<PAGE>
EXHIBIT 99.3
------------
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information give effect to CMGI's
acquisitions of the AltaVista Business on August 18, 1999, AdForce on January
12, 2000, Flycast on January 13, 2000, yesmail.com on March 10, 2000, Tallan on
March 31, 2000 and uBid on April 28, 2000, each of which have been accounted for
under the purchase method of accounting. The unaudited pro forma condensed
combined statements of operations for the nine months ended April 30, 2000 and
the year ended July 31, 1999 give effect to the acquisitions of the AltaVista
Business, AdForce, Flycast, yesmail.com, Tallan and uBid as if each had occurred
on August 1, 1998. The pro forma statement of operations for the nine months
ended April 30, 2000 is based on historical results of operations of CMGI for
the nine months ended April 30, 2000 (which include the results of the AltaVista
Business, AdForce, Flycast, yesmail.com and Tallan from their respective dates
of acquisition through April 30, 2000), the historical results of the AltaVista
Business for the period from August 1, 1999 through August 18, 1999, the
historical results of AdForce for the six months ended December 31, 1999, the
historical results of Flycast for the six months ended December 31, 1999, the
historical results of yesmail.com for the period from August 1, 1999 through
March 10, 2000, the historical results of Tallan for the eight months ended
March 31, 2000 and the historical results of uBid for the nine months ended
March 31, 2000. The pro forma statement of operations for the twelve months
ended July 31, 1999 is based on historical results of operations of CMGI for the
twelve months ended July 31, 1999, the historical results of operations of
AdForce, Flycast, yesmail.com, Tallan and uBid for the twelve months ended June
30, 1999 and the historical results of operations of the components of the
AltaVista Business consisting of the carve-out historical results of AltaVista
Search and the historical results of Zip2 Corporation for the twelve months
ended June 30, 1999 and the historical results of Shopping.com for the twelve
months ended July 31, 1999. The following pro forma financial information,
consisting of the pro forma statements of operations and the accompanying notes,
should be read in conjunction with and are qualified by the historical annual
and quarterly financial statements and notes of CMGI.
The pro forma financial information is presented for illustrative purposes
only and is not necessarily indicative of the future results of operations of
the consolidated company after the acquisitions of the AltaVista Business,
AdForce, Flycast, yesmail.com, Tallan and uBid, or of the results of operations
of the consolidated company that would have actually occurred had the
acquisitions of the AltaVista Business, AdForce, Flycast, yesmail.com, Tallan
and uBid been effected as of the dates described above.
1
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Nine Months Ended April 30, 2000
(In thousands, except per share data)
Results prior to acquisition dates
----------------------------------
<TABLE>
<CAPTION>
AltaVista
CMGI Business AdForce Flycast yesmail.com
------------ ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues................... $ 503,078 $ 7,198 $ 11,569 $ 34,619 $17,909
Operating expenses:
Cost of revenues.............. 410,974 4,104 7,736 23,882 11,491
Research and development...... 101,283 1,891 5,586 5,084 2,953
In-process research
and development.............. 45,937 -- -- -- --
Selling....................... 314,150 7,361 7,061 12,816 10,331
General and administrative.... 126,843 2,400 3,732 7,210 12,070
Amortization of
intangible assets
and stock-based
compensation................. 905,857 30,117 5,237 663 948
----------- -------- -------- -------- --------
Total operating expenses.... 1,905,044 45,873 29,352 49,655 37,793
----------- -------- -------- -------- --------
Operating income (loss)....... (1,401,966) (38,675) (17,783) (15,036) (19,884)
Other income (expense):
Interest income
(expense), net.............. 4,433 (35) 1,373 616 1,026
Equity in losses
of affiliates............... (15,719) -- -- -- --
Minority interest............ 110,844 -- 101 -- --
Non-operating gains, net..... 499,962 -- -- -- --
----------- -------- -------- -------- --------
599,520 (35) 1,474 616 1,026
----------- -------- -------- -------- --------
Income (loss) before
