanding at the end of each period.
(5) Individual's historical amounts give retroactive effect to the acquisition
of ClariNet Communications Corp. by Individual in June 1997, which was
accounted for as a pooling of interests.

15
<PAGE>

RISK FACTORS

The following factors should be considered carefully in evaluating the
proposals to be voted on at the Desktop Meeting and the Individual Meeting and
the acquisition of the securities offered hereby. This section contains
forward-looking statements that involve risks and uncertainties. Actual
results could differ materially from those anticipated in these forward-
looking statements as a result of certain factors, including those set forth
in the following risk factors and elsewhere herein.

UNCERTAINTIES RELATING TO INTEGRATION OF OPERATIONS

Individual and Desktop have entered into the Agreement with the expectation
that the proposed Merger will result in long-term strategic benefits. These
anticipated benefits will depend in part on whether the companies' operations
can be integrated in an efficient and effective manner. There can be no
assurance that this will occur. The combination of the companies will require,
among other things, integration of the companies' respective service offerings
and coordination of the companies' sales, marketing and research and
development efforts. Historically, the sales models used by Desktop and
Individual have differed significantly. While Desktop has sold principally to
the enterprise market utilizing a direct sales force, Individual has addressed
the three tiers of the market with a distribution strategy that utilizes a
direct sales force at the enterprise level, telesales to workgroups, and an
Internet distribution model that incorporates World Wide Web ("Web") banner
advertising, marketing relationships with a number of high traffic Web sites
and agreements with Internet Service Providers to capture the individual
knowledge worker. There can be no assurance that the Combined Company will be
able to take full advantage of the combined sales force's efforts. Desktop and
Individual also use a number of distribution channels in certain overseas
markets in which their respective products are sold and there can be no
assurance that channel conflicts will not develop following the Merger as the
Combined Company attempts to integrate these channels.

The services of Individual and Desktop rely on the timely collection,
processing and distribution of news and information to enterprises and
individuals around the world. While the companies intend to take precautions
to maintain service levels, there can be no assurances that, should operations
centers for the two companies be combined, there will be no service
interruptions or performance degredation in the Individual or Desktop
services. Should significant service disruptions occur, customer retention,
revenues, and service and support costs of the Combined Company could be
materially adversely affected.

The success of the integration process will be significantly influenced by
the ability of the Combined Company to attract and retain key management,
sales, marketing and research and development personnel. There is no assurance
that the foregoing will be accomplished smoothly or successfully. The
integration of operations following the Merger will require the dedication of
management resources, which may distract attention from the day-to-day
operations of the Combined Company. The inability of management to
successfully integrate the operations of the companies could have a material
adverse effect upon the business, operating results and financial condition of
the Combined Company.

HISTORY OF OPERATING LOSSES

Individual was incorporated in January 1989 and introduced its initial
service, First!, in March 1990. Since its inception, Individual has incurred
substantial costs to develop and enhance its technology, to create, introduce,
and enhance its service offerings, to establish marketing and distribution
relationships, to recruit and train a sales and marketing group, to acquire
customers for its subscription services, and to build an administrative
organization. As a consequence, Individual has incurred operating losses in
each of its fiscal quarters and in each year since inception, including net
losses of approximately $50.9 million and $13.8 million during the year ended
December 31, 1996 and the nine months ended September 30, 1997, respectively.
As of September 30, 1997, Individual had an accumulated deficit of
approximately $83.7 million. The time required to reach profitability is
highly uncertain and there can be no assurance that Individual will be able to
achieve profitability on a sustained basis, if at all. The failure of the
Individual business to achieve profitability could have a material adverse
effect

16
<PAGE>

on the Combined Company's business, results of operations and financial
condition. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

NO EFFECT ON EXCHANGE RATIO OF PRICE OF DESKTOP COMMON STOCK

Under the terms of the Agreement, the shares of Individual Common Stock
issued and outstanding at the Effective Time will be converted into the right
to receive shares of Desktop Common Stock. The Agreement does not contain any
provisions for adjustment of the Exchange Ratio based on fluctuations in the
price of Desktop Common Stock. Accordingly, the value of the consideration to
be received by stockholders of Individual upon the Merger will depend on the
market price of the Desktop Common Stock at the Effective Time.

COSTS AND EXPENSES OF INTEGRATION

Desktop and Individual estimate they will, together, incur aggregate direct
transaction costs of approximately $4 million associated with the Merger,
substantially all of which will be charged to operations of the Combined
Company upon consummation of the Merger. The Combined Company expects to incur
an additional significant charge to operations, which is not currently
reasonably estimable, in the quarter ended March 31, 1998, the quarter in
which the Merger is expected to be consummated, to reflect costs associated
with integrating the two companies. There can be no assurance that the
Combined Company will not incur additional material charges in subsequent
quarters to reflect additional costs associated with the Merger.

EFFECTS OF MERGER ON CUSTOMERS

There can be no assurance that the present and potential customers of
Individual and Desktop will continue their current buying patterns without
regard to the proposed Merger. Any significant delay or reduction in orders
could have an adverse effect on the near-term business and results of
operations of the Combined Company. In addition, uncertainties regarding
product overlap of the companies' respective services and the resolution of
that overlap may cause customers to delay purchasing decisions regarding these
products.

FLUCTUATIONS IN QUARTERLY RESULTS

The Combined Company's quarterly operating results may in the future
fluctuate significantly depending on factors such as demand for its services,
changes in service mix, the size and timing of new and renewal subscriptions
from corporate customers, advertising revenue levels, the effects of new
service announcements by the Combined Company and its competitors, the ability
of the Combined Company to develop, market and introduce new and enhanced
versions of its services on a timely basis and the level of product and price
competition. A substantial portion of the Combined Company's cost of revenue,
which consists principally of fees payable to information providers,
telecommunications costs and personnel expenses, is relatively fixed in
nature. The operating expense levels of Individual and Desktop are based, in
significant part, on their expectations of future revenue. If quarterly
revenues are below management's expectations, results of operations would be
adversely affected because a relatively small amount of the Combined Company's
costs and expenses will vary with its revenues.

FUTURE OPERATING RESULTS UNCERTAIN

The Combined Company's ability to increase its revenues will depend upon its
ability to expand its sales force, to increase sales to new customers as well
as increase penetration into existing customers, and to integrate Desktop's
and Individual's product offerings under a single brand. As a result, Desktop
and Individual believe that period-to-period comparisons of Desktop's,
Individual's or the Combined Company's results of operations are not and will
not necessarily be meaningful and should not be relied upon as an indication
of future performance. Due to all of the foregoing factors, it is possible
that in some future quarter the Combined Company's operating results will be
below the expectations of public market analysts and investors. In such event,
the price of the Combined Company's Common Stock would likely be materially
adversely affected. Although each of Desktop and Individual have experienced
growth in revenues in recent years, there can be no assurance that, in the
future, the Combined Company will sustain revenue growth or be profitable on a
quarterly or annual basis.

17
<PAGE>

DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET

Although Individual distributes its products and services across multiple
delivery platforms, including facsimile, electronic mail, and private networks
based on Lotus Notes and other groupware products, sales of certain of
Individual's products and services, such as NewsPage and ClariNews, will
depend upon the adoption of the Internet as a widely used medium for commerce
and communication. Rapid growth in the use of and interest in the Internet is
a recent phenomenon. There can be no assurance that communication or commerce
over the Internet will become widespread or that extensive content will
continue to be provided over the Internet. The Internet may not prove to be a
viable commercial marketplace for a number of reasons, including potentially
inadequate development of the necessary infrastructure, such as a reliable
network backbone, or timely development and commercialization of performance
improvements, including high speed modems. In addition, to the extent that the
Internet continues to experience significant growth in the number of users and
level of use, there can be no assurance that the Internet infrastructure will
continue to be able to support the demands placed upon it by such potential
growth or that the performance or reliability of the Web will not be adversely
affected by this continued growth. The Internet could lose its viability due
to delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity, or due to increased
governmental regulation. Changes in or insufficient availability of
telecommunications services to support the Internet also could result in
slower response times and adversely affect usage of the Web and Individual's
online services. If the necessary infrastructure or complementary services
necessary to make the Internet a viable commercial marketplace are not
developed, or if the Internet does not become a viable commercial marketplace,
the Combined Company's business, results of operations, and financial
condition could be materially adversely affected.

RELIANCE ON ADVERTISING REVENUES AND UNCERTAINTY OF WEB AS ADVERTISING MEDIUM

The Internet is an unproven medium for paid advertising sponsorship of Web-
based services such as Individual's NewsPage and ClariNews services.
Subscriptions to Individual's Web-based services are partially subsidized by
revenues from the sale of advertisements on the Web pages of such services.
Most of Individual's advertising customers have only limited experience with
the Web as an advertising medium, have not devoted a significant portion of
their advertising expenditures to Web-based advertising and may not find such
advertising to be effective for promoting their products and services relative
to traditional print and broadcast media. Individual's ability to generate
significant advertising revenues to subsidize subscriptions to its Web-based
services will depend upon, among other things, advertisers' acceptance of the
Web as an effective and sustainable advertising medium, the development of a
large base of users of Individual's services possessing demographic
characteristics attractive to advertisers, and the ability of Individual to
develop and update effective advertising delivery and measurement systems. No
standards have yet been widely accepted for the measurement of the
effectiveness of Web-based advertising, and there can be no assurance that
such standards will develop sufficiently to support Web-based advertising as a
significant advertising medium. In addition, there is intense competition in
the sale of advertising on the Internet, which has resulted in a wide range of
rates quoted by different vendors for a variety of advertising services, which
makes it difficult to project future levels of Internet advertising revenues
that will be realized generally or by any specific company. Competition among
current and future Web sites, as well as competition with other traditional
media for advertising placements, could result in significant price
competition and reductions in advertising revenues. As a result of these
factors, there can be no assurance that Individual will sustain or increase
current advertising sales levels. Failure to so could have a material adverse
effect on the Combined Company's business, results of operations and financial
condition.

DEPENDENCE ON KEY PERSONNEL

Competition for qualified sales, technical and other qualified personnel is
intense, and there can be no assurance that the Combined Company will be able
to attract, assimilate or retain additional highly qualified employees in the
future. If the Combined Company is unable to hire and retain such personnel,
its business, operating results and financial condition would be materially
adversely affected. Success of the integration process following the Merger
and future financial success also depends in significant part upon the
continued service of its key technical, sales and senior management personnel.
The loss of the services of a significant

18
<PAGE>

number of these key employees could have a material adverse effect on its
business, operating results and financial condition. Additions of new, and
departures of existing, personnel, particularly in key positions, can be
disruptive and can result in departures of existing personnel, which could
have a material adverse effect upon the Combined Company's business, results
of operations and financial condition.

COMPETITION

The business information services industry is intensely competitive and is
characterized by rapid technological change and the entry into the field of
extremely large and well-capitalized companies as well as smaller competitors.
The Combined Company will compete or may compete directly or indirectly with
the following categories of companies: (i) large, well-established news and
information providers such as The Dialog Corporation, Dow Jones, Knight-
Ridder, Lexis/Nexis, Pearson, Reuters and Thomson; (ii) market data services
companies such as ADP, Bloomberg and Telerate; (iii) traditional print media
companies that are increasingly searching for opportunities for on-line
provision of news, including through the establishment of World Wide Web sites
on the Internet; (iv) large providers of LAN-based and Internet-based software
systems such as IBM/Lotus, Netscape and Microsoft, which could, in the future,
ally with competing news and information providers; and (v) single-user,
advertising-subsidized Web-based services and Internet access providers. Many
of these companies and market participants not named above have substantially
greater financial, technical and marketing resources than the Company.
Increased competition, on the basis of price or otherwise, may require price
reductions or increased spending on marketing or software development, which
could have a material adverse effect on the Combined Company's business,
results of operations and financial condition.

RISKS RELATING TO ACQUISITIONS

Individual has recently completed the acquisition of ClariNet Communications
Corp., and the Combined Company may acquire other companies, products or
technologies in the future. There can be no assurance that these acquisitions
can be effectively integrated, that such acquisitions will not result in costs
or liabilities that could materially and adversely affect the Combined
Company's business, operating results and financial condition, or that the
Combined Company will obtain the anticipated or desired benefits of such
transactions.

Management may from time to time consider acquisitions of assets or
businesses that it believes may enable the Combined Company to obtain
complementary skills and capabilities, offer new products, expand its customer
base or obtain other competitive advantages. Such acquisitions involve
potential risks, including difficulties in assimilating the acquired company's
operations, technology, products and personnel, completing and integrating
acquired in-process technology, diverting management's resources,
uncertainties associated with operating in new markets and working with new
employees and customers, and the potential loss of the acquired company's key
employees.

DEPENDENCE ON COOPERATIVE MARKETING ARRANGEMENTS

Desktop and Individual have entered into certain cooperative marketing
agreements and informal arrangements with software vendors, Web site sponsors
and operators of on-line services, including Microsoft, Netscape and NETCOM.
These companies presently market services that compete directly with those of
Desktop and Individual. If the Combined Company's marketing activities with
such companies were terminated, reduced, curtailed, or otherwise modified, the
Combined Company may not be able to replace or supplement such efforts alone
or with others. If these companies were to develop and market their own
business information services or those of the Combined Company's competitors,
the Company's business, results of operations and financial condition may be
materially and adversely affected.

LITIGATION RISKS

A class action shareholder suit has been filed against Individual, certain
of its directors and officers and the underwriters of its initial public
offering claiming that the defendants made misstatements, or failed to make
statements, to the investing public in Individual's Prospectus and
Registration Statement relating to its initial public offering, as well as in
subsequent public disclosures, relating to the alleged existence of disputes
between Joseph A. Amram, Individual's former Chief Executive Officer, and
Individual. Individual believes that the

19
<PAGE>

allegations contained in the complaint are without merit and intends to defend
vigorously against the claims, and based upon information currently available,
believes that the action will not have a material impact on the Company.
However, there can be no assurance that this litigation will ultimately be
resolved on terms that are favorable to Individual and that the resolution of
this litigation will not have a material adverse effect on the Combined
Company.

DEPENDENCE ON NEWS PROVIDERS

A significant percentage of the Combined Company's customers subscribe to
services provided by one or more of Press Association Inc., a subsidiary of
The Associated Press, Dow Jones, The Financial Times, Reuters and Thomson.
Both Desktop's and Individual's agreements with news providers are generally
for terms of one to three years, with automatic renewal unless notice of
termination is provided before the end of the term by either party. These
agreements may also be terminated by the provider if Desktop or Individual
fails to fulfill its obligations under the agreement and, under some of the
agreements, upon the occurrence of a change in control of Desktop or
Individual, as the case may be. Many of these news and information providers
compete with one another and, to some extent, with Desktop and Individual.
Termination of one or more significant news provider agreements would decrease
the news and information which the Combined Company can offer its customers
and could have a material adverse effect on the Combined Company's business
and results of operations.

Also, an increase in the fees required to be paid by the Combined Company to
its information providers would have an adverse effect on the Company's gross
margins and results of operations. Because both Desktop and Individual license
the informational content included in its services from third parties, the
Combined Company's exposure to copyright infringement actions may increase.
Although both Desktop and Individual generally obtain representations as to
the origins and ownership of such licensed content and generally obtain
indemnification for any breach thereof, there can be no assurance that such
representations will be accurate or that indemnification will adequately
compensate the Combined Company for any breach.

DEPENDENCE ON NEWS TRANSMISSION SOURCES

Desktop's news and information is transmitted using one or more of three
methods: leased telephone lines, satellites or FM radio transmission. None of
these methods of news transmission is within the control of Desktop, and the
loss or significant disruption of any of them could have a material adverse
effect on the Combined Company's business. Many newswire providers have
established their own broadcast communications networks using one or more of
these three vehicles. In these cases, Desktop's role is to arrange
communications between the news provider and the NewsEDGE customer's server.
For sources which do not have their own broadcast communications capability,
news and information is delivered to the Desktop news consolidation facility,
where it is reformatted for broadcast to NewsEDGE servers and retransmitted to
customers through an arrangement between Desktop and WavePhore ("WavePhore"),
a common carrier communications vendor. WavePhore presently markets services
that compete directly with those of Desktop and Individual. WavePhore is also
the communications provider for many newswires offered by Desktop through
NewsEDGE. Desktop's agreement with WavePhore expires on December 31, 1998.
This agreement can be terminated earlier in the event of a material breach by
Desktop of the agreement. If the agreement with WavePhore were terminated on
short notice, or if WavePhore were to encounter technical or financial
difficulties adversely affecting its ability to continue to perform under the
agreement or otherwise, the Combined Company's business would be materially
and adversely affected. Desktop believes that if WavePhore were unable to
fulfill its obligations, other sources of retransmission would be available to
the Combined Company, although the transition from WavePhore to those sources
could result in delays or interruptions of service that could have a material
adverse affect on the Combined Company's business, results of operations and
financial condition.

RISK OF SYSTEM FAILURE OR INADEQUACY

The Combined Company's operations are dependent on its ability to maintain
its computer and telecommunications systems in effective working order and to
protect its systems against damage from fire, natural disaster, power loss,
telecommunications failure or similar events. Although the Combined Company
will

20
<PAGE>

have limited back-up capability, this measure does not eliminate the
significant risk to the Combined Company's operations from a natural disaster
or system failure at its principal site. In addition, any failure or delay in
the timely transmission or receipt of feeds and computer downloads from its
information providers, whether on account of system failure of the information
providers, the public network or otherwise, could disrupt the Combined
Company's operations.

RISKS RELATING TO YEAR 2000 ISSUES

Because the Combined Company's Software and Services are not date sensitive
or date dependent, the Combined Company believes that its software and
services are substantially year 2000 compliant and currently does not
anticipate material expenditures to remedy any year 2000 problems. However,
many computer systems were not designed to handle any dates beyond the year
1999, and therefore, many companies will be required to modify their computer
hardware and software prior to the year 2000 in order to remain functional.
Many enterprises, including the Combined Company's present and potential
customers, will be devoting a substantial portion of their information systems
spending to resolving this upcoming year 2000 problem, which may result in
spending being diverted from network applications, such as the Combined
Company's products, over the next two years. Additionally, the Combined
Company utilizes third party computer and telecommunications equipment to
distribute its products as well as to operate other aspects of its business,
and there can be no assurances that such equipment is year 2000 compliant.
Although the Combined Company intends to take measures to address the impact,
if any, of year 2000 issues, failure of any critical equipment to operate
properly in the year 2000 may have a material adverse effect upon the Combined
Company's business, results of operations and financial condition or require
the Combined Company to incur unanticipated material expenses to remedy any
problem.

RAPID TECHNOLOGICAL CHANGE

The business information services, software and communications industries
are subject to rapid technological change, which may render existing products
and services obsolete or require significant unanticipated investments in
research and development. The Combined Company's future success will depend,
in part, upon its ability to enhance its service offerings and keep pace with
technological developments. The Combined Company's future success will depend
on its ability to enhance its existing services, to develop new products and
services that address the needs of its customers and to respond to
technological advances and emerging industry standards and practices, each on
a timely basis. Services as complex as those offered by Desktop and Individual
entail significant technical risks, often encounter development delays and may
result in service failures when first introduced or as new versions are
released. Any such delays in development or failures that occur after
commercial introduction of new or enhanced services may result in loss of or
delay in market acceptance, which could have a material adverse effect upon
the Combined Company's business, results of operations and financial
condition.

DEPENDENCE ON PROPRIETARY TECHNOLOGY

Both Desktop and Individual are heavily dependent upon proprietary
technology. In addition, each company relies on a combination of trade secret,
copyright and trademark laws and non-disclosure agreements to protect its
proprietary rights in its software and technology. There can be no assurance
that such measures are or will be adequate to protect the Combined Company's
proprietary technology. In addition, there can be no assurance that the
Combined Company's competitors will not independently develop technologies
that are substantially equivalent or superior to the Combined Company's
technologies or services. Individual has licensed the proprietary SMART
filtering software, which is used as the filtering engine for all of its
products and services, from Cornell Research Foundation, Inc. ("Cornell
University"). Under the terms of the license agreement with Cornell
University, Individual has exclusive worldwide rights until February 1999 to
design, develop, market, and sell systems and services based on the SMART
software for the retrieval and dissemination of data from recent and
continually changing data sources. Provided that Individual is not then in
default of the license agreement, at the end of the initial term of the
agreement Individual will retain a continuing worldwide, non-exclusive,
perpetual, royalty-free right to use the SMART software; and in addition,
Individual owns, and will

21
<PAGE>

continue to own, all enhancements to the SMART software that it has developed.
There can be no assurance, however, that Cornell University will not license
the SMART software to a third party, including a competitor of the Combined
Company, once the Combined Company's exclusive rights have lapsed. In
addition, Cornell University may terminate the license agreement if Individual
has materially breached the agreement and such breach remains uncured 60 days
after written notice of such breach has been given. If the license agreement
were to terminate, the Combined Company could be required to develop or
acquire a replacement filtering technology, and there can be no assurance that
such technology could be developed or acquired, on a timely basis or at all,
and on favorable terms to the Combined Company. Consequently, any termination
of Individual's license agreement with Cornell University would have a
material adverse effect on the Combined Company's business, results of
operations and financial condition.

There has been substantial litigation in the information services industry
involving intellectual property rights. Although neither Desktop nor
Individual believes that it is infringing the intellectual property rights of
others, there can be no assurance that such claims, if asserted, would not
have a material adverse effect on the Combined Company's business, results of
operations, and financial condition. In addition, inasmuch as the Combined
Company licenses the informational content that is included in its services
from third parties, its exposure to copyright infringement actions may
increase because the Combined Company must rely upon such third parties for
information as to the origin and ownership of such licensed content. Although
both Desktop and Individual generally obtain representations as to the origins
and ownership of such licensed informational content and generally obtain
indemnification to cover any breach of any such representations, there can be
no assurance that such representations will be accurate or that such
indemnification will provide adequate compensation for any breach of such
representations. In the future, litigation may be necessary to enforce and
protect trade secrets, copyrights and other intellectual property rights of
the Combined Company. The Combined Company may also be subject to litigation
to defend against claimed infringement of the rights of others or to determine
the scope and validity of the intellectual property rights of others. Any such
litigation would be costly and divert management's attention, either of which
would have a material adverse effect on the Combined Company's business,
results of operations, and financial condition. Adverse determinations in such
litigation could result in the loss of the Combined Company's proprietary
rights, subject the Combined Company to significant liabilities, require the
Combined Company to seek licenses from third parties, and prevent the Combined
Company from selling its services, any one of which could have a material
adverse effect on the Combined Company's business, results of operations, and
financial condition.

VOLATILITY OF STOCK PRICES

The markets for Desktop's and Individual's Common Stock are highly volatile.
The trading price of the Combined Company's Common Stock could be subject to
wide fluctuations in response to quarterly variations in operating and
financial results, announcements of technological innovations or new products
by the Combined Company or its competitors, changes in prices of the Combined
Company's or its competitors' products and services, changes in product mix,
changes in revenue and revenue growth rates for the Combined Company as a
whole or for individual geographic areas, as well as other general market and
economic conditions, including those outside the control of the Combined
Company. Statements or changes in opinions, ratings, or earnings estimates
made by brokerage firms or industry analysts relating to the market in which
the Combined Company does business or relating to Desktop, Individual, or the
Combined Company specifically have resulted, and could in the future result,
in an immediate and adverse effect on the market price of the Combined
Company's Common Stock. Statements by financial or industry analysts regarding
the extent of the dilution in Desktop's net income per share resulting from
the Merger and the extent to which such analysts expect potential business
synergies to offset such dilution can be expected to contribute to volatility
in the market price of the Combined Company's Common Stock. In addition, the
stock market has from time to time experienced extreme price and volume
fluctuations which have particularly affected the market price for the
securities of many high-technology companies and which often have been
unrelated to the operating performance of these companies. These broad market
fluctuations may adversely affect the market price of the Combined Company's
Common Stock.

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EFFECT OF ANTITAKEOVER PROVISIONS OF DELAWARE LAW AND THE COMBINED COMPANY'S
CHARTER DOCUMENTS

Upon consummation of the Merger, the stockholders of Individual will become
stockholders of the Combined Company, a corporation governed by the laws of
Delaware. The Combined Company will be subject to the provisions of Section
203 of the Delaware General Corporation Law, which has the effect of
restricting changes in control of a company. In addition, the Combined
Company's charter provides for a staggered Board of Directors and the ability
of the Combined Company's Board of Directors to issue up to 1,000,000 shares
of preferred stock and to fix the rights, preferences, privileges and
restrictions, including voting rights, of such shares without any further vote
or action by the stockholders. These and other provisions of Delaware law
applicable to the Combined Company along with the Combined Company's charter
documents may have the effect of delaying, deterring, or preventing changes in
control or management of the Combined Company. See "Description of Capital
Stock."

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INTRODUCTION

This Prospectus/Joint Proxy Statement is furnished in connection with the
solicitation of proxies to be used at the Desktop Meeting and the Individual
Meeting. This Prospectus/Joint Proxy Statement is also furnished by Desktop to
Individual stockholders in connection with the issuance of shares of Desktop
Common Stock in connection with the Merger described herein.

The information set forth herein concerning Desktop has been furnished by
Desktop and the information set forth herein concerning Individual has been
furnished by Individual.

DESKTOP DATA, INC. SPECIAL MEETING

DATE, TIME AND PLACE OF DESKTOP MEETING

The Desktop Meeting will be held at Testa, Hurwitz & Thibeault, LLP, High
Street Tower, 125 High Street, Boston, Massachusetts 02110, on Tuesday,
February 24, 1998 at 10:00 a.m.

PURPOSE

The purpose of the Desktop Meeting is (i) to approve and adopt the
Agreement, the Merger and the issuance of shares of Desktop Common Stock to
the stockholders of Individual pursuant to the Agreement, (ii) to approve an
amendment to the Certificate to change the corporate name of Desktop to
"NewsEDGE Corporation," subject to and upon consummation of the Merger, (iii)
to approve an amendment to the Certificate to increase the number of
authorized shares of Desktop Common Stock from 15,000,000 shares to 35,000,000
shares, subject to and upon consummation of the Merger, (iv) to approve an
amendment to the Desktop 1995 Stock Plan to increase the number of shares
reserved for issuance thereunder from 1,625,000 shares to 4,125,000 shares,
subject to and upon consummation of the Merger, and (v) to approve amendments
to the Desktop Employee Stock Purchase Plan, including the increase in the
number of shares of Desktop Common Stock reserved for issuance thereunder from
175,000 shares to 500,000 shares, subject to and upon consummation of the
Merger.

RECORD DATE AND OUTSTANDING SHARES

Only Desktop stockholders of record at the close of business on January 9,
1998 (the "Desktop Record Date") are entitled to notice of and to vote at the
Desktop Meeting. As of the Desktop Record Date, there were 115 stockholders of
record of Desktop Common Stock. On or about January 28, 1998, a notice meeting
the requirements of Delaware law was mailed to all stockholders of record as
of the Desktop Record Date.

VOTE REQUIRED

Under Delaware law, the charter documents of Desktop and Nasdaq rules,
approval and adoption of the Agreement and the Merger, the amendment of the
Certificate to change the name of Desktop and the amendment of the Certificate
to increase the authorized number of shares of Common Stock require the
affirmative vote of holders of a majority of the outstanding shares of Desktop
Common Stock. All other proposals require the affirmative vote of a majority
of the total votes cast regarding such proposals. Each stockholder of record
of Desktop Common Stock on the Desktop Record Date is entitled to cast one
vote per share, exercisable in person or by properly executed proxy, on each
matter properly submitted for the vote of the stockholders of Desktop at the
Desktop Meeting.

The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of Desktop Common Stock entitled to vote at
the Desktop Meeting shall constitute a quorum. The effect of an abstention is
the same as that of a vote against the proposal with regard to proposals (i),
(ii) and (iii) and abstentions shall only be counted toward the number of
shares represented at the Desktop Meeting for purpose of establishing a quorum
for the conduct of business with regard to all other proposals.

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The executive officers of Desktop and members of the Desktop Board and their
affiliates have entered into the Desktop Participation Agreement with
Individual, pursuant to which each such holder has agreed to vote (i) in favor
of approval of the Agreement and the issuance of shares of Desktop Common
Stock to stockholders of Individual pursuant to the Agreement, and (ii)
against (among other things) approval of any proposal made in opposition to or
competition with consummation of the Merger. In addition, each such holder has
agreed pursuant to the Desktop Participation Agreement, to grant to
Individual, within five days of Individual's written request, an irrevocable
proxy to vote shares as aforesaid. The outstanding shares of Desktop Common
Stock subject to the Desktop Participation Agreement represent 33.38% of the
votes entitled to be cast by holders of shares of Desktop Common Stock issued
and outstanding as of January 9, 1998. See "Terms of the Merger--Participation
Agreements."

PROXIES

Each of the persons named as proxies in the proxy is an officer of Desktop.
All shares of Desktop Common Stock that are entitled to vote and are
represented at the Desktop Meeting either in person or properly executed
proxies received prior to or at the Desktop Meeting and not duly and timely
revoked will be voted at the Desktop Meeting in accordance with the
instructions indicated on such proxies. If no such instructions are indicated,
such proxies will be voted for the applicable proposal.

The Desktop Board knows of no other matter to be presented at the Desktop
Meeting. If any other matters are properly presented for consideration at the
Desktop Meeting (or any adjournments or postponements thereof) including,
among other things, consideration of a motion to adjourn or postpone the
Desktop Meeting to another time and/or place (including, without limitation,
for the purpose of soliciting additional proxies), the persons named in the
enclosed form of proxy and voting thereunder will have the discretion to vote
on such matters in accordance with their best judgment.

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of Desktop at or before the taking of the vote at the
Desktop Meeting, a written notice of revocation bearing a later date than the
proxy; (ii) duly executing a later-dated proxy relating to the same shares and
delivering it to the Secretary of Desktop before the taking of the vote at the
Desktop Meeting or (iii) attending the Desktop Meeting and voting in person
(although attendance at the Desktop Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be sent so as to be delivered to Desktop Data, Inc. at
80 Blanchard Road, Burlington, Massachusetts 01803, Attention: Assistant
Secretary, or hand-delivered to the Assistant Secretary of Desktop, in each
case at or before the taking of the vote at the Desktop Meeting.

SOLICITATION OF PROXIES; EXPENSES

The cost of the solicitation of Desktop stockholders will be borne by
Desktop. In addition, Desktop may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. Proxies may also be
solicited by certain Desktop directors, officers and regular employees
personally or by telephone, telegram, letter or facsimile. Such persons will
not receive additional compensation, but may be reimbursed for reasonable out-
of-pocket expenses incurred in connection with such solicitation.

RECOMMENDATIONS OF DESKTOP BOARD OF DIRECTORS

THE DESKTOP BOARD HAS UNANIMOUSLY APPROVED THE AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND HAS DETERMINED THAT THE MERGER IS FAIR
AND IN THE BEST INTERESTS OF DESKTOP AND ITS STOCKHOLDERS. AFTER CAREFUL
CONSIDERATION, THE DESKTOP BOARD UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF (I)
THE ADOPTION OF THE AGREEMENT, THE MERGER AND THE ISSUANCE OF SHARES OF
DESKTOP COMMON STOCK PURSUANT TO THE AGREEMENT, (II) THE APPROVAL OF THE
AMENDMENT TO THE CERTIFICATE TO CHANGE THE CORPORATE NAME OF DESKTOP TO
"NEWSEDGE CORPORATION," SUBJECT TO AND UPON CONSUMMATION OF THE MERGER, (III)

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THE APPROVAL OF THE AMENDMENT TO THE CERTIFICATE TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF DESKTOP COMMON STOCK FROM 15,000,000 SHARES TO 35,000,000
SHARES, SUBJECT TO AND UPON CONSUMMATION OF THE MERGER, (IV) THE APPROVAL OF
THE AMENDMENT TO THE DESKTOP 1995 STOCK PLAN TO INCREASE THE NUMBER OF SHARES
OF DESKTOP COMMON STOCK TO BE RESERVED FOR ISSUANCE THEREUNDER FROM 1,625,000
SHARES TO 4,125,000 SHARES, SUBJECT TO AND UPON CONSUMMATION OF THE MERGER,
AND (V) THE APPROVAL OF THE AMENDMENTS TO THE DESKTOP 1995 EMPLOYEE STOCK
PURCHASE PLAN INCLUDING THE INCREASE IN THE NUMBER OF SHARES OF DESKTOP COMMON
STOCK RESERVED FOR ISSUANCE THEREUNDER FROM 175,000 SHARES TO 500,000 SHARES,
SUBJECT TO AND UPON CONSUMMATION OF THE MERGER.

INDIVIDUAL, INC. SPECIAL MEETING

DATE, TIME AND PLACE OF INDIVIDUAL MEETING

The Individual Meeting will be held at the offices of Testa, Hurwitz &
Thibeault, LLP, High Street Tower, 125 High Street, Boston, Massachusetts
02110, on Tuesday, February 24, 1998 at 10:00 a.m.

PURPOSE

The purpose of the Individual Meeting is to approve and adopt the Agreement
and the Merger.

RECORD DATE AND OUTSTANDING SHARES

Only Individual stockholders of record at the close of business on January
9, 1998 (the "Individual Record Date") are entitled to notice of, and to vote
at, the Individual Meeting. As of the Individual Record Date, there were 181
stockholders of record of Individual Common Stock. On or about January 28,
1998, a notice meeting the requirements of Delaware law is being mailed to all
stockholders of record as of the Individual Record Date.

VOTE REQUIRED

Under Delaware law, the charter documents of Individual and Nasdaq rules,
the affirmative vote of the holders of a majority of the Individual Common
Stock outstanding as of the Individual Record Date is required to approve and
adopt the Agreement. Each stockholder of record of Individual Common Stock on
the Individual Record Date is entitled to cast one vote per share on each
matter to be acted upon at the Individual Meeting.

The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of Individual Common Stock entitled to vote
at the Individual Meeting shall constitute a quorum. The effect of an
abstention is the same as that of a vote "against" the proposal.

Certain executive officers of Individual, members of the Individual Board
and their affiliates have entered into the Individual Participation Agreement
with Desktop, pursuant to which, among other things, each such holder has
agreed to vote (i) in favor of the approval and adoption of the Agreement and
the Merger and (ii) against (among other things) approval of any proposal made
in opposition to or in competition with the consummation of the Merger. In
addition, each such holder has agreed pursuant to the Individual Participation
Agreement to grant to Desktop, within five days of Desktop's written request,
an irrevocable proxy to vote shares as aforesaid. The outstanding shares of
Individual Common Stock subject to the Individual Participation Agreement
represent 23.6% of the votes entitled to be cast by holders of shares of
Individual Common Stock as of January 9, 1998. See "Terms of the Merger--
Participation Agreements."

PROXIES

Each of the persons named as proxies in the Individual proxy is an officer
of Individual. All shares of Individual Common Stock that are entitled to vote
and are represented at the Individual Meeting either in person or by properly
executed proxies received prior to or at the Individual Meeting and not duly
and timely revoked

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<PAGE>

will be voted at the Individual Meeting in accordance with the instructions
indicated on such proxies. If no such instructions are indicated, such proxies
will be voted for the approval of the Agreement and the Merger.

The Individual Board knows of no other matter to be presented at the
Individual Meeting. If any other matter upon which a vote may properly be
taken should be presented at the Individual Meeting (or any adjournments or
postponements thereof) including, among other things, consideration of a
motion to adjourn or postpone the Individual Meeting to another time and/or
place (including, without limitation, for the purpose of soliciting additional
proxies) the persons named in the enclosed form of proxy and voting thereunder
will have the discretion to vote on such matters in accordance with their best
judgment.

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of Individual at or before the taking of the vote at the
Individual Meeting, a written notice of revocation bearing a later date than
the proxy; (ii) duly executing a later-dated proxy relating to the same shares
and delivering it to the Secretary of Individual before the taking of the vote
at the Individual Meeting or (iii) attending the Individual Meeting and voting
in person (although attendance at the Individual Meeting will not in and of
itself constitute a revocation of a proxy). Any written notice of revocation
or subsequent proxy should be sent so as to be delivered to Individual, Inc.
at 8 New England Executive Park West, Burlington, Massachusetts 01803,
Attention: Secretary, or hand-delivered to the Secretary of Individual, in
each case at or before the taking of the vote at the Individual Meeting.

SOLICITATION OF PROXIES; EXPENSES

The cost of solicitation of Individual stockholders will be borne by
Individual. In addition, Individual may reimburse brokerage firms and other
persons representing beneficial owners of shares for their expenses in
forwarding solicitation materials to such beneficial owners. Proxies may also
be solicited by certain Individual directors, officers and regular employees
personally or by telephone, telegram, letter or facsimile. Such persons will
not receive additional compensation, but may be reimbursed for reasonable out-
of-pocket expenses incurred in connection with such solicitation. Individual
has retained Innisfree M&A Incorporated, an independent proxy solicitation
firm, to assist in soliciting proxies at an estimated fee of $6,000 plus
reimbursement of reasonable expenses.

APPRAISAL RIGHTS

Holders of Individual Common Stock are not entitled to appraisal rights
under the Delaware General Corporation Law in connection with the Merger.

RECOMMENDATION OF INDIVIDUAL BOARD OF DIRECTORS

THE INDIVIDUAL BOARD HAS UNANIMOUSLY APPROVED THE AGREEMENT AND THE MERGER
AND HAS DETERMINED THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF,
INDIVIDUAL AND ITS STOCKHOLDERS. AFTER CAREFUL CONSIDERATION, THE INDIVIDUAL
BOARD UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF APPROVAL AND ADOPTION OF THE
AGREEMENT AND THE MERGER.

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<PAGE>

APPROVAL OF THE MERGER AND RELATED TRANSACTIONS

The following discussion summarizes the proposed Merger and related
transactions. The following is not, however, a complete statement of all
provisions of the Agreement and related agreements. Detailed terms of and
conditions to the Merger and certain related transactions are contained in the
Agreement, a conformed copy of which is attached to this Prospectus/Joint
Proxy Statement as Annex A. Reference is also made to the Desktop Option
Agreement and the Individual Option Agreement attached to this
Prospectus/Joint Proxy Statement as Annex B and Annex C, respectively, and to
the other Annexes hereto. Statements made in this Prospectus/Joint Proxy
Statement with respect to the terms of the Merger and such related
transactions are qualified in their respective entireties by reference to the
more detailed information set forth in the Agreement and the other Annexes
hereto. This section contains forward-looking statements that involve risks
and uncertainties. Actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain
factors, including those set forth in "Risk Factors" and elsewhere herein.

JOINT REASONS FOR THE MERGER

The Boards of Directors of Desktop and Individual have determined that the
Combined Company would have the potential to realize long-term improved
operating and financial results and a stronger competitive position than
either company might achieve independently. Desktop and Individual believe
that there is a tight strategic fit between the customized news integration
businesses and services which each company has separately developed, and that
the differences between the companies' historical approaches -- in market
segmentation, product features and service design, and industry emphasis --
make the business combination complementary. Desktop and Individual believe
that the Merger will provide greater opportunities to develop business
relationships, license content and technology, and engage in other strategic
combinations or transactions involving their respective products, services,
and technologies than would be the case if the companies otherwise
independently engaged in these activities. In this way, the Merger could
provide the Combined Company with the range of products and services required
to play a defining role in the market for customized news integration services
for business.

Each of the Boards of Directors of Desktop and Individual has identified
additional potential mutual benefits of the Merger that they believe will
contribute to the success of the Combined Company. These potential benefits
include principally the following:

. The combined experience, financial resources, size, and breadth of
product offerings of Desktop and Individual will allow the Combined
Company to position itself as the leading independent provider of
customized, real-time news and information.

. The combination of Desktop's real-time news filtering services and
delivery architecture with Individual's high-precision, editorially-
managed news briefing products will allow the Combined Company to offer
a more comprehensive and integrated customized news solution to its
customers than would otherwise be possible with the products of the
separate companies. This could lead to more opportunities to sell
premium and add-on services to customers of each company.

. The combination of the two companies' different but complementary
customer acquisition and cultivation strategies may lead the Combined
Company to both a larger, better qualified customer base and an
increased potential for developing larger readership bases within each
of the Combined Company's corporate customers.

. Combined technological resources may allow the Combined Company to
compete more effectively and cost efficiently by providing the Combined
Company with the ability to respond more quickly and effectively to
technological change with an enhanced ability to develop new products
and services and provide greater functionality for existing products in
a market place experiencing rapid change.

. The creation of a larger customer base, a higher market profile, and
greater financial strength may enhance the market presence of the
Combined Company, present greater opportunities for marketing the
products of the Combined Company, and increase the confidence of buyers
and prospective buyers of the Combined Company's products.

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<PAGE>

. The creation of combined customer sales, service and technical support
groups may permit the Combined Company to provide more cost efficient
marketing, administration and support coverage to its customers.

. The scale of the Combined Company's distribution channels can offer
significant advantages in relationships with providers of information
for the Combined Company's services.

. The structure of the transaction as a strategic merger combined with the
close proximity of the companies' corporate headquarters in Burlington,
Massachusetts can provide significant advantages by increasing the
opportunities for (i) effectively utilizing the skills and resources of
the companies' respective management teams and (ii) matching the
respective corporate cultures of the two companies while maintaining
some of the most important aspects of each culture.

Desktop and Individual have each identified additional reasons for the
Merger. Each Board of Directors has recognized that the potential benefits of
the Merger may not be realized. See "Risk Factors."

DESKTOP'S REASONS FOR THE MERGER

In addition to the anticipated joint benefits described above, the Desktop
Board believes that the following are additional reasons the Merger will be
beneficial to Desktop and additional reasons for the stockholders of Desktop
to vote FOR the proposals set forth herein:

. The addition of Individual's products, which are designed for the single
user and work groups, to Desktop's news services will help meet an
increasingly important customer requirement in the enterprise market
that is currently not met by the NewsEDGE service.

. The Internet distribution model and potential for advertising support
may significantly increase the coverage of the enterprise market for
Desktop's services.

. The Desktop stockholders will have the opportunity to participate in the
potential for growth of the Combined Company after the Merger.

In the course of its deliberations during the Desktop Board meetings held on
October 14, 1997, October 27, 1997, October 28, 1997 and November 2, 1997, the
Desktop Board reviewed with Desktop management a number of additional factors
relevant to the Merger, including (i) historical information concerning
Individual's and Desktop's respective businesses, prospects, financial
performance and condition, operations, technology, management and competitive
position, including public reports filed with the SEC concerning results of
operations during the most recent fiscal year and fiscal quarter; (ii) Desktop
management's view as to the financial condition, results of operations and
businesses of Individual and Desktop before and after giving effect to the
Merger based on management due diligence and publicly available earnings
estimates; (iii) current market conditions and historical market prices,
volatility and trading information with respect to Individual and Desktop
Common Stock; (iv) the relationship between the market value of Desktop Common
Stock to be issued in exchange for each share of Individual Common Stock and a
comparison of comparable merger transactions; (v) the belief that the terms of
the Agreement, including the parties' representations, warranties and
covenants, and the conditions to their respective obligations, are reasonable;
(vi) Desktop management's view as to the prospects of Desktop as an
independent company; (vii) Desktop management's view as to the potential for
other third parties to enter into strategic relationships with or to acquire
Individual or Desktop; (viii) detailed financial analysis and pro forma and
other information with respect to the companies presented by BT Alex. Brown in
Board presentations, including BT Alex. Brown's opinion that the Exchange
Ratio was fair from a financial point of view to Desktop (a copy of this
opinion is annexed hereto, and Desktop stockholders are urged to review
carefully such opinion); (ix) the impact of the Merger on Desktop's customers,
business partners and employees; and (x) reports from management, legal and
financial advisors as to the results of their due diligence investigation of
Individual. The Desktop Board also considered the terms of the proposed
Agreement regarding Individual and Desktop's respective rights to consider and
negotiate other acquisition proposals in certain circumstances, as well as the
possible effects of the provisions regarding the termination fees and Option
Agreements. In addition, the Desktop Board noted that the Merger is expected
to be accounted for as a pooling of interests and that no

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<PAGE>

goodwill is expected to be created on the books of the Combined Company as a
result thereof, and that four of the seven initial seats on the Combined
Company's Board of Directors will be held by Desktop Board members following
the Merger.

The Desktop Board also identified and considered a variety of potentially
negative factors in its deliberations concerning the Merger, including, but
not limited to: (i) the risk that the potential benefits sought in the Merger
might not be fully realized; (ii) the possibility that the Merger might not be
consummated and the effect of public announcement of the Merger on (a)
Desktop's revenues and operating results; (b) Desktop's ability to attract and
retain key management, marketing, and technical personnel; and (c) progress of
certain development projects; (iii) the potential dilutive effect of the
issuance of Desktop Common Stock in the Merger; (iv) the substantial charges
to be incurred, primarily in the quarter ending March 31, 1998, in connection
with the Merger, including costs of integrating the businesses and transaction
expenses arising from the Merger; (v) the risk that despite the efforts of the
Combined Company, key technical and management personnel might not remain
employed by the Combined Company, and (vi) the risks described under "Risk
Factors" herein. The Desktop Board believed that these risks were outweighed
by the potential benefits of the Merger.

INDIVIDUAL'S REASONS FOR THE MERGER

In addition to the anticipated joint benefits described above, the
Individual Board believes that the following are additional reasons the Merger
will be beneficial to Individual and additional reasons for the stockholders
of Individual to vote FOR the proposals set forth herein:

. The addition of Desktop's real-time news filtering features to
Individual's enterprise news products will help meet an increasingly
important customer requirement in the enterprise market, without the
need to conduct expensive new development activities and invest in
costly delivery infrastructure.

. The added resources of Desktop will provide Individual with the critical
size and revenue needed to compete in a rapidly changing and expanding
marketplace and provide Individual stockholders with the potential for
stock price appreciation.

. The experienced sales personnel brought by Desktop as well as its
better-developed European distribution, will significantly increase the
coverage of the large enterprise market for Individual's products and
services.

. The Individual stockholders will have the opportunity to participate in
the potential for growth of the Combined Company after the Merger.

In the course of its deliberations during Individual Board meetings held on
October 14, 1997, October 16, 1997, October 23, 1997, October 29, 1997, and
November 2, 1997, and the meeting of the Executive Committee of the Individual
Board held on September 19, 1997, the Individual Board reviewed with
Individual management a number of additional factors relevant to the Merger,
including (i) historical information concerning Individual's and Desktop's
respective businesses, prospects, financial performance and condition,
operations, technology, management and competitive position, including public
reports filed with the SEC concerning results of operations during the most
recent fiscal year and fiscal quarter; (ii) Individual management's view as to
the financial condition, results of operations and businesses of Individual
and Desktop before and after giving effect to the Merger, based on management
due diligence and publicly available earnings estimates; (iii) current market
conditions and historical market prices, volatility and trading information
with respect to Individual and Desktop Common Stock; (iv) the consideration to
be received by Individual stockholders in the Merger and the relationship
between the market value of Desktop Common Stock to be issued in exchange for
Individual Common Stock and a comparison of comparable merger transactions;
(v) the belief that the terms of the Agreement, including the parties'
representations, warranties and covenants, and the conditions to their
respective obligations, are reasonable; (vi) Individual management's view as
to the prospects of Individual as an independent company; (vii) Individual
management's view as to the potential for other third parties to enter into
strategic relationships with or to acquire Individual or Desktop; (viii)
BancAmerica Robertson Stephens' opinion, dated November 2, 1997, that, as of
such date, the Exchange Ratio was fair from a financial point of view to

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<PAGE>

the stockholders of Individual (a copy of this opinion is annexed hereto, and
Individual stockholders are urged to review carefully such opinion); (ix) the
impact of the Merger on Individual's customers and employees; (x) the impact
of the Merger on the financial community; (xi) reports from management, and
Individual's legal advisors as to the results of their due diligence
investigation of Desktop; (xii) the potential long-term appreciation in value
to Individual's stockholders and strategic positioning of the Combined Company
resulting from the synergies between the two companies; and (xiii) the
potential market strength of the Combined Company. In its discussions, the
Individual Board considered the recommendations of Individual's management as
well as information and analysis provided by Individual's outside management
consulting firm and BancAmerica Robertson Stephens. The Individual Board also
considered the terms of the proposed Agreement regarding Individual's and
Desktop's respective rights to consider and negotiate other acquisition
proposals in certain circumstances, as well as the possible effects of the
provisions regarding the termination fees and Option Agreements. In addition,
the Individual Board noted that the Merger is expected to be accounted for as
a pooling of interests and that no goodwill is expected to be created on the
books of the Combined Company as a result thereof, and that three of the seven
initial seats on the Combined Company's Board of Directors will be held by
Individual Board members following the Merger.

The Individual Board also identified and considered a variety of potentially
negative factors in its deliberations concerning the Merger, including, but
not limited to: (i) the risk that the potential benefits sought in the Merger
might not be fully realized; (ii) the possibility that the Merger might not be
consummated and the effect of public announcement of the Merger on (a)
Individual's sales and operating results; (b) Individual's ability to attract
and retain key management, marketing, and technical personnel; and (c)
progress of certain development projects; (iii) the potential dilutive effect
of the issuance of Desktop Common Stock in the Merger; (iv) the substantial
charges to be incurred, primarily in the quarter ending March 31, 1998, in
connection with the Merger, including costs of integrating the businesses and
transaction expenses arising from the Merger; (v) the risk that despite the
efforts of the Combined Company, key technical and management personnel might
not remain employed by the Combined Company; and (vi) the risks described
under "Risk Factors" herein. The Individual Board believed that these risks
were outweighed by the potential benefits of the Merger.

BACKGROUND OF THE MERGER

The market for information services became increasingly competitive
beginning in 1996. In their efforts to enhance their market positions and grow
their businesses in an increasingly competitive environment, each of Desktop
and Individual has continually evaluated strategic relationships of various
forms, such as joint marketing relationships and potential acquisitions of
technologies and companies.

Desktop and Individual have been competitors since Individual's inception in
1989. Desktop and Individual are located in Burlington, Massachusetts and Mr.
Donald L. McLagan, Chief Executive Officer of Desktop, and Mr. Michael E.
Kolowich, Chief Executive Officer of Individual, have known each other since
1985, while they were employed at Lotus Development Corporation. Mr. Kolowich
became Chief Executive Officer of Individual in September 1996. In December
1996, Mr. McLagan and Mr. Kolowich, together with representatives of their
respective management teams, briefly discussed the possibility of a business
combination and the industry conditions both companies were experiencing.
However, it was clear from the discussions that it was unlikely that the
companies would be able to agree on the terms of any such business
combination. Accordingly, no negotiations or further meetings or contacts
occurred as a result of these discussions.

During the spring of 1997, Individual's management began a reassessment of
its business model.

In early September 1997, Individual management concluded, based in part on
advice provided by Individual's outside management consulting firm, The
Parthenon Group, that Individual's competitors in the business information
markets were in a competitively superior position to Individual because of
their ability to exploit revenue opportunities and leverage cost structures
from other aspects of their businesses. Accordingly, Individual management
began to explore a number of strategic alternatives. Individual management
then requested that Individual's investment bank, BancAmerica Robertson
Stephens and The Parthenon Group attend the Executive Committee meeting of the
Individual Board scheduled for September 19, 1997.

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At the Executive Committee meeting held on September 19, 1997, management,
with the assistance of The Parthenon Group, presented their findings to the
members of the Executive Committee. On the basis of those findings, the
decision was made to engage BancAmerica Robertson Stephens to assist
Individual in identifying potential strategic partners.

Over the next several weeks, BancAmerica Robertson Stephens made contact
with a limited number of potential strategic partners.

On September 22, 1997, BancAmerica Robertson Stephens contacted BT Alex.
Brown, Desktop's investment banker, regarding a possible business relationship
between the two companies.

On October 3, 1997, Mr. McLagan and Mr. Kolowich, had an initial telephone
call to discuss the possibility of merging the two companies and the potential
synergies with respect to the combination of the companies.

A number of phone discussions between Mr. McLagan and Mr. Kolowich took
place over the next two weeks, and Mr. McLagan and Mr. Kolowich discussed a
possible merger with their respective management teams and members of their
respective Boards.

On October 14, 1997, the Desktop Board of Directors along with senior
management met by telephone conference and discussed a potential merger with
Individual. In such meeting, Desktop's and Individual's respective competitive
positions were discussed, as well as Desktop's prospective business plan, the
strategic factors associated with a possible business combination and the
services of Individual. To pursue discussions with Individual, the Desktop
Board authorized management to prepare and negotiate a Confidentiality and
Exclusivity Agreement with Individual, under which each company would agree to
maintain the confidentiality of the other party's confidential information and
each Company would agree to refrain from pursuing a similar transaction with
other parties. Mr. McLagan delivered a draft of such agreement to Mr. Kolowich
that day.

Over the next two days, the parties, along with their financial advisors and
legal counsel, negotiated the Confidentiality and Exclusivity Agreement.

On October 16, 1997 the Individual Board met and senior management reviewed
with the Individual Board the initial informal discussions between senior
management of the two companies concerning a possible strategic business
combination in order to enhance Individual's long term strategic position. Mr.
McLagan was invited to attend a portion of the meeting and presented his
proposal with respect to a business combination, along with Desktop's
strategic vision of a combined company. Mr. McLagan was then excused. There
was a preliminary discussion concerning the factors that supported a possible
combination of the respective product lines, technologies and market positions
of Individual and Desktop and the strategic factors associated with a possible
strategic business combination with Desktop. The Individual Board also
discussed possible terms of the transaction and potential organizational
structure of a combined company. BancAmerica Robertson Stephens also attended
the meeting and discussed the features of Desktop's proposal. The Individual
Board authorized management to execute the Confidentiality and Exclusivity
Agreement. Because Testa, Hurwitz & Thibeault, LLP is counsel to both Desktop
and Individual, the Individual Board also authorized management to retain
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. as special counsel to
Individual for subsequent negotiations. In addition, the Individual Board
authorized management to enter into discussions and negotiations with Desktop
with respect to the terms of a possible business combination.

Between October 17, 1997 and November 2, 1997 representatives of the two
companies and their respective technical, legal and financial advisors met to
conduct due diligence as to the business of each other's company and to
explore further potential synergies between the two companies and the
operations issues associated with any business combination. In addition,
Desktop's and Individual's special counsel and executive officers had further
discussions regarding the terms of the Agreement and related documents,
including the terms of the proposed Option Agreements, the termination rights
relating to the Agreement, the conditions upon which any

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breakup fees would be payable and the amount of such fees, and the
representations, warranties and covenants to be made. Desktop's and
Individual's financial advisors had further discussions regarding valuation
issues relevant to negotiation of a mutually acceptable exchange ratio and
other terms and conditions of a potential business combination.

On October 23, 1997 Desktop provided to Individual a draft of the Agreement
and there then ensued discussions between counsel to Desktop and special
counsel to Individual regarding the proposed structure and other principal
terms of the Agreement.

On October 23, 1997 the Individual Board met by teleconference to review the
status of the Merger, discussing the status of Individual's due diligence
process, a presentation by BancAmerica Robertson Stephens of their preliminary
analysis of the proposed transaction and the respective current share prices,
and a preliminary review of the Agreement by special counsel. The Board
allowed negotiations to proceed.

Mr. Kolowich met with the Desktop Board immediately prior to the October 28,
1997 Desktop Board meeting and discussed the history, capabilities and
prospects of Individual.

On October 27, 1997 and October 28, 1997 the Desktop Board met to review the
status of negotiations and discussed the status of Desktop's due diligence
review of Individual and the status of the merger negotiations. In addition,
there was a discussion regarding the potential market reaction to the proposed
combination, the impact of an Exchange Ratio based on the then current trading
prices for Desktop Common Stock and Individual Common Stock, with little
premium to be realized for either the Desktop stockholders or the Individual
stockholders, Desktop's counsel also gave a preliminary review of the status
of negotiations concerning the Agreement. In addition, at such meeting, BT
Alex. Brown made a presentation regarding their preliminary analysis of the
Exchange Ratio and reviewed its detailed financial analysis of the Combined
Company following the Merger. At this time, the Desktop Board unanimously
agreed that management should continue to proceed with negotiation and
investigation of the proposed combination.

On October 29, 1997 the Individual Board again met by teleconference to
review the status of negotiations and Individual's due diligence of Desktop.
Management reviewed the status of its due diligence and the financial review
performed by Coopers & Lybrand L.L.P., Individual's independent accountants.
BancAmerica Robertson Stephens also updated its preliminary analysis of the
proposed transaction. Special counsel presented the major points of and issues
related to the Agreement and, after considerable discussion, the Board made
specific recommendations as to its preferred structure and resolution of such
issues. The Board agreed to allow negotiations to continue to proceed.

From October 23, 1997 through November 2, 1997 Desktop and Individual,
together with their respective legal and financial advisors, continued to
negotiate the terms of definitive agreements relating to the transaction,
including the terms of the proposed Option Agreements, the termination rights
relating to the Agreement, the conditions upon which any breakup fees would be
payable and the amount of such fees, and the representations, warranties and
covenants to be made. Final due diligence by Desktop of Individual, and
Individual of Desktop, also took place.

On the evening of November 2, 1997 the Desktop Board convened to consider
and vote upon the proposed merger and related transactions. At this specially
scheduled meeting, (i) management of Desktop reported that agreement had been
reached with respect to the Exchange Ratio, (ii) management responded to
questions regarding various aspects of the proposed merger, (iii) Desktop's
legal advisors held further discussions regarding the Desktop Board's
fiduciary duties in considering a strategic business combination and reviewed
proposed definitive terms of the Agreement and related documents, including
the Option Agreements, (iv) BT Alex. Brown made a presentation to the Desktop
Board regarding the Exchange Ratio, reviewed its detailed financial analysis
and pro forma and other information with respect to the companies and
delivered its written opinion to the effect that the Exchange Ratio was fair
from a financial point of view to Desktop (a copy of this opinion is annexed
hereto, and stockholders are urged to carefully review such opinion), and (v)
the Desktop Board approved the Agreement and related agreements. While BT
Alex. Brown updated certain information in its October 28, 1997 presentation
in preparing its November 2, 1997 presentation to the Desktop Board, there
were no material differences between such presentations. See "--Opinion of BT
Alex. Brown, Financial Advisor to Desktop Data."

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In the evening of November 2, 1997 at a specially scheduled meeting of the
Individual Board, (i) management of Individual reported that agreement had
been reached with respect to the Exchange Ratio, (ii) the management of
Individual again made presentations to the Board regarding the risks and
benefits of the Merger, (iii) Individual's legal advisors held further
discussions regarding the Board's fiduciary duties in considering a strategic
business combination and reviewed proposed definitive terms of the Agreement
and related documents, including the Stock Option Agreements, (iv) BancAmerica
Robertson Stephens delivered its oral opinion (later confirmed in writing) to
the effect that, as of such date, the Exchange Ratio pursuant to the Agreement
was fair to the stockholders of Individual from a financial point of view (a
written copy of this opinion is annexed hereto, and Individual stockholders
are urged to carefully review this opinion) and (v) the Individual Board
approved the Agreement and related agreements. While BancAmerica Robertson
Stephens updated certain information in its October 23, 1997 and October 29,
1997 presentations in preparing its November 2, 1997 presentation to the
Individual Board, there were no material differences among such presentations.
See "--Opinion of BancAmerica Robertson Stephens, Financial Advisor to
Individual."

On November 2, 1997 following final approval by the Desktop Board and the
Individual Board, the Agreement and the Stock Option Agreements were executed
by both companies. On November 3, 1997, each of the members of the Board of
Directors of each of Desktop and Individual and certain officers of each of
Desktop and Individual executed the Individual Participation Agreement, the
Desktop Participation Agreement, the Individual Affiliate Agreements and the
Desktop Affiliate Agreements and Desktop and Individual issued a joint press
release announcing the Merger.

OPINION OF BT ALEX. BROWN, FINANCIAL ADVISOR TO DESKTOP

BT Alex. Brown has acted in connection with this transaction as Desktop's
financial advisor, including rendering its opinion to the Desktop Board as to
the fairness, from a financial point of view, of the Exchange Ratio to
Desktop.

At the November 2, 1997 meeting of the Desktop Board, representatives of BT
Alex. Brown made a presentation with respect to the Merger and rendered to the
Desktop Board its oral opinion, subsequently confirmed in writing as of the
same date, that, as of such date, and subject to the assumptions made, matters
considered and limitations set forth in such opinion and summarized below, the
Exchange Ratio was fair, from a financial point of view, to Desktop. There
were no material differences between such oral opinion and the BT Alex. Brown
Opinion (as defined below). No limitations were imposed by the Desktop Board
upon BT Alex. Brown with respect to the investigations made or procedures
followed by it in rendering its opinion.

THE FULL TEXT OF BT ALEX. BROWN'S WRITTEN OPINION DATED NOVEMBER 2, 1997
(THE "BT ALEX. BROWN OPINION"), WHICH SETS FORTH, AMONG OTHER THINGS,
ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN,
IS ATTACHED HERETO AS APPENDIX D AND IS INCORPORATED HEREIN BY REFERENCE. BT
ALEX. BROWN HAS CONSENTED TO THE INCLUSION OF THE BT ALEX. BROWN OPINION IN
THIS JOINT PROXY STATEMENT/PROSPECTUS. DESKTOP STOCKHOLDERS ARE URGED TO READ
THE BT ALEX. BROWN OPINION IN ITS ENTIRETY. THE BT ALEX. BROWN OPINION IS
DIRECTED TO THE DESKTOP BOARD, ADDRESSES ONLY THE FAIRNESS OF THE EXCHANGE
RATIO TO DESKTOP FROM A FINANCIAL POINT OF VIEW AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY DESKTOP STOCKHOLDER AS TO HOW SUCH STOCKHOLDER SHOULD
VOTE AT THE DESKTOP MEETING. THE BT ALEX. BROWN OPINION WAS RENDERED TO THE
DESKTOP BOARD FOR ITS CONSIDERATION IN DETERMINING WHETHER TO APPROVE THE
MERGER AGREEMENT. THE DISCUSSION OF THE BT ALEX. BROWN OPINION IN THIS JOINT
PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
FULL TEXT OF THE BT ALEX. BROWN OPINION.

In connection with the BT Alex. Brown Opinion, BT Alex. Brown reviewed
certain publicly available financial information and other information
concerning Desktop and Individual and certain internal analyses and other
information furnished to it by Desktop and Individual. BT Alex. Brown also
held discussions with the members of the senior managements of Desktop and
Individual regarding the businesses and prospects of their respective
companies and the joint prospects of a combined company. In addition, BT Alex.
Brown (i) reviewed the reported prices and trading activity for the common
stock of both Desktop and Individual, (ii) compared

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certain financial and stock market information for Desktop and Individual with
similar information for certain other companies whose securities are publicly
traded, (iii) reviewed the financial terms of certain recent business
combinations, (iv) reviewed the terms of the Merger Agreement and certain
related documents, and (v) performed such other studies and analyses and
considered such other factors as it deemed appropriate.

In conducting its review and arriving at its opinion, BT Alex. Brown assumed
and relied upon, without independent verification, the accuracy, completeness
and fairness of the information furnished to or otherwise reviewed by or
discussed with it for purposes of rendering its opinion. With respect to the
financial projections of Desktop and other information relating to the
prospects of Desktop and Individual provided to BT Alex. Brown by each
company, BT Alex. Brown assumed that such projections and other information
were reasonably prepared and reflected the best currently available judgments
and estimates of the respective managements of Desktop and Individual as to
the likely future financial performances of their respective companies and of
the combined entity. The financial projections of Desktop and the other
information relating to the prospects of Desktop and Individual that were
provided to BT Alex. Brown were utilized and relied upon by BT Alex. Brown in
the Contribution Analysis, the Discounted Cash Flow Analysis and the Pro Forma
Combined Earnings Analysis summarized below. BT Alex. Brown did not receive
financial projections from Individual; however, Individual's management
confirmed that their expectations, based upon Individual's near-term operating
plan, were within the range of publicly available analyst estimates. BT Alex.
Brown assumed, with the consent of Desktop, that the Merger will qualify for
pooling of interests accounting treatment. BT Alex. Brown did not make and it
was not provided with an independent evaluation or appraisal of the assets of
Desktop or Individual, nor has BT Alex. Brown been furnished with any such
evaluations or appraisals. The BT Alex. Brown Opinion is based on market,
economic and other conditions as they existed and could be evaluated as of the
date of the opinion letter.

The following is a summary of the analyses performed and factors considered
by BT Alex. Brown in connection with the rendering of the BT Alex. Brown
Opinion.

Historical Financial Information. In rendering its opinion, BT Alex. Brown
reviewed and analyzed historical and current financial information of Desktop
and Individual which included (i) Desktop's and Individual's income statements
and balance sheets; (ii) Desktop's and Individual's quarterly and annual
operating results; and (iii) Desktop's and Individual's margins and growth
rates.

Historical Stock Price Performance. BT Alex. Brown reviewed and analyzed the
daily closing per share market prices and trading volume for Desktop Common
Stock and Individual Common Stock from November 1, 1996 to October 31, 1997
and the relative stock price movements of the two companies over this period.
BT Alex. Brown also reviewed the daily closing per share market prices of the
Desktop Common Stock and Individual Common Stock and compared the movement of
such daily closing prices with the movement of the S&P 500 composite average
over the period from November 1, 1996 to October 31, 1997. BT Alex. Brown
noted that, on a relative basis, both Desktop Common Stock (-59.0%) and
Individual Common Stock (-10.9%) underperformed the S&P 500 composite average
(+31.2%) and that Individual outperformed Desktop over this period. BT Alex.
Brown also reviewed the daily closing per share market prices of Desktop
Common Stock and Individual Common Stock and compared the movement of such
closing prices with the movement of an online and information services
industry composite average (consisting of America Online, Inc., Excalibur
Technologies Corporation, Excite, Inc., Gartner Group, Inc., Infoseek
Corporation, INSO Corporation, Lycos, Inc. and The Dialog Corporation plc)
over the period from November 1, 1996 to October 31, 1997. BT Alex. Brown
noted that, on a relative basis, Desktop Common Stock (-59.0%) and Individual
Common Stock (-10.9%) underperformed such online and information services
industry composite average (+63.5%). This information was presented to give
the Desktop Board background information regarding the respective stock prices
of Desktop and Individual over the period indicated.

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Analysis of Certain Other Publicly Traded Companies. This analysis examines
a company's valuation as compared to the valuation in the public market of
other selected publicly traded companies. BT Alex. Brown compared certain
financial information (based on the commonly used valuation measurements
described below) relating to both Desktop and Individual to certain
corresponding information from a group of eleven publicly traded online and
information services industry companies (consisting of America Online, Inc.,
Excalibur Technologies Corporation, Excite, Inc., FactSet Research Systems
Inc., Gartner Group, Inc., Infoseek Corporation, INSO Corporation, Lycos,
Inc., The Dialog Corporation plc, Verity, Inc., and WavePhore, Inc.
(collectively, the "Selected Companies")). Such financial information
included, among other things, (i) common equity market valuation; (ii)
operating performance; (iii) ratios of common equity market value as adjusted
for debt and cash ("Enterprise Value") to revenues and earnings before
interest expense, income taxes and depreciation and amortization ("EBITDA");
and (iv) ratios of common equity market prices per share ("Equity Value") to
earnings per share ("EPS"). The financial information used in connection with
the multiples provided below with respect to Desktop, Individual and the
Selected Companies was based on the latest reported twelve month period as
derived from publicly available information and on estimated revenue for
calendar years 1997 and 1998 as derived from BT Alex. Brown research or other
publicly available research reports and estimated EPS for calendar years 1997
and 1998 as reported by the Institutional Brokers Estimating System ("IBES").
Where EBITDA or EPS for Individual or any Selected Company was negative or
implied a multiple which was significantly outside of the range of multiples
for the other Selected Companies, a multiple of such number was considered to
be not meaningful and, where appropriate, excluded from the calculation of the
mean of such multiple for the Selected Companies. BT Alex. Brown noted that,
on a trailing twelve month basis, the multiple of Enterprise Value to revenues
was 1.2x for Desktop and 2.1x for Individual, compared to a range of 1.1x to
15.6x, with a mean of 5.6x, for the Selected Companies; the multiple of
Enterprise Value to estimated calendar year 1997 revenue was 1.1x for Desktop
and 2.1x for Individual, compared to a range of 1.1x to 10.9x, with a mean of
4.8x, for the Selected Companies; the multiple of Enterprise Value to
estimated calendar year 1998 revenue was 0.9x for Desktop and 1.6x for
Individual, compared to a range of 0.9x to 6.6x, with a mean of 3.7x, for the
Selected Companies; and the multiple of Enterprise Value to trailing twelve
month EBITDA was 11.8x for Desktop and not meaningful for Individual, compared
to a range of 3.6x to 233.3x, with a mean of 13.2x, for the Selected
Companies. BT Alex. Brown further noted that the multiple of Equity Value to
trailing twelve month EPS was 30.7x for Desktop and not meaningful for
Individual, compared to a range of 13.3x to 41.3x, with a mean of 29.0x, for
the Selected Companies; the multiple of Equity Value to calendar year 1997 EPS
was 37.2x for Desktop and not meaningful for Individual, compared to a range
of 19.6x to 275.0x, with a mean of 28.7x, for the Selected Companies; and the
multiple of Equity Value to calendar year 1998 EPS was 29.6x for Desktop and
not meaningful for Individual, compared to a range of 18.9x to 154.4x, with a
mean of 33.lx, for the Selected Companies. As a result of the foregoing
procedures, BT Alex. Brown noted that the multiples for Desktop and Individual
were generally within the range of the multiples for the Selected Companies,
and generally below the mean of the multiples for the Selected Companies. As
noted above, EPS projections for the Selected Companies, Desktop and
Individual were based on IBES estimates. The IBES EPS estimate, as of November
2, 1997, for calendar year 1997 for Desktop was $0.28 and for Individual was
($0.77) and for calendar year 1998 for Desktop was $0.35 and for Individual
was ($0.05).

Analysis of Selected Mergers and Acquisitions. BT Alex. Brown reviewed the
financial terms, to the extent publicly available, of 26 pending or completed
mergers and acquisitions since August 1, 1988 in the online and information
services industry (the "Selected Transactions"). BT Alex. Brown calculated
various financial multiples based on certain publicly available information
for each of the Selected Transactions and compared them to corresponding
financial multiples for the Merger, based on the Exchange Ratio. BT Alex.
Brown noted that the multiple of Enterprise Value to trailing twelve month
revenues was 2.lx for the Merger versus a range of 1.0x to 6.8x, with a mean
of 2.8x, for the Selected Transactions and the multiple of Enterprise Value to
trailing twelve month EBITDA was not meaningful for the Merger versus a range
of 5.4x to 22.8x, with a mean of 14.0x, for the Selected Transactions. All
multiples for the Selected Transactions were based on public information
available at the time of announcement of such transactions, without taking
into account differing market and other conditions during the nine-year period
during which the Selected Transactions occurred.

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Premiums Paid Analysis. BT Alex. Brown reviewed the premiums paid, to the
extent publicly available, in 150 pooling of interests transactions announced
since January 1, 1993 with Enterprise Values between $50 million and $200
million (the "Premium Transactions"). BT Alex. Brown noted that the Premium
Transactions were effected at an average of the premium to the target's per
share market price four weeks prior to announcement and to the target's per
share market price one day prior to announcement of 38.6% and 25.6%,
respectively, versus transaction premiums of (6.0%) and 0.9%, respectively,
for the Merger (based on the per share market price four weeks prior to and
one day prior to the announcement of the Merger).

Historical Exchange Ratio Analysis. BT Alex. Brown reviewed and analyzed the
historical ratio of the daily per share market closing prices of Individual
Common Stock divided by the corresponding prices of Desktop Common Stock since
Individual's initial public offering on March 15, 1996 and over the six-month
and one-month periods prior to November 2, 1997. Such average exchange ratios
for the aforementioned time periods were 0.416, 0.455 and 0.480, respectively.
BT Alex. Brown then calculated the respective premiums over such average daily
exchange ratios represented by the Exchange Ratio, which for such periods were
20.2%, 9.9% and 4.1%, respectively.

Contribution Analysis. BT Alex. Brown analyzed the relative contributions of
Desktop and Individual to the pro forma balance sheet and income statement of
the combined company utilizing management projections for Desktop, consensus
research estimates for Individual for calendar years 1997 and 1998 and BT
Alex. Brown estimates, as derived from discussions with Individual's
management, for calendar year 1999. BT Alex. Brown then compared these
relative contributions to Individual's relative pro forma ownership of
approximately 48.6% of the outstanding capital of the Combined Company
calculated using basic shares outstanding and 50.1% of the outstanding capital
of the combined company accounting for stock options and warrants using the
treasury stock method. This analysis showed that on a pro forma combined
basis, based on the two companies' reported balance sheets as of September 30,
1997, Desktop and Individual would contribute approximately 62.9% and 37.1%,
respectively, of total assets and 79.6% and 20.4%, respectively, of
stockholders' equity. This analysis also showed that on a pro forma combined
basis (excluding the effects of (i) any synergies that may be realized as a
result of the Merger, and (ii) any non-recurring expenses relating to the
Merger), Desktop and Individual would account for approximately 54.1% and
45.9% respectively, of the Combined Company's pro forma revenue for the twelve
month period ending September 30, 1997; 54.8% and 45.2%, respectively, of the
Combined Company's pro forma revenue for calendar year 1997; 55.0% and 45.0%,
respectively, of the Combined Company's pro forma revenue for calendar year
1998; 55.9% and 44.1%, respectively, of the Combined Company's pro forma
revenue for calendar year 1999; 67.2% and 32.8%, respectively, of the Combined
Company's pro forma EBITDA for calendar year 1998; 57.7% and 42.3%,
respectively, of the Combined Company's pro forma EBITDA for calendar year
1999; and 73.1% and 26.9%, respectively, of the Combined Company's pro forma
pre-tax income for calendar year 1999. This analysis also showed that as of
the last business day preceding the announcement of the Merger, Desktop and
Individual would account for approximately 50.2% and 49.8%, respectively, of
the sum of the companies' equity market capitalizations.

Discounted Cash Flow Analysis. BT Alex. Brown performed a discounted cash
flow analysis for Individual. The discounted cash flow approach values a
business based on the current value of the future cash flow that the business
is expected to generate. To establish a current value under this approach,
future cash flow must be estimated and an appropriate discount rate
determined. BT Alex. Brown used estimates of projected financial performance
for Individual for 1998 based on consensus analyst estimates and BT Alex.
Brown estimates for the years 1999 through 2002 as derived from discussions
with Individual's management. BT Alex. Brown aggregated the present value of
the cash flows through 2002 with the present value of a range of terminal
values. The terminal values were computed based on projected EBITDA in
calendar year 2002 and a range of terminal multiples, which were based on a
review of the trading characteristics of the common stock of the Selected
Companies, of 10.0x to 12.0x. All cash flows were discounted at rates ranging
from 18.0% to 22.0%. BT Alex. Brown arrived at such discount rates based on
its judgment of the weighted average cost of capital of the Selected
Companies. This analysis indicated a range of values for Individual Common
Stock of $6.84 to $8.80 per share. BT Alex. Brown performed a discounted cash
flow sensitivity analysis, using discount rates

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ranging from 15.0% to 25.0% and a range of terminal multiples of 7.0x to
16.0x. This sensitivity analysis indicated a range of values for Individual
Common Stock of $5.05 to $11.88 per share. BT Alex. Brown also performed an
analysis of the current value of Individual's net operating loss carryforwards
("NOLs") utilizing discount rates ranging from 18.0% to 22.0%. This analysis
indicated a range of values for Individual's NOLs of $0.42 to $0.48 per share
of Individual Common Stock.

Pro Forma Combined Earnings Analysis. BT Alex. Brown analyzed certain pro
forma effects of the Merger. Based on such analysis, BT Alex. Brown computed
the resulting dilution/accretion to the Combined Company's EPS estimates for
the fiscal years ending 1998 and 1999, pursuant to the Merger before and after
taking into account any potential cost savings and other synergies that
Desktop and Individual could achieve if the Merger were consummated and before
nonrecurring costs relating to the Merger. BT Alex. Brown calculated such
dilution/accretion both before and after giving effect to Individual's NOLs
and under two different earnings scenarios for Desktop in 1998. In the first
1998 earnings scenario ("1998 Scenario A"), BT Alex. Brown used management
plan EPS estimates for Desktop. In the second 1998 earnings scenario ("1998
Scenario B"), BT Alex. Brown used IBES EPS estimates for Desktop. Under both
scenarios, BT Alex. Brown used IBES EPS estimates for Individual. In
calculating dilution/accretion for 1999, BT Alex. Brown used management plan
EPS estimates for Desktop and BT Alex. Brown EPS estimates as derived from
discussions with Individual's management for Individual. In cases where
synergies were taken into account, the analysis assumed that equal cost
savings and other synergies would be realized in 1998 and 1999.

BT Alex. Brown first performed the pro forma combined earnings analysis
without taking into account the effects of Individual's NOLs. BT Alex. Brown
noted that before taking into account any potential synergies and before
certain nonrecurring costs relating to the Merger, the Merger would be
approximately 57.7% dilutive, 62.2% dilutive and 29.1% dilutive to the
Combined Company's EPS for 1998 Scenario A, 1998 Scenario B and 1999,
respectively. BT Alex. Brown further noted that assuming $5 million of pre-tax
synergies and before such nonrecurring costs, the Merger would be
approximately 4.1% dilutive, 14.4% dilutive and 3.3% dilutive to the Combined
Company's EPS for 1998 Scenario A, 1998 Scenario B and 1999, respectively. BT
Alex. Brown also noted that assuming $10 million of pre-tax synergies and
before such nonrecurring costs, the Merger would be approximately 49.5%
accretive, 33.4% accretive and 22.4% accretive to the Combined Company's EPS
for 1998 Scenario A, 1998 Scenario B and 1999, respectively.

BT Alex. Brown subsequently performed the pro forma combined earnings
analysis after utilization of Individual's NOLs. BT Alex Brown noted that,
before taking into account any potential synergies and before certain
nonrecurring costs relating to the Merger, the Merger would be approximately
29.5% dilutive, 37.1% dilutive and 8.3% dilutive to the Combined Company's EPS
for 1998 Scenario A, 1998 Scenario B and 1999, respectively. BT Alex. Brown
further noted that, assuming $5 million of pre-tax synergies and before such
nonrecurring costs, the Merger would be approximately 31.6% accretive, 17.5%
accretive and 13.8% accretive to the Combined Company's EPS for 1998 Scenario
A, 1998 Scenario B and 1999, respectively. BT Alex. Brown also noted that,
assuming $10 million of pre-tax synergies and before such nonrecurring costs,
the Merger would be approximately 85.2% accretive, 65.3% accretive and 39.5%
accretive to the Combined Company's EPS for 1998 Scenario A, 1998 Scenario B
and 1999, respectively.

Merger of Equals Analysis. BT Alex. Brown reviewed the terms, to the extent
publicly available, of twelve pending or completed "merger of equals"
transactions announced since June 1, 1993 in which the stockholders of each
party to the transaction would own between 41% and 59% of the combined
company's outstanding capital (the "MOE Transactions"). The MOE Transactions
comprised the business combinations involving HFS Incorporated and CUC
International Inc. (May 27, 1997), Morgan Stanley Group Inc. and Dean Witter,
Discover & Co. (February 4, 1997), US Order Inc. and Colonial Data
Technologies Corp. (August 5, 1996), Pharmacia AB and The Upjohn Company
(August 20, 1995), Frontier Corporation and ALC Communications Corporation
(April 10, 1995), Continental Medical Systems, Inc. and Horizon Healthcare
Corporation (March 31, 1995), USA Waste Services, Inc. and Chambers
Development Company, Inc. (November 28, 1994), Dibrell Brothers Incorporated
and Monk-Austin, Inc. (October 23, 1994), Lockheed Corporation and Martin
Marietta Corporation (August 30, 1994), SynOptics Communications, Inc. and
Wellfleet Communications, Inc. (July 5, 1994),

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Columbia Healthcare Corporation and HCA-Hospital Corporation of America
(October 2, 1993), and Price Company and Costco Wholesale Corp. (June 16,
1993). BT Alex. Brown analyzed the governance provisions of these
transactions, including representation on the combined company's Board of
Directors by each party to the transaction and the senior management structure
of the combined company. For each party to an MOE Transaction, BT Alex. Brown
also analyzed the premiums and discounts of the exchange ratio over the market
exchange ratios one day prior and four weeks prior to the announcement of such
MOE Transaction. BT Alex. Brown noted that the MOE Transactions were effected
at exchange ratios which implied a premium or discount to the relative
exchange ratios dictated by the public market one day prior and four weeks
prior to announcement of the MOE Transaction. BT Alex. Brown also noted that
in only two of the twelve MOE Transactions, one party to the transaction
received all of the senior management positions in the combined company and
the right to designate a majority of the directors to the combined company's
Board of Directors (the "Control Party"). BT Alex. Brown noted that these two
transactions were effected at exchange ratios which implied a premium to the
stockholders of the company which was not the Control Party four weeks prior
to announcement of 183.5% and 76.1%, and one day prior to announcement of
88.2% and 70.5%, and which implied a premium to the stockholders of the
company which was the Control Party four weeks prior to announcement of (-
64.7%) and (-43.2%), and one day prior to announcement of (-46.9%) and (-
41.3%). BT Alex. Brown noted that the other ten MOE Transactions were effected
at exchange ratios which implied a premium to the stockholders of each party
involved in the transaction four weeks prior to announcement ranging from (-
30.2%) to 43.2%, and one day prior to announcement ranging from (-28.4%) to
39.6%.

Relevant Market and Economic Factors. In rendering its opinion, BT Alex.
Brown considered, among other factors, the condition of the U.S. stock
markets, particularly in the online and information services industry, and the
current level of economic activity. No company used in the analysis of other
publicly traded companies nor any transaction used in the analyses of selected
mergers and acquisitions, premiums paid or mergers of equals summarized above
is identical to Desktop, Individual or the Merger. Accordingly, such analyses
must take into account differences in the financial and operating
characteristics of the Selected Companies and the companies in the Selected
Transactions, the Premium Transactions and the MOE Transactions and other
factors, such as general economic conditions, conditions in the markets in
which such companies compete and strategic and operating plans for such
companies, that could affect the public trading value and acquisition value of
the Selected Companies and the companies in the Selected Transactions, the
Premium Transactions and the MOE Transactions, respectively.

While the foregoing summary describes all analyses and factors that BT Alex.
Brown deemed material in its presentation to the Desktop Board, it is not a
comprehensive description of all analyses and factors considered by BT Alex.
Brown. The preparation of a fairness opinion is a complex process involving
various determinations as to the most appropriate and relevant methods of
financial analysis and the applications of these methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to
summary description. BT Alex. Brown believes that its analyses must be
considered as a whole and that selecting portions of its analyses and of the
factors considered by it, without considering all analyses and factors, would
create an incomplete view of the evaluation process underlying the BT Alex.
Brown Opinion. In performing its analyses, BT Alex. Brown considered industry
performance and general economic, market and financial conditions, all of
which are beyond the control of Desktop and Individual. The analyses performed
by BT Alex. Brown are not necessarily indicative of actual values or future
results, which may be significantly more or less favorable than those
suggested by such analyses. Accordingly, such analyses and estimates are
inherently subject to substantial uncertainty. Additionally, analyses relating
to the value of a business do not purport to be appraisals or to reflect the
prices at which the business actually may be sold. Furthermore, no opinion is
being expressed as to the prices at which shares of Desktop Common Stock may
trade at any future time.

The fees to date payable to BT Alex. Brown for rendering the BT Alex. Brown
Opinion have been $250,000, which amount will be credited against the final
fee of 1.2% of the equity consideration to be paid in the Merger, payable upon
consummation of the Merger. In addition, Desktop has agreed to reimburse BT
Alex. Brown for its reasonable out-of-pocket expenses incurred in connection
with rendering financial advisory services, including

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fees and disbursements of its legal counsel. Desktop has agreed to indemnify
BT Alex. Brown and its directors, officers, agents, employees and controlling
persons, for certain costs, expenses, losses, claims, damages and liabilities
related to or arising out of its rendering of services under its engagement as
financial advisor.

The Desktop Board retained BT Alex. Brown to act as its advisor based upon
BT Alex. Brown's role as lead manager of Desktop's initial public offering on
August 11, 1995 and subsequent advisory services and based upon BT Alex.
Brown's qualifications, reputation, experience and expertise. BT Alex. Brown
is an internationally recognized investment banking firm and, as customary
part of its investment banking business, is engaged in the valuation of
businesses and their securities in connection with mergers and acquisitions,
negotiated underwritings, private placements and valuations for corporate and
other purposes. BT Alex. Brown may actively trade the equity securities of
Desktop and Individual for its own account and for the account of its
customers and accordingly may at any time hold a long or short position in
such securities. BT Alex. Brown maintains a market in Desktop Common Stock and
regularly publishes research reports regarding the online and information
services industry and the business and securities of Desktop and other
publicly traded companies in the online and information services industry.

OPINION OF BANCAMERICA ROBERTSON STEPHENS, FINANCIAL ADVISOR TO INDIVIDUAL

On October 10, 1997, Individual and BancAmerica Robertson Stephens executed
an engagement letter (the "BancAmerica Robertson Stephens Engagement Letter")
pursuant to which BancAmerica Robertson Stephens was engaged to act as
Individual's financial advisor in connection with the Merger. Pursuant to the
BancAmerica Robertson Stephens Engagement Letter, Individual retained
BancAmerica Robertson Stephens to provide financial advisory and investment
banking services in connection with a possible sale of or business combination
involving Individual, and to render an opinion as to the fairness of the
exchange ratio in such a business combination, from a financial point of view,
to the stockholders of Individual.

On November 2, 1997, the Board of Directors of Individual met to evaluate
the proposed Merger, at which time the Board of Directors received an oral
opinion from BancAmerica Robertson Stephens that, as of such date, the
Exchange Ratio was fair from a financial point of view to the stockholders of
Individual. Shortly thereafter, BancAmerica Robertson Stephens delivered a
written opinion, dated November 2, 1997, to the same effect. No limitations
were imposed by Individual's Board of Directors on BancAmerica Robertson
Stephens with respect to the investigations made or procedures followed by it
in furnishing its opinion. The Exchange Ratio was determined through
negotiations between the managements of Individual and Desktop. Although
BancAmerica Robertson Stephens did assist the management of Individual in
those negotiations, it was not asked by, and did not recommend to, Individual
that any specific exchange ratio constituted the appropriate exchange ratio
for the Merger. BancAmerica Robertson Stephens expressed no opinion as to tax
consequences of the Merger, and BancAmerica Robertson Stephens' opinion as to
fairness of the Exchange Ratio does not take into account the particular tax
status or position of any stockholder of Individual. In furnishing its
opinion, BancAmerica Robertson Stephens was not engaged as an agent or
fiduciary of Individual's stockholders or any other third party.