income taxes................ (802,446) (38,710) (16,309) (14,420) (18,858)
Income tax
expense (benefit)........... (71,420) -- -- -- --
----------- -------- -------- -------- --------
Net income (loss)............ (731,026) (38,710) (16,309) (14,420) (18,858)
Deemed preferred dividend,
preferred stock
accretion and
amortization of discount.... (9,333) -- -- -- --
----------- -------- -------- -------- --------
Net loss available to
common stockholders....... $ (740,359) $(38,710) $(16,309) $(14,420) $(18,858)
=========== ======== ======== ======== ========
Basic loss per share $ (2.94)
===========
Diluted loss per share..... $ (2.94)
===========
Shares used in computing
loss per share:
Basic...................... 251,560
===========
Diluted.................... 251,560
===========
Results prior to acquisition dates
----------------------------------
Pro Forma Pro Forma
Tallan uBid Adjustments As Adjusted
------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net revenues................. $52,081 $210,877 $ (3,670)(A) $ 833,661
Operating expenses:
Cost of revenues............ 29,947 190,307 (3,670)(A) 674,771
Research and development.... -- 4,290 -- 121,087
In-process research
and development............ -- -- (38,600)(B) 7,337
Selling..................... 1,996 22,939 -- 376,654
General and administrative.. 12,768 17,424 (14,269)(C) 168,178
Amortization of
intangible assets
and stock-based
compensation............... 66 2,186 26,337 (D) 1,482,213
(15,550)(E)
74,442 (F)
126,010 (G)
117,155 (H)
118,305 (I)
90,440 (J)
------- -------- ---------- -----------
Total operating expenses.. 44,777 237,146 480,600 2,830,240
------- -------- ---------- -----------
Operating income (loss)...... 7,304 (26,269) (484,270) (1,996,579)
Other income (expense):
Interest income
(expense), net............. 185 1,245 (1,139)(K) 10,927
3,223 (L)
Equity in losses
of affiliates.............. -- -- -- (15,719)
Minority interest........... -- -- 4,055 (M) 115,000
Non-operating gains, net.... -- -- -- 499,962
------- -------- ---------- -----------
185 1,245 6,139 610,170
------- -------- ---------- -----------
Income (loss) before
income taxes................ 7,489 (25,024) (478,131) (1,386,409)
Income tax expense (benefit) 3,338 -- (31,589)(N) (99,671)
------- -------- ---------- -----------
Net income (loss)............ 4,151 (25,024) (446,542) (1,286,738)
Deemed preferred dividend,
preferred stock
accretion and
amortization of discount.... (5,607) -- 5,607 (O) (9,333)
------ -------- ---------- -----------
Net loss available to
common stockholders......... $(1,456) $(25,024) $(440,935) $(1,296,071)
======= ======== ========= ===========
Basic loss per share........ $ (4.66)(P)
===========
Diluted loss per share...... $ (4.66)(P)
===========
Shares used in computing
loss per share:
Basic....................... 277,998(P)
===========
Diluted..................... 277,998(P)
===========
</TABLE>
2
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED JULY 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AltaVista
CMGI Business AdForce Flycast yesmail.com
---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues................. $ 175,666 $ 97,838 $ 10,490 $ 18,596 $ 6,179
Operating expenses:
Cost of revenues............ 168,830 64,155 7,269 12,901 4,038
Research and development.... 22,253 27,105 7,358 4,760 1,747
In-process research
and development............ 6,061 -- -- -- --
Selling..................... 45,505 79,210 6,775 12,309 4,175
General and administrative.. 43,566 31,823 2,289 3,540 2,331
Amortization of intangible
assets and stock-based
compensation............... 16,110 171,925 6,265 1,786 211
--------- --------- -------- -------- -------
Total operating expenses.. 302,325 374,218 29,956 35,296 12,502
--------- --------- -------- -------- -------
Operating income (loss)...... (126,659) (276,380) (19,466) (16,700) (6,323)
Other income (expense):
Interest income
(expense), net............. 269 (7,555) 288 (39) (133)
Equity in losses of
affiliates................. (15,737) -- -- -- --
Minority interest........... 2,331 -- -- (35)
Non-operating gains
(losses), net.............. 889,041 -- -- -- (230)
--------- --------- -------- -------- -------
875,904 (7,555) 288 (39) (398)
--------- --------- -------- -------- -------
Income (loss) from continuing
operations before
income taxes................ 749,245 (283,935) (19,178) (16,739) (6,721)