THE FULL TEXT OF THE BANCAMERICA ROBERTSON STEPHENS OPINION, WHICH SETS
FORTH, AMONG OTHER THINGS, ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED HERETO AS ANNEX E AND IS
INCORPORATED HEREIN BY REFERENCE. STOCKHOLDERS OF INDIVIDUAL ARE URGED TO READ
THE BANCAMERICA ROBERTSON STEPHENS OPINION IN ITS ENTIRETY. BANCAMERICA
ROBERTSON STEPHENS HAS CONSENTED TO THE INCLUSION OF ITS OPINION IN THE JOINT
PROXY STATEMENT/PROSPECTUS AND HAS DETERMINED THAT THE CONDITIONS FOR SUCH
CONSENT DESCRIBED IN THE BANCAMERICA ROBERTSON STEPHENS OPINION HAVE BEEN
SATISFIED. THE BANCAMERICA ROBERTSON STEPHENS OPINION WAS PREPARED FOR THE
BENEFIT AND USE OF THE INDIVIDUAL BOARD OF DIRECTORS IN ITS CONSIDERATION OF
THE MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO STOCKHOLDERS OF
INDIVIDUAL AS TO HOW THEY SHOULD VOTE AT THE MEETING IN CONNECTION WITH THE
MERGER. THE BANCAMERICA ROBERTSON STEPHENS OPINION DOES NOT ADDRESS THE
RELATIVE MERITS OF THE MERGER AND ANY OTHER TRANSACTIONS OR BUSINESS
STRATEGIES DISCUSSED BY THE INDIVIDUAL BOARD OF DIRECTORS AS ALTERNATIVES TO
THE MERGER AGREEMENT OR THE UNDERLYING BUSINESS DECISION OF THE INDIVIDUAL
BOARD OF DIRECTORS TO PROCEED WITH OR EFFECT THE MERGER. THE SUMMARY OF THE
BANCAMERICA ROBERTSON STEPHENS OPINION SET FORTH IN THIS JOINT PROXY
STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL
TEXT OF THE BANCAMERICA ROBERTSON STEPHENS OPINION.

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In connection with the preparation of the BancAmerica Robertson Stephens
Opinion, BancAmerica Robertson Stephens, among other things, (i) reviewed
financial information on Individual furnished to it by Individual, including
certain internal financial analyses and forecasts prepared by the management
of Individual; (ii) reviewed publicly available information; (iii) held
discussions with the respective managements of Individual and Desktop
concerning the businesses, past and current business operations, financial
condition and future prospects of Individual and Desktop, independently and
combined, including, in the case of Desktop, discussion regarding the degree
to which it could rely on publicly available Wall Street research analyst
estimates of Desktop's future financial performance; (iv) reviewed the terms
of the Merger Agreement, the Option Agreements and the Participation
Agreements; (v) reviewed the stock price and trading histories of Individual
and Desktop; (vi) prepared comparable company, contribution and discounted
cash flow analyses of Individual and Desktop; (vii) prepared a pro-forma
merger analysis of the Merger; (viii) compared the financial terms of the
Merger with other transactions that it deemed relevant; (ix) reviewed
estimates by Individual's and Desktop's management and in the case of
Individual's management, with the assistance of Individual's management
consulting firm, of the cost savings, revenue enhancements and other benefits
expected to be derived from the Merger; and (x) made such other studies and
inquiries, and reviewed such other data, as it deemed relevant.

In connection with rendering its opinion, however, BancAmerica Robertson
Stephens has not independently verified any of the foregoing information and
assumed that all such information was complete and accurate in all material
respects. Furthermore, it did not obtain any independent appraisal of the
properties or assets and liabilities of Individual or Desktop or any of their
respective subsidiaries, nor was it furnished with any such evaluations or
appraisals. With respect to financial and operating forecasts of Individual
provided to BancAmerica Robertson Stephens by Individual, BancAmerica
Robertson Stephens assumed that such forecasts were reasonably prepared and
reflect the best available estimates and judgments of the management of
Individual, and that such projections and forecasts will be realized in the
amounts and in the time periods currently estimated by the management of
Individual. In addition, BancAmerica Robertson Stephens has relied upon the
estimates and judgments of Individual management as to the future financial
performance of Individual. BancAmerica Robertson Stephens has also relied upon
the estimates by Individual's and Desktop's management and in the case of
Individual's management, with the assistance of Individual's management
consulting firm of the cost savings, revenue enhancements and other benefits
expected to be derived from the Merger. BancAmerica Robertson Stephens has
also assumed, with Individual's consent, that the Merger will be accounted for
as a "pooling-of-interests" under generally accepted accounting principles.
While BancAmerica Robertson Stephens believes that its review, as described
above, provided an adequate basis for the opinion that it expressed, such
opinion is necessarily based upon market, economic and other conditions that
exist and can be evaluated as of the date of the BancAmerica Robertson
Stephens Opinion, and on information available to it as of the date thereof.
Finally, BancAmerica Robertson Stephens expressed no opinion as to the value
of any employee agreements or arrangements entered into in connection with the
Agreement or the Merger Agreement. In rendering the BancAmerica Robertson
Stephens Opinion, BancAmerica Robertson Stephens assumed that the Merger would
be consummated substantially on the terms described in the Merger Agreement,
without any waiver of any material terms or conditions by any party thereto.
Although developments following the date of the BancAmerica Robertson Stephens
Opinion may affect the opinion, BancAmerica Robertson Stephens assumed no
obligation to update, revise or reaffirm its opinion.

The following is a summary of the financial analyses performed by
BancAmerica Robertson Stephens in connection with rendering the BancAmerica
Robertson Stephens Opinion:

Comparable Company Analysis for Individual. Using publicly available
information, BancAmerica Robertson Stephens analyzed, among other things, the
market values and trading multiples of Individual, Desktop and selected
publicly traded companies in the electronic news services industry, including:
Dow Jones, M.A.I.D. p.l.c. and Reuters (collectively, the "Comparable
Companies"). BancAmerica Robertson Stephens compared total capitalization
values as multiples of, among other things, estimated calendar 1997 and 1998
revenues. BancAmerica Robertson Stephens also compared the profit margins and
projected earnings per share growth of Individual, Desktop and the Comparable
Companies. All multiples were based on closing stock prices as of

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October 31, 1997. Applying a range of multiples for the Comparable Companies
of estimated calendar year 1998 and 1997 revenues of 0.9X to 3.3X and 1.1X to
5.2X, respectively, to corresponding financial data for Individual resulted in
an equity reference range for Individual of approximately $3.26 to $11.43 per
share, as compared to the equity value of approximately $5.17 per share as
implied by the Exchange Ratio based on the closing price of Desktop Common
Stock on October 31, 1997.

Comparable Company Analysis for Desktop. Using publicly available
information, BancAmerica Robertson Stephens analyzed, among other things, the
market values and trading multiples of Individual, Desktop and the Comparable
Companies. BancAmerica Robertson Stephens compared total capitalization values
as multiples of, among other things, estimated calendar 1997 and 1998
revenues. BancAmerica Robertson Stephens also compared the profit margins and
projected earnings per share growth of Individual, Desktop and the Comparable
Companies. All multiples were based on closing stock prices as of October 31,
1997. Applying a range of multiples for the Comparable Companies of estimated
calendar year 1998 and 1997 revenues of 1.6X to 3.3X and 1.9X to 5.2X,
respectively, to corresponding financial data for Desktop resulted in an
equity reference range for Desktop of approximately $13.82 to $30.09 per
share, as compared to the equity value of approximately $10.34 per share based
on the closing price of Desktop Common Stock on October 31, 1997. Applying a
range of multiples for the Comparable Companies of estimated calendar year
1998 and 1997 EBIT of 12.0X to 20.2X and 15.4X to 18.6X, respectively, to
corresponding financial data for Desktop resulted in an equity reference range
for Desktop of approximately $7.85 to $11.95 per share, as compared to the
equity value of approximately $10.34 per share based on the closing price of
Desktop Common Stock on October 31, 1997. Applying a range of multiples for
the Comparable Companies of estimated calendar year 1998 and 1997 PE of 16.8X
to 33.7X and 22.3X to 37.2X, respectively, to corresponding financial data for
Desktop resulted in an equity reference range for Desktop of approximately
$6.03 to $12.08 per share, as compared to the equity value of approximately
$10.34 per share based on the closing price of Desktop Common Stock on October
31, 1997.

Precedent Mergers of Equals Analysis. Using publicly available information,
BancAmerica Robertson Stephens analyzed the implied premiums paid or proposed
to be paid in selected merger of equal transactions, including: BW/IP
Inc./Duriron Co. Inc. (May 6, 1997), Morgan Stanley Group/Dean Witter Discover
(February 25, 1997), Indiana Federal/Pinnacle Financial (November 14, 1996),
Liberty Bancorp/Hinsdale Financial Corp. (August 2, 1996), Colonial Data/US
Order Inc. (August 2, 1996), ROC Communities Inc./Chateau Properties (July 18,
1996), Cupertino National/Mid-Peninsula Bancorp (June 6, 1996), NYNEX
Corp./Bell Atlantic Corp. (April 22, 1996), Kansas City Power &
Light/UtiliCorp United (January 22, 1996), AMSCO International/Steris Corp.
(December 18, 1995), Tokos Medical Corp./Healthdyne (October 3, 1995),
Weatherford International/Enterra Corp. (June 26, 1995), Charter One
Financial/FirstFed Michigan Corp. (May 30, 1995), Abbey Healthcare
Group/Homedco Group (March 2, 1995), Software Etc Stores/Babbages (August 25,
1994), Dime Bancorp/Anchor Bancorp (July 6, 1994), Wellfleet
Communications/SynOptics Communications (July 5, 1994), Price Co./Costco
Wholesale (June 16, 1993), First Security Financial/Omni Capital Group
(November 26, 1992), Critical Care America/Medical Care International (June
17, 1992), Comerica/Manufacturers National (October 28, 1991) and Iowa
Resources/Midwest Energy Co. (March 16, 1990) (collectively, the "MOE
Transactions"). BancAmerica Robertson Stephens compared, among other things,
the premium paid in the MOE Transactions over the public equity closing sale
price one day and four weeks prior to the announcement of the transactions.
Applying a range of multiples for the MOE Transactions of premium ranges for
one day and four weeks prior to announcement of the transactions, of -6.9% to
26.3% and -8.2% to 29.1%, respectively, resulted in an equity reference range
for Individual of approximately $4.60 to $7.10 per share, as compared to the
equity value of approximately $5.17 per share as implied by the Exchange Ratio
based on the closing price of Desktop Common Stock on October 31, 1997. All
multiples for the MOE Transactions were based on public information available
at the time of announcement, or one day or four weeks prior to the
announcement, as the case may be, of such transactions, without taking into
account differing market and other conditions during the period in which the
MOE Transactions occurred.

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No company, transaction or business used in Comparable Company Analysis or
Precedent Mergers of Equals Analysis as a comparison is identical to
Individual, Desktop or the Merger. Accordingly, an analysis of the results of
the foregoing is not entirely mathematical; rather it involves complex
considerations and judgments concerning differences in financial and operating
characteristics and other factors that could affect the acquisition, public
trading and other values of the Individual Comparable Companies, MOE
Transactions or the business segment, company or transactions to which they
are compared.

Historical Exchange Ratio Analysis. BancAmerica Robertson Stephens reviewed
and analyzed the historical ratio of the daily per share market closing prices
of Individual Common Stock and Desktop Common Stock since Individual's IPO in
March 1996. BancAmerica Robertson Stephens noted that the Exchange Ratio of
.500 represents a premium to the 0.416 average price ratio for the two
companies since Individual's IPO, a premium to the 0.438 average price ratio
for the two companies for the last 12 months, a premium to the 0.397 average
price ratio for the two companies for the last 90 days, a premium to the 0.408
average price ratio for the two companies for the last 60 days, a premium to
the 0.496 average price ratio for the two companies for the last 30 days and a
premium to the 0.495 price ratio for the two companies on October 31, 1997.

Contribution Analysis. BancAmerica Robertson Stephens analyzed the
respective contributions of Individual and Desktop to the estimated revenues
and gross profit for the years ended December 31, 1996, 1997 and 1998, and
earnings before interest and taxes ("EBIT") for the year ended December 31,
1998. This analysis indicated that (i) in calendar year 1996, Individual would
contribute approximately 45.3% of revenue and approximately 38% of gross
profit, and Desktop would contribute approximately 54.7% of revenue and
approximately 62% of gross profit, of the Combined Company, (ii) in calendar
year 1997, Individual would contribute approximately 45.5% of revenue and
approximately 38.2% of gross profit, and Desktop would contribute
approximately 54.5% of revenue and approximately 61.8% of gross profit, of the
Combined Company, (iii) in calendar year 1998, Individual would contribute
approximately 45.5% of revenue, 42.7% of gross profit and 11.4% of EBIT, and
Desktop would contribute approximately 54.5% of revenue, 57.3% of gross profit
and 88.6% of EBIT, of the Combined Company, in each case as compared to
Individual's relative ownership of approximately 50.4% of the outstanding
common stock of the Combined Company on a treasury stock fully-diluted basis.

Discounted Cash Flow Analysis for Individual. BancAmerica Robertson Stephens
performed a discounted cash flow analysis of the unlevered (before interest
expense) after-tax cash flows of Individual using the Individual estimates
that were prepared by the management of Individual for the fiscal years 1998
through 2002. BancAmerica Robertson Stephens first discounted the projected,
unlevered after-tax cash flows through December 31, 2002 using a range of
discount rates from 25% to 30%. The range of discount rates was based on the
cost of capital of Individual and Desktop, which ranged from 24.7% to 32%.
Individual unlevered after-tax cash flows were calculated as the after-tax
operating earnings of Individual adjusted to add back non-cash expenses and
deduct uses of cash not reflected in the income statement. BancAmerica
Robertson Stephens then added to the present value of the cash flows the
terminal value of Individual in the fiscal year ending December 31, 2002,
discounted back at the same discount rate. The terminal value was computed by
multiplying Individual's projected EBIT in fiscal 2002 by terminal multiples
ranging from 10.0X to 14.0X. The range of terminal multiples selected reflect
BancAmerica Robertson Stephens' judgment as to an appropriate range of
multiples at the end of the referenced period. The discounted cash flow
valuation resulted in an equity reference range of approximately $2.83 to
$6.18 per share, as compared to the equity value of approximately $5.17 per
share as implied by the Exchange Ratio based on the closing price of Desktop
Common Stock on October 31, 1997.

Discounted Cash Flow Analysis for Desktop. BancAmerica Robertson Stephens
performed a discounted cash flow analysis of the unlevered (before interest
expense) after-tax cash flows of Desktop using the Wall Street estimates as
discussed with the management of Desktop for the fiscal year 1998 and
BancAmerica Robertson Stephens estimates based on discussions with Desktop for
the fiscal years 1999 through 2002. BancAmerica Robertson Stephens first
discounted the projected, unlevered after-tax cash flows through December 31,
2002 using a range of discount rates from 25% to 30%. The range of discount
rates was based on the cost of capital of

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Individual and Desktop, which ranged from 24.7% to 32%. Desktop unlevered
after-tax cash flows were calculated as the after-tax operating earnings of
Desktop adjusted to add back non-cash expenses and deduct uses of cash not
reflected in the income statement. BancAmerica Robertson Stephens then added
to the present value of the cash flows the terminal value of Desktop in the
fiscal year ending December 31, 2002, discounted back at the same discount
rate. The terminal value was computed by multiplying Desktop's projected EBIT
in fiscal 2002 by terminal multiples ranging from 10.0X to 14.0X. The range of
terminal multiples selected reflect BancAmerica Robertson Stephens' judgment
as to an appropriate range of multiples at the end of the referenced period.
The discounted cash flow valuation resulted in an equity reference range of
approximately $14.73 to $19.73 per share, as compared to the equity value of
approximately $10.34 per share based on the closing price of Desktop Common
Stock on October 31, 1997.

Pro Forma Earnings Analysis. BancAmerica Robertson Stephens analyzed certain
implied pro forma effects resulting from the Merger based on Individual
estimates that were prepared by Individual, including, among other things, the
impact of the Merger on the projected earnings per share (the "EPS") for the
calendar year 1998 that the Combined Company may realize in its operations
following consummation of the Merger. This analysis implied dilution ranging
from -83.1% to -17.4% without synergies and accretion ranging from 13.4% to
55.2% with approximately $7.6 million of synergies, in each case to the
Combined Company's EPS for the calendar year 1998. The actual results achieved
by the Combined Company may vary from projected results and such variations
may be material.

While the foregoing summary describes certain analyses and factors that
BancAmerica Robertson Stephens deemed material in its presentation to the
Individual Board of Directors, it is not a comprehensive description of all
analyses and factors considered by BancAmerica Robertson Stephens. The
preparation of a fairness opinion is a complex process that involves various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of these methods to the particular circumstances
and, therefore, such an opinion is not readily susceptible to summary
description. BancAmerica Robertson Stephens believes that its analyses must be
considered as a whole and that selecting portions of its analyses and of the
factors considered by it, without considering all analyses and factors, would
create an incomplete view of the evaluation process underlying the BancAmerica
Robertson Stephens Opinion. Several analytical methodologies were employed and
no one method of analysis should be regarded as critical to the overall
conclusion reached by BancAmerica Robertson Stephens. Each analytical
technique has inherent strengths and weaknesses, and the nature of the
available information may further affect the value of particular techniques.
The conclusion reached by BancAmerica Robertson Stephens is based on all
analyses and factors taken as a whole and also on application of BancAmerica
Robertson Stephens' own experience and judgment. Such conclusion may involve
significant elements of subjective judgment and qualitative analysis.
BancAmerica Robertson Stephens therefore gives no opinion as to the value or
merit standing alone of any one or more parts of the analysis it performed. In
performing its analyses, BancAmerica Robertson Stephens considered general
economic, market and financial conditions. The analyses performed by
BancAmerica Robertson Stephens are not necessarily indicative of actual values
or future results, which may be significantly more or less favorable than
those suggested by such analyses. Accordingly, analyses relating to the value
of a business do not purport to be appraisals or to reflect the prices at
which the business actually may be purchased. Furthermore, no opinion is being
expressed as to the prices at which shares of Desktop Common Stock may trade
at any future time.

Individual engaged BancAmerica Robertson Stephens pursuant to the
BancAmerica Robertson Stephens Engagement Letter on October 10, 1997. The
BancAmerica Robertson Stephens Engagement Letter provides that, for its
services, BancAmerica Robertson Stephens is entitled to receive, contingent
upon consummation of the Merger, a fee equal to one percent (1.0%) of the
Aggregate Transaction Value (as defined in the BancAmerica Robertson Stephens
Engagement Letter). Individual has also agreed to reimburse BancAmerica
Robertson Stephens for its out-of-pocket expenses and to indemnify and hold
harmless BancAmerica Robertson Stephens and its affiliates and any other
person, director, employee or agent of BancAmerica Robertson Stephens or any
of its affiliates, or any person controlling BancAmerica Robertson Stephens or
its affiliates for certain losses, claims, damages, expenses and liabilities
relating to or arising out of services

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provided by BancAmerica Robertson Stephens as financial advisor to Individual.
The terms of the fee arrangement with BancAmerica Robertson Stephens, which
Individual and BancAmerica Robertson Stephens believe are customary in
transactions of this nature, were negotiated at arm's length between
Individual and BancAmerica Robertson Stephens, and the Individual Board of
Directors was aware of such fee arrangements.

BancAmerica Robertson Stephens was retained based on BancAmerica Robertson
Stephens' experience as a financial advisor in connection with mergers and
acquisitions and in securities valuations generally, as well as BancAmerica
Robertson Stephens' investment banking relationship and familiarity with
Individual. BancAmerica Robertson Stephens has provided financial advisory and
investment banking services to Individual from time to time, including acting
as managing underwriter for its initial public offering.

BancAmerica Robertson Stephens is a nationally recognized investment banking
firm. As part of its investment banking business, BancAmerica Robertson
Stephens is frequently engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of securities, private placements and
other purposes. BancAmerica Robertson Stephens may actively trade the equity
of Individual and Desktop for its own account and for the account of its
customers and, accordingly, may at any time hold a long or short position in
such securities. BancAmerica Robertson Stephens maintains a market in the
Individual Common Stock and regularly publishes research reports regarding the
software industry and the business and securities of Individual and other
publicly traded companies in the software industry.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes the material federal income tax
considerations of the Merger that are generally applicable to holders of
Individual Common Stock. This discussion does not deal with all income tax
considerations that may be relevant to particular Individual stockholders in
light of their particular circumstances, such as stockholders who are dealers
in securities, foreign persons, stockholders who acquired their shares in
connection with previous mergers involving Individual or an affiliate, or
stockholders who acquired their shares in connection with stock option or
stock purchase plans or in other compensatory transactions. In addition, the
following discussion does not address the tax consequences of transactions
effectuated prior to or after the Merger (whether or not such transactions are
in connection with the Merger), including, without limitation, transactions in
which shares of Individual Common Stock were or are acquired or shares of
Desktop Common Stock were or are disposed of. Furthermore, no foreign, state
or local tax considerations are address herein. ACCORDINGLY, INDIVIDUAL
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC
TAX CONSEQUENCES OF THE MERGER, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES TO THEM OF THE MERGER.

The Merger is intended to constitute a "reorganization" within the meaning
of Section 368(a) of the Code, with each of Desktop and Individual intended to
qualify as a "party to the reorganization" under Section 368(b) of the Code.

The parties are not requesting a ruling from the Internal Revenue Service
("IRS") in connection with the Merger. At or prior to the Effective Time,
Desktop and Individual will have each received opinions from their respective
legal counsel, Testa, Hurwitz & Thibeault, LLP and Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., respectively, that:

(a) The Merger qualifies as a "reorganization" within the meaning of
Section 368(a) of the Code, and Desktop and Individual are each a "party to
the reorganization" within the meaning of Section 368(b) of the Code;

(b) No gain or loss is recognized by holders of Individual Common Stock
solely upon their receipt of Desktop Common Stock in the Merger in exchange
therefor (except to the extent of cash received in lieu of fractional
shares thereof);

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(c) The aggregate tax basis of the Desktop Common Stock received in the
Merger by an Individual stockholder is the same as the aggregate tax basis
of the Individual Common Stock surrendered in exchange therefor, reduced by
the basis allocable to any fractional shares;

(d) The holding period of the Desktop Common Stock received in the Merger
by an Individual stockholder includes the period during which the
stockholder held the Individual Common Stock surrendered in exchange
therefor, provided that the Individual Common Stock is held as a capital
asset at the time of the Merger;

(e) Neither Desktop nor Individual recognizes material amounts of gain or
loss solely as a result of the Merger; and

(f) Cash payments received by holders of Individual Common Stock in lieu
of fractional shares are treated as if such fractional shares of Desktop
Common Stock had been issued in the Merger and then redeemed by Desktop.
Individual stockholders receiving such cash generally recognize gain or
loss, upon such payments, measured by the difference (if any) between the
amount of cash received and the basis in such fractional shares.

These opinions, which support the foregoing conclusions and this discussion
of "Certain Federal Income Tax Considerations" have been filed as exhibits to
the Registration Statement of which this Joint Proxy Statement/Prospectus is a
part, neither bind the IRS nor preclude the IRS from adopting a contrary
position (collectively, the "Tax Opinions"). Testa, Hurwitz & Thibeault, LLP
and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. have consented to the
inclusion of their respective Tax Opinions in the Registration Statement. In
addition, the Tax Opinions are subject to certain assumptions and
qualifications and are based on the truth and accuracy of certain
representations made by Desktop and Individual, including representations in
certificates delivered to counsel by the respective managements of Desktop and
Individual. Of particular importance are those assumptions and representations
relating to the "continuity of interest" requirement.

To satisfy the continuity of interest requirement, Individual stockholders
must not, pursuant to a plan or intent existing at or prior to the Merger,
dispose of or transfer so much of either (i) their Common Stock of Individual
in anticipation of the Merger or (ii) the Desktop Common Stock to be received
in the Merger (collectively, "Planned Dispositions"), such that the Individual
stockholders, as a group, no longer have a substantial proprietary interest in
the Individual business being conducted by Desktop after the Merger.
Individual stockholders will generally be regarded as having retained a
substantial proprietary interest as long as the Desktop Common Stock received
in the Merger (after reduction for any Planned Dispositions), in the
aggregate, represents a "substantial portion" of the entire consideration
received by the Individual stockholders in the Merger. For advance ruling
purposes, the IRS considers the "substantial portion" requirement to be
satisfied if at least 50% by value of the outstanding target stock (Individual
in this case) is exchanged for parent stock (Desktop in this case) in the
reorganization. If the continuity of interest requirement were not satisfied,
the Merger would not be treated as a "reorganization."

A successful IRS challenge to the "reorganization" status of the Merger (as
a result of a failure of the "continuity of interest" requirement or
otherwise) would result in an Individual stockholder recognizing gain or loss
with respect to each share of Individual Common Stock surrendered equal to the
difference between the stockholder's basis in such share and the fair market
value, as of the Effective Time of the Merger, of the Desktop Common Stock
received in exchange therefor. In such event, a stockholder's aggregate basis
in the Desktop Common Stock so received would equal its fair market value and
the holding period for such stock would begin the day after the Merger.

Individual stockholders will be required to attach a statement to their tax
returns for the year of the Merger that contains the information listed in
Treas. Reg. Section 1.368-3(b). Such statement must include the stockholder's
tax basis in the stockholder's Individual Common Stock and a description of
the Desktop Common Stock received. INDIVIDUAL STOCKHOLDERS ARE URGED TO
CONSULT THEIR PERSONAL TAX ADVISORS WITH RESPECT TO THIS STATEMENT.

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GOVERNMENTAL AND REGULATORY APPROVALS

Desktop and Individual are aware of no governmental or regulatory approvals
required for consummation of the Merger, other than compliance with the
federal securities laws and applicable securities and "blue sky" laws of the
various states.

ACCOUNTING TREATMENT

The Merger is intended to qualify as a pooling of interests for financial
reporting purposes in accordance with generally accepted accounting
principles. Consummation of the Merger is conditioned upon receipt of
confirmation by Desktop and Individual of the conclusions contained in letters
from their respective independent accountants regarding those firms'
concurrence with Desktop management's and Individual management's conclusions,
respectively, as to the appropriateness of pooling of interests accounting for
the Merger under APB No. 16, if closed and consummated in accordance with the
Agreement.

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TERMS OF THE MERGER

EFFECTIVE TIME

The Merger will become effective upon the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware (the "Effective
Time"). The Closing Date will occur at a time and date to be specified by
Desktop and Individual no later than the second business day after the
satisfaction or waiver of the conditions to the Merger, or at such other time
as Desktop and Individual agree in writing. Assuming all conditions to the
Merger are met or waived prior thereto, it is anticipated that the Closing
Date and Effective Time will be on or about February 24, 1998.

MANNER AND BASIS OF CONVERTING SHARES

At the Effective Time of the Merger, Individual will merge with and into
Desktop and Desktop will continue as the surviving corporation. As a result of
the Merger, each outstanding share of Individual Common Stock, other than
shares held in the treasury of Individual or owned by Desktop or any wholly-
owned subsidiary of Desktop or Individual, will be converted into the right to
receive one-half ( 1/2) of one share of Desktop Common Stock, and each
outstanding warrant and each outstanding option or right to purchase
Individual Common Stock under the Individual Stock Option Plans and Individual
Stock Purchase Plan will be assumed by Desktop and will become an option,
warrant or right to purchase Combined Company Common Stock, with appropriate
adjustments to be made to the number of shares issuable thereunder and the
exercise price thereof to reflect the Exchange Ratio. See "--Interests of
Certain Persons."

No fractional shares will be issued by virtue of the Merger, but in lieu
thereof each holder of shares of Individual Common Stock who would otherwise
be entitled to a fraction of a share (after aggregating all fractional shares
to be received by such holder) will receive from the Combined Company an
amount of cash (rounded to the nearest whole cent) equal to the product of (i)
such fraction, multiplied by (ii) the average closing price of a share of
Desktop Common Stock for the ten most recent days that Desktop Common Stock
has traded ending on the trading day immediately prior to the Effective time,
as reported on Nasdaq.

At or promptly after the Effective Time, the Combined Company, acting
through the Exchange Agent, will deliver to each Individual stockholder of
record a letter of transmittal with instructions to be used by such
stockholder in surrendering certificates which, prior to the Merger,
represented shares of Individual Common Stock. CERTIFICATES SHOULD NOT BE
SURRENDERED BY THE HOLDERS OF INDIVIDUAL COMMON STOCK UNTIL SUCH HOLDERS
RECEIVE THE LETTER OF TRANSMITTAL FROM THE EXCHANGE AGENT. At the Effective
Time, each then outstanding option or warrant to purchase Individual Common
Stock, whether vested or unvested, will be assumed by the Combined Company
without any action on the part of the holder thereof. WARRANTS AND OPTION
AGREEMENTS NEED NOT BE SURRENDERED.

No later than two business days after the Closing Date, the Combined Company
will file a registration statement on Form S-8 under the Securities Act
covering the shares of Combined Company Common Stock issuable upon exercise of
options to purchase Individual Common Stock to be assumed by Desktop at the
Effective Time.

STOCK OWNERSHIP FOLLOWING THE MERGER

Based upon the capitalization of Individual as of the close of business on
January 9, 1998 (including the number of shares of Individual Common Stock
outstanding and the number of shares issuable upon exercise of outstanding
options and warrants to purchase Individual Common Stock), an aggregate of
approximately 8,209,098 shares of Desktop Common Stock will be issued to
Individual stockholders in the Merger and Desktop will assume options and
warrants for up to approximately 2,944,350 additional shares of Combined
Company Common Stock. Based upon the number of shares of Desktop Common Stock
issued and outstanding as of January 9, 1998, and after giving effect to the
issuance of Desktop Common Stock as described in the previous sentence, the
former holders of Individual Common Stock would hold, and have voting power
with respect to,

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approximately 48.6% of the Combined Company's total issued and outstanding
shares (or 53.5% of the Combined Company's issued and outstanding shares
assuming exercise of all outstanding options and warrants to purchase Desktop
Common Stock and Individual Common Stock). The foregoing numbers of shares and
percentages are subject to change in the event that the capitalization of
either Desktop or Individual changes subsequent to January 9, 1998 and prior
to the Effective Time, and there can be no assurance as to the actual
capitalization of Desktop or Individual at the Effective Time or of the
Combined Company at any time following the Effective Time.

Of the 3,961,673 shares of Individual Common Stock subject to outstanding
options under the Individual Stock Plans, 1,320,886 shares would be
exercisable as of February 24, 1998 and, assuming the Merger is consummated on
such date, an additional 1,740,017 shares would become exercisable as a result
of acceleration provisions. All outstanding warrants to purchase Individual
Common Stock may be exercised at any time prior to or subsequent to the
Effective Time. See "--Interests of Certain Persons" and "Individual--
Securities Ownership of Certain Beneficial Owners and Management of
Individual."

CONDUCT OF COMBINED COMPANY FOLLOWING THE MERGER

Once the Merger is consummated, Individual will cease to exist as a
corporation, and all of the business, assets, liabilities and obligations of
Individual will be merged into Desktop, with Desktop remaining as the
surviving corporation (the "Surviving Corporation"). Following the Merger, the
headquarters of the Combined Company will be in Burlington, Massachusetts and,
assuming the stockholders of Desktop approve such proposal, the name of the
Surviving Corporation shall be "NewsEDGE Corporation."

Pursuant to the Agreement, the Certificate of Incorporation of Desktop in
effect immediately prior to the Effective Time will become the Certificate of
Incorporation of the Surviving Corporation and the Bylaws of Desktop will
become the Bylaws of the Surviving Corporation. The Board of Directors of the
Surviving Corporation will consist of directors who are serving as directors
of Desktop at the Effective Time. The officers of Desktop immediately prior to
the Effective Time will remain as officers of the Surviving Corporation, until
their successors are duly elected or appointed or qualified, and Mr. Kolowich
will be appointed as Vice-Chairman of the Surviving Corporation.

Following the Effective Time and pursuant to the Agreement, the Combined
Company's Board of Directors will take action to cause the Board of Directors
of the Combined Company, immediately after the Effective Time, (i) to consist
of seven persons, four of whom were serving on the Board of Directors on the
date of the Agreement (one of whom will be Donald L. McLagan and three of whom
will be non-employee directors and are expected to be Rory J. Cowan, Ellen
Carnahan and June Rokoff) ("Former Desktop Directors"), and three of whom will
have served on the Individual Board (one of whom will be Michael E. Kolowich
and two of whom will be non-employee directors and are expected to be James D.
Daniell and William A. Devereaux) ("Former Individual Directors") and (ii) to
reconstitute the Board of Directors of the Combined Company so that two Former
Desktop Directors and one Former Individual Director will be in the class of
directors whose terms expire at the Annual Meeting of Stockholders for the
third year after the Effective Time, one Former Desktop Director and one
Former Individual Director will be in the class whose term expires two years
after the Effective Time, and one Former Desktop Director and one Former
Individual Director will be in the class whose term expires at the Annual
Meeting one year after the Effective Time. If, prior to the Effective Time,
any of the Desktop or Individual designees decline or are unable to serve as
directors of the Combined Company, then the company designating such person
will designate another person to serve in such person's stead, which person
will be reasonably acceptable to the other company.

Pursuant to the Agreement, at the Effective Time, Donald L. McLagan will
continue as the Chairman, President and Chief Executive Officer of the
Combined Company, Michael E. Kolowich will become the Vice-Chairman of the
Combined Company, and Edward R. Siegfried will continue as the Vice
President--Finance and Operations, and Chief Financial Officer of the Combined
Company.

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CONDUCT OF DESKTOP'S AND INDIVIDUAL'S BUSINESS PRIOR TO THE MERGER

Pursuant to the Agreement, each of Desktop and Individual have agreed, on
behalf of itself and its subsidiaries, that during the period from the date of
the Agreement and continuing until the earlier of the termination of the
Agreement pursuant to its terms or the Effective Time, except as set forth in
certain disclosure schedules or to the extent that the other party shall
otherwise consent in writing, to carry on its business diligently and in
accordance with good commercial practice and to carry on its business in the
usual, regular and ordinary course, in substantially the same manner as
heretofore conducted, to pay its debts and taxes when due subject to good
faith disputes over such debts or taxes, to pay or perform other material
obligations when due and to use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and
employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings. In furtherance of the foregoing and subject to applicable law,
Desktop and Individual have agreed to confer, as promptly as practicable,
prior to taking any material actions or making any material management
decisions with respect to the conduct of business. In addition, except as set
forth in certain disclosure schedules to the Agreement, without the prior
written consent of the other, each of Desktop and Individual have agreed that
it shall neither do any of the following nor permit its subsidiaries to do any
of the following:

(a) amend or otherwise change its Certificate of Incorporation or By-
Laws;

(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of
capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital
stock, or any other ownership interest (including, without limitation, any
phantom interest) (except for the issuance of shares of common stock
issuable pursuant to employee stock options under the Individual Stock
Option Plans, the Desktop Stock Option Plans or under outstanding warrants,
as the case may be, or pursuant to rights to purchase shares under the
Individual Stock Purchase Plan and the Desktop Stock Purchase Plan, as the
case may be, which options, warrants or rights, as the case may be, are
outstanding on the date hereof); provided, however, that Desktop may
continue to grant options pursuant to the Desktop Stock Option Plans
without the prior consent of Individual, in amounts not to exceed 1,500
shares per person, and Individual may continue to grant options pursuant to
the Individual Stock Option Plans, without the prior written consent of
Desktop, in amounts not to exceed 3,000 shares per person.

(c) sell, pledge, dispose of or encumber any assets (except for (i) sales
of assets in the ordinary course of business and in a manner consistent
with past practice and (ii) dispositions of obsolete or worthless assets);

(d) accelerate, amend or change the period (or permit any acceleration,
amendment or change) of exercisability of options granted under the
Individual Stock Option Plans, the Desktop Stock Option Plans, the
Individual Stock Purchase Plan and the Desktop Stock Purchase Plan (the
"Employee Plans") or under outstanding warrants or authorize cash payments
in exchange for any options granted under any of such plans;

(e) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, except that a wholly owned
subsidiary may declare and pay a dividend to its parent, (ii) split,
combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock or (iii) amend the terms
of, repurchase, redeem or otherwise acquire, or permit any subsidiary to
repurchase, redeem or otherwise acquire, any of its securities or any
securities of its subsidiaries, or propose to do any of the foregoing;

(f) sell, transfer, license, sublicense or otherwise dispose of any
Individual intellectual property rights or Desktop intellectual property
rights, as the case may be, or amend or modify any existing agreements with
respect to any Individual intellectual property rights, Individual
Intellectual Property rights agreements, Desktop Intellectual Property
rights or Desktop intellectual property rights agreements, as the case may
be, other than nonexclusive object and source code licenses in the ordinary
course of business consistent with past practice;

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(g) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof; (ii) incur any indebtedness for borrowed money or issue
any debt securities or assume, guarantee (other than guarantees of bank
debt of its subsidiaries entered into in the ordinary course of business)
or endorse or otherwise as an accommodation become responsible for, the
obligations of any person, or make any loans or advances, except in the
ordinary course of business consistent with past practice; (iii) enter into
or amend any material contract or agreement other than in the ordinary
course of business; (iv) authorize any capital expenditures or purchase of
fixed assets which are, in the aggregate, in excess of $100,000, taken as a
whole (except pursuant to a capital expenditure budget approved in writing
by both parties); or (v) enter into or amend any contract, agreement,
commitment or arrangement to effect any of the foregoing matters;

(h) increase the compensation payable or to become payable to its
officers or employees, except for increases in salary or wages of employees
who are not officers in accordance with past practices, or grant any
severance or termination pay to, or enter into any employment or severance
agreement with any director, officer (except for officers who are
terminated on an involuntary basis) or other employee, or establish, adopt,
enter into or amend any Employee Plan;

(i) take any action, other than as required by generally accepted
accounting principles ("GAAP"), to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue
recognition, capitalization of software development costs, payments of
accounts payable and collection of accounts receivable);

(j) make any material tax election inconsistent with past practices or
settle or compromise any material federal, state, local or foreign tax
liability or agree to an extension of a statute of limitations for any
assessment of any tax, except to the extent the amount of any such
settlement has been reserved for on its most recent report filed with the
SEC;

(k) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities reflected or
reserved against in the financial statements of Individual or Desktop, as
the case may be, or incurred in the ordinary course of business and
consistent with past practice;

(1) except as may be required by law, take any action to terminate or
amend any of its Employee Plans other than in connection with the Merger;

(m) take or allow to be taken or fail to take any act or omission which
would jeopardize the treatment of the Merger as a pooling of interests for
accounting purposes under GAAP;

(n) enter into any material partnership arrangements, joint development
agreements or strategic alliances; or

(o) take, or agree in writing or otherwise to take, any of the actions
described in (a) through (n) above, or any action which would make any of
the representations or warranties of Individual or Desktop, as the case may
be, contained in the Agreement untrue or incorrect or prevent Individual or
Desktop, as the case may be, from performing or cause Individual or
Desktop, as the case may be, not to perform its covenants under the
Agreement or result in any of the conditions to the Merger set forth in the
Agreement not being satisfied.

NO SOLICITATION

Under the terms of the Agreement, until the earlier of the Effective Time or
termination of the Agreement pursuant to its terms, each of Desktop and
Individual have agreed that, without the other's prior written consent, they
will not, and will instruct their respective directors, officers, employees,
representatives, investment bankers, agents and affiliates not to, directly or
indirectly, solicit or encourage the initiation or submission of, any
inquiries, proposals or offers regarding any acquisition, merger, take-over
bid, sale of substantial assets, sale of shares of capital stock (including
without limitation by way of a tender offer) or similar transaction, involving

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the other party or any subsidiaries of the other party (any of the foregoing
inquiries or proposals being referred to as an "Acquisition Proposal"). Each
of Desktop and Individual have agreed to (i) notify Individual or Desktop,
respectively, immediately upon receipt of any Acquisition Proposal or any
request for nonpublic information relating to Individual or Desktop,
respectively, or any of their subsidiaries in connection with an Acquisition
Proposal, and (ii) immediately notify Individual or Desktop, respectively, of
the identity of the offeror and the terms and conditions of any such proposal
in reasonable detail.

Notwithstanding the foregoing, each of Desktop and Individual may, to the
extent its Board of Directors determines, in good faith, after receiving a
written opinion of outside legal counsel to the effect that the Board of
Directors is required to do so in order to discharge properly its fiduciary
duties, participate in discussions or negotiations with, and, subject to the
execution of a confidentiality agreement and subject to payment of a fee of
$3.5 million to the other party and the triggering of the other party's rights
under the Option Agreement, furnish information to any person, entity or group
after such person, entity or group has delivered to either Desktop or
Individual, as the case may be, in writing, an unsolicited bona fide
Acquisition Proposal which the Board of Directors of such company in its good
faith reasonable judgment determines, after consultation with its independent
financial advisors, would result in a Superior Proposal.

In the event either Desktop or Individual receives a Superior Proposal, the
Board of Directors of such company may approve such Superior Proposal or
recommend such Superior Proposal to its stockholders, if the Board determines
that such action is required by its fiduciary duties under applicable law.
However, any such action could give rise to a payment of $3.5 million to the
other party and trigger the other party's rights under the Option Agreement.

BREAK UP FEES; EXPENSES

Except as set forth below, all fees and expenses incurred in connection with
the Agreement and the transactions contemplated thereby will be paid by the
party incurring such expenses, whether or not the Merger is consummated.

Each of Desktop and Individual have agreed that (i) if it accepts a Superior
Proposal or if the Board of directors of such company recommends a Superior
Proposal to the stockholders of such company, (ii) if the stockholders of such
company fail to approve the Merger and such party subsequently enters into an
Alternative Transaction within six months of termination of the Agreement,
(iii) if the Board of Directors of such company shall have withdrawn or
modified, in a manner adverse to the other party, its recommendation in favor
of the Merger, (iv) if such company breaches any covenant or agreement set
forth in the Agreement and such breach is not cured within five days, (v) if
any representation or warranty on the part of the other party proves to be
untrue on the date made and such failure to be true is reasonably likely to
have a material adverse effect, or (vi) if such company delivers non-public
information of such company to a third party pursuant to an Acquisition
Proposal, then such company will immediately pay to the other party the sum of
$3.5 million.

CONDITIONS TO THE MERGER

The respective obligations of each party to the Agreement to effect the
Merger shall be subject to the satisfaction at or prior to the Effective Time
of the following conditions: (a) the Agreement shall have been approved and
adopted by the requisite vote under applicable law by the stockholders of
Individual and Desktop, respectively, and the issuance of shares of Desktop
Common Stock by virtue of the Merger shall have been duly approved by the
requisite vote under the rules of Nasdaq by the stockholders of Desktop, (b)
the SEC shall have declared the Registration Statement effective and no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose, and no
similar proceeding in respect of the Proxy Statement, shall have been
initiated or threatened in writing by the SEC, (c) no court, administrative
agency or commission or other governmental authority or instrumentality shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which has the
effect of

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making the Merger illegal or otherwise prohibiting consummation of the Merger,
(d) Individual and Desktop shall each have received substantially identical
written opinions from their counsel, Mintz, Levin, Cohn, Ferris, Glovsky &
Popeo, P.C. and Testa, Hurwitz & Thibeault, LLP, respectively, in form and
substance reasonably satisfactory to them, to the effect that the Merger will
constitute a reorganization within the meaning of Section 368(a) of the Code,
(e) the shares of Desktop Common Stock issuable to stockholders of Individual
pursuant to the Agreement and such other shares required to be reserved for
issuance in connection with the Merger shall have been authorized for listing
on Nasdaq upon official notice of issuance, (f) each of Desktop and Individual
shall have received confirmation of the conclusions contained in letters from
each of Arthur Andersen LLP and Coopers & Lybrand L.L.P., each dated within
two (2) business days prior to the Effective Time, regarding those firms'
concurrence with Desktop managements' and Individual managements' conclusions
as to the appropriateness of pooling of interest accounting for the Merger
under APB No. 16, if the Merger is consummated in accordance with the
Agreement. If the condition set forth in (d) above is waived by either Desktop
or Individual, then Desktop and Individual will undertake to recirculate the
Joint Proxy Statement/Prospectus and to resolicit.

In addition, the obligations of Individual to consummate and effect the
Merger are subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing,
exclusively by Individual: (a) the representations and warranties of Desktop
contained in the Agreement shall be true and correct on and as of the
Effective Time, except for changes contemplated by the Agreement and except
for those representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same force and effect as if made on and as of the Effective
Time, except, in all such cases where the failure to be so true and correct,
would not have a material adverse effect on Desktop, and Individual shall have
received a certificate to such effect signed on behalf of Desktop by the
President and the Chief Financial Officer of Desktop; (b) Desktop shall have
performed or complied in all material respects with all agreements and
covenants required by the Agreement to be performed or complied with by it on
or prior to the Effective Time, and Individual shall have received a
certificate to such effect signed on behalf of Desktop by the President and
the Chief Financial Officer of Desktop, (c) all material consents, waivers,
approvals, authorizations or orders required to be obtained, and all filings
to be made, by Desktop for the authorization of the Agreement shall have been
obtained and made by Desktop; (d) there shall not have been instituted,
pending or threatened any act and or proceeding by any court, administrative
agency or commission or other governmental authority or instrumentality
seeking to prohibit or limit Individual from exercising all material rights
and privileges pertaining to its ownership in the Combined Company or seeking
to compel Individual to dispose of or hold separate or any material portion of
the business or assets of Individual as a result of the Merger; (e) no
material adverse effect with respect to Desktop shall have occurred since the
date of the Agreement; (f) Individual shall have received an Affiliate
Agreement from each Desktop affiliate; (g) Individual shall have received a
legal opinion from Testa, Hurwitz & Thibeault, LLP, counsel to Desktop, in a
form reasonably acceptable to Individual; and (h) Desktop shall have received
a consent required as a result of the Merger under a third party agreement.

Further, the obligations of Desktop to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of each
of the following conditions, any of which may be waived, in writing,
exclusively by Desktop: (a) the representations and warranties of Individual
contained in the Agreement shall be true and correct on and as of the
Effective Time, except for changes contemplated by the Agreement and except
for those representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same force and effect as if made on and as of the Effective
Time, except, in all such cases where the failure to be so true and correct,
would not have a material adverse effect on Individual, and Desktop shall have
received a certificate to such effect signed on behalf of Individual by the
President and the Chief Financial Officer of Individual; (b) Individual shall
have performed or complied in all material respects with all agreements and
covenants required by the Agreement to be performed or complied with by it on
or prior to the Effective Time, and Desktop shall have received a certificate
to such effect signed on behalf of Individual by the President and the Chief
Financial Officer of Individual; (c) all material consents, waivers,
approvals, authorizations or orders required to be obtained, and all filings
to be made, by

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Individual for the authorization of the Agreement shall have been obtained and
made by Individual; (d) there shall not have been instituted, pending or
threatened any act and or proceeding by any court, administrative agency or
commission or other governmental authority or instrumentality seeking to
prohibit or limit Individual from exercising all material rights and
privileges pertaining to its ownership in the Combined Company or seeking to
compel Desktop to dispose of or hold separate or any material portion of the
business or assets of Desktop as a result of the Merger; (e) no material
adverse effect with respect to Individual shall have occurred since the date
of the Agreement; (f) Desktop shall have received an Affiliate Agreement from
each Individual affiliate; (g) Desktop shall have received a legal opinion
from Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., LLP, special counsel
to Individual, in a form reasonably acceptable to Desktop; and (h) Individual
shall have received the consents required as a result of the Merger under
certain third party agreements.

TERMINATION OF THE AGREEMENT

The Agreement provides that it may be terminated at any time prior to the
Effective Time of the Merger, whether before or after approval of the Merger
by the stockholders of Desktop and Individual: (a) by mutual written consent
duly authorized by the Boards of Directors of Desktop and Individual; (b) by
either Desktop or Individual if the Merger shall not have been consummated by
April 30, 1998 (provided that the right to so terminate the Agreement shall
not be available to any party whose failure to fulfill any obligation under
the Agreement has been the cause of or resulted in the failure of the Merger
to occur on or before such date); (c) by either Desktop or Individual if a
court of competent jurisdiction or governmental, regulatory or administrative
agency or commission shall have issued a non-appealable final order, decree or
ruling or taken any other action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger; (d) by
either Desktop or Individual if the required approvals of the stockholders of
Desktop or Individual contemplated by the Agreement shall not have been
obtained by reason of the failure to obtain the required vote upon a vote
taken at a meeting of stockholders duly convened therefor or at any
adjournment thereof (provided that the right to so terminate the Agreement
shall not be available to any party where the failure to obtain stockholder
approval of such party shall have been caused by the action or failure to act
of such party in breach of the Agreement; (e) by either Desktop or Individual,
if Individual shall have accepted a Superior Proposal or if the Individual
Board recommends an Individual Superior Proposal to the stockholders of
Individual; (f) by Desktop, if the Individual Board shall have withheld,
withdrawn or modified in a manner adverse to Desktop its recommendation in
favor of the Merger; (g) by either Desktop or Individual, if Desktop shall
have accepted a Desktop Superior Proposal or if the Desktop Board recommends a
Desktop Superior Proposal to the stockholders of Desktop; (h) by Individual,
if the Desktop Board shall have withheld, withdrawn or modified in a manner
adverse to Individual its recommendation in favor of the Merger; (i) by
Individual, upon a breach of any covenant or agreement on the part of Desktop
set forth in the Agreement such that the conditions set forth in subsection
(b) of the second to last paragraph of the preceding section would not be
satisfied as of the time of such breach (provided that if such breach by
Desktop is curable by Desktop through the exercise of its commercially
reasonable efforts within five (5) days of the time of such breach, then
Individual may not so terminate the Agreement during such five-day period
provided Desktop continues to exercise such commercially reasonable efforts);
(j) by Desktop, upon a breach of any covenant or agreement on the part of
Individual set forth in the Agreement such that the conditions set forth in
subsection (b) of the last paragraph of the preceding section would not be
satisfied as of the time of such breach (provided that if such breach by
Individual is curable by Individual through the exercise of its commercially
reasonable efforts within five (5) days of the time of such breach, then
Desktop may not so terminate the Agreement during such five-day period
provided Individual continues to exercise such commercially reasonable
efforts); (k) by Individual, if there shall have occurred any material adverse
effect with respect to Desktop since the date of the Agreement; (l) by
Desktop, if there shall have occurred any material adverse effect with respect
to Individual since the date of the Agreement; (m) by either Desktop or
Individual if the SEC determines that Desktop may not account for the Merger
as a pooling of interests; (n) by Desktop if any representation or warranty on
the part of Individual set forth in the Agreement proves to be untrue on the
date made and such failure to be true is reasonably likely to have a material
adverse effect with respect to Individual; or (o) by Individual if any
representation or warranty on the part of Desktop set forth in the Agreement
proves to be untrue on the date made and such failure to be true is reasonably
likely to have a material adverse effect with respect to Desktop.

54
<PAGE>

OPTION AGREEMENTS

The following discussion summarizes the terms of the Desktop Option
Agreement (as defined below) and the Individual Option Agreement (as defined
below). The following is not, however, a complete statement of all provisions
of such agreements and the discussion herein is qualified in its entirety by
reference to the more detailed information set forth in such agreements,
attached to this Prospectus/Joint Proxy Statement as Annex B and Annex C,
respectively.

Subject to certain conditions, the Desktop Option may be exercised in whole
or in part by Individual (i) upon the commencement of a tender or exchange
offer for 25% or more of any class of Desktop's capital stock; (ii) in the
event the Board of Directors of Desktop shall have withheld, withdrawn or
modified, in a manner adverse to Individual, its recommendation in favor of
the Merger; (iii) in the event Desktop shall have accepted a Superior Proposal
or if the Desktop Board recommends a Superior Proposal to the stockholders of
Desktop; (iv) in the event the stockholders of Desktop fail to approve the
Merger or the issuance of shares of Desktop Common Stock by virtue of the
Merger and Desktop subsequently enters into an Alternative Transaction within
six months of termination of the Agreement; (v) in the event that any
representation or warranty on the part of Desktop set forth in the Agreement
proves to be untrue on the date made and such failure to be true is reasonably
likely to have a material adverse effect with respect to Desktop; or (vi) in
the event Desktop delivers any nonpublic information with respect to Desktop
to a third party making an Acquisition Proposal (any of the events specified
in clauses (i)-(vi) of this sentence are referred to herein as a "Desktop
Exercise Event"). The Desktop Option Agreement terminates upon the earlier of
(i) at the Effective Time, (ii) 180 days following the termination of the
Agreement if a Desktop Exercise Event shall have occurred on or prior to the
date of such termination, and (iii) the date on which the Agreement is
terminated if a Desktop Exercise Event shall not have occurred on or prior to
such date (provided, however, with respect to clause (ii) of this sentence,
that if the Desktop Option cannot be exercised by reason of any applicable
government order, then the Desktop Option Agreement shall not terminate until
the tenth business day after such impediment to exercise shall have been
removed or shall have become final and not subject to appeal). Notwithstanding
the foregoing, the Desktop Option may not be exercised if Individual is in
breach in any material respect of any of its covenants or agreements contained
in the Agreement.

As an inducement to Desktop to enter into the Agreement, Individual entered
into a Stock Option Agreement with Desktop dated November 2, 1997 (the
"Individual Option Agreement") pursuant to which Individual granted Desktop
the right (the "Individual Option"), under certain conditions, to purchase up
to 3,249,779 shares of Individual Common Stock by exchanging therefor shares
of Desktop Common Stock at the rate of one-half ( 1/2) of one share of Desktop
Common Stock for each share of Individual Common Stock and/or, at Desktop's
election, by paying cash of $5.17 per share.

Subject to certain conditions, the Individual Option may be exercised in
whole or in part by Desktop (i) upon the commencement of a tender or exchange
offer for 25% or more of any class of Individual's capital stock; (ii) in the
event the Board of Directors of Individual shall have withheld, withdrawn or
modified, in a manner adverse to Desktop its recommendation in favor of the
Merger; (iii) in the event Individual shall have accepted a Superior Proposal
or if the Board of Directors of Individual recommends a Superior Proposal to
the stockholders of Individual; (iv) in the event the stockholders of
Individual fail to approve the Agreement and the Merger and Individual
subsequently enters into an Alternative Transaction within six months of
termination of the Agreement (v) in the event that any representation or
warranty on the part of Individual set forth in the Agreement proves to be
untrue on the date made and such failure to be true is reasonably likely to
have a material adverse effect with

55
<PAGE>

respect to Individual; or (vi) in the event Individual delivers any nonpublic
information with respect to Individual to a third party making an Acquisition
Proposal (any of the events specified in clauses (i)-(vi) of this sentence are
referred to herein as an "Individual Exercise Event"). The Individual Option
Agreement terminates upon the earlier of (i) at the Effective Time, (ii) 180
days following the termination of the Agreement if an Individual Exercise
Event shall have occurred on or prior to the date of such termination, and
(iii) the date on which the Agreement is terminated if an Individual Exercise
Event shall not have occurred on or prior to such date; (provided, however,
with respect to clause (ii) of this sentence, that if the Individual Option
cannot be exercised by reason of any applicable government order shall not
have expired or been terminated, then the Individual Option Agreement shall
not terminate until the tenth business day after such impediment to exercise
shall have been removed or shall have become final and not subject to appeal.
Notwithstanding the foregoing, the Individual Option may not be exercised if
Desktop is in breach in any material respect of any of its covenants or
agreements contained in the Agreement.

PARTICIPATION AGREEMENTS

Each of the executive officers of Desktop and each of the members of the
Desktop Board and their affiliates, including Donald L. McLagan, trusts for
the benefit of Mr. McLagan's children, Edward R. Siegfried, Clifford M.
Pollan, Daniel F.X. O'Reilly, John L. Moss, A. Baron Cass III, June Rokoff,
Rory J. Cowan, Ellen Carnahan and William Blair Venture Partners III (who own
an aggregate of 2,901,116 shares of Desktop Common Stock and options
exercisable as of the Desktop Record Date to purchase 60,084 shares of Desktop
Common Stock, representing approximately 33.38% of the votes entitled to be
cast by holders of shares of Desktop Common Stock issued and outstanding as of
the Desktop Record Date has entered into a Desktop Participation Agreement
with Individual. Pursuant to the Desktop Participation Agreement, which is
irrevocable, each of the foregoing Desktop stockholders has agreed to vote in
favor of the Merger and against approval of any proposal made in opposition or
competition with consummation of the Merger.

Each of the members of the Individual Board and their affiliates and certain
of the executive officers of Individual including Michael E. Kolowich, Robert
L. Lentz, Joseph A. Amram, James D. Daniell, William A. Devereaux, Jeffery S.
Galt, Elon Kohlberg, Marino R. Polestra, Gregory S. Stanger, funds managed by
Burr, Egan, Deleage & Co., The Dialog Corporation and Microsoft Corporation
(who own an aggregate of 3,869,592 shares of Individual Common Stock and
options and warrants exercisable as of the Individual Record Date to purchase
1,025,806 shares of Individual Common Stock, representing approximately 23.6%
of the votes entitled to be cast by holders of shares of Individual Common
Stock issued and outstanding as of the Individual Record Date has entered into
an Individual Participation Agreement with Desktop. Pursuant to the Individual
Participation Agreement, which is irrevocable, each of the foregoing
Individual stockholders has agreed to vote in favor of the Merger and against
approval of any proposal made in opposition or competition with consummation
of the Merger.

AFFILIATE AGREEMENTS

Each of the executive officers of Desktop and each of the members of the
Board of Directors of Desktop and their affiliates have entered into
agreements restricting sales, dispositions or other transactions reducing
their risk of investment in respect of the shares of Desktop Common Stock held
by them to help ensure that the Merger will be treated as a pooling of
interests for accounting and financial reporting purposes. Each of the members
of the Board of directors of Individual and certain officers of Individual and
their affiliates have entered into agreements restricting sales, dispositions
or other transactions reducing their risk of investment in respect of the
shares of Individual Common Stock held by them prior to the Merger and the
shares of Desktop Common Stock received by them in the Merger so as to comply
with the requirements of applicable federal securities and tax laws and to
help ensure that the Merger will be treated as a pooling of interests for
accounting and financial reporting purposes.

INTERESTS OF CERTAIN PERSONS

Desktop is currently negotiating an employment agreement with Mr. Kolowich,
Individual's Chairman, Chief Executive Officer and President.

56
<PAGE>

Individual Options

The number of shares exercisable pursuant to options issued under the
Individual Amended and Restated 1989 Stock Option Plan, as amended (the
"Individual 1989 Plan"), pursuant to the terms of the option agreements issued
pursuant thereto, is subject to partial acceleration as a result of the Merger
such that 50% of the shares that are not exercisable immediately preceding the
Effective Time of the Merger will become exercisable upon the Effective Time.
In addition, certain options granted to executive officers and directors of
Individual under the Individual 1989 Plan will become fully vested at the
Effective Time, and options issued under the Individual 1996 Non-Employee
Director Plan will become fully vested at the Effective Time. See "--Stock
Ownership Following the Merger" and "Individual--Securities Ownership of
Certain Beneficial Owners and Management of Individual.

Indemnification

The Third Amended and Restated Certificate of Incorporation of Individual
contains certain provisions permitted under Delaware General Corporation Law
(DGCL) relating to the liability of directors. These provisions eliminate a
director's liability for monetary damages for a breach of fiduciary duty,
except in certain circumstances involving certain wrongful acts, such as the
breach of a director's duty of loyalty or acts or omissions which involve
intentional misconduct or a knowing violation of law. The Third Amended and
Restated Certificate of Incorporation of Individual also contains provisions
indemnifying the directors and officers of Individual to the fullest extent
permitted by the DGCL. Desktop, as the Surviving Corporation, has agreed
pursuant to the Agreement, to indemnify the officers and directors of
Individual, to the fullest extent permitted under DGCL and under the
Certificate, with regard to any liabilities arising out of or pertaining to
any action or omission in his or her capacity as director, officer or employee
of Individual, occurring prior to the Effective Time (including, without
limitation, actions or omissions relating to the Merger). Individual officers
and directors will also benefit from a "tail" on Individual's existing
directors, officers and company liability insurance policy for an additional
one year.

57
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION

FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed financial statements
have been prepared to give effect to the Merger, using the pooling of
interests method of accounting.

The unaudited pro forma combined condensed financial statements reflect
certain assumptions deemed probable by management regarding the Merger (e.g.,
that share information used in the unaudited pro forma information
approximates actual share information at the effective date). No adjustments
to the unaudited pro forma combined condensed financial information have been
made to account for different possible results in connection with the
foregoing, as management believes that the impact on such information of the
varying outcomes, individually or in the aggregate would not be materially
different.

The unaudited pro forma combined condensed balance sheet as of September 30,
1997 gives effect to the Merger as if it had occurred on September 30, 1997,
and combines the unaudited condensed consolidated balance sheet of Desktop and
the unaudited condensed consolidated balance sheet of Individual as of
September 30, 1997.

The unaudited pro forma combined condensed statements of operations combine
the historical consolidated statements of operations of Desktop and Individual
for each of the three years ended December 31, 1996 and the nine months ended
September 30, 1997, in each case as if the Merger had occurred at the
beginning of the earliest period presented.

Desktop and Individual estimate that they will incur direct transaction
costs of approximately $4 million associated with the Merger, which will be
charged to operations upon consummation of the Merger. In addition, it is
expected that following the Merger, the Combined Company will incur an
additional significant charge to operations, which is not currently reasonably
estimable, to reflect costs associated with integrating the two companies.
There can be no assurance that the Combined Company will not incur additional
charges to reflect costs associated with the Merger or that management will be
successful in its efforts to integrate the operations of the two companies.

Such unaudited pro forma combined condensed financial information is
presented for illustrative purposes only and is not necessarily indicative of
the financial position or results of operations that would have actually been
reported had the Merger occurred at the beginning of the periods presented,
nor is it necessarily indicative of future financial position or results of
operations. These unaudited pro forma combined condensed financial statements
are based upon the respective historical consolidated financial statements of
Desktop and Individual and should be read in conjunction with the respective
historical consolidated financial statements and notes thereto of Desktop and
Individual included elsewhere in this Prospectus/Joint Proxy Statement, and do
not incorporate, nor do they assume, any benefits from cost savings or
synergies of operations of the Combined Company.

58
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

SEPTEMBER 30, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
DESKTOP INDIVIDUAL ADJUSTMENTS COMBINED
-------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......... $ 29,220 $ 9,920 $ $ 39,140
Short-term investments............. 13,157 8,679 21,836
Accounts receivable, net........... 4,865 6,063 10,928
Prepaid expenses and deposits...... 2,569 1,926 4,495
-------- -------- --------
Total current assets............. 49,811 26,588 76,399
-------- -------- --------
Property and equipment, net.......... 5,591 4,028 9,619
-------- -------- --------
Other assets, net.................... 143 2,182 2,325
-------- -------- ------ --------
Total assets..................... $ 55,545 $ 32,798 $ -- $ 88,343
======== ======== ====== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................... $ 2,149 $ 2,668 $ $ 4,817
Accrued expenses................... 6,053 8,928 14,981
Accrued merger and integration
costs............................. -- -- 4,000 4,000
Deferred revenue, current.......... 15,122 10,510 25,632
Current portion of long-term
obligations....................... 34 1,226 1,260
-------- -------- ------ --------
Total current liabilities........ 23,358 23,332 4,000 50,690
-------- -------- ------ --------
Long-term obligations, less current
portion............................. 12 1,235 1,247
-------- -------- --------
Deferred revenue, noncurrent......... 2 -- 2
-------- -------- --------
Stockholders' equity:
Common stock, $0.01 par value...... 87 163 (82) 168
Additional paid-in capital......... 31,925 91,515 82 123,522
Cumulative translation adjustment.. -- 12 12
Unrealized gain on marketable
securities........................ -- 222 222
Retained earnings (deficit)........ 161 (83,681) (4,000) (87,520)
-------- -------- ------ --------
Total stockholders' equity....... 32,173 8,231 (4,000) 36,404
-------- -------- ------ --------
Total liabilities and
stockholders' equity............ $ 55,545 $ 32,798 $ -- $ 88,343
======== ======== ====== ========
</TABLE>

See accompanying notes to unaudited pro forma combined condensed financial
statements.

59
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
NINE
MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------- ------------------
1994 1995 1996 1996 1997
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues....................... $24,469 $42,122 $ 61,838 $ 43,873 $ 57,743
------- ------- -------- -------- --------
Costs and expenses:
Cost of revenues............. 8,463 15,186 23,186 15,660 22,756
Customer support expenses.... 1,656 2,315 2,983 2,113 3,795
Development expenses......... 3,177 5,610 9,268 6,707 9,266
Sales and marketing
expenses.................... 13,510 19,379 27,229 19,332 25,590
General and administrative
expenses.................... 2,167 4,339 7,124 4,589 4,347
Mergers, disposition and
other charges............... -- -- 39,422 37,482 5,016
------- ------- -------- -------- --------
Total costs and expenses... 28,973 46,829 109,212 85,883 70,770
------- ------- -------- -------- --------
Loss from operations......... (4,504) (4,707) (47,374) (42,010) (13,027)
Interest income................ 80 1,128 2,640 1,642 2,827
Interest expense............... (93) (452) (872) (896) (432)
------- ------- -------- -------- --------
Loss before provision for
income taxes.................. (4,517) (4,031) (45,606) (41,264) (10,632)
Provision for income taxes..... 4 206 709 384 1,107
------- ------- -------- -------- --------
Net loss..................... (4,521) (4,237) (46,315) (41,648) (11,739)
Accretion of dividends on
Series B Preferred Stock...... (135) (101) -- -- --
Discount on redemption of
Series B Preferred Stock...... -- 1,232 -- -- --
------- ------- -------- -------- --------
Net loss available for common
stockholders................ $(4,656) $(3,106) $(46,315) $(41,648) $(11,739)
======= ======= ======== ======== ========
Net loss per common and common
equivalent share.............. $ (0.39) $ (0.25) $ (2.98) $ (2.73) $ (0.70)
======= ======= ======== ======== ========
Weighted average number of
common and common equivalent
shares outstanding............ 12,024 12,669 15,543 15,249 16,653
======= ======= ======== ======== ========
</TABLE>

See accompanying notes to unaudited pro forma combined condensed financial
statements.

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<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

(1) These unaudited pro forma combined financial statements reflect the
issuance of 8,166,712 shares of Desktop Common Stock in exchange for an
aggregate of 16,333,424 shares of Individual Common Stock (outstanding as of
September 30, 1997) in connection with the Merger, based on the Exchange Ratio
of 0.5 set forth in the following table.

<TABLE>
<S> <C>
Individual Common Stock outstanding as of September 30, 1997.... 16,333,424
Exchange Ratio.................................................. 0.5
----------
Number of shares of Desktop Common Stock exchanged.............. 8,166,712
Number of shares of Desktop Common Stock outstanding as of Sep-
tember 30, 1997................................................ 8,670,411
----------
Number of shares of Combined Company Common Stock outstanding
after completion of the Merger................................. 16,837,123
==========
</TABLE>

The actual number of shares of Desktop common stock to be issued will be
determined at the Effective Time based on the number of shares of Individual
Common Stock outstanding on that date.

(2) Desktop and Individual estimate they will incur direct transaction costs
of approximately $4 million associated with the Merger consisting of
transaction fees for investment bankers, attorneys, accountants, financial
printing and other related charges. These nonrecurring transaction costs will
be charged to operations upon consummation of the Merger. These direct
transaction costs have been reflected in the pro forma combined balance sheet.

It is expected that following the Merger, the Combined Company will incur
additional significant charges to operations, which are not currently
reasonably estimable, to reflect costs associated with integrating the two
companies. These charges have not been reflected in the pro forma condensed
balance sheet. There can be no assurance that the Combined Company will not
incur additional charges to reflect costs associated with the Merger or that
management will be successful in its efforts to integrate the operations of
the two companies.

The direct transaction costs and additional significant charges are not
reflected in the pro forma combined condensed statements of operations.

(3) The unaudited pro forma combined condensed financial statements do not
include adjustments to conform the accounting policies of Individual to those
followed by Desktop. The nature and extent of such adjustments, if any, will
be based upon further analysis and are not expected to be material.

(4) The pro forma combined net loss per share is based on the combined
weighted average number of common shares of Desktop Common Stock and
Individual Common Stock for each period. This is based on the exchange Ratio
of 0.5 shares of Desktop Common Stock for each share of Individual Common
Stock as described in the Merger Agreement. Common equivalent shares have been
excluded as their effect would be antidilutive.

(5) Certain financial statement balances of Individual have been
reclassified to conform with the Desktop financial statement presentation.

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<PAGE>

COMBINED COMPANY FOLLOWING THE MERGER

The Individual Board and the Desktop Board have determined that the Combined
Company would have the potential to realize long-term improved operating and
financial results and a stronger competitive position. Desktop and Individual
believe that there is a strategic fit among their respective services and
that, in order to succeed in the market served by these services, suppliers
will need to expand their service offerings to address a wider range of
customer requirements. Desktop and Individual also believe that the Merger
will provide greater opportunities to develop business relationships, license
technology, and engage in other strategic combinations and transactions
involving their respective products and technologies than would be the case if
the companies otherwise independently engaged in these activities. In this
way, the Merger could provide the Combined Company with the range of products
and services required to play a defining role in the market for automated news
delivery.

However, these anticipated benefits will depend in part on whether the
companies' operations can be integrated in an efficient and effective manner.
There can be no assurance that this will occur. The combination of the
companies will require, among other things, integration of the companies'
respective service offerings and coordination of the companies' sales,
marketing and research and development efforts. Historically, the sales models
used by Desktop's and Individual's sales organizations have differed
significantly, although each employs direct sales personnel. As compared to
Desktop, Individual's product line has traditionally experienced a shorter
sales cycle and its sales model has relied more heavily on telesales. There
can be no assurance that the Combined Company will be able to take full
advantage of the combined sales force's efforts. Desktop and Individual also
use a number of distribution channels in the various geographic markets in
which their respective products are sold and there can be no assurance that
channel conflict will not develop following the Merger as the Combined Company
attempts to integrate these channels.

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<PAGE>

ADDITIONAL MATTERS BEING SUBMITTED TO A VOTE
OF ONLY DESKTOP STOCKHOLDERS

AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO CHANGE NAME

Desktop's Certificate provides that the name of Desktop is "Desktop Data,
Inc." Pursuant to the Agreement, Desktop has agreed to propose and recommend
that the Certificate be amended at the Effective Time to change Desktop's name
to "NewsEDGE Corporation." The Board of Directors of Desktop has authorized
such amendment of the Certificate at the Effective Time, subject to
stockholder approval. Under the proposed amendment, subject to and upon
consummation of the Merger, Article I of the Certificate would be amended and
restated to read as follows:

"The name of the corporation is "NewsEDGE Corporation."

The Desktop stockholders are being asked to approve such amendment. It is
expected that the products of the Combined Company will be sold under a single
"NewsEDGE" branded label and that the name "NewsEDGE Corporation" will provide
the Combined Company with a recognizable product/company association that the
name Desktop Data, Inc. does not currently provide. The affirmative vote of
the holders of a majority of the shares of Desktop Common Stock issued and
outstanding on the Desktop Record Date will be required to approve the
amendment of the Certificate. The effect of an abstention is the same as that
of a vote against the proposal.

THE DESKTOP BOARD UNANIMOUSLY RECOMMENDS THAT THE DESKTOP STOCKHOLDERS VOTE
"FOR" THE AMENDMENT OF THE DESKTOP AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE CORPORATE NAME OF DESKTOP TO "NEWSEDGE
CORPORATION," SUBJECT TO AND UPON CONSUMMATION OF THE MERGER.

AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

Desktop's Certificate provides that the number of authorized shares of
Common Stock, par value $.01 per share, is 15,000,000 shares. To fulfill its
obligations to Individual Stockholders, option holders and warrant holders
under the Agreement and to accommodate the increases in the authorized shares
reserved for issuance under the Desktop 1995 Stock Plan and the 1995 Employee
Stock Purchase Plan, Desktop requires a minimum of approximately 25,000,000
shares. Accordingly, on November 2, 1997, the Board of Directors of Desktop
resolved to recommend to the stockholders of Desktop that Desktop amend the
Certificate to increase the number of authorized shares of Desktop Common
Stock from 15,000,000 to 35,000,000 shares.

As of January 9, 1998, there were approximately 8,700,000 shares of Desktop
Common Stock issued and outstanding. Upon consummation of the Merger, Desktop
will be required to issue approximately 8,200,000 shares of Desktop Common
Stock to holders of Individual Common Stock. According to the terms of the
Merger, Desktop has also agreed to assume all outstanding options, warrants or
rights to purchase Individual Common Stock, which will require Desktop to
reserve approximately 3,100,000 shares for such purpose. Assuming that the
proposals to amend the Desktop 1995 Stock Plan and the Desktop 1995 Employee
Stock Purchase Plan are approved, there will be approximately 3,900,000 shares
reserved for future issuance pursuant to Desktop's Stock Plans. Unless the
authorized but unissued shares of Common Stock is increased to at least
approximately 24,000,000, Desktop will not have a sufficient number of
authorized but unissued shares of Common Stock to satisfy its obligations
under the Agreement or issue any further options under its stock plans.

The Board of Directors of Desktop wishes to further increase the authorized
but unissued shares of Common Stock to 35,000,000 so that the Board of
Directors will have the authority to issue approximately 11,000,000 additional
shares of Common Stock without stockholder approval for other corporate
purposes. These other purposes may include, without limitation: entering into
collaborative research and development arrangements with other companies in
which Desktop Common Stock or the right to acquire Desktop Common Stock are
part of the consideration; raising capital through the sale of Desktop Common
Stock; attracting and retaining valuable employees by the issuance of
additional stock options; resolving potential lawsuits or disputes to which
Desktop

63
<PAGE>

may be a party by the issuance of Desktop Common Stock or warrants for Desktop
Common Stock in settlement thereof; and other transactions involving the use
of Desktop Common Stock. Desktop has no present commitments, agreements or
undertakings to issue any additional shares for any such other purpose.

The Desktop stockholders are being asked to approve such amendment. The
affirmative vote of the holders of a majority of the shares of Desktop Common
Stock issued and outstanding on the Desktop Record Date will be required to
approve the amendment of the Certificate. The effect of an abstention is the
same as that of a vote against the proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT
TO THE CERTIFICATE TO INCREASE THE AUTHORIZED SHARES OF DESKTOP COMMON STOCK
FROM 15,000,000 SHARES TO 35,000,000 SHARES, SUBJECT TO AND UPON CONSUMMATION
OF THE MERGER.

AMENDMENT OF THE 1995 STOCK PLAN

Desktop's 1995 Stock Plan (the "Desktop Option Plan") was initially adopted
by the Desktop Board on June 16, 1995 and initially approved by the Desktop
stockholders on June 26, 1995. The Desktop Option Plan authorizes the grant of
stock to employees, non-employee directors and consultants of Desktop. A
maximum of 625,000 shares of Desktop Common Stock were originally reserved for
issuance under the Desktop Option Plan and such number was increased to
1,625,000 at Desktop's Annual Meeting of Stockholders which was held on June
3, 1997. Options granted under the Desktop Option Plan may be either
"incentive stock options" as defined in Section 422 of the Code, or
nonstatutory stock options, as determined by the Compensation Committee of the
Desktop Board. Stock appreciation rights may also be granted under the Desktop
Option Plan.

As of January 9, 1998, options to purchase 902,179 shares of Desktop Common
Stock granted under the Desktop Option Plan were outstanding, 719,329 shares
remained available for future option grants and options covering 3,492 shares
had been exercised.

On November 2, 1997, the Desktop Board approved a further increase of
2,500,000 shares for issuance under the Desktop Option Plan, which, if
approved by the Desktop stockholders, would increase the total shares reserved
for issuance under the Desktop Option Plan, since its inception and as of the
date immediately following approval of this proposal, to 4,125,000 shares.

Desktop stockholders are requested to approve this amendment to the Desktop
Option Plan. As of January 9, 1998, Desktop employed 218 persons. After the
Merger, the Combined Company will employ 438 persons. The management of both
Desktop and Individual rely on stock options as an essential part of the
compensation package necessary to attract and retain experienced officers and
employees. The Desktop Board believes this increase is in the best interests
of the Combined Company following the Merger, as the increase can contribute
to ensuring that the Combined Company will have an adequate reserve of shares
under the Desktop Option Plan, providing additional long term incentives to
help retain key personnel in the Combined Company following the Merger,
especially in light of the acceleration of Individual options pursuant to the
terms of the Individual Stock Option Plans and as a result of the Merger.

The affirmative vote of a majority of the votes cast with regard to this
proposal will be required to approve the amendment to the Desktop Option Plan.
Abstentions will be counted toward the number of shares represented and voting
at the Desktop Meeting.

Description of the Desktop Option Plan

The purpose of the Desktop Option Plan is to provide incentives to officers
and other employees of Desktop by providing them with opportunities to
purchase stock of Desktop pursuant to options which qualify as incentive stock
options ("ISO" or "ISOs") as defined in Section 422 of the Code. The Desktop
Option Plan also provides for the issuance to consultants, employees, officers
and directors of Desktop of options which do not qualify as ISOs ("Non-
Qualified Option" or "Non-Qualified Options"). Awards and purchases may also
be granted to consultants, employees, officers and directors of Desktop. ISOs,
Non-Qualified Options, awards and purchases are sometimes referred to
collectively as "Stock Rights," and ISOs and Non-Qualified Options are
sometimes referred to collectively as "Options."

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Administration. The Desktop Option Plan is administered by the Compensation
Committee of the Board of Directors of Desktop (the "Committee"), which
currently consists of two directors. Subject to the terms of the Desktop
Option Plan, the Committee has the authority to select the optionees and
determine the terms of the Options granted, including: (i) the number of
shares subject to each Option, (ii) when the Option becomes exercisable, (iii)
the exercise price of the Option, (iv) the duration of the Option, and (v) the
time, manner and form of payment upon exercise of an Option. The
interpretation and construction by the Committee of any provision of the
Desktop Option Plan or of any Stock Right granted under the Desktop Option
Plan shall be final unless otherwise determined by the Board of Directors of
Desktop.

Eligible Participants. Subject to certain limitations, ISOs under the
Desktop Option Plan may be granted to any employee of Desktop other than
members of the Committee. For any ISO optionee, the aggregate fair market
value (determined on the date of grant of an ISO) of Desktop Common Stock to
be received by such optionee (under all stock option plans of Desktop)
pursuant to an ISO if such optionee exercises his or her ISOs at the earliest
possible date cannot exceed $100,000 in any calendar year; any portion of an
ISO grant that exceeds such $100,000 limit will be treated for tax purposes as
a Non-Qualified Option. Non-Qualified Options, awards and purchases may be
granted to any director (other than a member of the Committee), officer,
employee or consultant of Desktop. As of January 9, 1998, there were
approximately 218 officers and employees of Desktop that were eligible to
participate in the Desktop Option Plan.

Granting of Stock Rights, Prices and Duration. Stock Rights may be granted
under the Desktop Option Plan at any time prior to June 16, 2005. Pursuant to
the Desktop Option Plan, ISOs cannot be granted with exercise prices less than
the fair market value of the Desktop Common Stock on the date of grant as
determined in good faith by the Board of Directors (or less than 110% of the
fair market value in the case of ISOs granted to an employee or officer
holding 10% or more of the voting stock of Desktop). The exercise price per
share of Non-Qualified Options granted under the Desktop Option Plan cannot be
less than the minimum legal consideration required under applicable state law.
On January 9, 1998 the closing price of Desktop's Common Stock on Nasdaq was
$8.69.

The Desktop Option Plan provides that each Option shall expire on the date
specified by the Committee, but not more than ten years from its date of grant
in the case of ISOs and ten years and one day in the case of Non-Qualified
Options. However, in the case of an ISO granted to an employee owning more
than 10% of the total combined voting power of all classes of stock of Desktop
or any Related Corporation, such ISO shall expire five years from the date of
grant.

Exercise of Options. Each Option granted under the Desktop Option Plan shall
either be fully exercisable at the time of grant or shall become exercisable
in such installments as the Committee may specify. Each Option may be
exercised from time to time, in whole or in part, up to the total number of
shares with respect to which it is then exercisable. The Committee shall have
the right to accelerate the date of exercise of any installment of any Option
(subject to the $100,000 per year limit on the fair market value of stock
subject to ISOs granted to any employee which may become exercisable in any
calendar year).

Payment for exercise of an Option under the Desktop Option Plan may be made
in cash or by check or, if authorized by the Committee in its discretion, in
full or in part by a personal recourse, interest bearing note, by tendering
shares of Desktop Common Stock or by an assignment to Desktop of the proceeds
from the sale of Common Stock acquired upon exercise of the Option and an
authorization to the broker or selling agent to pay the amount to Desktop.

Effect of Termination of Employment, Disability or Death. Options granted
under the Desktop Option Plan are not transferable by the option holder except
by will or by the laws of descent and distribution. If an ISO optionee ceases
to be employed by Desktop or any Related Corporation other than by reason of
death or disability, no further installment of his or her ISOs will become
exercisable, and the ISOs shall terminate after the passage of 90 days from
the date of termination of employment (but not later than their specified
expiration dates), except to the extent that such ISOs shall have been
converted into Non-Qualified Options.

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If an optionee dies, any ISO held by the optionee may be exercised, to the
extent exercisable on the date of death, by the optionee's estate, personal
representative or beneficiary who acquires the option by will or by the laws
of descent and distribution, at any time within 180 days from the date of the
optionee's death (but not later than the specified expiration date of the
ISO). If an ISO optionee ceases to be employed by Desktop by reason of his or
her disability (as defined in Section 22(e)(3) of the Code), the optionee may
exercise any ISO held by him or her on the date of termination of employment,
to the extent exercisable on that date, at any time within 180 days from the
date of termination of employment (but not later than the specified expiration
date of the ISO). Non-Qualified Options are subject to the termination and
cancellation provisions as may be determined by the Committee.

Non-Assignability of Options. Only the optionee may exercise an Option. No
assignment or transfers are permitted except by will or by the laws of descent
and distribution.

Miscellaneous. Option holders are protected against dilution in the event of
a stock dividend, recapitalization, stock split, merger or similar
transaction. The Board of Directors may from time to time adopt amendments,
certain of which are subject to shareholder approval, and may terminate the
Desktop Option Plan at any time (although such action shall not affect options
previously granted). Any shares subject to an Option which for any reason
expires or terminates unexercised may again be available for option grants
under the Desktop Option Plan. Unless terminated sooner, the Desktop Option
Plan will terminate on June 16, 2005.

Federal Income Tax Consequences

The following discussion of the U.S. Federal income tax consequences of the
issuance and exercise of Stock Rights granted under the Desktop Option Plan is
based upon the provisions of the Code as in effect on the date of this
Prospectus/Joint Proxy Statement, current regulations thereunder, and existing
administrative rulings of the Internal Revenue service. It is not intended to
be a complete discussion of all of the U.S. Federal income tax consequences of
the Desktop Option Plan or of the requirements that must be met in order to
qualify for the described tax treatment.

Incentive Stock Options. The following general rules are applicable under
current Federal income tax law to ISOs under the Desktop Option Plan:

1. In general, no taxable income results to the optionee upon the grant
of an ISO or upon the issuance of shares to him or her upon the exercise of
the ISO, and no tax deduction is allowed to Desktop upon either grant or
exercise of an ISO.

2. If shares acquired upon exercise of an ISO are not disposed of within
(i) two years from the date the ISO was granted or (ii) one year after the
date the shares are issued to the optionee pursuant to the ISO exercise,
the difference between the amount realized on any subsequent disposition of
the shares and the exercise price will generally be treated as capital gain
or loss to the optionee.

3. If shares acquired upon exercise of an ISO are disposed of before the
expiration of one or both of the requisite holding periods (a
"Disqualifying Disposition"), then in most cases the lesser of (i) any
excess of the fair market value of the shares at the time of exercise of
the ISO over the exercise price or (ii) the actual gain on disposition,
will be taxed as ordinary income in the year of such disposition.

4. In any year that an optionee recognizes compensation income on a
Disqualifying Disposition of stock acquired by exercising an ISO, Desktop
generally should be entitled to a corresponding deduction for Federal
income tax purposes.

5. Any excess of the amount realized by the optionee as the result of a
Disqualifying Disposition over the sum of (i) the exercise price and (ii)
the amount of ordinary income recognized under the above rules generally
will be treated as capital gain.

6. An optionee may be entitled to exercise an ISO by delivering shares of
Desktop's Common Stock to Desktop in payment of the exercise price, if the
optionee's ISO agreement so provides. If an optionee exercise an ISO in
such fashion, special rules will apply.

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7. In addition to the tax consequences described above, the exercise of
ISOs may result in a further "minimum tax". The Code provides that an
"alternative minimum tax" (at a rate of 26% or 28%) will be applied against
a taxable base which is equal to "alternative minimum taxable income,"
reduce by a statutory exemption. In general, the amount by which the value
of the Desktop Common Stock received upon exercise of the ISO exceeds the
exercise price is included in the optionee's alternative minimum taxable
income. A taxpayer is required to pay the higher of his or her regular tax
liability or the alternative minimum tax. A taxpayer who pays alternative
minimum tax attributable to the exercise of an ISO may be entitled to a tax
credit against his or her regular tax liability in later years.

Non-Qualified Options. The following general rules are applicable under
current Federal income tax law to Non-Qualified Options under the Desktop
Option Plan:

1. The optionee will not recognize any taxable income upon the grant of a
Non-Qualified Option, and Desktop will not be allowed a business expense
deduction by reason of such grant.

2. The optionee generally will recognize ordinary income at the time of
exercise of a Non-qualified Option in an amount equal to the excess, if
any, of the fair market value of the shares on the date of exercise over
the exercise price. Desktop may be required to withhold income tax on this
amount.

3. When the optionee sells the shares, he or she generally will recognize
a capital gain or loss in an amount equal to the difference between the
amount realized upon the sale of the shares and his or her basis in the
shares (generally, the exercise price plus the amount taxed to the optionee
as ordinary income).

4. Desktop generally should be entitled to a corresponding Federal income
tax deduction when ordinary income is recognized by the optionee.

5. An optionee may be entitled to exercise a Non-Qualified Option by
delivering shares of Desktop's Common Stock to Desktop in payment of the
exercise price. If an optionee exercises a Non-Qualified Option in such
fashion, special rules will apply.

Awards and Purchases. The following general rules are applicable under
Federal income tax law to Awards and Purchases under the Desktop Option Plan.
Under current Federal income tax law, persons receiving Desktop Common Stock
pursuant to an Award or Purchase will generally recognize ordinary
compensation income equal to the fair market value of the shares received,
reduced by any purchase price paid. Desktop should generally be entitled to a
corresponding Federal income tax deduction. When such Desktop Common Stock is
sold, the seller generally will recognize capital gain or loss. Special rules
apply if the stock acquired is subject to vesting or is subject to certain
restrictions on resale under Federal securities laws applicable to directors,
officers or 10% stockholders.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES AND DESKTOP WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS
AND STOCK APPRECIATION RIGHTS UNDER THE DESKTOP OPTION PLAN. IT DOES NOT
PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF THE
EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF
ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE EMPLOYEE OR CONSULTANT
MAY RESIDE.

THE DESKTOP BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENT OF THE
DESKTOP OPTION PLAN, SUBJECT TO AND UPON CONSUMMATION OF THE MERGER.