Income tax expense (benefit). 325,402 -- -- 2 --
--------- --------- -------- -------- -------
Income (loss) from
continuing operations....... 423,843 (283,935) (19,178) (16,741) (6,721)
Preferred stock accretion.... (1,662) -- -- (998) --
--------- --------- -------- -------- -------
Income (loss) from continuing
operations available
to common stockholders...... $ 422,181 $(283,935) $(19,178) $(17,739) $(6,721)
========= ========= ======== ======== =======
Basic income (loss) from
continuing operations
per share.................. $ 2.26
=========
Diluted income (loss) from
continuing operations
per share.................. $ 2.05
=========
Shares used in computing
income (loss) from
continuing operations per share:
Basic....................... 186,532
=========
Diluted..................... 206,832
=========
Pro Forma Pro Forma
Tallan uBid Adjustments As Adjusted
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues................. $33,013 $119,313 $ (1,991)(A) $ 459,104
Operating expenses:
Cost of revenues............ 19,080 109,073 (1,991)(A) 383,355
Research and development.... -- 2,193 -- 65,416
In-process research
and development............ -- -- -- 6,061
Selling..................... 1,121 8,879 -- 157,974
General and administrative.. 7,050 9,208 -- 99,807
Amortization of intangible
assets and stock-based
compensation............... 145 7,086 682,337 (D) 1,811,278
(8,906)(E)
166,547 (F)
277,452 (G)
192,208 (H)
177,526 (I)
120,586 (J)
------- -------- ----------- -----------
Total operating expenses... 27,396 136,439 1,605,759 2,523,891
------- -------- ----------- -----------
Operating income (loss)....... 5,617 (17,126) (1,607,750) (2,064,787)
Other income (expense):
Interest income
(expense), net.............. (128) 331 (23,100)(K) (52,715)
(22,648)(L)
Equity in losses
of affiliates............... -- -- -- (15,737)
Minority interest............ -- -- 76,516 (M) 78,812
Non-operating gains
(losses), net............... -- -- -- 888,811
------- -------- ----------- -----------
(128) 331 30,768 899,171
------- -------- ----------- -----------
Income (loss) from continuing
operations before
income taxes................ 5,489 (16,795) (1,576,982) (1,165,616)
Income tax
expense (benefit)........... 2,344 -- (314,834)(N) 12,914
------- -------- ----------- -----------
Income (loss) from
continuing operations....... 3,145 (16,795) (1,262,148) (1,178,530)
Preferred stock accretion.... -- -- 998 (O) (1,662)
------- -------- ----------- -----------
Income (loss) from continuing
operations available
to common stockholders...... $ 3,145 $ (16,795) $(1,261,150) $(1,180,192)
======= ========= =========== ===========
Basic income (loss) from
continuing operations
per share.................. $ (4.51)(P)
===========
Diluted income (loss) from
continuing operations
per share.................. $ (4.51)(P)
===========
Shares used in computing
income (loss) from
continuing operations per share:
Basic....................... 261,505 (P)
==========
Diluted..................... 261,505 (P)
==========
</TABLE>
3
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
Pro Forma Adjustments and Assumptions:
The pro forma information herein gives effect to the following acquisitions:
On August 18, 1999, CMGI acquired an 81.495% equity stake in the former
AltaVista division of Digital Equipment Corporation, referred to as the
AltaVista Business, from Compaq Computer Corporation and its wholly-owned
subsidiary Digital Equipment Corporation. Consideration for the acquisition was
valued at approximately $2.4 billion, including $4 million of direct costs of
the acquisition. The AltaVista Business includes the assets and liabilities
constituting the AltaVista Internet search service, referred to as AltaVista
Search, which was a division of Digital, and also includes former Compaq/Digital
wholly-owned subsidiaries Zip2 Corporation and Shopping.com. In consideration
for the acquisition, CMGI issued 37,989,950 shares of its common stock valued at
approximately $1.8 billion, 18,090.45 shares of its Series D Preferred Stock
(which were converted into 3,618,090 shares of CMGI common stock in October
1999) valued at approximately $173 million and promissory notes with an
aggregate principal amount of $220 million. Additionally, AltaVista Business and
CMGI stock options issued in the transaction, valued at approximately $175
million and $4 million, respectively, have been included in CMGI's purchase
consideration.