AMENDMENTS OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN

Desktop's 1995 Employee Stock Purchase Plan (the "Desktop Purchase Plan")
was initially adopted by the Desktop Board on June 16, 1995 and initially
approved by the Desktop stockholders on June 26, 1995. The Desktop Purchase
Plan provides for the issuance of up to 175,000 shares of Desktop Common Stock
pursuant to the exercise of nontransferable options granted to participating
employees. It is intended that the Desktop Purchase Plan will constitute an
"employee stock purchase plan" within the meaning of Section 423(b) of the
Code.

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As of January 9, 1998 31,264 shares had been purchased and 143,736 shares
remained available for future purchase under the Desktop Purchase Plan. As of
September 30, 1997, 123 employees were eligible to participate in the Desktop
Purchase Plan. Following the Merger and assuming the amendments to the
Purchase Plan are approved, 250 employees of the Combined Company will be
eligible to participate in the Purchase Plan.

On November 2, 1997, the Desktop Board approved an increase of 325,000
shares for issuance under the Desktop Purchase Plan, which, if approved by the
Desktop stockholders, would increase the total shares reserved for issuance
under the Desktop Purchase Plan, since its inception and as of the date
immediately following approval of this proposal, to 500,000. On November 2,
1997, the Desktop Board also approved an amendment to the Desktop Purchase
Plan to clarify that the services performed for Desktop and any predecessor of
Desktop count towards satisfying the one year service eligibility requirement
to participate in the Desktop Purchase Plan.

Desktop stockholders are requested to approve the amendments to the Desktop
Purchase Plan. As of January 9, 1998, Desktop employed 218 persons. After the
Merger, the Combined Company will employ 457 persons. Since its inception, 78
persons have participated in the Desktop Purchase Plan. The management of both
Desktop and Individual believe that 143,736 shares will not be adequate to
fulfill the expected interest in the Desktop Purchase Plan following the
Merger. Both the management of Desktop and Individual believe that the
Combined Company needs to continue to provide the opportunity to participate
in the Desktop Purchase Plan to the Combined Company's employees to attract
and retain key personnel. Furthermore, to provide for the equitable treatment
of the employees of the Combined Company following the Merger, the Desktop
Board recommends that Article 3 of the Desktop Purchase Plan be amended to
clarify that the services that Individual employees have performed for
Individual will count towards satisfying the one year service eligibility
requirement to participate in the Desktop Purchase Plan.

The affirmative vote of a majority of the votes cast with regard to this
proposal will be required to approve the amendments to the Desktop Purchase
Plan. Abstentions will be counted toward the number of shares represented and
voting at the Desktop Meeting.

Description of Desktop Purchase Plan

The Desktop Purchase Plan is intended to encourage stock ownership by all
eligible employees of the Company so that they may share in the growth of the
Company by acquiring or increasing their proprietary interest in the Company.
The Desktop Purchase Plan is designed to encourage eligible employees to
remain in the employ of the Company. Under the Desktop Purchase Plan, payroll
deductions are used to purchase the Company's Common Stock for eligible,
participating employees through the exercise of stock options.

Administration. The Desktop Purchase Plan is administered by the Committee.
The Committee, subject to the provisions of the Desktop Purchase Plan, has the
power to construe the Desktop Purchase Plan, to determine all questions
thereunder, and to adopt and amend such rules and regulations for
administration of the Desktop Purchase Plan as it may deem appropriate.

Eligibility. All employees of Desktop, except employees who own five percent
or more of Desktop Common Stock, whose customary employment is 20 hours or
more per week and for more than five months in any calendar year and who have
completed at least one year of employment are eligible to participate in the
Desktop Purchase Plan. Employees who own five percent or more of Desktop
Common Stock and directors who are not employees of Desktop may not
participate in the Desktop Purchase Plan. Persons who are eligible employees
on or before the first day of any Payment Period who elect to participate in
the Desktop Purchase Plan shall receive their options as of such day. An
employee may not be granted an option under the Desktop Purchase Plan, if
after the granting of the option such employee would be treated as owning 5%
or more of the total combined voting power or value of all classes of stock of
Desktop.

Payment Periods; Payment for Shares of Desktop Common Stock. An employee
electing to participate in the Desktop Purchase Plan must authorize an amount
(a whole percentage not less than 1% nor more than 10%

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of the employee's base pay or salary compensation) to be deducted by Desktop
from the employee's base pay or salary and applied toward the purchase of
Desktop Common Stock under the Desktop Purchase Plan. "Payment Periods"
commence on March 1st and September 1st of each year and end on August 31st
and February 28th, respectively, of each year. On the first business day of
each Payment Period, the Company will grant to each Desktop Purchase Plan
participant an option to purchase shares of Desktop Common Stock. On the last
day of each Payment Period, the employee will be deemed to have exercised this
option, at the option price, to the extent of such employee's accumulated
payroll deductions, on the condition that the employee remains eligible to
participate in the Desktop Purchase Plan throughout the Payment Period. In no
event, however, may the employee exercise an option granted under the Desktop
Purchase Plan for more than 250 shares during a Payment Period. If the amount
of the accumulated payroll deductions exceeds the aggregate purchase price of
250 shares, the excess of the amount of accumulated payroll deductions over
the aggregate purchase price of the 250 shares will be promptly refunded to
the employee without interest. Furthermore, no employee may be granted an
option which permits the employee's right to purchase Desktop Common Stock
under the Desktop Purchase Plan and all other Section 423 plans of Desktop to
accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the respective date(s) of grant) for each calendar year in
which the option is outstanding. Any excess accumulation of payroll deductions
will be promptly refunded to the employee without interest. Under the terms of
the Desktop Purchase Plan, the option price is an amount equal to the lesser
of (i) 85% of the average market price of the Desktop Common Stock on the
first business day of the Payment Period or (ii) 85% of the average market
price of the Desktop Common Stock on the last business day of the Payment
Period. Desktop will accumulate and hold for the employee's account the
amounts deducted from his pay. No interest will be paid on these amounts.

For purposes of the Desktop Purchase Plan, the term "average market price"
on any date means (i) the average (on that date) of the high and low prices of
the Desktop Common Stock on the principal national securities exchange on
which the Desktop Common Stock is traded, if the Desktop Common Stock is then
traded on a national securities exchange; or (ii) the last reported sale price
(on that date) of the Desktop Common Stock on Nasdaq, if the Desktop Common
Stock is not then traded on a national securities exchange, or (iii) the
average of the closing bid and asked prices last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Desktop
Common Stock is not reported on Nasdaq; or (iv) if the Desktop Common Stock is
not publicly traded, the fair market value of the Desktop Common Stock as
determined by the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale and offer
prices of the Desktop Common Stock in private transactions negotiated at arm's
length. An employee may enter the Desktop Purchase Plan by delivering to
Desktop, at least 10 days before the beginning date of the next succeeding
Payment Period, an authorization (i) stating the initial percentage to be
deducted from the employee's pay, (ii) authorizing the purchase of shares of
Desktop Common Stock for the employee in each Payment Period in accordance
with the terms of the Desktop Purchase Plan and (iii) specifying the exact
name or names in which shares purchased by the employee is to be issued.

If an employee is not a participant in the Desktop Purchase Plan on the last
day of the Payment Period, the employee generally is not entitled to exercise
his option. An employee's rights under the Desktop Purchase Plan generally
terminate upon his voluntary withdrawal from the Desktop Purchase Plan at any
time, or when he ceases employment because of retirement, resignation,
discharge, death or any other reason, except that employment shall be treated
as continuing intact while an employee is on military leave, sick leave or
other bona fide leave of absence, for up to 90 days, or for so long as the
employee's right to reemployment is guaranteed either by statute or by
contract, if longer.

Transferability. An employee's rights under the Desktop Purchase Plan are
the employee's alone and may not be transferred to, assigned to, or availed of
by any other person. Any option granted to an employee may be exercised,
during the employee's lifetime, only by the employee.

Withdrawal from Desktop Purchase Plan. An employee may withdraw from the
Desktop Purchase Plan, in whole but not in part, at any time prior to the last
business day of each Payment Period by delivering a withdrawal notice to
Desktop, in which event Desktop will refund the entire balance of the
employee's deductions not previously used to purchase stock under the Desktop
Purchase Plan.

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Amendments and Termination. The Committee may from time to time adopt
amendments to the Desktop Purchase Plan provided that, without the approval of
Stockholders, no amendment may increase the number of shares that may be
issued under the Desktop Purchase Plan or change the class of the employees
eligible to receive options under the Desktop Purchase Plan or cause Rule 16b-
3 under the Securities Exchange Act of 1934 to be inapplicable to the Desktop
Purchase Plan. The Desktop Purchase Plan may be terminated at any time by the
Committee but such termination will not affect options then outstanding under
the Desktop Purchase Plan. If at any time shares of Common Stock reserved for
the purposes of the Desktop Purchase Plan remain available for purchase but
not in sufficient number to satisfy all then unfilled purchase requirements,
the available shares will be apportioned among participants in proportion to
amount of payroll deductions accumulated on behalf of each participant that
would otherwise be used to purchase stock, and the Desktop Purchase Plan will
terminate. Upon termination of the Desktop Purchase Plan, all payroll
deductions not used to purchase Desktop Common Stock will be refunded to
Desktop Purchase Plan participants without interest.

Federal Income Tax Consequences. The following discussion summarizes certain
U.S. federal income tax considerations for persons receiving options under the
Desktop Purchase Plan and certain tax effects on Desktop, based upon the
provisions of the Code as in effect on the date of this Prospectus/Proxy
Statement, current regulations and existing administrative rulings of the IRS.
However, the summary is not intended to be a complete discussion of all the
federal income tax consequences of this plan:

1. The amounts deducted from an employee's pay under the Desktop Purchase
Plan will be included in the employee's compensation subject to Federal
income tax. Subject to certain requirements, generally no additional income
will be recognized by the employee either at the time options are granted
pursuant to the Desktop Purchase Plan or at the time the employee purchases
shares pursuant to the Desktop Purchase Plan.

2. If the employee disposes of Desktop Common Stock purchased pursuant to
the Desktop Purchase Plan more than two years after the first business day
of the Payment Period in which the employee acquired the shares, then upon
such disposition the employee will recognize ordinary income in an amount
equal to the lesser of:

(a) the excess, if any, of the fair market value of the shares at the
time of disposition over the amount the employee paid for the shares, or

(b) the excess of the fair market value of the shares on the first
business day of the Payment Period over the option price.

3. If the employee disposes of shares purchased pursuant to the Desktop
Purchase Plan within two years after the first business day of the Payment
Period in which the employee acquired the shares, then upon disposition the
employee generally will recognize ordinary income in an amount equal to the
excess, if any, of the fair market value of the shares on the last business
day of the applicable Payment Period over the amount the employee paid for
the shares.

In addition, the employee generally will recognize capital gain or loss
in an amount equal to the difference between the amount realized upon the
sale of the shares and the employee's tax basis in the shares (i.e., the
amount the employee paid for the shares plus the amount, if any, taxed to
the employee as ordinary income). If the employee's holding period for the
shares is more than one year, such gain or loss generally will be long-term
capital gain or loss.

4. If the employee disposes of shares purchased pursuant to the Desktop
Purchase Plan more than two years after the first business day of the
Payment Period, Desktop will not be entitled to a corresponding receive any
Federal income tax deduction with respect to such shares. If this two-year
holding period is not satisfied, Desktop generally will be entitled to a
Federal income tax deduction in an amount equal to the amount which is
treated as ordinary income.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON PARTICIPANTS AND DESKTOP WITH RESPECT TO THE PURCHASE OF DESKTOP COMMON
STOCK UNDER THE DESKTOP PURCHASE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND
DOES NOT DISCUSS THE TAX CONSEQUENCES OF THE EMPLOYEE'S DEATH OR

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THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN
COUNTRY IN WHICH THE EMPLOYEE MAY RESIDE.

THE DESKTOP BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENTS OF THE
DESKTOP PURCHASE PLAN, SUBJECT TO AND UPON CONSUMMATION OF THE MERGER.

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DESKTOP

DESKTOP BUSINESS

The following description contains forward-looking statements which involve
risks and uncertainties. Desktop's actual results may differ significantly
from the results discussed in the forward-looking statements. Factors that
might cause such differences include, but are not limited to, those discussed
in "Risk Factors".

Desktop is the leading independent provider of customized, real-time news
and information. Desktop operates as a value-added news integrator to
organizations. Desktop's unique combination of diverse, authoritative content,
innovative on-line delivery technologies, and customization and support
services empower its clients to transform news and information into a
centrally-managed, competitive business resource. Desktop's primary service,
NewsEDGE, is used by approximately 169,000 business professionals in over 410
corporations, financial institutions and government offices worldwide.

THE NEWSEDGE SERVICE

Desktop's NewsEDGE service allows knowledge workers to take advantage of the
abundance of news and information available to their organizations. Typically,
Desktop installs its NewsEDGE software on a dedicated, customer-owned network
server which is connected to the customer's LAN at the customer site. Desktop
arranges for the delivery to the server of real-time news and information from
the customer's choice of over 180 newswires, aggregating news and information
from over 1,600 sources. The news is filtered to reflect personal profiles
that have been established by each user on the user's desktop or laptop
computer, and is delivered in real time, 24 hours a day, seven days a week.
When a news story matching a user's personal profile arrives, the user is
notified by a visual and audio alert, even if the user is then working in
another application. When the user's computer is not turned on or is not
connected to the LAN, stories matching that user's profile are stored by the
server and delivered when the user's computer is reactivated. NewsEDGE stores
approximately 90 days of news stories in a database on the NewsEDGE server,
whether or not the stories have matched a profile, and enables users to
quickly search the entire database at no additional charge.

NewsEDGE is distinguished from the information offerings of individual news
providers because it integrates the newswires from a number of competitive
sources into a single, comprehensive service offering. The NewsEDGE user's
profile gathers breaking news from several sources and delivers it to the
user's desktop. NewsEDGE leverages the existing LAN investment of business
organizations and enables broad access to real-time news from multiple highly
respected news sources. NewsEDGE alerts knowledge workers to important
developments affecting their businesses, giving them an opportunity to gain an
edge on competitors.

Desktop's NewsEDGE service was designed to operate in a client/server LAN or
WAN environment. Desktop typically installs its NewsEDGE software on a
dedicated, customer-owned network server which receives broadcast news on a 24
hour per day basis. Desktop arranges for the communication of news selected by
the customer to the server through leased telephone lines, satellites or FM
side-band transmission. Customers may also, however, access news services by
connecting to NewsEDGE servers located at Desktop's headquarters in
Burlington, Massachusetts through dedicated, leased line connections or via
the public Internet.

No matter where the server is located, the NewsEDGE server software manages
the receipt of news from multiple news sources over the communications vehicle
arranged by Desktop. Incoming stories are tested against the interest profiles
of all NewsEDGE users on the LAN and alerts are sent to each user in
accordance with the user's own profile. Profiles may also be created for
shared access by groups of users with common interests. All stories received
by the server are indexed by full text, ticker symbols, subject codes and
dates and added to a news history database to support subsequent searching and
retrieval. Typically, approximately 90 days of history of stories received,
regardless of whether the stories have matched a profile, are maintained for
user inquiry on the NewsEDGE server on the customer LAN.

NewsEDGE client software manages the user's interface with the news. The
NewsEDGE client software provides an easy-to-use graphical user interface that
permits users to readily create and modify personalized

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profile lists of words, phrases and ticker symbols for news monitoring and
alerting. When a news story matching a user's personal profile arrives, the
user is notified by a visual and audio alert, even if the user is then working
in another application. Users can also conduct immediate searches of news
stored in the NewsEDGE server using Boolean search techniques, key words or
phrases, ticker symbols and subject codes. NewsEDGE user functionality is
supported in the Netscape Navigator and Microsoft Internet Explorer browsers
and in Windows 3.1, Windows '95, and Windows NT desktop operating systems.

Increasingly, customers of the NewsEDGE service have requested the ability
to customize NewsEDGE features and functionality to fit into internally-
developed applications or other third-party-provided applications. In
response, Desktop launched its NewsOBJECTS products and Alliance Partner
Program in the spring of 1997. Through NewsOBJECTS, NewsEDGE will support
object or component level, programmatic access to the NewsEDGE Server. With
component level access, applications integration and customization of news
monitoring is greatly facilitated, thereby lowering the barrier to the use of
the news service on more desktops throughout the customer organization. As of
October 1997, eight companies, Avesta Technologies, Capitol Hill Software,
CompassWare Development, CSK Software, Data Channel, Digitial Knowledge Assets
LLC, Midas-Kapiti Int'l, Infotec, Menhir and TIBCo Financial, have joined the
NewsOBJECTS Alliance Partner Program to integrate and embed NewsEDGE
functionality into their applications.

NewsEDGE is designed with client-server architecture to leverage customers'
LAN and WAN investments. The latest version of NewsEDGE Server software
operates on Windows NT and earlier versions operate on OS/2 and Windows NT.
NewsEDGE supports multiple LAN configurations, including Novell Netware,
Banyan VINES and TCP/IP, broadcast, point-to-point, session and mixed
protocols. NewsEDGE also supports server to server connections to groupware,
E-mail, quotation and other applications on customer LANS, including Lotus
Notes.

Desktop has developed interfaces to on-line resources provided by other news
and information providers, designed to permit NewsEDGE users to be alerted to
or search for these resources using NewsEDGE, and then to link directly to
them. For example, through Desktop's LinkEDGE, a user may be alerted that a
press conference announcing breaking developments for a company matching the
user's profile is about to be broadcast by NBC Desktop. LinkEDGE, which was
released in December 1995, is designed to allow the user to directly access
this press conference on the user's computer screen through NewsEDGE, rather
than waiting for a later news story reporting on the event. Another
application of this feature is designed to permit users to readily retrieve
SEC filings by linking directly with Disclosure, Inc., which distributes such
filings. The ability to link to 15-minute-delayed market data from Quote.com
was added to LinkEDGE for NewsEDGE/WEB in April 1997.

News and Information Providers

Desktop has contracted with providers to make available through the NewsEDGE
service over 180 newswires, aggregating news and information from over 1,600
sources published by over 120 global content providers. News and information
sources currently available on NewsEDGE include newswires from AFP/Extel News
Limited, The Associated Press, Inc., Dow Jones & Company, Inc.,
KnightRidder/Tribune Information Services, L.P., Nihon Shimbun America, Inc.
(English language Japanese news) and Reuters America, Inc., as well as the
text of stories in The Financial Post (Toronto), Financial Times (London), The
New York Times News Service, USA Today and The Wall Street Journal. Also
available on NewsEDGE are the business sections of over 100 North American
newspapers, over 30 major metropolitan business journals, periodicals such as
Business Week, Forbes, Fortune, InfoWorld, MacWeek and PC Week, newsletters
such as those distributed by American Banker and Phillips Business Information
Services, Inc., and international wire services and publications such as
Agence France Presse, Deutsche PressAgentur GmbH, and the Economist.

Newswires are delivered to customer LANs through one or more of three
delivery vehicles: leased telephone lines, direct satellite transmission, and
FM sideband transmission. Many newswire providers have established their own
broadcast communications networks using one or more of these three vehicles.
In these cases, Desktop's role is to arrange the communications between the
news provider and the NewsEDGE customer server. For newspapers, newsletters,
magazines and other sources which do not have their own broadcast

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communications capabilities, news and information are delivered to Desktop's
news consolidation facility in Burlington, Massachusetts, where it is
reformatted for broadcast to NewsEDGE servers and retransmitted to customers
by a common carrier communications provider (currently WavePhore, Inc.).

Pricing

NewsEDGE customers are charged an annual subscription fee for the NewsEDGE
service, plus a onetime installation fee. The subscription fee includes the
NewsEDGE software, ongoing customer support, and the customer's choice of
newswires. Pricing varies depending on the number and type of platforms in the
customer's LAN, the number of authorized users and the newswires selected.
Current list prices for installation within the United States range from
$4,000 to $6,000 per server. There are no separate charges for creating or
changing a profile or for conducting searches.

As a result of the low incremental cost of providing NewsEDGE to additional
users, Desktop offers substantial volume discounts. For example, the list
price for a customer within the United States with 100 authorized users and
including a basic package of newswires is currently $47,000 per year for
NewsEDGE/WEB, for a cost per user per day of $1.29. The same package for 1,000
authorized users lists for $88,000, at a cost per user per day of $0.24. The
NewsEDGE list price for this package decreases on a per user basis as the
number of users increases.

Certain newswires, including popular offerings from Dow Jones and Reuters,
are billed separately directly by the news provider as an addition to the
NewsEDGE subscription fee. Most customers purchase subscriptions for one or
more of these newswires.

Sales and Marketing

NewsEDGE is sold and marketed through Desktop's direct sales force and
marketing staff, which as of September 30, 1997, consisted of 72 full-time
employees based at twelve locations throughout the United States, Canada and
the United Kingdom. Because the decision to purchase NewsEDGE is complex and
has implications for many different groups and constituencies throughout a
customer organization, Desktop believes that the education, NewsEDGE
demonstrations and follow-through required to make a new customer sale is best
done by its own sales staff, which focuses exclusively on NewsEDGE. Desktop
believes that the size and experience of its sales force provide Desktop with
a competitive advantage. Desktop's new account selling is concentrated on
major corporations, financial institutions, government agencies, and
publishers where timely news has high value, where there are numerous LAN
users and where NewsEDGE cost economies of scale can provide the greatest
benefit.

NewsEDGE is generally sold pursuant to annual subscriptions that renew
automatically unless notice of termination is provided prior to the end of the
term. The Desktop sales team responsible for making the initial sale is also
responsible for renewals and tradeups. Tradeups include the purchase by the
customer of additional newswires, the authorization of more users and
platforms and the acquisition of additional NewsEDGE servers. Desktop's
experienced direct sales force and significant investments in development and
customer support have resulted in annual renewal rates of at least 90% for
each of the last five years.

To expand its service offerings and assist its sales force in selling
NewsEDGE, Desktop has entered into development and joint marketing
relationships with various corporate partners. For example, Desktop has
contracted with TIBCO to adapt NewsEDGE for use in conjunction with products
sold to the trading floors of financial services firms, and to jointly market
the resulting service. Desktop has also contracted with MSNBC Business Video
to make MSNBC Business Video's television and video offerings available
through NewsEDGE and to jointly market this service. Similar arrangements have
also been made with Disclosure, Inc. in regard to SEC filings and with
Disclosure Global Alert for other financial information.

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NewsEDGE Customers

NewsEDGE customers include corporate, financial and government customers. As
of September 30, 1997, NewsEDGE had been installed by 410 customers,
representing approximately 169,000 authorized users. No customer has accounted
for over 5% of Desktop revenues in any of the last three years.

Customer Support

Desktop believes that customer service and support is critical to achieving
its objectives. Desktop employs its own customer support staff, which provides
centralized hot-line telephone support, field installation, training, and
upgrade and maintenance support services for NewsEDGE customers. The NewsEDGE
support staff consists of individuals with technical knowledge and experience
relating not only to NewsEDGE, but also to the various client/server
architectures and systems installed at customer sites. NewsEDGE is a highly
visible application operating on customer networks. The operation of NewsEDGE
is dependent on the customer's hardware, news communication to the customer's
site, the operation of the customer network, other applications which the
customer may be running simultaneously and the technical skills of the
customers NewsEDGE administrator. The NewsEDGE support staff diagnoses
problems and suggests solutions over the telephone and, where necessary,
travels to customer sites for further diagnosis and maintenance and brings in
specialized expertise from Desktop's emergency staff of technology experts or
the NewsEDGE engineers themselves. Desktop has a comprehensive call monitoring
and problem tracking system to concentrate and escalate attention to customer
problems.

Development

Desktop recognizes that the continued enhancement of NewsEDGE and the
extension of its news and information offerings is critical to obtaining new
customers and to obtaining tradeup sales and renewals from existing customers.
Since its inception, Desktop has made substantial investments in research and
development, issuing regular new releases of its NewsEDGE software since the
service's first launch in 1990. The NewsEDGE software has been developed by
Desktop's internal development and quality assurance staff. New versions of
NewsEDGE are released periodically and made available to the client/server
systems installed at customer sites as part of the annual NewsEDGE
subscription fee. The current version of NewsEDGE, release 3.2, was made
available to customers beginning in July 1997.

Other development efforts have been focused on supporting additional desktop
operating platforms and LAN configurations, expanding the scalability of the
NewsEDGE server, increasing the number of news sources, increasing storage for
news history, advancing the ease of programmatic access through support for
ActiveX, Java, and HTML components and providing enhanced precision and
functionality for user searches and profiles. Desktop's development expenses
were $1.9 million, $2.9 million, $4.2 million and $3.8 million in 1994, 1995,
1996 and the first nine months of 1997, respectively.

The NewsEDGE software is entirely proprietary to Desktop. Desktop believes
that control over its own development is critical to its speed and flexibility
in meeting market and technology changes. The NewsEDGE server is developed in
modules according to the primary NewsEDGE functions: a news collection and
alerting module; a news database module for storing and retrieving the full
text of the news stories; a network module adaptable to the network protocols
installed at customer sites; and a module which allows customer administrators
to configure newswire access and monitor NewsEDGE activity. An important
aspect of NewsEDGE development is the continuing enhancement of the number of
newswires offered by Desktop. Desktop's marketing personnel identify newswires
to be added to the NewsEDGE offerings based on customer feedback, and
negotiate contracts with news providers. The newswires are then integrated
with NewsEDGE by development and support personnel. Desktop is currently
seeking to expand its offerings with additional industry-specific information
to increase sales to customers in new vertical markets and with additional
international news sources to increase the availability of global, 24-hour a
day coverage by NewsEDGE. Vertical market wires for the high-tech,
pharmaceutical and consumer goods industries, developed in conjunction with
Information Access Co., were released in August 1997.

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Competition

The business information services industry is intensely competitive and is
characterized by rapid technological change and the entry into the field of
extremely large and well-capitalized companies as well as smaller competitors.
Desktop competes or may compete directly or indirectly with the following
categories of companies: (i) large, well-established news and information
providers such as The Dialog Corporation, Dow Jones, Knight-Ridder,
Lexis/Nexis, Pearson, Reuters and Thomson; (ii) market data services companies
such as ADP, Bloomberg, and Telerate; (iii) traditional print media companies
that are increasingly searching for opportunities for on-line provision of
news, including through the establishment of Web sites on the Internet; (iv)
large providers of LAN-based software systems such as Lotus/IBM and Microsoft,
which could, in the future, ally with competing news and information
providers; and (v) to a lesser degree, consumer-oriented, advertising-
subsidized Web-based services and Internet access providers. Many of these
companies and market participants not named above have substantially greater
financial, technical and marketing resources than Desktop.

Desktop believes that NewsEDGE is differentiated from the news and system
products offered by large news and systems providers because of Desktop's
ability to deliver news from many different, competing providers on an
enterprise-wide basis, directly to LAN-connected personal computers,
customized to meet the needs of each individual user, at a relatively low cost
per user. Although they may compete with Desktop in some respects, Desktop
attempts to establish cooperative, mutually beneficial relationships with
large information or systems providers, many of whom are information providers
and customers as well as current and potential joint marketing partners. In
addition, several smaller companies offer directly competitive products or
services that provide news to enterprises through the customer's computer
network. Desktop believes that NewsEDGE offers advantages over each of these
competing products. For example, each of the competing services offers
substantially fewer real-time news sources than does NewsEDGE. Furthermore,
unlike NewsEDGE, certain competitors do not offer real-time scrolling of news
stories or a historical database to support searching, while others do not
support Lotus Notes or other groupware applications. In addition, many
competitors rely on database engines developed by third parties, and as a
result, Desktop believes these services are not as readily adaptable to
evolving customer information provider needs as is NewsEDGE. Finally, many of
these smaller competitors is owned by a larger organization, which Desktop
believes restricts their ability to attract a large variety of news sources
and to fully respond to news providers' delivery requirements and makes it
difficult for them to provide the same level and focus of sales, development
and customer support as can be provided by Desktop.

Increased competition, on the basis of price or otherwise, may require price
reductions or increased spending on marketing or software development, which
could have a material adverse effect on Desktop's business and results of
operations.

Intellectual Property and Proprietary Rights

Desktop primarily relies upon a combination of copyright, trademark and
trade secret laws and license agreements to establish and protect proprietary
rights in its technology. The NewsEDGE software is licensed to customers on a
nonexclusive basis pursuant to license agreements containing provisions
prohibiting unauthorized use, copying and transfer of the licensed program.
The source code for Desktop's software is protected both as a trade secret and
as an unpublished copyrighted work. Despite these precautions, it may be
possible for a third party to copy or otherwise obtain and use Desktop's
software or technology without authorization or to develop similar technology
independently. In addition, effective copyright and trade secret protection
may be unavailable or limited in certain foreign countries. Desktop does not
hold any patents.

Because the software development industry is characterized by rapid
technological change, Desktop believes that factors such as the technological
and creative skills of its personnel, new software developments, frequent
software enhancements, name recognition and reliable maintenance are more
important to establishing and maintaining a technology leadership position
than the various legal protections of its technology.

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Desktop believes that its software, trademarks and other proprietary rights
do not infringe the proprietary rights of third parties. There can be no
assurance, however, that third parties will not assert such infringement by
Desktop with respect to current or future software or services. Any such
claims, with or without merit, could be time-consuming, result in costly
litigation, cause software release delays or might require Desktop to enter
into royalty or licensing agreements. Such royalty or licensing agreements, if
required, may not be available on terms acceptable to Desktop.

Employees

As of January 9, 1998, Desktop had 218 full-time employees, consisting of 89
employees in sales and marketing, 57 employees in customer support, 51
employees in development and 15 employees in general administration. Desktop's
employees are not represented by any collective bargaining organization, and
Desktop has never experienced a work stoppage. Desktop believes that its
relationships with its employees are good.

Facilities

Desktop's corporate headquarters are located in Burlington, Massachusetts.
Desktop leases approximately 40,000 square feet under a lease expiring in May
2003. Desktop leases additional facilities and offices for sales and customer
service and support in New York, New Jersey, Washington, D.C., Illinois,
California, Texas, South Carolina, North Carolina, Toronto, Canada, and
London, England. Desktop believes that its existing facilities and offices and
additional alternative space available to it are adequate to meet its
requirements for the foreseeable future.

Legal Proceedings

Desktop is not a party to any material legal proceedings.

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

THE DISCUSSION IN "DESKTOP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" CONTAINS TREND ANALYSIS AND OTHER
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
SET FORTH IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF THE FACTORS SET
FORTH ELSEWHERE HEREIN, INCLUDING "RISK FACTORS."

Overview

Desktop, through its NewsEDGE products, delivers a large variety of news and
information sources in real time to professionals' personal computers,
automatically monitoring and filtering the news, and alerting the users to
stories of interest to them. NewsEDGE is delivered via corporations'
intranets, the Internet and local area networks.

Desktop's revenues consist primarily of NewsEDGE subscription fees and
related royalties received from news providers in connection with sales of
their newswires through NewsEDGE. Historically, royalties have constituted
less than 10% of this amount. Desktop's other revenues consist principally of
NewsEDGE installation services and related computer hardware system sales, and
non-recurring custom development projects related to Desktop's software.

NewsEDGE subscriptions are generally for an initial term of twelve months,
payable in advance, and are automatically renewable for successive one year
periods unless the customer delivers notice of termination prior to the
expiration date of the then current agreement. NewsEDGE subscription revenues
are recognized ratably over the subscription term, beginning on installation
of the NewsEDGE service. Accordingly, a substantial portion of the Desktop's
revenues are recorded as deferred revenues until they are recognized over the
license term. Desktop does not capitalize customer acquisition costs.

Certain newswires offered by Desktop through NewsEDGE are purchased by the
customer directly from the news provider and payments are made directly from
the NewsEDGE customer to the provider. For some of these newswires, Desktop
receives ongoing royalties on payments made by the customer to the news
provider, and those royalties constitute part of Desktop's subscription and
royalty revenues. For other newswires that are resold by Desktop to the
NewsEDGE customer, Desktop includes a fee for the newswire in the NewsEDGE
subscription fee paid by the customer and pays a royalty to the news provider.
Such royalties are included in Desktop's cost of revenues.

RESULTS OF OPERATIONS

The following table sets forth, as a percentage of total revenues,
consolidated statement of operations data for the periods indicated. These
operating results are not necessarily indicative of the results for any future
period.

<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
----------------- ---------------
1994 1995 1996 1996 1997
---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C>
Subscription and royalty revenues............. 90% 94% 93% 93% 93%
Other revenues................................ 10 6 7 7 7
--- --- --- ------ ------
Total revenues............................... 100 100 100 100 100
Cost of revenues.............................. 27 28 28 27 31
Customer support expenses..................... 14 11 10 11 12
Development expenses.......................... 13 12 12 13 12
Sales and marketing expenses.................. 43 38 35 36 35
General and administrative expenses........... 6 5 5 5 5
--- --- --- ------ ------
Total costs and expenses..................... 103 94 90 92 95
Income (loss) from operations................. (3) 6 10 8 5
Interest income, net.......................... 1 4 5 6 5
--- --- --- ------ ------
Income (loss) before provision for income tax-
es........................................... (2) 10 15 14 10
Provision for income taxes.................... -- 1 2 2 4
--- --- --- ------ ------
Net income (loss)............................ (2)% 9% 13% 12% 6%
=== === === ====== ======
</TABLE>

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RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30,
1997 AND SEPTEMBER 30, 1996

Revenues. Revenues consist of (i) subscription and royalty revenues and (ii)
other revenues which consist of revenues from NewsEDGE installation services
and other sources. Total revenues increased 24% to $10.8 million for the three
months ended September 30, 1997 as compared to $8.8 million for the same
period in 1996. Year-to-date total revenues increased 30% to $31.3 million as
compared to $24.1 million for the same period in 1996. The increase in
subscription and royalty revenues was due to increased subscription revenues
from new customers, the retention and growth of revenues from existing
customers and increased royalties from the sale of third party information
news. For the three months ended September 30, 1997, subscription and royalty
revenues increased 27% to $10.2 million, up from $8.1 million for the same
period in 1996. Year-to-date subscription and royalty revenues increased 30%
to $29.2 million as compared to $22.5 million for the same period in 1996.

For the three month period ended September 30, 1997, other revenues
consisting of revenues from NewsEDGE installation services, computer hardware
system sales and non-recurring custom development projects decreased 9% to
$630,000, down from $690,000 for the same period in 1996. Conversely, year-to-
date other revenues increased 27% to $2.1 million, up from $1.6 million for
the same period in 1996. Fluctuations in other revenues occur as a result of
increases or decreases in non-recurring custom development projects and
installations of NewsEDGE.

International revenues (revenues from customers outside of North America)
accounted for less than 5% of revenues during the nine month periods ended
September 30, 1996 and September 30, 1997.

The number of installed customers increased from 373 customers at September
30, 1996, to 410 customers at September 30, 1997, an increase of 10%. The
number of authorized users within customer organizations increased from
110,298 users at September 30, 1996 to 169,438 users at September 30, 1997, an
increase of 54%. The average users per customer increased from 270 users at
September 30, 1996 to 369 users at September 30, 1997, an increase of 37%.
Desktop's average revenues per customer increased from $63,435 for the nine
months ended September 30, 1996 to $73,806 for the nine months ended September
30, 1997, an increase of 16%.

Cost of revenues. Cost of revenues consists primarily of royalties paid to
third party information providers for the cost of news services licensed to
customers, costs associated with transmitting news services to customer sites
and the cost of computer hardware sold to customers. Cost of revenues does not
include customer support expenses. Cost of revenues, as a percentage of total
revenues, increased to 32% and 31%, respectively, for the three and nine month
periods ended September 30, 1997 from 28% and 27%, respectively, for the same
periods in 1996. The percentage increases in cost of revenues were due
primarily to increases in royalties paid to third party information providers
and increases in transmission costs.

Customer support expenses. Customer support expenses consist primarily of
costs associated with technical support of Desktop's installed base of
customers. Customer support expenses increased 53% to $1.4 million for the
three months ended September 30, 1997, as compared to $898,000 for the same
period in 1996. Year-to-date customer support expenses increased 51% to $3.9
million for the nine months ended September 30, 1997, as compared to $2.5
million for the same period in 1996. These increases resulted primarily from
higher staffing levels and the continuing need for Desktop to provide
additional support to its growing customer base. As a percentage of total
revenues, customer support expenses increased to 13% and 12% for the three and
nine month periods ended September 30, 1997 from 10% and 11% for the
comparable periods in 1996. At September 30, 1997, Desktop had 62 employees
engaged in field and central customer support operations.

Development expenses. Development expenses consist primarily of costs
associated with the design, programming, and testing of Desktop's new software
and services. Development expenses increased 31% to $1.3 million for the three
months ended September 30, 1997, as compared to $1.0 million for same period
in 1996. Year-to-date development expenses increased 20% to $3.8 million for
the nine months ended September 30, 1997, as compared to $3.2 million for the
same period in 1996. Increases in development expenses resulted primarily from
higher payroll and recruiting costs deemed necessary to attract and retain new
and existing

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personnel. As a percentage of total revenues, development expenses remained
relatively constant at 12% for the three and nine month periods ended
September 30, 1997, as compared to 12% and 13% for the comparable periods in
1996. At September 30, 1997, Desktop had 44 employees engaged in development
and quality assurance operations.

Sales and marketing expenses. Sales and marketing expenses consist primarily
of compensation costs (including sales commissions and bonuses), travel
expenses, trade shows and other marketing programs. Sales and marketing
expenses increased 22% to $3.9 million for the three month period ended
September 30, 1997, as compared to $3.2 million for the same period in 1996.
Year-to-date sales and marketing expenses increased 27% to $11.0 million for
the nine month period ended September 30, 1997, from $8.6 million for the same
period in 1996. Sales and marketing expenses increased during these periods,
primarily due to the expansion of the sales and marketing organizations. As a
percentage of total revenues, sales and marketing expenses remained relatively
constant at 36% and 35% for the three and nine month periods ended September
30, 1997, as compared with 37% and 36% for the same period in 1996. As of
September 30, 1997, Desktop's direct sales force and marketing staff consisted
of 75 employees.

General and administrative expenses. General and administrative expenses
consist primarily of expenses for finance, office operations, administration
and general management activities, including legal, accounting and other
professional fees. General and administrative expenses increased 62% to
$583,000 for the three months ended September 30, 1997 from $359,000 for the
same period in 1996. Year-to-date general and administrative expenses
increased 39% to $1.6 million for the nine months ended September 30, 1997
from $1.1 million for the same period in 1996. The increases in general and
administrative expenses were due primarily to additions of staff and new
administrative functions to support Desktop's growth. General and
administrative expenses, as a percentage of total revenues, remained
relatively constant at 5% for the three and nine month periods ended September
30, 1997, as compared to 4% and 5% for the same periods in 1996. At. September
30, 1997, Desktop had 15 employees engaged in general and administrative
operations.

Interest income, net. Interest income, net consists of interest earned on
cash and cash equivalents, short-term and long-term investments, offset by
interest expense on equipment financing. Interest income, net increased to
$575,000 and $1.6 million for the three and nine month periods ended September
30, 1997, from $490,000 and $1.4 million for the comparable periods in 1996
due to higher cash and investment balances generated from operations and
higher interest rates earned on cash, cash equivalent and investment balances.

Provision for income taxes. The provision for income taxes increased to
$260,000 and $1.1 million, respectively, for the three and nine month periods
ended September 30, 1997 from $151,000 and $384,000, respectively, for the
comparable periods in 1996. The increase in the tax provision is due to both a
reduction in the tax loss carryforwards and higher expected taxable income
from Desktop's operations. Despite Desktop's profitability in 1995 and 1996,
Desktop has provided a full valuation allowance against its net deferred tax
asset due to the uncertainty surrounding the realization of the net deferred
tax asset. The uncertainty is due to the mechanism required for utilizing net
operating loss carryforwards (NOLs) and tax credit carryforwards, as well as
Desktop's history of cumulative losses since inception of $1.9 million as of
December 31, 1996. Desktop has significant NOLs from disqualifying
dispositions and tax credit carryforwards (TCCs) primarily from research and
development activities. Desktop is required to first use the NOLs (including
NOLs generated from disqualifying dispositions) prior to realizing any benefit
from the TCCs, thus extending the time as to when the TCCs can be utilized.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996, AS COMPARED TO THE
YEAR ENDED DECEMBER 31, 1995

Revenues. Total revenues increased 46% to $33.8 million for 1996, as
compared to $23.2 million for 1995. Subscription and royalty revenues
increased 44% to $31.3 million from $21.7 million for 1996 and 1995,
respectively. The increase in subscription and royalty revenues was
attributable to increased subscription revenues from new customers, the
retention and growth of revenues from existing customers and increased
royalties from the sale of third party information news.

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Other revenues increased 72% to $2.5 million for 1996 from $1.4 million for
1995. The increase was due primarily to revenue from one-time custom
development project, such as the NBC Desktop Video and LinkEDGE projects.
Desktop currently does not solicit hardware sales, and anticipates that
revenues from hardware sales will decline as a percentage of total revenues.

International revenues (revenues from customers outside of North America)
accounted for less than 5% of revenues during the years ended December 31,
1996 and 1995.

Cost of revenues. Cost of revenues, as a percentage of total revenues
remained constant at 28% for the years ended December 31, 1996 and 1995.

Customer support expenses. Customer support expenses increased 40% to $3.5
million for 1996, as compared to $2.5 million for 1995. These increases
resulted primarily from higher staffing levels and the continuing need for
Desktop to provide additional support to its growing customer base. As a
percentage of total revenues, customer support expenses declined to 10% for
1996 versus 11% for 1995.

Development expenses. Development expenses increased 47% to $4.2 million for
1996, as compared to $2.9 million for 1995. Development expenses increased as
a result of higher staffing levels to provide for enhancements of existing
features and the development of new features. Development expenses, as a
percentage of total revenues, increased slightly to 13% for the year ended
December 31, 1996, as compared to 12% for the year ended December 31, 1995.

Sales and marketing expenses. Sales and marketing expenses increased 34% to
$11.7 million for 1996, as compared to $8.7 million for 1995. Sales and
marketing expenses represented 35% of revenues for 1996, as compared to 38%
for 1995. Sales and marketing expenses increased during these periods,
primarily due to the expansion of the sales and marketing organizations. As a
percentage of total revenues, however, sales and marketing expenses decreased
primarily as a result of the increase in Desktop's revenues, without a
corresponding increase in sales and marketing expenses.

General and administrative expenses. General and administrative expenses
increased 24% to $1.6 million for 1996, from $1.3 million for 1995. The
increases in general and administrative expenses were due primarily to
additions to staff to support Desktop's growth. General and administrative
expenses, as a percentage of total revenues, decreased slightly to 5% for the
year ended December 31, 1996, as compared to 6% for the year ended December
31, 1995.

Interest income, net. Interest income, net increased to $1.9 million for
1996, from $897,000 for 1995, due primarily to interest earned on higher cash
balances generated from operations.

Provision for income taxes. For the year ended December 31, 1996, the
provision for income taxes was $614,000. This provision is primarily the
result of state taxes in states that do not have net operating loss
carryforwards available and the alternative minimum tax due under the Internal
Revenue Code. Despite Desktop's profitability in 1995 and 1996, Desktop has
provided a full valuation allowance against its net deferred tax asset due to
the uncertainty surrounding the realization of the net deferred tax asset. The
uncertainty is due to the mechanism required for utilizing net operating loss
carryforwards (NOLs) and tax credit carryforwards, as well as Desktop's
history of cumulative losses since inception of $1.9 million as of December
31, 1996. Desktop has significant NOLs from disqualifying dispositions and tax
credit carryforwards (TCCs) primarily from research and development
activities. Desktop is required to first use the NOLs (including NOLs
generated from disqualifying dispositions) prior to realizing any benefit from
the TCCs, thus extending the time as to when the TCCs can be utilized.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995, AS COMPARED TO THE
YEAR ENDED DECEMBER 31, 1994

Revenues. Total revenues increased 61% to $23.2 million for 1995, as
compared to $14.4 million for 1994. Subscription and royalty revenues
increased 68% to $21.7 million from $12.9 million for 1995 and 1994,

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<PAGE>

respectively. The increase in subscription and royalty revenues was
attributable to increased subscription revenues from new customers, the
retention and growth of revenues from existing customers and increased
royalties from the sale of third party information news.

Other revenues remained flat at $1.4 million for 1995 and 1994.

International revenues accounted for less than 5% of revenues during the
years ended December 31, 1995 and 1994. Desktop established a sales and
technical support operation in England during the second half of 1994.

Cost of revenues. Cost of revenues, as a percentage of total revenues,
increased slightly to 28% for the year ended December 31, 1995, as compared to
27% for the year ended December 31, 1994.

Customer support expenses. Customer support expenses increased 31% to $2.5
million for 1995, as compared to $1.9 million for 1994. These increases
resulted primarily from higher staffing levels and the continuing need for
Desktop to provide additional support to its growing customer base. As a
percentage of total revenues, customer support expenses declined to 11% for
1995 versus 13% for 1994.

Development expenses. Development expenses increased 51% to $2.9 million for
1995, as compared to $1.9 million for 1994. Development expenses increased as
a result of higher staffing levels to provide for enhancements of existing
features and the development of new features. Development expenses, as a
percentage of total revenues, declined slightly to 12% for the year ended
December 31, 1995, as compared to 13% for the year ended December 31, 1994.

Sales and marketing expenses. Sales and marketing expenses increased 42% to
$8.7 million for 1995, as compared to $6.2 million for 1994. Sales and
marketing expenses represented 38% of revenues for 1995, as compared to 43%
for 1994. Sales and marketing expenses increased during these periods,
primarily due to the expansion of the sales and marketing organizations. As a
percentage of total revenues, however, sales and marketing expenses decreased
primarily as a result of the increase in Desktop's revenues, without a
corresponding increase in sales and marketing expenses.

General and administrative expenses. General and administrative expenses
increased 42% to $1.3 million for 1995, from $900,000 for 1994. The increase
in general and administrative expenses was due primarily to additions to staff
to support Desktop's growth. General and administrative expenses, as a
percentage of total revenues, remained flat at 6% for both 1995 and 1994.

Interest income, net. Interest income, net consists of interest earned on
cash and cash equivalents, offset by interest expense on equipment financing.
Interest income, net increased to $897,000 for 1995, from $97,000 for 1994,
due to both the interest earned on higher cash balances generated from
operations and the proceeds from Desktop's initial public offering, and higher
interest rates paid on invested cash balances.

Provision for income taxes. For the year ended December 31, 1995, the
provision for income taxes was $183,000. This provision is the result of state
taxes due in states that do not have net operating loss carryforwards
available and the alternative minimum tax due under the Internal Revenue Code.
No provision for income taxes was made for the year ended December 31, 1994
because Desktop incurred a net operating loss for that year. Desktop has
continued to provide a full valuation allowance against its net deferred tax
asset due to the uncertainty surrounding the realization of the net deferred
tax asset. The uncertainty is primarily due to Desktop's cumulative losses. As
a result, management believes that it is more likely than not that the net
deferred tax asset will not be realized.

LIQUIDITY AND CAPITAL RESOURCES

Desktop's combined cash, cash equivalent and investment balance was $42.4
million at September 30, 1997, as compared to $36.8 million at December 31,
1996, an increase of $5.6 million. Net cash of $7.6 million was generated from
operations for the nine months ending September 30, 1997 as a result of
Desktop's profitability

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<PAGE>

and increases in current liabilities since the beginning of the year. Net cash
provided by investing activities for the nine months ended September 30, 1997
was $10.8 million, due to the maturity of certain investments. Net cash
provided by financing activities in the nine months ended September 30, 1997
was $118,000, due primarily to employee stock option exercises and stock
purchases pursuant to the employee stock purchase plan.

Desktop continues to investigate the possibility of investments in or
acquisitions of complementary businesses, products or technologies, although
Desktop has not entered into any commitment or negotiations with respect to
any material transactions other than with respect to the Merger.

Desktop believes that its current cash, cash equivalent and investment
balances combined with funds anticipated to be generated from future
operations will be sufficient to satisfy working capital and expenditure
requirements through at least fiscal 1999. The rate of use by Desktop of its
cash resources will depend, however, on numerous factors, including the rate
of expansion for current products and services, the development of new
services, and potential acquisitions, dispositions or strategic investments.

DESKTOP CERTAIN TRANSACTIONS

William Blair & Company, an affiliate of William Blair Venture Partners III
("Blair"), is a customer of Desktop and was billed an aggregate of
approximately $69,000 in NewsEDGE subscriber fees in the year ended December
31, 1996. Ms. Carnahan, a general partner of Blair, currently serves on the
Board of Directors of Desktop and is expected to be a director of the Combined
Company.

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<PAGE>

DESKTOP STOCK INFORMATION

DESKTOP PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of the Desktop
Common Stock as of January 9, 1998 for the following: (i) each person or
entity who is known by Desktop to own beneficially more than 5% of the
outstanding shares of Desktop's Common Stock ("Principal Stockholders"); (ii)
each of Desktop's directors; (iii) each of the officers named in Desktop's
Summary Compensation Table ("Named Officers"); and (iv) all directors and
executive officers of Desktop as a group:

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE
NAME OWNED(1) BENEFICIALLY OWNED
---- ------------ ------------------
<S> <C> <C>
PRINCIPAL STOCKHOLDERS(2):
Individual, Inc.(3)........................... 4,704,277 44.83%
8 New England Executive Park West
Burlington, MA 01803
Donald L. McLagan(4).......................... 2,133,499 24.55%
c/o Desktop, Inc.
80 Blanchard Road
Burlington, MA 01803
Matthew L. Feshbach........................... 698,100 8.03%
425 Sherman Avenue, Suite 220
Palo Alto, CA 94306
FMR Corp.(5).................................. 490,600 5.65%
82 Devonshire Street
Boston, MA 02109
DIRECTORS:
Ellen Carnahan(6)............................. 215,620 2.48%
A. Baron Cass(7).............................. 96,437 1.11%
June Rokoff................................... 10,525 *
Rory J. Cowan(8).............................. 12,500 *
NAMED OFFICERS:
Daniel F. X. O'Reilly(9)...................... 231,949 2.66%
Clifford M. Pollan(10)........................ 137,288 1.58%
Edward R. Siegfried(11)....................... 127,066 1.46%
John L. Moss(12).............................. 12,995 *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A
GROUP:
(9 persons)(13)............................... 2,977,879 33.96%
</TABLE>
- --------
* Represents less than 1% of the outstanding shares.
(1) The number and percentage of shares beneficially owned is determined
under rules of the SEC, and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within sixty days of January 9,
1998 through the exercise of any stock option or other right. Unless
otherwise indicated in the footnotes, each person has sole voting and
investment power (or shares such powers with his or her spouse) with
respect to the shares shown as beneficially owned.
(2) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Securities Exchange Act of 1934, as
amended.
(3) Includes 1,726,398 shares which Individual has the right to acquire if
the Agreement is terminated under certain circumstances, pursuant to the
Desktop Option Agreement. See "Terms of Merger--Option Agreements." If
acquired, Individual will have sole voting and sole investment power over
such shares. Also includes 2,977,879 shares (including presently
exercisable stock options) as to which Individual shares

84
<PAGE>

voting power with the executive officers of Desktop and members of the
Desktop Board and their affiliates that are parties to the Desktop
Participation Agreement. See "Terms of the Merger--Participation
Agreements." Individual does not have sole or shared investment power over
these shares.
(4) Includes 414,442 shares held in trust for the benefit of Mr. McLagan's
two children, of which Mr. McLagan's wife is the sole trustee. Mr.
McLagan disclaims beneficial ownership of such shares.
(5) Includes 211,400 shares held by Fidelity Management and Research Company
("Fidelity Research") and 267,400 shares held by Fidelity Management
Trust Company ("Fidelity Trust"). Fidelity Research and Fidelity Trust
are both wholly-owned subsidiaries of FMR Corp., Edward C. Johnson 3d,
Chairman of FMR Corp., and Abigail P. Johnson, a Director of FMR Corp.,
own 12% and 24.5%, respectively, of the outstanding voting common stock
of FMR Corp. Various Johnson family members and trusts for their benefit
are the predominant owners of the FMR Corp. voting common stock. These
Johnson family members, through the ownership of voting common stock and
the execution of a shareholders' voting agreement, may be deemed to form
a controlling group with respect to FMR Corp. Neither FMR Corp. nor Mr.
Johnson has the sole power to vote or direct the voting of the shares
owned directly by Fidelity Research, which power resides with Fidelity
Research's board of Trustees, Fidelity Research carries out the voting of
the shares under written guidelines established by Fidelity Research's
board of trustees. Mr. Johnson and FMR Corp, through their control of
Fidelity Trust, have sole voting and dispositive power over the shares
owned by Fidelity Trust.
(6) Includes 213,120 shares of Desktop Common Stock held by William Blair
Venture Partners III ("WBVP"). Ms. Carnahan is a general partner of Blair
management and may be deemed to share voting and investment power with
respect to the shares held by WBVP. Ms. Carnahan disclaims beneficial
ownership of such shares, except to the extent of her proportionate
interests in WBVP. Ms. Carnahan is also a principal of William Blair &
Company, L.L.C. Also includes 2,500 shares of Common Stock issuable
pursuant to outstanding stock options exercisable within 60 days of
January 9, 1998 by Ms. Carnahan.
(7) Includes 38,971 shares held by Prime Petroleum, Inc. Profit Sharing
trust, of which Mr. Cass is the sole trustee, and of which he and his
spouse are the sole beneficiaries. Also includes 2,500 shares of Desktop
Common Stock issuable pursuant to outstanding stock options exercisable
within 60 days of January 9, 1998.
(8) Includes 2,500 shares of Desktop Common Stock issuable pursuant to
outstanding stock options exercisable within 60 days of January 9, 1998.
(9) Includes 18,956 shares of Desktop Common Stock issuable pursuant to
outstanding stock options exercisable within 60 days of January 9, 1998.
(10) Includes 18,956 shares of Desktop Common Stock issuable pursuant to
outstanding stock options exercisable within 60 days of January 9, 1998.
(11) Includes 18,956 shares of Desktop Common Stock issuable pursuant to
outstanding stock options exercisable within 60 days of January 9, 1998.
(12) Includes 12,395 shares of Desktop Common Stock issuable pursuant to
outstanding stock options exercisable within 60 days of January 9, 1998.
(13) Includes 76,763 shares of Desktop Common Stock issuable pursuant to
outstanding stock options exercisable within 60 days of January 9, 1998.

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<PAGE>

DESKTOP STOCK PRICE AND DIVIDEND INFORMATION

Desktop Common Stock has been traded on Nasdaq under the symbol "DTOP" since
Desktop's initial public offering in August 1995. The following table sets
forth the range of high and low closing prices for the Desktop Common Stock as
reported on Nasdaq for the periods indicated.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal 1995
Third Quarter*................................................. $38.00 $21.00
Fourth Quarter................................................. 38.00 21.25
Fiscal 1996
First Quarter.................................................. 36.75 17.25
Second Quarter................................................. 40.75 26.50
Third Quarter.................................................. 33.25 22.25
Fourth Quarter................................................. 29.00 17.25
Fiscal 1997
First Quarter.................................................. 19.25 12.75
Second Quarter................................................. 13.50 5.94
Third Quarter.................................................. 11.88 10.13
Fourth Quarter................................................. 11.88 6.69
Fiscal 1998
First Quarter (through January 9, 1998)........................ 8.75 8.09
</TABLE>
- --------
* Third Quarter data reflects the period from Desktop's initial public
offering in August through September 30, 1995.

As of October 31, 1997, the last trading day prior to the announcement of
the execution of the Agreement, the closing price for the Desktop Common Stock
as reported on Nasdaq was $10.34. As of January 9, 1998, the closing price for
the Desktop Common Stock as reported on Nasdaq was $8.688. Desktop has not
paid any dividends on its Common Stock since its inception and does not intend
to pay any dividends in the foreseeable future. At the Desktop Record Date,
there were approximately 115 Desktop stockholders of record.

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<PAGE>

DESKTOP MANAGEMENT AND EXECUTIVE COMPENSATION

MANAGEMENT

The following table sets forth the director nominees to be elected at the
Desktop Meeting, the directors and executive officers of Desktop, their ages,
and the positions currently held by each such person with Desktop:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Donald L. McLagan....... 55 Chairman, President, Chief Executive Officer and Director
Edward R. Siegfried..... 52 Vice President--Finance and Chief Financial
Officer, Treasurer and Assistant Secretary
Clifford M. Pollan...... 42 Vice President--Sales and Marketing
Daniel F.X. O'Reilly, 51
Ph.D................... Vice President and Chief Technology Officer
John L. Moss............ 46 Vice President--Development
A. Baron Cass, III(2)... 54 Director
June Rokoff(1).......... 48 Director
Ellen Carnahan(2)....... 42 Director
Rory J. Cowan(1)(2)..... 45 Director
</TABLE>
- --------
(1) Member of Compensation Committee
(2) Member of Audit Committee

Mr. McLagan is the founder of Desktop and has been President and a director
since its inception in 1988. Mr. McLagan was elected Chairman and Chief
Executive officer in June 1995. From 1985 to 1988, Mr. McLagan was Vice
President and General Manager of the Information Services Division of Lotus
Development Corporation, a computer software company. From 1969 to 1984, Mr.
McLagan was employed by Data Resources, Inc., an economic information service
company, most recently as Executive Vice President.

Mr. Siegfried joined Desktop in 1989 as Vice President, Treasurer and
Assistant Secretary and was elected Vice President--Finance and Operations in
May 1995. From 1985 to 1989, Mr. Siegfried served as the Vice President
responsible for finance, administration and operations at Softbridge
Microsystems, Inc., a computer software company. From 1974 to 1985, Mr.
Siegfried was the Senior Vice President--Finance and Administration of Data
Resources, Inc. Mr. Siegfried is a certified public accountant and from 1967
to 1974 was employed by Arthur Andersen LLP, most recently as an Audit
Manager.

Mr. Pollan joined Desktop in 1989 as a Vice President and was elected Vice
President--Sales and Marketing in May 1995. From 1986 to 1989, Mr. Pollan was
a Director of Sales at Lotus Development Corporation. From 1985 to 1986, Mr.
Pollan was the Vice President of Sales of Isys Corporation, a financial
information company, and from 1978 to 1985 was employed by Data Resources,
Inc., most recently as a Director of Consulting.

Dr. O'Reilly joined Desktop in 1989 as a Vice President and was elected Vice
President--Development in May 1995. In July 1996, Dr. O'Reilly was promoted to
Vice President and Chief Technology Officer. From 1979 to 1989, Dr. O'Reilly
was the Vice President of the Information System Development Group of Data
Resources, Inc. From 1975 to 1979, Dr. O'Reilly held various teaching
positions in the Mathematics Departments of Marquette University, Simmons
College and Boston College.

Mr. Moss joined Desktop in 1997 as Vice President--Development. From 1992 to
1996, Mr. Moss was President and Chief Executive Officer of Software House,
Inc., a company specializing in real-time security control applications. Prior
to that, he was a unit president for JWP, Inc., a public company specializing
in construction and building management products and services. Mr. Moss is
also an instructor of Computer Science at Tufts University.

87
<PAGE>

Mr. Cass has served on the Board of Directors of Desktop since November
1989. Mr. Cass has been a general partner of CCS & Associates L.P., an
investment general partnership, since 1983. Mr. Cass is also currently a
general partner of C3 Holdings, L.L.C., a private merchant banking firm, a
general partner of Equity Analysts, L.P., a real estate investment
partnership, and a general partner of Sands Partnership No. 1 L.P., an
investment partnership. Previously, Mr. Cass was a Vice President with the
investment firms of Goldman, Sachs & Co. and Bear Stearns & Co., Inc.

Ms. Rokoff has served on the Board of Directors of Desktop since July 1996.
Until December 1995, Ms. Rokoff was a Senior Vice President, Worldwide
Services Group, at Lotus Development Corporation where she spent ten years in
management. Previous management positions at Lotus included Senior Vice
President-- Development, Vice President--Graphics and Information Management,
and General Manager, Lotus 1-2-3 Release 3. Prior to Lotus, Ms. Rokoff was the
Chief Operating Officer of Isys Corporation, and spent thirteen years at Data
Resources, Inc., where she managed its software development. Since her
departure from Lotus, Ms. Rokoff has served as a director of Mathsoft, Inc.
and various organizations.

Ms. Carnahan has served on the Board of Directors of Desktop since March
1991. Ms. Carnahan has been a general partner of William Blair Venture
Partners III, a venture capital firm, since 1988. Prior to 1988, Ms. Carnahan
was Vice President of Marketing and Planning at SPSS, Inc., an applications
software company.

Mr. Cowan has served on the Board of Directors of Desktop since May 1993.
Since December 1996, Mr. Cowan has been Chairman and Chief Executive Officer
of LioNBRIDGE Technologies, an international software services company. From
1991 to 1996, Mr. Cowan was an executive vice president of R.R. Donnelley &
Sons Company, a supplier of commercial print and print-related services.
During 1995 and 1996, Mr. Cowan was also the Chief Executive Officer of Stream
International, Inc., a software services company. Mr. Cowan also serves as a
director of Interleaf, Inc.

Executive officers of Desktop are elected by the Board of Directors on an
annual basis and serve until their successors have been duly elected and
qualified. There is no family relationship between any director or executive
officer of Desktop.

COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS

COMPENSATION OF DIRECTORS

On January 23, 1996, the Compensation Committee of the Desktop Board
approved the Director Compensation Plan. Under the Director Compensation Plan,
each Desktop non-employee director receives both an annual retainer of $5,000
and a fee of $1,000 for each Board meeting physically attended. A "non-
employee director," for purposes of the Director Compensation Plan, is a
director who is not an employee of Desktop and not an officer, director,
general partner or employee of a securities firm, venture capital firm or
other institution or corporation which, together with its affiliates, holds
more than 5% of the issued and outstanding Desktop Common Stock. Directors who
are employees, or who are affiliated with a person who holds more than 5% of
the Desktop Common Stock, receive no remuneration under the Director
Compensation Plan, for serving as members of the Desktop Board or as members
of Committees of the Desktop Board. Under the Director Compensation Plan, non-
employee directors are also reimbursed for their reasonable out-of-pocket
travel expenses associated with their attendance at Board meetings. During the
fiscal year ended December 31, 1996, Messrs. Cass and Cowan and Ms. Rokoff
earned $7,000, $8,000, and $3,500, respectively, under the Director
Compensation Plan.

In addition, in order to provide an incentive to non-employee directors,
options are granted to non-employee directors pursuant to the Desktop 1995
Non-Employee Director Stock Option Plan, as amended (the "Director Plan").
Under the Director Plan, each non-employee director, including non-employee
directors who are affiliated with a person who holds more than 5% of the
Common Stock, receives, on the date such person is first elected to the Board,
an option to purchase 20,000 shares (the "Initial Option") of Desktop Common
Stock,

88
<PAGE>

vesting over four years. Subsequent to the grant of the Initial Option, each
non-employee director who has attended at least 75% of the board meetings
during the previous fiscal year will receive an option to purchase 2,500
shares of Desktop Common Stock per year, vesting on the first anniversary of
the date of such grant. All options granted under the Director Plan will have
an exercise price equal to the fair market value of the Desktop Common Stock
on the date of grant. Each option granted under the Director Plan will expire
ten years from the date of grant.

During the fiscal year ended December 31, 1996, Messrs. Cass and Cowan and
Ms. Carnahan each received options to purchase 2,500 shares at an exercise
price of $34.00 per share pursuant to the Director Plan. In addition, Ms.
Rokoff received an option to purchase 20,000 shares at an exercise price of
$26.25 per share as an Initial Option.

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid to or earned by
Desktop's Chief Executive Officer and Desktop's four other most highly
compensated officers whose salary plus bonus exceeded $100,000 ("Named
Executive Officers") during the last fiscal year for services rendered to
Desktop during the fiscal years ended December 31, 1994, 1995 and 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
SECURITIES ALL
UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) OPTIONS (#) COMPENSATION(2)
- --------------------------- ---- ---------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
Donald L. McLagan ...... 1996 $135,300 $16,500 -- $ 760
Chairman, President,
Chief Executive 1995 124,150 -- -- 739
Officer and Director 1994 115,500 -- -- 289
Edward R. Siegfried .... 1996 135,300 16,500 35,000 760
Vice President--Finance
and Operations, 1995 125,150 -- -- 739
Chief Financial 1994 115,500 -- -- 289
Officer, Treasurer and
Assistant Secretary
Clifford M. Pollan ..... 1996 135,300 40,511 35,000 760
Vice President--Sales
and Marketing 1995 124,150 23,661(3) -- 739
1994 115,500 45,157 289
Daniel F.X. O'Reilly ... 1996 135,300 16,500 35,000 1,624
Vice President and
Chief Technology Offi-
cer 1995 124,150 -- -- 1,490
1994 115,500 -- -- 289
</TABLE>
- --------
(1) Includes bonuses earned with respect to services rendered in the fiscal
year indicated, whether or not such bonus was actually paid during such
fiscal year.
(2) Represents matching contributions made by Desktop to the Named Executive
Officer under Desktop's 401(k) plan.
(3) Amount disclosed is $4,843 lower than the amount disclosed in Desktop's
1996 Proxy Statement for fiscal 1995. The difference is due to an
adjustment from an estimate to an actual payout.

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<PAGE>

The following table provides certain information concerning grants of option
to purchase Desktop's Common Stock made during the year ended December 31,
1996 to each of the Named Executive Officers. No stock appreciation rights
("SARS") were granted during the fiscal year ended December 31, 1996.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE GRANT DATE
GRANTED EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME (#)(1) FISCAL YEAR ($/SHARE) DATE (1)($)
- ---- ---------- ------------ --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Donald L. McLagan....... -- -- -- -- --
Edward R. Siegfried..... 35,000 6.10% $24.00 1/23/06 $455,999
Clifford M. Pollan...... 35,000 6.10% $24.00 1/23/06 $455,999
Daniel F. X. O'Reilly... 35,000 6.10% $24.00 1/23/06 $455,999
</TABLE>
- --------
(1) In accordance with Securities and Exchange Commission rules, the Black-
Scholes option repricing model was chosen to estimate the grant date
present value of the options set forth in this table. Desktop's use of
this model should not be construed as an endorsement of its accuracy at
valuing options. All stock option valuation models, including the Black
Scholes model, require a prediction about the future movement of the stock
price. The following assumption was made for the purposes of the grant
date present value: an option term of 3-6 years, volatility at 63% and an
interest rate at 5.34%. The real value of the options in this table
depends upon the actual performance of Desktop Common Stock during the
applicable period.

OPTION EXERCISES AND HOLDINGS

The following table sets forth, for each of the officers named in the
Summary Compensation Table, certain information concerning stock options
exercised during fiscal 1996, and the number of shares subject to both
exercisable and unexercisable stock options as of December 31, 1996. Also
reported are values for "in-the-money" options that represent the positive
spread between the respective exercise prices of outstanding stock options and
the fair market value of Desktop's Common Stock as of December 31, 1996.

AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
YEAR-END (#) FISCAL YEAR END ($)
------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. McLagan....... -- -- -- -- -- --
Edward R. Siegfried..... -- -- -- 35,000 -- --
Clifford M. Pollan...... -- -- -- 35,000 -- --
Daniel F. X. O'Reilly... -- -- -- 35,000 -- --
</TABLE>

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<PAGE>

INDIVIDUAL

INDIVIDUAL BUSINESS

The following description contains forward-looking statements which involve
risks and uncertainties. Individual's actual results may differ significantly
from the results discussed in the forward-looking statements. Factors that
might cause such differences include, but are not limited to, those discussed
in "Risk Factors."

Individual develops and markets a suite of customized news and information
services that provide knowledge workers with daily personalized current
awareness reports, while offering information providers and advertisers new
ways to reach targeted audiences. Utilizing its knowledge processing systems,
editorial knowledge bases, and an exclusive license to Cornell University's
SMART technology, and proprietary extensions of that technology developed by
Individual, Individual's intelligent software agents search each day through
approximately 10,000 to 20,000 stories drawn from approximately 600 broad
(e.g., Reuters) and specialized (e.g., PC Week) information sources, and
prepare for each user a highly relevant daily news briefing with full-text
retrieval options. Individual delivers its information services to
approximately 700,000 users across a range of delivery platforms, including
facsimile, electronic mail, groupware, intranets, and the Internet. In June
1997, the Company acquired ClariNet Communications Corp. in a merger accounted
for as a pooling of interests. ClariNet is the publisher of ClariNews, a
business news service provided to over 1.5 million Internet subscribers and
sold primarily to Internet service providers ("ISP's"), corporations, and
universities.

INDIVIDUAL'S MARKET

Individual's principal focus is the expanding market for business news and
the corporate knowledge worker, whose effectiveness often depends on the
ability to keep current with and make sense of large volumes of random
information in a short period of time. In recent years, the proliferation of
personal computers, desktop publishing software, and LANs has resulted in the
rapid growth of sources of news and other information distributed
electronically. As a result, electronically available information accounts for
a significant and growing share of the total information market. Methods of
accessing information have also evolved dramatically over the past decade, as
technological advances have created a flexible and far-reaching set of
delivery platforms, such as facsimile transmission, electronic mail,
groupware, and online technologies. More recently, the increasing popularity
of the Internet and the Web has introduced a structural change in the way
information is produced, distributed, and consumed, dramatically lowering the
cost of publishing information and significantly increasing its reach. Web
servers have also been implemented on corporate intranets which disseminate
internal information throughout an organization. By facilitating the
publishing and consumption of information, the Internet and intranets are
dramatically increasing the amount of information, both relevant and
irrelevant, readily available to corporate knowledge workers.

Three recent trends are further accelerating the significance of current
awareness information services to corporate knowledge workers: consolidation
of buying influence in corporations, universal connectivity, and coalescence
around Internet standards. Only recently, departments and other smaller
corporate units were buying information in isolated pockets within the
corporation. Now, more companies are creating comprehensive knowledge
management strategies and consolidating their buying in one place--often at an
executive-level position such as "Chief Knowledge Officer." Such concentration
makes it more efficient to sell to an entire company, rather than having to
approach and educate multiple isolated buyers. A second major trend is the
movement towards universal desktop connectivity. Knowledge workers across
corporations and industries are being hooked up to the Internet, corporate
intranets, e-mail systems, and large-scale groupware systems like Lotus Notes
in greater numbers than ever. Finally, the proliferation of Internet standards
increases the number of corporate desktops with HTML browsers (the standard
for Internet distribution).

Traditional methods of maintaining current awareness are proving
increasingly inadequate in light of the dynamic changes affecting information
technologies and the corporation. Subscribing to and reviewing a full set of
potentially relevant information sources, such as newspapers and trade
publications, may provide

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comprehensive coverage, but is no longer practical from both a cost and time
perspective. Proprietary online electronic databases, such as Dialog, Dow
Jones News Retrieval, Lexis/Nexis, and Reuters, contain extensive information,
but generally require specialized search languages to query the database.
Although direct access to the Internet or consumer online services offer
inexpensive access to information, they generally do not employ sophisticated
filtering systems, sources may be limited and lack depth, and few
professionals have the inclination or time to maintain current awareness by
exploring the myriad of available sites each day in order to locate relevant
news and information.

The rapid growth of information sources and delivery platforms also creates
both challenges and opportunities for information providers and advertisers.
New electronic information delivery platforms offer information providers the
potential to establish additional distribution channels to reach a broader
audience, thereby realizing incremental revenues without incurring significant
additional costs. Moreover, the emergence of highly customized news sources
also provides advertisers with a means of cost-effectively reaching a micro-
targeted audience. In addition, the deployment of online technologies provides
advertisers with the ability to establish interactive relationships with
potential customers.

INDIVIDUAL'S SERVICES

The Individual solution offers a suite of customized information services
that provide knowledge workers with relevant current awareness reports while
offering information providers and advertisers new ways to reach targeted
audiences. Individual's intelligent software agents filter information from
approximately 600 sources, prepare a customized report of highly-relevant
information, and proactively deliver a user's personal report by 8:00 a.m.
Eastern Time each business day. These reports are delivered via platforms
convenient to the user, including facsimile, electronic mail, groupware,
intranets, and the Internet.

Individual's extensive suite of services and distribution strategy is
tailored to address the news and information needs of multiple market segments
ranging from individuals to enterprises. Individual's principal services
include First!, Hoover, NewsPage Corporate Licensing, and NewsPage for
Workgroups, targeted to corporate workgroups and enterprises, and a series of
single-user services, including NewsPage, a Web-based news site that offers
information and targeted advertising to knowledge workers with Internet access
and HeadsUp, targeted for the individual business executive or knowledge
worker. In June 1997, Individual acquired ClariNet Communications Corp., the
publisher of ClariNews, a Web-based electronic newspaper for individual and
enterprise customers. In June 1997, Individual also acquired CompanyLink, a
Web-based company briefing and market intelligence service. Individual
believes that these services offer prospective customers a range of
information solutions according to their desired breadth and depth of content,
delivery platform, and level of customization.

Individual's marketing strategy is to address the multiple market segments
of knowledge workers through a three-tiered sales and distribution strategy
designed to cultivate users from the enterprise level down to the single
knowledge worker. Individual creates broad user acceptance by selling to the
single knowledge worker and cultivating that user as the source for a
workgroup and eventually an enterprise sale. NewsPage is targeted to the
single knowledge worker inside corporations and is designed to establish brand
recognition and daily user acceptance. NewsPage, as a Web-based service gains
readership through traditional Web banner advertising and marketing
relationships with a number of high traffic Web sites, including a recently
announced relationship with Netscape, whereby Individual was named the
exclusive provider of business information to Netscape's Netcenter on-line
business service. Users of NewsPage and HeadsUp become sources of leads for
Individual's telesales group to promote a workgroup subscription solution
called NewsPage for Workgroups with expanded sources and full access to
Individual's company resource service, CompanyLink. The telesales organization
targets small companies and workgroups within larger corporations, with a
target user group of 10 to under 200 and annual subscriptions of $1,000 to
$20,000. The NewsPage service includes advertising which provides an
additional source of revenue and subsidizes the subscription cost per user vs.
the higher premium enterprise products of First! and Hoover. At the enterprise
level, Individual uses a direct sales force in the United States and Japan and
independent sales agents in Europe, selling First!, Hoover and NewsPage
Corporate Licensing. By providing a suite of services at different price
points, Individual can allow the customer to disseminate the service to a
larger user population by determining the level of service required for each
user and tailoring a service offering to match the budget and information
needs of each user, ranging from a free, advertising-supported service, to a
premium subscription service with extensive access to content.

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PRODUCTS AND SERVICES

Individual offers a suite of customized information services targeted to
distinct market segments. Individual's enterprise services include ClariNews,
First!, Hoover and NewsPage Corporate Licensing, and its single-user services
include ClariNews, CompanyLink, HeadsUp and NewsPage. To deliver these
services, Individual utilizes the proprietary SMART text retrieval and
filtering technology, scaleable internal processing systems, editorial
knowledge bases and specialists, and quality assurance tools and analysts.

<TABLE>
<CAPTION>
DELIVERY PLATFORMS
SERVICES DESCRIPTION TARGET USERS (INTRODUCTION DATE) PRICING
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ENTERPRISE
ClariNews Daily business news Enterprise-wide Intranet news $1-$12 per user per year
service with intraday distribution for large
updates corporations
First! Daily, comprehensive Management teams, Fax (Q1 1990) Subscription-based
full-text news service corporate workgroups, E-mail (Q1 1990) pricing ranging from
sales teams, and/or Lotus Notes (Q3 1992) $5,000 to more than
enterprise-wide SGML/HTML (Q4 1994) $200,000 annually,
distribution within large Intranet(Q3 1995) depending on customer
organizations requirements
Hoover Real-time and archival Management teams, Lotus Notes (Q3 1991) Software license fees plus
news service corporate workgroups, subscriptions to content.
sales teams, and/or Total fees vary depending
enterprise-wide on customer requirements
distribution within large and information sources
organizations
NewsPage Internet news site Enterprise-wide Internet and License pricing of
Corporate updated daily, including distribution to E-mail delivery $1,000-$50,000 depending
Licensing story briefs, full-text Corporate Knowledge (Q2 1997) on the number of users
and fulfillment, and targeted workers
NewsPage advertising with links to
for advertisers' Web sites
Workgroups
- --------------------------------------------------------------------------------------------------------------------
SINGLE-USER
ClariNews Daily business news Internet subscribers of LAN access to $.25 to $1 per ISP and
service ISP's and universities News Servers university user per year
and internet access
CompanyLink Company resource, Knowledge workers Internet (Q2 1997) Advertising supported
information and news with access to the with variable
service Internet subscription
fees and fulfillment costs
HeadsUp Daily news reports Individual executives Fax (Q2 1993) Subscription-based
including story briefs and managers within E-mail (Q4 1993) pricing of $360 and up
and full-text large and small annually, based upon
fulfillment options organizations fulfillment options*
NewsPage Internet news site Knowledge workers Internet (Q2 1995) Advertiser supported
updated daily, including with access to the E-mail (Q1 1996) with variable
story briefs, Internet subscription fees and
full-text fulfillment, fulfillment costs*
and targeted advertising
with links to advertisers'
Web sites
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* These services provide headlines and abstracts of news items; depending
on subscription plan, user requests for the full text of an article may
be subject to additional fulfillment charges.

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Enterprise Services

First! provides comprehensive, full-text news and information delivered each
day to enterprises and workgroups that seek daily business intelligence
regarding their industry environment for use in areas such as sales,
marketing, product management, finance, purchasing, advertising, public
relations, and competitive analysis. First! offers customization at the
enterprise, workgroup, and single-user levels. The service is generally
delivered to enterprises through a two-tiered filtering process, with a
broader set of stories relevant to the enterprise delivered to a shared
groupware platform. Personalized profiles can then be defined to select the
subset of stories of highest relevance to each individual user.

First! articles are delivered each business day in full-text via facsimile,
electronic mail, or as an enterprise-wide feed to groupware platforms such as
Lotus Notes or to internal intranet servers. To encourage readership and
knowledge-sharing across the workgroup, First! is structured to facilitate
workgroup-wide redistribution and integration with comments from users. These
features enable First! to serve as a backbone for organization-wide knowledge
development.

Individual has also recently introduced First! Alert, an intra-day news
service which draws stories from major newswires, matches them to client
profiles and delivers them by e-mail to First! Alert customers as news becomes
available throughout the business day.

First! is generally sold to large enterprises on an annual subscription
basis. New enterprise customers typically make full subscription commitments
after a several-month paid service trial and one or more visits from
Individual's direct sales force.

Hoover is an intelligent software agent for organizations which integrates
and organizes news and information from internal and external news and
information sources. The Hoover agent provides a consolidated briefing report
that is organized based on a specified "context," such as a company or
industry. Reports are presented in Lotus Notes database format, and include
real-time intra-day alerting from newswire feeds, as well as extensive access
to archival databases. Hoover's comprehensive information relationships
include archival access for year-to-date information plus a two-year backfile.

NewsPage Corporate Licensing ("NPCL") and NewsPage for Workgroups are built
on Individual's single-user service NewsPage. NPCL and NewsPage for Workgroups
provide a subscription service to small companies, workgroups and enterprises.
NewsPage for Workgroups is sold via telesales and NPCL is sold through
Individual's direct sales force. Subscribers to both NPCL and NewsPage for
Workgroups have access to a broader set of content than the NewsPage service,
as well as daily e-mail delivery of the user's personalized electronic news
briefing. Both services are designed for wider dissemination within companies
at a lower subscription price than Individual's other enterprise offerings,
and are partially subsidized by advertising revenue.

Single-User Services

NewsPage is Individual's interactive news and information site on the Web
that provides timely and relevant information, updated each business day and
organized in a topic-based menu system. Users can navigate through menus,
explore news relating to more than 25 industry areas, and link directly to
pre-specified topics of interest. NewsPage leverages the Web's document-
linking structure by allowing users to view articles in brief or full-text
format and to connect directly to the Web sites of advertisers to obtain
additional product information or potentially to complete transactions online.
NewsPage was selected by Internet World as the "Best Online News Service" for
1995 and by PC Magazine as one of the "Top 100 Web Sites" in 1997. NewsPage
currently has over 600,000 registered users.

NewsPage includes advertising from leading companies seeking to participate
in "relevance-based advertising," Individual's model for linking sponsors to
micro-targeted readers. In contrast to traditional advertising, which is
challenged to attract the attention of appropriate readers in a mass-media
environment, the

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relevance-based model ensures a qualified audience through reader-driven
content selection. Users, while reading a news item on a subject of interest
to them, are presented with an advertising banner from a related sponsoring
company. The user can then immediately link to the Web site of the advertiser
to get detailed product information or potentially to conduct business
transactions directly over the Internet. Current and recent advertisers from a
range of industries include Microsoft, Bay Networks, International Business
Machines, American Telephone & Telegraph, The Wall Street Journal and Digital
Equipment Corporation.

NewsPage is primarily advertising supported, offering a basic level of
service to users at no charge, and a higher level of service, including full
text of stories from a broader set of sources, to users paying a
monthly subscription fee and fulfillment fees to view full-text articles from
certain sources. Advertising revenue is recognized ratably over the
advertisement period. NewsPage can be found on the Web at
"http://www.newspage.com".

HeadsUp is a personalized, interactive daily business intelligence report
designed to meet the information needs of individual business professionals,
such as executives in small businesses, mobile business professionals, or
individual knowledge workers within larger organizations. HeadsUp is delivered
each business day by facsimile or electronic mail. News items are presented as
briefs, with full text available through Individual's interactive system
either by electronic mail or through Individual's telephone interactive voice
response system. Subscribers create their profiles by selecting topics from
Individual's Topic Selector, a library of more than 2,400 topic categories and
company names. Subscribers specify their targeted mix of topics and prioritize
their choices, and can update this profile over time to better meet their
changing information requirements. Individual has recently introduced HeadsUp
Alert, an intra-day financial news service which draws stories from major
newswires, matches them to client profiles and delivers them by e-mail to
HeadsUp Alert customers as news becomes available throughout the business day.
HeadsUp is offered through both monthly and annual subscriptions.

Recent Acquisitions

In June 1997, Individual acquired ClariNet Communications Corp., the
publisher of ClariNews, a leading Web-based electronic newspaper, which is
distributed through Internet Service Providers and to corporations,
educational institutions and individual subscribers. ClariNews provides
breaking news (including photos) updated throughout the day by business topic,
from major news wire services such as UPI, ESPN's Sportsticker, Business Wire
and Newsbytes, as well as premiere information sources including Christian
Science Monitor, Agence France-Presse, Bay City News, Entertainment News
Services, United Media, and Universal Press Syndicate. The breaking-
news/intra-day alert capabilities of ClariNews have been incorporated into
NewsPage. ClariNews is located on the Web at "http://www.clarinet.com".

Also in June 1997, Individual acquired CompanyLink, a comprehensive, Web-
based company briefing and market intelligence service. CompanyLink's advanced
technology detects corporate-specific references and detailed market
statistics on more than 65,000 companies and dynamically links those
references to related news and information on the Web. The service also
features a personalized news product that enables automatic access to updated
information for competitive research, industry reports, potential
business/customer investigation, and more. CompanyLink databases are organized
by company profile, corporate contacts, stock symbols, SEC filings, public and
private competitors, news and press releases, and local weather and mapping
information. Features of the CompanyLink service have been integrated into
NewsPage to provide company and industry research capabilities. CompanyLink is
located on the Web at "http://www.companylink.com".

Knowledge Processing Architecture

Each of Individual's daily news and information services utilizes
proprietary technology and production systems which have been designed and
enhanced to enable the automated retrieval, compiling and distribution of news
items most relevant to each user. Individual continuously receives news and
information from its information providers via electronic news feeds.
Individual maintains a database of profiles characterizing the

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interests of each of its customers. Individual's filtering and editorial
systems match each customer's profile with the most relevant set of incoming
stories. Individual's internal systems are designed to deliver its services by
8:00 a.m. Eastern Time each business day to each of its customers over a
conveniently accessible delivery platform.

Individual initially focused on information providers in the high technology
sector and has subsequently added information sources in several other
vertical markets, including telecommunications, healthcare, finance, energy,
and defense. More recently, Individual has created an extensive set of more
than 20,000 company profiles, allowing news relating to a specific company to
be filtered and delivered to users.

Individual's agreements with its information providers generally grant
Individual the non-exclusive worldwide right to distribute through
Individual's services the content published by the information provider. These
agreements typically have an initial term of either two or three years, are
automatically renewable unless terminated by one of the parties upon prior
notice, and provide for termination upon a breach by a party which is not
remedied within the applicable cure period after notice from the other party.
Each information provider represents, among other things, that it has
ownership of, or other sufficient rights in, the content licensed to
Individual but disclaims responsibility for any errors in that content.
Individual typically pays its information providers a fee which is either
based upon Individual's revenue attributable to the licensed content or a
fixed monthly amount or both.

MARKETS AND CUSTOMERS

At September 30, 1997, Individual had approximately 700,000 users of its
enterprise and single-user services, plus approximately 1.5 million
subscribers to ClariNews. At that date, Individual also had approximately 700
enterprise customers deploying the First! and Hoover services to users within
their organizations.

SALES AND MARKETING

Individual targets its sales and marketing programs to reach knowledge
workers within large enterprises, within small organizations, or who work
independently, and organizes these efforts into the Enterprise and Single User
Markets. In the Enterprise markets Individual markets and sells its services
in the United States and internationally through multiple sales channels,
including Individual's direct sales force and telesales. Sales and marketing
programs in the single user markets consist of a direct sales force for the
sale of advertising on ClariNews, CompanyLink and NewsPage, and development of
users on ClariNews, CompanyLink and NewsPage through Web advertising and
promotion, direct mail, strategic relationships with leading Web sites, and,
in the case of NewsPage, marketing relationships with other Web sites through
the NewsPage Network. In September 1997, Netscape named Individual as the
exclusive provider of business information to the Netscape Netcenter on-line
business service. The service, named "Netscape's Business First by
Individual," began service in the fourth quarter of 1997. Individual's sales
and marketing staff consisted of 71 full-time employees at September 30, 1997,
located in Individual's headquarters in Burlington, Massachusetts, in San
Francisco and San Jose, California, New York City, and Tokyo.

To date, Individual has utilized its direct sales force primarily to pursue
sales of its enterprise services, First! and Hoover, in the United States.
Individual generally targets its direct sales efforts to large enterprises
with potential readers in excess of 200. For enterprises with less than 200
users Individual generally uses telesales. Individual also has a separate
direct sales force to sell advertising for ClariNet, CompanyLink and NewsPage.

Individual's telesales force focuses principally on sales of NewsPage
Corporate Licensing, HeadsUp and First! for smaller businesses. Individual's
telesales efforts are complemented by a direct mail program designed to
generate prospects. The telesales force is also trained to recognize
enterprise prospects where Individual's First! for Notes and Intranet service
would be an appropriate solution and to forward these leads to Individual's
direct sales force.

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Strategic Relationships. Individual has established strategic alliances with
leading firms to promote and sell its NewsPage service. Individual has
relationships with companies including NETCOM, Netscape, Microsoft, MSNBC,
Yahoo!, Intuit and others involving cooperative marketing and distribution of
Individual's services. These arrangements vary with each partner and generally
are intended to bring users to the NewsPage site or to provide some level of
direct NewsPage service to the partner's customer. Depending on the agreement
and the level of service Individual will pay the partner or share in the
advertising revenue derived from that user. Individual has also entered into a
distribution partnership with Digital Equipment Corporation for the delivery
of NewsPage as a feature of its client support services product. Individual
believes that this may serve as a model for future relationships in which
Individual's targeted, topical news products can be an important building
block for broader services offered by its partners. In September 1997,
Netscape named Individual as the exclusive provider of business information to
the Netscape Netcenter on-line business service. The service, named
"Netscape's Business First by Individual," began service in the fourth quarter
of 1997.

International Sales. Individual has begun to establish the direct and
indirect channels and the strategic relationships which it believes are
required to expand its international business. Individual has established a
dedicated exclusive agency relationship with a reseller in the United Kingdom.
In the fourth quarter of 1995, Individual incorporated a wholly-owned
subsidiary in Japan in order to expand its international business in the Far
East. In April 1996, Individual entered into a joint venture with Toshiba
Corporation and Mitsui Corporation to provide customized news and information
from Japanese language sources to corporate managers and executives across a
variety of industries in Japan. Individual also utilizes sales agents in
several other countries. In the nine months ended September 30, 1997 and in
each of the three years ended December 31, 1996, 1995 and 1994, less than 10%
of Individual's sales revenue was generated from international customers.

CUSTOMER SERVICE AND SUPPORT

Individual believes that customer service and support are critical to the
value of its services and in retaining and expanding its customer base.
Individual's customer support staff, which consisted of 22 people at
September 30, 1997, provides on-site support, if required, toll free telephone
support, response to customer requests to modify or update their profiles,
pro-active calls to customer accounts as appropriate, and support for
questions with respect to billing charges for a given period. The customer
service and support organization also provides feedback to other functions of
Individual regarding customer requirements and priorities for new features or
new information sources. Individual's editorial specialists also contribute to
Individual's customer support capability by assisting customers in the
definition and modification of their profiles. Individual does not charge its
customers for service and support, except it may charge for on-site support,
which is generally billed on a time and materials basis.

EDITORIAL, OPERATIONS, AND PRODUCT DEVELOPMENT

Individual's knowledge processing systems have been designed and enhanced to
enable the automated retrieval of the news items most relevant to each user's
personal interest profile, while eliminating duplicative and irrelevant items.
Individual's proprietary systems and technology are built around the SMART
(System for Manipulation and Retrieval of Text) filtering technology.
Individual, since its inception, has directed substantial resources to
developing and enhancing its internal production systems, editorial
capabilities, quality assurance function, and product development expertise.
Individual believes that these integrated capabilities allow it to deliver
highly relevant, concise news reports to its users.

The SMART technology is an information filtering system developed through 20
years of research at Cornell University, for which Individual has an exclusive
license. See "Business--Licenses and Intellectual Property." The SMART
software analyzes incoming electronic information sources to identify items
matching each subscriber's customized profile, and delivers a news report to
the user each business day. In contrast to earlier-generation keyword search
algorithms, the SMART software relies on a complex, multi-dimensional
representation of each user's profile and employs advanced techniques to
retrieve items with the highest degree of relevance. Since a major news item
might be carried by a number of sources, Individual's filtering engine

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eliminates redundant stories and identifies the particular article that best
covers the topic. Individual believes that its SMART technology enables it to
deliver services to its users with significantly higher relevance than those
generated by alternative approaches.

Individual's internal systems are deployed across a client-server network of
PCs and Unix and NT workstations which can be expanded to meet increases in
production requirements. Individual believes that the components of its
production systems can be purchased from external vendors with minimal lead
times.

To support its production systems and to enhance the performance of the
SMART filtering engine, Individual employs a staff of editorial specialists
and domain experts. The role of these specialists is to refine, on an ongoing
basis, the knowledge base that defines the topics and filtering parameters in
each information domain. Through their in-depth vertical industry knowledge
and experience with the SMART codification techniques, the editorial
specialists build and refine a set of domain knowledge bases and thesauri of
industry terminology that enable SMART to identify the relevant news stories
for individual profiles and industry topics. Individual has also developed a
set of software tools that facilitate the creation and maintenance of these
domain knowledge bases. Individual believes that this editorial function is a
critical component of its ability to provide its users with extensive, yet
highly targeted, coverage of news items of interest. As of September 30, 1997,
Individual employed 40 full-time people in its editorial department.

Individual's quality assurance function monitors the quality and consistency
of its delivered services every day. The quality assurance function also
investigates transmission problems, which can occur as a result of internal
system difficulties or problems on the receiving end. To provide its large
enterprise customers with a high level of customer service, Individual has
developed internal systems and procedures to identify potential delivery
problems as early as possible in the overall daily production cycle.
Individual has also developed a set of automated tools used by Individual in
its internal production process, which operate together with the SMART
filtering systems to improve the efficiency and effectiveness of Individual
quality assurance function.

Individual product development efforts are focused on expanding and
enhancing Individual's suite of services, further developing Individual's core
retrieval and filtering technology, further developing Individual's knowledge
processing and delivery systems, and developing service capabilities that
leverage the interactive capabilities of the Internet. Individual's product
development efforts to expand and enhance the delivery of its services include
efforts to enhance the interactive capabilities of Individual's Internet and
intranet-based services, enhancing First! for Notes, and general ongoing
enhancements to its delivery capabilities. For the nine months ended September
30, 1997 and the years ended December 31, 1996, 1995, and 1994, Individual had
$5.4 million, $5.0 million, $2.7 million, and $1.3 million of product
development expenses, constituting 21%, 18%, 14%, and 13% of revenue,
respectively. Individual expects that it will continue to commit substantial
resources to research and development for the foreseeable future.

COMPETITION

The market for information services is intensely competitive and rapidly
changing. Individual competes, or may in the future compete, directly or
indirectly for users, information providers and/or advertisers with the
following categories of companies: (i) large, well-established news and
information providers such as The Dialog Corporation, Dow Jones, Knight-
Ridder, Lexis/Nexis, Pearson, Reuters and Thomson; (ii) traditional print
media companies that are increasingly searching for opportunities for online
provision of news, including through the establishment of Web sites on the
Internet; (iii) providers of network-based software systems such as Lotus and
Microsoft, which could, in the future, ally with competing news and
information providers; (iv) third party providers of software that allows
customers to aggregate and filter a variety of news feeds, (v) consumer online
services such as CompuServe, America Online and The Microsoft Network; (vi)
Internet-based news distributors and search engine providers such as Digital
Equipment, Infoseek, Lycos, Verity, and Yahoo!; and (vii) companies that offer
space for advertising on the Web, including content sites such as c|net,
ESPNet, GNN,

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HotWired, Pathfinder, and USA Today. Individual presently has strategic
relationships with certain of its competitors or potential competitors
(including Knight-Ridder, Microsoft and Netscape) and licenses content from
others.

Individual believes that the principal competitive factors in selling its
products and services to knowledge workers include information relevance,
depth and breadth of information sources, ease of use, timeliness, delivery
platform capabilities, service quality, and cost. Individual believes that the
principal competitive factors in attracting information providers include the
ability to generate incremental fees, the ability to promote brand name
recognition, the potential to acquire new subscribers, and the degree of
delivery differentiation. Individual believes that the principal competitive
factors in attracting advertisers include the number of users or audience
size, demographics of user base or audience, the ability to micro-target
advertising, the capability to interact with customers, and overall cost-
effectiveness of advertising. Individual believes that it competes favorably
with respect to these factors, but there can be no assurance that it will
continue to do so.

Many of Individual's current and potential competitors have longer operating
histories, significantly greater financial, technical and marketing resources,
greater name recognition, and a larger installed customer base than
Individual. In addition, any of these competitors may be able to respond more
quickly to new or emerging technologies and changes in customer requirements,
and to devote greater resources to the development, promotion and sale of
their services than Individual. There can be no assurance that Individual's
current or potential competitors will not develop products and services
comparable or superior to those developed by Individual or adapt more quickly
than Individual to new technologies, evolving industry trends or changing
customer requirements. Increased competition could result in price reductions,
reduced margins, or loss of market share, any of which would materially and
adversely affect Individual's business, results of operations, or financial
condition. There can be no assurance that Individual will be able to compete
successfully against current and future competitors, or that competitive
pressures faced by Individual will not have a material adverse effect on its
business, results of operations, and financial condition. If Individual is
unable to compete successfully against current and future competitors,
Individual's business, results of operations, and financial condition will be
materially adversely affected. See "Risk Factors."

LICENSES AND INTELLECTUAL PROPERTY

Individual's success is dependent to a significant degree on its proprietary
technology. Individual relies on a combination of trade secret, copyright, and
trademark laws and on non-disclosure agreements and contractual provisions to
establish and protect its proprietary rights. Individual has received two
patents and has not to date registered any of its copyrights or trademarks.
Despite Individual's efforts to protect its proprietary rights, unauthorized
parties may attempt to copy aspects of Individual's services or to obtain and
use information that Individual regards as proprietary. There can be no
assurance that the steps taken by Individual to protect its proprietary rights
will be adequate or that Individual's competitors will not independently
develop technologies that are substantially equivalent or superior to
Individual's technologies or services.

Individual has licensed the proprietary SMART filtering software, which is
used as the filtering engine for all of its products and services, from
Cornell University. Under the terms of the license agreement with Cornell
University, Individual has exclusive worldwide rights until February 1999 to
design, develop, market, and sell systems and services based on the SMART
software for the retrieval and dissemination of data from recent and
continually changing data sources. Provided that Individual is not then in
default of the license agreement, at the end of the initial term of the
agreement Individual will retain a continuing worldwide, non-exclusive,
perpetual royalty-free right to use the SMART software, as well as the
exclusive rights to all enhancements it has made to the software. There can be
no assurance, however, that Cornell University will not license the SMART
software to a third party, including a competitor of Individual, once
Individual's exclusive rights have lapsed. In addition, Cornell University may
terminate the license agreement if Individual has materially breached the
agreement and such breach remains uncured 60 days after written notice of such
breach has been given. If the license agreement were to terminate, Individual
would be required to develop or acquire a replacement filtering technology,
and there can be no assurance that such technology could be developed or
acquired, on a timely basis or at all, and

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on favorable terms to Individual. Consequently, any termination of
Individual's license agreement with Cornell University would have a material
adverse effect on Individual's business, results of operations, and financial
condition.

There has been substantial litigation in the information services industry
involving intellectual property rights. Although Individual does not believe
that it is infringing the intellectual property rights of others, there can be
no assurance that such claims, if asserted, would not have a material adverse
effect on Individual's business, results of operations, and financial
condition. In addition, inasmuch as Individual licenses the informational
content that is included in its services from third parties, its exposure to
copyright infringement actions may increase because Individual must rely upon
such third parties for information as to the origin and ownership of such or
licensed content. Although Individual obtains representations as to the
origins and ownership of such licensed informational content and obtains
indemnification to cover any breach of any such representations, there can be
no assurance that such representations will be accurate or that such
indemnification will provide adequate compensation for any breach of such
representations. In the future, litigation may be necessary to enforce and
protect trade secrets, copyrights and other intellectual property rights of
Individual. Individual may also be subject to litigation to defend against
claimed infringement of the rights of others or to determine the scope and
validity of the intellectual property rights of others. Any such litigation
would be costly and divert management's attention, either of which would have
a material adverse effect on Individual's business, results of operations, and
financial condition. Adverse determinations in such litigation could result in
the loss of Individual's proprietary rights, subject Individual to significant
liabilities, require Individual to seek licenses from third parties, and
prevent Individual from selling its services, any one of which could have a
material adverse effect on Individual's business, financial condition, and
results of operations.

EMPLOYEES

Individual had 239 full-time employees at September 30, 1997. Of the 239
total employees, 91 were in editorial and operations, 71 were in sales and
marketing, 57 were in product development, and 20 were in finance and
administration. Individual's future success depends in significant part upon
the continued service of its key technical, editorial, sales, product
development and senior management personnel and on its ability to attract and
retain highly qualified employees. There is no assurance that Individual will
continue to attract and retain high-caliber employees, as competition for such
personnel is intense. Individual's employees are not represented by any
collective bargaining organization, and Individual has never experienced a
work stoppage and considers its relations with its employees to be good.

PROPERTIES

Individual's corporate headquarters are located in Burlington,
Massachusetts. Individual leases approximately 39,245 square feet under a
lease expiring December 31, 1999, with options to expand into adjacent space
on or before the termination of the lease. The Company leases 15,257 square
feet under a lease expiring October 31, 2001 in San Francisco, California. In
addition, Individual has two leases in San Jose, California of 5,226 square
feet and 5,425 square feet, expiring on April 14, 1998 and May 31, 2000,
respectively. Individual also leases additional facilities and offices for
development, sales and support personnel in Atlanta and Tokyo. Individual
believes that its existing facilities are adequate for its current
requirements and that additional space can be obtained to meet its future
requirements. Individual owns substantially all equipment used in its
facilities.

LEGAL PROCEEDINGS

An amended consolidated securities class action complaint (In re:
Individual, Inc. Securities Litigation, Master File No. 96-12272 (D. Mass))
was filed on February 28, 1997 in the United States District Court for the
District of Massachusetts against Individual and certain of Individual's
current and former directors and officers, as well as eight of the
underwriters of Individual's initial public offering, which closed on March
20, 1996. The complaint asserts that the defendants violated securities laws
by failing to disclose at the time of the initial public offering that there
allegedly was a dispute between Joseph A. Amram, the former Chief Executive
Officer of Individual, and the Board of Directors, that ultimately led to Mr.
Amram's departure from Individual four months after the offering. The
plaintiffs seek damages, including costs and expenses, in an unspecified
amount, among other relief.

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On April 15, 1997, the defendants moved to dismiss the litigation in its
entirety on the grounds that plaintiffs fail to state any cognizable legal
claim. After reviewing defendants' arguments in support of their motion to
dismiss, plaintiffs voluntarily dropped three of the five counts of the
complaint. A hearing on defendants' motion to dismiss the remaining counts was
held before United States District Judge Woodlock of the United States
District Court for the District of Massachusetts on July 2, 1997. No decision
has been rendered in the case to date.

Individual believes that the allegations contained in the complaint are
without merit and intends to defend vigorously against all such claims.
Although Individual believes that claims payable under these actions, if any,
would not have a material effect on Individual's results of operations or
financial condition, there can be no assurance that this litigation will not
have a material adverse effect on Individual.

Individual is not currently a party to any other legal proceedings, the
adverse outcome of which, individually or in the aggregate, would have a
material adverse effect on Individual's results of operations or financial
position. From time to time, Individual may be involved in litigation relating
to claims arising out of its operations in the normal course of business.

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INDIVIDUAL MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND
RESULTS OF OPERATIONS

THE DISCUSSION IN "INDIVIDUAL MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" CONTAINS TREND ANALYSIS AND
OTHER FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF THE FACTORS
SET FORTH ELSEWHERE HEREIN, INCLUDING "RISK FACTORS."

Overview

Individual offers a suite of customized information services that provide
knowledge workers with relevant current awareness reports each day while
offering information providers and advertisers new ways to reach targeted
audiences. Individual commenced delivery of its initial service in early 1990,
and has subsequently introduced additional services targeted at multiple
market segments.

On November 3, 1997 Individual announced that it signed a definitive
agreement to merge with Desktop to form a new company, NewsEDGE Corporation.
The merger is expected to be accounted for as a pooling of interests and each
stockholder of Individual will receive one share of Desktop Common Stock for
every two shares of Individual Common Stock. The Merger is subject to
shareholder approval and is expected to be consummated in the first quarter of
1998.

Individual's revenue is derived from two classes of services: enterprise
services and single-user services. Revenue for Individual's principal
enterprise service, First! (introduced in the first quarter of 1990) consists
of subscription fees from organizations. In October 1996, Individual acquired
the Hoover business intelligence unit ("Hoover"), from the Information Access
Company ("IAC"), a unit of the Thomson Corporation. Revenue from the Hoover
service consists of both subscription fees for content, and software license
and maintenance fees. Individual's principal single-user service is the Web-
based service, NewsPage, introduced in the second quarter of 1995. NewsPage
base service is generally available for no charge to users. Revenue consists
of advertising fees from companies placing advertisements through this service
and from subscription fees for premium levels of service and fees for the
fulfillment of certain user requests for additional information. Another
single-user service of Individual is HeadsUp, which was introduced in the
second quarter of 1993. HeadsUp consists of subscription fees and fees for the
fulfillment of certain user requests for additional information. HeadsUp is a
fax and e-mail-based service and is not being promoted actively in 1997,
primarily due to Individual's belief that users are moving to Web-based
information services, such as NewsPage. Revenue from ClariNews, a news service
of ClariNet, acquired in June 1997 (described below), is included in both
enterprise services and single-user services.

On June 28, 1996, Individual acquired FreeLoader, a developer of agent-based
software for the off-line delivery of Web multi-media content. Individual
ceased operations of FreeLoader as of May 31, 1997. All costs related to the
shutdown have been included in acquisitions and other charges. In addition,
acquisitions and other changes include operating expenses of FreeLoader of
approximately $1.4 million, which are predominantly product development
expenses. The impact of this shutdown on Individual's results of operations
was not material, as the majority of the purchase price was previously
allocated to purchased incomplete technology and accordingly, was expensed at
the time of the purchase.

In June 1997, Individual acquired CompanyLink, a service of Delphi Internet
Services. CompanyLink's advanced technology detects corporate-specific
references and detailed market statistics on more than 65,000 companies and
dynamically links those references to related news and information on the Web.
The service also features a personalized news product that enables automatic
access to updated information for competitive research, industry reports,
potential business/customer investigation, and more. CompanyLink did not
materially contribute to revenues in the period from its acquisition through
September 30, 1997. The purchase price for the acquisition included $280,000
in cash, a Common Stock Purchase Warrant exercisable for the purchase of
50,000 shares of Individual Common Stock at an exercise price of $5.25 per
share and certain monthly contingent

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payments payable for a period of twelve months after the closing of the
acquisition. Individual also incurred $50,000 of legal and accounting expenses
in connection with the acquisition. The acquisition has been recorded using
the purchase method of accounting. The total purchase price of $447,000 has
been recorded as an intangible asset and is being amortized over 18 months.
This amortization expense is included in acquisitions and other charges.

In June 1997, Individual completed the acquisition of ClariNet
Communications Corp. ("ClariNet") through a subsidiary merger pursuant to
which approximately 1,475,000 shares of Individual Common Stock were issued in
exchange for all of the outstanding Common Stock of ClariNet (including
approximately 138,512 shares of Individual Common Stock reserved for issuance
upon exercise of outstanding ClariNet stock options assumed by Individual in
the merger). The transaction was accounted for as a pooling of interests and,
therefore, all prior period financial statements presented herein have been
restated as if the merger took place at the beginning of such periods.
ClariNet is the publisher of ClariNews, a premier globally branded electronic
newspaper. ClariNet revenue consists primarily of subscription fees generated
by the licensing of its content through more than 350 Internet Service
Providers ("ISP's"), corporations, and educational institutions worldwide.
Revenue from subscription fees from ISP's and educational institutions is
included in single-user revenue and revenue from subscription fees from
corporations is included in enterprise revenue. Advertising currently accounts
for less than five percent of ClariNet revenue.

Individual recognizes subscription revenue ratably over the subscription
period. Individual's subscription contracts are typically billed in advance,
and amounts attributable to services not yet delivered are recorded in
deferred revenue. Customers of Individual's services may, under certain
circumstances, terminate their subscriptions at any time and receive a credit
in the form of a cash refund for the unused portion. Historically, the level
of subscription cancellations prior to the termination of the subscription
period has not been material and has had no impact on revenue previously
recognized. Fulfillment fees are recognized as revenue at the time stories are
provided. Advertising revenue is recognized ratably over the advertisement
period.

The majority of Individual's operating expenses consists of salaries and
related costs. Individual had 239 full-time employees on September 30, 1997,
up from 214 on December 31, 1996, and up from 157 and 96 on December 31, 1995
and 1994, respectively. Individual incurs significant expenses to acquire new
customers, reported as new subscriber acquisition expenses. Individual may
also incur expenses in the process of soliciting a subscription renewal, which
are included in sales and marketing expenses. The cost of soliciting
subscription renewals is substantially less than the cost of acquiring new
subscriptions.

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RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain financial
data as a percentage of total revenue (all data has been restated to reflect
the acquisition of ClariNet, which was acquired in June 1997 and accounted for
as a pooling of interests):

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------ ------------------
1994 1995 1996 1996 1997
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenue........................ 100 % 100 % 100 % 100 % 100 %
Cost of Revenue................ 43 45 47 44 50
--- --- ---- --------- --------
Gross Margin................... 57 55 53 56 50
Operating expenses:
Sales and marketing............ 14 17 23 22 22
New subscriber acquisition..... 59 39 32 32 33
Product development............ 13 15 18 18 21
General and administrative..... 12 16 20 17 10
Mergers, acquisitions,
dispositions and related
charges....................... -- -- 141 190 19
--- --- ---- --------- --------
Total operating expense...... 98 87 234 279 105
Loss from operations........... (41) (32) (181) (223) (55)
Interest and other income
(expense), net................ (1) (1) (1) (3) 3
--- --- ---- --------- --------
Net loss....................... (42)% (33)% (182)% (226)% (52)%
=== === ==== ========= ========
</TABLE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30,
1997 AND 1996

Revenue. Revenue increased 23% from $7,221,000 for the three months ended
September 30, 1996 to $8,854,000 for the three months ended September 30,
1997. Revenue increased 34% from $19,771,000 to $26,430,000 in the nine months
ended September 30, 1996 and 1997, respectively. Additionally, the number of
registered and authorized users of Individual's information services,
including ClariNews, was increased to more than 2,170,000 at September 30,
1997, an increase of 18% over the number of users at September 30, 1996.

In the third quarter of fiscal 1997, revenue from Individual's enterprise
(First!, Hoover and ClariNews sold to corporations) products was $5,886,000,
up from $4,498,000 for the third quarter of fiscal 1996. This increase of 31%
in revenue resulted primarily from Hoover, acquired in October 1996, and new
sales of First! Intranet, which offset declining revenues from First!
distributed by fax and e-mail. For the nine months ended September 30, 1997,
enterprise revenue grew to $17,164,000, an increase of 41% over the
$12,206,000 of revenue for the same period in 1996. During the nine months
ended September 30, 1997, Individual revamped its sales approach to target
larger, strategic account relationships for First! Intranet and First! Notes.
This decision resulted in a 31% increase in the average size of a First!
account during the first nine months of 1997 to almost $25,000, as compared to
a contract base a year ago which was weighted more heavily by multiple fax and
e-mail contracts with an average contract value of $19,000. However, due to
the longer selling cycle for larger accounts, the new sales strategy has
reduced short-term enterprise revenue while creating a sales pipeline to
generate long-term growth.

In the third quarter of fiscal 1997, revenue from single-user services
(NewsPage, HeadsUp and ClariNews) grew by 9% to $2,968,000, up from $2,724,000
for the third quarter of fiscal 1996. The growth was attributable primarily to
Individual's NewsPage service on the Web. The increase in revenue from
NewsPage was partially offset by the declining revenues of the non-Web single-
user service HeadsUp, which has not been actively promoted as Individual
believes that many of these users are migrating to Web-based services,
including Individual's NewsPage service, and reduction in subscription fees
received from ISP's for ClariNews. The reduction in revenue from ClariNews is
the combination in both the number of ISP customers subscribing to the

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service and a reduction to lower premium service from certain ISP's.
Individual also expects the trend of declining revenue from HeadsUp to
continue in the future. For the nine months ended September 30, 1997, single-
user revenue grew to $9,266,000, an increase of 22% over the $7,566,000 of
revenue for the same period in 1996.

Cost of revenue. Cost of revenue was $4,266,000 for the three months ended
September 30, 1997, as compared to $3,159,000 for the same period in 1996, or
an increase of 35%. Cost of revenue was $13,099,000 for the nine months ended
September 30, 1997, as compared to $8,707,000 for the same period in 1996, or
an increase of 50%. Gross margin decreased from 56% to 52% for the three
months ended September 30, 1997, and decreased from 56% to 50% for the nine
months ended September 30, 1997. Approximately two-thirds of the decline in
gross margin is the result of higher information provider costs, including
minimum royalties paid to certain information providers and the higher royalty
percentage paid on Hoover revenue as compared to revenue from First!. The
remainder of the decline in gross margin results from additional costs
incurred in increasing the capacity for NewsPage e-mail deliveries and
supporting larger scale enterprise accounts.

Sales and marketing. Sales and marketing expenses decreased 1% to $1,601,000
for the three months ended September 30, 1997, down from $1,620,000 for the
same period of 1996. Sales and marketing expenses increased by 32% to
5,729,000 for the nine months ended September 30, 1997, up from $4,330,000 for
the same period of 1996. The nine-month increase is primarily due to
additional personnel for product management, advertising sales related to
selling advertising on NewsPage and additional sales personnel for ClariNet,
subscription and advertising royalties paid to NewsPage distribution partners,
and increased expenses related to renewing First! contracts.

New subscriber acquisition. New subscriber acquisition expenses increased
24% to $2,690,000 for the three months ended September 30, 1997, from
$2,174,000 for the same period in 1996. New subscriber acquisition expenses
increased 40% from $6,353,000 to $8,888,000 for the nine months ended
September 30, 1996 and September 30, 1997 respectively. Approximately one-
third of the increase is due to costs incurred to acquire NewsPage users,
including Website advertising, radio advertising, and direct mailings. In the
third quarter of 1997, Individual reduced its spending on this type of
advertising in favor of a large alliance-based approach that leverages
strategic distribution partners, such as the Netscape Netcenter agreement, to
grow the NewsPage subscriber base. The Netscape service commenced in the
fourth quarter of 1997 and none of the license fees paid to Netscape as part
of this agreement has been included in expenses in the three month period
ended September 30, 1997. The balance of the year-to-year increase is due
mostly to expenses related to additional direct sales personnel and sales
management, and to a lesser extent to minimum fees paid to Dow Jones related
to sales commitments for the inclusion of certain Dow Jones content, sold as
an add-on service to the First! service.

Product development. Product development expenses increased 49% to
$2,206,000 for the three months ended September 30, 1997, up from $1,477,000
for the same period in 1996. Product development expenses increased 55% to
$5,449,000 for the nine months ended September 30, 1997, up from $3,523,000
for the same period in 1996. This increase is primarily the result of an
increase of approximately one-third in the number of personnel working on
continued enhancements of both the First! and NewsPage products.

General and administrative. General and administrative expenses decreased
48% to $743,000 for the three months ended September 30, 1997, down from
$1,435,000 for the same period of 1996. General and administrative expenses
decreased 20% to $2,787,000 for the nine months ended September 30, 1997, down
from $3,465,000 for the same period of 1996. The decrease in the third quarter
of 1997 is due primarily to the inclusion in 1996 of legal costs and severance
payments relating to the departure of the former CEO and recruiting expenses
related to the hiring of a new CEO.

Mergers, Acquisitions, dispositions and related charges. Mergers,
acquisitions, dispositions and related charges were $315,000 for the three
months ended September 30, 1997, and $5,015,000 for the nine months ended
September 30, 1997. These charges primarily include operating costs, primarily
development expenses,

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related to FreeLoader, a wholly-owned subsidiary acquired in June 1996, and
charges related to the shutdown of FreeLoader in May 1997. Other items
included in these charges were amortization on goodwill acquired in the Hoover
acquisition in October 1996, and transaction costs related to the CompanyLink
and ClariNet acquisitions in June 1997. Acquisition and other charges for the
nine months ended September 30, 1996 were $37,482,000, primarily related to
the acquisition of FreeLoader which was expensed as in-process development at
the time of the acquisition.

Interest income and other, net. Interest income and other, net increased
266% to $333,000 for the three months ended September 30, 1997, from a net
expense of $201,000 for the same period in 1996. Interest income and other,
net increased 336% to $1,187,000 for the nine months ended September 30, 1997,
up from $272,000 for the same period of 1996. These increases were due to the
recognition in 1996 of Individual's share of operating losses from its joint
venture in Japan with Toshiba Corp. and Mitsui & Co. Ltd. Individual's
investment in the joint venture was reduced to zero during the third quarter
of 1996. Interest income increased primarily from interest earned on the
investment of net proceeds of Individual's initial public offering in March
1996.

Interest expense. Interest expense increased 156% to $174,000 for the three
months ended September 30, 1997, up from $68,000 for the same period of 1996.
Interest expense decreased 52% to $432,000 for the nine months ended September
30, 1997, down from $897,000 for the same period of 1996. The increase for the
three months ended September 30, 1997 was due to interest costs incurred on
guaranteed payments with two FreeLoader employees related to the acquisition
of FreeLoader in June 1996. The decrease over the nine month period is due to
interest costs incurred in 1996 on senior subordinated notes that were paid in
full in March 1996 from a portion of the proceeds of Individual's initial
public offering.

RESULTS OF OPERATIONS FOR THE YEARS ENDED 1996, 1995 AND 1994

Revenue. Revenue was $28.1 million in 1996, $18.9 million in 1995, and $10.1
million in 1994, representing an increase of 48.7% in 1996 and 87.1% in 1995.
Growth in Individual's enterprise services and single-user services each
contributed to these increases. The number of registered and authorized users
of Individual's enterprise and single-user services increased by over 50%
during 1996 to 1,962,000 (includes 1,500,000 from ClariNet). Revenue from
international sources was less than 10% in each of 1996, 1995 and 1994.
Domestic revenue is expected to grow faster than international revenue in
1997.

Revenue from enterprise services was $16.9 million in 1996, $11.3 million in
1995, and $7.1 million in 1994, representing an increase of 50% in 1996 and
59% in 1995. These increases resulted primarily from subscription fees of new
First! customers, primarily distributed through Lotus Notes (First! Notes) and
intranets (First! Intranet), which were first introduced in 1995, and upgrades
of existing contracts, offset by a decrease in revenue from First! fax and e-
mail. The First! Notes and First! Intranet products generally have a higher
contract value and serve a larger number of users than the First! fax and e-
mail products.

Revenue from single-user services was $11.1 million in 1996, $7.6 million in
1995, and $3.0 million in 1994, representing an increase of 46% in 1996 and
153% in 1995. The increase in 1996 consists of both subscription and
advertising revenues from NewsPage, Individual's Web service introduced in the
second quarter of 1995, and an increase in sales of ClariNews to ISP's. These
increases were partially offset by the decline in revenue from its non-Web
subscription services, HeadsUp and Physician's NewsScan. The increase in 1995
was primarily due to the growth of HeadsUp and Physician's NewsScan, which
were not actively promoted in 1996, as users were moving to the Web to receive
information.

Cost of revenue. The principal elements of Individual's cost of revenue are
fees paid to information providers, payroll and related expenses for its
editorial and operations staff, as well as telecommunication and computer
related costs for the support and delivery of Individual's services. Cost of
revenue was $13.2 million, $8.6 million, and $4.3 million, and gross margins
were 53%, 55%, and 57%, in 1996, 1995, and 1994, respectively. The increase in
cost of revenue for each period primarily reflects costs incurred to provide
service to an increased number of users, including costs relating to expanding
the number of information sources

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available to users. Total cost of revenue in 1996 was also impacted by costs
related to increasing production capacity for NewsPage, the cost of
information content, and from a change in estimated depreciable lives on
equipment from 5 years to 3 years, which resulted in an increase of
depreciation expense of approximately $481,000. The decrease in gross margin
as a percentage of revenue was primarily due to the following factors: (i)
minimum royalty commitments paid on information sources have increased the
percentage of revenue paid to information providers; and (ii) NewsPage
capacity has expanded in anticipation of revenue growth and the margins from
NewsPage are not as favorable as margins realized on Individual's non-Web
services, which NewsPage is primarily replacing.

Sales and marketing. Sales and marketing expenses consist principally of
salaries, commissions, and associated costs for Individual personnel engaged
in the general marketing of all of Individual's services, activities related
to renewing existing customer contracts, and, beginning in 1995, costs of
selling advertising. Sales and marketing expenses were $6.5 million in 1996,
$3.3 million in 1995, and $1.4 million in 1994, representing an increase of
97% in 1996 and 136% in 1995. The principal reasons for the increases were
growth in Individual's sales and marketing staff, the increased level of
activity necessary to renew subscriptions from a larger customer base, and
expansion of general promotional activities. In addition, sales expenses
increased as a percentage of revenue in the later part of 1995 and in 1996 due
to the creation of a direct sales force and other related expenditures to sell
advertising and an increase in general marketing expenses to attract new
advertisers on the NewsPage service.

New subscriber acquisition costs. New subscriber acquisition costs consist
primarily of the direct sales, promotion and telesales expenses directly
related to obtaining new subscribers and, beginning primarily in 1996,
advertising costs paid to other Web sites and fees paid to distribution
partners for attracting new subscribers for NewsPage. New subscriber
acquisition costs were $9.0 million in 1996, $7.4 million in 1995, and $6.0
million in 1994, representing an increase of 22% in 1996 and 23% in 1995. The
dollar increases were due to the addition of personnel selling First! to new
customers and promotional expenses to attract new users to NewsPage. As a
percentage of revenue, new subscriber acquisition expenses declined due to the
larger First! customer base and overall increased revenue. In addition, in
1996, Individual decreased its promotional efforts of non-Web single user
services.

Product development. Product development expenses consist primarily of
salary and related expenses for engineering and technical personnel associated
with developing new services and enhancing existing services. To date, all of
Individual's costs for product development have been expensed as incurred.
Product development expenses were $5.0 million in 1996, $2.7 million in 1995,
and $1.3 million in 1994, representing an increase of 85% in 1996 and 108% in
1995. The increases were primarily due to the addition of personnel and
increased contracting expenses for enhancements of First!, including expanding
the number of delivery platforms supported by Individual, as well as the
development of NewsPage, introduced in the second quarter of 1995. Additional
expenses were incurred in recent years to enhance the scalability and
reliability of Individual's production system.

General and administrative. General and administrative expenses consist of
salary and related costs for certain executive officers, finance and
administrative personnel, professional fees, and other general corporate
expenses. General and administrative expenses were $5.5 million in 1996, $3.1
million in 1995, and $1.3 million in 1994, representing an increase of 77% in
1996 and 138% in 1995. Reasons for the 1996 increase include severance expense
related to executive terminations; legal fees related to acquisitions, a
dispute with Individual's founder and former Chief Executive Officer, and a
shareholder suit; fees incurred in hiring of new personnel; and professional
fees related to new requirements as a public company.

Mergers, acquisitions, dispositions and related charges. Mergers,
acquisitions, dispositions, and related charges were $39.4 million in 1996, of
which $35.6 million was a non-cash charge incurred in June 1996, based on an
assessment of purchased FreeLoader technology which did not meet definitions
of "completed technology" and thus was expensed upon consummation of the
acquisition in accordance with generally accepted accounting principles. Other
items included in these charges were all operating costs of FreeLoader

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incurred since the acquisition, principally research and development related,
goodwill amortization and other costs related to the acquisition of Hoover in
October 1996, and the gain on the sale of BookWire in November 1996.

Interest income and other, net; interest expense. Interest income and other,
net, was $648,000 in 1996, $208,000 in 1995, and ($21,000) in 1994. The
increase was due to interest income on the proceeds of Individual's initial
public offering, as offset by Individual's share of operating losses of its
joint venture in Japan with Toshiba Corp. and Mitsui & Co., Ltd. The proceeds
of Individual's initial public offering were invested in United States
government securities, money market accounts, and other investment-grade
securities. Individual's investment in the joint venture has been reduced to
zero and its future operating results will have no impact in the foreseeable
future. Interest expense was $872,000 in 1996, $452,000 in 1995, and $93,000
in 1994. The increase was primarily due to interest on senior subordinated
notes incurred in December 1995 and in the first quarter of 1996. The notes
were paid in full in March 1996 from the proceeds of the initial public
offering. Other interest charges include financing charges related to
equipment leases and bank installment loans used to finance certain purchases
of equipment.

LIQUIDITY AND CAPITAL RESOURCES

Individual's cash, cash equivalents and marketable securities balance at
September 30, 1997 was $18,599,000, as compared to $30,566,000 at December 31,
1996. Net cash used in operations was $11,828,000 for the nine months ended
September 30, 1997, as compared with $5,425,000 for the same period in 1996.
The decrease in cash is due to increased operating losses incurred in the
first three quarters of 1997, a decrease in deferred revenue of $4,185,000 in
the first three quarters of 1997, and the payment in September 1997 to
Netscape of the prepaid license fee, partially offset by a decrease in
accounts receivable of $5,887,000. The decreases in accounts receivable and
deferred revenue in the nine months ended September 30, 1997 reflects the
cyclical nature of the business with a high percentage of annual contracts
billed in the fourth quarter. Net cash used in investing activities was
$2,229,000 in the nine months ended September 30, 1997 as compared with
$9,605,000 for the same period of 1996. In the first three quarters of 1997,
only $155,000 was used to purchase marketable securities, primarily from U.S.
government agencies, down from $6,992,000 used during the same period a year
ago. Net cash provided by financing activities was $1,918,000 for the nine
months ended September 30, 1997, as compared to $24,788,000 in the same period
of 1996. This decrease resulted primarily from the completion of Individual's
initial public offering in March of 1996.

Individual has also used equipment leases and debt instruments to finance
the majority of its purchases of capital equipment. At September 30, 1997,
Individual had approximately $1,977,000 outstanding in connection with these
obligations and had an additional $699,000 available under established credit
arrangements. In addition, Individual has a revolving line of credit with a
commercial bank providing for a maximum credit of $3,500,000 subject to
certain covenants. At September 30, 1997, no amounts were outstanding under
this line.

Management believes that cash and marketable securities will be sufficient
to fund its operations for the next twelve months and to provide for the
payments of up to $6 million to the two FreeLoader founders. This may depend
on numerous factors, including the rate of expansion for current products and
services, the development of new products and services, and potential
acquisitions or strategic investments. The payment to the FreeLoader founders
are due under the terms of the FreeLoader purchase agreement, as amended, with
approximately $1.3 million due in October 1997 and the balance in the period
from February 1998 through April 1998.

Recently Issued Accounting Standards

The Financial Accounting Standards Board issued Statement No. 128 ("SFAS
128"), "Earnings per Share", which modifies the way in which earnings per
share (EPS) is calculated and disclosed. Upon adoption of this standard for
the fiscal period ending December 31, 1997, Individual will disclose basic and
diluted EPS and will restate all prior period EPS data presented. Basic EPS
excludes dilution and is computed by dividing

108
<PAGE>

income available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS, similar to fully
diluted EPS, reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock or resulted in the issuance of common stock that then shared in the
earnings of the entity. Management believes the adoption of SFAS 128 will not
have a material impact on reported earnings per share.

The Financial Accounting Standard Board recently issued Statement of
Financial Accounting Standard No. 130, "Reporting Comprehensive Income." This
Statement requires that changes in comprehensive income be shown in a
financial statement that is displayed with the same prominence as other
financial statements. The Statement will become effective for fiscal years
beginning after December 15, 1997.

In June 1997, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131). SFAS No. 131 specifies new
guidelines for determining a company's operating segments and related
requirements for disclosure. Individual is in the process of evaluating the
impact of the new standard on the presentation of the financial statements and
the disclosures therein. The Statement will become effective for fiscal years
beginning after December 15, 1997.

109
<PAGE>

INDIVIDUAL STOCK INFORMATION

INDIVIDUAL PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of Individual Common Stock as of January 9, 1998 by: (i) each person
who, to the knowledge of Individual, owned beneficially more than 5% of the
shares of Individual Common Stock outstanding at such date; (ii) each director
or nominee for director; (iii) each executive officer identified in the
Summary Compensation Table set forth below under "Compensation and Other
Information Concerning Directors and Officers;" and (iv) all directors,
nominees for director, and executive officers as a group.

<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING(2)
------------------------------------ ------------ --------------
<S> <C> <C>
Desktop Data, Inc. (3).......................... 8,145,177 39.37%
80 Blanchard Road
Burlington, MA 01803
Funds managed by Burr, Egan, Deleage & Co. (4).. 1,289,399 7.86%
One Post Office Square Suite 3800
Boston, MA 02109
Brad Templeton (5).............................. 1,112,439 6.77%
c/o Individual, Inc.
8 New England Executive Park West
Burlington, MA 01803
The Venture Capital Fund of New England II, L.P 1,077,186 6.56%
(6)............................................
160 Federal Street
Boston, MA 02110
Microsoft Corporation (7)....................... 1,050,000 6.40%
One Microsoft Way
Redmond, WA 98052
BEA Associates (8).............................. 931,800 5.68%
153 East 53rd Street
One Citicorp Center
New York, NY 10022
The Dialog Corporation (9)...................... 900,000 5.48%
3460 Hillview Avenue
Palo Alto, CA 94304
Joseph A. Amram (10)............................ 824,673 4.85%
Michael E. Kolowich (11)........................ 506,175 3.02%
William A. Devereaux (12)....................... 314,937 1.91%
Jeffery S. Galt (13)............................ -- *
Elon Kohlberg (14).............................. 26,819 *
Marino R. Polestra (15)......................... 21,389 *
Gregory S. Stanger (16)......................... -- *
James D. Daniell (17)........................... 6,111 *
Janesse T. Bruce (18)........................... 85,000 *
Robert L. Lentz (18)............................ 73,834 *
Annette E. Lissauer (18)........................ 74,223 *
Richard C. Vancil (18).......................... 65,812 *
Bruce D. Glabe.................................. 23,700 *
All directors, nominees and executive officers
as a group
(12 persons)(19)............................... 1,829,756 10.40%
</TABLE>

110
<PAGE>

- --------
* Less than 1% of the outstanding shares of Individual Common Stock.
(1) Except as noted in the footnotes to this table, each person or entity
named in the table has sole voting and investment power with respect to
the shares of Individual Common Stock. The inclusion herein of any shares
of Individual Common Stock deemed owned beneficially does not constitute
an admission of beneficial ownership of those shares.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission"), and includes
voting and investment power with respect to shares. The number of shares
of Individual Common Stock deemed outstanding as of January 9, 1998
includes: (i) 16,418,196 shares of Individual Common Stock outstanding on
such date and (ii) all shares of Individual Common Stock subject to
options ("presently exercisable stock options") and warrants ("presently
exercisable warrants") currently exercisable or exercisable within 60
days of January 9, 1998 by the person or group in question. The option
information included in the above table does not include any options that
will become exercisable immediately at the Effective Time of the Merger
due to certain acceleration provisions. Individual's Amended and Restated
1989 Stock Option Plan (the "1989 Plan") and Individual's 1996 Non-
Employee Director Stock Option Plan (the "Non-Employee Director Plan")
and option agreements issued thereunder provide that if Individual is
merged or consolidated with or into another entity, or if all or
substantially all of Individual's assets are acquired by another entity,
then the exercisability of such options accelerates such that the number
of shares that shall become exercisable at the Effective Time of the
Merger shall include 50% with respect to options granted under the 1989
Plan, and 100% with respect to options granted under the Non-Employee
Director Plan, of the unvested shares subject to the option immediately
prior to the Effective Time of the Merger. In addition, certain options
granted to certain executive officers and directors of Individual under
the 1989 Plan will become fully vested at the Effective Time pursuant to
option agreements that provide for the accelerated vesting of 100% of the
unvested shares subject to such options at the Effective Time. See
footnotes (5)-(19) below for further information regarding the impact of
these acceleration provisions on certain beneficial owners included in
the above table.
(3) Includes 3,249,779 shares which Desktop has the right to acquire, if the
Agreement is terminated under certain circumstances, pursuant to the
Individual Option Agreement. See "Terms of the Merger--Option
Agreements." If acquired, Desktop will have sole voting power and sole
investment power over such shares. Also includes 4,895,398 shares
(including presently exercisable stock options and presently exercisable
warrants) as to which Desktop shares voting power with the Individual
Board and those officers and stockholders of Individual who are parties
to the Individual Participation Agreement. See "Terms of the Merger--
Participation Agreements." Desktop does not have sole or shared
investment power over such shares.
(4) Consists of 1,090,444 shares of Individual Common Stock owned by Alta IV
Limited Partnership and 198,955 shares of Individual Common Stock owned
by C.V. Sofinnova Partners Five. The respective general partners of Alta
IV Limited Partnership and C.V. Sofinnova Partners Five exercise sole
voting and investment powers with respect to the shares owned by such
funds. The principals of Burr, Egan, Deleage & Co. are general partners
of Alta IV Management Partners, L.P. (which is the general partner of
Alta IV Limited Partnership). As general partners of the fund, they may
be deemed to share voting and investment power for the shares held by the
fund. Burr, Egan, Deleage & Co. serves as an advisor to C.V. Sofinnova
Partners Five. The principals of Burr, Egan, Deleage & Co. disclaim
beneficial ownership of all such shares held by all of the aforementioned
funds, except to the extent of their proportionate pecuniary interests
therein. Marino R. Polestra, a Vice President of Burr, Egan, Deleage &
Co. and a director of Individual, disclaims beneficial ownership with
respect to all shares held by all of the above-mentioned funds.
(5) Includes 12,500 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options but does not include options to
purchase 43,750 shares of Individual Common Stock that will become
exercisable at the Effective Time due to the acceleration provisions
discussed in footnote 2 above.
(6) FH & Co. II, L.P. ("FH II") is the general partner of The Venture Capital
Fund of New England II, L.P. FH II and the general partners of FH II may
be deemed to own beneficially all of the shares held by The Venture
Capital Fund of New England II, L.P. Excludes 12,000 shares owned by a
general partner of FH II. FH II and each of the general partners of FH II
expressly disclaims beneficial ownership with respect to all shares held
by The Venture Capital Fund of New England II, L.P.
(7) Gregory S. Stanger, Director, Business Development and Investments at
Microsoft Corporation and a director of Individual, may be deemed to
share voting and investment power with respect to the shares held by
Microsoft. Mr. Stanger disclaims beneficial ownership with respect to
such shares. Individual has established business arrangements with
Microsoft.

111
<PAGE>

(8) BEA Associates is an Investment Adviser registered under the Investment
Advisers Act of 1940. CS Holding indirectly owns 80% of the partnership
units in BEA Associates.
(9) Jeffery S. Galt, a director of Individual and Executive Vice President of
The Dialog Corporation, may be deemed to share voting and investment
power with respect to such shares. Mr. Galt disclaims beneficial
ownership with respect to the shares held by The Dialog Corporation. The
Company has established business arrangements with The Dialog
Corporation.
(10) Includes 14,721 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options and 549,301 shares of Individual
Common Stock issuable pursuant to presently exercisable warrants, but
does not include options to purchase 15,279 shares of Individual Common
Stock that will become exercisable at the Effective Time due to the
acceleration provisions discussed in footnote 2 above. Also includes (i)
3,750 shares of Common Stock held in trust by Mr. Amram and his wife, as
Trustees of the Knowledge = Freedom Foundation, a charitable trust (the
"Foundation"), (ii) 5,617 shares of Common Stock held by Martha Amram,
Mr. Amram's wife, and (iii) 5,000 shares of Common Stock and 45,000
shares issuable pursuant to presently exercisable warrants held in trust
by an independent trustee for the benefit of Mr. Amram's two children.
Mr. Amram disclaims beneficial ownership with respect to the shares held
by Martha Amram and the shares and warrants held in trusts for the
benefit of the Foundation and Mr. Amram's children.
(11) Includes 354,175 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options, but does not include options to
purchase 659,158 shares of Individual Common Stock that will become
exercisable at the Effective Time due to the acceleration provisions
discussed in footnote 2 above.
(12) Includes 53,805 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options and 9,000 shares of Individual Common
Stock issuable pursuant to presently exercisable warrants, but does not
include options to purchase 28,196 shares of Individual Common Stock that
will become exercisable at the Effective Time due to the acceleration
provisions discussed in footnote 2 above.
(13) Excludes 900,000 shares of Individual Common Stock held by The Dialog
Corporation, with respect to which Mr. Galt disclaims beneficial
ownership. See footnote 9 above.
(14) Includes 26,819 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options, but does not include options to
purchase 12,308 shares of Individual Common Stock that will become
exercisable at the Effective Time due to the acceleration provisions
discussed in footnote 2 above.
(15) Includes 21,387 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options, but does not include options to
purchase 8,614 shares of Individual Common Stock that will become
exercisable at the Effective Time due to the acceleration provisions
discussed in footnote 2 above. Excludes 1,090,444 shares of Individual
Common Stock owned by Alta IV Limited Partnership and 198,955 shares of
Individual Common Stock owned by C.V. Sofinnova Partners Five, with
respect to which Mr. Polestra disclaims beneficial ownership. See
footnote 4 above.
(16) Excludes 1,050,000 shares of Individual Common Stock held by Microsoft
Corporation, with respect to which Mr. Stanger disclaims beneficial
ownership. See footnote 7 above.
(17) Includes 6,111 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options, but does not include options to
purchase 13,889 shares of Individual Common Stock that will become
exercisable at the Effective Time due to the acceleration provisions
discussed in footnote 2 above.
(18) Includes shares of Individual Common Stock issuable pursuant to presently
exercisable stock options in the following amounts: Ms. Bruce: 85,000;
Mr. Lentz: 60,834; and Ms. Lissauer: 45,498, but does not include options
to purchase 32,500 and 39,583 shares of Individual Common Stock held by
Ms. Bruce and Mr. Lentz, respectively, that will become exercisable at
the Effective Time due to the acceleration provisions discussed in
footnote 2 above. Also includes 8,625 shares of Individual Common Stock
issuable pursuant to presently exercisable warrants held by Mr. Vancil.
(19) Includes 579,895 shares of Individual Common Stock issuable pursuant to
presently exercisable stock options and 603,301 shares of Individual
Common Stock issuable pursuant to presently exercisable warrants, but
does not include options to purchase 931,814 shares of Individual Common
Stock that will become exercisable at the Effective Time due to the
acceleration provisions discussed in footnote 2 above. Excludes shares of
Individual Common Stock beneficially owned by funds managed by Burr,
Egan, Deleage & Co., Microsoft Corporation and The Dialog Corporation.
See footnotes 4, 7 and 9 above.

112
<PAGE>

INDIVIDUAL STOCK PRICE AND DIVIDEND INFORMATION

Individual's Common Stock is quoted on Nasdaq under the symbol "INDV". The
following table sets forth for the periods indicated the high and low sale
prices for Individual's Common Stock.

<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Fiscal 1996
First Quarter (from March 15, 1996).................... $16.625 $14.000
Second Quarter......................................... 24.500 14.000
Third Quarter.......................................... 17.750 3.875
Fourth Quarter......................................... 6.750 4.375
Fiscal 1997
First Quarter.......................................... 11.875 5.250
Second Quarter......................................... 6.500 3.875
Third Quarter.......................................... 7.313 2.625
Fourth Quarter......................................... 6.063 3.000
Fiscal 1998
First Quarter (through January 9, 1998)................ 4.375 3.750
</TABLE>

As of October 31, 1997, the last trading day prior to the announcement of
the execution of the Agreement, the closing price of Individual Common Stock
as reported on Nasdaq was $5.125. As of January 9, 1998, the closing price of
Individual Common Stock as reported on Nasdaq was $4.063.

Individual has not paid any cash dividends since its inception and does not
intend to pay any cash dividends in the foreseeable future. At the Individual
Record Date, there were approximately 181 Individual stockholders of record.

INDIVIDUAL MANAGEMENT AND EXECUTIVE COMPENSATION

MANAGEMENT

The following table sets forth for each Director and the executive officers
of Individual, their ages and present positions with Individual:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Michael E. Kolowich(3)........... 45 Chairman of the Board, President and
Chief Executive Officer
Robert L. Lentz.................. 47 Senior Vice President, Finance and
Administration and Chief Financial
Officer, Treasurer and Secretary
Michael D. Kinkead............... 53 Senior Vice President, Worldwide Sales
and Marketing
Michael F. Kraley................ 47 Senior Vice President, Chief Technology
Officer
G. Neil Skene Jr. ............... 46 Senior Vice President, News, Products
and Services and
Editor-in-Chief
Joseph A. Amram(2)............... 41 Director
James D. Daniell(3).............. 34 Director
William A. Devereaux(1)(3)....... 51 Director
Jeffery S. Galt(1)............... 41 Director
Elon Kohlberg.................... 52 Director
Marino R. Polestra(2)(3)......... 40 Director
Gregory S. Stanger............... 33 Director
</TABLE>
- --------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Member of Executive Committee.

113
<PAGE>

Michael E. Kolowich joined Individual in September 1996 as President and
Chief Executive Officer and a director of Individual and became the Chairman
of the Board in May 1997. Prior to joining Individual in July 1997, Mr.
Kolowich served from July 1996 until September 1996 as Vice President/Business
Operations of Nets Inc., an Internet content provider formed in June 1996 when
AT&T New Media Services, a provider of interactive online information services
for business professionals, merged with Industry.Net. Mr. Kolowich served as
President of AT&T New Media Services and AT&T Interchange Online Network from
December 1994 until the merger with Industry.Net in June 1996. From April 1991
until December 1994, Mr. Kolowich was President of Ziff-Davis Interactive, an
electronic publishing division of Ziff-Davis Publishing Company.

Robert L. Lentz joined Individual in March 1996 as Vice President, Finance,
and has served as Senior Vice President, Finance and Administration, Chief
Financial Officer, Treasurer and Secretary since January 1997. Prior to
joining Individual, Mr. Lentz served since 1993 as Vice President, Finance and
Operations of Teloquent Communications Corporation, a telecommunications
software company. Prior to that, Mr. Lentz served from 1990 to 1993 as Senior
Vice President and General Manager, Information Systems Division, in the
Personal Communications Division of Electronic Data Systems Corporation, a
provider of software and information technology services to the personal
communications industry.

Michael D. Kinkead joined Individual in October 1996 as Senior Vice
President, Enterprise Markets, and has served as Senior Vice President,
Worldwide Sales and Marketing since July 1997. Prior to joining Individual,
Mr. Kinkead founded SandPoint, an electronic news and information services
company, in 1989, and served as its President and Chief Executive Officer
until the acquisition of SandPoint by Information Access Company ("IAC") in
February 1995. Mr. Kinkead managed the Hoover business unit of IAC from
February 1995 to September 1995 and served on the Executive Committee of IAC
as Vice President of Planning from September 1995 until Individual's
acquisition of the Hoover business from IAC in October 1996.

Michael F. Kraley has served as Senior Vice President, Chief Technology
Officer since joining Individual in September 1996. Prior to joining
Individual, Mr. Kraley served from January 1996 to April 1996 as Chief
Technology Officer at AT&T New Media Services. From December 1994 to January
1996, Mr. Kraley was Vice President, Development and Operations at AT&T New
Media Services. Prior to that, Mr. Kraley served as Vice President,
Development at Ziff-Davis Interactive from December 1992 to December 1994, and
as Senior Director at Ziff-Davis Interactive from March 1992 to December 1992.

G. Neil Skene Jr. joined Individual in March 1997 as Senior Vice President,
News, Products and Services and Editor-in-Chief. Prior to joining Individual,
Mr. Skene served from February 1991 to January 1997 as President, Editor and
Publisher of Congressional Quarterly Inc., a print and electronic publisher of
books and periodicals relating to government, and from January 1990 to
February 1991 as Editor and Publisher of Congressional Quarterly Inc.

Joseph A. Amram has served as a director of Individual since January 1989
and has been Managing Director of YAA Enterprises, a private investment and
consulting company, since August 1996. Mr. Amram served as President and Chief
Executive Officer of Individual from its inception in January 1989 through
July 1996.

James D. Daniell has served as a director of Individual since March 1997.
Dr. Daniell has been Chief Executive Officer of LitleNet LLC since November
1997. Prior to that, he served as Chief Operating Officer and Vice President
of Strategy and New Business Development at AT&T Networked Commerce Services
from February 1997 to November 1997. From November 1996 to February 1997, Dr.
Daniell served as Vice President of Electronic Messaging and New Business
Development at AT&T Easy Commerce Services. Prior to that, from December 1995
to November 1996, Dr. Daniell was Vice President of Corporate and New Business
Development at AT&T Corporation. Dr. Daniell served from April 1994 to
December 1995 as Vice President, Business Communications Services Strategy and
New Business Development, at AT&T Corporation. Prior to that, Dr. Daniell was
a founder and Vice President of Business Development and Strategic Relations
at Bridge Builder Technologies, a software tools company, from May 1993 to
April 1994. Before joining Bridge Builder Technologies, Dr. Daniell served
from March 1991 to May 1993 as Strategic Planning Director and Vice President
at UNIX Systems Laboratories. Dr. Daniell also serves as a director of LIN
Television.

114
<PAGE>

Jeffery S. Galt has served as a director of Individual since March 1997.
Since November 1997, Mr. Galt has served as Executive Vice President of The
Dialog Corporation, which was formed as a result of the merger of Knight-
Ridder Information, Inc. with M.A.I.D. plc in November 1997. Prior to such
merger, Mr. Galt served as President of Knight-Ridder Information, Inc. from
October 1996 to November 1997, and was acting President of Knight-Ridder
Information, Inc. from January 1996 to September 1996. From November 1993 to
January 1996, Mr. Galt served as Executive Vice President, Chief Operating
Officer of Knight-Ridder Information, Inc. Prior to that, he served from June
1992 to November 1993 as Executive Vice President, Planning, Development, and
Technology at Specialized Management Support, Inc., a provider of electronic
data services and real estate information to the financial services industry.
From August 1991 to June 1992, Mr. Galt was Vice President, Marketing,
Planning & Business Development at TRW Information Services Division, a
provider of consumer and business credit and real estate information to the
financial services industry.

Elon Kohlberg has served as a director of Individual since August 1995. Mr.
Kohlberg has been a Professor of Business Administration at the Harvard
Business School since 1976. Mr. Kohlberg also serves as a director of TEVA
Industries and the Lemmon Company.

Marino R. Polestra has served as a director of Individual since January
1991. Since February 1989, Mr. Polestra has been a Vice President of Burr,
Egan, Deleage & Co., a venture capital firm, and a general partner of certain
funds affiliated with Burr, Egan, Deleage & Co. Since February 1996, Mr.
Polestra has been general partner of Alta California Partners, L.P. Mr.
Polestra also serves as a director of Security Dynamics Technologies, Inc. and
Premisys Communications, Inc.

Gregory S. Stanger has served as a director of Individual since July 1997.
Mr. Stanger has been Director, Business Development and Investments at
Microsoft Corporation since July 1996. From June 1993 through July 1996, Mr.
Stanger served as Manager, Business Development and Investments at Microsoft.
Prior to that, he served from November 1992 to June 1993 as a Financial
Analyst at Microsoft.

William A. Devereaux has served as a director of Individual since 1989 and
served as Chairman of the Board of Individual from July 1996 to May 1997. Mr.
Devereaux has been Managing Director, American Capital Company, a venture
capital and merchant banking company, from 1987 to 1992 and since 1995. From
1993 to 1994, Mr. Devereaux was Vice President, Strategic Planning at the
Communications Division of General Instrument Corp. Prior to that, from 1979
to 1987, Mr. Devereaux was Executive Vice President at American Cable Systems,
a national provider of cable television services.

Executive officers of Individual are elected by the Board of Directors on an
annual basis and serve until their successors have been duly elected and
qualified. There are no family relationships among any of the executive
officers or directors of Individual.

COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS

COMPENSATION OF DIRECTORS

During the fiscal year ended December 31, 1997, outside directors were
reimbursed for their reasonable out-of-pocket expenses incurred in attending
meetings.

115
<PAGE>

EXECUTIVE COMPENSATION SUMMARY

The following table sets forth summary information concerning the
compensation earned for services rendered to Individual in all capacities for
the fiscal years ended December 31, 1996 and 1995, by (i) the Chief Executive
Officer, (ii) each of the other four most highly compensated executive officers
of Individual at December 31, 1996 who earned more than $100,000 in salary and
bonus in fiscal 1996, and (iii) two former executive officers of Individual
(collectively, the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION(2)
-------------------------------------------- SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION(1)($) OPTIONS (#) COMPENSATION($)
------------------ ---- ---------- --------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Kolowich(3).. 1996 $50,583.31 $ 26,700 -- 1,000,000 --
President and Chief 1995 -- -- -- -- --
Executive Officer
Janesse T. Bruce(4)..... 1996 117,621.68 32,780.77 -- 120,000 --
Senior Vice President, 1995 -- -- -- -- --
Single User Markets
Robert L. Lentz ........ 1996 93,037.88 37,515.38 -- 110,000 --
Senior Vice President, 1995 -- -- -- -- --
Finance and
Administration, Chief
Financial Officer,
Treasurer and Secretary
Annette E. Lissauer(5).. 1996 100,000 29,930 -- -- --
Vice President 1995 91,003 21,760 -- 37,500 --
Richard C. Vancil(6).... 1996 110,000 13,580 -- -- --
Vice President, 1995 100,583 10,815 -- 22,500 --
Marketing and Business
Development
Joseph A. Amram(7)...... 1996 85,744 -- -- -- $100,000(8)
1995 108,733 25,000 -- 181,667 --
Bruce D. Glabe(9)....... 1996 132,322 19,673 -- -- --
1995 118,750 19,100 -- 41,250 --
</TABLE>
- --------
(1) In accordance with the rules of the Commission, the compensation described
in this table does not include medical, group life insurance or other
benefits received by the Named Executive Officers which are available
generally to all salaried employees of Individual, and certain perquisites
and other personal benefits, securities or property received by the Named
Executive Officers which do not exceed the lesser of $50,000 or 10% of any
such officer's salary and bonus disclosed in this table.
(2) Represents stock options granted during the fiscal years ended December 31,
1995 and December 31, 1996 under Individual's Amended and Restated 1989
Stock Option Plan. Individual did not grant any restricted stock awards or
stock appreciation rights or make any long-term incentive plan payouts
during the fiscal years ended December 31, 1995 and December 31, 1996.
(3) Mr. Kolowich became President and Chief Executive Officer of Individual in
September 1996. Mr. Kolowich's annual salary is $180,000, and his target
annual incentive bonus is $80,000 (payable in Individual Common Stock).

116
<PAGE>

(4) Ms. Bruce has been on a leave of absence from Individual since August 8,
1997.
(5) Ms. Lissauer's employment with Individual terminated in April 1997.
(6) Mr. Vancil's employment with Individual terminated in October 1997.
(7) Mr. Amram's employment with Individual terminated in August 1996. Mr.
Amram served as President and Chief Executive Officer from Individual's
inception in January 1989 through July 1996, and is currently a director
of Individual.
(8) $100,000 was paid to Mr. Amram in December 1996 pursuant to Mr. Amram's
severance agreement with Individual.
(9) Mr. Glabe's employment with Individual terminated in December 1996.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information concerning grants of
stock options made to the Named Executive Officers pursuant to Individual's
Amended and Restated 1989 Stock Option Plan, as amended, during the fiscal
year ended December 31, 1996:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
NUMBER OF PERCENT OF REALIZABLE VALUE
SECURITIES TOTAL OPTIONS AT ASSUMED ANNUAL
UNDERLYING GRANTED TO EXERCISE OR RATES OF STOCK
OPTIONS EMPLOYEES IN BASE PRICE PER EXPIRATION PRICE APPRECIATION
NAME GRANTED(#)(1) FISCAL YEAR(2) SHARE($)(3) DATE(1) FOR OPTION TERM(4)
---- ------------- -------------- -------------- ---------- ---------------------
5%($) 10%($)
---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Kolowich..... 1,000,000 38.99% $6.00 9/3/06 $3,773,368 $9,562,455
Janesse T. Bruce........ 120,000 4.68 6.25 1/23/06 471,671 1,195,307
Robert L. Lentz......... 110,000 4.29 6.25 3/6/06 432,365 1,095,698
Annette E. Lissauer..... -- -- -- -- -- --
Richard C. Vancil....... -- -- -- -- -- --
Joseph A. Amram......... -- -- -- -- -- --
Bruce D. Glabe.......... -- -- -- -- -- --
</TABLE>
- --------
(1) The options, which were granted under Individual's Amended and Restated
1989 Stock Option Plan, have a term of ten years, subject to earlier
termination in certain events related to termination of employment. Such
options become exercisable over a four-year period, 1/48th of such options
vesting each month commencing on the last day of the first full month
after the date of grant.
(2) Based on an aggregate of 2,564,857 shares subject to options granted to
employees of Individual in fiscal 1996.
(3) All options were granted at an exercise price equal to or greater than
fair market value as determined by the Board of Directors of Individual on
the date of grant. On August 22, 1996 and October 23, 1996, the Board of
Directors of Individual repriced all outstanding stock options of
Individual which were granted to employees between December 8, 1995 and
July 8, 1996, by reducing the exercise price applicable to such options to
$6.25 per share.
(4) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%)
on the market value of Individual's Common Stock on the date of option
grant over the term of the options. These numbers are calculated based on
rules promulgated by the Commission and do not reflect Individual's
estimate of future stock price growth. Actual gains, if any, on stock
option exercises and Common Stock holdings are dependent on the timing of
such exercise and the future performance of the Individual Common Stock.
There can be no assurance that the rates of appreciation assumed in this
table can be achieved or that the amounts reflected will be received by
the individuals.

117
<PAGE>

OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table sets forth information with respect to options to
purchase Individual's Common Stock granted to the Named Executive Officers
under Individual's Amended and Restated 1989 Stock Option Plan, as amended,
including (i) the number of shares of Individual Common Stock purchased upon
exercise of options during the fiscal year ended December 31, 1996; (ii) the
net value realized upon such exercise; (iii) the number of unexercised options
outstanding at December 31, 1996; and (iv) the value of such unexercised
options at December 31, 1996:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBERS OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE OPTIONS AT YEAR END OPTIONS AT YEAR END
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE($)(2)
---- --------------- -------------- ------------------------- -------------------------------
<S> <C> <C> <C> <C> <C>
Michael E. Kolowich..... -- -- 62,501 / 937,499 --
Janesse T. Bruce........ -- -- 50,625 / 69,375 --
Robert L. Lentz......... -- -- 20,625 / 89,375 --
Annette E. Lissauer..... 13,800 $191,365(3) 91,633 / 36,017 $470,079 / $50,071
21,000 256,832
Richard C. Vancil....... 30,000 424,490 73,905 / 23,595 321,859 / 20,587
Joseph A. Amram......... 60,000 828,897(3) -- --
66,750 1,290,585
Bruce D. Glabe.......... 45,000 212,015 80,625 / -- 375,772 / --
</TABLE>
- --------
(1) Amounts disclosed in this column were calculated based on the difference
between the fair market value of Individual's Common Stock on the date of
exercise and the exercise price of the options, in accordance with
regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and do not reflect amounts actually received
by the Named Executive Officers. Named Executive Officers will receive
cash only if and when they sell the Individual Common Stock issued upon
exercise of the options, and the amount of cash received by such
individuals is dependent upon the price of Individual's Common Stock at
the time of such sale.
(2) Value is based on the difference between the option exercise price and the
fair market value at December 31, 1996, the fiscal year-end ($6.00 per
share as quoted on the Nasdaq), multiplied by the number of shares
underlying the option.
(3) There was no public trading market for the Individual Common Stock as of
the date of exercise of these options. Accordingly, these values have been
calculated on the basis of the initial public offering price of $14.00 per
share, minus the applicable per share exercise price.

118
<PAGE>

DESCRIPTION OF CAPITAL STOCK

DESCRIPTION OF DESKTOP CAPITAL STOCK

Assuming the stockholders of Desktop approve the amendment to the
Certificate to increase the number of authorized shares of Common Stock, the
authorized capital stock of Desktop consists of 35,000,000 shares of Common
Stock, $0.01 par value per share, and 1,000,000 shares of preferred stock,
$0.01 par value per share.

Desktop Common Stock

As of the Desktop Record Date, there were approximately 8,690,852 shares of
Desktop Common Stock outstanding held of record by approximately 115
stockholders. Desktop Common Stock is listed on Nasdaq under the symbol
"DTOP." Holders of Desktop Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders. The stockholders do not have
a right to take action by written consent. The holders of Desktop Common Stock
are entitled to receive ratably such dividends, if any, as may be declared
from time to time by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of Desktop,
the holders of Desktop Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities. The Desktop Common Stock has no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to the Desktop Common Stock.
All outstanding shares of Desktop Common Stock are fully paid and non-
assessable, and the shares of Desktop Common Stock to be outstanding upon
completion of the Merger will be fully paid and non-assessable.

Desktop Preferred Stock

Desktop has 1,000,000 shares of Preferred Stock authorized, of which, as of
November 2, 1997, no shares are outstanding. The Board of Directors has the
authority to issue these shares of Preferred Stock in one or more series and
to fix the rights, preferences, privileges and restrictions granted to or
imposed upon any unissued and undesignated shares of Preferred Stock and to
fix the number of shares constituting any series and the designations of such
series, without any further vote or action by the stockholders. Although it
presently has no intention to do so, the Board of Directors, without
stockholder approval, can issue Preferred Stock with voting and conversion
rights which could adversely affect the voting power or other rights of the
holders of Desktop Common Stock and the issuance of Preferred Stock may have
the effect of delaying, deferring or preventing a change in control of
Desktop.

Transfer Agent and Registrar

The Transfer Agent and Registrar for the Desktop Common Stock is BankBoston,
N.A., 150 Royall Street, Canton, Massachusetts 02021 and its telephone number
is (617) 575-2908.

DESCRIPTION OF INDIVIDUAL CAPITAL STOCK

The authorized capital stock of Individual consists of 25,000,000 shares of
Individual Common stock, $0.01 par value per share, and 1,000,000 shares of
Preferred Stock, $.01 par value per share (the "Preferred Stock").

Individual Common Stock

As of the Individual Record Date, there were approximately 16,418,196 shares
of Individual Common Stock outstanding held of record by approximately 181
stockholders. Individual Common Stock is listed on Nasdaq under the trading
symbol "INDV." Holders of Individual Common Stock are entitled to one vote per
share on all matters to be voted upon by the stockholders and to receive such
lawful dividends as may be declared by Individual's Board of Directors. In the
event of the liquidation, dissolution or winding up of Individual, the holders
of shares of Individual Common Stock will be entitled to share ratably in
Individual's assets. All outstanding shares of Individual Common Stock are
fully paid and nonassessable.

119
<PAGE>

Individual Preferred Stock

The Individual Board has the authority, without any further vote or action
by the stockholders, to provide for the issuance of up to 1,000,000 shares of
Preferred Stock in series, to establish from time to time the number of shares
to be included in each such series, to fix the designations, preferences,
limitations and relative, participating, optional or other special rights and
qualifications or restrictions on the shares of each series, and to determine
the voting powers, if any, of such shares. The issuance of Preferred Stock
could adversely affect, among other things, the rights of existing
stockholders or could delay or prevent a change in control of Individual
without further action by the stockholders. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for distribution to
holders of Individual Common Stock. In addition, any such issuance could have
the effect of delaying, deferring or preventing a change in control of
Individual and could make the removal of the present management of Individual
more difficult. Individual has no current plans to issue any Preferred Stock.

Transfer Agent and Registrar

The Transfer Agent and Registrar for Individual Common Stock is BankBoston,
N.A., 150 Royall Street, Canton, Massachusetts 02021 and its telephone number
is (617) 575-2908.

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS

After consummation of the Merger, the holders of Individual Common Stock who
receive Desktop Common Stock under the terms of the Agreement will become
stockholders of Desktop. As stockholders of Individual, their rights are
presently governed by Delaware law and by the Third Amended and Restated
Certificate of Incorporation of Individual, as amended (the "Individual
Certificate") and the Individual Amended and Restated By-laws (the "Individual
By-laws"). As stockholders of Desktop, their rights will be governed by
Delaware law and by the Desktop Certificate and Desktop's Amended and Restated
By-laws (the "Desktop By-laws"). There are no material differences between the
Individual Charter and the Desktop Certificate or between the Individual By-
laws and the Desktop By-laws. The following discussion summarizes the rights
of holders of Desktop Common Stock and the rights of holders of Individual
Common Stock following the Merger. This summary does not purport to be
complete and is qualified in its entirety by reference to the Desktop
Certificate and the Desktop By-laws and the relevant provisions of Delaware
law.

Desktop is subject to the provisions of Section 203 of the Delaware General
Corporation Law (the "DGCL"). Subject to certain exceptions, Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
after the date of the transaction in which the person became an interested
stockholder, unless the interested stockholder attained such status with the
approval of the Board of Directors or unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns,
or within three years did own, 15% or more of the corporation's voting stock.

Desktop's Certificate provides for the division of the Board of Directors
into three classes as nearly equal in size as possible with staggered three-
year terms. Any director may be removed without cause only by the vote of at
least 75% of the shares entitled to vote for the election of directors or with
cause by the vote of at least a majority of such shares. The classification of
the Board of Directors could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring,
control of Desktop.

The Desktop By-laws provide that for nominations for the Board of Directors
or for other business to be properly brought by a stockholder before a meeting
of stockholders, the stockholder must first have given timely notice thereof
in writing to the Secretary of Desktop. To be timely, a notice of nominations
or other business to be brought before an annual meeting must be delivered not
less than 120 days nor more than 150 days prior to the first anniversary of
the date of the proxy statement delivered to stockholders in connection with
the preceding

120
<PAGE>

year's annual meeting or, if either the date of the annual meeting is more
than 30 days before or more than 60 days after such anniversary, or if no
proxy statement was delivered to stockholders in connection with the preceding
year's annual meeting, such notice must be delivered not earlier than 90 days
prior to such annual meeting and not later than the later of 60 days prior to
the annual meeting or 10 days following the date on which public announcement
of the date of such annual meeting is first made by Desktop. With respect to
special meetings, notice must generally be delivered not more than 90 days
prior to such meeting and not later than the later of 60 days prior to such
meeting or 10 days following the day on which public announcement of such
meeting is first made by Desktop. The notice must contain, among other things,
certain information about the stockholder delivering the notice and, as
applicable, background information about each nominee or a description of the
proposed business to be brought before the meeting.

Desktop's Certificate authorizes the Board of Directors, when considering a
tender offer or merger or acquisition proposal, to take into account factors
in addition to potential economic benefits to stockholders. Such factors may
include: (i) the interests of Desktop's stockholders, including the
possibility that these interests might be best served by the continued
independence of Desktop; (ii) whether the proposed transaction might violate
Federal or state laws; (iii) the consideration being offered in the proposed
transaction in relation to the then current market price for the outstanding
capital stock of Desktop, as well as in relation to the market price for the
capital stock of Desktop over a period of years, the estimated price that
might be achieved in a negotiated sale of Desktop as a whole or in part or
through orderly liquidation, the premiums over market price for the securities
of other corporations in similar transactions, current political, economic and
other factors bearing on securities prices and Desktop's financial condition
and future prospects; and (iv) the social, legal and economic effects upon
employees, suppliers, customers, creditors and others having similar
relationships with Desktop, upon the communities in which Desktop conducts its
business and upon the economy of the state, region and nation. The foregoing
provisions could have the effect of making it more difficult for a third party
to acquire, or of discouraging a third party from acquiring, control of
Desktop.

Desktop's Certificate provides that any action required or permitted to be
taken by the stockholders of Desktop may be taken only at a duly called annual
or special meeting of the stockholders, and that special meetings may be
called only the Chairman of the Board of Directors, a majority of the Board of
Directors, or the President of Desktop. These provisions could have the effect
of delaying until the next annual stockholder's meeting stockholder actions
that are favored by the holders of a majority of the outstanding voting
securities of Desktop. These provisions may also discourage another person or
entity from making a tender offer for Desktop's Common Stock, because such
person or entity, even if it acquired a majority of the outstanding voting
securities of Desktop, would be able to take action as a stockholder (such as
electing new directors or approving a merger) only at a duly called
stockholder's meeting, and not by written consent.

The DGCL provides generally that the affirmative vote of a majority of the
shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or By-laws, unless a corporation's certificate of
incorporation or By-laws, as the case may be, requires a greater percentage.
The Desktop Certificate requires the affirmative vote of the holders of at
least 75% of the outstanding voting stock of Desktop to amend or repeal
certain provisions of the Desktop Certificate and to reduce the number of
authorized shares of Desktop Common Stock and Desktop Preferred Stock. The By-
laws may be amended or repealed by a majority vote of the Board of Directors
or the holders of a majority of the shares of Desktop's voting stock, provided
that the affirmative vote of the holders of at least 75% of the voting stock
is required to amend or repeal certain of the indemnification provisions
contained in the Desktop By-laws. Such 75% stockholder vote would be in
addition to any separate class vote that might in the future be required
pursuant to the terms of any Desktop preferred stock that might be outstanding
at the time such amendments are submitted to stockholders. The foregoing
provisions could have the effect of making it more difficult for a third party
to acquire, or of discouraging a third party from acquiring, control of
Desktop.

121
<PAGE>

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Desktop Certificate contains certain provisions permitted under the DGCL
relating to the liability of directors. These provisions eliminate a director's
personal liability for monetary damages resulting from a breach of fiduciary
duty, except in certain circumstances involving certain wrongful acts, such as
the breach of a director's duty of loyalty or acts or omissions which involve
intentional misconduct or a knowing violation of law. These provisions do not
limit or eliminate the rights of Desktop or any stockholder to seek non-
monetary relief, such as an injunction or rescission, in the event of a breach
of a director's fiduciary duty. These provisions will not alter a director's
liability under Federal securities laws. The Desktop Certificate also contains
provisions indemnifying the directors and officers of Desktop to the fullest
extent permitted by the DGCL. Desktop believes that these provisions will
assist the Desktop in attracting and retaining qualified individuals to serve
as directors.

EXPERTS

The consolidated financial statements of Desktop Data, Inc. as of December
31, 1995 and 1996, and for each of the three years ended December 31, 1996,
included in this Prospectus/Joint Proxy Statement have been included in
reliance upon the reports of Arthur Andersen LLP, independent accountants,
given on the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Individual, Inc. as of December 31,
1995 and 1996, and for each of the three years ended December 31, 1996 included
in this Prospectus/Joint Proxy Statement have been included herein in reliance
on the report of Coopers & Lybrand L.L.P., independent accountants, given on
the authority of such firm as experts in accounting and auditing.

LEGAL MATTERS

The validity of the Desktop Common Stock issuable pursuant to the Merger will
be passed on by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts. Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo, P.C., Boston, Massachusetts, is acting as
special counsel for Individual in connection with certain legal matters
relating to the Merger and the transactions contemplated thereby. Testa,
Hurwitz & Thibeault, LLP, is also acting as counsel for Individual in
connection with certain legal matters relating to this Prospectus/Joint Proxy
Statement.

122
<PAGE>

DESKTOP DATA, INC. AND INDIVIDUAL, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Desktop Data, Inc. and Subsidiaries:
Audited Consolidated Financial Statements:
Report of Independent Public Accountants............................... F-2
Consolidated Balance Sheets............................................ F-3
Consolidated Statements of Operations.................................. F-4
Consolidated Statements of Stockholders' Equity (Deficit).............. F-5
Consolidated Statements of Cash Flows.................................. F-6
Notes to Consolidated Financial Statements............................. F-7
Unaudited Interim Consolidated Financial Statements:
Condensed Consolidated Balance Sheets.................................. F-17
Condensed Consolidated Statements of Income............................ F-18
Condensed Consolidated Statements of Cash Flows........................ F-19
Notes to the Condensed Consolidated Financial Statements............... F-20
Individual, Inc.:
Audited Consolidated Financial Statements:
Report of Independent Accountants...................................... F-22
Consolidated Balance Sheets............................................ F-23
Consolidated Statements of Operations.................................. F-24
Consolidated Statements of Stockholders' Equity (Deficit).............. F-25
Consolidated Statements of Cash Flows.................................. F-26
Notes to Consolidated Financial Statements............................. F-27
Unaudited Interim Consolidated Financial Statements:
Consolidated Balance Sheet............................................. F-39
Consolidated Statements of Operations.................................. F-40
Consolidated Statements of Cash Flows.................................. F-41
Notes to Consolidated Financial Statements............................. F-42
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Desktop Data, Inc.:

We have audited the accompanying consolidated balance sheets of Desktop
Data, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of operations, stockholders'
equity (deficit) and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Desktop
Data, Inc. and subsidiaries as of December 31, 1996 and 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

Hartford, Connecticut
January 31, 1997 (except with respect
to the matters discussed in Note
4(d), as to which the date is
February 13, 1997)

F-2
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
----------- -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.......................... $10,735,071 $19,300,515
Short-term investments............................. 18,119,717 13,117,217
Accounts receivable................................ 4,948,351 3,163,744
Prepaid expenses and deposits...................... 1,814,104 1,184,309
----------- -----------
Total current assets............................. 35,617,243 36,765,785
----------- -----------
LONG-TERM INVESTMENTS................................ 7,927,667 --
----------- -----------
PROPERTY AND EQUIPMENT, AT COST:
Computer equipment................................. 4,846,437 2,836,704
Furniture and fixtures............................. 518,615 291,253
Machinery and equipment............................ 734,847 70,056
Equipment under capital leases..................... 138,792 113,171
----------- -----------
6,238,691 3,311,184
Accumulated depreciation........................... (1,599,021) (1,320,647)
----------- -----------
4,639,670 1,990,537
----------- -----------
OTHER ASSETS......................................... 142,570 122,193
----------- -----------
$48,327,150 $38,878,515
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable................................... $ 878,147 $ 974,168
Accrued expenses................................... 3,572,198 3,125,756
Deferred revenue, current.......................... 13,630,356 10,063,149
Obligations under capital leases, current.......... 34,191 24,581
----------- -----------
Total current liabilities........................ 18,114,892 14,187,654
----------- -----------
OBLIGATIONS UNDER CAPITAL LEASES, NONCURRENT......... 37,569 52,529
----------- -----------
DEFERRED REVENUE, NONCURRENT......................... 190,165 33,427
----------- -----------
COMMITMENTS (NOTE 5)
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value--Authorized--
15,000,000 shares Issued and outstanding--
8,626,425 shares and 8,510,680 shares in 1996 and
1995.............................................. 86,264 85,107
Additional paid-in capital......................... 31,782,106 30,988,442
Accumulated deficit................................ (1,883,846) (6,468,644)
----------- -----------
Total stockholders' equity....................... 29,984,524 24,604,905
----------- -----------
$48,327,150 $38,878,515
=========== ===========
</TABLE>

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

F-3
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES................................ $33,779,259 $23,185,833 $14,357,624
----------- ----------- -----------
COSTS AND EXPENSES:
Cost of revenues...................... 9,500,735 6,397,094 3,878,896
Customer support expenses............. 3,492,756 2,492,493 1,907,926
Development expenses.................. 4,230,161 2,870,351 1,902,200
Sales and marketing expenses.......... 11,657,566 8,721,712 6,152,745
General and administrative expenses... 1,595,039 1,281,227 899,796
----------- ----------- -----------
Total costs and expenses............ 30,476,257 21,762,877 14,741,563
----------- ----------- -----------
Income (loss) from operations....... 3,303,002 1,422,956 (383,939)
INTEREST INCOME, NET.................... 1,896,021 897,108 96,872
----------- ----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................... 5,199,023 2,320,064 (287,067)
PROVISION FOR INCOME TAXES.............. 614,225 183,000 --
----------- ----------- -----------
Net income (loss)................... 4,584,798 2,137,064 (287,067)
ACCRETION OF DIVIDENDS ON SERIES B
PREFERRED STOCK........................ -- (101,250) (135,000)
DISCOUNT ON REDEMPTION OF SERIES B
PREFERRED STOCK........................ -- 1,232,238 --
----------- ----------- -----------
Net income (loss) available for
common stockholders................ $ 4,584,798 $ 3,268,052 $ (422,067)
=========== =========== ===========
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE IN 1996; PRO FORMA NET
INCOME (LOSS) PER COMMON AND COMMON
EQUIVALENT SHARE IN 1995 AND 1994 (NOTE
1)..................................... $ .52 $ .43 $ (.06)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING IN
1996; PRO FORMA WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING IN 1995 AND 1994 (NOTE 1).. 8,778,479 7,518,529 6,670,410
=========== =========== ===========
</TABLE>

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

F-4
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
SERIES A
CONVERTIBLE
PREFERRED STOCK COMMON STOCK TREASURY STOCK TOTAL
--------------------- -------------------- ADDITIONAL ------------------ STOCKHOLDERS'
NUMBER $.01 NUMBER $.01 PAID-IN ACCUMULATED NUMBER EQUITY
OF SHARES PAR VALUE OF SHARES PAR VALUE CAPITAL DEFICIT OF SHARES COST (DEFICIT)
---------- --------- --------- --------- ----------- ----------- --------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31,
1993.............. 5,335,410 $ 53,354 2,400,876 $24,009 $ 2,803,287 $(8,318,641) 27,457 $(26,191) $(5,464,182)
Purchase of
treasury stock... -- -- -- -- -- -- 2,028 (4,564) (4,564)
Exercise of stock
options.......... -- -- 241,337 2,413 25,990 -- -- -- 28,403
Accretion of
dividends on
redeemable
preferred stock.. -- -- -- -- (350,000) -- -- -- (350,000)
Net loss.......... -- -- -- -- -- (287,067) -- -- (287,067)
---------- -------- --------- ------- ----------- ----------- ------- -------- -----------
BALANCE,
DECEMBER 31,
1994.............. 5,335,410 53,354 2,642,213 26,422 2,479,277 (8,605,708) 29,485 (30,755) (6,077,410)
Purchase of
treasury stock... -- -- -- -- -- -- 281 (1,930) (1,930)
Retirement of
treasury stock... -- -- (29,766) (298) (32,387) -- (29,766) 32,685 --
Exercise of stock
options.......... -- -- 74,110 742 63,895 -- -- -- 64,637
Payments and
accretion of
dividends on
redeemable
preferred stock.. -- -- -- -- (2,217,000) -- -- -- (2,217,000)
Proceeds from
initial public
offering, less
offering costs... -- -- 1,977,000 19,770 26,691,551 -- -- -- 26,711,321
Conversion of
Series A, C and D
preferred stock.. (5,335,410) (53,354) 3,847,123 38,471 2,770,868 -- -- -- 2,755,985
Discount on
redemption of
Series B
preferred stock.. -- -- -- -- 1,232,238 -- -- -- 1,232,238
Net income........ -- -- -- -- -- 2,137,064 -- -- 2,137,064
---------- -------- --------- ------- ----------- ----------- ------- -------- -----------
BALANCE,
DECEMBER 31,
1995.............. -- -- 8,510,680 85,107 30,988,442 (6,468,644) -- -- 24,604,905
Exercise of stock
options.......... -- -- 99,566 996 162,681 -- -- -- 163,677
Stock issued under
employee stock
purchase plan.... -- -- 16,179 161 295,033 -- -- -- 295,194
Tax benefit from
exercise of stock
options.......... -- -- -- -- 335,950 -- -- -- 335,950
Net income........ -- -- -- -- -- 4,584,798 -- -- 4,584,798
---------- -------- --------- ------- ----------- ----------- ------- -------- -----------
BALANCE,
DECEMBER 31,
1996.............. -- $ -- 8,626,425 $86,264 $31,782,106 $(1,883,846) -- $ -- $29,984,524
========== ======== ========= ======= =========== =========== ======= ======== ===========
</TABLE>

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

F-5
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1996 1995 1994
------------ ------------ ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................... $ 4,584,798 $ 2,137,064 $ (287,067)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities--
Depreciation....................... 898,300 498,900 307,369
Tax benefit from exercise of stock
options........................... 335,950 -- --
Changes in assets and liabilities:
Accounts receivable.............. (1,784,607) (905,914) (722,767)
Prepaid expenses and deposits.... (629,795) (439,893) (311,603)
Accounts payable................. (96,021) 552,292 12,505
Accrued expenses................. 446,442 1,496,537 912,086
Deferred revenue................. 3,723,945 2,476,294 2,602,930
------------ ------------ ----------
Net cash provided by operating
activities.................... 7,479,012 5,815,280 2,513,453
------------ ------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments.. (47,494,860) (13,117,217) --
Proceeds from maturities and sales of
short-term investments.............. 42,492,360 -- --
Purchases of long-term investments... (7,927,667) -- --
Purchases of property and equipment.. (3,521,809) (1,383,269) (634,946)
Increase in other assets............. (20,377) (65,876) (24,000)
------------ ------------ ----------
Net cash used in investing
activities.................... (16,472,353) (14,566,362) (658,946)
------------ ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock
options............................. 163,677 64,637 28,403
Proceeds from stock issued under
employee stock purchase plan........ 295,194 -- --
Proceeds from initial public
offering, less offering costs....... -- 26,711,321 --
Payments of dividends on redeemable
preferred stock..................... -- (2,638,041) --
Purchase of fractional shares on
conversion of preferred stock....... -- (1,041) --
Redemption of Series B preferred
stock............................... -- (135,000) --
Purchase of treasury stock........... -- (1,930) (4,564)
Payments on obligations under capital
leases.............................. (30,974) (21,799) (14,261)
------------ ------------ ----------
Net cash provided by financing
activities.................... 427,897 23,978,147 9,578
------------ ------------ ----------
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS........................... (8,565,444) 15,227,065 1,864,085
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR.................................. 19,300,515 4,073,450 2,209,365
------------ ------------ ----------
CASH AND CASH EQUIVALENTS, END OF
YEAR.................................. $ 10,735,071 $ 19,300,515 $4,073,450
============ ============ ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest............... $ 5,325 $ 3,121 $ 2,578
============ ============ ==========
Cash paid for income taxes........... $ 294,119 $ 10,600 $ --
============ ============ ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH
TRANSACTIONS:
Equipment acquired under capital
lease obligations................... $ 25,624 $ 18,090 $ 95,081
============ ============ ==========
Accretion of dividends on redeemable
preferred stock..................... $ -- $ 17,238 $ 350,000
============ ============ ==========
Discount on redemption of Series B
preferred stock..................... $ -- $ 1,232,238 $ --
============ ============ ==========
Conversion of Series A, C and D
preferred stock..................... $ -- $ 2,757,025 $ --
============ ============ ==========
</TABLE>

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

F-6
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1996

(1)OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Desktop Data, Inc. ("Desktop") was incorporated on July 11, 1988, and
through its NewsEDGE service and software, delivers to businesses, primarily
throughout the United States, a large variety of news and information sources
in real time to personal computers installed on LANs and WANs, automatically
monitors and filters the news, and alerts users to stories of interest to
them.

The accompanying consolidated financial statements reflect the application
of certain significant accounting policies, as described in this note and
elsewhere in the accompanying notes to consolidated financial statements.

(a) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Desktop and its wholly owned subsidiaries, Desktop Data Canada, Inc. and
Desktop Data Securities Corp. All material intercompany accounts and
transactions have been eliminated in consolidation.

(b) Cash and Cash Equivalents

Cash and cash equivalents, which have original maturities of less than three
months, consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1995
----------- -----------
<S> <C> <C>
Cash................................................ $ 989,221 $ 926,947
Money market accounts............................... 900,479 5,413,147
Securities purchased under agreements to resell..... -- 11,973,971
U.S. Treasury Bills................................. -- 986,450
U.S. Government Agencies............................ 8,845,371 --
----------- -----------
$10,735,071 $19,300,515
=========== ===========
</TABLE>

Investments are classified into one of three categories and accounted for as
follows:

<TABLE>
<CAPTION>
CATEGORY ACCOUNTING TREATMENT
-------- --------------------
<S> <C>
Held to maturity--securities for which Reported at amortized cost
Desktop has the positive intent and ability
to hold to maturity
Trading--securities held for resale in the Reported at fair value, with
near term unrealized gains and losses
included in income
Available for sale--securities not classified Reported at fair value, with
as trading or held to maturity unrealized gains and losses, net
of tax, reported as a separate
component of equity
</TABLE>

F-7
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

As of December 31, 1996, all of Desktop's investments are classified and
accounted for as held to maturity. As of December 31, 1996 and 1995, the
amortized cost of the Desktop's investments, which approximates fair market
value, is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1995
----------- -----------
<S> <C> <C>
SHORT-TERM
Repurchase Agreement................................ $ -- $ 4,417,701
U.S. Government Agencies............................ 13,833,870 8,699,516
U.S. Treasury Notes................................. 4,285,847 --
----------- -----------
$18,119,717 $13,117,217
=========== ===========
LONG-TERM
U.S. Treasury Notes, due in 1998.................... $ 7,927,667 $ --
=========== ===========
</TABLE>

Any security that experiences a decline in value that management believes is
other than temporary is reduced to its net realizable value by a charge to
income. Realized gains and losses from the sale of investment securities are
recorded on the trade date by specific identification of the security sold.
Realized gains and losses were not material during any year presented.

(d) Management Estimates

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

(e) Depreciation

Desktop provides for depreciation using the straight-line method by charges
to operations in amounts that allocate the cost of assets over their estimated
useful lives of five years, except for depreciation of leasehold improvements
which are depreciated over the shorter of the lease term or life of the asset.

(f) Research and Development and Software Development Costs

Research and development costs are expensed as incurred. Statement of
Financial Accounting Standards (SFAS) No. 86, Accounting for the Costs of
Computer Software To Be Sold, Leased or Otherwise Marketed, requires the
capitalization of certain computer software development costs incurred after
technological feasibility is established. Desktop has not capitalized software
development costs to date, as the costs incurred after technological
feasibility of a software product has been established have not been
significant.

F-8
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

(g) Revenue Recognition

Revenues in the accompanying consolidated statements of operations consist
of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Subscription and royalty revenues...... $31,292,468 $21,743,194 $12,925,145
Other revenues......................... 2,486,791 1,442,639 1,432,479
----------- ----------- -----------
$33,779,259 $23,185,833 $14,357,624
=========== =========== ===========
</TABLE>

Desktop licenses its software for a specified term under standard
subscription agreements. Subscription revenues are recognized ratably over the
term of the agreement, generally 12 months, beginning upon installation. The
unearned portion of revenue is shown as deferred revenue in the accompanying
consolidated balance sheets. Royalty revenues are recognized as they are
earned under agreements with certain news providers. Other revenues are
recognized at the time of shipment or when services are rendered. Cost of
revenues includes royalties payable to news service and transmission providers
and is expensed over the term of the subscription agreement.

(h) Income Taxes

Desktop accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. This statement requires Desktop to recognize
deferred tax assets and liabilities for the expected future tax consequences
of events that have been recognized in Desktop's financial statements or tax
returns. Under this method, deferred tax assets and liabilities are determined
based on differences between the financial statement carrying amounts and the
tax bases of assets and liabilities and net operating loss carryforwards
available for tax reporting purposes, using the applicable tax rates for the
years in which the differences are expected to reverse. A valuation allowance
is recorded on deferred tax assets unless realization is more likely than not.

(i) Foreign Currency Translation

Revenues and expenses are translated using exchange rates in effect during
the year. Gains or losses from foreign currency translation are expensed as
incurred. There were no significant gains or losses from foreign currency
translations during any year presented.

(j) Postretirement Benefits

Desktop has no obligations for postretirement benefits.

(k) Concentration of Credit Risk

SFAS No. 105, Disclosure of Information about Financial Instruments with
Off-Balance-Sheet Risk and Financial Instruments with Concentration of Credit
Risk, requires disclosure of any significant off-balance-sheet and credit risk
concentrations. Desktop has no significant off-balance-sheet concentration of
credit risk, such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. Desktop maintains the majority of cash balances
with two financial institutions, and its accounts receivable balances are
primarily domestic. No single customer accounted for greater than 10% of
revenues or represents a significant credit risk to Desktop.

F-9
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

(l) Net Income and Pro Forma Net Loss per Common and Common Equivalent Share

For the year ended December 31, 1996, net income per common and common
equivalent share is computed by dividing net income by the weighted average
common and common stock equivalents during that period. Common equivalent
shares from stock options have been included in the computation using the
treasury-stock method.

For the years ended December 31, 1995 and 1994, pro forma net loss per
common and common equivalent share is computed by dividing net income (loss),
less the charge for the accretion of the Series B preferred stock dividends
plus the discount on the redemption of the Series B preferred stock, by the
pro forma weighted average number of common and common stock equivalent shares
outstanding during that period, assuming conversion of all shares of Series A
convertible preferred stock and all shares of Series C and D redeemable
preferred stock into common stock. In 1995, common equivalent shares from
stock options have been included in the computation using the treasury stock
method.

The dollar and per share impact available to common stockholders of the
redemption of the Series B preferred stock is as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1996 1995 1994
---------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net income (loss)....... $4,584,798 $0.52 $2,137,064 $0.28 $(287,067) $(0.04)
Accretion of dividends
on Series B preferred
stock.................. -- -- (101,250) (0.01) (135,000) (0.02)
---------- ----- ---------- ----- --------- ------
Net income (loss) before
redemption of Series B
preferred stock........ 4,584,798 0.52 2,035,814 0.27 (422,067) (0.06)
Discount on redemption
of Series B preferred
stock.................. -- -- 1,232,238 0.16 -- --
---------- ----- ---------- ----- --------- ------
Net income (loss)
available for common
stockholders........... $4,584,798 $0.52 $3,268,052 $0.43 $(422,067) $(0.06)
========== ===== ========== ===== ========= ======
Weighted average number
of common and common
equivalent shares
outstanding in 1996;
Pro forma weighted
average number of
common and common
equivalent shares
outstanding in 1995 and
1994................... 8,778,479 7,518,529 6,670,410
========== ========== =========
</TABLE>

(m) New Accounting Pronouncement

In June 1996, the Financial Accounting Standards Board (FASB) issued SFAS
No. 125, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities. Desktop does not expect the statement to have
a material impact on Desktop's consolidated financial position or results of
operations upon adoption on January 1, 1997.

(n) Reclassifications

Certain prior year amounts have been reclassified to conform with current
year presentation.

F-10
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

(o) Long-Lived Assets

The Company adopted SFAS No. 121 Accounting for Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of (SFAS 121) in 1995. SFAS 121 requires that
long-lived assets be reviewed for impairment by comparing the fair value of
the assets with their carrying amount. Any write-downs are to be treated as
permanent reductions in the carrying amount of the assets. Accordingly, the
Company evaluates the possible impairment of long-lived assets at each
reporting period based on the undiscounted projected cash flows of the related
asset. Should there be an impairment, the cash flow estimates that will be
used will contain management's best estimates, using appropriate and customary
assumptions and projections at the time.

(2) INCOME TAXES

The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Tax effect of net operating loss carryforwards,
excluding amounts related to stock option
exercises........................................ $ -- $ 1,598,099
Deferred revenue.................................. 312,040 282,000
Financial reserves not yet deductible............. 309,726 336,000
Deferred tax (liability) asset related to property
and equipment.................................... (180,076) 4,000
Research and development and alternative minimum
tax credit carryforwards......................... 595,956 451,431
Valuation allowance............................... (1,037,646) (2,671,530)
----------- -----------
$ -- $ --
=========== ===========
</TABLE>

The reduction in the valuation allowance from 1995 to 1996 is primarily
attributable to the utilization of net operating loss carryforwards. In
determining the need for a valuation allowance Desktop considered several
items. Negative evidence that is significant for the period since Desktop's
IPO is the generation of large Net Operating Loss carryforwards (NOLs) from
disqualifying dispositions (the amount unused as of December 31, 1996 was in
excess of $2.5 million which constituted Desktop's entire NOL carryforward).
In addition, Desktop had tax credit carryforwards of $595,000 as of December
31, 1996. The income tax laws provide for an ordering rule with respect to the
utilization of Desktop's tax attributes (i.e. NOL & credit carryforwards). The
tax laws require Desktop to utilize the NOLs prior to taking the benefit for
credit carryforwards. In addition, Desktop anticipates further disqualifying
dispositions which will generate additional tax losses, thus extending the
time as to when the credits can be utilized. As a result, there is significant
uncertainty as to whether Desktop will ever realize a benefit from any of the
tax credit carryforwards. Additional doubt as to the realizability of the tax
credit is presented because (i) the credits have calculated limits on usage
based on income in any period, (ii) the credits have expiration dates and
(iii) utilization could be further limited by other events such as an
acquisition or a change in ownership, which is common among technology
companies. This negative evidence was weighed against the relatively short
history of profitability. As a result, management belives that it is more
likely than not that the net deferred tax asset will not be realized.

The exercise of nonqualified stock options gives rise to compensation which
is includable in the taxable income of the applicable employees and deductible
by Desktop for federal and state income tax purposes. Compensation resulting
from increases in the fair market value of Desktop's common stock subsequent
to the date of grant of the applicable exercised stock options is not
recognized by Desktop, in accordance with Accounting Principles Board Opinion
No. 25, as an expense for financial accounting purposes and the related

F-11
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

tax benefits are credited directly to additional paid-in capital when the
benefit is realized. Tax deductions related to stock option exercises were
approximately $2.8 million and $550,000 for 1996 and 1995, respectively.
During the year ended December 31, 1996, a tax benefit in the amount of
$335,950 for deductions of approximately $840,000, which amount represents all
of the 1995 deduction and a portion of the 1996 deduction, was realized and
credited to additional paid-in capital. As of December 31, 1996, Desktop has a
net operating loss carryforward of approximately $2.5 million which expires in
2008. All of such carryforward is the result of deductions related to stock
option exercises. Accordingly, the tax benefit related to the utilization of
such carryforward will be credited to additional paid-in capital upon
utilization.

The research and development credit carryforwards of $514,324 expire in 2007
through 2011.

A reconciliation of the federal statutory rate to Desktop's effective tax
rate at December 31, 1996 and 1995 is as follows:

<TABLE>
<CAPTION>
1996 1995
----- -----
<S> <C> <C>
Income tax provision at federal statutory rate................. 34.0% 34.0%
Increase (decrease) in tax resulting from--
State tax provision, net of federal benefit.................. 6.3 6.3
Change in valuation allowance................................ (31.4) (32.4)
Other........................................................ 2.9 --
----- -----
Effective tax rate......................................... 11.8% 7.9%
===== =====
</TABLE>

The income tax provision for the years ended December 31, 1996 and 1995 is
comprised of the following:

<TABLE>
<CAPTION>
1996 1995
---------- --------
<S> <C> <C>
Current
Federal.............................................. 1,853,371 788,800
State................................................ 327,538 146,200
International........................................ 67,200 0
---------- --------
2,248,109 935,000
Deferred
Federal.............................................. (1,385,094) (669,000)
State................................................ (248,790) (83,000)
International........................................ 0 0
---------- --------
(1,633,884) (752,000)
---------- --------
Total.................................................. 614,225 183,000
========== ========
</TABLE>

(3) STOCKHOLDERS' EQUITY

(a) Redeemable Preferred Stock

In December 1990, Desktop sold 13,500 shares of Series B convertible
redeemable preferred stock (the Series B preferred stock) and 1,500 shares of
Series C convertible preferred stock (the Series C preferred stock) for gross
proceeds of $1,350,000 and $150,000, respectively. On October 20, 1992,
Desktop sold 20,000 shares of Series D convertible redeemable preferred stock
(the Series D preferred stock) for gross proceeds of $2,000,000.

F-12
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

(b) Stock Split

On June 26, 1995, Desktop's stockholders approved a 1-for-2.25 reverse stock
split of Desktop's common stock. The reverse stock split has been
retroactively reflected in the accompanying consolidated financial statements
and notes for all periods presented.

On August 11, 1995, Desktop completed an initial public offering of
1,977,000 shares of its common stock, including 300,000 shares granted to the
underwriters upon exercise of their over-allotment option. The proceeds to
Desktop, net of underwriting discounts, commissions and offering expenses,
were approximately $26,711,000.

(d) Conversion of Preferred Stock

Upon the closing of the initial public offering, the Series A, Series C and
Series D preferred stock were converted (at a rate of approximately 0.444,
534.90 and 33.68 shares, respectively) into an aggregate of 3,847,123 shares
of common stock. In addition, Desktop paid cash dividends of approximately
$2,009,000 and $629,000 on the Series A and Series B preferred stock,
respectively.

(e) Series B Redeemable Preferred Stock

In accordance with the underlying agreement, the mandatory redemption
requirement related to the Series B preferred stock was relieved upon
Desktop's initial public offering as the offering price exceeded $13.10 per
share. In December 1995, Desktop redeemed the Series B preferred stock for
$10.00 per share or an aggregate of $135,000. As a result of the redemption,
Desktop recognized a $1,232,238 discount.

(f) Preferred Stock

On June 26, 1995, Desktop's stockholders approved a new class of
undesignated preferred stock, which became effective upon the closing of
Desktop's initial public offering.

(4) STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS

(a) 1989 Stock Option Plan

Desktop has a stock option plan (the "1989 Plan") pursuant to which 622,222
shares of common stock are reserved for issuance. The 1989 Plan is
administered by the Board of Directors and provides for the granting of
incentive stock options, nonqualified stock options, stock awards and direct
stock purchases. During 1995, the Board of Directors terminated the 1989 Plan,
such that no further options may be granted under the 1989 Plan.

Under the 1989 Plan, Desktop has granted nonstatutory stock options to
certain employees. The options generally vest over a four-year period and
expire not more than five years from the date of grant.

(b) 1995 Stock Plan

On June 26, 1995, Desktop's stockholders approved the 1995 Stock Plan (the
"1995 Plan"). The 1995 Plan is administered by the Board of Directors and
provides for stock awards, direct purchases and the grant of options to
purchase shares of Desktop common stock. A maximum of 625,000 shares may be
issued under the 1995 Plan. Options granted under the 1995 Plan expire 10
years from the date of grant.

F-13
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

On June 26, 1995, Desktop's stockholders also approved the 1995 Non-Employee
Director Stock Option Plan, as amended, (the "1995 Director Plan"), for which
100,000 shares of Desktop common stock have been reserved. The purpose of the
1995 Director Plan is to attract and retain qualified persons who are not also
officers or employees of Desktop (the "Eligible Directors") to serve as
directors of Desktop. Under the 1995 Director Plan, any Eligible Director
shall automatically be granted an option to purchase 20,000 shares of Desktop
common stock on the effective date of election at an option price equal to the
fair market value on the date of grant, and an option to purchase 2,500 shares
of Desktop common stock on the date of each successive annual meeting of the
stockholders, if such director has attended at least 75% of the meetings of
the Board of Directors during the past fiscal year. Options granted under this
plan expire 10 years from the date of grant.

(d) Stock Option Plan Activity

The following schedule summarizes all stock option activity under the 1989
Plan and the 1995 Plan for the three years ended December 31, 1996:

<TABLE>
<CAPTION>
1996 1995 1994
----------------- ----------------- ------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning
of year................ 263,241 $ 3.44 275,881 $1.39 440,420 $ .50
Granted................. 575,850 24.18 75,497 8.58 91,655 2.33
Exercised............... (99,566) 1.64 (74,110) .87 (241,337) .12
Terminated.............. (89,542) 21.28 (14,027) 3.85 (14,857) 1.49
------- ------- --------
Outstanding, end of
year................... 649,983 $19.60 263,241 $3.44 275,881 $1.39
======= ====== ======= ===== ======== =====
Exercisable, end of
year................... 83,401 $ 3.52 115,572 $1.34 82,908 $ .86
======= ====== ======= ===== ======== =====
Weighted average fair
value of options
granted................ $13.19 $4.67 N/A
====== =====
</TABLE>

The following table summarizes information about stock options outstanding
at December 31, 1996:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------- --------------------------
NUMBER WEIGHTED AVERAGE WEIGHTED NUMBER WEIGHTED
EXERCISE PRICE/ OUTSTANDING REMAINING AVERAGE EXERCISABLE AVERAGE
RANGE OF AS OF CONTRACTUAL EXERCISE AT EXERCISE
EXERCISE PRICES DECEMBER 31, 1996 LIFE PRICE DECEMBER 31, 1996 PRICE
--------------- ----------------- ---------------- -------- ----------------- --------
<S> <C> <C> <C> <C> <C>
$0.90-$7.43............. 136,923 2.37 $ 3.31 80,071 $ 2.73
15.00.................. 5,035 3.55 15.00 1,748 15.00
22.75.................. 140,950 9.55 22.75 -- --
23.50.................. 52,200 9.79 23.50 93 23.50
24.00-35.75............ 314,875 9.10 24.85 1,489 30.95
------- ------
$0.90-35.75............. 649,983 7.76 $19.60 83,401 $ 3.52
======= ==== ====== ====== ======
</TABLE>

On February 13, 1997, Desktop's Board of Directors authorized the repricing
of all stock options previously granted under the 1995 Plan, excluding 105,000
options which were granted to the executive officers of Desktop. The repricing
provides for the exercise price of 375,525 options outstanding to be reduced
to $14.13 per share, the closing price of Desktop's stock on February 13,
1997. Prior to the repricing, such options had exercise prices of $22.75 to
$35.75.

F-14
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

(e) 1995 Employee Stock Purchase Plan

On June 26, 1995, Desktop's stockholders approved the 1995 Employee Stock
Purchase Plan (the "1995 Purchase Plan"). This plan permits eligible employees
to purchase Desktop's common stock at 85% of the fair market value of the
stock on the first or last date of each semiannual plan period, whichever is
lower. The 1995 Purchase Plan covers substantially all employees, subject to
certain limitations. An eligible employee may elect to have up to 10% of his
or her total compensation, as defined, withheld and applied toward the
purchase of shares in such a plan period (not to exceed $25,000 in any year).
At December 31, 1996, 158,821 shares of Desktop common stock were reserved for
purchases under the 1995 Purchase Plan.

(f) Fair Value of Stock Based Compensation

In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
Compensation. SFAS No. 123 requires the measurement of the fair value of stock
options to be included in the statement of operations or disclosed in the
notes to financial statements. Desktop has determined that it will continue to
account for stock-based compensation for employees under Accounting Principles
Board Opinion No. 25 and elect the disclosure-only alternative under SFAS No.
123. Desktop has computed the pro forma disclosures required under SFAS No.
123 for options granted in 1995 and 1996 using the Black-Scholes option
pricing model as prescribed by SFAS No. 123. The weighted average assumptions
used are as follows:

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Risk free interest rate................................ 5.26-6.70% 5.76-7.74%
Expected dividend yield................................ None None
Expected lives......................................... 3-6 years 3-6 years
Expected volatility.................................... 63% 63%
</TABLE>

Had compensation cost for Desktop's stock option plans been determined
consistent with SFAS No. 123, Desktop's net income applicable to common
stockholders and net income per common and common equivalent share would have
been the following pro forma amounts:

<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Net income available to common stockholders:
As reported......................................... $4,584,798 $3,268,052
Pro forma........................................... 3,074,395 3,213,195
Net income per common and common equivalent share:
As reported......................................... $ .52 $ .43
Pro forma........................................... .35 .43
</TABLE>

Because the SFAS No. 123 method of accounting has not been applied to
options granted prior to January 1, 1995, the resulting pro forma compensation
cost may not be representative of that to be expected in future years.
Additionally, the pro forma information included above does not consider the
repricing of the stock options in the 1995 Plan in February 1997.

F-15
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1996

(5) COMMITMENTS

(a) Operating Leases

Desktop conducts its operations in facilities under operating leases
expiring through 2003. Desktop's future minimum lease payments under these
leases as of December 31, 1996 are approximately as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
---- ----------
<S> <C>
1997.............................. $ 699,000
1998.............................. 681,000
1999.............................. 567,000
2000.............................. 435,000
2001.............................. 435,000
Thereafter........................ 581,000
----------
$3,398,000
==========
</TABLE>

Rent expense charged to operations was approximately $900,000, $564,000 and
$452,000 for the years ended 1996, 1995 and 1994, respectively.

(b) Capital Leases

Desktop leases certain equipment under capital leases. Future minimum lease
payments under these capital leases as of December 31, 1996 are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
---- -------
<S> <C>
1997.............................................................. $41,146
1998.............................................................. 39,001
1999.............................................................. 7,447
-------
Total minimum lease payments...................................... 87,594
Less--Amount representing interest................................ 15,834
-------
Obligations under capital leases.................................. 71,760
Less--Current portion of capital lease obligations................ 34,191
-------
$37,569
=======
</TABLE>

(6) PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits in the accompanying consolidated balance
sheets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
---------- ----------
<S> <C> <C>
Prepaid commissions.................................... $ 995,378 $ 893,258
Prepaid royalties...................................... 562,446 184,393
Other.................................................. 256,280 106,658
---------- ----------
$1,814,104 $1,184,309
========== ==========
</TABLE>

(7) ACCRUED EXPENSES

Accrued expenses in the accompanying consolidated balance sheets consist of
the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
---------- ----------
<S> <C> <C>
Payroll and payroll-related........................... $ 867,789 $ 966,990
Royalties............................................. 917,086 800,778
Other................................................. 1,787,323 1,357,988
---------- ----------
$3,572,198 $3,125,756
========== ==========
</TABLE>

F-16
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $29,220 $10,735
Short-term investments............................. 13,157 18,120
Accounts receivable................................ 4,865 4,948
Prepaid expenses and deposits...................... 2,569 1,814
------- -------
Total current assets............................. 49,811 35,617
------- -------
Long-term investments.............................. -- 7,928
------- -------
Property and equipment, net........................ 5,591 4,640
------- -------
Other assets....................................... 143 142
------- -------
Total assets..................................... $55,545 $48,327
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................... $ 2,149 $ 878
Accrued expenses................................... 6,053 3,572
Deferred revenue, current.......................... 15,122 13,631
Obligation under capital leases, current........... 34 34
------- -------
Total current liabilities........................ 23,358 18,115
------- -------
Obligation under capital leases, noncurrent.......... 12 38
------- -------
Deferred revenue, noncurrent......................... 2 190
------- -------
Commitments (Note 3)
Stockholders' equity:
Common stock....................................... 87 86
Additional paid-in capital......................... 31,925 31,782
Retained earnings (deficit)........................ 161 (1,884)
------- -------
Total stockholders' equity....................... 32,173 29,984
------- -------
Total liabilities and stockholders' equity....... $55,545 $48,327
======= =======
</TABLE>

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

F-17
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------------
1997 1996 1997 1996
--------- ----------------- --------
<S> <C> <C> <C> <C>
Revenues................................. $ 10,848 $ 8,752 $ 31,313 $ 24,102
--------- -------- -------- --------
Costs and Expenses:
Cost of revenues....................... 3,424 2,409 9,600 6,519
Customer support expenses.............. 1,372 898 3,852 2,547
Development expenses................... 1,345 1,024 3,817 3,184
Sales and marketing expenses........... 3,886 3,199 10,973 8,649
General and administrative expenses.... 583 359 1,560 1,124
--------- -------- -------- --------
Total costs and expenses............. 10,610 7,889 29,802 22,023
--------- -------- -------- --------
Income from operations................. 238 863 1,511 2,079
Interest income, net..................... 575 490 1,640 1,370
--------- -------- -------- --------
Income before provision for income tax-
es...................................... 813 1,353 3,151 3,449
Provision for income taxes............... 260 151 1,107 384
--------- -------- -------- --------
Net income............................. $ 553 $ 1,202 $ 2,044 $ 3,065
========= ======== ======== ========
Net income per common and common equiva-
lent share.............................. $ 0.06 $ 0.14 $ 0.23 $ 0.35
========= ======== ======== ========
Weighted average number of common and
common equivalent shares outstanding.... 8,792 8,795 8,750 8,811
========= ======== ======== ========
</TABLE>

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

F-18
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1997 1996
-------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income.............................................. $ 2,044 $ 3,065
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation.......................................... 1,152 664
Changes in assets and liabilities:
Accounts receivable................................... 83 (884)
Prepaid expenses and deposits......................... (755) (687)
Accounts payable...................................... 1,271 339
Accrued expenses...................................... 2,481 613
Deferred revenue...................................... 1,303 4,078
-------- ---------
Net cash provided by operating activities........... 7,579 7,188
======== =========
Cash flows from investing activities:
(Increase) decrease in investments, net................. 12,891 (15,051)
Purchases of property and equipment..................... (2,103) (2,838)
Increase in other assets................................ -- (149)
-------- ---------
Net cash provided by (used in) investing activi-
ties............................................... 10,788 (18,038)
======== =========
Cash flows from financing activities:
Proceeds from exercise of stock options................. 81 124
Proceeds from stock issuance under employee stock pur-
chase plan............................................. 63 154
Payments on obligation under capital leases............. (26) (22)
-------- ---------
Net cash provided by financing activities........... 118 256
======== =========
Increase (decrease) in cash and cash equivalents.......... 18,485 (10,594)
Cash and cash equivalents, beginning of period............ 10,735 19,301
-------- ---------
Cash and cash equivalents, end of period.................. $ 29,220 $ 8,707
======== =========
Supplemental disclosure of cash flow information
Cash paid for income taxes.............................. $ 138 $ 205
======== =========
Cash paid for interest.................................. $ 5 $ 4
======== =========
Supplemental disclosure of noncash transactions
Equipment acquired under capital lease obligations...... $ -- $ 25
======== =========
</TABLE>

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

F-19
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The condensed consolidated financial statements of Desktop presented herein
have been prepared pursuant to the rules of the Securities and Exchange
Commission for quarterly reports on Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These financial statements should be read in conjunction with
Desktop's consolidated financial statements and notes thereto for the year
ended December 31, 1996 contained herein. In the opinion of management, the
accompanying unaudited consolidated financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the consolidated financial position, results of operations and
cash flows of Desktop and its subsidiaries. Quarterly operating results are
not necessarily indicative of the results which would be expected for the full
year.

Principles of Consolidation

Cash Equivalents and Investments

Cash equivalents consist of highly liquid investments purchased with an
original maturity of three months or less. Those securities with maturities of
three months to twelve months as of the balance sheet date are classified as
short-term investments and securities with maturities of greater than twelve
months are classified as long-term investments.

At September 30, 1997, cash equivalents included approximately $2,258,000 in
money market investments and $23,134,000 in U.S. government agency securities.
At September 30, 1997, short-term investments included approximately
$8,049,000 in U.S. Treasury Notes and $5,108,000 in U.S. government agency
securities. As of September 30, 1997, all of Desktop's investments are
classified and accounted for as held to maturity.

Net Income Per Common and Common Equivalent Share

For the three and nine month periods ended September 30, 1997 and 1996, net
income per common and common equivalent share is computed by dividing net
income by the weighted average number of common and common equivalent shares
outstanding during that period. Common equivalent shares from stock options
have been included in the computation using the treasury-stock method.

In February 1997, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings Per Share. SFAS No. 128 specifies revised
computational guidelines, presentation and disclosure requirements for
earnings per share and supersedes Accounting Principles Board Opinion No. 15.
SFAS No. 128 is effective for financial statements issued for periods ending
after December 15, 1997, including interim periods. Earlier application is not
permitted. However, upon adoption, SFAS No. 128 requires restatement of all
prior period earnings per share information. The difference between earnings
per share for the three and nine months ended September 30, 1997 and 1996,
calculated in accordance with SFAS No. 128, and net income per common and
common equivalent share computed using the existing rules, is not expected to
be significant.

F-20
<PAGE>

DESKTOP DATA, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(UNAUDITED)

2. STOCKHOLDERS' EQUITY

On February 13, 1997, Desktop's Board of Directors authorized the repricing
of all stock options previously granted under the 1995 Plan, excluding 105,000
options which were granted to the executive officers of Desktop. The repricing
provided for the exercise price of 375,525 options to be reduced to $14.13 per
share, the closing price of Desktop's common stock on February 13, 1997. Prior
to the repricing, such options had exercise prices ranging from $22.75 to
$35.75.

On June 18, 1997, Desktop's Board of Directors authorized the repricing of
518,075 and 4,203 stock options previously granted under the 1995 Plan and
1989 Plan, respectively. The repricing provided for the exercise price of the
total 522,278 options to be reduced to $8.625 per share, the closing price of
Desktop's common stock on June 18, 1997. Prior to the repricing, such options
had exercise prices ranging from $9.13 to $24.00. No options held by executive
officers of Desktop were repriced.

3. COMMITMENTS

On August 31, 1995 Desktop entered into an operating lease for office
facilities which commenced in February 1996 and expires in fiscal 2003.
Desktop will pay out a total of approximately $2.3 million in monthly lease
payments over the period of the lease. As of September 30, 1997, Desktop has
paid a deposit of approximately $150,000 related to the lease.

4. SUBSEQUENT EVENTS

On November 2, 1997, Desktop entered into an Agreement and Plan of Merger
and Reorganization (the "Agreement") with Individual, Inc. ("Individual"), a
publicly-held company that develops and markets a suite of customized news and
information services that provide knowledge workers with daily personalized
current awareness reports. Individual's proprietary systems filter incoming
information, prepare for each user a daily news briefing, and deliver its
services across a range of delivery platforms, including facsimile, electronic
mail, groupware, intranets and the Internet. Under the terms of the Agreement,
Desktop will issue one-half ( 1/2) of one share of Common Stock for each
outstanding share of Individual common stock (the "Exchange Ratio"). In
addition, each outstanding option, warrant or right to purchase Individual
common stock pursuant to outstanding warrants or rights to purchase common
stock under Individual's various stock option and purchase plans will be
assumed by Desktop and will become an option, warrant or right to purchase
Desktop's common stock after giving effect to the Exchange Ratio. Consummation
of the merger contemplated by the Agreement is conditioned upon the
affirmative vote of both companies' stockholders, among other conditions.

F-21
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of Individual, Inc.

We have audited the accompanying consolidated balance sheets of Individual,
Inc. as of December 31, 1996 and 1995, and the related consolidated statements
of operations, stockholders' equity (deficit) and cash flows for each of the
three years in the period ended December 31, 1996. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion of these consolidated 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 consolidated financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Individual, Inc. at December 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.

Coopers & Lybrand L.L.P.

Boston, Massachusetts
February 15, 1997, except for Note 2 for which the date is November 20, 1997.

F-22
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 22,117,834 $ 17,920,924
Investments in marketable securities............. 8,448,306 --
Accounts receivable, net......................... 11,950,638 6,154,287
Deferred income taxes............................ 35,000 --
Prepaid expenses................................. 562,063 165,420
------------ ------------
Total current assets........................... 43,113,841 24,240,631
Property and equipment, net........................ 4,333,580 3,032,811
Other assets, net.................................. 952,388 504,243
------------ ------------
Total assets................................... $ 48,399,809 $ 27,777,685
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable................................. $ 4,894,036 $ 2,163,384
Accrued royalties................................ 1,610,829 582,929
Accrued expenses................................. 3,955,481 1,434,726
Deferred revenue................................. 14,694,856 9,629,156
Equipment financing loans and notes payable...... 1,074,055 776,084
------------ ------------
Total current liabilities...................... 26,229,257 14,586,279
Senior subordinated notes.......................... -- 10,000,000
Other long term liabilities........................ 1,540,375 985,738
Commitments and contingencies (note 13)
Redeemable preferred stock......................... -- 23,999,013
Stockholders' equity (deficit):
Preferred stock, $0.01 par value................. -- 6,113
Common stock, $0.01 par value.................... 157,225 29,706
Additional paid in capital....................... 89,902,258 3,099,150
Cumulative dividends on redeemable preferred
stock........................................... -- (6,234,366)
Cumulative translation adjustment................ 70,149 5,111
Unrealized gains on marketable securities........ 125,475 --
Accumulated deficit.............................. (69,594,253) (18,693,974)
Less 32,865 and 157,500 shares held in treasury
(at cost) in 1996 and 1995, respectively........ (30,677) (5,085)
------------ ------------
Total stockholders' equity (deficit)........... 20,630,177 (21,793,345)
------------ ------------
Total liabilities and stockholders' equity
(deficit)......................................... $ 48,399,809 $ 27,777,685
============ ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-23
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED DECEMBER 31,
-----------------------------------------
1996 1995 1994
------------- ------------ ------------
<S> <C> <C> <C>
Revenue............................ $ 28,058,685 $ 18,936,379 $ 10,111,191
Cost of revenue.................... 13,174,571 8,611,735 4,331,559
------------- ------------ ------------
Gross margin....................... 14,884,114 10,324,644 5,779,632
Operating expenses:
Sales and marketing.............. 6,540,790 3,270,328 1,403,672
New subscriber acquisition....... 9,030,375 7,387,187 5,953,139
Product development.............. 5,038,162 2,739,819 1,275,198
General and administrative....... 5,529,105 3,057,575 1,267,298
Mergers, dispositions and other
charges......................... 39,422,186 -- --
------------- ------------ ------------
Total operating expenses....... 65,560,618 16,454,909 9,899,307
------------- ------------ ------------
Loss from operations............... (50,676,504) (6,130,265) (4,119,675)
Interest income and other, net..... (223,775) (243,994) (113,850)
------------- ------------ ------------
Net loss........................... $ (50,900,279) $ (6,374,259) $ (4,233,525)
============= ============ ============
Supplemental net loss per common
share............................. $ (3.65) $ (0.60) $ (0.40)
============= ============ ============
Supplemental weighted average
common shares outstanding......... 13,941,628 10,719,313 10,706,450
============= ============ ============
</TABLE>

F-24
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 1994, 1995, AND 1996

<TABLE>
<CAPTION>
PREFERRED COMMON
STOCK STOCK CUMULATIVE UNREALIZED
------------------ ------------------- ADDITIONAL CUMULATIVE DIVIDENDS ON GAINS ON
NUMBER OF PAR NUMBER OF PAR PAID-IN TRANSLATION REDEEMABLE MARKETABLE ACCUMULATED
SHARES VALUE SHARES VALUE CAPITAL ADJUSTMENT PREFERRED STOCK SECURITIES DEFICIT
--------- ------- ---------- -------- ----------- ----------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT
DECEMBER 31,
1993............ 611,335 $ 6,113 2,920,164 $ 29,202 $ 3,088,545 -- $(3,105,264) -- $ (8,086,190)
Exercise of
options......... -- -- 3,277 33 457 -- -- -- --
Accretion of
redeemable to
preferred stock
dividends ...... -- -- -- -- -- -- (1,486,880) -- --
Net loss........ -- -- -- -- -- -- -- -- (4,233,525)
-------- ------- ---------- -------- ----------- ------- ----------- -------- ------------
BALANCE AT
DECEMBER 31,
1994............ 611,335 6,113 2,923,441 29,235 3,089,002 -- (4,592,144) -- (12,319,715)
Exercise of
options......... -- -- 47,094 471 10,148 -- -- -- --
Accretion of
redeemable
preferred stock
dividends....... -- -- -- -- -- -- (1,642,222) -- --
Cumulative
translation
adjustments..... -- -- -- -- -- $ 5,111 -- -- --
Net loss........ -- -- -- -- -- -- -- -- (6,374,259)
-------- ------- ---------- -------- ----------- ------- ----------- -------- ------------
BALANCE AT
DECEMBER 31,
1995............ 611,335 6,113 2,970,535 29,706 3,099,150 5,111 (6,234,366) -- (18,693,974)
Conversion of
all redeemable
preferred stock
to common
stock........... (611,335) (6,113) 7,625,210 76,252 17,694,508 -- 6,234,366 -- --
Net proceeds
from IPO and
exercise of
over-allotment
option.......... -- -- 2,675,000 26,750 33,782,487 -- -- -- --
Stock issued in
acquisition of
FreeLoader...... -- -- 1,514,314 15,143 33,965,942 -- -- -- --
Exercise of
options,
warrants, ESPP
and common
stock........... -- -- 937,439 9,374 959,990 -- -- -- --
Employee stock
reorganization.. -- -- -- -- 400,181 -- -- -- --
Cumulative
translation
adjustment...... -- -- -- -- -- 65,038 -- -- --
Unrealized gains
on marketable
securities...... -- -- -- -- -- -- -- $125,475 --
Net loss........ -- -- -- -- -- -- -- -- (50,900,279)
-------- ------- ---------- -------- ----------- ------- ----------- -------- ------------
BALANCE AT
DECEMBER 31,
1996............ -- -- 15,722,498 $157,225 $89,902,258 $70,149 -- $125,475 $(69,594,253)
======== ======= ========== ======== =========== ======= =========== ======== ============
<CAPTION>
TREASURY STOCK
-------------------- TOTAL
NUMBER OF STOCKHOLDER'S
SHARES COST EQUITY (DEFICIT)
---------- --------- ----------------
<S> <C> <C> <C>
BALANCE AT
DECEMBER 31,
1993............ 157,500 $ (5,085) $ (8,072,679)
Exercise of
options......... -- -- 490
Accretion of
redeemable to
preferred stock
dividends ...... -- -- (1,486,880)
Net loss........ -- -- (4,233,525)
---------- --------- ----------------
BALANCE AT
DECEMBER 31,
1994............ 157,500 (5,085) (13,792,594)
Exercise of
options......... -- -- 10,619
Accretion of
redeemable
preferred stock
dividends....... -- -- (1,642,222)
Cumulative
translation
adjustments..... -- -- 5,111
Net loss........ -- -- (6,374,259)
---------- --------- ----------------
BALANCE AT
DECEMBER 31,
1995............ 157,500 (5,085) (21,793,345)
Conversion of
all redeemable
preferred stock
to common
stock........... -- -- 23,999,013
Net proceeds
from IPO and
exercise of
over-allotment
option.......... -- -- 33,809,237
Stock issued in
acquisition of
FreeLoader...... -- -- 33,981,085
Exercise of
options,
warrants, ESPP
and common
stock........... (124,635) (25,592) 943,772
Employee stock
reorganization.. -- -- 400,181
Cumulative
translation
adjustment...... -- -- 65,038
Unrealized gains
on marketable
securities...... -- -- 125,475
Net loss........ -- -- (50,900,279)
---------- --------- ----------------
BALANCE AT
DECEMBER 31,
1996............ 32,865 $(30,677) $ 20,630,177
========== ========= ================
</TABLE>

F-25
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------
1996 1995 1994
------------ ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss............................... $(50,900,279) $(6,374,259) $(4,233,525)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization........ 2,034,404 777,661 414,915
Gain on sale of BookWire business.... (766,207) -- --
Loss on disposal of property and
equipment........................... 27,198 29,857 32,090
Provision for doubtful accounts...... 197,621 24,382 33,678
Compensation recognized under
employee stock plans................ 400,181 -- --
Loss on joint venture................ 1,883,417 -- --
Purchased incomplete technology...... 35,563,750 -- --
Changes in operating assets and
liabilities: --
Increase in accounts receivable..... (5,060,858) (2,175,567) (2,014,281)
Increase in prepaid expenses........ (310,269) (104,004) (2,253)
Decrease (Increase) in other
assets............................. 26,056 (14,505) (9,658)
Increase in accounts payable and
accrued expenses................... 3,109,810 2,752,147 661,220
Increase in other long term
liabilities........................ 500,003 -- --
Increase in deferred revenue........ 4,523,891 2,666,728 3,404,565
------------ ----------- -----------
Net cash used in operating activities
...................................... (8,771,282) (2,417,560) (1,713,249)
------------ ----------- -----------
Cash flows from investing activities:
Additions to property and equipment.. (2,454,075) (1,821,242) (1,438,743)
Investment in joint venture.......... (1,883,417) -- --
Cash acquired from/(paid for)
acquisition......................... 928,354 (178,817) --
Investments in marketable
securities.......................... (11,287,450) -- --
Maturity of marketable securities.... 3,000,000 1,000,000 --
------------ ----------- -----------
Net cash used in investing activities
...................................... (11,696,588) (1,000,059) (1,438,743)
------------ ----------- -----------
Cash flows from financing activities:
Principal repayments under lease
obligations......................... (345,133) 822,873 383,042
Proceeds from issuance of common and
preferred stock, net of related
expenses............................ 34,953,984 10,121,890 490
Deferred financing costs............. (9,109) (330,535) --
(Payment) issuance of senior
subordinated notes.................. (10,000,000) 10,000,000 --
------------ ----------- -----------
Net cash provided by financing
activities............................ 24,599,742 20,614,228 383,532
------------ ----------- -----------
Effect of exchange rate on cash........ 65,038 5,111 --
Net increase (decrease) in cash and
cash equivalents...................... 4,196,910 17,201,720 (2,768,460)
Cash and cash equivalents at the
beginning of period................... 17,920,924 719,204 3,487,664
------------ ----------- -----------
Cash and cash equivalents at the end of
period................................ $ 22,117,834 $17,920,924 $ 719,204
============ =========== ===========
Supplemental cash flow information:
Interest paid........................ $ 811,478 $ 170,853 $ 92,315
============ =========== ===========
Income taxes......................... $ 149,000 $ 12,000 $ 12,000
============ =========== ===========
Non cash transactions:
Equipment acquired under capital
lease obligation.................... $ 22,859 -- --
============ =========== ===========
Conversion of redeemable preferred
stock to common stock............... $ 23,999,013 -- --
============ =========== ===========
</TABLE>

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

F-26
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF THE BUSINESS

Individual, Inc. ("Individual") develops and markets a suite of customized
information services that provide knowledge workers with daily personalized
current awareness reports, while offering information providers and
advertisers new ways to reach targeted audiences. Individual's proprietary
systems filter incoming information, prepare for each user a highly relevant
daily news briefing, and deliver its services across a range of delivery
platforms, including facsimile, electronic mail, groupware, intranets, and the
Internet. The financial statements have been restated to include the financial
results of ClariNet Communications Corp. ("ClariNet") acquired in June 1997
and accounted for as a pooling of interests. ClariNet is the publisher of
ClariNews, a business news service for Internet subscribers worldwide,
primarily sold to Internet Service Providers, corporations, and universities.

2. BASIS OF PRESENTATION

These consolidated financial statements and related footnotes of Individual
have been prepared to give retroactive effect to the merger with ClariNet on
June 13, 1997 (Note 5) for all periods presented.

3. SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Individual's services are sold on a subscription basis which may vary in
term from one month to a year. A subscription contract entitles the customer
to a specified level of service for the subscription period. Proceeds from
subscriptions are deferred at the time of sale and revenue is recognized
ratably over the term of the subscription period. Revenue for story
fulfillments in excess of the specified level of service is recognized as the
stories are provided. Advertising revenue is recognized ratably over the
advertising period.

Basis of Consolidation

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

Subscriber Acquisition Costs

New subscriber acquisition costs, which are expensed as incurred, relate
directly to new customer solicitations and include Individual's direct costs
of acquiring new customers, including the cost of providing trial
subscriptions free of charge. Costs associated with renewal of current
customers are included in sales and marketing and are expensed as incurred.

Product Development

Costs incurred in the plan, design or improvement of new or existing systems
which support content and delivery of Individual's services are expensed as
incurred and are included in product development. Such costs include the
conceptual formulation, testing of alternatives, and development of working
models. Development costs incurred subsequent to the establishment of
technological feasibility, which would be eligible for capitalization, have
been insignificant.

F-27
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(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 and
accompanying notes. Actual results could differ from those estimates.
Estimates and assumptions in these financial statements relate to, among other
items, valuation of deferred tax assets, the allowance for doubtful accounts
and accrued liabilities.

Long-Lived Assets

The Company adopted Financial Accounting Statement No. 121 "Accounting for
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS 121) in
1995. SFAS 121 requires that long-lived assets be reviewed for impairment by
comparing the fair value of the assets with their carrying amount. Any write-
downs are to be treated as permanent reductions in the carrying amount of the
assets. Accordingly, the Company evaluates the possible impairment of long-
lived assets at each reporting period based on the undiscontinued projected
cash flows of the related asset. Should there be an impairment, the cash flow
estimates that will be used will contain management's best estimates, using
appropriate and customary assumptions and projections at the time.

Reclassification of Amounts

Certain amounts in the financial statements for the year ended December 31,
1995 have been reclassified to conform to the presentation for the year ended
December 31, 1996.

Cash and Cash Equivalents

At December 31, 1996, cash and cash equivalents included $7,795,662 in
commercial paper, $2,285,061 in money market investments, $10,334,539 in U.S.
Government Agency securities, and $1,702,572 cash on deposit. At December 31,
1995, cash and cash equivalents included cash on deposit and investments in
money market type mutual funds. Individual considers investments with
maturities of 90 days or less at the time of acquisition or money market type
investments to be cash equivalents. Presently, Individual carries all cash
equivalents at cost, which approximates fair value. Individual is party to a
letter of credit totaling $207,000 at December 31, 1996, for which various
short term investments are held as collateral. In Individual's past
experience, no claims have been made against this financial instrument.
Management does not expect any material losses to result from this letter of
credit because performance is not expected to be required.

Marketable Securities

Individual held $8,448,306 in U.S. Government Agency securities classified
as marketable securities. $2,333,965 mature in one year, and $6,114,341 mature
within five years. Individual accounts for investments in marketable
securities using the provisions of Financial Accounting Standard Statement No.
115 "Accounting for Certain Investments in Debt and Equity Securities." All
marketable securities are classified as available-for-sale and are carried at
fair value. Individual may use the proceeds from the sale of marketable
securities for general working capital requirements. Unrealized holding gains
of $125,475 are carried as a separate component of stockholders' equity. No
marketable securities have been sold in 1996, and therefore no gains or losses
on the sale of marketable securities have been recognized.

Risks and Uncertainties

Financial instruments which potentially subject Individual to concentrations
of credit risk consist principally of money market funds and accounts
receivable. Individual maintains substantially all of its money market funds

F-28
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

with one registered investment company. Individual believes the credit risk
associated with accounts receivable is minimal due to the number of customers
and their dispersion over different industries and geographical locations.
Individual's foreign operations were not material to Individual's consolidated
financial position or results of operations.

Supplemental Net Loss Per Common Share

The supplemental net loss per common share is computed based upon the
weighted average number of common shares outstanding. Common equivalent shares
are not included in the per share calculations since the effect of their
inclusion would be antidilutive. Common equivalent shares result from the
assumed exercise of outstanding stock options and warrants. The computation of
supplemental earnings per share gives effect to the conversion of all shares
of Series B, C, D, E and G Redeemable Preferred Stock and Series A and F
Preferred Stock and does not include the dividends on Redeemable Preferred
Stock as an increase in net loss. Pursuant to the requirements of the
Securities and Exchange Commission, common shares and common equivalent shares
issued at prices below the IPO price of $14.00 per share during the twelve
months immediately preceding the date of the initial filing of the
Registration Statement in connection with the IPO have been included in the
calculation of common shares and common share equivalents, using the treasury
stock method, as if they were outstanding for all periods prior to the IPO.
Presentation herein is consistent with the pro forma calculations included in
Individual's Registration Statement on Form S-1 (No. 333-00792) filed on
January 31, 1996, as amended, and the Registration Statement on Form S-1 (No.
333-8511) filed on September 9, 1996, as amended, except for the impact of
shares issued in the merger with ClariNet, accounted for as a pooling of
interests and therefore showing the shares as being issued for all periods
presented.

Historical Net Loss Per Common Share

Net loss per common share on a historical basis is computed in the same
manner as supplemental net loss per common share, except that Series B, C, D,
E and G Redeemable Preferred Stock and Series A and F Preferred Stock are not
assumed to be converted prior to the IPO. In the computation of net loss per
common share, accretion of redeemable preferred stock dividend amounts is
included as an increase to net loss attributable to common stockholders. Net
loss per common share on a historical basis is calculated as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED,
--------------------------------------
1996 1995 1994
------------ ----------- -----------
<S> <C> <C> <C>
Net loss........................... $(50,900,279) $(6,374,259) $(4,233,525)
Accretion of dividends on
redeemable preferred stock........ (462,706) (1,642,222) (1,486,880)
------------ ----------- -----------
Net loss to common stockholders.... $(51,362,985) $(8,016,481) $(5,720,405)
============ =========== ===========
Net loss per common share.......... $ (4.25) $ (2.59) $ (1.86)
============ =========== ===========
Weighted average number of common
and common equivalent shares
outstanding....................... 12,097,051 3,094,103 3,081,240
============ =========== ===========
</TABLE>

Fully diluted net loss per common share is the same as primary net loss per
common share.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the
straight-line method over their estimated useful lives. Expenditures for
maintenance and repairs are charged to operations and are expensed as
incurred. Furniture and fixtures are depreciated over seven years. In 1996,
Individual changed the period over

F-29
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

which equipment, which is primarily comprised of computer hardware and
software, is depreciated from five years to three years. Management believes
that three years more closely approximates the actual useful life of the
equipment. The change in estimate resulted in an increase in depreciation
expense of $480,569, which has been reflected in the accompanying financial
statements as of and for the year ended December 31, 1996.

Individual leases certain equipment, furniture and fixtures. The present
value of lease payments for property and equipment leases meeting the
requirements for capitalization are included as capitalized leased assets and
are amortized on a straight-line basis over the shorter of the equipment's
useful life or the term of the leases.

Upon retirement or sale, the cost of the assets disposed and the related
accumulated depreciation and amortization are removed from the accounts and
any resulting gain or loss is included in the determination of net income.

Goodwill

Goodwill is being amortized using the straight-line method over 2 years.
Individual evaluates whether changes have occurred that would require revision
of the remaining estimated useful life of the assigned goodwill or rendered
the goodwill not recoverable.

Income Taxes

Individual follows the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse.

Accounts receivable

Accounts receivable are presented net of allowance for doubtful accounts
which were $300,111 and $85,251 as of December 31, 1996 and 1995 respectively.

4. INITIAL PUBLIC OFFERING

On March 20, 1996, Individual completed an initial public offering (the
"IPO") of 2,500,000 shares of Common Stock at $14.00 per share, of which
2,300,000 shares were sold by Individual and 200,000 shares were sold by
selling stockholders. The proceeds to Individual, net of underwriting
discounts, commissions and offering expenses were approximately $29,000,000.
In April 1996, the Underwriters exercised their over-allotment option to
purchase an additional 375,000 shares of Common Stock from Individual, for net
proceeds of approximately $4,900,000.

Upon the closing of the IPO, all series of Preferred Stock were converted
into an aggregate of 7,625,210 shares of Common Stock. Upon conversion of the
Preferred Stock to Common Stock, all cumulative dividends associated with the
Redeemable Preferred Stock expired and were no longer payable.

5. MERGERS, DISPOSITION, AND OTHER CHARGES

On June 28, 1996, Individual completed the acquisition of FreeLoader, Inc.
("FreeLoader") by a subsidiary merger pursuant to the terms of the Agreement
and Plan of Reorganization dated as of May 30, 1996 among

F-30
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Individual, FL Merger Corp., a wholly-owned subsidiary of Individual,
FreeLoader, and certain stockholders of FreeLoader. As a result of the
FreeLoader merger, FreeLoader became a wholly-owned subsidiary of Individual.

Pursuant to the FreeLoader merger agreement, Individual issued approximately
1,874,489 shares of its Common Stock to the stockholders of FreeLoader as
consideration for the merger (including up to 360,180 shares of Common Stock
reserved for issuance upon exercise of outstanding FreeLoader stock options
assumed by Individual in the merger). The aggregate estimated purchase price
of approximately $36,000,000 was based on the fair market value of Individual
Common Stock and options and includes estimated accrued transaction costs of
approximately $950,000 and the net identifiable liabilities assumed of
approximately $633,000. The transaction was accounted for as a purchase.
Approximately $35,600,000 of the purchase price has been allocated to
purchased technology. This charge for purchased technology, determined to be
in-process, in addition to all operating expenses of FreeLoader of
approximately $2.6 million, predominantly product development expenses, are
reflected in mergers, acquisitions, dispositions and other charges. It was
determined that this purchased research and development had no alternative
future uses. The value of the purchase technology was derived at the time of
purchase using the net present value of estimated future free cash flows to be
generated by the resulting technology when completed. Under the merger
agreement, Individual is required to pay a balloon payment of $2,000,000,
payable upon the successful completion of three years of employment with
Individual. Individual has been accruing this charge ratably over the three
year period. Individual has also guaranteed the value of certain shares issued
to the two founders in the transaction, which will be measured during the
period January 1, 1997 through May 31, 1997. If the fair value of the stock is
less than the guaranteed value, then Individual will pay out the difference in
cash. At December 31, 1996, the fair value of stock is approximately
$3,300,000 below the guaranteed price. Any payments, if made, would be
reflected as a reduction to shareholder's equity.

The following condensed pro forma results of operations for the twelve
months ended December 31, 1996 have been presented to disclose the acquisition
of FreeLoader as if it had occurred as of the beginning of fiscal year 1996.
The computation of pro forma net loss per common share assumes the 1,514,309
shares issued in the acquisition of FreeLoader to be outstanding from January
1, 1996. The computation also gives effect to the conversion of all shares of
Series B, C, D, E, and G redeemable preferred stock and Series A and F
preferred stock as of January 1, 1996, and excludes the dividends on
redeemable preferred stock as an increase to net loss. In addition, the one
time charge of $35,600,000 for the purchase of incomplete technology has been
included in the net loss computation. The condensed pro forma results of
operations for the corresponding period of the prior year are insignificant.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
PRO FORMA
-----------------
<S> <C>
Revenue................................................. $ 28,058,685
============
Net loss................................................ (54,537,115)
============
Pro forma net loss per common share..................... $ (3.76)
============
Pro forma weighted average common shares outstanding.... 14,518,330
============
</TABLE>

On February 6, 1997, Individual announced that it is planning to sell
Freeloader or seek a majority investor.

Individual sold its BookWire business on November 1, 1996 for approximately
$1,000,000 in cash. The sale resulted in a pretax gain of $766,000. The
results of BookWire were not significant to the consolidated results of
Individual in 1996.

F-31
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

On October 17, 1996, Individual acquired certain assets and liabilities of
the Hoover Business Intelligence Services unit from the Information Access
Company (IAC), a unit of The Thomson Corporation (Toronto, Canada). Hoover is
an intelligent software agent that provides real-time and archival electronic
news and information services. The acquisition, financed through cash and
installment payments, was accounted for as a purchase. The purchase price was
$1,650,000, including $500,000 in acquisition related costs, of which
$1,085,000 was paid in cash, and $565,000 in notes payable over 36 months.
Approximately $672,000 of the purchase price has been allocated to the net
identifiable assets acquired, and approximately $978,000 of the purchase price
has been allocated to goodwill. Goodwill is being amortized over a period of
two years. At December 31, 1996, goodwill was $814,880, net of accumulated
amortization of $163,000, which was included in mergers, acquisitions,
dispositions and other charges.

In June 1997, Individual completed the acquisition of ClariNet
Communications Corp. ("ClariNet") through a subsidiary merger, whereby a
wholly-owned subsidiary of Individual was merged with and into ClariNet, with
ClariNet continuing as the surviving corporation and a wholly-owned subsidiary
of Individual. ClariNet publishes a global electronic newspaper on the
Internet called ClariNews, which is distributed through internet service
providers and to corporations, educational institutions and individual
subscribers. Under the terms of the ClariNet merger agreement, each share of
ClariNet Communications Corp. Common Stock was exchanged for 0.21954874 shares
of Individual Common Stock. Approximately 1,475,000 shares of Individual
Common Stock were issued in exchange for all of the outstanding Common Stock
of ClariNet (including approximately 138,512 shares of Individual Common Stock
reserved for issuance upon exercise of outstanding ClariNet stock options
assumed by Individual in the merger). The transaction was accounted for as a
pooling of interests and therefore, all prior period financial statements
presented herein have been restated as if the merger took place at the
beginning of such periods.

Separate results of operations for the periods prior to the merger with
ClariNet are as follows:

<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED DECEMBER
31,
--------------------------------------
1996 1995 1994
------------ ----------- -----------
PRO FORMA PRO FORMA PRO FORMA
<S> <C> <C> <C>
Net Sales
Individual....................... $ 24,144,780 $16,732,749 $ 9,126,641
ClariNet......................... 3,913,905 2,203,630 984,550
------------ ----------- -----------
Combined........................... $ 28,058,685 $18,936,379 $10,111,191
============ =========== ===========
Net Income (loss)
Individual....................... $(51,017,359) $(6,442,808) $(4,255,902)
ClariNet......................... 117,080 68,549 22,375
------------ ----------- -----------
Combined........................... $(50,900,279) $(6,374,259) $(4,233,527)
============ =========== ===========
Other changes in shareholders'
equity (deficit)
Individual....................... $ 93,292,364 $(1,626,492) $(1,486,390)
ClariNet......................... 31,437 -- --
------------ ----------- -----------
Combined........................... $ 93,323,801 $(1,626,492) $(1,486,390)
============ =========== ===========
</TABLE>

6. JOINT VENTURE

On May 31, 1996 Individual acquired for approximately $1,883,000 in cash 44%
of the shares of NewsWatch, Inc. ("NewsWatch"), a joint venture established by
Individual, Toshiba Corporation and Mitsui & Co. Ltd. The joint venture was
established to provide customized electronic information services in Japan.
The

F-32
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

investment is being accounted for using the equity method of accounting.
Individual's share of undistributed losses of NewsWatch is included in
interest income and other, net. Individual's investment in the joint venture
has been reduced to zero as of December 31, 1996.

Individual has entered into certain software and know-how license agreements
with the joint venture in exchange for an initial lump sum royalty payment to
Individual of approximately $1,032,000 net of intercompany profits, received
in May 1996, and continuing royalties based on revenue of the joint venture
over a twenty-year period.

7. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Equipment.......................................... $ 5,453,066 $ 2,912,807
Furniture and fixtures............................. 743,690 612,086
Leased equipment................................... 708,700 639,577
----------- -----------
6,905,456 4,164,470
Accumulated depreciation........................... (2,571,876) (1,131,659)
----------- -----------
$ 4,333,580 $ 3,032,811
=========== ===========
</TABLE>

Depreciation and amortization expense amounted to $2,034,404, $777,661, and
$414,915 for the years ended December 31, 1996, 1995, and 1994, respectively.
Accumulated amortization on capital leases, net of disposals, amounted to
$397,256, and $444,493 as of December 31, 1996 and 1995 respectively.

8. FEDERAL AND STATE INCOME TAXES

Due principally to operating losses from inception, Individual has not
incurred any income tax expense.

Individual's deferred income taxes as of December 31, were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
----------- ---------- ----------
<S> <C> <C> <C>
Deferred income tax assets:
Research tax credits................. $ 200,000 $ 200,000 $ 115,000
Net loss carryforwards............... 13,881,440 7,051,322 4,664,400
Other................................ 86,778 153,574 131,197
----------- ---------- ----------
Total deferred income tax assets... 14,168,218 7,404,896 4,910,597
Deferred income tax liabilities........ 368,711 330,502 131,498
Valuation allowance.................... (13,764,507) (7,074,394) (4,779,099)
----------- ---------- ----------
Net deferred income tax assets......... $ 35,000 $ -- $ --
=========== ========== ==========
</TABLE>

Losses generated from the acquisition of incomplete technology of
$35,600,000 are not deductible for tax purposes and accordingly are not
included in the deferred tax asset.

A valuation reserve against net deferred assets has been established based
upon weighted available evidence that it is more likely than not that some or
all of the deferred tax assets will not be realized. A valuation allowance has
been recognized due to the uncertainty of realizing the future benefit from
net deferred tax assets.

Deferred tax assets result from net operating loss carryforwards and
estimated future tax effects attributable to differences between tax and
financial reporting bases of certain assets and liabilities, including certain
accruals, reserves, and fixed assets.

F-33
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

For federal income tax purposes, as of December 31, 1996, Individual has
regular tax net operating loss carryforwards of $32,000,000, which may be used
to offset future taxable income. The utilization of the net operating loss
carryforwards and credit carryforwards for income tax purposes may be
restricted due to limitations which arise because of a change of ownership.
These net operating losses expire beginning in 2004.

9. COMMON STOCK

During 1996, the stockholders authorized an increase in the number of
authorized shares of Common Stock from 12,500,000 to 25,000,000. Common
stockholders are entitled to one vote for each share held.

At December 31, 1996, Individual has reserved shares of Common Stock as
follows:

<TABLE>
<S> <C>
Exercise of Common Stock warrants.................................. 2,174,528
Options under stock option plans (see Note 13)..................... 6,368,893
---------
8,543,421
=========
</TABLE>

10. REDEEMABLE PREFERRED STOCK:

At December 31, 1995, Redeemable Preferred stock consisted of the following:

<TABLE>
<CAPTION>
AGGREGATE
SHARES ISSUED AND CUMULATIVE LIQUIDATION
SERIES PAR VALUE SHARES AUTHORIZED OUTSTANDING DIVIDENDS PREFERENCE
------ --------- ----------------- ----------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
B....................... $.01 866,003 866,003 $ 986,273 $ 2,025,477
C....................... .01 1,436,804 1,422,221 2,534,750 5,094,748
D....................... .01 226,666 222,222 381,368 881,368
E....................... .01 1,240,000 1,159,677 2,176,633 5,771,632
G....................... .01 1,050,000 700,000 155,342 10,655,342
---------- -----------
6,234,366 24,428,567
Less: Unamortized Issu-
ance Costs............. -- (429,554)
---------- -----------
$6,234,366 $23,999,013
========== ===========
</TABLE>

Each share of Series B, C, D, E, and G Redeemable Preferred Stock was
convertible into 1.5 shares of Common Stock, all at the option of the
stockholder. All series of Preferred Stock were converted into an aggregate of
7,625,210 shares of Common Stock upon the closing of the IPO (see note 3).
Series G Redeemable Preferred was issued in 1995, and all other Series were
issued prior to 1994.

11. PREFERRED STOCK:

At December 31, 1995, Preferred Stock consisted of the following:

<TABLE>
<CAPTION>
SHARES SHARES ISSUED LIQUIDATION
SERIES AUTHORIZED AND OUTSTANDING PREFERENCE
------ ---------- --------------- -----------
<S> <C> <C> <C>
A..................................... 16,335 11,335 $ 68,010
F..................................... 700,000 600,000 $3,000,000
</TABLE>

Each share of Series A and F Preferred Stock was convertible into 15 and 1.5
shares, respectively, of Common Stock. All series of Preferred Stock were
converted into an aggregate of 7,625,210 shares of Common Stock upon the
closing of the IPO (see note 3).

F-34
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. COMMON STOCK PURCHASE WARRANTS

Common Stock Purchase Warrants outstanding at December 31, 1996 were as
follows:

<TABLE>
<CAPTION>
NUMBER OF WARRANT
SHARES PRICE PER
NUMBER OF WARRANTS EXERCISABLE SHARE
------------------ ----------- ------------
<S> <C> <C> <C>
Common Stock..................... 2,174,528 2,174,528 $3.33-$12.00
</TABLE>

The warrants to purchase shares of Common Stock issued principally to
employees in 1989, and 1991, generally expire in ten years, or sooner under
certain conditions, and were granted at an exercise price in excess of the
fair value of the Common Stock as determined by the Board of Directors. The
aggregate exercise price of the outstanding Common Stock warrants is
$18,903,694.

13. EMPLOYEE BENEFIT PLANS

Stock Compensation Plans

At December 31, 1996, Individual had six stock-based compensation plans,
which are described below. In October 1995, the FASB issued SFAS 123,
"Accounting for Stock-Based Compensation." SFAS 123 is effective for periods
beginning after December 15, 1995 and requires that companies either recognize
compensation expense for grants of stock, stock options, and other equity
instruments based on fair value, or provide pro forma disclosure of net income
and earnings per share in the notes to the financial statements. Individual
adopted the disclosure provisions of SFAS 123 in 1996 and has applied APB
Opinion 25 and related Interpretations in accounting for its plans.
Accordingly, no compensation cost has been recognized for its stock options
plans under FAS 123. Had compensation cost for Individual's stock-based
compensation plans been determined based on the fair value at the grant dates
as calculated in accordance with SFAS 123, Individual's net loss and earnings
per share for the years ended December 31, 1996 and 1995 would have been
increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C> <C>
Net Loss.............................. As reported $(50,900,357) $(6,374,259)
------------ -----------
Pro forma $(53,404,321) $(6,726,950)
------------ -----------
Net loss per share.................... As reported $(3.65) $(.60)
------------ -----------
Pro forma $(3.83) $(.63)
------------ -----------
</TABLE>
The effects of applying SFAS 123 in this pro forma disclosure are not
indicative of future amounts. SFAS 123 does not apply to awards prior to 1995,
and additional awards in future years are anticipated.

The fair value of each stock option is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions: an expected life of 4 years, expected volatility of 80% for post
IPO grants, and no volatility (minimum value method) for pre IPO grants, and a
risk free interest rate of 6.33% and 6.12% for 1996 and 1995 respectively.

During 1996, Individual recognized expense of approximately $400,000 for
stock-based compensation.

Stock Option Plans

Individual has six fixed option plans which are administered by the Board of
Directors. During 1996, the Board of Directors approved an increase in the
number of authorized shares under the Amended and Restated

F-35
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1989 Stock Option Plan to 5,000,000 shares of Common Stock of which 1,500,000
shares is subject to ratification by the stockholders at the next Annual
Stockholders Meeting. The 1996 Employee Stock Purchase Plan provides for the
issuance of a maximum of 500,000 shares of Common Stock. The 1996 Non-Employee
Director Stock Option Plan provides for the grant of options to purchase a
maximum of 500,000 shares of Common Stock. Individual had 230,381 shares
issued and outstanding under the Amended and Restated 1996 Stock Plan, which
was assumed by Individual pursuant to the FreeLoader acquisition, and no
additional options will be issued under this FreeLoader stock option plan.
Individual had 138,512 shares issued and outstanding under the ClariNet stock
option plans, which were assumed by Individual pursuant to the ClariNet
acquisition, and no additional options will be issued under the ClariNet stock
option plans.

As of December 31, 1996, all stock options have been granted with an
exercise price equivalent to, or in excess of, the fair value of the common
stock as quoted on NASDAQ. In no event shall the aggregate fair market value
of common stock underlying ISOs granted to any employee, which are exercisable
for the first time by such employee during any calendar year, exceed $100,000.
Stock options become exercisable in varying installments as determined by the
Board of Directors at the time of grant. Options expire at various dates not
to exceed 10 years from date of grant.

A summary of the status of Individual's stock option plans as of December
31, 1996, 1995, and 1994 and changes during the years ending on those dates is
presented below (shares in thousands):

<TABLE>
<CAPTION>
1996 1995 1994
WTD. AVG. WTD. AVG. WTD. AVG.
------------------- ------------------- -------------------
SHARES EXER. PRICE SHARES EXER. PRICE SHARES EXER. PRICE
------ ----------- ------ ----------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year................ 2,435 $3.66 1,417 $2.23 663 $.19
Granted................. 2,776 7.30 1,113 5.38 772 1.91
Exercised............... (850) .26 (47) .23 (3) .15
Canceled................ (930) 8.36 (48) .41 (15) .37
Outstanding at end of
year................... 3,431 4.76 2,435 3.66 1,417 2.23
===== ===== =====
Options exercisable at
year end............... 751 1,039 498
===== ===== =====
Weighted average fair
value of options
granted during the
year................... $4.58 $4.93
===== =====
</TABLE>

The following table summarizes information about stock options outstanding
at December, 31, 1996:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------- ---------------------
WTD. AVG. WTD. AVG. NUMBER WTD. AVG.
RANGE OF NUMBER REMAINING EXERCISE EXERCISABLE EXERCISE
EXERCISE PRICES OUTSTANDING CONTR. LIFE PRICE AT 12/31/96 PRICE
--------------- ----------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$ .13 to .17........... 95,352 7.5 $ .14 75,593 $ .14
.20 to .27........... 180,547 9.6 .25 113,058 .25
.42 to .43........... 488,477 10.0 .43 198,212 .43
.46.................. 878 9.2 .46 329 .46
.83.................. 110,956 8.6 .83 29,061 .83
3.42 to 4.33.......... 56,204 9.9 3.85 -- --
5.33 to 8.00.......... 2,343,630 9.6 5.96 267,799 6.18
10.80 to 12.00......... 154,342 9.0 11.50 66,896 11.59
--------- -------
$ .13 to 12.00......... 3,430,386 750,928
========= =======
</TABLE>

F-36
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

During 1996, certain options were repriced to $6.25, which was equal to the
market value of Individual's Common Stock on the date of the repricing.

Employee Stock Purchase Plan

Individual has an employee stock purchase plan for all employees meeting
certain eligibility criteria. Under the 1996 Employee Stock Purchase Plan,
employees may purchase shares of Individual's Common Stock, subject to certain
limitations, at not less than 85 percent of the lower of the beginning or
ending withholding period fair market value as defined in the plan. A total of
500,000 shares of Common Stock have been reserved for issuance under the plan.
There are two six month withholding periods each year, and the first
withholding period occurred in 1996. In fiscal year 1996, a total of 47,540
shares were issued at $4.46 per share. At December 31, 1996, 452,460 shares
were available for future issuance under the plan. The fair value of the
employees' purchase rights was estimated using the Black-Scholes model with
the following assumptions for 1996: an expected life of six months; expected
volatility of 80 percent; and risk-free interest rate of 6.33%. The weighted
average fair value of those purchase rights granted in 1996 was $4.42.

401(k) Plan

Individual maintains a 401(k) retirement savings plan (the "401(k) Plan").
All employees of Individual are eligible to participate in the 401(k) Plan.
The 401(k) Plan provides that each participant may contribute up to 15% of his
or her pre-tax gross compensation (but not greater than a statutorily
prescribed annual limit). The percentage elected by certain highly compensated
participants may be required to be lower. The 401(k) Plan permits, but does
not require, additional contributions to the 401(k) Plan by Individual. All
amounts contributed by employee participants in conformance with plan
requirements and earnings on such contributions are fully vested at all times.
Individual's matching contributions to the 401(k) Plan were approximately
$178,000, $99,000, and $63,000 in 1996, 1995, and 1994, respectively.

14. COMMITMENTS AND CONTINGENCIES

Leases

Individual leases office space under three leases which expire on December
31, 1999, May 31, 2000 and October 31, 2001. Individual also leases certain
computer equipment under capital leases. Rental expense for the years ended
December 31, 1996, 1995, and 1994 was approximately $837,000, $595,000, and
$200,000 respectively, as a result of Individual entering into various leases.

Aggregate future minimum lease commitments for all leases at December 31,
1996 are as follows:

<TABLE>
<CAPTION>
CAPITALIZED OPERATING
LEASES LEASES TOTAL
----------- ---------- ----------
<S> <C> <C> <C>
1997........................................ $79,775 $1,203,266 $1,283,041
1998........................................ 10,550 1,223,860 1,234,410
1999........................................ 2,988 1,178,181 1,181,169
2000........................................ -- 352,755 352,755
2001........................................ -- 257,462 257,462
------- ---------- ----------
Total minimum lease commitments............. 93,313 $4,215,524 $4,308,837
------- ---------- ----------
Less imputed interest....................... 3,661
-------
Capitalized lease obligations at December
31, 1996................................... $89,652
=======
</TABLE>

F-37
<PAGE>

INDIVIDUAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Legal Actions

Individual has been named as a defendant in a putative federal securities
class action lawsuit filed on November 13, 1996 in the United States District
Court for the District of Massachusetts. The lawsuit was filed on behalf of an
alleged class of purchasers of Individual's Common Stock during the period
from March 15, 1996 through July 24, 1996. The complaint filed in the lawsuit
also names as defendants, among others, certain of Individual's current and
former directors and officers, including Joseph A. Amram, Individual's former
Chief Executive Officer, as well as the three co-managing underwriters of
Individual's IPO.

The complaint alleges, among other things, that the defendants made
misstatements, or failed to make statements, to the investing public in the
IPO Prospectus and Registration Statement, as well as in subsequent public
disclosures, relating to the alleged existence of disputes between Joseph A.
Amram and Individual. The plaintiffs seek damages, including costs and
expenses, in an unspecified amount, among other relief. Individual believes
that the allegations contained in the complaint are without merit and intends
to defend vigorously against all such claims. The ultimate claims payable
under these actions, if any, are neither probable nor estimable.

Total amounts included in general and administrative costs related to this
action were $500,000 for the year ended December 31, 1996.

Individual believes that the allegations contained in the complaint are
without merit and intends to defend vigorously against all such claims. The
ultimate claims payable under these actions, if any, are neither probable nor
estimable. There can be no assurance that this litigation will not have a
material adverse effect on Individual.

15. BANK FINANCING

At December 31, 1996 bank financing consisted of the following:

<TABLE>
<CAPTION>
OUTSTANDING
BALANCE AS OF
STATED EFFECTIVE DECEMBER 31, AVAILABLE
AVAILABLE DESCRIPTION INTEREST RATE INTEREST RATE EXPIRATION 1996 PORTION
- --------------------- ------------- ------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
PORTION
$500,000 equipment
line................... Prime + 2.0% 10.25% 11/1/97 $ 133,329 --
$500,000 line of
credit................. Prime + 1.75% 10.00% 6/25/97 -- $ 500,000
$1,000,000 equipment
line................... Prime +1.5% 9.75% 9/1/99 497,408 13,878
$1,000,000 equipment
line................... Prime + 1.5% 9.75% 12/1/00 696,000 81,000
$2,000,000 equipment
line................... Prime + 1.0% 9.25% 12/1/00 -- 2,000,000
$3,500,000 revolving
line................... Prime + 1.0% 9.25% 9/1/97 -- 3,500,000
----------
1,326,737
Less current portion.... 804,734
----------
Long term portion....... $ 522,003
==========
</TABLE>

Borrowings under these lines are secured by substantially all the assets of
Individual.

Individual's long-term debt and credit arrangements contain financial
covenants, including capital base, quick ratio and a leverage ratio. At
December 31, 1996, Individual was in compliance with these arrangements.

F-38
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 9,920,140
Investments in marketable securities........................... 8,678,763
Accounts receivable, net....................................... 6,063,360
Deferred income taxes.......................................... --
Prepaid expenses............................................... 1,925,412
------------
Total current assets......................................... 26,587,675
Property and equipment, net...................................... 4,027,349
Other assets, net................................................ 2,182,425
------------
Total assets................................................. $ 32,797,449
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................... $ 2,668,248
Accrued royalties.............................................. 1,815,918
Accrued expenses............................................... 7,112,415
Deferred revenue............................................... 10,509,802
Equipment financing loans and notes payable.................... 1,225,708
------------
Total current liabilities.................................... 23,332,091
Other long term liabilities...................................... 1,234,601
Commitments and contingencies (note 6)
Stockholders' equity:
Common stock, $0.01 par value; 25,000,000 shares authorized,
16,333,424 and 15,722,498 shares issued and outstanding in
1997 and 1996, respectively................................... 163,334
Additional paid in capital..................................... 91,515,235
Cumulative translation adjustment.............................. 11,585
Unrealized gains on marketable securities...................... 221,455
Accumulated deficit............................................ (83,680,852)
------------
Total stockholders' equity................................... 8,230,757
------------
Total liabilities and stockholders' equity....................... $ 32,797,449
============
</TABLE>

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

F-39
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- --------------------------
1997 1996 1997 1996
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenue................. $ 8,853,897 $ 7,221,310 $ 26,429,619 $ 19,771,334
Cost of revenue......... 4,266,171 3,158,912 13,099,003 8,706,997
------------- ------------- ------------ ------------
Gross margin............ 4,587,726 4,062,398 13,330,616 11,064,337
Operating expenses:
Sales and marketing... 1,600,732 1,620,001 5,729,019 4,329,508
New subscriber
acquisition.......... 2,689,703 2,173,862 8,887,627 6,353,491
Product development... 2,205,924 1,476,922 5,449,379 3,523,364
General and
administrative....... 743,408 1,435,163 2,786,773 3,464,945
Acquisitions and other
charges.............. 314,741 1,261,369 5,015,463 37,481,786
------------- ------------- ------------ ------------
Total operating
expenses........... 7,554,508 7,967,317 27,868,261 55,153,094
------------- ------------- ------------ ------------
Loss from operations.... (2,966,782) (3,904,919) (14,537,645) (44,088,757)
Interest income and
other, net............. 332,611 (200,579) 1,186,770 272,260
Interest expense........ (174,157) (68,462) (432,399) (896,848)
------------- ------------- ------------ ------------
Net loss................ $ (2,808,328) $ (4,173,960) $(13,783,274) $(44,713,345)
============= ============= ============ ============
Net loss per common
share.................. $ (0.17) $ (0.27) $ (0.86) $ (3.34)
============= ============= ============ ============
Weighted average common
shares outstanding..... 16,197,277 15,395,949 16,010,858 13,374,646
============= ============= ============ ============
</TABLE>

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

F-40
<PAGE>

INDIVIDUAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................... $(13,783,274) $(44,713,345)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization.................... 1,956,204 951,962
Loss on disposal of property and equipment....... 437,824 45,926
Provision for doubtful accounts.................. -- 73,649
Compensation recognized under employee stock
plans........................................... -- 27,981
Purchased incomplete technology.................. -- 35,563,750
Decrease in retained earnings from changing
fiscal year of combining enterprise............. (225,361)
Loss on joint venture............................ -- 1,945,966
Changes in operating assets and liabilities:
Decrease in accounts receivable.................. 5,887,278 1,157,188
Increase in prepaid expenses..................... (1,328,427) (339,317)
Increase in other assets......................... (1,223,613) (82,464)
Increase in accounts payable and accrued
expenses........................................ 1,136,309 332,947
(Decrease) Increase in other long term
liabilities..................................... (500,004) 324,226
Decrease in deferred revenue..................... (4,185,054) (713,296)
------------ ------------
Net cash used in operating activities.............. (11,828,118) (5,424,827)
------------ ------------
Cash flows from investing activities:
Additions to property and equipment.............. (1,793,694) (1,739,377)
Investment in joint venture...................... -- (1,883,417)
Cash (paid for) acquired from acquisition........ (280,000) 1,010,354
Investments in marketable securities............. (155,000) (6,992,450)
------------ ------------
Net cash used in investing activities.............. (2,228,694) (9,604,890)
------------ ------------
Cash flows from financing activities:
Principal repayments on loans.................... (67,047) (91,649)
Increase (decrease) in equipment loan, net....... 412,929 (20,220)
Proceeds from issuance of common stock, net of
related expenses................................ 1,652,800 34,899,385
Payment on senior subordinated notes............. -- (10,000,000)
Payment to dissenter shareholder................. (81,000) --
------------ ------------
Net cash provided by financing activities.......... 1,917,682 24,787,516
------------ ------------
Effect of exchange rate on cash.................... (58,564) 14,441
------------ ------------
Net (decrease) increase in cash and cash
equivalents....................................... (12,197,694) 9,772,240
Cash and cash equivalents at the beginning of
period............................................ 22,117,834 17,920,924
------------ ------------
Cash and cash equivalents at the end of period..... $ 9,920,140 $ 27,693,164
============ ============
Supplemental cash flow information:
Interest paid.................................... $ 159,206 $ 782,601
============ ============
Income taxes..................................... $ $ 112,000
============ ============
Non cash transactions:
Issuance of common stock in connection with
acquisition..................................... $ 500,000 --
============ ============
Issuance of common stock in exchange for
consulting services............................. $ 400,000
============ ============
Equipment acquired under capital lease
obligation...................................... -- $ 22,859
============ ============
Net liabilities assumed in exchange for stock.... -- $ 1,643,019
============ ============
Conversion of redeemable preferred stock into
common stock.................................... -- $ 2,999,013
============ ============
</TABLE>

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

F-41
<PAGE>

INDIVIDUAL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION

The unaudited consolidated financial statements of Individual, Inc.
("Individual") presented herein have been prepared pursuant to the rules of
the Securities and Exchange Commission for quarterly reports on Form 10-Q and
do not include all of the information and note disclosures required by
generally accepted accounting principles. The condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto, together with management's discussion and
analysis of financial condition and results of operations, contained in
Individual's financial statements included herein. In the opinion of
management, the accompanying unaudited consolidated financial statements
include all adjustments, consisting of only normal recurring adjustments,
necessary to present fairly the consolidated financial position, results of
operations and cash flows of Individual and its subsidiaries. Quarterly
operating results are not necessarily indicative of the results which would be
expected for the full year. In June 1997, Individual acquired all of the
outstanding capital stock of ClariNet Communications Corp. ("ClariNet") in a
transaction accounted for as a pooling of interests. Accordingly, all prior
period financial statements presented herein have been restated to include the
financial position, results of operations, and cash flows of ClariNet. See
Note 5.

2. USE OF ESTIMATES

3. RECLASSIFICATION OF AMOUNTS

Certain amounts in the financial statements for the three months and the
nine months ended September 30, 1996 have been reclassified to conform to the
presentation for the three months and the nine months ended September 30,
1997.

Individual's ClariNet subsidiary changed its fiscal year end from November
30 to December 31 in 1997. In accordance with guidelines of the Securities and
Exchange Commission, only nine months of income and expense were included in
the Consolidated Statement of Income. Results of operations for the additional
month were credited directly to retained earnings. Cash flow activity for this
same period has been reflected as a single line item in the operating
activities section of the Consolidated Statements of Cash Flows.

4. PER SHARE COMPUTATIONS

Net loss per common share for 1996 gives effect to the conversion of all
shares of Series B, C, D, E and G Redeemable Preferred Stock and Series A and
F Preferred Stock and does not include the dividends on Redeemable Preferred
Stock as an increase in net loss. Pursuant to the requirements of the
Securities and Exchange Commission, common shares and common equivalent shares
issued at prices below the IPO price of $14.00 per share during the twelve
months immediately preceding the date of the initial filing of the
Registration Statement have been included in the calculation of common shares
and common share equivalents, using the treasury stock method, as if they were
outstanding for all periods prior to the IPO.

During July 1997, certain options were repriced to $3.25, which was equal to
or greater than the market value of Individual's stock on the date of the
repricing.

F-42
<PAGE>

INDIVIDUAL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(UNAUDITED)

5. ACQUISITIONS AND OTHER CHARGES

In June 1997, Individual completed the acquisition of ClariNet, through a
subsidiary merger pursuant to which a wholly-owned subsidiary of Individual
was merged with and into ClariNet, with ClariNet continuing as the surviving
corporation and a wholly-owned subsidiary of Individual. ClariNet publishes a
global electronic newspaper on the Internet called ClariNews, which is
distributed through Internet Service Providers and to corporations,
educational institutions and individual subscribers. Under the terms of the
ClariNet merger agreement, each share of ClariNet Common Stock was exchanged
for 0.21954874 shares of Individual Common Stock. Approximately 1,475,000
shares of Individual Common Stock were issued in exchange for all of the
outstanding Common Stock of ClariNet (including approximately 138,512 shares
of Individual Common Stock reserved for issuance upon exercise of outstanding
ClariNet stock options assumed by Individual in the merger). The transaction
was accounted for as a pooling of interests, and therefore, all prior period
financial statements presented herein have been restated as if the merger took
place at the beginning of such periods.

Separate results of operations for the periods prior to the merger with
ClariNet are as follows:

<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/97 6/30/96
------------ ------------ ----------- -----------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
Net Sales
Individual............. 7,874,827 5,647,727 15,669,714 10,677,018
ClariNet............... 931,748 990,607 1,906,007 1,873,006
---------- ----------- ----------- -----------
Combined................. 8,806,575 6,638,334 17,575,721 12,550,024
========== =========== =========== ===========
Net Income
Individual............. (5,896,129) (38,338,143) (10,554,743) (40,848,364)
ClariNet............... (254,801) 178,914 (420,203) 308,979
---------- ----------- ----------- -----------
Combined................. (6,150,930) (38,159,229) (10,974,946) (40,539,385)
========== =========== =========== ===========
Other changes in share-
holders' equity (defi-
cit)
Individual............. 639,939 38,819,702 990,882 10,902,367
ClariNet............... -- -- -- 7,425
---------- ----------- ----------- -----------
Combined................. 639,939 38,819,702 990,882 10,909,792
========== =========== =========== ===========
</TABLE>

In connection with the merger, $873,000 of merger costs and expenses were
incurred and have been charged to expense in the second quarter of 1997 and
are included in acquisitions and other charges. The merger costs and expenses
related primarily to legal, accounting, and investment adviser's fees.

In June 1997, Individual acquired certain assets and liabilities of the
CompanyLink service from Knowledge Factory Partners, L.L.C., a subsidiary of
Delphi Internet Services Corporation. CompanyLink service detects corporate-
specific references and detailed market statistics on more than 65,000
companies and dynamically links those references to related news and
information on the Web. The purchase price for the acquisition included
$280,000 in cash, a Common Stock Purchase Warrant exercisable for the purchase
of 50,000 shares of Individual Common Stock at an exercise price of $5.25 per
share and certain monthly contingent payments payable for a period of twelve
months after the closing of the acquisition. Individual also recognized
$50,000 of legal and accounting expenses in connection with the acquisition.
The acquisition has been recorded using the purchase method of accounting. The
total estimated purchase price of $447,000 has been recorded as an intangible
asset and is being amortized over 18 months. Amortization expense is included
in acquisitions and other charges.

F-43
<PAGE>

INDIVIDUAL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(UNAUDITED)

Individual ceased operations of its FreeLoader service as of May 31, 1997,
and all costs related to the shutdown are included in acquisitions and other
charges as well as operating expenses of FreeLoader of approximately $1.4
million, which are predominantly product development expenses.

6. COMMITMENTS AND CONTINGENCIES

Under the merger agreement with FreeLoader, Individual was required to pay a
balloon payment of $2,000,000, payable upon the successful completion of three
years of employment with Individual by the FreeLoader founders. In October
1997, in settlement of certain matters between Individual and the FreeLoader
founders, Individual agreed to pay the founders $1,290,000 in lieu of the
$2,000,000 balloon payment. Prior to the October 1997 settlement, Individual
had been accruing for the $2,000,000 balloon payment ratably each month, over
the three year period. In consequence of the settlement and the resulting
$1,290,000 payment, Individual recorded an additional amount in acquisition
and other charges, in the third quarter of 1997, to true up the accrual to
$1,290,000. As part of the October 1997 settlement, Individual and the two
founders also agreed to amend the value guarantee with respect to certain
shares issued to the two founders in the FreeLoader merger. The value
guarantee will be measured during the period from February 1998 through April
1998. If the fair value of the stock subject to the value guarantee is less
than the guaranteed value, then Individual will pay out the difference in
cash. At September 30, 1997, the fair value of the stock was approximately
$3,269,000 below the guaranteed value. Individual has letters of credit
outstanding of approximately $4,740,000 in connection with the payment of the
value guarantee by Individual.

An amended consolidated securities class action complaint was filed in the
United States District Court for the District of Massachusetts against
Individual and certain of Individual's current and former directors and
officers, as well as eight of the underwriters of Individual's initial public
offering, which closed on March 20, 1996. The complaint asserts that the
defendants violated securities laws by failing to disclose at the time of the
initial public offering that there allegedly was a dispute between Joseph A.
Amram, the former Chief Executive Officer of Individual, and the Board of
Directors, that ultimately led to Mr. Amram's departure from Individual four
months after the offering. The plaintiffs seek damages, including costs and
expenses, in an unspecified amount, among other relief.

7. RECENTLY ISSUED ACCOUNTING STANDARDS

F-44
<PAGE>

INDIVIDUAL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(UNAUDITED)

the period. Diluted EPS, similar to fully diluted EPS, reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity.
Management believes the adoption of SFAS 128 will not have a material impact
on reported earnings per share.

8. NETSCAPE AGREEMENT

In September 1997, Individual was named by Netscape Communications
Corporation as the exclusive provider of business information services to the
Netscape Netcenter on-line business service. The agreement provides Individual
the opportunity to gain traffic for its NewsPage service from the Netscape
home page, one of the highest traffic pages on the Web, and to lower
Individual's historical cost of acquiring new subscribers. As part of the
agreement, Individual paid Netscape an upfront license fee covering the 27-
month period of the contract. These fees are included in prepaid expenses and
other assets. There are no guarantees or traffic commitments from Netscape,
and there are no assurances that the fees paid to Netscape will be realized
from future revenue generated from Netcenter traffic.

F-45
<PAGE>

ANNEX A

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

BY AND BETWEEN

DESKTOP DATA, INC.

AND

INDIVIDUAL, INC.

DATED AS OF NOVEMBER 2, 1997

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE I -- THE MERGER................................................. 2
Section 1.01. The Merger.............................................. 2
Section 1.02. Effective Time.......................................... 2
Section 1.03. Effect of the Merger.................................... 2
Section 1.04. Certificate of Incorporation; By-Laws................... 3
Section 1.05. Directors and Officers.................................. 3
Section 1.06. Effect on Capital Stock................................. 3
Section 1.07. Exchange of Certificates................................ 4
Section 1.08. Stock Transfer Books.................................... 6
Section 1.09. No Further Ownership Rights in Individual Common Stock.. 6
Section 1.10. Lost, Stolen or Destroyed Certificates.................. 6
Section 1.11. Tax and Accounting Consequences......................... 6
Section 1.12. Taking of Necessary Action; Further Action.............. 6
Section 1.13. Material Adverse Effect................................. 7
ARTICLE II -- REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL 7
Section 2.01. Organization of Individual.............................. 7
Section 2.02. Capital Structure....................................... 7
Section 2.03. Obligations with Respect to Capital Stock............... 8
Section 2.04. Authority............................................... 8
Section 203 of the Delaware General Corporation Law Not
Section 2.05. Applicable.............................................. 9
Section 2.06. SEC Filings; Individual Financial Statements............ 10
Section 2.07. Absence of Certain Changes or Events.................... 10
Section 2.08. Taxes................................................... 11
Section 2.09. Intellectual Property................................... 11
Section 2.10. Compliance; Permits; Restrictions....................... 12
Section 2.11. Litigation.............................................. 12
Section 2.12. Brokers' and Finders' Fees.............................. 12
Section 2.13. Employee Benefit Plans.................................. 13
Absence of Liens and Encumbrances; Condition of
Section 2.14. Equipment............................................... 13
Section 2.15. Environmental Matters................................... 13
Section 2.16. Labor Matters........................................... 14
Section 2.17. Agreements, Contracts and Commitments................... 15
Section 2.18. Pooling of Interests.................................... 16
Section 2.19. Change of Control Payments.............................. 16
Section 2.20. Statements; Proxy Statement/Prospectus.................. 16
Section 2.21. Board Approval.......................................... 17
Section 2.22. Fairness Opinion........................................ 17
Section 2.23. Minute Books............................................ 17
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF DESKTOP 17
Section 3.01. Organization of Desktop................................. 17
Section 3.02. Desktop Capital Structure............................... 17
<CAPTION>
Section 3.03. Obligations With Respect to Capital Stock................ 18
<C> <S> <C>
Section 3.04. Authority............................................... 18
Section 203 of the Delaware General Corporation Law Not
Section 3.05. Applicable.............................................. 20
</TABLE>

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<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
Section 3.06. SEC Filings; Desktop Financial Statements............... 20
Section 3.07. Absence of Certain Changes or Events.................... 21
Section 3.08. Taxes................................................... 21
Section 3.09. Intellectual Property................................... 21
Section 3.10. Compliance; Permits; Restrictions....................... 22
Section 3.11. Litigation.............................................. 22
Section 3.12. Brokers' and Finders' Fees.............................. 23
Section 3.13. Employee Benefit Plans.................................. 23
Absence of Liens and Encumbrances; Conditions of
Section 3.14. Equipment............................................... 23
Section 3.15. Environmental Matters................................... 24
Section 3.16. Labor Matters........................................... 24
Section 3.17. Agreements, Contracts and Commissions................... 24
Section 3.18. Pooling of Interests.................................... 26
Section 3.19. Change of Control Payments.............................. 26
Section 3.20. Statements; Proxy Statements/Prospectus................. 26
Section 3.21. Board Approval.......................................... 26
Section 3.22. Fairness Opinion........................................ 27
Section 3.23. Minute Books............................................ 27
ARTICLE IV -- CONDUCT OF BUSINESS PENDING THE MERGER.................... 27
Section 4.01. Conduct of Business..................................... 27
Section 4.02. No Solicitation......................................... 27
ARTICLE V -- ADDITIONAL INFORMATION..................................... 30
Proxy Statement/Prospectus; Registration Statement;
Section 5.01. Other Filings........................................... 32
Section 5.02. Meetings of Stockholders................................ 33
Section 5.03. Access to Information; Confidentiality.................. 33
Section 5.04. Consents, Approvals..................................... 34
Section 5.05. Stock Options........................................... 34
Section 5.06. Individual Employee Stock Purchase Plan................. 35
Section 5.07. Individual Affiliate Agreement.......................... 36
Section 5.08. Desktop Affiliate Agreement............................. 36
Section 5.09. Indemnification and Insurance........................... 36
Section 5.10. Notification of Certain Matters......................... 37
Section 5.11. Further Action/Tax Treatment............................ 38
Section 5.12. Public Announcements.................................... 38
Section 5.13. Listing of Desktop Common Stock......................... 38
Section 5.14. Conveyance Taxes........................................ 38
Section 5.15. Accountants' Letters.................................... 38
Section 5.16. Pooling Accounting Treatment............................ 39
Section 5.17. Third Party Consents.................................... 39
Section 5.18. Tax-free Reorganization................................. 39
Section 5.19. Board of Directors of Desktop........................... 39
Section 5.20. Officers of Desktop..................................... 39
Section 5.21. Change of Name.......................................... 39
Section 5.22. Form S-8................................................ 40
ARTICLE VI -- CONDITIONS TO THE MERGER.................................. 40
Conditions to Obligation of Each Party to Effect the
Section 6.01. Merger.................................................. 40
Section 6.02. Additional Conditions to Obligations of Desktop......... 40
Section 6.03. Additional Conditions to Obligations of Individual...... 42
</TABLE>

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<TABLE>
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<C> <S> <C>
ARTICLE VII -- TERMINATION.............................................. 43
Section 7.01. Termination............................................. 43
Section 7.02. Notice of Termination; Effect of Termination............ 45
Section 7.03. Fees and Expenses....................................... 45
ARTICLE VIII -- GENERAL PROVISIONS...................................... 47
Effectiveness of Representations, Warranties and
Section 8.01. Agreements.............................................. 47
Section 8.02. Notices................................................. 47
Section 8.03. Certain Definitions..................................... 48
Section 8.04. Amendment............................................... 48
Section 8.05. Waiver.................................................. 49
Section 8.06. Headings................................................ 49
Section 8.07. Severability............................................ 49
Section 8.08. Entire Agreement........................................ 49
Section 8.09. Assignment.............................................. 49
Section 8.10. Parties in Interest..................................... 49
Section 8.11. Failure or Indulgence Not Waiver, Remedies Cumulative... 49
Section 8.12. Governing Law........................................... 49
Section 8.13. Counterparts............................................ 50
EXHIBITS:
Exhibit A: Desktop Stock Option Agreement
Exhibit B: Individual Stock Option Agreement
Exhibit C: Form of Desktop Participation Agreement
Exhibit D: Form of Individual Participation Agreement
Exhibit E: Form of Individual Affiliate Agreement
Exhibit F: Form of Desktop Affiliate Agreement
</TABLE>

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ANNEX A

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of November 2,
1997 (this "Agreement"), between Desktop Data, Inc., a Delaware corporation
("Desktop"), and Individual, Inc., a Delaware corporation ("Individual"),

W I T N E S S E T H :

WHEREAS, the Boards of Directors of Desktop and Individual have each
determined that it is advisable and in the best interests of their respective
stockholders for Desktop to enter into a business combination with Individual
upon the terms and subject to the conditions set forth herein;

WHEREAS, in furtherance of such combination, the Boards of Directors of
Desktop and Individual have each approved the merger (the "Merger") of
Individual with and into Desktop in accordance with the applicable provisions
of Delaware General Corporation Law ("Delaware Law"), and upon the terms and
subject to the conditions set forth herein;

WHEREAS, pursuant to the Merger, each outstanding share (a "Share") of
Individual's common stock, $.01 par value (the "Individual Common Stock"),
shall be converted into the right to receive the Merger Consideration (as
defined in Section 1.07(b)), upon the terms and subject to the conditions set
forth herein;

WHEREAS, Desktop and Individual intend, by approving resolutions authorizing
this Agreement, to adopt this Agreement as a plan of reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder, and to cause the Merger to
qualify as a reorganization under the provisions of Section 368(a) of the
Code;

WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to Desktop's and Individual's willingness to enter
into this Agreement, Desktop shall execute and deliver a Stock Option
Agreement in favor of Individual in substantially the form attached hereto as
Exhibit A (the "Desktop Stock Option Agreement") and Individual shall execute
and deliver a Stock Option Agreement in favor of Desktop in substantially the
form attached hereto as Exhibit B (the "Individual Stock Option Agreement"
and, together with the Desktop Stock Option Agreement, the "Stock Option
Agreements"). The Board of Directors of Desktop and Individual have each
approved the Stock Option Agreements;

WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to Desktop's and Individual's willingness to enter
into this Agreement, the Chief Executive Officer of Desktop and certain other
affiliates of Desktop shall enter into a Participation Agreement in
substantially the form attached hereto as Exhibit C (the "Desktop
Participation Agreements"), and the Chief Executive Officer of Individual and
certain other affiliates of Individual shall enter into a Participation
Agreement in substantially the form attached hereto as Exhibit D (the
"Individual Participation Agreements" and, collectively with the Desktop
Participation Agreements, the "Participation Agreements");

WHEREAS, Desktop and Individual desire to make certain representations and
warranties and other agreements in connection with the Merger; and

WHEREAS, for accounting purposes, it is intended that the transactions
contemplated hereby shall be accounted for as a pooling of interests under
U.S. generally accepted accounting principles ("GAAP");

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Desktop and Individual hereby agree as follows:

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ARTICLE I

THE MERGER

Section 1.01. THE MERGER.

(a) Effective Time. At the Effective Time (as defined in Section 1.02),
and subject to and upon the terms and conditions of this Agreement and
Delaware Law, Individual shall be merged with and into Desktop, the
separate corporate existence of Individual shall cease, and Desktop shall
continue as the surviving corporation. Desktop as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "Surviving
Corporation."

(b) Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to
Section 7.01 and subject to the satisfaction or waiver of the conditions
set forth in Article VI, the consummation of the Merger will take place as
promptly as practicable (and in any event within two business days) after
satisfaction or waiver of the conditions set forth in Article VI, at the
offices of Testa, Hurwitz & Thibeault, LLP, High Street Tower, 125 High
Street, Boston, Massachusetts 02110, unless another date, time or place is
agreed to in writing by the parties hereto.

Section 1.02. EFFECTIVE TIME. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VI, the parties
hereto shall cause the Merger to be consummated by filing a Certificate of
Merger in accordance with the relevant provisions of Delaware Law (the
"Certificate of Merger"), together with any required related certificates,
with the Secretary of State of the State of Delaware, in such form as required
by, and executed in accordance with the relevant provisions of, Delaware Law
(the time of such filing being the "Effective Time").

Section 1.03. EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and
the applicable provisions of Delaware Law. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of Individual shall vest in the
Surviving Corporation, and all debts, liabilities, obligations and duties of
Individual shall become the debts, liabilities, obligations and duties of the
Surviving Corporation.

Section 1.04. CERTIFICATE OF INCORPORATION; BY-LAWS.

(a) Certificate of Incorporation. The Certificate of Incorporation of
Desktop, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by Delaware Law and such Certificate of Incorporation;
provided, however, that the Certificate of Incorporation of the Surviving
Corporation shall be amended as of the Effective Time (i) to increase the
number of authorized shares of capital stock of the Surviving Corporation
and (ii) so that the name of the Surviving Corporation is "NewsEDGE
Corporation."

(b) By-Laws. The By-Laws of Desktop, as in effect immediately prior to
the Effective Time, shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by Delaware Law, the Certificate of
Incorporation of the Surviving Corporation and such By-Laws.

Section 1.05. DIRECTORS AND OFFICERS. The directors of Desktop immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of
Desktop immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed and qualified.

Section 1.06. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of Desktop, Individual or the
holders of any of the following securities:

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(a) Conversion of Securities. Every Share issued and outstanding
immediately prior to the Effective Time (excluding any shares to be
canceled pursuant to Section 1.06(b)) shall be converted, subject to
Section 1.06(e), into the right to receive one-half (1/2) of a share (the
"Exchange Ratio") of validly issued, fully paid and nonassessable common
stock of Desktop, $.01 par value per share ("Desktop Common Stock").

(b) Cancellation. Each Share held in the treasury of Individual and each
Share owned by Desktop or by any direct or indirect wholly owned subsidiary
of Individual or Desktop immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, be canceled and retired without payment
of any consideration therefor and cease to exist.

(c) Stock Options; Employee Stock Purchase Plan. All options to purchase
Individual Common Stock then outstanding under Individual's Amended and
Restated 1989 Stock Option Plan, 1995 Incentive Stock Option Plan, 1996
Non-Employee Director Stock Option Plan, 1996 Stock Option Plan and Amended
and Restated 1996 Stock Plan (collectively, the "Individual Stock Option
Plans") shall be assumed by Desktop in accordance with Section 5.05.
Immediately prior to the Effective Time, all rights to purchase Individual
Common Stock then outstanding under Individual's 1996 Employee Stock
Purchase Plan (the "Individual Employee Stock Purchase Plan") will be
assumed by Desktop in accordance with Section 5.06.

(d) Warrants. All warrants to purchase Individual Common Stock (the
"Warrants") then outstanding shall be assumed by Desktop in accordance with
Section 5.05.

(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted
to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible
into Desktop Common Stock or Individual Common Stock), reorganization,
recapitalization or other like change with respect to Desktop Common Stock
or Individual Common Stock occurring after the date hereof and prior to the
Effective Time.

(f) Fractional Shares. No fraction of a share of Desktop Common Stock
will be issued, but in lieu thereof each holder of Individual Common Stock
who would otherwise be entitled to a fraction of a share of Desktop Common
Stock (after aggregating all fractional shares of Desktop Common Stock to
be received by such holder) shall receive from Desktop an amount of cash
(rounded to the nearest whole cent), without interest, equal to the product
of (i) such fraction, multiplied by (ii) the average closing price of a
share of Desktop Common Stock for the ten (10) most recent days that
Desktop Common Stock has traded ending on the trading day immediately prior
to the Effective Time, as reported on the Nasdaq Stock Market ("Nasdaq").

Section 1.07. EXCHANGE OF CERTIFICATES.

(a) Exchange Agent. Desktop shall supply, or shall cause to be supplied,
to or for the account of a bank or trust company designated by Desktop (the
"Exchange Agent"), in trust for the benefit of the holders of Individual
Common Stock, for exchange in accordance with this Section 1.07, through
the Exchange Agent, certificates evidencing the Desktop Common Stock
issuable pursuant to Section 1.06 in exchange for outstanding Shares.

(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Desktop will instruct the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time evidenced outstanding Shares (the "Certificates") (i)
a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Desktop may reasonably
specify after review by Individual) and (ii) instructions to effect the
surrender of the Certificates in exchange for the certificates evidencing
shares of Desktop Common Stock and, in lieu of any fractional shares
thereof, cash. Upon surrender of a Certificate

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for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) certificates
evidencing that number of whole shares of Desktop Common Stock which such
holder has the right to receive in accordance with the Exchange Ratio in
respect of the Shares formerly evidenced by such Certificate, (B) any
dividends or other distributions to which such holder is entitled pursuant
to Section 1.07(c), and (C) cash in lieu of fractional shares of Desktop
Common Stock to which such holder is entitled pursuant to Section 1.06(f)
(the Desktop Common Stock, dividends, distributions and cash described in
this clause (C) being, collectively, the "Merger Consideration"), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares which is not registered in the transfer
records of Individual as of the Effective Time, Desktop Common Stock and
cash may be issued and paid in accordance with this Article I to a
transferee if the Certificate evidencing such Shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and
effect such transfer pursuant to this Section 1.07(b) and by evidence that
any applicable stock transfer taxes have been paid. Until so surrendered,
each outstanding Certificate that, prior to the Effective Time, represented
Shares will be deemed from and after the Effective Time, for all corporate
purposes, other than the payment of dividends, to evidence the ownership of
the number of full shares of Desktop Common Stock into which such Shares
shall have been so converted and the right to receive an amount in cash in
lieu of the issuance of any fractional shares in accordance with Section
1.06.

(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time, with respect
to Desktop Common Stock with a record date after the Effective Time, shall
be paid to the holder of any unsurrendered Certificate until the holder of
such Certificate shall surrender such Certificate. Subject to applicable
law, following surrender of any such Certificate, there shall be paid to
the record holder of the certificates representing whole shares of Desktop
Common Stock issued in exchange therefor, without interest, at the time of
such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such
whole shares of Desktop Common Stock.

(d) Transfers of Ownership. If any certificate for shares of Desktop
Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will
be properly endorsed and otherwise in proper form for transfer and that the
person requesting such exchange will have paid to Desktop or any person
designated by it any transfer or other taxes required by reason of the
issuance of a certificate for shares of Desktop Common Stock in any name
other than that of the registered holder of the certificate surrendered, or
established to the satisfaction of Desktop or any agent designated by it
that such tax has been paid or is not payable.

(e) No Liability. Notwithstanding anything to the contrary in this
Section 1.07, neither Desktop nor Individual shall be liable to any holder
of Individual Common Stock or Desktop Common Stock for any Merger
Consideration (or dividends or distributions with respect thereto)
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.

(f) Withholding Rights. The Surviving Corporation and the Exchange Agent
shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable pursuant to this Agreement to any holder of shares, such
amounts as the Surviving Corporation or the Exchange Agent is required to
deduct and withhold with respect to the making of such payment under the
Code or any provision of state, local, provincial or foreign tax law. To
the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was
made by the Surviving Corporation or the Exchange Agent.

Section 1.08. STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of Individual shall be closed, and there shall be no further
registration of transfers of Individual Common Stock thereafter on the records
of Individual.

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Section 1.09. NO FURTHER OWNERSHIP RIGHTS IN INDIVIDUAL COMMON STOCK. The
Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation
of Shares which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided
in this Article 1.

Section 1.10. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the ExchangeAgent
shall issue in exchange for such lost, stolen or destroyed Certificates,upon
the making of an affidavit of that fact by the holder thereof, such shares of
Desktop Common Stock as may be required pursuant to Section 1.06; provided,
however, that Desktop may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
Certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Desktop or the Exchange
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.

Section 1.11. TAX AND ACCOUNTING CONSEQUENCES. It is intended by the parties
hereto that the Merger shall (i) constitute a reorganization within the
meaning of Section 368 of the Code and (ii) qualify for accounting treatment
as a pooling of interests under GAAP. The parties hereto hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections 1.368-
2(g) and 1.368-3(a) of the United States Treasury Regulations.

Section 1.12. TAKING OF NECESSARY ACTION; FURTHER ACTION. Each of Desktop
and Individual in good faith will take all such commercially reasonable and
lawful action as may be necessary or appropriate in order to effectuate the
Merger in accordance with this Agreement as promptly as possible. If, at any
time after the Effective Time, any such further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the
Surviving Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of Individual, the
officers and directors of Individual are fully authorized in the name of their
respective corporations or otherwise to take, and will take, all such lawful
and necessary action.

Section 1.13. MATERIAL ADVERSE EFFECT. When used in this Agreement with
respect to Individual or any of its subsidiaries, or Desktop or any of its
subsidiaries, as the case may be, the term "Material Adverse Effect" means any
change or effect that, individually or when taken together with all other such
changes or effects that have occurred prior to the date of determination of
the occurrence of the Material Adverse Effect, is or is reasonably likely to
be materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of Individual and its
subsidiaries or Desktop and its subsidiaries, as the case may be, in each case
taken as a whole.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL

Individual hereby represents and warrants to Desktop that, except as set
forth in the written disclosure schedule previously delivered by Individual to
Desktop (the "Individual Disclosure Schedule") or pursuant to transactions and
agreements contemplated hereby:

Section 2.01. ORGANIZATION OF INDIVIDUAL. Each of Individual and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power to own, lease and operate its property and to carry on its
business as now being conducted and as proposed to be conducted, and is duly
qualified to do business and in good standing as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have a Material
Adverse Effect on Individual. Individual has delivered to Desktop a true and
complete list of all of Individual's subsidiaries, together with the
jurisdiction of incorporation of each subsidiary. Individual has delivered or
made

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available a true and correct copy of the Certificate of Incorporation and
Bylaws of Individual and similar governing instruments of its subsidiaries,
each as amended to date, to counsel for Desktop.

Section 2.02. CAPITAL STRUCTURE. The authorized capital stock of Individual
consists of 25,000,000 shares of Common stock, par value $.01 per share, of
which there were 16,330,548 shares issued and outstanding as of October 27,
1997 and 1,000,000 shares of Preferred Stock, par value $.01 per share, of
which no shares are issued or outstanding. All outstanding shares of
Individual Common Stock are duly authorized, validly issued, fully paid and
non- assessable and are not subject to preemptive rights created by statute,
the Certificate of Incorporation or By-laws of Individual or any agreement or
document to which Individual is a party or by which it is bound. As of October
27, 1997, Individual had reserved an aggregate of 5,999,140 shares of Common
Stock, net of exercises, for issuance to employees, consultants and non-
employee directors pursuant to the Individual Stock Option Plans, under which
options were outstanding for an aggregate of 4,083,547 shares, and 2,174,528
shares, net of exercises, for issuance to holders of Warrants upon their
exercise. All shares of Individual Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable. Section 2.02 of the Individual
Disclosure Schedule lists each outstanding option and warrant to acquire
shares of Individual Common Stock, the name of the holder of such option or
warrant, the number of shares subject to such option or warrant, the exercise
price of such option or warrant, the number of shares as to which such option
or warrant will have vested at such date, the vesting schedule and termination
date of such option or warrant and whether the exercisability of such option
or warrant will be accelerated in any way by the transactions contemplated by
this Agreement or for any other reason, and indicate the extent of
acceleration, if any. As of October 27, 1997, there were 127 participants in
the Individual Employee Stock Purchase Plan and Individual had reserved an
aggregate of 400,090 shares of Common Stock, net of purchases, thereunder.

Section 2.03. OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth
in Section 2.02, there are no equity securities of any class of Individual, or
any securities exchangeable or convertible into or exercisable for such equity
securities, issued, reserved for issuance or outstanding. Except for
securities Individual owns, directly or indirectly through one or more
subsidiaries, there are no equity securities of any class of any subsidiary of
Individual, or any security exchangeable or convertible into or exercisable
for such equity securities, issued, reserved for issuance or outstanding.
Except as set forth in Section 2.02, there are no options, warrants, equity
securities, calls, rights (including preemptive rights), commitments or
agreements of any character to which Individual or any of its subsidiaries is
a party or by which it is bound obligating Individual or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock of Individual or any
of its subsidiaries or obligating Individual or any of its subsidiaries to
grant, extend, accelerate the vesting of or enter into any such option,
warrant, equity security, call, right, commitment or agreement. There are no
registration rights and, to the knowledge of Individual there are no voting
trusts, proxies or other agreements or understanding with respect to any
equity security of any class of Individual or with respect to any equity
security of any class of any of its subsidiaries.

Section 2.04. AUTHORITY.

(a(a) Individual has all requisite corporate power and authority to enter
into this Agreement and the Individual Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and the execution and delivery of the Individual Stock
Option Agreement and the consummation of the transactions contemplated
thereby, have been duly authorized by all necessary corporate action on the
part of Individual, subject only to the approval of this Agreement by
Individual's stockholders and the filing and recordation of the Certificate
of Merger pursuant to Delaware Law. A vote of the holders of at least a
majority of the outstanding shares of the Individual Capital Stock is
required for Individual's stockholders to approve this Agreement. This
Agreement and the Individual Stock Option Agreement have been duly executed
and delivered by Individual and, assuming the due authorization, execution
and delivery by Desktop constitute the valid and binding obligations of
Individual, enforceable in accordance with their

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terms, except as enforceability may be limited by bankruptcy and other
similar laws and general principles of equity. The execution and delivery
of this Agreement and the Individual Stock Option Agreement by Individual
do not, and the performance of this Agreement and the Individual Stock
Option Agreement will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Individual or the equivalent organizational
documents of any of its subsidiaries, (ii) to the best knowledge of
Individual, subject to obtaining the approval of Individual's stockholders
of the Merger as contemplated in Section 5.02 and compliance with the
requirements set forth in Section 2.04(b) below, conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to
Individual or any of its subsidiaries or by which its or any of their
respective properties is bound or affected, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair Individual's rights or
alter the rights of obligations of any third party under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of Individual or any of its subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Individual or any of
its subsidiaries is a party or by which Individual or any of its
subsidiaries or its or any of their respective properties are bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Individual. Section 2.04 of the Individual
Disclosure Schedule lists all material consents, waivers and approvals
under any of Individual's or any of its subsidiaries' agreements,
contracts, license or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby.

(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission
or other governmental authority or instrumentality ("Governmental Entity")
is required by or with respect to Individual in connection with the
execution and delivery of this Agreement and the Individual Stock Option
Agreement or the consummation of the transactions contemplated hereby or
thereby, except for (i) the filing of a Form S-4 Registration Statement
(the "Registration Statement") with the Securities and Exchange Commission
("SEC") in accordance with the Securities Act of 1933, as amended (the
"Securities Act"), (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (iii) the filing of the Proxy
Statement (as defined in Section 2.20) with the SEC in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iv) the
filing of a Current Report on Form 8-K with the SEC, (v) such consents,
approvals, orders, authorizations, registrations, declarations and filings
as may be required under applicable federal and state securities laws and
the laws of any foreign country and (vi) such other consents,
authorizations, filings, approvals and registrations which, if not obtained
or made, would not have a Material Adverse Effect on Individual or Desktop
or have a material adverse effect on the ability of the parties to
consummate the Merger.

Section 2.05. SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW NOT
APPLICABLE. The Board of Directors of Individual has taken all actions so that
the restrictions contained in Section 2.03 of the Delaware General Corporation
Law applicable to a "business combination" (as defined in Section 203) will
not apply to the execution, delivery or performance of this Agreement or the
Stock Option Agreements or to the consummation of the Merger or the other
transactions contemplated by this Agreement or the Stock Option Agreements.

Section 2.06. SEC FILINGS; INDIVIDUAL FINANCIAL STATEMENTS.

(a) Individual has filed all forms, reports and documents required to be
filed with the SEC since March 15, 1996, and has made available to Desktop
such forms, reports and documents in the form filed with the SEC. All such
required forms, reports and documents (including those that Individual may
file subsequent to the date hereof) are referred to herein as the
"Individual SEC Reports." As of their respective dates, the Individual SEC
Reports (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such

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Individual SEC Reports, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing ) contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of
Individual's subsidiaries is required to file any forms, reports or other
documents with the SEC.

(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Individual SEC Reports or
delivered to Desktop representing the financial condition of Individual as
of September 30, 1997 (the "Individual Financials"), including any
Individual SEC Reports filed after the date hereof until the Closing, (x)
complied or will comply as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, (y) was
prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or,
in the case of unaudited interim financial statements, as may be permitted
by the SEC on Form 10-Q under the Exchange Act) and (z) fairly presented
the consolidated financial position of Individual and its subsidiaries as
at the respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of Individual as of September 30,
1997 is hereinafter referred to as the "Individual Balance Sheet." Except
as disclosed in the Individual Financials, neither Individual nor any of
its subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a balance sheet or in
the related notes to the consolidated financial statements prepared in
accordance with GAAP which are, individually or in the aggregate, material
to the business, results of operations or financial condition of Individual
and its subsidiaries taken as a whole, except liabilities (i) provided for
in the Individual Balance Sheet, or (ii) incurred since the date of the
Individual Balance Sheet in the ordinary course of business consistent with
past practices.

(c) Individual has heretofore furnished to Desktop a complete and correct
copy of any amendments or modifications, which have not yet been filed with
the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Individual with the
SEC pursuant to the Securities Act or the Exchange Act.

Section 2.07. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Individual Balance Sheet through the date of this Agreement, there has not
been: (i) any Material Adverse Effect on Individual, (ii) any material change
by Individual in its accounting methods, principles or practices, except as
required by concurrent changes in GAAP, or (iii) any revaluation by Individual
of any of its assets having a Material Adverse Effect on Individual,
including, without limitation, writing down the value of capitalized software
or inventory or writing off notes or accounts receivable other than in the
ordinary course of business.

Section 2.08. TAXES. Individual and each of its subsidiaries has filed all
tax returns required to be filed by any of them and has paid (or Individual
has paid on its behalf), or has set up an adequate reserve for the payment of,
all material taxes required to be paid as shown on such returns, and the most
recent financial statements delivered to Desktop reflect an adequate reserve
for all material taxes payable by Individual and its subsidiaries accrued
through the date of such financial statements. Except as reasonably would not
be expected to have a Material Adverse Effect on Individual, no deficiencies
for any taxes have been proposed, asserted or assessed against Individual or
any of its subsidiaries. For the purpose of this Agreement, the term "tax"
shall include all Federal, state, local and foreign income, profits,
franchise, gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts.

Section 2.09. INTELLECTUAL PROPERTY.

(a) Individual and its subsidiaries own, or have the right to use, sell
or license all intellectual property utilized in their respective
businesses as presently conducted (such intellectual property and the
rights

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thereto are collectively referred to herein as the "Individual IP Rights"),
except for any failure to own or have the right to use, sell or license
that would not have a Material Adverse Effect on Individual.

(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
breach of any instrument or agreement governing any Individual IP Rights
(the "Individual IP Rights Agreements"), will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Individual IP Rights or impair the right of Individual and its subsidiaries
or the Surviving Corporation to use, sell or license any Individual IP
Rights or portion thereof, except for the occurrence of any such breach,
forfeiture, termination or impairment that would not individually or in the
aggregate, result in a Material Adverse Effect on Individual.

(c) (i) neither the manufacture, marketing, license, sale or intended use
of any product or technology currently licensed or sold or under
development by Individual or any of its subsidiaries violates any license
or agreement between Individual or any of its subsidiaries and any third
party or, to the knowledge of Individual infringes any intellectual
property right of any other party; and (ii) there is no pending or, to the
knowledge of Individual, threatened claim or litigation contesting the
validity, ownership or right to use, sell, license or dispose of any
Individual IP Rights, nor has Individual received any written notice
asserting that any Individual IP Rights or the proposed use, sale, license
or disposition thereof conflicts or will conflict with the rights of any
other party, except, with respect to clauses (i) and (ii), for any
violations, infringements, claims or litigation that would not have a
Material Adverse Effect on Individual.

(d) Individual has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all Individual IP rights.

Section 2.10. COMPLIANCE; PERMITS; RESTRICTIONS.

(a) Neither Individual nor any of its subsidiaries is in conflict with,
or in default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to Individual or any of its subsidiaries or
by which its or any of their respective properties is bound or affected, or
(ii) any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Individual or any of its subsidiaries is a party or by which Individual or
any of its subsidiaries or its or any of their respective properties is
bound or affected, except for any conflicts, defaults or violations which
would not have a Material Adverse Effect on Individual. Without limiting
the foregoing, Individual is in compliance with all material provisions of
its agreements with information providers, including provisions relating to
royalty calculations; Individual has not received any notice from any
information provider claiming non-compliance with any such agreement. To
the knowledge of Individual, no investigation or review by any governmental
or regulatory body or authority is pending or threatened against Individual
or its subsidiaries, nor has any governmental or regulatory body or
authority indicated an intention to conduct the same, other than, in each
such case, those the outcome of which would not have a Material adverse
Effect on Individual.

(b) Individual and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities
which are material to the operation of the business of Individual and its
subsidiaries taken as a whole (collectively, the "Individual Permits").
Individual and its subsidiaries are in compliance with the terms of
Individual Permits, except where the failure to so comply would not have a
Material Adverse Effect on Individual.

Section 2.11. LITIGATION. Except as set forth in Section 2.11 of the
Individual Disclosure Schedule, as of the date of this Agreement, there is no
action, suit, proceeding, claim, arbitration or investigation pending, or as
to which Individual or any of its subsidiaries has received any notice of
assertion nor, to Individual's knowledge, is there a threatened action, suit,
proceeding, claim arbitration or investigation against Individual or any of
its subsidiaries which would have a Material Adverse Effect on Individual, or
which in any manner challenges or seeks to prevent, enjoin, alter or delay any
of the transactions contemplated by this Agreement.

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Section 2.12. BROKERS' AND FINDERS' FEES. Except for fees payable to
BancAmerica ROBERTSON STEPHENS pursuant to the engagement letter dated October
10, 1997, a copy of which has been provided to Desktop, Individual has not
incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.

Section 2.13. EMPLOYEE BENEFIT PLANS.

(a) With respect to each material employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or contributed to by
Individual or any trade or business (an "ERISA Affiliate") which is under
common control with Individual within the meaning of Section 414 of the
Code (the "Individual Employee Plans"), Individual has made available to
Desktop a true and complete copy of, to the extent applicable, (i) such
Individual Employee Plan, (ii) the most recent annual report (Form 5500),
(iii) each trust agreement related to such Individual Employee Plan, (iv)
the most recent summary plan description for each Individual Employee Plan
for which such description is required, (v) the most recent actuarial
report relating to any Individual Employee Plan subject to Title IV of
ERISA and (vi) the most recent United States Internal Revenue Service
("IRS") determination letter issued with respect to any Individual Employee
Plan.

(b) Each Individual Employee Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination for the
IRS covering the provisions of the Tax Reform Act of 1986 stating that such
Individual Employee Plan is so qualified and nothing has occurred since the
date of such letter that could reasonably be expected to affect the
qualified status of such plan. Each Individual Employee Plan has been
operated in all material respects in accordance with its terms and the
requirements of applicable law. Neither Individual nor any ERISA Affiliate
of Individual has incurred or is reasonably expected to incur any material
liability under Title IV of ERISA in connection with the termination of any
plan covered or previously covered by Title IV of ERISA. No Individual
Employee Plan is a Multiemployer Plan as defined in Section 3(37) of ERISA.
Individual

(c) With respect to the employees and former employees of Individual,
there are no employee post-retirement medical or health plans in effect,
except as required by Section 4980B of the Code. No tax under Section 4980B
or Section 4980D of the Code has been incurred in respect of any Employee
Plan that is a group health plan, as defined in Section 5000(b)(1) of the
Code.

Section 2.14. ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION OF EQUIPMENT.

Individual and each of its subsidiaries has good and valid title to, or, in
the case of leased properties and assets, valid leasehold interest in, all of
its material tangible properties and assets, real, personal and mixed, used in
its business, free and clear of any liens or encumbrances except as reflected
in the Individual Financials and except for liens for taxes not yet due and
payable and such imperfections of title and encumbrances, if any, which would
not have a Material Adverse Effect on Individual.

Section 2.15. ENVIRONMENTAL MATTERS.

(a) Hazardous Material. Except as would not have a Material Adverse
Effect on Individual, no underground storage tanks and no amount of any
substance that has been designated by any Governmental Entity or by
applicable federal, state or local law, to be radioactive, toxic, hazardous
or otherwise a danger to health or the environment, including, without
limitation, PCBs, asbestos, petroleum, urea-formaldehyde and all substances
listed as hazardous substances pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or defined
as a hazardous waste pursuant to the United States Resource Conservation
and Recovery Act of 1976, as amended, and the regulations promulgated
pursuant to said laws, (a "Hazardous Material"), but excluding office and
janitorial supplies,

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are present, as a result of the deliberate actions of Individual or any of
its subsidiaries, or, to Individual's knowledge, as a result of any actions
of any third party or otherwise, in, on or under any property, including
the land and the improvements, ground water and surface water thereof, that
Individual or any of its subsidiaries has at any time owned, operated,
occupied or leased.

(b) Hazardous Material Activities. Except as would not have a Material
Adverse Effect on Individual, neither Individual nor any of its
subsidiaries has transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous Materials in
violation of any law in effect on or before the date hereof, nor has
Individual or any of its subsidiaries disposed of, transported, sold, or
manufactured any product containing a Hazardous Material (collectively
"Hazardous Material Activities") in violation of any rule, regulation,
treaty or statute promulgated by any Governmental Entity in effect prior to
or as of the date hereof to prohibit, regulate or control Hazardous
Materials or any Hazardous Material Activity.

(c) Permits. Individual and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"Individual Environmental Permits") necessary for the conduct of
Individual's and its subsidiaries' Hazardous Material Activities and other
businesses of Individual and its subsidiaries as such activities and
businesses are currently being conducted, except where the failure to so
hold would not have a Material Adverse Effect on Individual.

(d) Environmental Liabilities. No material action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or
to Individual's knowledge, threatened concerning any Individual
Environmental Permit, Hazardous Material or any Hazardous Material Activity
of Individual or any of its subsidiaries. Individual is not aware of any
fact or circumstance which could involve Individual or any of its
subsidiaries in any environmental litigation or impose upon Individual or
any of its subsidiaries any environmental liability that would have a
Material Adverse Effect on Individual.

Section 2.16. LABOR MATTERS. To Individual's knowledge, there are no
activities or proceedings of any labor union to organize any employees of
Individual or any of its subsidiaries and there are no strikes, or material
slowdowns, work stoppages or lockouts, or threats thereof by or with respect
to any employees of Individual or any of its subsidiaries. Individual and its
subsidiaries are and have been in compliance with all applicable laws
regarding employment practices, terms and conditions of employment, and wages
and hours (including, without limitation, ERISA (as defined below), WARN or
any similar state or local law), except for any noncompliance that would not
have a Material Adverse Effect on Individual.

Section 2.17. AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth in
Section 2.17 of the Individual Disclosure Schedule, neither Individual nor any
of its subsidiaries is a party to or is bound by:

(a) any collective bargaining agreements;

(b) any bonus, deferred compensation, incentive compensation, pension,
profit-sharing or retirement plans, or any other employee benefit plans or
arrangements;

(c) any employment or consulting agreement, contract or commitment with
any officer or director level employee, not terminable by Individual or any
of its subsidiaries on thirty (30) days notice without liability, except to
the extent general principles of wrongful termination law may limit
Individual's or any of its subsidiaries' ability to terminate employees at
will;

(d) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;

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(e) any agreement of indemnification or guaranty not entered into in the
ordinary course of business other than indemnification agreements between
Individual or any of its subsidiaries and any of its officers or directors;

(f) any agreement, contract or commitment containing any covenant
limiting the freedom of Individual or any of its subsidiaries to engage in
any line of business or compete with any person;

(g) any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $100,000 and not
cancelable without penalty;

(h) any agreement, contract or commitment currently in force relating to
the disposition or acquisition of assets not in the ordinary course of
business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise;

(i) any mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of
money or extension of credit;

(j) any joint marketing or development agreement;

(k) any distribution agreement (identifying any that contain exclusivity
provisions); or

(l) any other agreement, contract or commitment (excluding real and
personal property leases) which involve payment by Individual or any of its
subsidiaries under any such agreement, contract or commitment of $100,000
or more in the aggregate and is not cancelable without penalty within
thirty (30) days.

Neither Individual nor any of its subsidiaries, nor to Individual's
knowledge any other party to a Individual Contract (as defined below), has
breached, violated or defaulted under, or received notice that it has
breached, violated or defaulted under, any of the material terms or conditions
of any of the agreements, contracts or commitments to which Individual is a
party or by which it is bound of the type described in clauses (a) through (l)
above (any such agreement, contract or commitment, a "Individual Contract") in
such manner as would permit any other party to cancel or terminate any such
Individual Contract, or would permit any other party to seek damages, which
would have a Material Adverse Effect on Individual.

Section 2.18. POOLING OF INTERESTS. To the knowledge of Individual, based on
consultation with its independent accountants, neither Individual nor any of
its directors, officers or stockholders has taken any action which would
interfere with Desktop's ability to account for the Merger as a pooling of
interests.

Section 2.19. CHANGE OF CONTROL PAYMENTS. Section 2.19 of the Individual
Disclosure Schedule sets forth each plan or agreement pursuant to which all
material amounts may become payable (whether currently or in the future) to
current or former officers and directors of Individual as a result of or in
connection with the Merger.

Section 2.20. STATEMENTS; PROXY STATEMENT/PROSPECTUS. The information
supplied by Individual for inclusion in the Registration Statement (as defined
in Section 2.04(b)) shall not at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. The information supplied by Individual for
inclusion in the proxy statement/prospectus to be sent to the stockholders of
Individual and the stockholders of Desktop and in connection with the meeting
of Individual's stockholders to consider the approval of this Agreement (the
"Individual Stockholders' Meeting") and in connection with the meeting of
Desktop's stockholders to consider the approval of this Agreement and the
issuance of shares of Desktop Common Stock pursuant to the terms of the Merger
(the "Desktop Stockholders' Meeting") (such proxy statement/prospectus as
amended or supplemented is referred to herein as the "Proxy Statement") shall
not, on the date the Proxy Statement is first mailed to Individual's
stockholders and Desktop's stockholders, and at the time of the Individual
Stockholders' Meeting or the Desktop Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the

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circumstances under which they are made, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Individual
Stockholders' Meeting or the Desktop Stockholders' Meeting which has become
false or misleading. The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. If at any time prior to the Effective Time, any event
relating to Individual or any of its affiliates, officers or directors should
be discovered by Individual which should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, Individual
shall promptly inform Desktop. Notwithstanding the foregoing, Individual makes
no representation or warranty with respect to any information supplied by
Desktop which is contained in any of the foregoing documents.

Section 2.21. BOARD APPROVAL. The Board of Directors of Individual has, as
of the date of this Agreement, determined (i) that the Merger is fair to, and
in the best interests of Individual and its stockholders, and (ii) to
recommend that the stockholders of Individual approve this Agreement.

Section 2.22. FAIRNESS OPINION. Individual has received a written opinion
from BancAmerica ROBERTSON STEPHENS, dated as of the date hereof, to the
effect that as of the date hereof, the Exchange Ratio is fair to Individual's
stockholders from a financial point of view and has delivered to Desktop a
copy of such opinion.

Section 2.23. MINUTE BOOKS. The minute books of Individual made available to
counsel for Desktop are the only minute books of Individual and contain a
reasonably accurate summary, in all material respects, of all meetings of
directors (or committees thereof) and stockholders or actions by written
consent since the time of incorporation of Individual.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF DESKTOP

Desktop hereby represents and warrants to individual that except as set
forth in the written disclosure schedule previously delivered by Desktop to
Individual (the "Desktop Disclosure Schedule") or pursuant to transactions and
agreements contemplated hereby:

Section 3.01. ORGANIZATION OF DESKTOP. Desktop and each of its material
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power to own, lease and operate its property and to carry on its
business as now being conducted and as proposed to be conducted, and is duly
qualified to do business and in good standing as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have a Material
Adverse Effect on Desktop. Desktop has delivered to Individual a true and
complete list of all of Desktop's subsidiaries, together with the jurisdiction
of incorporation of each subsidiary and Desktop's equity interest therein.
Desktop has delivered or made available a true and correct copy of the
Certificate of Incorporation and Bylaws of Desktop and similar governing
instruments of its material subsidiaries, each as amended to date, to counsel
for Individual.

Section 3.02. DESKTOP CAPITAL STRUCTURE. The authorized capital stock of
Desktop consists of 15,000,000 shares of Common Stock, par value $.01 per
share, of which there were 8,675,369 shares issued and outstanding as of
October 27, 1997 and 1,000,000 shares of Preferred Stock, par value $.01 per
share, of which no shares are issued or outstanding. All outstanding shares of
the Common Stock of Desktop are duly authorized, validly issued, fully paid
and non-assessable and are not subject to preemptive rights created by
statute, the Certificate of Incorporation or By-laws of Desktop or any
agreement or document to which Desktop is a party or by which it is bound. As
of November 2, 1997, Desktop had reserved an aggregate of 1,871,024 shares of
Common Stock, net of exercises, for issuance to employees, consultants and
non-employee directors pursuant to Desktop's 1995 Stock Plan, 1989 Stock
Option Plan and 1995 Non- Employee Director Stock Option Plan, (collectively,
the "Desktop Stock Option Plans"), under which options are outstanding for
899,306 shares. All shares of the Common Stock of Desktop subject to issuance
as aforesaid, upon issuance on the terms and

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conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable.
Section 3.02 of the Desktop Disclosure Schedule lists each outstanding option
to acquire shares of the Desktop Common Stock at November 2, 1997, the name of
the holder of such option, the number of shares subject to such option, the
exercise price of such option, the number of shares as to which such option
will have vested at such date, the vesting schedule and termination date of
such option or warrant and whether the exercisability of such option will be
accelerated in any way by the transactions contemplated by this Agreement or
for any other reason, and indicate the extent of acceleration, if any. As of
November 2, 1997, there were 79 participants in Desktop's Employee Stock
Purchase Plan (the "Desktop Employee Stock Purchase Plan") and Desktop had
reserved an aggregate of 152,012 shares of Desktop Common Stock, net of
purchases, thereunder.

Section 3.03. OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth
in Section 3.02, there are no equity securities of any class of Desktop, or
any securities exchangeable or convertible into or exercisable for such equity
securities, issued, reserved for issuance or outstanding. Except for
securities Desktop owns, directly or indirectly through one or more
subsidiaries, there are no equity securities of any class of any subsidiary of
Desktop, or any security exchangeable or convertible into or exercisable for
such equity securities, issued, reserved for issuance or outstanding. Except
as set forth in Section 3.02, there are no options, warrants, equity
securities, calls, rights (including preemptive rights), commitments or
agreements or any character to which Desktop or any of its subsidiaries is a
party or by which it is bound obligating Desktop or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, or
repurchase, redeem or otherwise acquire, or cause the repurchase, redemption
or acquisition of, any shares of capital stock of Desktop or any of its
subsidiaries or obligating Desktop or any of its subsidiaries to grant,
extend, accelerate the vesting of or enter into any such option, warrant,
equity security, call, right, commitment or agreement. There are no
registration rights and, to the knowledge of Desktop there are no voting
trusts, proxies or other agreements or understandings with respect to any
equity security of any class of Desktop or with respect to any equity security
of any class of any of its subsidiaries.

Section 3.04. AUTHORITY.

(a) Desktop has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby.
Desktop has all requisite corporate power and authority to enter into the
Desktop Stock Option Agreement and to consummate the transactions
contemplated thereby. The execution and delivery of this Agreement and the
Desktop Stock Option Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Desktop, subject only to the approval of
the Merger by Desktop's stockholders as contemplated in Section 5.02 and
the filing and recordation of the Certificate of Merger pursuant to
Delaware Law. This Agreement has been duly executed and delivered by each
of Desktop and, assuming the due authorization, execution and delivery of
this Agreement by Individual, this Agreement constitutes the valid and
binding obligation of Desktop, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy and other similar
laws and general principles of equity. The Desktop Stock Option Agreement
has been duly executed and delivered by Desktop and, assuming the due
authorization, execution and delivery of the Desktop Stock Option Agreement
by Individual, the Desktop Stock Option Agreement constitutes the valid and
binding obligation of Desktop, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy and other similar
laws and general principles of equity. The execution and delivery of this
Agreement and the Desktop Stock Option Agreement by Desktop do not, and the
performance of this Agreement and the Desktop Stock Option Agreement by
Desktop will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Desktop or the equivalent organizational
documents of any of its other subsidiaries, (ii) to the best knowledge of
Desktop, subject to obtaining the approval of the Merger by Desktop's
stockholders as contemplated in Section 5.02 and compliance with the
requirements set forth in Section 3.04(b) below, conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to Desktop
or any of its subsidiaries or by which its or any of their respective
properties is bound or affected, or (iii) result in

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any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or impair Desktop's
rights or alter the rights or obligations of any third party under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any
of the properties or assets of Desktop or any of its subsidiaries pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Desktop or any of its subsidiaries is a party or by which Desktop or any of
its subsidiaries or its or any of their respective properties are bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Desktop. Section 3.04 of the Desktop Disclosure
Schedule lists all material consents, waivers and approvals under any of
Desktop's or any of its subsidiaries agreements, contracts, licenses or
leases required to be obtained in connection with the consummation of the
transactions contemplated hereby.

(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Desktop in connection with the execution and delivery of this
Agreement or the Desktop Stock Option Agreement or the consummation of the
transactions contemplated hereby or thereby, except for (i) the filing of
the Registration Statement with the SEC in accordance with the Securities
Act, (ii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (iii) the filing of the Proxy Statement
with the SEC in accordance with the Exchange Act, (iv) the filing of a
Current Report on Form 8-K with the SEC, (v) the listing of the Desktop
Common Stock on Nasdaq, (vi) the filing of an amendment to Desktop's
Certificate of Incorporation with the Secretary of State of the State of
Delaware, (vii) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal and state securities laws and the laws of any foreign country and
(viii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a material
Adverse Effect on Individual or Desktop or have a Material Adverse Effect
on the ability of the parties to consummate the Merger.

Section 3.05. SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW NOT
APPLICABLE. The Board of Directors of Desktop has taken all actions so that
the restrictions contained in Section 203 of the Delaware General Corporation
Law applicable to a "business combination" (as defined in Section 203) will
not apply to the execution, delivery or performance of this Agreement or the
Stock Option Agreements or to the consummation of the Merger or the other
transactions contemplated by this Agreement or the Stock Option Agreements.

Section 3.06. SEC FILINGS; DESKTOP FINANCIAL STATEMENTS.

(a) Desktop has filed all forms, reports and documents required to be
filed with the SEC since November 1, 1995, and has made available to
Individual such forms, reports and documents in the form filed with the
SEC. All such required forms, reports and documents (including those that
Desktop may file subsequent to the date hereof) are referred to herein as
the "Desktop SEC Reports." As of their respective dates, the Desktop SEC
Reports (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the Sec thereunder applicable to such Desktop SEC Reports,
and (ii) did not at the time they were filed (or if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. None of Desktop's subsidiaries is required to
file any forms, reports or other documents with the SEC.

(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Desktop SEC Reports or
delivered to Individual representing the financial condition of Desktop as
of September 30, 1997 (the "Desktop Financials"), including any Desktop SEC
Reports filed after the date hereof until the Closing, (x) complied or will
comply as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (y) was prepared in accordance
with

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GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto or, in the case of unaudited
interim financial statements, as may be permitted by the SEC on Form 10-Q
under the Exchange Act) and (z) fairly presented the consolidated results
of its operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of Desktop as of September 30, 1997
is hereinafter referred to as the "Desktop Balance Sheet." Except as
disclosed in the Desktop Financials, neither Desktop nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a balance sheet or in
the related notes to the consolidated financial statements prepared in
accordance with GAAP which are, individually or in the aggregate, material
to the business, results of operations or financial condition of Desktop
and its subsidiaries taken as a whole, except liabilities (i) provided for
in the Desktop Balance Sheet, or (ii) incurred since the date of the
Desktop Balance Sheet in the ordinary course of business consistent with
past practices.

(c) Desktop has heretofore furnished to Individual a complete and correct
copy of any amendments or modifications, which have not yet been filed with
the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Desktop with the SEC
pursuant to the Securities Act or the Exchange Act.

Section 3.07. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Desktop Balance Sheet through the date of this Agreement, there has not been:
(i) any Material Adverse Effect on Desktop, (ii) any material change by
Desktop in its accounting methods, principles or practices, except as required
by concurring changes in GAAP, or (ii) any revaluation by Desktop of any of
its assets having a Material Adverse Effect on Desktop, including, without
limitation, writing down the value of capitalized software or inventory or
writing off notes or accounts receivable other than in the ordinary course of
business.

Section 3.08. TAXES. Desktop and each of its subsidiaries has filed all tax
returns required to be filed by any of them and has paid (or Desktop has paid
on its behalf), or has set up an adequate reserve for the payment of, all
material taxes required to be paid as shown on such returns, and the most
recent financial statements delivered to Individual reflect an adequate
reserve for all material taxes payable by Desktop and its subsidiaries accrued
through the date of such financial statements. Except as reasonably would not
be expected to have a Material Adverse Effect on Desktop, no deficiencies for
any taxes have been proposed, asserted or assessed against Desktop or any of
its subsidiaries.

Section 3.09. INTELLECTUAL PROPERTY.

(a) Desktop and its subsidiaries own, or have the right to use, sell or
license all intellectual property utilized in their respective businesses
as presently conducted (such intellectual property and the rights thereto
are collectively referred to herein as the "Desktop IP Rights"), except for
any failure to own or have the right to use, sell or license that would not
have a Material Adverse Effect on Desktop.

(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
breach of any instrument or agreement governing any Desktop IP Rights (the
"Desktop IP Rights Agreements"), will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Desktop IP Rights or impair the right of Desktop and its subsidiaries to
use, sell or license any Desktop IP Rights or portion thereof, except for
the occurrence of any such breach, forfeiture, termination or impairment
that would not individually or in the aggregate, result in a Material
Adverse Effect on Desktop.

(c) (i) neither the manufacture, marketing, license, sale or intended use
of any product or technology currently licensed or sold or under
development by Desktop or any of its subsidiaries violates any licenses or
agreement between Desktop or any of its subsidiaries and any third party
or, to the knowledge of Desktop, infringes any intellectual property right
of any other party; and (ii) there is no pending or, to the knowledge of
Desktop, threatened claim or litigation contesting the validity, ownership
or right to use, sell,

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license or dispose of any Desktop IP Rights, nor has Desktop received any
written notice asserting that any Desktop IP Rights or the proposed use,
sale, license or disposition thereof conflicts or will conflict with the
rights of any other party, except, with respect to clauses (i) and (ii),
for any violations, infringements, claims or litigation that would not have
a Material Adverse Effect on Desktop.

(d) Desktop has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all Desktop IP Rights.

Section 3.10. COMPLIANCE; PERMITS; RESTRICTIONS.

(a) Neither Desktop nor any of its subsidiaries is in conflict with, or
in default or violation of, (i) any law, rule, regulation, order, judgment
or decree applicable to Desktop or any of its subsidiaries or by which its
or any of their respective properties is bound or affected, or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Desktop or any
of its subsidiaries is a party or by which Desktop or any of its
subsidiaries or its or any of their respective properties is bound or
affected, except for any conflicts, defaults or violations which would not
have a Material Adverse Effect on Desktop. Without limiting the foregoing,
Desktop is in compliance with all material provisions of its agreements
with information providers, including provisions relating to royalty
calculations; Individual has not received any notice from any information
providers claiming non-compliance with any such agreements. To the
knowledge of Desktop, no investigation or review by any governmental or
regulatory body or authority is pending or threatened against Desktop or
its subsidiaries, nor has any governmental or regulatory body or authority
indicated an intention to conduct the same, other than, in each such case,
those the outcome of which would not have a Material Adverse Effect on
Desktop. (b) Desktop and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities
which are material to the operation of the business of Desktop and its
subsidiaries taken as a whole (collectively, the "Desktop Permits").
Desktop and its subsidiaries are in compliance with the terms of the
Desktop Permits, except where the failure to so comply would not have a
Material Adverse Effect on Desktop.

Section 3.11. LITIGATION. As of the date of this Agreement, there is no
action, suit, proceeding, claim, arbitration or investigation pending, or as
to which Desktop or any of its subsidiaries has received any notice of
assertion nor, to Desktop's knowledge, is there a threatened action, suit,
proceeding, claim, arbitration or investigation against Desktop or any of its
subsidiaries which would have a Material Adverse Effect on Desktop, or which
in any manner challenges or seeks to prevent, enjoin, alter or delay any of
the transactions contemplated by this Agreement.

Section 3.12. BROKERS' AND FINDERS' FEES. Except for fees payable to BT
Alex. Brown Incorporated pursuant to an engagement letter dated June 11, 1997
a copy of which has been provided to Individual, Desktop has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.

SECTION 3.13. EMPLOYEE BENEFIT PLANS.

(a) With respect to each material employee benefit plan, program,
arrangement and contract (including without limitation, any "employee
benefit plan" as defined in Section 3(3) of ERISA) maintained or
contributed to by Desktop or any trade or business which is under common
control with Desktop within the meaning of Section 414 of the Code (the
"Desktop Employee Plans"), Desktop has made available to Individual a true
and complete copy of, to the extent applicable, (i) such Desktop Employee
Plan, (ii) the most recent annual report (Form 5500), (iii) each trust
agreement related to such Desktop Employee Plan, (iv) the most recent
summary plan description for each Desktop Employee Plan for which such a
description is required, (v) the most recent actuarial report relating to
any Desktop Employee Plan subject to Title IV of ERISA and (vi) the most
recent IRS determination letter issued with respect to any Desktop Employee
Plan.

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(b) Each Desktop Employee Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination from the
IRS governing the provisions of the Tax Reform Act of 1986 stating that
such Desktop Employee Plan is so qualified and nothing has occurred since
the date such letter that could reasonably be expected to affect the
qualified status of such plan. Each Desktop Employee Plan has been operated
in all material respects in accordance with its terms and the requirements
of applicable law. Neither Desktop nor any ERISA Affiliate of Desktop has
incurred or is reasonably expected to incur any material liability under
Title IV of ERISA in connection with the termination of any plan covered or
previously covered by Title IV of ERISA. No Desktop Employee Plan is a
Multiemployer Plan as defined in Section 3(37) of ERISA.

(c) With respect to the employees and former employees of Desktop, there
are no employee post-retirement medical or health plans in effect, except
as required by Section 4980B of the Code. No tax under Section 4980B or
Section 4980D of the Code has been incurred in respect of any Employee Plan
that is a group health plan, as defined in Section 5000(b)(1) of the Code.

SECTION 3.14. ABSENCE OF LIENS AND ENCUMBRANCES; CONDITIONS OF EQUIPMENT.
Desktop and each of its subsidiaries has good and valid title to, or, in the
case of leased properties and assets, valid leasehold interests in, all of its
material tangible properties and assets, real, personal and mixed, used in its
business, free and clear of any liens or encumbrances except as reflected in
the Desktop Financials and except for liens for taxes not yet due and payable
and such imperfections of title and encumbrances, if any, which would not have
a Material Adverse Effect on Desktop.

Section 3.15. ENVIRONMENTAL MATTERS.

(a) Hazardous Material. Except as would not have a Material Adverse
Effect on Desktop, no underground storage tanks and no Hazardous Materials
(but excluding office and janitorial supplies) are present as a result of
the deliberate actions of Desktop or any of its subsidiaries, or, to
Desktop's knowledge, as a result of any actions of any third party or
otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that Desktop or any
of its subsidiaries has at any time owned, operated, occupied or leased.

(b) Hazardous Material Activities. Except as would not have a Material
Adverse Effect on Desktop, neither Desktop nor any of its subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed
its employees or others to Hazardous Materials in violation of any law in
effect on or before the date hereof, nor has Desktop or any of its
subsidiaries engaged in any Hazardous Material Activities in violation of
any rule, regulation, treaty or statute promulgated by any Governmental
Entity in effect prior to or as of the date hereof to prohibit, regulate or
control Hazardous Materials or any Hazardous Material Activity.

(c) Permits. Desktop and its subsidiaries currently holds all
environmental approvals, permits, licenses, clearances and consents (the
"Desktop Environmental Permits") necessary for the conduct of Desktop's and
its subsidiaries' Hazardous Material Activities and other businesses of
Desktop and its subsidiaries as such activities and businesses are
currently being conducted, except where the failure to so hold would not
have a Material Adverse Effect on Desktop.

(d) Environmental Liabilities. No material action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or
to Desktop's knowledge, threatened concerning any Desktop Environmental
Permits, Hazardous Material or any Hazardous Material Activity of Desktop
or any of its subsidiaries. Desktop is not aware of any fact or
circumstance which could involve Desktop or any of its subsidiaries in any
environmental litigation or impose upon Desktop or any of its subsidiaries
any environmental liability that would have a Material Adverse Effect on
Desktop.

Section 3.16. LABOR MATTERS. To Desktop's knowledge, there are no activities
or proceedings of any labor union to organize any employees of Desktop or any
of its subsidiaries and there are no strikes, or material slowdowns, work
stoppages or lockouts, or threats thereof by or with respect to any employees
of

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Desktop or any of its subsidiaries. Desktop and its subsidiaries are and have
been in compliance with all applicable laws regarding employment practices,
terms and conditions of employment, and wages and hours (including, without
limitation, ERISA, WARN or any similar state or local law), except for any
noncompliance that would not have a Material Adverse Effect on Desktop.

Section 3.17. AGREEMENTS, CONTRACTS AND COMMISSIONS. Except as set forth in
Section 3.17 of the Desktop Disclosure Schedule, neither Desktop nor any of
its subsidiaries is a party to or is bound by:

(a) any collective bargaining agreements;

(b) any bonus, deferred compensation, incentive compensation, pension,
profit sharing or retirement plans, or any other employee benefit plans or
arrangements;

(c) any employment or consulting agreement contract or commitment with
any officer or director level employee, not terminable by Desktop or any of
its subsidiaries on thirty (30) days notice without liability, except to
the extent general principles of wrongful termination law may limit
Desktop's or any of its subsidiaries' ability to terminate employees at
will;

(d) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which all will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;

(e) any agreement of indemnification or guaranty not entered into in the
ordinary course of business other than indemnification agreements between
Desktop or any of its subsidiaries and any of its officers or directors;

(f) any agreement, contract or commitment containing any covenant
limiting the freedom of Desktop or any of its subsidiaries to engage in any
line of business or compete with any person;

(g) any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $100,000 and not
cancelable without penalty;

(i) any mortgage, indenture, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of
money or extension of credit;

(j) any joint marketing or development agreement;

(k) any distribution agreement (identifying any that contain exclusivity
provisions);

(l) any other agreement, contract or commitment (excluding real and
personal property leases) which involve payment by Desktop or any of its
subsidiaries under any such agreement, contract or commitment of $100,000
or more in the aggregate and is not cancelable without penalty within
thirty (30) days.

Neither Desktop nor any of its subsidiaries, nor to Desktop's knowledge any
other party to a Desktop Contract (as defined below), has breached, violated
or defaulted under, or received notice that it has breached violated or
defaulted under, any of the material terms or conditions of any of the
agreements, contracts or commitments to which Desktop is a party or by which
it is bound of the type described in clauses (a) through (1) above (any such
agreement, contract or commitment, a "Desktop Contract") in such a manner as
would permit any other party to cancel or terminate any such Desktop Contract,
or would permit any other party to seek damages, which would have a Material
Adverse Effect on Desktop.

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Section 3.18. POOLING OF INTERESTS. To the knowledge of Desktop, based on
consultation with its independent accountants, neither Desktop nor any of its
directors, officers or stockholders has taken any action which would interfere
with Desktop's ability to account for the Merger as a pooling of interests.

Section 3.19. CHANGE OF CONTROL PAYMENTS. Section 3.19 of the Desktop
Disclosure Schedule sets forth each plan or agreement pursuant to which all
material amounts may become payable (whether currently or in the future) to
current or former officers and directors of Desktop as a result of or in
connection with the Merger.

Section 3.20. STATEMENTS; PROXY STATEMENTS/PROSPECTUS. The information
supplied by Desktop for inclusion in the Registration Statement (as defined in
Section 2.04(b)) shall not at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. The information supplied by Desktop for
inclusion in the Proxy Statement to be sent to the stockholders of Desktop and
stockholders of Individual in connection with the Desktop Stockholders'
Meeting and in connection with the Individual Stockholders' Meeting shall not,
on the date the Proxy Statement is first mailed to Individual's stockholders
and Desktop's stockholders and at the time of the Individual Stockholders'
Meeting or the Desktop Stockholders' Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Desktop
Stockholders' Meeting or the Individual Stockholders' Meeting which has become
false or misleading. The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. If at any time prior to the Effective Time, any event
relating to Desktop or any of its affiliates, officers or directors should be
discovered by Desktop which should be set forth in an amendment to the
Regulation Statement or a supplement to the Proxy Statement, Desktop shall
promptly inform Individual. Notwithstanding the foregoing, Desktop makes no
representation or warranty with respect to any information supplied by
Individual which is contained in any of the foregoing documents.

Section 3.21. BOARD APPROVAL. The Board of Directors of Desktop has, as of
the date of this Agreement, determined to recommend that the Stockholders of
Desktop approve the issuance of the Desktop Common Stock in the Merger.

Section 3.22. FAIRNESS OPINION. Desktop has received a written opinion from
BT Alex. Brown Incorporated, dated as of the date hereof, to the effect that
as of the date hereof, the Merger is fair to Desktop's stockholders from a
financial point of view and has delivered to Individual a copy of such
opinion.

Section 3.23. MINUTE BOOKS. The minute books of Desktop made available to
counsel for Individual are the only minute books of Desktop and contain a
reasonably accurate summary, in all material respects, of all meetings of
directors (or committees thereof) and stockholders or actions by written
consent since the time of incorporation of Desktop.

ARTICLE IV

CONDUCT OF BUSINESS PENDING THE MERGER

Section 4.01. CONDUCT OF BUSINESS. During the period from the date of this
Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Individual (which for
the purposes of this Article 4 shall include Individual and each of its
subsidiaries) and Desktop (which for the purposes of this Article 4 shall
include Desktop and each of its subsidiaries) agree, except (i) in the case of
Individual as provided in Article 4 of the Individual Disclosure Schedule and
in the case of Desktop as provided in Article 4 of the Desktop Disclosure
Schedule, or (ii) to the extent that the other party shall otherwise consent
in writing, to carry on its business diligently and in accordance with good
commercial

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practice and to carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted, to pay its
debts and taxes when due subject to good faith disputes over such debts or
taxes, to pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
preserve intact its present business organization, keep available the services
of its present officers and employees and preserve its relationships with
customers, suppliers, distributors, licensors, licensees, and others with
which it has business dealings. In furtherance of the foregoing and subject to
applicable law, Individual and Desktop agree to confer, as promptly as
practicable, prior to taking any material actions or making any material
management decisions with respect to the conduct of business. In particular,
but without limiting the applicability of the foregoing sentence, Desktop and
Individual shall use all reasonable efforts, within 30 days after the date
hereof, to agree on (i) mutual capital expenditure budgets covering the period
prior to the Effective Date and (ii) an employee retention plan which will
include provision for severance for any employees whose jobs may be terminated
as a result of the Merger. In addition, except in the case of Individual as
provided in Article 4 of the Individual Disclosure Schedule and in the case of
Desktop as provided in Article 4 of the Desktop Disclosure Schedule, without
the prior written consent of the other, neither Individual nor Desktop shall
do any of the following, and neither Individual nor Desktop shall permit its
subsidiaries to do any of the following:

(a) amend or otherwise change its Certificate of Incorporation or By-
Laws;

(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of
capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital
stock, or any other ownership interest (including, without limitation, any
phantom interest) (except for the issuance of shares of common stock
issuable pursuant to employee stock options under the Individual Employee
Stock Option Plans, the Desktop Employee Stock Option Plans or the
Warrants, as the case may be, or pursuant to rights to purchase shares
under the Individual Employee Stock Purchase Plan and the Desktop Employee
Stock Purchase Plan, as the case may be, which options, warrants or rights,
as the case may be, are outstanding on the date hereof); provided, however,
that Desktop may continue to grant options pursuant to the Desktop Stock
Option Plans without the prior consent of Individual, in amounts not to
exceed 1,500 shares per person, and Individual may continue to grant
options pursuant to the Individual Stock Option Plans, without the prior
written consent of Desktop, in amounts not to exceed 3,000 shares per
person.

(d) accelerate, amend or change the period (or permit any acceleration,
amendment or change) of exercisability of options granted under the
Individual Employee Plans or the Desktop Employee Plans (including the
Individual Stock Option Plans, the Desktop Stock Option Plans, the
Individual Employee Stock Purchase Plan and the Desktop Employee Stock
Purchase Plan) or the Warrants or authorize cash payments in exchange for
any options granted under any of such plans;

(f) sell, transfer, license, sublicense or otherwise dispose of any
Individual IP Rights or Desktop IP Rights, as the case may be, or amend or
modify any existing agreements with respect to any Individual IP Rights,
Individual IP Rights Agreements, Desktop IP Rights or Desktop IP Rights
Agreements, as the case may be, other than nonexclusive object and source
code licenses in the ordinary course of business consistent with past
practice;

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(i) take any action, other than as required by GAAP, to change accounting
policies or procedures (including, without limitation, procedures with
respect to revenue recognition, capitalization of software development
costs, payments of accounts payable and collection of accounts receivable);

(1) except as may be required by law, take any action to terminate or
amend any of its Employee Plans other than in connection with the Merger;

(m) Take or allow to be taken or fail to take any act or omission which
would jeopardize the treatment of the Merger as a pooling of interests for
accounting purposes under GAAP; or

(n) enter into any material partnership arrangements, joint development
agreements or strategic alliances;

(o) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.01(a) through (n) above, or any action which would
make any of the representations or warranties of Individual or Desktop, as
the case may be, contained in this Agreement untrue or incorrect or prevent
Individual or Desktop, as the case may be, from performing or cause
Individual or Desktop, as the case may be, not to perform its covenants
hereunder or result in any of the conditions to the Merger set forth herein
not being satisfied.

If either party wishes to obtain the consent of the other to take actions
for which prior consent is required pursuant to this Section 4.01, such party
shall request such consent in writing by telecopy to the attention of the
Chief Executive Officer and the Chief Financial Officer of the other party. A
consent signed by either such officer shall be deemed sufficient for purposes
hereof. In addition, if the party receiving such a request does not respond in
writing (which may include an e-mailed response) to such request within 5
business days after the date the request is telecopied, the receiving party
shall be deemed to have consented to the requested action for all purposes of
this Agreement.

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Section 4.02. NO SOLICITATION.

(a) Restrictions on Individual

(i) Except as set forth in section 4.02(a) of the Individual
Disclosure Schedule, without the prior written consent of Desktop,
Individual shall not, directly or indirectly, through any officer,
director, employee, representative or agent of Individual or any of its
subsidiaries, solicit or encourage (including by way of furnishing
information) the initiation or submission of any inquiries, proposals
or offers regarding any acquisition, merger, take-over bid, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving
Individual or any subsidiaries of Individual (any of the foregoing
inquiries or proposals being referred to herein as an "Acquisition
Proposal"); provided, however, that nothing contained in this Agreement
shall prevent the Board of Directors of Individual from referring any
third party to this Section 4.02(a). Nothing contained in this Section
4.02(a) or any other provision of this Agreement shall prevent the
Board of Directors of Individual from considering, and recommending to
the stockholders of Individual an unsolicited bona fide written
Acquisition Proposal which the Board of Directors of Individual
determines in good faith (after consultation with its financial
advisors, and after receiving a written opinion of outside counsel to
the effect that the Board of Directors is required to do so in order to
discharge properly its fiduciary duties) would result in a transaction
more favorable to Individual's stockholders from a financial point of
view than the transaction contemplated by this Agreement (any such
Acquisition Proposal being referred to herein as a "Individual Superior
Proposal").

(ii) Individual shall immediately notify Desktop after receipt of any
Acquisition Proposal or any request for nonpublic information relating
to Individual or any of its subsidiaries in connection with an
Acquisition Proposal or for access to the properties, books or records
of Individual or any subsidiary by any person or entity that informs
the Board of Directors of Individual or such subsidiary that it is
considering making, or has made, an Acquisition Proposal. Such notice
to Desktop shall be made orally and in writing and shall indicate in
reasonable detail the identity of the offeror and the terms and
conditions of such proposal, inquiry or contact.

(iii) If the Board of Directors of Individual receives a request for
material nonpublic information by a party who makes a bona fide
Acquisition Proposal and the Board of Directors of Individual
determines that such proposal, if consummated pursuant to its terms,
would be a Superior Proposal, then, and only in such case, Individual
may, subject to the execution of a confidentiality agreement
substantially similar to that then in effect between Individual and
Desktop, provide such party with access to information regarding
Individual.

(iv) Individual shall immediately cease and cause to be terminated
any existing discussions or negotiations with any parties (other than
Desktop) conducted heretofore with respect to any of the foregoing.
Individual agrees not to release any third party from any
confidentiality or standstill agreement to which Individual is a party.

(v) Individual shall ensure that the officers, directors and
employees of Individual and its subsidiaries and any investment banker
or other advisor or representative retained by Individual are aware of
the restrictions described in this Section, and shall be responsible
for any breach of this Section 4.02(a) by such bankers, advisors and
representatives.

(b) Restrictions on Desktop

(i) Except as set forth in Section 4.02(b) of the Desktop Disclosure
Schedule, without the prior written consent of Individual, Desktop
shall not, directly or indirectly, through any officer, director,
employee, representative or agent of Desktop or any of its
subsidiaries, solicit or encourage (including by way of furnishing
information) the initiation or submission of any inquiries, proposals
or offers regarding any acquisition, merger, take-over bid, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving
Desktop or any subsidiaries of Desktop(any of the foregoing inquiries
or proposals being referred to herein as

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an "Acquisition Proposal"); provided, however, that nothing contained
in this Agreement shall prevent the Board of Directors of Desktop from
referring any third party to this Section 4.02(b). Nothing contained in
this Section 4.02(b) or any other provision of this Agreement shall
prevent the Board of Directors of Desktop from considering, and
recommending to the stockholders of Desktop an unsolicited bona fide
written Acquisition Proposal which the Board of Directors of Desktop
determines in good faith (after consultation with its financial
advisors, and after receiving a written opinion of outside counsel to
the effect that the Board of Directors is required to do so in order to
discharge properly its fiduciary duties) would result in a transaction
more favorable to Desktop's stockholders from a financial point of view
than the transaction contemplated by this Agreement (any such
Acquisition Proposal being referred to herein as a "Desktop Superior
Proposal").

(ii) Desktop shall immediately notify Individual after receipt of any
Acquisition Proposal or any request for nonpublic information relating
to Desktop or any of its subsidiaries in connection with an Acquisition
Proposal or for access to the properties, books or records of Desktop
or any subsidiary by any person or entity that informs the Board of
Directors of Desktop or such subsidiary that it is considering making,
or has made, an Acquisition Proposal. Such notice to Individual shall
be made orally and in writing and shall indicate in reasonable detail
the identity of the offeror and the terms and conditions of such
proposal, inquiry or contract.

(iii) If the Board of Directors of Desktop receives a request for
material nonpublic information by a party who makes a bona fide
Acquisition Proposal and the Board of Directors of Desktop determines
that such proposal, if consummated pursuant to its terms, would be a
Superior Proposal, then, and only in such case, Desktop may, subject to
the execution of a confidentiality agreement substantially similar to
that then in effect between Desktop and Individual, provide such party
with access to information regarding Desktop.

(iv) Desktop shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than
Individual) conducted heretofore with respect to any of the foregoing.
Desktop agrees not to release any third party from any confidentiality
or standstill agreement to which Desktop is a party.

(v) Desktop shall ensure that the officers, directors and employees
of Desktop and its subsidiaries and any investment banker or other
advisor or representative retained by Desktop are aware of the
restrictions described in this Section, and shall be responsible for
any breach of this Section 4.02(b) by such bankers, advisors and
representatives.

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ARTICLE V

ADDITIONAL AGREEMENTS

Section 5.01. PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER
FILINGS. As promptly as practicable after the execution of this Agreement,
Individual and Desktop will prepare, and file with the SEC, the Proxy
Statement and Desktop will prepare and file with the SEC the Registration
Statement in which the Proxy Statement will be included as a prospectus. Each
of Individual and Desktop will respond to any comments of the SEC, will use
its best efforts to have the Registration Statement declared effective under
the Securities Act as promptly as practicable after such filing and will cause
the Proxy Statement to be mailed to its stockholders at the earliest
practicable time. As promptly as practicable after the date of this Agreement,
Individual and Desktop will prepare and file any other filings required under
the Exchange Act, the Securities Act or any other Federal, foreign or Blue Sky
laws relating to the Merger and the transactions contemplated by this
Agreement (the "Other Filings"). Each party will notify the other party
promptly upon the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff or any other governmental officials for
amendments or supplements to the Registration Statement, the Proxy Statement
or any Other Filing or for additional information and will supply the other
party with copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Proxy Statement, the Merger or any Other Filing. The Proxy
Statement, the Registration Statement and the Other Filings will comply in all
material respects with all applicable requirements of law and the rules and
regulations promulgated thereunder. Whenever any event occurs which is
required to be set forth in an amendment or supplement to the Proxy Statement,
the Registration Statement or any Other Filing, Individual or Desktop, as the
case may be, will promptly inform the other party of such occurrence and
cooperate in filing with the SEC or its staff or any other government
officials, and/or mailing to stockholders of Individual and Desktop, such
amendment or supplement. The Proxy Statement will also include the
recommendations of (i) the Board of Directors of Individual in favor of
approval of this Agreement and the Merger (except that the Board of Directors
of Individual may withdraw, modify or refrain from making such recommendation
if the Board receives an opinion of counsel that the Board's fiduciary duties
under applicable law require it to do so), and (ii) the Board of Directors of
Desktop in favor of the issuance of shares of Desktop Common Stock in the
Merger, the change of Desktop's name and an increase in the number of
authorized shares of capital stock (except that the Board of Directors of
Desktop may withdraw, modify or refrain from making such recommendations if
the Board receives an opinion of counsel that the Board's fiduciary duties
under applicable law require it to do so).

Section 5.02. MEETINGS OF STOCKHOLDERS. Promptly after the date hereof,
Individual will take all action necessary in accordance with Delaware Law and
its Certificate of Incorporation and Bylaws to convene the Individual
Stockholders' Meeting to be held as promptly as practicable, and in any event
within 45 days after the declaration of effectiveness of the Registration
Statement, for the purpose of voting upon this Agreement. Individual will
consult with Desktop and use its commercially reasonable efforts to hold the
Individual Stockholders' Meeting on the same day as the Desktop Stockholders'
Meeting. Promptly after the date hereof, Desktop will take all action
necessary in accordance with Delaware Law and its Certificate of Incorporation
and Bylaws to convene the Desktop Stockholders' Meeting to be held as promptly
as practicable, and in any event within 45 days after the declaration of
effectiveness of the Registration Statement, for the purpose of (i) voting
upon this Agreement, (ii) the issuance of shares of Desktop Common Stock by
virtue of the Merger, (iii) the increase in the number of authorized shares of
capital stock, and (iv) the change of the name of the Surviving Corporation to
"NewsEDGE Corporation." Desktop will consult with Individual and will use its
commercially reasonable efforts to hold the Desktop Stockholders' Meeting on
the same day as the Individual Stockholders' Meeting. Desktop and Individual
will each use its commercially reasonable efforts to solicit from its
stockholders proxies in favor of the approval of the foregoing proposals and
to take all other action necessary or advisable to secure the vote or consent
of their respective stockholders required by the rules of the National
Association of Securities Dealers, Inc. or Delaware Law to obtain such
approvals, except to the extent that the Board of Directors of such party
determines that doing so would cause the Board of Directors of such party to
breach its fiduciary duties under applicable law.

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Section 5.03. ACCESS TO INFORMATION; CONFIDENTIALITY.

(a) Upon reasonable notice and subject to restrictions contained in
confidentiality agreements to which such party is subject, Individual and
Desktop shall each (and shall cause each of their subsidiaries to) afford
to the officers, employees, accountants, counsel and other representatives
of the other, reasonable access, during the period prior to the Effective
Time, to all its properties, books, contracts, commitments and records and,
during such period, Individual and Desktop each shall (and shall cause each
of their subsidiaries to) furnish promptly to the other all information
concerning its business, properties and personnel as such other party may
reasonably request, and each shall make available to the other the
appropriate individuals (including attorneys, accountants and other
professionals) for discussion of the other's business, properties and
personnel as either party may reasonably request. Each party shall keep
such information confidential in accordance with the terms of the currently
effective confidentiality and standstill agreement (the "Confidentiality
Agreement") between Desktop and Individual.

(b) Individual shall provide to Desktop and Desktop shall provide to
Individual promptly as available drafts of their respective Forms 10-Q for
the quarter ended September 30, 1997.

Section 5.04. CONSENTS; APPROVALS. Individual and Desktop shall each use
their best efforts to obtain all consents, waivers, approvals, authorizations
or orders (including, without limitation, all United States and foreign
governmental and regulatory rulings and approvals), and Individual and Desktop
shall make all filings (including, without limitation, all filings with United
States and foreign governmental or regulatory agencies) required in connection
with the authorization, execution and delivery of this Agreement by Individual
and Desktop and the consummation by them of the transactions contemplated
hereby. Individual and Desktop shall furnish all information required to be
included in the Proxy Statement and the Registration Statement, or for any
application or other filing to be made pursuant to the rules and regulations
of any United States, or foreign governmental body in connection with the
transactions contemplated by this Agreement.

Section 5.05. STOCK OPTIONS AND WARRANTS.

(a) At the Effective Time, Individual's obligations with respect to each
outstanding option or warrant to purchase Shares of Individual Common Stock
(each, a "Individual Option") under Individual's Stock Option Plans or
pursuant to the Warrants whether vested or unvested, will be assumed by
Desktop. Each Individual Option so assumed by Desktop under this Agreement
shall continue to have, and be subject to, the same terms and conditions
set forth in Individual's Employee Stock Option Plans, the agreement or
Warrant pursuant to which such Individual Option was issued as in effect
immediately prior to the Effective Time, except that (i) such Individual
Option will be exercisable for that number of Shares of Desktop Common
Stock equal to the product of the number of Shares of Individual Common
Stock that were purchasable under such Individual Option immediately prior
to the Effective Time multiplied by the Exchange Ratio, rounded up to the
nearest whole number of Shares of Desktop Common Stock, and (ii) the per
share exercise price for the shares of Desktop Common Stock issuable upon
exercise of such assumed Individual Option will be equal to the quotient
determined by dividing the exercise price per share of Individual Common
Stock at which such Individual Option was exercisable immediately prior to
the Effective Time by the Exchange Ratio, and rounding the resulting
exercise price up to the nearest whole cent.

(b) It is the intention of the parties that Individual Options assumed by
Desktop qualify following the Effective Time as incentive stock options as
defined in the Code ("ISO's") to the extent such Individual Options
qualified as ISO's prior to the Effective Time.

(c) After the Effective Time, Desktop will issue to each holder of an
outstanding Individual Option a document evidencing the foregoing
assumption by Desktop.

(d) Desktop will reserve sufficient shares of Desktop Common Stock for
issuance under this Section 5.05 hereof.

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Section 5.06. INDIVIDUAL EMPLOYEE STOCK PURCHASE PLAN.

(a) Individual shall use all reasonable efforts, to the extent permitted
by law and the provisions of the Individual Employee Stock Purchase Plan
(including the amendment provision thereof) to cause the exercise date (as
such term is used in the Individual Employee Stock Purchase Plan)
applicable to the then current offering period (as such term is used in the
Individual Employee Stock Purchase Plan) to be the last trading day on
which the shares of Individual Common Stock are traded on Nasdaq
immediately prior to the Effective Time (the "Final Individual Purchase
Date"); provided, that, such change in the Purchase Date shall be
conditioned upon the consummation of the Merger. On the Final Individual
Purchase Date, Individual shall apply the funds credited as of such date
under the individual stock purchase plan within each participant's payroll
withholdings account to the purchase of whole shares of Individual Common
Stock in accordance with the terms of the Individual Employee Stock
Purchase Plan. the cost to each participant in the Individual Stock
Purchase Plan for shares of Individual Common Stock shall be the lower of
85% of the average market price of individual Common Stock on Nasdaq on (i)
the first day of the then current offering period or (ii) the Final
Individual Purchase Date, in either event rounded up to the nearest
quarter.

(b) Desktop shall use all reasonable efforts to amend Desktop's Employee
Stock Purchase Plan so that Employees of Individual as of the Effective
Time shall be permitted to participate in Desktop's Employee Stock Purchase
Plan commencing on the first enrollment date following the Effective Time,
subject to compliance with the eligibility provisions of such plan (with
employees receiving credit, for purposes of such eligibility provisions,
for service with Individual).

(c) It is the intention of the parties that notwithstanding anything
contained in this Agreement, the exercise price, the number of shares
purchasable and the terms and conditions applicable to any adjustments to
the Individual Employee Stock Purchase Plan and any employee stock purchase
plan maintained by Desktop shall be determined so as to comply with
Sections 423 and 424 of the Code and the regulations promulgated thereunder
(specifically the provisions of Code Section 424(a) and 424(h)(3)(A) and
Treasury Regulation SECTION 1.425-1) such that the arrangement implemented
under the Individual Employee Stock Purchase Plan by reason of the Merger
not constitute a "modification."

(d) Desktop will reserve sufficient shares of Desktop Common Stock for
issuance under Section 5.06 hereof.

Section 5.07. INDIVIDUAL AFFILIATE AGREEMENT. Set forth in Section 5.07 of
the Individual Disclosure Schedule is a list of those persons who may be
deemed to be, in Individual's reasonable judgment, affiliates of Individual
within the meaning of Rule 145 promulgated under the Securities Act (a
"Individual Affiliate"). Individual will provide Desktop with such information
and documents as Desktop reasonably requests for purposes of reviewing such
list. Individual will use its best efforts to deliver or cause to be delivered
to Desktop prior to the Closing Date from each Individual Affiliate an
executed affiliate agreement in substantially the form attached hereto as
Exhibit E (the "Individual Affiliate Agreement"), each of which will be in
full force and effect as of the Effective Time. Desktop will be entitled to
place appropriate legends on the certificate evidencing any Desktop Common
Stock to be received by a Individual Affiliate pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the Desktop Common Stock, consistent with the terms of the
Individual Affiliate Agreement.

Section 5.08. DESKTOP AFFILIATE AGREEMENT. Set forth on Section 5.08 of the
Desktop Disclosure Schedule is a list of those persons who may be deemed to
be, in Desktop's reasonable judgment, affiliates of Desktop within the meaning
of Rule 145 promulgated under the Securities Act (a "Desktop Affiliate").
Desktop will provide Individual with such information and documents as
Individual reasonably requests for purposes of reviewing such list. Desktop
will use its best efforts to deliver or cause to be delivered to Individual
prior to the Closing Date from each Desktop Affiliate an executed affiliate
agreement in substantially the form attached hereto as Exhibit F (the "Desktop
Affiliate Agreement"), each of which will be in full force and effect as of
the Effective Time.

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Section 5.09. INDEMNIFICATION AND INSURANCE.

(a) From and after the Effective Time, the Surviving Corporation will
fulfill and honor in all respects the obligations of Individual which exist
prior to the date hereof to indemnify Individual's present and former
directors and officers and their heirs, executors and assigns. The
Certificate of Incorporation and By-laws of the Surviving Corporation will
contain the provisions with respect to indemnification and elimination of
liability for monetary damages set forth in the Certificate of
Incorporation and By-laws of Individual, which provisions will not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights
thereunder of individuals who, at the Effective Time, were directors,
officers, employees or agents of Individual, unless such modification is
required by law.

(b) After the Effective Time the Surviving Corporation will, to the
fullest extent permitted under applicable law or under the Surviving
Corporation's Certificate of Incorporation or By-laws, indemnify and hold
harmless, each present or former director or officer of Individual or any
of its subsidiaries and his or her heirs, executors and assigns
(collectively, the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, to the extent arising out of or pertaining
to any action or omission in his or her capacity as a director, officer,
employee or agent of Individual occurring prior to the Effective Time
(including without limitation actions or omissions relating to the Merger)
for a period of six years after the date hereof. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) any counsel retained by the Indemnified
Parties for any period after the Effective Time will be reasonably
satisfactory to the Surviving Corporation, (ii) after the Effective Time,
the Surviving Corporation will pay the reasonable fees and expenses of such
counsel, promptly after statements therefor are received and (iii) the
Surviving Corporation will cooperate in the defense of any such matter;
provided, however, that the Surviving Corporation will not be liable for
any settlement effected without its written consent (which consent will not
be unreasonably withheld); and provided, further, that, in the event that
any claim or claims for indemnification are asserted or made within such
six-year period, all rights to indemnification in respect of any such claim
or claims will continue until the disposition of any and all such claims.
The Indemnified Parties as group may retain only one law firm (in addition
to local counsel) to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a
conflict on any significant issue between the positions of any two or more
Indemnified Parties.

(c) For a period of six years after the Effective Time, the Surviving
Corporation will use all commercially reasonable efforts to maintain in
effect, if available, directors' and officers' liability insurance covering
those persons who are currently covered by Individual's Directors, Officers
and Company Liability insurance policies on terms comparable to those
applicable to the current directors of Individual; provided, however, that
in no event will the Surviving Corporation be required to expend per year
an amount in excess of two times the annual premium currently paid by
Desktop for its directors and officers' liability insurance coverage.

(d) Individual shall use best efforts, after consultation with Desktop,
to negotiate and secure a "tail" on its existing Directors, Officers and
Company Liability insurance policies for a period of one year, at a total
cost not to exceed $300,000.

(e) This Section 5.09 will survive any termination of this Agreement and
the consummation of the Merger at the Effective Time, is intended to
benefit Individual, the Surviving Corporation and the Indemnified Parties,
and will be binding on all successors and assigns of the Surviving
Corporation.

Section 5.10. NOTIFICATION OF CERTAIN MATTERS. Individual shall give prompt
notice to Desktop, and Desktop shall give prompt notice to Individual, of (i)
the occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate, and (ii) any failure
of Individual or Desktop, as the case

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may be, materially to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice; and provided, further, that failure to give such notice shall not be
treated as a breach of covenant for the purposes of Sections 6.02(a) and
6.03(a) unless the failure to give such notice results in material prejudice
to the other party.

Section 5.11. FURTHER ACTION/TAX TREATMENT. Upon the terms and subject to
the conditions hereof, each of the parties hereto in good faith shall use all
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, to obtain in a timely manner all necessary
waivers, consents and approvals and to effect all necessary registrations and
filings, and to otherwise satisfy or cause to be satisfied all conditions
precedent to its obligations under this Agreement. Each of Desktop and
Individual shall use its best efforts to cause the Merger to qualify, and will
not (both before and after consummation of the Merger) take any actions which
could prevent the Merger from qualifying, as a reorganization under the
provisions of Section 368 of the Code.

Section 5.12. PUBLIC ANNOUNCEMENTS. Desktop and Individual shall consult
with each other before issuing any press release or otherwise making any
public statements with respect to the Merger or this Agreement and shall not
issue any such press release or make any such public statement without the
prior consent of the other party, which shall not be unreasonably withheld;
provided, however, that a party may, without the prior consent of the other
party, issue such press release or make such public statement as may upon the
advice of counsel be required by law or the National Association of Securities
Dealers, Inc. if it has used all reasonable efforts to consult with the other
party.

Section 5.13. LISTING OF DESKTOP COMMON STOCK. Desktop shall use its
reasonable best efforts to cause the shares of Desktop Common Stock to be
issued in the Merger to be approved for listing on Nasdaq prior to the
Effective Time.

Section 5.14. CONVEYANCE TAXES. Desktop and Individual shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any
transfer, recording, registration and other fees, and any similar taxes which
become payable in connection with the transactions contemplated hereby that
are required or permitted to be filed on or before the Effective Time.

Section 5.15. ACCOUNTANTS' LETTERS. Upon reasonable notice from Desktop,
Individual shall use its best efforts to cause Coopers & Lybrand, LLP to
deliver to Desktop a letter covering such matters as are requested by Desktop
and as are customarily addressed in accountant's "comfort" letters.

Section 5.16. POOLING ACCOUNTING TREATMENT. Each of Desktop and Individual
agree not to take any action that would adversely affect the ability of
Desktop to treat the Merger as a pooling of interests under GAAP.

Section 5.17. THIRD PARTY CONSENTS. As soon as practicable following the
date hereof, Desktop and Individual will each use its commercially reasonable
efforts to obtain all material consents, waivers and approvals under any of
its or its subsidiaries' agreements, contracts, licenses or leases required to
be obtained in connection with the consummation of the transactions
contemplated hereby.

Section 5.18. TAX-FREE REORGANIZATION. Desktop and Individual will each use
its commercially reasonable efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368 of the Code. Desktop and
Individual will each make available to the other party and their respective
legal counsel copies of all returns requested by the other party.

Section 5.19. BOARD OF DIRECTORS OF DESKTOP. The Board of Directors of
Desktop shall recommend to the stockholders of Desktop and shall use all other
reasonable efforts to take all actions necessary

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(i) to cause the Board of Directors of the Surviving Corporation, immediately
after the Effective Time, to consist of seven (7) persons, four (4) of whom
shall have served on the Board of Directors of Desktop immediately prior to
the Effective Time (the "Former Desktop Directors"), and three (3) of whom
(selected by the Chief Executive Officer of Individual and approved by the
Chief Executive Officer of Desktop) shall have served on the Board of
Directors of Individual immediately prior to the Effective Time (the "Former
Individual Directors") and (ii) to constitute the Board of Directors of
Desktop so that two Former Desktop Directors and one Former Individual
Director shall be in the class of directors whose terms expire at the Annual
Meeting of Stockholders for the third year after the Effective Date, one
Former Desktop Director and one Former Individual Director shall be in the
class whose term expires two years after the Effective Date, and one Former
Desktop Director and one Former Individual Director shall be in the class
whose term expires at the Annual Meeting one year after the Effective Date.
If, prior to the Effective Time, any of the Individual or Desktop designees
shall decline or be unable to serve as a Individual or Desktop director,
Individual (if such person was designated by Individual) or Desktop (if such
person was designated by Desktop) shall designate another person to serve in
such person's stead, which person shall be reasonably acceptable to the other
party.

Section 5.20. OFFICERS OF DESKTOP. At the Effective Time, Donald L. McLagan
will continue to serve as the Chief Executive Officer, Chairman and President
of the Surviving Corporation, Edward R. Siegfried will continue to serve as
the Chief Financial Officer and Vice President-Finance and Operations of the
Surviving Corporation and Michael E. Kolowich will become the Vice-Chairman of
the Surviving Corporation.

Section 5.21. CHANGE OF NAME. Subject to the last sentence of Section 5.01
hereof, at the Desktop Stockholders' Meeting Desktop shall propose and
recommend that its Certificate of Incorporation be amended at the Effective
Time to change its name to "NewsEDGE Corporation."

Section 5.22. FORM S-8. Desktop agrees to file a registration statement on
Form S-8 for the shares of Desktop Common Stock issuable with respect to
assumed Individual Stock Options no later than two (2) business days after the
Closing Date.

ARTICLE VI

CONDITIONS TO THE MERGER

Section 6.01. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:

(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceedings
for that purpose and no similar proceeding in respect of the Proxy
Statement shall have been initiated or, to the knowledge of Desktop or
Individual, threatened by the SEC;

(b) Stockholder Approval. This Agreement shall have been approved and
adopted, and the Merger shall have been approved and adopted, by the
requisite vote, under applicable law, by the stockholders of Individual and
Desktop, respectively; and the issuance of shares of Desktop Common Stock
by virtue of the Merger shall have been approved by the requisite vote
under the rules of the National Association of Securities Dealers, Inc. by
the Stockholders of Desktop.

(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect,
nor shall any proceeding brought by any administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign,
seeking any of the foregoing be pending; and there shall not be any action
taken, or

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any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, which makes the consummation of the Merger
illegal;

(d) Tax Opinions. Desktop and Individual shall have received
substantially identical written opinions of Testa, Hurwitz & Thibeault, LLP
and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. respectively, in
form and substance reasonably satisfactory to them to the effect that the
Mergers will constitute a reorganization within the meaning of Section 368
of the Code.

(e) Nasdaq Listing. The Desktop Common Stock shall have been approved for
listing, subject to notice of issuance, on Nasdaq.

(f) Opinion of Accountants. Each of Desktop and Individual shall have
received letters from each of Arthur Andersen LLP and Coopers & Lybrand,
LLP, each dated within two (2) business days prior to the Effective Time,
regarding those firms' concurrence with Desktop managements' and Individual
managements' conclusions as to the appropriateness of pooling of interest
accounting for the Merger under Accounting Principles Board Opinion No. 16,
if the Merger is consummated in accordance with this Agreement.

Section 6.02. ADDITIONAL CONDITIONS TO OBLIGATIONS OF DESKTOP. The
obligations of Desktop to effect the Merger are also subject to the following
conditions:

(a) Representations and Warranties. The representations and warranties of
Individual contained in this Agreement (together with the Individual
Disclosure Schedule) shall be true and correct in all respects on and as of
the Effective Time, with the same force and effect as if made on and as of
the Effective Time, except for (i) changes contemplated by this Agreement,
(ii) those representations and warranties which address matters only as of
a particular date (which shall remain true and correct as of such date) or
(iii) failures to be true and correct that would not have a Material
Adverse Effect on Individual; and Desktop shall have received a certificate
to such effect signed by the President and Chief Financial Officer of
Individual;

(b) Agreements and Covenants. Individual shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time, except to the extent any such non-performance or non-
compliance would not have a Material Adverse Effect on Individual, and
Desktop shall have received a certificate to such effect signed by the
President and Chief Financial Officer of Individual;

(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made, by Individual for the authorization, execution and delivery of
this Agreement and the consummation by it of the transactions contemplated
hereby shall have been obtained and made by Individual;

(d) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other
inquiry that might result in such an action or proceeding) by any
governmental authority or administrative agency before any governmental
authority, administrative agency or court of competent jurisdiction, nor
shall there be in effect any judgment, decree or order of any governmental
authority, administrative agency or court of competent jurisdiction, in
either case, seeking to prohibit or limit Desktop from exercising all
material rights and privileges pertaining to its ownership of the Surviving
Corporation or the ownership or operation by Desktop or any of its
subsidiaries of all or a material portion of the business or assets of
Desktop or any of its subsidiaries, or seeking to compel Desktop or any of
its subsidiaries to dispose of or hold separate all or any material portion
of the business or assets of Desktop or any of its subsidiaries, as a
result of the Merger or the transactions contemplated by this Agreement;

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subsidiary of Individual having or reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect;

(f) Affiliate Agreements. Desktop shall have received from each person
who is identified in Section 5.07 of the Individual Disclosure Schedule as
an "affiliate" of Individual an Affiliate Agreement, and each such
Affiliate Agreement shall be in full force and effect;

(g) Legal Opinion. Desktop shall have received a legal opinion from
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to Individual,
in a form reasonably acceptable to Desktop;

(h) Transfer of Material Agreements. Individual shall have received all
consents and approvals required to the Merger under Individual's agreements
with Reuters NewMedia, Inc. and Netscape Communications, Inc.

Section 6.03. ADDITIONAL CONDITIONS TO OBLIGATIONS OF INDIVIDUAL. The
obligation of Individual to effect the Merger is also subject to the following
conditions:

(a) Representations and Warranties. The representations and warranties of
Desktop contained in this Agreement (together with the Desktop Disclosure
Schedule) shall be true and correct in all respects on and as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time, except for (i) changes contemplated by this Agreement, (ii)
those representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such date) and
(iii) failures to be true and correct that would not have a Material
Adverse Effect on Desktop; and Individual shall have received a certificate
to such effect signed by the President and Chief Financial Officer of
Desktop;

(b) Agreements and Covenants. Desktop shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time, except to the extent any such non-performance or non-
compliance would not have a Material Adverse Effect on Desktop, and
Individual shall have received a certificate to such effect signed by the
President and Chief Financial Officer of Desktop;

(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made, by Desktop for the authorization, execution and delivery of
this Agreement and the consummation by them of the transactions
contemplated hereby shall have been obtained and made by Desktop; and

(d) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other
inquiry that might result in such an action or proceeding) by any
governmental authority or administrative agency before any governmental
authority, administrative agency or court of competent jurisdiction, nor
shall there be in effect any judgment, decree or order of any governmental
authority, administrative agency or court of competent jurisdiction, in
either case, seeking to prohibit or limit Individual from exercising all
material rights and privileges pertaining to its ownership of the Surviving
Corporation or the ownership or operation by Individual or any of its
subsidiaries of all or a material portion of the business or assets of
Individual or any of its subsidiaries, or seeking to compel Individual or
any of its subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of Individual or any of its subsidiaries,
as a result of the Merger or the transactions contemplated by this
Agreement;

(e) Material Adverse Change. Since the date of this Agreement, there
shall have been no change, occurrence or circumstance in the business,
results of operations or financial condition of Desktop or any subsidiary
of Desktop having or reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect.

(f) Affiliate Agreements. Individual shall have received from each person
who is identified in Section 5.08 of the Desktop Disclosure Schedule as an
"affiliate" of Desktop an Affiliate Agreement, and each such Affiliate
Agreement shall be in full force and effect;

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(g) Legal Opinion. Individual shall have received a legal opinion from
Testa, Hurwitz & Thibeault, LLP, counsel to Desktop, in a form reasonably
acceptable to Individual.

(h) Consent. Desktop shall have received all consents and approvals
required to the Merger under Desktop's agreement with Reuters, Inc.

ARTICLE VII

TERMINATION

Section 7.01. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the
stockholders of Individual and Desktop:

(a) by mutual written consent duly authorized by the Boards of Directors
of Desktop and Individual; or

(b) by either Desktop or Individual if the Merger shall not have been
consummated by April 30, 1998 (provided that the right to terminate this
Agreement under this Section 7.01(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of or resulted in the failure of the Merger to occur on or before
such date); or

(c) by either Desktop or Individual if a court of competent jurisdiction
or governmental, regulatory or administrative agency or commission shall
have issued a non-appealable final order, decree or ruling or taken any
other action, in each case having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger; or

(d) by either Desktop or Individual, if the required approvals of the
stockholders of Desktop or Individual contemplated by this Agreement shall
not have been obtained by reason of the failure to obtain the requisite
vote upon a vote taken as a meeting of stockholders convened therefor or at
any adjournment thereof (provided that the right to terminate this
Agreement under this Section 7.01(d) shall not be available to any party
where the failure to obtain stockholder approval of such party shall have
been caused by the action or failure to act of such party in breach of this
Agreement); or

(e) by Desktop, if the Board of Directors of Individual shall have
withheld, withdrawn or modified in a manner adverse to Desktop its
recommendation in favor of the Merger; or

(f) by Individual, if the Board of Directors of Desktop shall have
withheld, withdrawn or modified in a manner adverse to Individual its
recommendation in favor of the Merger; or

(g) by Desktop or Individual, upon a breach of any, covenant or agreement
on the part of Individual or Desktop, respectively, set forth in this
Agreement, in either case, such that the conditions set forth in Section
6.02(b), or Section 6.03(b), would not be satisfied (a "Terminating
Breach"), provided that, if such Terminating Breach is curable prior to the
expiration of 5 days from its occurrence (but in no event later than April
30, 1998) by Desktop or Individual, as the case may be, through the
exercise of its reasonable best efforts and for so long as Desktop or
Individual, as the case may be, continues to exercise such reasonable best
efforts, neither Individual nor Desktop, respectively, may terminate this
Agreement under this Section 7.01(g) unless such 5-day period expires
without such Terminating Breach having been cured; or

(h) by either Individual or Desktop, if Individual shall have accepted a
Individual Superior Proposal or if the Board of Directors of Individual
recommends a Individual Superior Proposal to the stockholders of
Individual; or

(i) by either Desktop or Individual, if Desktop shall have accepted a
Desktop Superior Proposal or if the Desktop Board of Directors recommends a
Desktop Superior Proposal to the stockholders of Desktop; or

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(j) by Individual, if there shall have occurred any Material Adverse
Effect with respect to Desktop since the date of this Agreement; or

(k) by Desktop, if there shall have occurred any Material Adverse Effect
with respect to Individual since the date of this Agreement; or

(l) by either Desktop or Individual, if the SEC determines that Desktop
may not account for the Merger as a pooling of interests; or

(m) by either Desktop or Individual, if any representation or warranty on
the part of the other party set forth in this Agreement proves to have been
untrue on the date hereof, if such failure to be true is reasonably likely
to have a Material Adverse Effect.

Section 7.02. NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination
of this Agreement under Section 7.01 above will be effective immediately upon
the delivery of written notice of the terminating party to the other parties
hereto. In the event of the termination of this Agreement pursuant to Section
7.01, this Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto or any of its affiliates, directors,
officers or stockholders except (i) as set forth in Sections 7.02, 7.03 and
8.01 hereof, and (ii) nothing herein shall relieve any party from liability
for any willful breach hereof. No termination of this Agreement shall affect
the obligations of the parties contained in the Confidentiality Agreement, all
of which obligations shall survive termination of this Agreement in accordance
with its terms.

Section 7.03. FEES AND EXPENSES.

(a) Except as set forth in this Section 7.03, all fees and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses,
whether or not the Merger is consummated; provided, however, that Desktop
and Individual shall share equally all fees and expenses incurred in
relation to the preparation, printing and filing of the Proxy Statement
(including any preliminary materials related thereto) and the Registration
Statement (including financial statements and exhibits) and any amendments
or supplements thereto.

(b) Individual shall pay Desktop a fee of $3,500,000, plus actual,
documented and reasonable out-of-pocket expenses of Desktop relating to the
transactions contemplated by this Agreement (including but not limited to,
fees and expenses of Desktop's counsel, accountants and financial advisors)
upon the earliest to occur of the following events:

(i) the termination of this Agreement by Desktop pursuant to Section
7.01(e), 7.01 (g) or 7.01(m); or

(ii) the termination of this Agreement by Desktop or Individual
pursuant to Section 7.01(h); or

(iii) the termination of this Agreement by Individual or Desktop
pursuant to Section 7.01(d) as a result of the failure to receive the
requisite vote for approval and adoption by the stockholders of
Individual at the Individual Stockholders' Meeting, if Individual
subsequently enters into an Alternative Transaction; or

(iv) the delivery of information by Individual to a Third Party (as
defined in paragraph (d) below) or described in Section 4.02(a)(iii)
hereof.

(c) Desktop shall pay Individual a fee of $3,500,000, plus actual,
documented and reasonable out-of-pocket expenses of Individual relating to
the transactions contemplated by this Agreement (including but not limited
to, fees and expenses of Individual's counsel, accountants and financial
advisors) upon the earliest to occur of the following events:

(i) the termination of this Agreement by Individual pursuant to
Section 7.01(f), 7.01(g) or 7.01(m); or

(ii) the termination of this Agreement by Desktop or Individual
pursuant to Section 7.01(i); or

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(iii) the termination of this Agreement by Individual or Desktop
pursuant to Section 7.01(d) as a result of the failure to receive the
requisite vote for approval and adoption by the stockholders of Desktop
at the Desktop Stockholders' Meeting, if Desktop subsequently enters
into an Alternative Transaction; or

(iv) the delivery of information by Desktop to a Third Party as
described in Section 4.02(b)(iii) hereof.

(d) As used herein, "Alternative Transaction" means (i) a transaction
pursuant to which any person (or group of persons) other than Desktop or
its affiliates or Individual or its affiliates, as the case may be (a
"Third Party"), acquires more than 50 percent of the outstanding shares,
whether from Individual or Desktop, as the case may be, pursuant to a
tender offer or exchange offer or otherwise, (ii) a merger or other
business combination involving Individual or Desktop, as the case may be,
pursuant to which any Third Party acquires more than 50 percent of the
outstanding equity securities of Individual or Desktop, as the case may be,
or the entity surviving such merger or business combination or (iii) any
other transaction pursuant to which any Third Party acquires control of
assets (including for this purpose the outstanding equity securities of
subsidiaries of Individual or Desktop, as the case may be, or of the entity
surviving any merger or business combination including any of them) of
Individual or Desktop, as the case may be, and its subsidiaries having a
fair market value equal to more than 50 percent of the fair market value of
all the assets of Individual or Desktop, as the case may be, and its
subsidiaries, taken as a whole, immediately prior to such transaction).

(e) The fee payable pursuant to Sections 7.03(b)(i), (ii) and (iv) and
7.03(c)(i), (ii), (iv) shall be paid within one business day after the
first to occur of the events described in Sections 7.03(b)(i), (ii) and
(iv) and 7.03(c)(i), (ii) and (iv), as the case may be. The fee payable
pursuant to Sections 7.03(b)(iii) and 7.03(c)(iii) shall be paid on the
date of the closing of the Alternative Transaction giving rise to such fee,
provided, however, that no fee shall be payable unless the party entering
into an Alternative Transaction has completed or agreed to complete such
Alternative Transaction within six months of termination of this Agreement.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.01. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Except as otherwise provided in this Section 8.01, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. Any disclosure made with reference to one or more sections of the
Individual Disclosure Schedule or the Desktop Disclosure Schedule shall be
deemed disclosed with respect to each other section therein as to which such
disclosure is relevant provided such relevance is reasonably apparent. The
representations, warranties and agreements in this Agreement shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Section 7.01, as the case may be, except that the agreements set forth in
Sections 5.05, 5.06, 5.09, 5.19 and 5.22 shall survive the Effective Time
indefinitely and those set forth in Sections 5.03 and 7.03 shall survive
termination indefinitely. The Confidentiality Agreement shall remain in full
force and effect and shall survive termination of this Agreement as provided
therein.

Section 8.02. NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered if delivered personally, three days
after being sent by registered or certified mail (postage prepaid, return
receipt requested), one day after dispatch by recognized overnight courier
(provided delivery is confirmed by the carrier) and upon

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<PAGE>

transmission by telecopy, confirmed received, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address):

(a)If to Desktop:
Desktop Data, Inc.
80 Blanchard Road
Burlington, MA 01803
Attn: Donald L. McLagan

With a copy to:

Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, MA 02110
Attn: Lawrence S. Wittenberg, Esq.

(b)If to Individual:

Individual, Inc.
8 New England Executive Park West
Burlington, MA 01803
Attn: Michael E. Kolowich

With a copy to:

Mintz, Levin, Cohn, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02110
Attn: Jonathan L. Kravetz, Esq.

Section 8.03. CERTAIN DEFINITIONS. For purposes of this Agreement, the term:

(a) "affiliates" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person, including, without limitation,
any partnership or joint venture in which Individual or Desktop, as the
case may be, (either alone, or through or together with any other
subsidiary) has, directly or indirectly, an interest of 10 percent or more;

(b) "business day" means any day other than a day on which banks in
Boston are required or authorized to be closed;

(c) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act); and

(d) "subsidiary" or "subsidiaries" of Individual, the Surviving
Corporation, Desktop or any other person means any corporation,
partnership, joint venture or other legal entity of which Individual, the
Surviving Corporation, Desktop or such other person, as the case may be
(either alone or through or together with any other subsidiary), owns,
directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.

Section 8.04. AMENDMENT. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided, however, that, after approval of
the Merger by the stockholders of Individual and Desktop, no amendment may be
made which by law requires further approval by such stockholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.

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<PAGE>

Section 8.05. WAIVER. At any time prior to the Effective Time, any party
hereto may, with respect to any other party hereto, (a) extend the time for
the performance of any of the obligations or other acts, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall
be valid if set forth in an instrument in writing signed by the party or
parties to be bound

Section 8.06. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

Section 8.07. SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.

Section 8.08. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings (other than the
Confidentiality Agreement), both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, are not intended to confer upon any other person
any rights or remedies hereunder.

Section 8.09. ASSIGNMENT. No party may assign this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval
of the other parties hereto.

Section 8.10. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, expressed or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Section 5.08 (which is intended to be for
the benefit of the Indemnified Parties and may be enforced by such Indemnified
Parties).

Section 8.11. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

Section 8.12. GOVERNING LAW. This agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware
applicable to contracts executed and fully performed within the State of
Delaware.

Section 8.13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.

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<PAGE>

IN WITNESS WHEREOF, Desktop and Individual have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

DESKTOP DATA, INC.

/s/ Donald L. McLagan
By: _________________________________
Donald L. McLagan
President and Chief Executive
Officer

INDIVIDUAL, INC.

/s/ Michael E. Kolowich
By: _________________________________
Michael E. Kolowich
President and Chief Executive
Officer

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<PAGE>

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BETWEEN DESKTOP DATA, INC. AND INDIVIDUAL, INC.

W I T N E S S E T H

WHEREAS, Desktop Data, Inc. ("Desktop") and Individual, Inc. ("Individual")
entered into an Agreement and Plan of Merger and Reorganization dated as of
November 2, 1997 (the "Agreement"); and

WHEREAS, both parties to the Agreement desire to amend Section 3.22 of the
Agreement; and

WHEREAS, other capitalized terms used herein without definition shall have
the respective meaning ascribed to them in the Agreement;

NOW THEREFORE, Desktop and Individual intending to be legally bound hereby
agree as follows:

1. Section 3.22 of the Agreement shall be restated in its entirety to read as
follows:

"Section 3.22. FAIRNESS OPINION. Desktop has received a written opinion
from BT Alex. Brown Incorporated, dated as of the date of the Agreement, to
the effect that as of the date of the Agreement, the Exchange Ratio is fair
from a financial point of view, to Desktop and has delivered to Individual
a copy of such opinion."

2. This Amendment constitutes the entire agreement between the parties as to
its subject matter, and supersedes and terminates all proposals, agreements
or understandings, written or oral, and all other communications between
the parties, relating to the subject matter of this Amendment.

3. No provision of this Amendment shall be waived, amended, modified,
superseded, canceled, terminated, renewed or extended except in a written
instrument signed by the parties hereto.

4. This Amendment shall be governed by, and construed in accordance with, the
internal laws of the State of Delaware applicable to contracts executed and
fully performed within the State of Delaware.

5. This Agreement may be executed in duplicate counterparts, which, when taken
together, shall constitute one instrument and each of which shall be deemed
to be an original instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

IN WITNESS WHEREOF, parties have executed this Agreement as of the 15th day
of January, 1998.

DESKTOP DATA, INC.

BY: /s/ Edward R. Siegfried
-------------------------------
Name: Edward R. Siegfried
Title: Vice President--Finance and
Chief
Financial Officer

INDIVIDUAL, INC.

BY: /s/ Robert L. Lentz
-------------------------------
Name: Robert L. Lentz
Title: Senior Vice President,
Finance and
Administration and Chief
Financial Officer

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<PAGE>

ANNEX B

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT dated as of November 2, 1997 (the "Agreement")
is entered into by and between Desktop Data, Inc., a Delaware corporation
("Desktop"), and Individual, Inc., a Delaware corporation ("Individual").

R E C I T A L S

WHEREAS, concurrently with the execution and delivery of this Agreement,
Desktop and Individual are entering into an Agreement and Plan of
Reorganization (the "Merger Agreement"), which provides that, among other
things, upon the terms and subject to the conditions thereof, Individual will
be merged with and into Desktop (the "Merger") with Desktop continuing as the
surviving corporation; and

WHEREAS, as a condition to Desktop's willingness to enter into the Merger
Agreement, Desktop has requested that Individual agree, and Individual has so
agreed, to grant to Desktop an option to acquire shares of Individual's Common
Stock upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. GRANT OF OPTION

Individual hereby grants to Desktop an irrevocable option (the "Option") to
acquire up to 3,249,779 shares (the "Option Shares") of the Common Stock, par
value $.01 per share, of Individual ("Individual Shares") in the manner set
forth below (i) by exchanging therefor shares of the Common Stock, par value
$.01 per share, of Desktop ("Desktop Shares") at a rate of onehalf ( 1/2) of a
Desktop Share for each Option Share (the "Exercise Ratio") and/or, at
Desktop's election (ii) by paying cash at a price determined in accordance
with Section 4 below. Capitalized terms used in this Agreement but not defined
herein shall have the meanings ascribed thereto in the Merger Agreement.

2. EXERCISE OF OPTION

The Option may only be exercised by Desktop, in whole or in part, at any
time or from time to time, upon the occurrence of (i) the commencement of a
tender or exchange offer for 25% or more of any class of Individual's capital
stock, or (ii) any of the events specified in Section 7.03(b) of the Merger
Agreement, other than events described in Section 7.01(g) thereof (any of the
events specified in clauses (i) or (ii) of this sentence being referred to
herein as an "Exercise Event"). In the event Desktop wishes to exercise the
Option, Desktop shall deliver to Individual a written notice (an "Exercise
Notice") specifying the total number of Option Shares it wishes to acquire and
the form of consideration to be paid. Each closing of a purchase of Option
Shares (a "Closing") shall occur on a date and at a time designated by Desktop
in an Exercise Notice delivered at least five business days prior to the date
of such Closing, which Closing shall be held at the offices of counsel to
Individual. The Option shall terminate upon the earlier of (i) the Effective
Time, (ii) 180 days following the termination of the Merger Agreement pursuant
to Article VII thereof, if an Exercise Event shall have occurred on or prior
to the date of such termination, and (iii) the date on which the Merger
Agreement is terminated pursuant to Article VII thereof if anExercise Event
shall not have occurred on or prior to such date; provided, however, with
respect to the preceding clause (ii) of this sentence, that if the Option
cannot be exercised by

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<PAGE>

reason of any applicable government order then the Option shall not terminate
until the tenth business day after such impediment to exercise shall have been
removed or shall have become final and not subject to appeal. Notwithstanding
the foregoing, the Option may not be exercised if Desktop is in breach in any
material respect of any of its covenants or agreements contained in the Merger
Agreement.

3. CONDITIONS TO CLOSING

The obligation of Individual to issue Option Shares to Desktop hereunder is
subject to the conditions that (a) all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any
Federal, state or local administrative agency or commission or other Federal
state or local governmental authority or instrumentality, if any, required in
connection with the issuance of the Option Shares hereunder shall have been
obtained or made, as the case may be; and (b) no preliminary or permanent
injunction or other order by any court of competent jurisdiction prohibiting
or otherwise restraining such issuance shall be in effect.

4. CLOSING

At any Closing, (a) Individual shall deliver to Desktop a single certificate
in definitive form representing the number of Individual Shares designated by
Desktop in its Exercise Notice, such certificate to be registered in the name
of Desktop and to bear the legend set forth in Section 10 hereof, and (b)
Desktop shall pay to Individual the aggregate purchase price of the Individual
Shares so designated and being purchased by delivery of (i) a single
certificate in definitive form representing the number of Desktop Shares being
issued by Desktop in consideration therefor (based on the Exercise Ratio),
such certificate to be registered in the name of Individual and to bear the
legend set forth in Section 10 hereof, and or/, at Desktop's election, (ii) a
certified check, bank check or wire transfer, as the case may be. If Desktop
has elected to deliver cash in payment for any Individual Shares the price to
be paid by Desktop in cash to Individual at any Closing in respect of such
Individual Shares shall be $5.17 per share (the "Exercise Price").

5. REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL

Individual represents and warrants to Desktop that (a) Individual is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder; (b) the
execution and delivery of this agreement by Individual and consummation by
Individual of the transactions contemplated hereby have been duly authorized
by all necessary corporation action on the part of Individual and no other
corporation proceedings on the part of Individual are necessary to authorize
this Agreement or any of the transactions contemplated hereby; (c) this
Agreement has been duly executed and delivered by Individual and constitutes a
legal, valid and binding obligation of Individual and, assuming this Agreement
constitutes a legal, valid and binding obligation of Desktop, is enforceable
against Individual in accordance with its terms, except as enforceability may
be limited by bankruptcy and other laws affecting the rights and remedies of
creditors generally and general principles of equity; (d) Individual has taken
all necessary corporate and other action to authorize and reserve for issuance
and to permit it to issue upon exercise of the option, and at all times from
the date hereof until the termination of the Option will have reserved for
issuance, a sufficient number of unissued Individual Shares for Desktop to
exercise the Option in full and will take all necessary corporate or other
action to authorize and reserve for issuance all additional Individual Shares
or other securities which may be issuable pursuant to Section 9(a) upon
exercise of the Option, all of which, upon their issuance and delivery in
accordance with the terms of this Agreement, will be validly issued, fully
paid and nonassessable; (e) upon deliver of the Individual Shares and any
other securities to Desktop upon exercise of the Option, Desktop will acquire
such Individual Shares or other securities free and clear of all material
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever, excluding those imposed by Desktop; (f) the execution and
delivery of this agreement by Individual do not, and the performance of this
Agreement by Individual will not, (i) violate the Certificate of Incorporation
or ByLaws of Individual, (ii) conflict with or violate any order

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<PAGE>

applicable to Individual or any of its subsidiaries or by which they or any of
their property is bound or affected or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any of the property or assets of Individual or any of
its subsidiaries pursuant to , any contract or agreement to which Individual
or any of its subsidiaries is a party or by which Individual or any of its
subsidiaries or any of their property is bound or affected, except, in the
case of clauses (ii) and (iii) above, for violations, conflicts, breaches,
defaults, rights of termination, amendment, acceleration or cancellation,
liens or encumbrances which would not, individually or in the aggregate, have
a Material Adverse Effect on Individual; (g) the execution and delivery of
this Agreement by Individual does not, and the performance of this Agreement
by Individual will not, require any consent, approval, authorization or permit
of, or filing with, or notification to, any Governmental Entity; and (h) any
Desktop Shares acquired pursuant to this Agreement will not be acquired by
Individual with a view to the public distribution thereof and Individual will
not sell or otherwise dispose of such shares in violation of applicable law or
this Agreement.

6. REPRESENTATIONS AND WARRANTIES OF DESKTOP

Desktop represents and warrants to Individual that (a) Desktop is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder; (b) the
execution and delivery of this Agreement by Desktop and the consummation by
Desktop of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Desktop and no other corporate
proceedings on the part of Desktop are necessary to authorize this Agreement
or any of the transactions contemplated hereby; (c) this Agreement has been
duly executed and delivered by Desktop and constitutes a legal, valid and
binding obligation of Desktop and, assuming this Agreement constitutes a
legal, valid and binding obligation of Individual, is enforceable against
Desktop in accordance with its term, except as enforceability may be limited
by bankruptcy and other laws affecting the rights and remedies of creditors
generally and general principles of equity; (d) Desktop has taken (or will in
a timely manner take) all necessary corporate and other action to authorize
and reserve for issuance and to permit it to issue upon exercise of the Option
and will take all necessary corporate or other action to authorize and reserve
for issuance all additional Desktop Shares or other securities which may be
issuable pursuant to Section 9(b) upon exercise of the Option, all of which,
upon their issuance and delivery in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable; (e) upon
delivery of Desktop Shares to Individual in consideration of any acquisition
of Individual Shares pursuant hereto, Individual will acquire such Desktop
Shares free and clear of all material claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever, excluding those imposed
by Individual; (f) the execution and delivery of this Agreement by Desktop do
not, and the performance of this agreement by Desktop will not, (i) violate
the Certificate of Incorporation or By-Laws of Desktop, (ii) conflict with or
violate any order applicable to Desktop or any of its subsidiaries or by which
they or any of their property is bound or affected or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give rise to any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the property or assets of Desktop
or any of its subsidiaries pursuant to, any contract or agreement to which
Desktop or any of its subsidiaries is a party or by which Desktop or any of
its subsidiaries or any of their property is bound or affected, except, in the
case of clauses (ii) and (iii) above, for violations, conflicts, breaches,
defaults, rights of termination, amendment, acceleration or cancellation,
liens or encumbrances which would not, individually or in the aggregate, have
a Material Adverse Effect on Desktop; (g) the execution and delivery of this
agreement by Desktop does not, and the performance of this Agreement by
Desktop will not, require any consent approval, authorization or permit of, or
filing with or notification to, any Governmental Entity; and (h) any
Individual Shares acquired upon exercise of the Option will not be acquired by
Desktop with a view to the public distribution thereof and Desktop will not
sell or otherwise dispose of such shares in violation of applicable law or
this Agreement.

7. [INTENTIONALLY OMITTED.]

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8. REGISTRATION RIGHTS

(a) Following the termination of the Merger Agreement, each party hereto (a
"Holder") may by written notice (a "Registration Notice") to the other party
(the "Registrant") request the Registrant to register under the Securities Act
all or any part of the shares acquired by such Holder pursuant to this
Agreement (the "Registrable Securities") in order to permit the sale or other
disposition of such shares pursuant to a bona fide firm commitment
underwritten public offering in which the Holder and the underwriters shall
effect as wide a distribution of such Registrable Securities as is reasonably
practicable and shall use reasonable efforts to prevent any person or group
from purchasing through such offering shares representing more than 1% of the
outstanding shares of Common stock of the Registrant on a fully diluted basis;
provided, however, that any such Registration Notice must related to a number
of shares equal to at least 2% of the outstanding shares of Common Stock of
the Registrant on a fully diluted basis and that any rights to require
registration hereunder shall terminate with respect to any shares that may be
sold pursuant to Rule 144(k) under the Securities Act.

(b) The Registrant shall use all reasonable efforts to effect, as promptly
as practicable, the registration under the Securities Act of the Registrable
Securities; provided, however, that (i) neither party shall be entitled to
more than an aggregate of two effective registration statements hereunder and
(ii) the Registrant will not be required to file any such registration
statement during any period of time (not to exceed 40 days after a
Registration Notice in the case of clause (A) below or 90 days after a
Registration Notice in the case of clauses (B) and (C) below) when (A) the
Registrant is in possession of material nonpublic information which it
reasonably believes would be detrimental to be disclosed at such time and, in
the written opinion of counsel to such Registrant, such information would have
to be disclosed if a registration statement were filed at that time; (B) such
Registrant is required under the Securities Act to include audited financial
statements for any period in such registration statement and such financial
statements are not yet available for inclusion in such registration statement;
or (C) such Registrant determines, in its reasonable judgment, that such
registration would interfere with any financing, acquisition or other material
transaction involving the Registrant. If consummation of the sale of any
Registrable securities pursuant to a registration hereunder does not occur
within 180 days after the filing with the SEC of the initial registration
statement therefor, the provisions of this Section 8 shall again be applicable
to any proposed registration, it being understood that neither party shall be
entitled to more than an aggregate of two effective registration statements
hereunder. The Registrant shall use all reasonable efforts to cause any
Registrable Securities registered pursuant to this Section 8 to be qualified
for sale under the securities or blue sky laws of such jurisdictions as the
Holder may reasonably request and shall continue such registration or
qualification in effect in such jurisdictions; provided, however, that the
Registrant shall not be required to qualify to do business in, or consent to
general service of process in, any jurisdiction by reason of this provision.

(c) The registration rights set forth in this Section 8 are subject to the
condition that the Holder shall provide the Registrant with such information
with respect to such Holder's Registrable Securities, the plan for
distribution thereof, and such other information with respect to such Holder
as, in the reasonable judgment of counsel for the Registrant, is necessary to
enable the Registrant to include in a registration statement all material
facts required to be disclosed with respect to a registration thereunder.

(d) A registration effected under this Section 8 shall be effected at the
registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to the Holder, and the Registrant shall
provide to the underwriters such documentation (including certificates,
opinions of counsel and "comfort" letters from auditors) as are customary in
connection with underwritten public offerings and as such underwriters may
reasonably require. In connection with any registration, the parties agree (i)
to indemnify each other and the underwriters in the customary manner and (ii)
to enter into an underwriting agreement in form and substance customary for
transactions of this type with the underwriters participating in such
offering.

9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

(a) In the event of any change in the Individual Shares by reason of stock
dividends, split-ups, mergers (other than the Merger), recapitalizations,
combinations, change of shares and the like, the type and number of

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shares or securities subject to the Option, the Exercise Ratio and the
Exercise Price shall be adjusted appropriately, and proper provision shall be
made in the agreements governing such transaction so that Desktop shall
receive, upon exercise of the Option, the number and class of shares or other
securities or property that Desktop would have received in respect of the
Individual Shares if the Option had been exercised immediately prior to such
event or the record date therefor, as applicable.

(b) In the event of any change in the Desktop Shares by reason of stock
dividends, split-ups, mergers (other than the Merger), recapitalizations,
combinations, exchanges of shares and the like, the type and number of shares
or securities which Desktop can deliver to Individual pursuant to Section 4
hereof in full payment for any Individual Shares to be purchased and the
Exchange Ratio shall be adjusted appropriately.

10. RESTRICTIVE LEGENDS

Each certificate representing Option Shares issued to Desktop hereunder, and
each certificate representing Desktop Shares deliver to Individual at a
closing, shall include a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF NOVEMBER 2,
1997, A COPY OF WHICH MAY BE OBTAINED FROM DESKTOP DATA, INC.

11. LISTING

Individual, upon the request of Desktop, shall promptly file an application
to list the Individual Shares to be acquired upon exercise of the Option for
quotation on the Nasdaq National Market and shall use its best efforts to
obtain approval of such listing as soon as practicable. Desktop, upon the
request of Individual, shall promptly file an application to list the Desktop
Shares issued and delivered to Individual pursuant to Section 4 for quotation
on the Nasdaq National Market and shall use its best efforts to obtain
approval of such listing as soon as practicable.

12. BINDING EFFECT

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Nothing
contained in this Agreement, express or implied, is intended to confer upon
any person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Any shares sold by a party in compliance with the provisions
of Section 8 shall, upon consummation of such sale, be free of the
restrictions imposed with respect to such shares by this Agreement and any
transferee of such shares shall not be entitled to the rights of such party.
Certificates representing shares sold in a registered public offering pursuant
to Section 8 shall not be required to bear the legend set forth in Section 10.

13. SPECIFIC PERFORMANCE

The parties recognize and agree that if for any reason any of the provisions
of this Agreement are not performed in accordance with their specific terms or
are otherwise breached, immediate and irreparable harm or injury would be
caused for which money damages would not be an adequate remedy. Accordingly,
each party agrees that in addition to other remedies the other party shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement. In the event that any action shall be
brought in equity to enforce the provisions of the Agreement, neither party
will allege, and each party hereby waives the defense, that there is an
adequate remedy at law.

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<PAGE>

14. ENTIRE AGREEMENT

This Agreement and the Merger Agreement (including the appendices thereto)
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.

15. FURTHER ASSURANCES

Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
constitute the transactions contemplated hereby.

16. VALIDITY

The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto shall
negotiate in good faith and shall execute and deliver an amendment to this
Agreement in order, as nearly as possible, to effectuate, to the extent
permitted by law, the intent of the parties hereto with respect to such
provision.

17. NOTICES

All notices and other communications hereunder shall be in writing and shall
be deemed given if delivered personally or by commercial delivery service, or
sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers
for a party as shall be specified by like notice);

(1)if to Desktop, to:

Desktop, Data, Inc.
80 Blanchard Road
Burlington, MA 01803
Attention: President
Telephone No.: (617) 229-3000
Telecopy No.: (617) 229-3030

with a copy to:

Testa, Hurwitz & Thibeault, LLP
High Street Tower, 125 High Street
Boston, MA 02110
Attention: Lawrence S. Wittenberg, Esq.
Telephone No.: (617) 248-7000
Telecopy No.: (617) 248-7100

(2)If to Individual, to:

Individual, Inc.
8 New England Executive Park-West
Burlington, MA 01803
Attention: President
Telephone No.: (781) 273-6000
Telecopy No.: (781) 273-6060

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<PAGE>

with a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Jonathan L. Kravetz, Esq.
Telephone No.: (617) 542-6000
Telecopy No.: (617) 542-2241

18. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to agreements made and to be
performed entirely within such State.

19. COUNTERPARTS

This Agreement may be executed in two counterparts, each of which shall be
deemed to be an original, but both of which, taken together, shall constitute
one and the same instrument.

20. EXPENSES

Except as otherwise expressly provided herein or in the Merger Agreement,
all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.

21. AMENDMENTS; WAIVER

This Agreement may be amended by the parties hereto and the terms and
conditions hereof may be waived only by an instrument in writing signed on
behalf of each of the parties hereto, or, in the case of a waiver, by an
instrument signed on behalf of the party waiving compliance.

22. ASSIGNMENT

Neither of the parties hereto may sell, transfer, assign or otherwise
dispose of any of its rights or obligations under this Agreement or the option
created hereunder to any other person, without the express written consent of
the other party.

[Remainder of Page Intentionally Blank]

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<PAGE>

IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first
above written.

DESKTOP DATA, INC.

/s/ Donald L. McLagan
By: _________________________________
Name: Donald L. McLagan
Title: President and Chief
Executive Officer

INDIVIDUAL, INC.

/s/ Michael E. Kolowich
By: _________________________________
Name: Michael E. Kolowich
Title: President and Chief
Executive Officer

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<PAGE>

ANNEX C

STOCK OPTION AGREEMENT

RECITALS

WHEREAS, as a condition to Individual's willingness to enter into the Merger
Agreement, Individual has requested that Desktop agree, and Desktop has also
agreed, to grant to Individual an option to acquire shares of Desktop's Common
Stock upon the terms and subject to the conditions set forth herein.

AGREEMENT

1. GRANT OF OPTION

Desktop hereby grants to Individual an irrevocable option (the "Option") to
acquire up to 1,726,398 shares (the "Option Shares") of the Common Stock, par
value $.01 per share, of Desktop ("Desktop Shares") in the manner set forth
below (i) by exchanging therefor shares of the Common Stock, par value $.01
per share, of Individual ("Individual Shares") at a rate of two (2) Individual
Shares for each Option Share (the "Exercise Ratio") and/or, at Individual's
election, (ii) by paying cash at a price determined in accordance with Section
4 below. Capitalized terms used in this Agreement but not defined herein shall
have the meanings ascribed thereto in the Merger Agreement.

2. EXERCISE OF OPTION

The Option may only be exercised by Individual, in whole or in part, at any
time or from time to time, upon the occurrence of (i) the commencement of a
tender or exchange offer for 25% or more of any class of Desktop's capital
stock, or (ii) any of the events specified in Section 7.03 (c) of the Merger
Agreement, other than events described in Section 7.01(g) thereof (any of the
events specified in clauses (i) or (ii) of this sentence being referred to
herein as an "Exercise Event"). In the event Individual wishes to exercise the
Option, Individual shall deliver to Desktop a written notice (an "Exercise
Notice") specifying the total number of Option shares it wishes to acquire and
the form of consideration to be paid. Each closing of a purchase of Option
Shares (a "Closing") shall occur on a date and at a time designated by
Individual in an Exercise Notice delivered at Individual five business days
prior to the date of such Closing, which Closing shall be held at the offices
of counsel to Desktop. The Option shall terminate upon the earlier of (i) the
Effective Time, (ii) 180 days following the termination of the Merger
Agreement pursuant to Article VII thereof, if an Exercise Event shall have
occurred on or prior to the date of such termination, and (iii) the date on
which the Merger Agreement is terminated pursuant to Article VII thereof if an
Exercise Event shall not have occurred on or prior to such date; provided,
however, with respect to the preceding clause (ii) of this sentence, that if
the Option cannot be exercised by reason of any applicable government order,
then the Option shall not terminate until the tenth business day after such
impediment to exercise shall have been removed or shall have become final and
not subject to appeal. Notwithstanding the foregoing, the Option may not be
exercised if Individual is in breach in any material respect of any of its
covenants or agreements contained in the Merger Agreement.

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<PAGE>

3. CONDITIONS TO CLOSING

The obligation of Desktop to issue Option Shares to Individual hereunder is
subject to the conditions that (a) all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any
Federal, state or local administrative agency or commission or other Federal
state or local governmental authority or instrumentality, if any, required in
connection with the issuance of the Option Shares hereunder shall have been
obtained or made, as the case may be; and (b) no preliminary or permanent
injunction or other order by any court of competent jurisdiction prohibiting
or otherwise restraining such issuance shall be in effect.

4. CLOSING

At any Closing, (a) Desktop shall deliver to Individual a single certificate
in definitive form representing the number of Desktop Shares designated by
Individual in its Exercise Notice, such certificate to be registered in the
name of Individual and to bear the legend set forth in Section 10 hereof, and
(b) Individual shall pay to Desktop the aggregate purchase price for the
Desktop Shares so designated and being purchased by delivery of (i) a single
certificate in definitive form representing the number of Individual Shares
being issued by Individual in consideration therefor (based on the Exercise
Ratio), such certificate to be registered in the name of Desktop and to bear
the legend set forth in Section 10 hereof, and/or, at Individual's election,
(ii) a certified checks, bank check or wire transfer, as the case may be. If
Individual has elected to deliver cash in payment for any Desktop Shares, the
price to be paid by Individual in cash to Desktop at any Closing in respect of
such Desktop Shares shall be $10.34 per share (the "Exercise Price").

5. REPRESENTATIONS AND WARRANTIES OF DESKTOP

Desktop represents and warrants to Individual that (a) Desktop is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder; (b) the
execution and delivery of this Agreement by Desktop and consummation by
Desktop of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Desktop and no other corporate
proceedings on the part of Desktop are necessary to authorize this agreement
or any of the transactions contemplated hereby; (c) this Agreement has been
duly executed and delivered by Desktop and constitutes a legal, valid and
binding obligation of Desktop and, assuming this Agreement constitutes a
legal, valid and binding obligation of Individual, is enforceable against
Desktop in accordance with its terms, except as enforceability may be limited
by bankruptcy and other laws affecting the rights and remedies of creditors
generally and general principles of equity; (d) Desktop has taken all
necessary corporate and other action to authorize and reserve for issuance and
to permit it to issue upon exercise of the Option, and at all times from the
date hereof until the termination of the Option will have reserved for
issuance, a sufficient number of unissued Desktop Shares for Individual to
exercise the Option in full and will take all necessary corporate or other
action to authorize and reserve for issuance all additional Desktop Shares
necessary corporate or other action to authorize and reserve for issuance all
additional Desktop Shares or other securities which may be issuable pursuant
to Section 9(a) upon exercise of the Option, all of which, upon their issuance
and delivery in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable; (e) upon delivery of the Desktop Shares
and any other securities to Individual upon exercise of the Option, Individual
will acquire such Desktop Shares or other securities free and clear of all
material claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever, excluding those imposed by Individual; (f) the
execution and delivery of this Agreement by Desktop do not, and the
performance of this Agreement by Desktop will not, (i) violate the Certificate
of Incorporation or ByLaws of Desktop, (ii) conflict with or violate any order
applicable to Desktop or any of its subsidiaries or by which they or any of
their property is bound or affected or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any of the property or assets of Desktop or any of its
subsidiaries pursuant, to any contract or agreement to which Desktop or any of
Desktop represents and warrants to Individual that (a) Desktop is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and

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<PAGE>

authority to enter into this Agreement and to carry out its obligations
hereunder; (b) the execution and delivery of this Agreement by Desktop and
consummation by Desktop of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Desktop and no
other corporate proceedings on the part of Desktop are necessary to authorize
this agreement or any of the transactions contemplated hereby; (c) this
Agreement has been duly executed and delivered by Desktop and constitutes a
legal, valid and binding obligation of Desktop and, assuming this Agreement
constitutes a legal, valid and binding obligation of Individual, is
enforceable against Desktop in accordance with its terms, except as
enforceability may be limited by bankruptcy and other laws affecting the
rights and remedies of creditors generally and general principles of equity;
(d) Desktop has taken all necessary corporate and other action to authorize
and reserve for issuance and to permit it to issue upon exercise of the
Option, and at all times from the date hereof until the termination of the
Option will have reserved for issuance, a sufficient number of unissued
Desktop Shares for Individual to exercise the Option in full and will take all
necessary corporate or other action to authorize and reserve for issuance all
additional Desktop Shares necessary corporate or other action to authorize and
reserve for issuance all additional Desktop Shares or other securities which
may be issuable pursuant to Section 9(a) upon exercise of the Option, all of
which, upon their issuance and delivery in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable; (e) upon
delivery of the Desktop Shares and any other securities to Individual upon
exercise of the Option, Individual will acquire such Desktop Shares or other
securities free and clear of all material claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever, excluding those
imposed by Individual; (f) the execution and delivery of this Agreement by
Desktop do not, and the performance of this Agreement by Desktop will not, (i)
violate the Certificate of Incorporation or ByLaws of Desktop, (ii) conflict
with or violate any order applicable to Desktop or any of its subsidiaries or
by which they or any of their property is bound or affected or (iii) result in
any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give rise to any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the property or assets of Desktop
or any of its subsidiaries pursuant, to any contract or agreement to which
Desktop or any of its subsidiaries is a party or by which Desktop or any of
its subsidiaries or any of their property is bound or affected, except, in the
case of clauses (ii) and (iii) above, for violations, conflicts, breaches,
defaults, rights of termination, amendment, acceleration or cancellation,
liens or encumbrances which would not, individually or in the aggregate, have
a Material Adverse Effect on Desktop; (g) the execution and delivery of this
Agreement by Desktop does not, and the performance of this Agreement by
Desktop will not, require any consent, approval, authorization or permit of,
or filing with, or notification to, any Governmental Entity and (h) any
Individual Shares acquired pursuant to this Agreement will not be acquired by
Desktop with a view to the public distribution thereof and Desktop will not
sell or otherwise dispose of such shares in violation of applicable law or
this Agreement.

6. REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL

Individual represents and warrants to Desktop that (a) Individual is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder; (b) the
execution and delivery of this Agreement by Individual and the consummation by
Individual of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Individual and no other
corporate proceedings on the part of Individual are necessary to authorize
this Agreement or any of the transactions contemplated hereby; (c) this
Agreement has been duly executed and delivered by Individual and constitutes a
legal, valid and binding obligation of Individual and, assuming this Agreement
constitutes a legal, valid and binding obligation of Desktop, is enforceable
against Individual in accordance with its term, except as enforceability may
be limited by bankruptcy and other laws affecting the rights and remedies of
creditors generally and general principles of equity; (d) Individual has taken
(or will in a timely manner take) all necessary corporate and other action to
authorize and reserve for issuance and to permit it to issue upon exercise of
the Option and will take all necessary corporate or other action to authorize
and reserve for issuance all additional Individual Shares or other securities
which may be issuable pursuant to Section 9(b) upon exercise of the Option,
all of which, upon their issuance and delivery in accordance with the terms of
this Agreement, will be validly issued, fully paid and nonassessable;

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(e) upon delivery of Desktop Shares to Individual in consideration of any
acquisition of Individual Shares pursuant hereto, Individual will acquire such
Desktop Shares free and clear of all material claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever,
excluding those imposed by Desktop; (f) the execution and delivery of this
Agreement by Individual do not, and the performance of this Agreement by
Individual will not, (i) violate the Certificate of Incorporation or ByLaws of
Individual, (ii) conflict with or violate any order applicable to Individual
or any of its subsidiaries or by which they or any of their property is bound
or affected or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default)
under, or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of Individual or any of its subsidiaries pursuant to,
any contract or agreement to which Individual or any of its subsidiaries is a
party or by which Individual or any of its subsidiaries or any of their
property is bound or affected, except, in the case of clauses (ii) and (iii)
above, for violations, conflicts, breaches, defaults, rights of termination,
amendment, acceleration or cancellation, liens or encumbrances which would
not, individually or in the aggregate, have a Material Adverse Effect on
Individual; (g) the execution and delivery of this Agreement by Individual
does not, and the performance of this Agreement by Individual will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity; and (h) any Desktop Shares acquired
upon exercise of the Option will not be acquired by Individual with a view to
the public distribution thereof and Individual will not sell or otherwise
dispose of such shares in violation of applicable law or this Agreement.

7. [INTENTIONALLY OMITTED.]

8. REGISTRATION RIGHTS

(a) Following the termination of the Merger Agreement, each party hereto (a
"Holder") may by written notice (a "Registration Notice") to the other party
(the "Registrant") request the Registrant to register under the Securities Act
all or any part of the shares acquired by such Holder pursuant to this
Agreement (the "Registrable Securities") in order to permit the sale or other
disposition of such shares pursuant to a bona fide firm commitment
underwritten public offering in which the Holder and the underwriters shall
effect as wide a distribution of such Registrable Securities as is reasonably
practicable and shall use reasonable efforts to prevent any person or group
from purchasing through such offering shares representing more than 1% of the
outstanding shares of Common Stock of the Registrant on a fully diluted basis;
provided, however, that any such Registration Notice must relate to a number
of shares equal to at least 2% of the outstanding shares of Common Stock of
the Registrant on a fully diluted basis and that any rights to require
registration hereunder shall terminate with respect to any shares that may be
sold pursuant to Rule 144(k) under the Securities Act.

(b) The Registrant shall use all reasonable efforts to effect, as promptly
as practicable, the registration under the Securities Act of the Registrable
Securities; provided, however, that (i) neither party shall be entitled to
more than an aggregate of two effective registration statements hereunder and
(ii) the Registrant will not be required to file any such registration
statement during any period of time (not to exceed 40 days after a
Registration Notice in the case of clause (A) below or 90 days after a
Registration Notice in the case of clauses (B) and (C) below) when (A) the
Registrant is in possession of material nonpublic information which it
reasonably believes would be detrimental to be disclosed at such time and, in
the written opinion of counsel to such Registrant, such information would have
to be disclosed if a registration statement were filed at that time; (B) such
Registrant is required under the Securities Act to include audited financial
statements for any period in such registration statement and such financial
statements are not yet available for inclusion in such registration statement;
or (C) such Registrant determines, in its reasonable judgment, that such
registration would interfere with any financing, acquisition or other material
transaction involving the Registrant. If consummation of the sale of any
Registrable Securities pursuant to a registration hereunder does not occur
within 180 days after the filing with the SEC of the initial registration
statement therefor, the provisions of this Section 8 shall again be applicable
to any proposed registration, it being understood that neither party shall be
entitled to more than an aggregate of two effective registration statements
hereunder. The Registrant shall use all reasonable efforts to cause any

C-4
<PAGE>

Registrable Securities registered pursuant to this Section 8 to be qualified
for sale under the securities or blue sky laws of such jurisdictions as the
Holder may reasonably request and shall continue such registration or
qualification in effect in such jurisdictions; provided, however, that the
Registrant shall not be required to qualify to do business in, or consent to
general service of process in, any jurisdiction by reason of this provision.

(d) A registration effected under this Section 8 shall be effected at the
Registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to the Holder, and the Registrant shall
provide to the underwriters such documentation (including certificates,
opinions of counsel and "comfort" letters for auditors) as are customary in
connection with underwritten public offerings and as such underwriters may
reasonably require. In connection with any registration, the parties agree (i)
to indemnify each other and the underwriters in the customary manner and (ii)
to enter into an underwriting agreement in form and substance customary for
transactions of this type with the underwriters participating in such
offering.

9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

(a) In the event of any change in the Desktop Shares by reason of stock
dividends, splitups, mergers (other than the Merger), recapitalizations,
combinations, exchanges of shares and the like, the type and number of shares
or securities subject to the Option, the Exercise Ratio and the Exercise Price
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction so that Individual shall receive, upon
exercise of the Option, the number and class of shares or other securities or
property that Individual would have received in respect of the Desktop Shares
if the Option had been exercised immediately prior to such event or the record
date therefor, as applicable.

(b) In the event of any change in the Individual Shares by reason of stock
dividends, splitups, mergers (other than the Merger), recapitalizations,
combinations, exchanges of shares and the like, the type and number of shares
or securities which Individual can deliver to Desktop pursuant to Section 4
hereof if full payment for an Desktop Shares to be purchased and the Exchange
Ratio shall be adjusted appropriately.

10. RESTRICTIVE LEGENDS

Each certificate representing Option Shares issued to Individual hereunder,
and each certificate representing Individual Shares delivered to Desktop at a
Closing, shall include a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF NOVEMBER
2, 1997, A COPY OF WHICH MAY BE OBTAINED FROM INDIVIDUAL, INC.

11. LISTING

Desktop, upon the request of Individual, shall promptly file an application
to list the Desktop Shares to be acquired upon exercise of the Option for
quotation on the Nasdaq National Market and shall use its best efforts to
obtain approval of such listing as soon as practicable. Individual, upon the
request of Desktop, shall promptly file an application to list the Individual
Shares issued and delivered to Desktop pursuant to Section 4 for quotation on
the Nasdaq National Market and shall use its best efforts to obtain approval
of such listing as soon as practicable.

C-5
<PAGE>

12. BINDING EFFECT

13. SPECIFIC PERFORMANCE

14. ENTIRE AGREEMENT

15. FURTHER ASSURANCES

Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
constitute the transactions contemplated hereby.

16. VALIDITY

C-6
<PAGE>

17. NOTICES

(1)if to Desktop, to:

Desktop Data, Inc.
80 Blanchard Road
Burlington, MA 01803
Attention: President
Telephone No.: (617) 229-3000
Telecopy No.: (617) 229-3030

with a copy to:

Testa, Hurwitz & Thibeault, LLP
High Street Tower, 125 High Street
Boston, MA 02110
Attention: Lawrence S. Wittenberg, Esq.
Telephone No.: (617) 248-7000
Telecopy No.: (617) 248-7100

(2)If to Individual, to:

Individual, Inc.
8 New England Executive ParkWest
Burlington, MA 01803
Attention: President
Telephone No.: (781) 273-6000
Telecopy No.: (781) 273-6060

with a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Jonathan L. Kravetz, Esq.
Telephone No.: (617) 542-6000
Telecopy No.: (617) 542-2241

18. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to agreements made and to be
performed entirely within such State.

19. COUNTERPARTS

This Agreement may be executed in two counterparts, each of which shall be
deemed to be an original, but both of which, taken together, shall constitute
one and the same instrument.

C-7
<PAGE>

20. EXPENSES

21. AMENDMENTS; WAIVER

22. ASSIGNMENT

Neither of the parties hereto may sell, transfer, assign or otherwise
dispose of any of its rights or obligations under this Agreement or the Option
created hereunder to any other person, without the express written consent of
the other party.

[Remainder of Page Intentionally Blank]

C-8
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first
above written.

Individual, Inc.

/s/ Michael E. Kolowich
By: _________________________________
Name: Michael E. Kolowich
Title: President and Chief
Executive Officer

Desktop Data, Inc.

/s/ Donald L. McLagan
By: _________________________________
Name: Donald L. McLagan
Title: President and Chief
Executive Officer

C-9
<PAGE>

ANNEX D

November 2, 1997

The Board of Directors of
Desktop Data, Inc.
80 Blanchard Road
Burlington, MA 01803

Ladies and Gentlemen:

Desktop Data, Inc. (the "Company") and Individual, Inc. ("Individual"), both
Delaware corporations, have entered an Agreement and Plan of Merger and
Reorganization dated as of November 2, 1997 (the "Agreement"). Pursuant to the
Agreement, the implementation of which is contingent on stockholder approval
by the Company's stockholders and Individual's stockholders, Individual will
be merged with and into the Company (the "Merger"), and each outstanding share
of Individual common stock issued and outstanding immediately prior to the
effective time of the Merger will be converted into 0.5 shares (the "Exchange
Ratio") of common stock of the Company. We have assumed, with your consent,
that the Merger will qualify for pooling-of-interests accounting treatment and
as a tax free transaction for the stockholders of the Company. You have
requested our opinion as to whether the Exchange Ratio is fair, from a
financial point of view, to the Company.

BT Alex. Brown Incorporated ("BT Alex. Brown"), as a customary part of its
investment banking business, is engaged in the valuation of businesses and
their securities in connection with mergers and acquisitions, negotiated
underwritings, private placements and valuations for estate, corporate and
other purposes. We have acted as financial advisor to the Board of Directors
of the Company in connection with the transaction described above and will
receive a fee for our services, a portion of which is contingent upon the
consummation of the Merger. We have also acted as lead manager of the
Company's initial public offering on August 11, 1995 and provided other
investment banking advisory services. BT Alex. Brown maintains a market in the
common stock of the Company and regularly publishes research reports regarding
the information services industry and the businesses and securities of the
Company and other publicly owned companies in the information services
industry. In the ordinary course of business, BT Alex. Brown may actively
trade the securities of both the Company and Individual for our own account
and the account of our customers and, accordingly, may at any time hold a long
or short position in securities of the Company and Individual.

In connection with this opinion, we have reviewed certain publicly available
financial information and other information concerning the Company and
Individual and certain internal analyses and other information furnished to us
by the Company. We have also held discussions with the members of the senior
managements of the Company and Individual regarding the businesses and
prospects of their respective companies and the joint prospects of a combined
company. In addition, we have (i) reviewed the reported prices and trading
activity for the common stock of both the Company and Individual, (ii)
compared certain financial and stock market information for the Company and
Individual with similar information for certain other companies whose
securities are publicly traded, (iii) reviewed the financial terms of certain
recent business combinations, (iv) reviewed the terms of the Agreement and
certain related documents, and (v) performed such other studies and analyses
and considered such other factors as we deemed appropriate.

We have not independently verified the information described above and for
purposes of this opinion have assumed the accuracy, completeness and fairness
thereof. With respect to the information relating to the prospects of the
Company and Individual, we have assumed that such information reflects the
best currently available judgments and estimates of the managements of the
Company and Individual as to the likely future financial performances of their
respective companies and of the combined entity. In addition, we have not made
nor been provided with an independent evaluation or appraisal of the assets of
the Company and Individual, nor have we been furnished with any such
evaluations or appraisals. Our opinion is based on market, economic and other
conditions as they exist and can be evaluated as of the date of this letter.

D-1
<PAGE>

Desktop Data, Inc.
November 2, 1997
Page 2

Our advisory services and the opinion expressed herein were prepared for the
use of the Board of Directors of the Company and do not constitute a
recommendation to the Company's stockholders as to how they should vote at the
stockholders' meeting in connection with the Merger. We hereby consent,
however, to the inclusion of this opinion as an exhibit to any proxy or
registration statement distributed in connection with the Merger.

Based upon and subject to the foregoing, it is our opinion that, as of the
date of this letter, the Exchange Ratio is fair, from a financial point of
view, to the Company.

Very truly yours,

BT Alex. Brown Incorporated

By: /s/ Scott A. Wieler
-------------------------------------
Name: Scott A. Wieler
Managing Director

D-2
<PAGE>

ANNEX E

November 2, 1997

PRIVILEGED AND CONFIDENTIAL

Board of Directors
Individual, Inc.
8 New England Executive Park West
Burlington, Massachusetts 01803

Members of the Board:

You have asked our opinion with respect to the fairness to the stockholders
of Individual, Inc. ("Individual"), from a financial point of view and as of
the date hereof, of the Exchange Ratio (as defined below), in the proposed
"merger of equals" of Individual with and into Desktop Data, Inc. ("Desktop")
pursuant to the Agreement and Plan of Merger, dated as of November 2, 1997
(the "Agreement"). Under the terms of the Agreement, Individual shall be
merged with and into Desktop (the "Merger"). Desktop shall be the surviving
corporation and the separate existence of Individual shall cease. In the
Merger, each outstanding share of the common stock of Individual will be
converted into the right to receive 0.5 shares of Common Stock of Desktop (the
"Exchange Ratio"). All outstanding options and warrants to acquire shares of
Individual, and common stock equivalents, shall be converted into equivalent
rights to acquire Common Stock of Desktop at the same Exchange Ratio. Based on
the Exchange Ratio, current holders of Individual would hold approximately
50.4% and current holders of Desktop would hold approximately 49.6% of the
outstanding shares of Desktop on a treasury stock fully-diluted basis after
consummation of the Merger. The Merger is intended to qualify as a tax-
deferred transaction to Individual shareholders and to be accounted for as a
"pooling of interests." The terms and conditions of the Merger are set out
more fully in the Agreement. In connection with the Agreement, (i) Individual
and Desktop have entered into mutual stock option agreements (the "Option
Agreements") and (ii) certain stockholders of each of Individual and Desktop
have entered into participation agreements (the "Participation Agreements").

For purposes of this opinion we have (i) reviewed financial information on
Individual furnished to us by Individual, including certain internal financial
analyses and forecasts prepared by the management of Individual; (ii) reviewed
publicly available information; (iii) held discussions with the management of
Individual and Desktop concerning the businesses, past and current business
operations, financial condition and future prospects of both companies,
independently and combined, including, in the case of Desktop, discussion
regarding the degree to which we could rely on publicly available Wall Street
research analyst estimates of Desktop's future financial performance; (iv)
reviewed the Agreement, the Option Agreements and the Participation
Agreements; (v) reviewed the stock price and trading histories of both
companies; (vi) prepared comparable company, contribution, and discounted cash
flow analyses of Individual and Desktop; (vii) prepared a pro-forma merger
analysis of the Merger; (viii) compared the financial terms of the Merger with
other transactions that we deemed relevant; and (ix) reviewed estimates by
Individual's and Desktop's management and the Parthenon Group of the cost
savings, revenue enhancements and other benefits expected to be derived from
the Merger, and (x) made such other studies and inquiries, and reviewed such
other data, as we deemed relevant.

In connection with rendering our opinion, however, we have not independently
verified any of the foregoing information and have assumed that all such
information is complete and accurate in all material respects. Furthermore, we
did not obtain any independent appraisal of the properties or assets and
liabilities of Individual or Desktop or any of their respective subsidiaries,
nor were we furnished with any such evaluations or appraisals. With respect to
the financial and operating forecasts (and the assumptions and bases
therefore) of Individual that we may have reviewed, we have assumed that such
forecasts have been reasonably prepared and reflect the best available
estimates and judgments of Individual management and that such projections and
forecasts will be realized in the amounts and in the time periods currently
estimated by the management of Individual. In addition,

E-1
<PAGE>

Board of Directors
Individual, Inc.
November 2, 1997
Page Two
we have relied upon estimates and judgments of Individual management as to the
future financial performance of Individual. We have also relied upon the
estimate by Individual's and Desktop's management and the Parthenon Group of
the cost savings, revenue enhancements and other benefits expected to be
derived from the Merger. We have also assumed, with your consent, that the
Merger will be accounted for as a pooling of interests under generally
accepted accounting principles. While we believe that our review, as described
within, is an adequate basis for the opinion that we express, this opinion is
necessarily based upon market, economic and other conditions that exist and
can be evaluated as of the date of this letter, and on information available
to us as of the date hereof. Finally, we express no opinion as to the value of
any employee agreements or arrangements entered into in connection with the
Agreement or the Merger.

BancAmerica Robertson Stephens is familiar with Individual, having provided
certain investment banking services to Individual from time to time, including
acting as managing underwriter for the initial public offering of shares of
the common stock of Individual in March 1996 and maintaining a market in
shares of the common stock in Individual.

Our opinion is directed to the Board of Directors of Individual and is not
intended to be and does not constitute a recommendation to any stockholder of
Individual as to how such stockholder should vote on the Merger. This opinion
may be included in a proxy or registration statement distributed in connection
with the Merger, provided that this opinion is reproduced therein in full and
any description of, or reference to, this opinion therein is in a form and
substance acceptable to us and our legal counsel. Except as provided in the
previous sentence, this opinion shall not be reproduced, summarized, described
or referred to, or furnished to any party, without our prior written consent.

Based upon and subject to the foregoing considerations, it is our opinion,
that, as of the date hereof, the Exchange Ratio is fair to the stockholders of
Individual from a financial point of view.

Very truly yours,

BancAmerica ROBERTSON STEPHENS

By:/s/ George M. Vetter
-------------------------------------
Name: George M. Vetter
Authorized Signatory

E-2
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Delaware General Corporation Law and the Registrant's Charter and By-
laws provide for indemnification of the Registrant' s directors and officers
for liabilities and expenses that they may incur in such capacities. In
general, directors and officers are indemnified with respect to actions taken
in good faith in a manner reasonably believed to be in, or not opposed to, the
best interests of the Registrant, and with respect to any criminal action or
proceeding, actions that the indemnified party had no reasonable cause to
believe were unlawful. Reference is made to the Registrant's Charter and By-
laws filed as Exhibits 3.1 and 3.2 hereto, respectively.

The Agreement provides that commencing with the effectiveness of the Merger,
the Registrant will indemnify the current officers and directors of Individual
for any action or inaction by such person prior to the Merger.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed herewith or incorporated by reference
herein:

II-1
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.6 Lease for 80 Blanchard Road (filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995
and incorporated herein by reference).
10.9 Data Transmission Agreement between the Registrant and Mainstream
Data, Inc. dated as of November 24, 1993, as amended (filed as Exhibit
10.9 to the Registrant's Registration Statement on Form S-1, No. 33-
94054 incorporated herein by reference).
10.10 Software Development and Marketing Agreement between the Registrant
and Reuters America Inc. dated as of November 1, 1993 (filed as
Exhibit 10.10 to the Registrant's Registration Statement on Form S-1,
No. 33-94054 and incorporated herein by reference).
10.11 Letter Agreement between the Registrant and Teknekron Software
Systems, Inc. dated as of June 13, 1994 (filed as Exhibit 10.11 to the
Registrant's Registration Statement on Form S-1, No. 33-94054 and
incorporated herein by reference).
10.12 Database License, Development and Delivery Agreement between the
Registrant and NBC Desktop, Inc. dated as of October 17, 1994 (filed
as Exhibit 10.12 to the Registrant's Registration Statement on Form S-
1, No. 33-94054 and incorporated herein by reference).
10.13 Stock Option Agreement by and among Registrant and Individual, Inc.
dated as of November 3, 1997 (incorporated by reference to Exhibit
99.4 of Registrant's Form 8-K filed November 14, 1997).
10.14 Stock Option Agreement by and among Registrant and Individual, Inc.
dated as of November 3, 1997 (incorporated by reference to Exhibit
99.5 of Registrant's Form 8-K filed November 14, 1997).
*11.1 Computation of earnings per share.
*21.1 Subsidiaries of the Registrant.
*23.1 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1
and Exhibit 8.1).
*23.2 Consent of Arthur Andersen LLP with respect to Registrant's financial
statements.
*23.3 Consent of Coopers & Lybrand L.L.P. with respect to Individual's
financial statements.
*23.4 Consent of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. (included
in Exhibit 8.2).
*24.1 Power of Attorney (see page II-4).
*27.0 Financial Data Schedule
*99.1 Consent of BT. Alex. Brown Incorporated (included in Annex D to the
Prospectus/Joint Proxy Statement contained in this Registration
Statement).
*99.2 Consent of BankAmerica Robertson Stephens.
*99.3 Form of proxy to be used in soliciting Desktop's stockholders for its
special meeting.
*99.4 Form of proxy to be used in soliciting Individual's stockholders for
its special meeting.
*99.5 Desktop Stockholder Letter, dated January 28, 1998.
*99.6 Individual Stockholders Letter, dated January 28, 1998.
*99.7 Desktop Notice of Special Meeting of Stockholders, dated January 28,
1998.
*99.8 Individual Notice of Special Meeting of Stockholders, dated January
28, 1998.
</TABLE>
- --------
* Filed herewith.

ITEM 22. UNDERTAKINGS.

(1) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the undersigned Registrant undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other Items of the applicable form.

(2) The Registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new

II-2
<PAGE>

Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(3) Insofar as the indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of 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 Act
and will be governed by the final adjudication of such issue.

(4) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.

(5) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.

II-3
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN BURLINGTON,
MASSACHUSETTS, ON THE 26TH DAY OF JANUARY, 1998.

Desktop Data, Inc.

/s/ Donald L. McLagan
By: _________________________________
DONALD L. MCLAGAN,
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Donald L. McLagan and Edward R. Siegfried and
each of them acting individually, as such person's true and lawful attorneys-
in-fact and agents, each with full power of substitution, for such person, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement or under Rule 462(b) of
the Securities Act of 1933, as amended, and to file same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his or her substitutes, may do or cause to be done by virtue
thereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:

SIGNATURE TITLE DATE

/s/ Donald L. McLagan Chairman, President January 26,
- ------------------------------------- and Chief Executive 1998
DONALD L. MCLAGAN Officer (Principal
Executive Officer)

/s/ Edward R. Siegfried Vice President January 26,
- ------------------------------------- Finance and 1998
EDWARD R. SIEGFRIED Operations, Chief
Financial Officer,
Treasurer and
Assistant Secretary
(Principal
Financial Officer)

/s/ A. Baron Cass, III Director January 26,
- ------------------------------------- 1998
A. BARON CASS, III

II-4
<PAGE>

SIGNATURE TITLE DATE

/s/ Rory J. Cowan Director January 26,
- ------------------------------------- 1998
RORY J. COWAN

/s/ Ellen Carnahan Director January 26,
- ------------------------------------- 1998
ELLEN CARNAHAN

/s/ June Rokoff Director January 26,
- ------------------------------------- 1998
JUNE ROKOFF

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
*2.1 Agreement and Plan of Reorganization by and among the Registrant, and
Individual, Inc., dated as of November 2, 1997 (attached as Annex A to
the Prospectus/Joint Proxy Statement contained in this Registration
Statement).
3.1 Registrant's Amended and Restated Certificate of Incorporation as
currently in effect (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-1 (File No. 33-94054)).
*3.2 Registrant's Certificate of Merger amending Registrant's Amended and
Restated Certificate of Incorporation as proposed to Registrant's
stockholders.
3.3 Registrant's Amended and Restated Bylaws, as currently in effect
(incorporated by reference to Exhibit 3.4 to the Registrant's
Registration Statement on Form S-1 (File No. 33-94054)).
4.1 Form of Specimen Certificate for Registrant's Common Stock
(incorporated by reference to Exhibit 4.1 of Registrant's Registration
Statement on Form S-1 (File No. 33-94054)).
*5.1 Opinion of Testa, Hurwitz & Thibeault, LLP regarding the legality of
the securities being issued.
*8.1 Opinion of Testa, Hurwitz & Thibeault, LLP regarding certain tax
matters.
*8.2 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. regarding
certain tax matters.
9.1 Participation Agreement by and among the Registrant and certain
stockholders of Individual, Inc. dated as of November 3, 1997
(incorporated by reference to Exhibit 99.2 of Registrant's Form 8-K
filed November 14, 1997).
9.2 Participation Agreement by and among Individual, Inc. and certain
stockholders of the Registrant dated as of November 3, 1997
(incorporated by reference to Exhibit 99.3 of Registrant's Form 8-K
field November 14, 1997).
*10.1 1995 Stock Plan, as amended, of the Registrant as proposed to be
amended.
10.2 1995 Non-Employee Director Stock Option Plan (filed as an attachment
to the Registrant's Definitive Proxy Statement, filed on April 25,
1996 and incorporated herein by reference).
10.3 1989 Stock Plan (filed as Exhibit 10.3 to the Registrant's
Registration Statement on Form S-1, No. 33-94054 and incorporated
herein by reference).
*10.4 1995 Employee Stock Purchase Plan, as amended, of the Registrant as
proposed to be amended.
10.5 Amended and Restated Registration Agreement dated as of October 20,
1992 by and among the Registrant and certain stockholders named
therein (filed as Exhibit 10.5 to the Registrant's Registration
Statement on Form S-1, No. 33-94054 and incorporated herein by
reference).
10.6 Lease for 80 Blanchard Road (filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995
and incorporated herein by reference).
10.9 Data Transmission Agreement between the Registrant and Mainstream
Data, Inc. dated as of November 24, 1993, as amended (filed as Exhibit
10.9 to the Registrant's Registration Statement on Form S-1, No. 33-
94054 incorporated herein by reference).
10.10 Software Development and Marketing Agreement between the Registrant
and Reuters America Inc. dated as of November 1, 1993 (filed as
Exhibit 10.10 to the Registrant's Registration Statement on Form S-1,
No. 33-94054 and incorporated herein by reference).
10.11 Letter Agreement between the Registrant and Teknekron Software
Systems, Inc. dated as of June 13, 1994 (filed as Exhibit 10.11 to the
Registrant's Registration Statement on Form S-1, No. 33-94054 and
incorporated herein by reference).
10.12 Database License, Development and Delivery Agreement between the
Registrant and NBC Desktop, Inc. dated as of October 17, 1994 (filed
as Exhibit 10.12 to the Registrant's Registration Statement on Form S-
1, No. 33-94054 and incorporated herein by reference).
10.13 Stock Option Agreement by and among Registrant and Individual, Inc.
dated as of November 3, 1997 (incorporated by reference to Exhibit
99.4 of Registrant's Form 8-K filed November 14, 1997).
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.14 Stock Option Agreement by and among Registrant and Individual, Inc.
dated as of November 3, 1997 (incorporated by reference to Exhibit
99.5 of Registrant's Form 8-K filed November 14, 1997).
*11.1 Computation of earnings per share.
*21.1 Subsidiaries of the Registrant.
*23.1 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1
and Exhibit 8.1).
*23.2 Consent of Arthur Andersen LLP with respect to Registrant's financial
statements.
*23.3 Consent of Coopers & Lybrand L.L.P. with respect to Individual's
financial statements.
*23.4 Consent of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. (included
in Exhibit 8.2).
*24.1 Power of Attorney (see page II-4).
*27.0 Financial Data Schedule
*99.1 Consent of BT. Alex. Brown Incorporated (included in Annex D to the
Prospectus/Joint Proxy Statement contained in this Registration
Statement).
*99.2 Consent of BankAmerica Robertson Stephens.
*99.3 Form of proxy to be used in soliciting Desktop's stockholders for its
special meeting.
*99.4 Form of proxy to be used in soliciting Individual's stockholders for
its special meeting.
*99.5 Desktop Stockholder Letter, dated January 28, 1998.
*99.6 Individual Stockholders Letter, dated January 28, 1998.
*99.7 Desktop Notice of Special Meeting of Stockholders, dated January 28,
1998.
*99.8 Individual Notice of Special Meeting of Stockholders, dated January
28, 1998.
</TABLE>
- --------
* Filed herewith.

<PAGE>

EXHIBIT 3.2

CERTIFICATE OF MERGER OF INDIVIDUAL, INC. INTO DESKTOP DATA, INC.

Pursuant to Section 251 of the Delaware General Corporation Law (the
"DGCL"), Desktop Data, Inc., a Delaware corporation, hereby certifies as set
forth below:

1. The name and state of incorporation of each of the constituent
corporations of the merger is as follows:

<TABLE>
<CAPTION>
NAME STATE OF INCORPORATION
---- ----------------------
<S> <C>
Individual, Inc. Delaware
Desktop Data, Inc. Delaware
</TABLE>

2. An agreement and plan of merger and reorganization (the "Merger
Agreement") has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations in accordance with the
requirements of Section 251 of the DGCL.

3. The name of the resulting corporation is NewsEDGE Corporation (the
"Surviving Corporation").

4. The Certificate of Incorporation of Desktop Data, Inc. in effect
immediately prior to the effective time, as amended and restated in its
entirety as set forth in Exhibit A hereto, shall be the Second Amended and
Restated Certificate of Incorporation of the Surviving Corporation.

5. The executed Merger Agreement is on file at the principal place of
business of the Surviving Corporation at 80 Balanchard Road, Burlington, MA
01803.

6. A copy of the Merger Agreement will be furnished by the Surviving
Corporation, on request and without cost, to any stockholder of any
constituent corporation.

7. The merger shall become effective immediately upon the filing of this
certificate with the Secretary of State of Delaware in accordance with
Sections 251 and 103 of the DGCL.

This certificate of merger has been executed, acknowledge and attested on
February 24, 1998.

Desktop Data, Inc.

By: _____________________________
Donald L. McLagan
President and Chief Executive
Officer

Attest:

By: _____________________________
Lawrence S. Wittenberg, Secretary

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<PAGE>

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

NEWSEDGE CORPORATION
(INCORPORATED JULY 11, 1988)

* * * * * *

I, Donald L. McLagan, President of Desktop Data, Inc. (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, do hereby certify that the
Certificate of Incorporation of Desktop Data, Inc., as amended, has been
further amended, and restated as amended, in accordance with provisions of
Sections 242 and 245 of the General Corporation Law of the State of Delaware,
and, as amended and restated, is set forth in its entirety as follows:

FIRST. The name of the Corporation is NewsEDGE Corporation.

SECOND. The address of the registered office of the Corporation in the State
of Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The Corporation
Trust Company.

THIRD. The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.

FOURTH. The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is 36,000,000 shares, consisting of
35,000,000 shares of Common Stock with a par value of $.01 per share (the
"Common Stock") and 1,000,000 shares of Preferred Stock with a par value of
$.01 per share (the "Preferred Stock").

A description of the respective classes of stock and a statement of the
designations, powers, preferences and rights, and the qualifications,
limitations and restrictions of the Preferred Stock and Common Stock are as
follows:

A. COMMON STOCK

1. General. All shares of Common Stock will be identical and will entitle
the holders thereof to the same rights, powers and privileges. The rights,
powers and privileges of the holders of the Common Stock are subject to and
qualified by the rights of holders of the Preferred Stock.

2. Dividends. Dividends may be declared and paid on the Common Stock from
funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.

3. Dissolution, Liquidation or Winding Up. In the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, each issued and outstanding share of
Common Stock shall entitle the holder thereof to receive an equal portion
of the net assets of the Corporation available for distribution to the
holders of Common Stock, subject to any preferential rights of any then
outstanding Preferred Stock.

4. Voting Rights. Except as otherwise required by law or this Amended and
Restated Certificate of Incorporation, each holder of Common Stock shall
have one vote in respect of each share of stock held of record by such
holder on the books of the Corporation for the election of directors and on
all matters

2
<PAGE>

submitted to a vote of stockholders of the Corporation. Except as otherwise
required by law or provided herein, holders of Common Stock shall vote
together with holders of the Preferred Stock as a single class, subject to
any special or preferential voting rights of any then outstanding Preferred
Stock. There shall be no cumulative voting.

B. PREFERRED STOCK

The Preferred Stock may be issued in one or more series at such time or
times and for such consideration or considerations as the Board of Directors
of the Corporation may determine. Each series shall be so designated as to
distinguish the shares thereof from the shares of all other series and
classes. Except as otherwise provided in this Amended and Restated Certificate
of Incorporation, different series of Preferred Stock shall not be construed
to constitute different classes of shares for the purpose of voting by
classes.

The Board of Directors is expressly authorized to provide for the issuance
of all or any shares of the undesignated Preferred Stock in one or more
series, each with such designations, preferences, voting powers (or special,
preferential or no voting powers), relative, participating, optional or other
special rights and privileges and such qualifications, limitations or
restrictions thereof as shall be stated in the resolution or resolutions
adopted by the Board of Directors to create such series, and a certificate of
said resolution or resolutions (a "Certificate of Designation") shall be filed
in accordance with the General Corporation Law of the State of Delaware. The
authority of the Board of Directors with respect to each such series shall
include, without limitation of the foregoing, the right to provide that the
shares of each such series may be: (i) subject to redemption at such time or
times and at such price or prices; (ii) entitled to receive dividends (which
may be cumulative or non-cumulative) at such rates, on such conditions, and at
such times, and payable in preference to, or in such relation to, the
dividends payable on any other class or classes or any other series; (iii)
entitled to such rights upon the dissolution of, or upon any distribution of
the assets of, the Corporation; (iv) convertible into, or exchangeable for,
shares of any other class or classes of stock, or of any other series of the
same or any other class or classes of stock of the Corporation at such price
or prices or at such rates of exchange and with such adjustments, if any; (v)
entitled to the benefit of such limitations, if any, on the issuance of
additional shares of such series or shares of any other series of Preferred
Stock; or (vi) entitled to such other preferences, powers, qualifications,
rights and privileges, all as the Board of Directors may deem advisable and as
are not inconsistent with law and the provisions of this Amended and Restated
Certificate of Incorporation.

FIFTH. The Corporation is to have perpetual existence.

SIXTH. The following provisions are included for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Board of Directors and stockholders:

1. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors of the Corporation.

2. The Board of Directors of the Corporation is expressly authorized to
adopt, amend or repeal the By-laws of the Corporation, subject to any
limitation thereof contained in the By-laws. Except as otherwise provided
by this Amended and Restated Certificate of Incorporation, by the By-laws
of the Corporation or by law, the stockholders shall also have the power to
adopt, amend or repeal the By-laws of the Corporation by the affirmative
vote of the holders of a majority of the shares of the capital stock of the
Corporation issued and outstanding and entitled to vote at any regular or
special meeting of stockholders, provided notice of such alteration,
amendment, repeal or adoption of new by-laws shall have been stated in the
notice of such meeting.

3. Stockholders of the Corporation may not take any action by written
consent in lieu of a meeting.

4. Special meetings of stockholders may be called at any time only by the
President, the Chairman of the Board of Directors (if any) or a majority of
the Board of Directors. Business transacted at any special meeting of
stockholders shall be limited to matters relating to the purpose or
purposes stated in the notice of meeting.

3
<PAGE>

5. The books of the Corporation may be kept at such place within or
without the State of Delaware as the By-laws of the Corporation may provide
or as may be designated from time to time by the Board of Directors of the
Corporation.

SEVENTH.

1. Number of Directors. The number of directors which shall constitute the
whole Board of Directors shall be determined by resolution of a majority of
the Board of Directors, but in no event shall the number of directors be less
than three. The number of directors may be decreased at any time and from time
to time by a majority of the directors then in office, but only to eliminate
vacancies existing by reason of the death, resignation, removal or expiration
of the term of one or more directors. The directors shall be elected at the
annual meeting of stockholders by such stockholders as have the right to vote
on such election. Directors need not be stockholders of the Corporation.

2. Classes of Directors. The Board of Directors shall be and is divided into
three classes: Class I, Class II and Class III. No one class shall have more
than one director more than any other class.

3. Election of Directors. Elections of directors need not be by written
ballot except as and to the extent provided in the By-laws of the Corporation.

4. Terms of Office. Each director shall serve for a term ending on the date
of the third annual meeting following the annual meeting at which such
director was elected; provided, however, that each initial director in Class I
shall serve for a term ending on the date of the annual meeting next following
the end of the Corporation's fiscal year ending December 31, 1995; each
initial director in Class II shall serve for a term ending on the date of the
annual meeting next following the end of the Corporation's fiscal year ending
December 31, 1996; and each initial director in Class III shall serve for a
term ending on the date of the annual meeting next following the end of the
Corporation's fiscal year ending December 31, 1997.

5. Allocation of Directors Among Classes in the Event of Increases or
Decreases in the Number of Directors. In the event of any increase or decrease
in the authorized number of directors, (i) each director then serving as such
shall nevertheless continue as director of the class of which he or she is a
member until the expiration of such director's current term or his or her
prior death, retirement or resignation and (ii) the newly created or
eliminated directorships resulting from such increase or decrease shall be
apportioned by the Board of Directors among the three classes of directors so
as to ensure that no one class has more than one director more than any other
class. To the extent possible, consistent with the foregoing rule, any newly
created directorships shall be added to those classes whose terms of office
are to expire at the earliest dates following such allocation, unless
otherwise provided for from time to time by resolution adopted by a majority
of the directors then in office, though less than a quorum. No decrease in the
number of director constituting the whole Board of Directors shall shorten the
term of an incumbent Director.

6. Tenure. Notwithstanding any provisions to the contrary contained herein,
each director shall hold office until his or her successor is elected and
qualified, or until his or her earlier death, resignation or removal.

7. Vacancies. Unless and until filled by the stockholders, any vacancy in
the Board of Directors, however occurring, including a vacancy resulting from
an enlargement of the Board of Directors, may be filled only by vote of a
majority of the directors then in office, even if less than a quorum, or by a
sole remaining director. A director elected to fill a vacancy shall be elected
for the unexpired term of his or her predecessor in office, if applicable, and
a director chosen to fill a position resulting from an increase in the number
of directors shall hold office until the next election of the class for which
such director shall have been chosen and until his or her successor is elected
and qualified, or until his or her earlier death, resignation or removal.

8. Quorum. A majority of the total number of the whole Board of Directors
shall constitute a quorum at all meetings of the Board of Directors. In the
event one or more of the directors shall be disqualified to vote at any
meeting, then the required quorum shall be reduced by one for each such
director so disqualified; provided,

4
<PAGE>

however, that in no case shall less than one-third (1/3) of the number so
fixed constitute a quorum. In the absence of a quorum at any such meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice other than announcement at the meeting, until a quorum
shall be present.

9. Action at Meeting. At any meeting of the Board of Directors at which a
quorum is present, the vote of a majority of those present shall be sufficient
to take any action, unless a different vote is specified by law or the
Corporation's By-laws.

10. Removal. Any one or more or all of the directors may be removed without
cause only by the holders of at least seventy-five percent (75%) of the shares
then entitled to vote at an election of directors. Any one or more or all of
the directors may be removed with cause only by the holders of at least a
majority of the shares then entitled to vote at an election of directors.

11. Stockholder Nominations and Introduction of Business, Etc. Advance
notice of stockholder nominations for election of directors and other business
to be brought by stockholders before a meeting of stockholders shall be given
in the manner provided in the By-laws of the Corporation.

12. Rights of Preferred Stock. The provisions of this Article are subject to
the rights of the holders of any series of Preferred Stock from time to time
outstanding.

EIGHTH. No director (including any advisory director) of the Corporation
shall be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director notwithstanding any
provision of law imposing such liability; provided, however, that, to the
extent provided by applicable law, this provision shall not eliminate the
liability of a director (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this provision shall
apply to or have any effect on the liability or alleged liability of any
director for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.

NINTH. The Board of Directors of the Corporation, when evaluating any offer
of another party (a) to make a tender or exchange offer for any equity
security of the Corporation or (b) to effect a business combination, shall, in
connection with the exercise of its judgment in determining what is in the
best interests of the Corporation as whole, be authorized to give due
consideration to any such factors as the Board of Directors determines to be
relevant, including, without limitation:

(i) the interests of the Corporation's stockholders, including the
possibility that these interests might be best served by the continued
independence of the Corporation;

(ii) whether the proposed transaction might violate federal or state
laws;

(iii) not only the consideration being offered in the proposed
transaction, in relation to the then current market price for the
outstanding capital stock of the Corporation, but also to the market price
for the capital stock of the Corporation over a period of years, the
estimated price that might be achieved in a negotiated sale of the
Corporation as a whole or in part or through orderly liquidation, the
premiums over market price for the securities of other corporations in
similar transactions, current political, economic and other factors bearing
on securities prices and the Corporation's financial condition and future
prospects; and

(iv) the social, legal and economic effects upon employees, suppliers,
customers, creditors and others having similar relationships with the
Corporation, upon the communities in which the Corporation conducts its
business and upon the economy of the state, region and nation.

In connection with any such evaluation, the Board of Directors is authorized
to conduct such investigations and engage in such legal proceedings as the
Board of Directors may determine.

5
<PAGE>

TENTH.

1. Actions, Suits and Proceedings Other than by or in the Right of the
Corporation. The Corporation shall indemnify each person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at
the request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust
or other enterprise (including any employee benefit plan) (all such persons
being referred to hereafter as an "Indemnitee"), or by reason of any action
alleged to have been taken or omitted in such capacity, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with
such action, suit or proceeding and any appeal therefrom, if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Notwithstanding anything to the contrary in this Article, except as set forth
in Section 6 below, the Corporation shall not indemnify an Indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated by
the Indemnitee unless the initiation thereof was approved by the Board of
Directors of the Corporation.

2. Actions or Suits by or in the Right of the Corporation. The Corporation
shall indemnify any Indemnitee who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was, or has agreed to become, a director or officer of
the Corporation, or is or was serving, or has agreed to serve, at the request
of the Corporation, as a director, officer or trustee of, or in a similar
capacity with, another corporation, partnership, joint venture, trust or other
enterprise (including any employee benefit plan), or by reason of any action
alleged to have been taken or omitted in such capacity, against all expenses
(including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action,
suit or proceeding and any appeal therefrom, if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
such liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses (including
attorneys' fees) which the Court of Chancery of Delaware or such other court
shall deem proper.

3. Indemnification for Expenses of Successful Party. Notwithstanding the
other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of
any claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by him or on his behalf in connection
therewith. Without limiting the foregoing, if any action, suit or proceeding
is disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii)
an adjudication that the Indemnitee was liable to the Corporation, (iii) a
plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that
the Indemnitee did not act in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
(v) with respect to any criminal proceeding, an adjudication that the
Indemnitee had reasonable cause to believe his conduct was unlawful, the
Indemnitee shall be considered for the purpose hereof to have been wholly
successful with respect thereto.

6
<PAGE>

4. Notification and Defense of Claim. As a condition precedent to his right
to be indemnified, the Indemnitee must notify the Corporation in writing as
soon as practicable of any action, suit, proceeding or investigation involving
him for which indemnity will or could be sought. With respect to any action,
suit, proceeding or investigation of which the Corporation is so notified, the
Corporation will be entitled to participate therein at its own expense and/or
to assume the defense thereof at its own expense, with legal counsel
reasonably acceptable to the Indemnitee. After notice from the Corporation to
the Indemnitee of its election so to assume such defense, the Corporation
shall not be liable to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with such claim, other
than as provided below in this Section 4. The Indemnitee shall have the right
to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably
concluded that there may be a conflict of interest or position on any
significant issue between the Corporation and the Indemnitee in the conduct of
the defense of such action or (iii) the Corporation shall not in fact have
employed counsel to assume the defense of such action, in each of which cases
the fees and expenses of counsel for the Indemnitee shall be at the expense of
the Corporation, except as otherwise expressly provided by this Article. The
Corporation shall not be entitled, without the consent of the Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation
or as to which counsel for the Indemnitee shall have reasonably made the
conclusion provided for in clause (ii) above.

5. Advance of Expenses. Subject to the provisions of Section 6 below, in the
event that the Corporation does not assume the defense pursuant to Section 4
of this Article of any action, suit, proceeding or investigation of which the
Corporation receives notice under this Article, any expenses (including
attorneys' fees) incurred by an Indemnitee in defending a civil or criminal
action, suit, proceeding or investigation or any appeal therefrom shall be
paid by the Corporation in advance of the final disposition of such matter,
provided, however, that the payment of such expenses incurred by an Indemnitee
in advance of the final disposition of such matter shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to repay all
amounts so advanced in the event that it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Article. Such undertaking may be accepted without reference
to the financial ability of such person to make such repayment.

6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
Indemnitee shall submit to the Corporation a written request, including in
such request such documentation and information as is reasonably available to
the Indemnitee and is reasonably necessary to determine whether and to what
extent the Indemnitee is entitled to indemnification or advancement of
expenses. Any such indemnification or advancement of expenses shall be made
promptly, and in any event within 60 days after receipt by the Corporation of
the written request of the Indemnitee, unless with respect to requests under
Section 1, 2 or 5 the Corporation determines, by clear and convincing
evidence, within such 60-day period that the Indemnitee did not meet the
applicable standard of conduct set forth in Section 1 or 2, as the case may
be. Such determination shall be made in each instance by (a) a majority vote
of the directors of the Corporation who are not at that time parties to the
action, suit or proceeding in question ("disinterested directors"), even
though less than a quorum, (b) if there are no such disinterested directors,
or if such disinterested directors so direct, by independent legal counsel
(who may be regular legal counsel to the corporation) in a written opinion,
(c) a majority vote of a quorum of the outstanding shares of stock of all
classes entitled to vote for directors, voting as a single class, which quorum
shall consist of stockholders who are not at that time parties to the action,
suit or proceeding in question, or (d) a court of competent jurisdiction.

7. Remedies. The right to indemnification or advances as granted by this
Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or
if no disposition thereof is made within the 60-day period referred to above
in Section 6. Unless otherwise provided by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advancement of expenses under
this Article shall be on the Corporation. Neither the failure of the
Corporation to have made a

7
<PAGE>

determination prior to the commencement of such action that indemnification is
proper in the circumstances because the Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Corporation pursuant
to Section 6 that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. The Indemnitee's
expenses (including attorneys' fees) incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
proceeding shall also be indemnified by the Corporation.

8. Subsequent Amendment. No amendment, termination or repeal of this Article
or of the relevant provisions of the General Corporation Law of the State of
Delaware or any other applicable laws shall affect or diminish in any way the
rights of any Indemnitee to indemnification under the provisions hereof with
respect to any action, suit, proceeding or investigation arising out of or
relating to any actions, transactions or facts occurring prior to the final
adoption of such amendment, termination or repeal.

9. Other Rights. The indemnification and advancement of expenses provided by
this Article shall not be deemed exclusive of any other rights to which an
Indemnitee seeking indemnification or advancement of expenses may be entitled
under any law (common or statutory), agreement or vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article. In addition, the Corporation may, to the extent authorized from time
to time by its Board of Directors, grant indemnification rights to other
employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than,
those set forth in this Article.

10. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with any action, suit, proceeding or investigation and
any appeal therefrom but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify the Indemnitee for the portion of
such expenses (including attorneys' fees), judgments, fines or amounts paid in
settlement to which the Indemnitee is entitled.

11. Insurance. The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the
General Corporation Law of the State of Delaware.

12. Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.

13. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
in connection with any action, suit, proceeding or investigation, whether
civil, criminal or administrative, including an action by or in the right of
the Corporation, to the fullest extent permitted by an applicable portion of
this Article that shall not have been invalidated and to the fullest extent
permitted by applicable law.

14. Definitions. Terms used herein and defined in Section 145(h) and Section
145(i) of the General Corporation Law of the State of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).

8
<PAGE>

15. Subsequent Legislation. If the General Corporation Law of the State of
Delaware is amended after adoption of this Article to expand further the
indemnification permitted to Indemnitees, then the Corporation shall indemnify
such persons to the fullest extent permitted by the General Corporation Law of
the State of Delaware, as so amended.

ELEVENTH. The Corporation reserves the right to amend or repeal any
provision contained in this Amended and Restated Certificate of Incorporation
in the manner prescribed by the laws of the State of Delaware and all rights
conferred upon stockholders are granted subject to this reservation, provided,
however, that in addition to the vote of the holders of any class or series of
stock of the Corporation required by law or by this Amended and Restated
Certificate of Incorporation, but in addition to any vote of the holders of
any class or series of stock of the Corporation required by law, this Amended
and Restated Certificate of Incorporation or a Certificate of Designation with
respect to a series of Preferred Stock, the affirmative vote of the holders of
shares of voting stock of the Corporation representing at least seventy-five
percent (75%) of the voting power of all of the then outstanding shares of the
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to (i) reduce
or eliminate the number of authorized shares of Common Stock or the number of
authorized shares of Preferred Stock set forth in Article Fourth or (ii) amend
or repeal, or adopt any provision inconsistent with, Parts A and B of Article
FOURTH And Articles FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, TENTH and this
Article ELEVENTH of this Amended and Restated Certificate of Incorporation.

IN WITNESS WHEREOF, the undersigned has hereunto signed his name and affirms
that the statements made in this Amended and Restated Certificate of
Incorporation are true under the penalties of perjury this 24th day of
February, 1998.

-------------------------------------
Donald L. McLagan
President

-------------------------------------
Edward R. Siegfried
Assistant Secretary

<PAGE>

Exhibit 5.1

January 20, 1998
Desktop Data, Inc.
80 Blanchard Road
Burlington, MA 01803

RE: Registration Statement on Form S-4
----------------------------------

Gentlemen:

We have examined the Registration Statement on Form S-4 to be filed by you
with the Securities and Exchange Commission (the "Registration Statement") in
connection with the registration under the Securities Act of 1933, as amended,
of 10,189,935 shares of your Common Stock (the "Shares"). The Shares are to be
exchanged for existing shares of the Common Stock of Individual, Inc. as
described in the Registration Statement and pursuant to the Agreement and Plan
of Merger and Reorganization by and between Desktop, Inc. and Individual, Inc.
(the "Agreement") filed as an exhibit to the Registration Statement. We have
examined the proceedings proposed to be taken in connection with the issuance of
the Shares and as described in the Agreement.

Based upon such investigation as we have deemed necessary, we are of the
opinion that, upon completion of the proceedings being taken or contemplated to
be taken prior to the issuance of the Shares, the Shares, when issued in the
manner referred to in the Registration Statement, will be validly issued and
will be fully paid and nonassessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Registration
Statement under the caption "Legal Matters."

Very truly yours,

/s/ Testa, Hurwitz & Thibeault, LLP

Testa, Hurwitz & Thibeault, LLP

<PAGE>

Exhibit 8.1

January 23, 1998

Desktop Data, Inc.
80 Blanchard Road
Burlington, MA 01803

Re: Merger Pursuant to the Agreement and Plan of Merger and
-------------------------------------------------------
Reorganization, dated as of November 2, 1997, between Desktop Data,
-------------------------------------------------------------------
Inc. and Individual, Inc.
-------------------------

Ladies and Gentlemen:

We have acted as counsel for Desktop Data, Inc., a Delaware corporation
("Desktop") in connection with the preparation and execution of the Agreement
and Plan of Merger and Reorganization, dated as of November 2, 1997 (the
"Reorganization Agreement"), among Desktop and Individual, Inc., a Delaware
corporation ("Individual"). Pursuant to the Reorganization Agreement,
Individual will merge with and into Desktop (the "Merger"). Unless otherwise
defined, capitalized terms referred to herein have the meanings set forth in the
Reorganization Agreement. All section references, unless otherwise indicated,
are to the Internal Revenue Code of 1986, as amended (the "Code").

You have requested our opinion regarding certain United States federal
income tax consequences of the Merger. In delivering this opinion, we have
reviewed and relied upon the facts, statements, descriptions and representations
set forth in the Reorganization Agreement (including Schedules and Exhibits) and
such other documents pertaining to the Merger as we have deemed necessary or
appropriate. We have also relied upon certificates of officers of Desktop and
Individual, (collectively, the "Officer's Certificates"), Participation
Agreements (the "Participation Agreements") among Individual and various of its
shareholders, Affiliate Agreements (the "Affiliate Agreements") among Desktop
and various shareholders of Individual, and Shareholder Certificates (the
"Shareholder Certificates") by various shareholders of Individual.

In connection with rendering this opinion, we have assumed or have obtained
representations (without any independent investigation) that, as of the date
hereof and as of the Effective Time:
<PAGE>

Desktop Data, Inc.
January 23, 1998
Page 2

1. Original documents (including signatures) are authentic, documents
submitted to us as copies conform to the original documents, and there has been
(or will be by the Effective Time) due execution and delivery of all documents
where due execution and delivery are prerequisites to effectiveness thereof;

2. Any statement made in any of the documents referred to herein "to the
knowledge" of any person or party is correct without such qualification;

3. All statements, descriptions and representations contained in any of
the documents referred to herein or otherwise made to us are true and correct in
all respects and no actions have been (or will be) taken which are inconsistent
with such representations;

4. The Merger will be reported by Desktop, Individual and its shareholders
on their respective federal income tax returns in a manner consistent with the
opinion set forth below;

5. The shareholders of Individual do not, and will not on or before the
Effective Time, have a plan or intention to dispose of an amount of Desktop
Common Stock to be received in the Merger (or to dispose of Individual Common
Stock in anticipation of the Merger) such that the shareholders of Individual
will not receive and retain a meaningful continuing equity ownership in Desktop
that is sufficient to satisfy the continuity of interest requirement set forth
in Treas. Reg. (S)1.368-1(b) and as interpreted in certain Internal Revenue
Service rulings and federal judicial decisions;

6. The Merger will be consummated in accordance with the Reorganization
Agreement and will be effective under the laws of Delaware.

Based on our examination of the foregoing items and subject to the
assumptions, exceptions, limitations and qualifications set forth herein, we are
of the opinion that, if the Merger is consummated in accordance with the
Reorganization Agreement (without any waiver, breach or amendment of the
provisions thereof), the statements set forth in the Officer's Certificates and
the Shareholder Certificates and the representations made in the Participation
Agreements and the Affiliate Agreements are true and correct as of the date
hereof and as of the Effective Time, for federal income tax purposes:

(a) The Merger qualifies as a "reorganization" within the meaning of
Section 368(a) of the Code, and Desktop and Individual are each a "party to the
reorganization" within the meaning of Section 368(b) of the Code;

Desktop Data, Inc.
January 23, 1998
Page 3

(c) The aggregate tax basis of the Desktop Common Stock received in the
Merger by an Individual stockholder is the same as the aggregate tax basis of
the Individual Common Stock surrendered in exchange therefor, reduced by the
basis allocable to any fractional shares;

(d) The holding period of the Desktop Common Stock received in the Merger
by an Individual stockholder includes the period during which the stockholder
held the Individual Common Stock surrendered in exchange therefor, provided that
the Individual Common Stock is held as a capital asset at the time of the
Merger;

(e) Neither Desktop nor Individual recognizes material amounts of gain or
loss solely as a result of the Merger; and

(f) Cash payments received by holders of Individual Common Stock in lieu of
fractional shares are treated as if such fractional shares of Desktop Common
Stock had been issued in the Merger and then redeemed by Desktop. Individual
stockholders receiving such cash generally recognize gain or loss, upon such
payments, measured by the difference (if any) between the amount of cash
received and the basis in such fractional shares.

This opinion represents and is based upon our best judgment regarding the
application of federal income tax laws arising under the Code, existing judicial
decisions, administrative regulations and published rulings and procedures. Our
opinion is not binding upon the Internal Revenue Service or the courts, and
there is no assurance that the Internal Revenue Service will not successfully
assert a contrary position. Furthermore, no assurance can be given that future
legislative, judicial or administrative changes, on either a prospective or
retroactive basis, will not adversely affect the accuracy of the conclusions
stated herein. However, we undertake no responsibility to advise you of any
developments in the application or interpretation of the federal income tax laws
unless we are specifically requested to do so.

This opinion addresses only the matters set forth above, and does not
address any other federal, state, local or foreign tax consequences that may
result from the Merger or any other transaction (including any transaction
undertaken in connection with the Merger).
<PAGE>

Desktop Data, Inc.
January 23, 1998
Page 4

We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement and to the reference to our firm in the Registration
Statement under the caption "Certain Federal Income Tax Considerations."

Very truly yours,

/s/ Testa, Hurwitz & Thibeault, LLP

TESTA, HURWITZ & THIBEAULT, LLP

<PAGE>

Exhibit 8.2

January 23, 1998

Individual Inc.
8 New England Executive Park West
Burlington, MA 01803

Ladies and Gentlemen:

We have acted as counsel for Individual Inc., a Delaware corporation
("Individual") in connection with the preparation and execution of the Agreement
and Plan of Merger and Reorganization, dated as of November 2, 1997 (the
"Reorganization Agreement"), among Individual and Desktop Data, Inc., a Delaware
corporation ("Desktop"). Pursuant to the Reorganization Agreement, Individual
will merge with and into Desktop (the "Merger"). Unless otherwise defined,
capitalized terms referred to herein have the meanings set forth in the
Reorganization Agreement. All section references, unless otherwise indicated,
are to the Internal Revenue Code of 1986, as amended (the "Code").

In connection with rendering this opinion, we have assumed or have obtained
representations (without any independent investigation) that, as of the date
hereof and as of the Effective Time:

1. Original documents (including signatures) are authentic, documents
submitted to us as copies conform to the original documents, and there has been
(or will be by the Effective
<PAGE>

Individual, Inc.
January 23, 1998
Page 2

Time) due execution and delivery of all documents where due execution and
delivery are prerequisites to effectiveness thereof;

2. Any statement made in any of the documents referred to herein "to the
knowledge" of any person or party is correct without such qualification;

4. The Merger will be reported by Desktop, Individual and its
shareholders on their respective federal income tax returns in a manner
consistent with the opinion set forth below;

6. The Merger will be consummated in accordance with the Reorganization
Agreement and will be effective under the laws of Delaware.

(a) The Merger qualifies as a "reorganization" within the meaning of
Section 368(a) of the Code, and Desktop and Individual are each a "party to the
reorganization" within the meaning of Section 368(b) of the Code;
<PAGE>

Individual, Inc.
January 23, 1998
Page 3

(c) The aggregate tax basis of the Desktop Common Stock received in the
Merger by an Individual stockholder is the same as the aggregate tax basis of
the Individual Common Stock surrendered in exchange therefor, reduced by the
basis allocable to any fractional shares;

(d) The holding period of the Desktop Common Stock received in the Merger
by an Individual stockholder includes the period during which the stockholder
held the Individual Common Stock surrendered in exchange therefor, provided that
the Individual Common Stock is held as a capital asset at the time of the
Merger;

(e) Neither Desktop nor Individual recognizes material amounts of gain or
loss solely as a result of the Merger; and

(f) Cash payments received by holders of Individual Common Stock in lieu of
fractional shares are treated as if such fractional shares of Desktop Common
Stock had been issued in the Merger and then redeemed by Desktop. Individual
stockholders receiving such cash generally recognize gain or loss, upon such
payments, measured by the difference (if any) between the amount of cash
received and the basis in such fractional shares.

Individual, Inc.
January 23, 1998
Page 4

We hereby consent to the filing of this opinion as Exhibit 8.2 to the
Registration Statement and to the reference to our firm in the Registration
Statement under the caption "Certain Federal Income Tax Considerations."

Very truly yours,

/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.

MINTZ, LEVIN, COHN, FERRIS, GLOVSKY
and POPEO, P.C.

<PAGE>

EXHIBIT 10.1

DESKTOP DATA, INC.

1995 STOCK PLAN, AS AMENDED

1. Purpose. The purpose of the Desktop Data, Inc. 1995 Stock Plan, as
amended (the "Plan") is to encourage key employees of Desktop Data, Inc. (the
"Company") and of any present or future parent or subsidiary of the Company
(collectively, "Related Corporations") and other individuals who render
services to the Company or a Related Corporation, by providing opportunities
to participate in the ownership of the Company and its future growth through
(a) the grant of options which qualify as "incentive stock options" ("ISOs")
under Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"); (b) the grant of options which do not qualify as ISOs ("Non-Qualified
Options"); (c) awards of stock in the Company ("Awards"); and (d)
opportunities to make direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereafter individually as
an "Option" and collectively as "Options." Options, Awards and authorizations
to make Purchases are referred to hereafter collectively as "Stock Rights." As
used herein, the terms "parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation," respectively, as those terms are defined in Section
424 of the Code.

2. Administration of the Plan.

A. Board or Committee Administration. The Plan shall be administered by the
Board of Directors of the Company (the "Board") or by a committee appointed by
the Board (the "Committee"); provided that the Plan shall be administered: (i)
to the extent required by applicable regulations under Section 162(m) of the
Code, by two or more "outside directors" (as defined in applicable regulations
thereunder) and (ii) to the extent required by Rule 16b-3 promulgated under
the Securities Exchange Act of 1934 or any successor provision ("Rule 16b-3"),
by a disinterested administrator or administrators within the meaning of Rule
16b-3. Hereinafter, all references in this Plan to the "Committee" shall mean
the Board if no Committee has been appointed. Subject to ratification of the
grant or authorization of each Stock Right by the Board (if so required by
applicable state law), and subject to the terms of the Plan, the Committee
shall have the authority to (i) determine to whom (from among the class of
employees eligible under paragraph 3 to receive ISOs) ISOs shall be granted,
and to whom (from among the class of individuals and entities eligible under
paragraph 3 to receive Non-Qualified Options and Awards and to make Purchases)
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted; (ii) determine the time or times at which Options or Awards shall be
granted or Purchases made; (iii) determine the purchase price of shares
subject to each Option or Purchase, which prices shall not be less than the
minimum price specified in paragraph 6; (iv) determine whether each Option
granted shall be an ISO or a Non-Qualified Option; (v) determine (subject to
paragraph 7) the time or times when each Option shall become exercisable and
the duration of the exercise period; (vi) extend the period during which
outstanding Options may be exercised; (vii) determine whether restrictions
such as repurchase options are to be imposed on shares subject to Options,
Awards and Purchases and the nature of such restrictions, if any, and (viii)
interpret the Plan and prescribe and rescind rules and regulations relating to
it. If the Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated
as an ISO. The interpretation and construction by the Committee of any
provisions of the Plan or of any Stock Right granted under it shall be final
unless otherwise determined by the Board. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem
advisable. No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Stock Right granted under it.

B. Committee Actions. The Committee may select one of its members as its
chairman, and shall hold meetings at such time and places as it may determine.
A majority of the Committee shall constitute a quorum and acts of a majority
of the members of the Committee at a meeting at which a quorum is present, or
acts reduced to or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of the

1
<PAGE>

Committee. From time to time the Board may increase the size of the Committee
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies however
caused, or remove all members of the Committee and thereafter directly
administer the Plan.

C. Grant of Stock Rights to Board Members. Subject to the provisions of the
first sentence of paragraph 2(A) above, if applicable, Stock Rights may be
granted to members of the Board. All grants of Stock Rights to members of the
Board shall in all other respects be made in accordance with the provisions of
this Plan applicable to other eligible persons. Consistent with the provisions
of the first sentence of Paragraph 2(A) above, members of the Board who either
(i) are eligible to receive grants of Stock Rights pursuant to the Plan or
(ii) have been granted Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights pursuant to the
Plan, except that no such member shall act upon the granting to himself or
herself of Stock Rights, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board during which action is taken
with respect to the granting to such member of Stock Rights.

3. Eligible Employees and Others. ISOs may be granted only to employees of
the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.

4. Stock. The stock subject to Stock Rights shall be authorized but unissued
shares of Common Stock of the Company, par value $.01 per share (the "Common
Stock"), or shares of Common Stock reacquired by the Company in any manner.
The aggregate number of shares which may be issued pursuant to the Plan is
4,125,000, subject to adjustment as provided in paragraph 13. If any Stock
Right granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable
in whole or in part or shall be repurchased by the Company, the shares of
Common Stock subject to such Stock Right shall again be available for grants
of Stock Rights under the Plan.

No employee of the Company or any Related Corporation may be granted Options
to acquire, in the aggregate, more than 624,999 of shares of Common Stock
under the Plan. If any Option granted under the Plan shall expire or terminate
for any reason without having been exercised in full or shall cease for any
reason to be exercisable in whole or in part or shall be repurchased by the
Company, the shares subject to such Option shall be included in the
determination of the aggregate number of shares of Common Stock deemed to have
been granted to such employee under the Plan.

5. Granting of Stock Rights. Stock Rights may be granted under the Plan at
any time on or after June 16, 1995 and prior to June 16, 2005. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant. Options granted under the Plan are intended to qualify as performance-
based compensation to the extent required under Proposed Treasury Regulation
Section 1.162-27.

6. Minimum Option Price; ISO Limitations.

A. Price for Non-Qualified Options, Awards and Purchases. The exercise price
per share specified in the agreement relating to each Non-Qualified Option
granted, and the purchase price per share of stock granted in any Award or
authorized as a Purchase, under the Plan shall in no event be less than the
minimum legal consideration required therefor under the laws of any
jurisdiction in which the Company or its successors in interest may be
organized. Non-Qualified Options granted under the Plan, with an exercise
price less than the fair market value per share of Common Stock on the date of
grant, are intended to qualify as performance-based compensation under Section
162(m) of the Code and any applicable regulations thereunder. Any such Non-
Qualified Options granted under the Plan shall be exercisable only upon the
attainment of a pre-established, objective performance goal established by the
Committee. If the Committee grants Non-Qualified Options with an exercise
price less than the fair market value per share of Common Stock on the date of
grant, such grant will be submitted for, and will be contingent upon
shareholder approval.

2
<PAGE>

B. Price for ISOs. The exercise price per share specified in the agreement
relating to each ISO granted under the Plan shall not be less than the fair
market value per share of Common Stock on the date of such grant. In the case
of an ISO to be granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of
grant. For purposes of determining stock ownership under this paragraph, the
rules of Section 424(d) of the Code shall apply.

C. $100,000 Annual Limitation on ISO Vesting. Each eligible employee may be
granted Options treated as ISOs only to the extent that, in the aggregate
under this Plan and all incentive stock option plans of the Company and any
Related Corporation, ISOs do not become exercisable for the first time by such
employee during any calendar year with respect to stock having a fair market
value (determined at the time the ISOs were granted) in excess of $100,000.
The Company intends to designate any Options granted in excess of such
limitation as Non-Qualified Options.

D. Determination of Fair Market Value. If, at the time an Option is granted
under the Plan, the Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the date of grant or, if the prices or quotes
discussed in this sentence are unavailable for such date, the last business
day for which such prices or quotes are available prior to the date of grant
and shall mean (i) the average (on that date) of the high and low prices of
the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of
the Common Stock on The Nasdaq National Market, if the Common Stock is not
then traded on a national securities exchange; or (iii) the closing bid price
(or average of bid prices) last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not
reported on the Nasdaq National Market. If the Common Stock is not publicly
traded at the time an Option is granted under the Plan, "fair market value"
shall mean the fair value of the Common Stock as determined by the Committee
after taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices of the Common
Stock in private transactions negotiated at arm's length.

7. Option Duration. Subject to earlier termination as provided in paragraphs
9 and 10 or in the agreement relating to such Option, each Option shall expire
on the date specified by the Committee, but not more than (i) ten years from
the date of grant in the case of Options generally and (ii) five years from
the date of grant in the case of ISOs granted to an employee owning stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(B). Subject to earlier termination as provided in paragraphs
9 and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.

8. Exercise of Option. Subject to the provisions of paragraphs 9 through 12,
each Option granted under the Plan shall be exercisable as follows:

A. Vesting. The Option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.

B. Full Vesting of Installments. Once an installment becomes exercisable
it shall remain exercisable until expiration or termination of the Option,
unless otherwise specified by the Committee.

C. Partial Exercise. Each Option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number
of shares with respect to which it is then exercisable.

D. Acceleration of Vesting. The Committee shall have the right to
accelerate the date that any installment of any Option becomes exercisable;
provided that the Committee shall not, without the consent of an optionee,
accelerate the permitted exercise date of any installment of any Option
granted to any employee as an ISO (and not previously converted into a Non-
Qualified Option pursuant to paragraph 16) if such acceleration would
violate the annual vesting limitation contained in Section 422(d) of the
Code, as described in paragraph 6(C).

3
<PAGE>

9. Termination of Employment. Unless otherwise specified in the agreement
relating to such ISO, if an ISO optionee ceases to be employed by the Company
and all Related Corporations other than by reason of death or disability as
defined in paragraph 10, no further installments of his or her ISOs shall
become exercisable, and his or her ISOs shall terminate on the earlier of (a)
ninety (90) days after the date of termination of his or her employment, or
(b) their specified expiration dates, except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. For purposes of this paragraph 9, employment
shall be considered as continuing uninterrupted during any bona fide leave of
absence (such as those attributable to illness, military obligations or
governmental service) provided that the period of such leave does not exceed
90 days or, if longer, any period during which such optionee's right to
reemployment is guaranteed by statute. A bona fide leave of absence with the
written approval of the Committee shall not be considered an interruption of
employment under this paragraph 9, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by any change of employment within or
among the Company and Related Corporations, so long as the optionee continues
to be an employee of the Company or any Related Corporation. Nothing in the
Plan shall be deemed to give any grantee of any Stock Right the right to be
retained in employment or other service by the Company or any Related
Corporation for any period of time.

10. Death; Disability.

A. Death. If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of his or her death, any ISO owned by such
optionee may be exercised, to the extent otherwise exercisable on the date
of death, by the estate, personal representative or beneficiary who has
acquired the ISO by will or by the laws of descent and distribution, until
the earlier of (i) the specified expiration date of the ISO or (ii) 180
days from the date of the optionee's death.

B. Disability. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any ISO held by him or her on the
date of termination of employment, for the number of shares for which he or
she could have exercised it on that date, until the earlier of (i) the
specified expiration date of the ISO or (ii) 180 days from the date of the
termination of the optionee's employment. For the purposes of the Plan, the
term "disability" shall mean "permanent and total disability" as defined in
Section 22(e)(3) of the Code or any successor statute.

11. Assignability. No Stock Right shall be assignable or transferable by the
grantee except by will, by the laws of descent and distribution or, in the
case of Non-Qualified Options only, pursuant to a valid domestic relations
order. Except as set forth in the previous sentence, during the lifetime of a
grantee each Stock Right shall be exercisable only by such grantee.

12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any Non-
Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as
the Committee may determine. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are authorized and directed to take any and all
action necessary or advisable from time to time to carry out the terms of such
instruments.

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13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company
relating to such Option:

A. Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of Options shall be appropriately increased
or decreased proportionately, and appropriate adjustments shall be made in
the purchase price per share to reflect such subdivision, combination or
stock dividend.

B. Consolidations or Mergers. If the Company is to be consolidated with
or acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), the Committee or
the board of directors of any entity assuming the obligations of the
Company hereunder (the "Successor Board"), shall, as to outstanding
Options, either (i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the shares then subject
to such Options either (a) the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition, (b)
shares of stock of the surviving corporation or (c) such other securities
as the Successor Board deems appropriate, the fair market value of which
shall not materially exceed the fair market value of the shares of Common
Stock subject to such Options immediately preceding the Acquisition; or
(ii) upon written notice to the optionees, provide that all Options must be
exercised, to the extent then exercisable, within a specified number of
days of the date of such notice, at the end of which period the Options
shall terminate; or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the fair market value of the shares subject
to such Options (to the extent then exercisable) over the exercise price
thereof.

C. Recapitalization or Reorganization. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph B above) pursuant to which securities of the Company or of
another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to
receive for the purchase price paid upon such exercise the securities he or
she would have received if he or she had exercised such Option prior to
such recapitalization or reorganization.

D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs A, B or C with respect to ISOs shall be made
only after the Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of
such ISOs (as that term is defined in Section 424 of the Code) or would
cause any adverse tax consequences for the holders of such ISOs. If the
Committee determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs or would cause adverse tax
consequences to the holders, it may refrain from making such adjustments.

E. Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, each Option will terminate immediately prior
to the consummation of such proposed action or at such other time and
subject to such other conditions as shall be determined by the Committee.

F. Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.

G. Fractional Shares. No fractional shares shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such
fractional shares.

H. Adjustments. Upon the happening of any of the events described in
subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall
also be appropriately adjusted to reflect the events described in such
subparagraphs. The Committee or the Successor Board shall determine the
specific adjustments to be made under this paragraph 13 and, subject to
paragraph 2, its determination shall be conclusive.

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14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify
the number of shares as to which such Option is being exercised, accompanied
by full payment of the purchase price therefor either (a) in United States
dollars in cash or by check, (b) at the discretion of the Committee, through
delivery of shares of Common Stock having a fair market value equal as of the
date of the exercise to the cash exercise price of the Option, (c) at the
discretion of the Committee, by delivery of the grantee's personal recourse
note bearing interest payable not less than annually at no less than 100% of
the lowest applicable Federal rate, as defined in Section 1274(d) of the Code,
(d) at the discretion of the Committee and consistent with applicable law,
through the delivery of an assignment to the Company of a sufficient amount of
the proceeds from the sale of the Common Stock acquired upon exercise of the
Option and an authorization to the broker or selling agent to pay that amount
to the Company, which sale shall be at the participant's direction at the time
of exercise, or (e) at the discretion of the Committee, by any combination of
(a), (b), (c) and (d) above. If the Committee exercises its discretion to
permit payment of the exercise price of an ISO by means of the methods set
forth in clauses (b), (c), (d) or (e) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant of the ISO
in question. The holder of an Option shall not have the rights of a
shareholder with respect to the shares covered by such Option until the date
of issuance of a stock certificate to such holder for such shares. Except as
expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends
or similar rights for which the record date is before the date such stock
certificate is issued.

15. Term and Amendment of Plan. This Plan was adopted by the Board on June
16, 1995, subject, with respect to the validation of ISOs granted under the
Plan, to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders or, in lieu thereof, by written consent. If the
approval of stockholders is not obtained prior to June 16, 1996, any grants of
ISOs under the Plan made prior to that date will be rescinded. The Plan shall
expire at the end of the day on June 16, 2005 (except as to Options
outstanding on that date). Subject to the provisions of paragraph 5 above,
Options may be granted under the Plan prior to the date of stockholder
approval of the Plan. The Board may terminate or amend the Plan in any respect
at any time, except that, without the approval of the stockholders obtained
within 12 months before or after the Board adopts a resolution authorizing any
of the following actions: (a) the total number of shares that may be issued
under the Plan may not be increased (except by adjustment pursuant to
paragraph 13); (b) the benefits accruing to participants under the Plan may
not be materially increased; (c) the requirements as to eligibility for
participation in the Plan may not be materially modified; (d) the provisions
of paragraph 3 regarding eligibility for grants of ISOs may not be modified;
(e) the provisions of paragraph 6(B) regarding the exercise price at which
shares may be offered pursuant to ISOs may not be modified (except by
adjustment pursuant to paragraph 13); (f) the expiration date of the Plan may
not be extended; and (g) the Board may not take any action which would cause
the Plan to fail to comply with Rule 16b-3. Except as otherwise provided in
this paragraph 15, in no event may action of the Board or stockholders alter
or impair the rights of a grantee, without such grantee's consent, under any
Option previously granted to such grantee.

16. Conversion of ISOs into Non-Qualified Options. The Committee, at the
written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's
ISOs (or any installments or portions of installments thereof) that have not
been exercised on the date of conversion into Non-Qualified Options at any
time prior to the expiration of such ISOs, regardless of whether the optionee
is an employee of the Company or a Related Corporation at the time of such
conversion. Such actions may include, but shall not be limited to, extending
the exercise period or reducing the exercise price of the appropriate
installments of such ISOs. At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any optionee the right to
have such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate
action.

17. Application Of Funds. The proceeds received by the Company from the sale
of shares pursuant to Options granted and Purchases authorized under the Plan
shall be used for general corporate purposes.

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<PAGE>

18. Notice to Company of Disqualifying Disposition. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of ISOs granted under the Plan.
A Disqualifying Disposition is generally any disposition occurring on or
before the later of (a) the date two years following the date the ISO was
granted or (b) the date one year following the date the ISO was exercised.

19. Withholding of Additional Income Taxes. Upon the exercise of a Non-
Qualified Option, the grant of an Award, the making of a purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of
restricted stock or securities acquired on the exercise of an Option
hereunder, or the making of a distribution or other payment with respect to
such stock or securities, the Company may withhold taxes in respect of amounts
that constitute compensation includible in gross income. The Committee in its
discretion may condition (i) the exercise of an Option, (ii) the grant of an
Award, (iii) the making of a Purchase of Common Stock for less than its fair
market value, or (iv) the vesting or transferability of restricted stock or
securities acquired by exercising an Option, on the grantee's making
satisfactory arrangement for such withholding. Such arrangement may include
payment by the grantee in cash or by check of the amount of the withholding
taxes or, at the discretion of the Committee, by the grantee's delivery of
previously held shares of Common Stock or the withholding from the shares of
Common Stock otherwise deliverable upon exercise of a Option shares having an
aggregate fair market value equal to the amount of such withholding taxes.

20. Governmental Regulation. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that
exercise ISOs under the Plan, and the Company may be required to file tax
information returns reporting the income received by grantees of Options in
connection with the Plan.

21. Governing Law. The validity and construction of the Plan and the
instruments evidencing Options shall be governed by the laws of the
Commonwealth of Massachusetts.

<PAGE>

EXHIBIT 10.4

DESKTOP DATA, INC.

1995 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED

ARTICLE 1 -- PURPOSE.

This 1995 Employee Stock Purchase Plan (the "Plan") is intended to encourage
stock ownership by all eligible employees of Desktop Data, Inc. (the
"Company"), a Delaware corporation, and its participating subsidiaries (as
defined in Article 17) so that they may share in the growth of the Company by
acquiring or increasing their proprietary interest in the Company. The Plan is
designed to encourage eligible employees to remain in the employ of the
Company and its participating subsidiaries. The Plan is intended to constitute
an "employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").

ARTICLE 2 -- ADMINISTRATION OF THE PLAN.

The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by
the Board of Directors. The Committee may select one of its members as
Chairman, and shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or approved
in writing by a majority of the members of the Committee, shall be the valid
acts of the Committee.

The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem
best, provided that any such rules and regulations shall be applied on a
uniform basis to all employees under the Plan. No member of the Board of
Directors or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted under it.

In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board of Directors.

ARTICLE 3 -- ELIGIBLE EMPLOYEES.

All employees of the Company, any predecessor of the Company or any of its
participating subsidiaries whose customary employment is 20 hours or more per
week and for more than five months in any calendar year and who have completed
one year of employment shall be eligible to receive options under the Plan to
purchase common stock of the Company, and all eligible employees shall have
the same rights and privileges hereunder. Persons who are eligible employees
on the first business day of any Payment Period (as defined in Article 5)
shall receive their options as of such day. Persons who become eligible
employees after any date on which options are granted under the Plan shall be
granted options on the first day of the next succeeding Payment Period on
which options are granted to eligible employees under the Plan. In no event,
however, may an employee be granted an option if such employee, immediately
after the option was granted, would be treated as owning stock possessing five
percent or more of the total combined voting power or value of all classes of
stock of the Company or of any parent corporation or subsidiary corporation,
as the term "parent corporation" and "subsidiary corporation" are defined in
Section 424(e) and (f) of the Code. For purposes of determining stock
ownership under this paragraph, the rules of Section 424(d) of the Code shall
apply, and stock which the employee may purchase under outstanding options
shall be treated as stock owned by the employee.

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ARTICLE 4 -- STOCK SUBJECT TO THE PLAN.

The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued Common Stock, par value $.01 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company,
including shares purchased in the open market. The aggregate number of shares
which may be issued pursuant to the Plan is 500,000, subject to adjustment as
provided in Article 12. If any option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available under the Plan.

ARTICLE 5 -- PAYMENT PERIOD AND STOCK OPTIONS.

The first Payment Period during which payroll deductions will be accumulated
under the Plan shall commence on the later to occur of January 1, 1996 and the
first day of the first calendar month following effectiveness of the Form S-8
registration statement filed with the Securities and Exchange Commission
covering the shares to be issued pursuant to the Plan and shall end on June
30, 1996. The Payment Period commencing January 1, 1998 shall end on March 31,
1998. The Payment Period commencing April 1, 1998 shall end on August 31,
1998. Then, for the remainder of the duration of the Plan, Payment Periods
shall consist of the six month periods commencing on March 1 and September 1
and ending on August 31 and February 28 of each calendar year, respectively.

Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the
Option Price hereinafter provided for, a maximum of 250 shares, on condition
that such employee remains eligible to participate in the Plan throughout the
remainder of such Payment Period. The participant shall be entitled to
exercise the option so granted only to the extent of the participant's
accumulated payroll deductions on the last day of such Payment Period. If the
participant's accumulated payroll deductions on the last day of the Payment
Period would enable the participant to purchase more than 250 shares except
for the 250 share limitation, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the 250 shares shall
be promptly refunded to the participant by the Company, without interest,
unless the participant waives the right to receive such excess funds and
agrees to carry forward such excess funds into the next Payment Period. The
Option Price per share for each Payment Period shall be the lesser of (i) 85%
of the average market price of the Common Stock on the first business day of
the Payment Period and (ii) 85% of the average market price of the Common
Stock on the last business day of the Payment Period, in either event rounded
up. The foregoing limitation on the number of shares subject to option and the
Option Price shall be subject to adjustment as provided in Article 12.

For purposes of the Plan, the term "average market price" on any date means
(i) the average (on that date) of the high and low prices of the Common Stock
on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange;
or (ii) the last reported sale price (on that date) of the Common Stock on The
Nasdaq National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked prices
last quoted (on that date) by an established quotation service for over-the-
counter securities, if the Common Stock is not reported on The Nasdaq National
Market; or (iv) if the Common Stock is not publicly traded, the fair market
value of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.

For purposes of the Plan, the term "business day" means a day on which there
is trading on The Nasdaq National Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday
or legal holiday in the Commonwealth of Massachusetts.

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<PAGE>

No employee shall be granted an option which permits the employee's right to
purchase stock under the Plan, and under all other Section 423(b) employee
stock purchase plans of the Company and any parent or subsidiary corporations,
to accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the date or dates that options on such stock were granted) for
each calendar year in which such option is outstanding at any time. The
purpose of the limitation in the preceding sentence is to comply with Section
423(b)(8) of the Code. If the participant's accumulated payroll deductions on
the last day of the Payment Period would otherwise enable the participant to
purchase Common Stock in excess of the Section 423(b)(8) limitation described
in this paragraph, the excess of the amount of the accumulated payroll
deductions over the aggregate purchase price of the shares actually purchased
shall be promptly refunded to the participant by the Company, without
interest.

ARTICLE 6 -- EXERCISE OF OPTION.

Each eligible employee who continues to be a participant in the Plan on the
last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company
such number of full shares of Common Stock reserved for the purpose of the
Plan as the participant's accumulated payroll deductions on such date will pay
for at the Option Price, subject to the 250 share limit of the option and the
Section 423(b)(8) limitation described in Article 5. If the individual is not
a participant on the last day of a Payment Period, then he or she shall not be
entitled to exercise his or her option. Only full shares of Common Stock may
be purchased under the Plan. Unused payroll deductions remaining in a
participant's account at the end of a Payment Period by reason of the
inability to purchase a fractional share shall be carried forward to the next
Payment Period.

ARTICLE 7 -- AUTHORIZATION FOR ENTERING THE PLAN.

An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization:

A. Stating the percentage to be deducted regularly from the employee's
pay;

B. Authorizing the purchase of stock for the employee in each Payment
Period in accordance with the terms of the Plan; and

C. Specifying the exact name or names in which stock purchased for the
employee is to be issued as provided under Article 11 hereof.

Such authorization must be received by the Company at least ten days before
the first day of the next succeeding Payment Period and shall take effect only
if the employee is an eligible employee on the first business day of such
Payment Period.

Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on
file under the Plan will continue from one Payment Period to succeeding
Payment Periods as long as the Plan remains in effect.

The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these
amounts.

ARTICLE 8 -- MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS.

An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than one percent (1%) but not more than ten percent
(10%) of the employee's total compensation, including base pay or salary and
any overtime, bonuses or commissions.

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ARTICLE 9 -- CHANGE IN PAYROLL DEDUCTIONS.

Deductions may not be increased or decreased during a Payment Period.
However, a participant may withdraw in full from the Plan.

ARTICLE 10 -- WITHDRAWAL FROM THE PLAN.

A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal
notice to the Company.

To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least ten days before the first day of the next Payment
Period in which he or she wishes to participate. The employee's reentry into
the Plan becomes effective at the beginning of such Payment Period, provided
that he or she is an eligible employee on the first business day of the
Payment Period.

ARTICLE 11 -- ISSUANCE OF STOCK.

Certificates for stock issued to participants shall be delivered as soon as
practicable after each Payment Period by the Company's transfer agent.

Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name
of the participant and another person of legal age as joint tenants with
rights of survivorship.

ARTICLE 12 -- ADJUSTMENTS.

Upon the happening of any of the following described events, a participant's
rights under options granted under the Plan shall be adjusted as hereinafter
provided:

A. In the event that the shares of Common Stock shall be subdivided or
combined into a greater or smaller number of shares or if, upon a
reorganization, splitup, liquidation, recapitalization or the like of the
Company, the shares of Common Stock shall be exchanged for other securities
of the Company, each participant shall be entitled, subject to the
conditions herein stated, to purchase such number of shares of Common Stock
or amount of other securities of the Company as were exchangeable for the
number of shares of Common Stock that such participant would have been
entitled to purchase except for such action, and appropriate adjustments
shall be made in the purchase price per share to reflect such subdivision,
combination or exchange; and

B. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which
shall at the time be subject to option hereunder, each participant upon
exercising such an option shall be entitled to receive (for the purchase
price paid upon such exercise) the shares as to which the participant is
exercising his or her option and, in addition thereto (at no additional
cost), such number of shares of the class or classes in which such stock
dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as is equal to the number of shares thereof and
the amount of cash in lieu of fractional shares, respectively, which the
participant would have received if the participant had been the holder of
the shares as to which the participant is exercising his or her option at
all times between the date of the granting of such option and the date of
its exercise.

Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made
only after the Committee, based on advice of counsel for the Company,
determines whether such adjustments would constitute a "modification" (as that
term is defined in Section 424

4
<PAGE>

of the Code). If the Committee determines that such adjustments would
constitute a modification, it may refrain from making such adjustments.

If the Company is to be consolidated with or acquired by another entity in a
merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor
Board") shall, with respect to options then outstanding under the Plan, either
(i) make appropriate provision for the continuation of such options by
arranging for the substitution on an equitable basis for the shares then
subject to such options either (a) the consideration payable with respect to
the outstanding shares of the Common Stock in connection with the Acquisition,
(b) shares of stock of the successor corporation, or a parent or subsidiary of
such corporation, or (c) such other securities as the Successor Board deems
appropriate, the fair market value of which shall not materially exceed the
fair market value of the shares of Common Stock subject to such options
immediately preceding the Acquisition; or (ii) terminate each participant's
options in exchange for a cash payment equal to the excess of (a) the fair
market value on the date of the Acquisition, of the number of shares of Common
Stock that the participant's accumulated payroll deductions as of the date of
the Acquisition could purchase, at an option price determined with reference
only to the first business day of the applicable Payment Period and subject to
the 250 share, Code Section 423(b)(8) and fractional share limitations on the
amount of stock a participant would be entitled to purchase, over (b) the
result of multiplying such number of shares by such option price.

The Committee or Successor Board shall determine the adjustments to be made
under this Article 12, and its determination shall be conclusive.

ARTICLE 13 -- NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.

An option granted under the Plan may not be transferred or assigned and may
be exercised only by the participant.

ARTICLE 14 -- TERMINATION OF EMPLOYEE'S RIGHTS.

Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan
shall immediately terminate, and the Company shall promptly refund, without
interest, the entire balance of his or her payroll deduction account under the
Plan. Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or
other bona fide leave of absence, for up to 90 days, or for so long as the
participant's right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days.

ARTICLE 15 -- TERMINATION AND AMENDMENTS TO PLAN.

The Plan may be terminated at any time by the Company's Board of Directors
but such termination shall not affect options then outstanding under the Plan.
It will terminate in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have been purchased. If
at any time shares of stock reserved for the purpose of the Plan remain
available for purchase but not in sufficient number to satisfy all then
unfilled purchase requirements, the available shares shall be apportioned
among participants in proportion to the amount of payroll deductions
accumulated on behalf of each participant that would otherwise be used to
purchase stock, and the Plan shall terminate. Upon such termination or any
other termination of the Plan, all payroll deductions not used to purchase
stock will be refunded, without interest.

The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that may be
issued under the Plan; (ii) change the class of employees eligible to receive
options under the Plan, if such action would be treated as the adoption of a
new plan for purposes of Section 423(b) of the Code; or (iii) cause Rule 16b3
under the Securities Exchange Act of 1934 to become inapplicable to the Plan.

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<PAGE>

ARTICLE 16 -- LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN.

The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his or her own affairs. An employee may,
therefore, sell stock purchased under the Plan at any time the employee
chooses, subject to compliance with any applicable federal or state securities
laws and subject to any restrictions imposed under Article 21 to ensure that
tax withholding obligations are satisfied. The employee assumes the risk of
any market fluctuations in the price of the stock.

ARTICLE 17 -- PARTICIPATING SUBSIDIARIES.

The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the stockholders.

ARTICLE 18 -- OPTIONEES NOT STOCKHOLDERS.

Neither the granting of an option to an employee nor the deductions from his
or her pay shall constitute such employee a stockholder of the shares covered
by an option until such shares have been actually purchased by the employee.

ARTICLE 19 -- APPLICATION OF FUNDS.

The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.

ARTICLE 20 -- NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

By electing to participate in the Plan, each participant agrees to notify
the Company in writing immediately after the participant transfers Common
Stock acquired under the Plan, if such transfer occurs within two years after
the first business day of the Payment Period in which such Common Stock was
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment period in which such Common Stock was
acquired. Each participant further agrees to provide any information about
such a transfer as may be requested by the Company or any subsidiary
corporation in order to assist it in complying with the tax laws. Such
dispositions generally are treated as "disqualifying dispositions" under
Sections 421 and 424 of the Code, which have certain tax consequences to
participants and to the Company and its participating subsidiaries.

ARTICLE 21 -- WITHHOLDING OF ADDITIONAL INCOME TAXES.

By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts
are added to the participant's account, used to purchase Common Stock or
refunded, in order to satisfy such withholding obligations. Each participant
further acknowledges that when Common Stock is purchased under the Plan the
Company and its participating subsidiaries may be required to withhold taxes
with respect to all or a portion of the difference between the fair market
value of the Common Stock purchased and its purchase price, and each
participant agrees that such taxes may be withheld from compensation otherwise
payable to such participant. It is intended that tax withholding will be
accomplished in such a manner that the full amount of payroll deductions
elected by the participant under Article 7 will be used to purchase Common
Stock. However, if amounts sufficient to satisfy applicable tax withholding
obligations have not been withheld from compensation otherwise payable to any
participant, then, notwithstanding any other

6
<PAGE>

provision of the Plan, the Company may withhold such taxes from the
participant's accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the participant pays to the Company, prior to
the exercise date, an amount sufficient to satisfy such withholding
obligations. Each participant further acknowledges that the Company and its
participating subsidiaries may be required to withhold taxes in connection
with the disposition of stock acquired under the Plan and agrees that the
Company or any participating subsidiary may take whatever action it considers
appropriate to satisfy such withholding requirements, including deducting from
compensation otherwise payable to such participant an amount sufficient to
satisfy such withholding requirements or conditioning any disposition of
Common Stock by the participant upon the payment to the Company or such
subsidiary of an amount sufficient to satisfy such withholding requirements.

ARTICLE 22 -- GOVERNMENTAL REGULATIONS.

The Company's obligation to sell and deliver shares of Common Stock under
the Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.

Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.

ARTICLE 23 -- GOVERNING LAW.

The validity and construction of the Plan shall be governed by the laws of
the Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of law thereof.

ARTICLE 24 -- APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY.

The Plan was adopted by the Board of Directors on June 16, 1995 and was
approved by the stockholders of the Company on June 22, 1995.

<PAGE>

Exhibit 11.1

DESKTOP DATA, INC. AND SUBSIDIARIES
COMPUTATION OF NET EARNINGS PER SHARE
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,

1996 1995
---- ----
<S> <C> <C>
Net income $ 4,584,798 $ 2,137,064
Accretion of dividends on Series B preferred
stock - (101,250)
Discount on redemption of Series B preferred
stock - 1,232,238
------------- ------------
Net income (loss) available for common
stockholders $ 4,584,798 $ 3,268,052
============= =============
Weighted average common shares outstanding 8,572,200 4,959,013
Weighted average shares to reflect the
conversion of Series A, Series C, and Series D
preferred stock as of the beginning of
the period - 2,350,452
Common stock equivalents outstanding, pursuant
to the treasury stock method 206,279 209,064
-------------- -----------
Weighted average number of common and
common equivalent shares outstanding
in 1996 and 1995 8,778,479 7,518,529
------------- -----------
Net income per common and common equivalent
share in 1996 and 1995 $ 0.52 $ 0.43
============= ===========
</TABLE>

<PAGE>

EXHIBIT 21.1

SUBSIDIARIES OF DESKTOP DATA, INC.

1. Desktop Data Canada, Inc., Toronto, Ontario, Canada.

2. Desktop Data Securities Corporation, Massachusetts, United States of
America.

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.

/s/ Arthur Andersen LLP

ARTHUR ANDERSEN LLP

Boston, Massachusetts
January 23, 1998

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this registration statement on Form S-4 of
Desktop Data, Inc. of our report dated February 15, 1997, except for Note 2
for which the date is November 20, 1997, on our audits of the consolidated
financial statements of Individual, Inc. as of December 31, 1996 and 1995 and
for each of the three years in the period ended December 31, 1996. We also
consent to the reference to our firm under the caption "Experts".

/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
January 23, 1998

<PAGE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 10,735,071
<SECURITIES> 18,119,717
<RECEIVABLES> 4,948,351
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35,617,243
<PP&E> 6,238,691
<DEPRECIATION> 1,599,021
<TOTAL-ASSETS> 48,327,150
<CURRENT-LIABILITIES> 18,114,892
<BONDS> 0
0
0
<COMMON> 86,264
<OTHER-SE> 29,898,260
<TOTAL-LIABILITY-AND-EQUITY> 48,327,150
<SALES> 33,779,259
<TOTAL-REVENUES> 33,779,259
<CGS> 9,500,735
<TOTAL-COSTS> 30,476,257
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,199,023
<INCOME-TAX> 614,225
<INCOME-CONTINUING> 4,584,798
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,584,798
<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0.52

</TABLE>

<PAGE>

Exhibit 99.2

BancAmerica
ROBERTSON STEPHENS

We hereby consent to the inclusion of and reference to our opinion dated
November 2, 1997 in the prospectus included in this Registration Statement on
Form S-4 of Desktop Data, Inc., a Delaware corporation ("Desktop"), covering
common stock, par value $0.01 per share, of Desktop to be issued in connection
with the merger of Individual, Inc., a Delaware corporation, with and into
Desktop. In giving the foregoing consent, we do not admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended (the "Securities Act") and rules and
regulations promulgated thereunder, nor do we admit that we are experts with
respect to any part of such Registration Statement within the meaning of the
term "experts" as used in the Securities Act or the rules and regulations
promulgated thereafter.

BANCAMERICA ROBERTSON STEPHENS

/s/ BancAmerica Robertson Stephens

San Francisco
January 23, 1998

555 CALIFORNIA STREET SAN FRANCISCO 94104 415-781-9700
INVESTMENT BANKERS MEMBER OF ALL MAJOR EXCHANGES

<PAGE>

EXHIBIT 99.3

LOGO

DESKTOP DATA, INC.

PROXY FOR SPECIAL MEETING OF STOCKHOLDERS, FEBRUARY 24, 1998

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Donald L. McLagan and Edward R. Siegfried,
and each of them with full power of substitution to vote all shares of stock of
DESKTOP DATA, INC. (the "Corporation") which the undersigned is entitled to
vote at the Special Meeting of Stockholders of the Corporation to be held on
Tuesday, February 24, 1998 at 10:00 a.m., local time, at the offices of Testa,
Hurwitz & Thibeault, LLP, 125 High Street, Boston, Massachusetts 02110 and at
any adjournment thereof, upon matters set forth in the Notice of Special
Meeting and Proxy Statement dated January 28, 1998, a copy of which has been
received by the undersigned.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO CHOICE IS
SPECIFIED, THEN THIS PROXY WILL BE VOTED IN FAVOR OF (I) APPROVING AND ADOPTING
THE AGREEMENT AND PLAN OF MERGER AND REORGANIZATION DATED NOVEMBER 2, 1997 (THE
"AGREEMENT"), RELATING TO THE PROPOSED MERGER (THE "MERGER") OF INDIVIDUAL,
INC., A DELAWARE CORPORATION ("INDIVIDUAL"), WITH AND INTO THE CORPORATION AND
THE ISSUANCE OF SHARES OF THE CORPORATION'S COMMON STOCK (THE "COMMON STOCK")
PURSUANT TO THE AGREEMENT; (II) APPROVING AN AMENDMENT TO THE AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION TO CHANGE THE
CORPORATE NAME TO "NEWSEDGE CORPORATION," SUBJECT TO AND UPON CONSUMMATION OF
THE MERGER; (III) APPROVING AN AMENDMENT TO THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF THE CORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF THE COMMON STOCK FROM 15,000,000 SHARES TO 35,000,000
SHARES, SUBJECT TO AND UPON CONSUMMATION OF THE MERGER; (IV) APPROVING AN
AMENDMENT TO THE CORPORATION'S 1995 STOCK PLAN TO INCREASE THE NUMBER OF SHARES
OF THE COMMON STOCK TO BE RESERVED FOR ISSUANCE THEREUNDER FROM 1,625,000 TO
4,125,000 SHARES, SUBJECT TO AND UPON CONSUMMATION OF THE MERGER; AND (V)
APPROVING AMENDMENTS TO THE CORPORATION'S 1995 EMPLOYEE STOCK PURCHASE PLAN,
INCLUDING THE INCREASE IN THE NUMBER OF SHARES OF THE COMMON STOCK RESERVED FOR
ISSUANCE THEREUNDER FROM 175,000 TO 500,000 SHARES, SUBJECT TO CONSUMMATION OF
THE MERGER. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

*******************************

LOGO

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE

The Board of Directors recommends a vote for the following proposals:

1. To approve and adopt the Agreement and the issuance of shares of the
Corporation's Common Stock to the stockholders of Individual pursuant to the
Agreement:

[_] FOR [_] AGAINST [_] ABSTAIN

2. To approve an amendment to the Corporation's Amended and Restated
Certificate of Incorporation to change the corporate name to "NewsEDGE
Corporation," subject to and upon consummation of the Merger:

[_] FOR [_] AGAINST [_] ABSTAIN

3. To approve an amendment to the Corporation's Amended and Restated
Certificate of Incorporation to increase the number of authorized shares of
the Common Stock from 15,000,000 to 35,000,000, subject to consummation of
the Merger:

[_] FOR [_] AGAINST [_] ABSTAIN

4. To approve an amendment to the Corporation's 1995 Stock Plan to increase the
number of shares of Common Stock reserved for issuance thereunder from
1,625,000 to 4,125,000 shares:

[_] FOR [_] AGAINST [_] ABSTAIN

5. To approve an amendment to the Corporation's 1995 Employee Stock Purchase
Plan including the increase in the number of shares of the Common Stock
reserved for issuance thereunder from 175,000 to 500,000 shares:

[_] FOR [_] AGAINST [_] ABSTAIN

6. To transact such other business as may properly come before the meeting and
any adjournments thereof.

[_] MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT

Please sign your name exactly as it
appears on your stock certificate(s),
write in the date and return this proxy
as soon as possible in the enclosed
envelope. If the stock is registered in
more than one name, each joint owner
should sign. If signing as attorney,
executor, trustee, administrator or
guardian, please give full title as
such. Only authorized officers should
sign for corporations.

Signature ______ Date _________________

<PAGE>

EXHIBIT 99.4

LOGO

INDIVIDUAL, INC.

PROXY FOR SPECIAL MEETING OF STOCKHOLDERS, FEBRUARY 24, 1998

SOLICITED BY THE BOARD OF DIRECTORS

The undersigned stockholder of Individual, Inc., a Delaware corporation
("Individual" or the "Corporation"), hereby acknowledges receipt of the Notice
of Special Meeting of Stockholders and Prospectus/Joint Proxy Statement, each
dated January 28, 1998, and hereby appoints Michael E. Kolowich and Robert L.
Lentz, and each of them, proxies and attorneys-in-fact, with full power to each
of substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the Special Meeting of Stockholders of the Corporation to be
held at the offices of Testa, Hurwitz & Thibeault, LLP, 20th Floor Conference
Center, High Street Tower, 125 High Street, Boston, Massachusetts 02110, on
February 24, 1998 at 10:00 a.m., local time, and at any adjournment or
adjournments thereof, and to vote all shares of Individual Common Stock which
the undersigned would be entitled to vote if then and there personally present,
on all matters set forth below and in the Notice of Special Meeting of
Stockholders and Prospectus/Joint Proxy Statement, and in their discretion upon
any other business that may properly come before the meeting and any
adjournment or adjournments thereof:

1. To approve and adopt the Agreement and Plan of Merger and Reorganization
(the "Agreement"), dated as of November 2, 1997, between Desktop Data, Inc.,
a Delaware corporation ("Desktop"), and Individual, pursuant to which, among
other matters, (i) Individual will be merged with and into Desktop, with
Desktop continuing as the surviving corporation (the "Merger"), and (ii)
each share of Common Stock, $.01 par value per share, of Individual will be
converted into the right to receive, and become exchangeable for, one-half (
1/2) of one share of Common Stock, par value $.01 per share, of Desktop.

[_] FOR [_] AGAINST [_] ABSTAIN

2. In their discretion, to transact such other business as may properly come
before the meeting or any adjournment or adjournments thereof.

[CONTINUED AND TO BE SIGNED ON REVERSE SIDE]

LOGO

THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE APPROVAL AND ADOPTION OF THE AGREEMENT AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

Dated: ___________________________, 1998

----------------------------------------
Signature

(This Proxy should be marked, dated and signed by the stockholder(s) exactly
as his, her or its name appears hereon, and returned promptly in the enclosed
envelope. If signing as attorney, executor, trustee or guardian, please give
full title as such. If shares are held jointly, each owner should sign. Please
read reverse side before signing.)

<PAGE>

EXHIBIT 99.5

DESKTOP DATA, INC.

January 28, 1998

Dear Stockholder:

As most of you are aware, Desktop Data, Inc. ("Desktop") has entered into an
agreement to combine with Individual, Inc. ("Individual") in a strategic
business combination (the "Merger"). At our Special Meeting on Tuesday,
February 24, 1998, you will be asked to consider and vote upon: (i) the
Agreement and Plan of Merger and Reorganization dated November 2, 1997 (the
"Agreement"), between Desktop and Individual, relating to the proposed Merger
and the issuance of shares of the Common Stock, par value $0.01 per share, of
Desktop (the "Desktop Common Stock") to the stockholders of Individual
pursuant to the Agreement, (ii) an amendment to the Amended and Restated
Certificate of Incorporation of Desktop (the "Certificate") to change the
corporate name of Desktop to "NewsEDGE Corporation," subject to and upon
consummation of the Merger, (iii) an amendment to the Certificate to increase
the authorized shares of Desktop Common Stock reserved for issuance from
15,000,000 to 35,000,000 shares, subject to and upon consummation of the
Merger, (iv) an amendment to the Desktop 1995 Stock Plan to increase the
number of shares of the Desktop Common Stock to be reserved for issuance
thereunder from 1,625,000 to 4,125,000 shares, subject to and upon
consummation of the Merger; and (v) amendments to the Desktop 1995 Employee
Stock Purchase Plan, including the increase in the number of shares of the
Desktop Common Stock reserved for issuance thereunder from 175,000 to 500,000
shares, subject to and upon consummation of the Merger. Each of the foregoing
proposals is described more fully in the accompanying Prospectus/Joint Proxy
Statement.

After careful consideration, Desktop's Board of Directors has unanimously
approved the Agreement and the transactions contemplated thereby and
recommends that you vote for each of the foregoing proposals. The Board of
Directors of Desktop believes the Merger offers Desktop and its stockholders a
number of important benefits including: (i) the potential to realize long-term
improved operating and financial results and a stronger competitive position
than Desktop might achieve independently; (ii) a strategic fit between the
customized news integration businesses and services which each company has
independently developed; and (iii) greater opportunities to develop business
relationships and license content and technology. In this way, the Merger
could provide Desktop with the range of products and services required to play
a defining role in the market for customized news integration services for
business information. Following the Merger, based on the shares of Individual
Common Stock, par value $.01 per share (the "Individual Common Stock"), and
Desktop Common Stock outstanding as of January 9, 1998, the former holders of
Individual Common Stock will hold 48.6% of the common stock of the
consolidated entity composed of Desktop and Individual together (the "Combined
Company Common Stock"), and the holders of Desktop Common Stock prior to the
Merger will hold 51.4% of the Combined Company Common Stock.

All stockholders are invited to attend the Special Meeting in person. The
approval of the Agreement and the Merger and the amendments to the Certificate
require the affirmative vote of a majority of the outstanding shares entitled
to vote regarding such proposal. All other proposals require the affirmative
vote of a majority of the total votes cast regarding such proposals.

STOCKHOLDERS ARE URGED TO REVIEW CAREFULLY THE INFORMATION CONTAINED IN THE
ACCOMPANYING PROSPECTUS/JOINT PROXY STATEMENT, INCLUDING IN PARTICULAR THE
INFORMATION UNDER THE CAPTIONS "RISK FACTORS," "DESKTOP DATA, INC. SPECIAL
MEETING--RECOMMENDATIONS OF DESKTOP BOARD OF DIRECTORS," "APPROVAL OF THE
MERGER AND RELATED TRANSACTIONS--JOINT REASONS FOR THE MERGER" AND "--
DESKTOP'S REASONS FOR THE MERGER" PRIOR TO MAKING ANY VOTING DECISION.

You may revoke your proxy at any time before it has been voted, and if you
attend the Special Meeting you may
vote in person even if you have previously returned your proxy card. Your
prompt cooperation will be greatly appreciated.

Sincerely,

Donald L. McLagan
Chairman, President and Chief
Executive Officer

Burlington, Massachusetts

YOUR PROXY IS IMPORTANT-PLEASE VOTE PROMPTLY

<PAGE>

EXHIBIT 99.6

INDIVIDUAL

January 28, 1998
Dear Stockholder:

As most of you are aware, Individual, Inc. ("Individual") has entered into
an agreement to combine with Desktop Data, Inc. ("Desktop") in a strategic
business combination (the "Merger"). At our Special Meeting on Tuesday,
February 24, 1998, you will be asked to consider and approve the Agreement and
Plan of Merger and Reorganization dated November 2, 1997 between Desktop and
Individual (the "Agreement") relating to the Merger. The accompanying
Prospectus/Joint Proxy Statement provides detailed information concerning the
proposed Merger.

After careful consideration, Individual's Board of Directors has unanimously
approved the Agreement and the Merger and recommends that you vote FOR the
approval and adoption of the Agreement and the Merger. The Board of Directors
of Individual believes the Merger offers Individual and its stockholders a
number of important benefits, including, among other benefits: (i) the
potential to realize long-term improved operating and financial results and a
stronger competitive position than Individual might achieve independently,
(ii) a strategic fit between the customized news integration businesses and
services which each company has independently developed, and (iii) greater
opportunities to develop business relationships and license content and
technology. In this manner, the Merger could provide Individual with the range
of products and services required to play a defining role in the market for
customized news integration services for business information.

Pursuant to the Merger, all of the issued and outstanding shares of capital
stock of Individual will be converted into the right to receive an aggregate
of approximately 8,209,098 shares of common stock, par value $.01 per share
(the "Desktop Common Stock"), of Desktop, based on the capitalization of
Individual on January 9, 1998. Desktop will also assume options exercisable
for up to approximately 1,980,836 additional shares of the common stock of the
consolidated entity composed of Desktop and Individual together (the "Combined
Company Common Stock") and warrants to purchase up to approximately 963,514
additional shares of Combined Company Common Stock, based on the number of
options and warrants outstanding on January 9, 1998. Following the Merger,
based on the shares of Individual Common Stock and Desktop Common Stock
outstanding as of January 9, 1998, the former holders of Individual Common
Stock, $.01 par value per share ("Individual Common Stock"), will hold
approximately 48.6% of the Combined Company Common Stock, and the holders of
Desktop Common Stock prior to the Merger will hold approximately 51.4% of the
Combined Company Common Stock.

All stockholders are invited to attend the Special Meeting in person. The
affirmative vote of holders of a majority of the shares of Individual Common
Stock outstanding as of the record date of January 9, 1998 will be necessary
for approval and adoption of the Agreement and Merger, and the other
transactions contemplated thereby.

STOCKHOLDERS ARE URGED TO REVIEW CAREFULLY THE INFORMATION CONTAINED IN THE
ACCOMPANYING PROSPECTUS/JOINT PROXY STATEMENT, INCLUDING IN PARTICULAR THE
INFORMATION UNDER THE CAPTIONS "RISK FACTORS," "INDIVIDUAL, INC. SPECIAL
MEETING--RECOMMENDATION OF INDIVIDUAL BOARD OF DIRECTORS," "APPROVAL OF THE
MERGER AND RELATED TRANSACTIONS--JOINT REASONS FOR THE MERGER" AND "--
INDIVIDUAL'S REASONS FOR THE MERGER" PRIOR TO MAKING ANY VOTING DECISION IN
CONNECTION WITH THEIR INDIVIDUAL COMMON STOCK.
<PAGE>

Whether or not you expect to attend the Special Meeting in person, please
complete, sign and promptly return the enclosed proxy card in the enclosed
postage-prepaid envelope to assure representation of your shares. You may
revoke your proxy at any time before it has been voted, and if you attend the
Special Meeting you may vote in person even if you have previously returned
your proxy card. Your prompt cooperation will be greatly appreciated.

Sincerely,

Michael E. Kolowich
Chairman, President and Chief
Executive Officer

Burlington, Massachusetts

YOUR PROXY IS IMPORTANT-PLEASE VOTE PROMPTLY

INDIVIDUAL STOCKHOLDERS SHOULD NOT SURRENDER OR OTHERWISE ATTEMPT TO
EXCHANGE THEIR INDIVIDUAL STOCK CERTIFICATES FOR DESKTOP STOCK CERTIFICATES
UNLESS AND UNTIL THEY HAVE RECEIVED APPROPRIATE NOTICE AND INSTRUCTIONS FOR
EXCHANGE.

<PAGE>

EXHIBIT 99.7
DESKTOP DATA, INC.
80 BLANCHARD ROAD
BURLINGTON, MASSACHUSETTS 01803

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of Desktop Data, Inc.:

The Special Meeting of Stockholders of Desktop Data, Inc. ("Desktop"), a
Delaware corporation, will be held on Tuesday, February 24, 1998 at 10:00
a.m., local time, at the offices of Testa, Hurwitz & Thibeault, LLP, 125 High
Street, Boston, Massachusetts 02110 for the following purposes:

1. To consider, approve and adopt the Agreement and Plan of Merger and
Reorganization dated November 2, 1997 (the "Agreement"), relating to the
proposed merger (the "Merger") of Individual, Inc., a Delaware corporation
("Individual"), with and into Desktop and the issuance of shares of Desktop
common stock, par value $.01 per share ("Desktop Common Stock" and, following
the Merger, the "Combined Company Common Stock") to the stockholders of
Individual pursuant to the Agreement;

2. To consider and approve an amendment to the Amended and Restated
Certificate of Incorporation of Desktop to change the corporate name of
Desktop to "NewsEDGE Corporation," subject to and upon consummation of the
Merger;

3. To consider and approve an amendment to Desktop's Amended and Restated
Certificate of Incorporation to increase the number of authorized shares of
Desktop Common Stock from 15,000,000 shares to 35,000,000 shares, subject to
and upon consummation of the Merger;

4. To consider and approve an amendment to the Desktop 1995 Stock Plan to
increase the number of shares of Desktop Common Stock to be reserved for
issuance thereunder from 1,625,000 to 4,125,000 shares, subject to and upon
consummation of the Merger;

5. To consider and approve amendments to the Desktop 1995 Employee Stock
Purchase Plan, including the increase in the number of shares of Desktop
Common Stock reserved for issuance thereunder from 175,000 to 500,000 shares,
subject to and upon consummation of the Merger; and

6. To transact such other business as may properly come before the meeting
or any adjournments thereof.

Each of the foregoing proposals is described more fully in the accompanying
Prospectus/Joint Proxy Statement.

As a result of the Merger, each outstanding share of Individual common
stock, par value $.01 per share ("Individual Common Stock"), other than shares
held in the treasury of Individual or owned by Desktop or any wholly owned
subsidiary of Individual or Desktop, will be converted into the right to
receive one-half ( 1/2) of one share (the "Exchange Ratio") of Desktop Common
Stock, and each outstanding option or right to purchase Individual Common
Stock under Individual's stock option plans and Individual's stock purchase
plan will be assumed by Desktop and will become an option or right to purchase
Combined Company Common Stock, with appropriate adjustments to be made to the
number of shares issuable thereunder and the exercise price thereof to reflect
the Exchange Ratio. Furthermore, Desktop will assume all outstanding warrants
for the purchase of Individual Common Stock, with appropriate adjustments to
be made to the number of shares issuable thereunder and the exercise price
thereof to reflect the Exchange Ratio. Following the Merger, based on the
shares of Individual Common Stock and Desktop Common Stock outstanding as of
January 9, 1998, the former holders
<PAGE>

of Individual will hold 48.6% of the Combined Company Common Stock and the
holders of Desktop Common Stock prior to the Merger will hold 51.4% of the
Combined Company Common Stock.

Only stockholders of record at the close of business on January 9, 1998 are
entitled to notice of and to vote at the meeting.

All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if such stockholder has returned a proxy.

By Order of the Board of Directors

Lawrence S. Wittenberg
Secretary

Burlington, Massachusetts
January 28, 1998

<PAGE>

EXHIBIT 99.8

INDIVIDUAL, INC.
8 NEW ENGLAND EXECUTIVE PARK WEST
BURLINGTON, MASSACHUSETTS 01803

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 24, 1998

A Special Meeting of Stockholders (the "Individual Special Meeting") of
Individual, Inc., a Delaware corporation ("Individual"), will be held at the
offices of Testa, Hurwitz & Thibeault, LLP, located at High Street Tower, 125
High Street, Boston, Massachusetts 02110, on Tuesday, February 24, 1998, at
10:00 a.m., local time, to consider and act on the following matters:

1. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger and Reorganization (the "Agreement"), dated as of November
2, 1997, between Desktop Data, Inc., a Delaware corporation ("Desktop"), and
Individual, pursuant to which, among other things, (i) Individual will be
merged with and into Desktop, with Desktop continuing as the surviving
corporation (the "Merger") and (ii) each outstanding share of common stock,
par value $.01 per share ("Individual Common Stock"), of Individual will be
converted into the right to receive, and become exchangeable for, one-half (
1/2) of one share of common stock, par value $.01 per share ("Desktop Common
Stock"), of Desktop.

2. To transact such other matters as may properly come before the Individual
Special Meeting, including any motion to adjourn the Individual Special
Meeting to a later date to permit further solicitation of proxies, or any
postponements or adjournments thereof.

Following the Merger, based on the shares of Individual Common Stock and
Desktop Common Stock outstanding as of January 9, 1998, the former holders of
Individual Common Stock will hold approximately 48.6% of the common stock of
the consolidated entity composed of Desktop and Individual and their
respective subsidiaries after the Merger (the "Combined Company Common
Stock"), and the holders of Desktop Common Stock prior to the Merger will hold
approximately 51.4% of the Combined Company Common Stock.

Information relating to the above matters is set forth in the attached
Prospectus/Joint Proxy Statement. Stockholders of record as of the close of
business on January 9, 1998 are entitled to notice of, and to vote at, the
Individual Special Meeting and any adjournment or postponement thereof.

All stockholders are cordially invited to attend the Individual Special
Meeting in person. However, to ensure your representation at the Individual
Special Meeting, you are urged to complete, sign, date and return the enclosed
proxy card promptly in the enclosed postage-prepaid envelope.

By Order of the Board of Directors

Robert L. Lentz
Senior Vice President, Finance
andAdministration, Chief Financial
Officer, Treasurer and Secretary

Burlington, Massachusetts
January 28, 1998

WHETHER OR NOT YOU EXPECT TO ATTEND THE INDIVIDUAL SPECIAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE
NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.