On January 12, 2000, CMGI completed its acquisition of AdForce, Inc., a
leading online provider of centralized, outsourced ad management and delivery
services. The total purchase price for AdForce was valued at approximately $545
million, consisting of 11,270,209 shares of CMGI common stock valued at
approximately $473 million, options and warrants to purchase CMGI common stock
valued at approximately $70.9 million, and direct acquisition costs of
approximately $1.1 million. Of the purchase price, $9.3 million was allocated to
in-process research and development, which was charged to operations during the
third quarter of fiscal 2000. The pro forma statement of operations for the nine
months ended April 30, 2000 includes nine months and twenty days of historical
operating results of AdForce. The effects of including the additional twenty
days of operating results is not material to the pro forma financial
information.
On January 13, 2000, CMGI completed its acquisition of Flycast Communications
Corporation, a leading provider of Web-based direct response advertising
solutions. The total purchase price for Flycast was valued at approximately
$905.3 million consisting of 14,611,499 shares of CMGI common stock valued at
approximately $716.6 million, options and warrants to purchase CMGI common stock
valued at approximately $168.2 million, and direct acquisition costs of
approximately $20.5 million. Of the purchase price, $29.3 million was allocated
to in-process research and development, which was charged to operations during
the third quarter of fiscal 2000. The pro forma statement of operations for the
nine months ended April 30, 2000 includes nine months and nineteen days of
historical operating results of Flycast. The effects of including the additional
nineteen days of historical operating results is not material to the pro forma
financial information. CMGI completed the contribution of Flycast to Engage,
Inc., a subsidiary of CMGI, on April 28, 2000. No pro forma adjustments related
to this contribution have been included in the pro forma financial statements.
On March 10, 2000, CMGI completed its acquisition of yesmail.com, a leading
outsourcer of permission e-mail marketing technologies and services. The total
purchase price for yesmail.com was valued at approximately $597.2 million
consisting of 5,120,181 shares of CMGI common stock valued at approximately
$546.4 million, options to purchase CMGI common stock valued at approximately
$45.3 million, and direct acquisition costs of approximately $5.5 million.
On March 31, 2000, CMGI completed its acquisition of approximately 94.2% of
Tallan, Inc., a leading provider of Internet and e-commerce services to Fortune
500, Global 2000 and dot.com companies. The total purchase price for Tallan was
valued at approximately $904.8 million consisting of cash totaling $342.3
million, options to purchase CMGI common stock valued at approximately $188.3
million, short-term promissory notes valued at approximately $368.7 million, and
direct acquisition costs of approximately $5.5 million.
On April 28, 2000, CMGI completed its acquisition of uBid, Inc., a leading e-
commerce auction site. The total purchase price for uBid was valued at
approximately $390.1 million consisting of 3,068,374 shares of CMGI common stock
valued at approximately $360.6 million, options to purchase CMGI common stock
valued at approximately $26.5 million, and direct acquisition costs of
approximately $3 million.
4
<PAGE>
The following table sets forth the allocation of the purchase prices for the
acquisitions included in the pro forma financial information. The purchase
prices were allocated over CMGI's acquired portion of the fair value of the
assets and liabilities of the acquired companies as of the dates of acquisition.
<TABLE>
<CAPTION>
AltaVista
Business AdForce Flycast yesmail.com Tallan uBid
-------------- ------------ ------------ ----------- ----------- -----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Working capital, including cash
(cash overdraft) acquired........... $ (39,604) $ 33,808 $ 34,377 $ 15,378 $ 13,793 $ 22,927
Property and equipment............... 44,460 10,360 11,751 3,195 3,062 5,423
Other assets (liabilities), net...... 15,786 (5,078) (2,518) 2,044 341 --
Goodwill............................. 2,199,426 438,350 738,537 576,623 887,630 361,758
Developed technology................. 128,128 29,440 35,000 -- -- --
Other identifiable intangible
assets.............................. 40,575 28,820 58,820 -- -- --
In-process research and
development......................... -- 9,300 29,300 -- -- --
---------- -------- -------- -------- -------- --------
Purchase price....................... $2,388,771 $545,000 $905,267 $597,240 $904,826 $390,108
========== ======== ======== ======== ======== ========
</TABLE>
The valuation of the actual intangible assets acquired in the acquisitions of
yesmail.com, Tallan and uBid has not yet been completed. When completed certain
amounts which have been allocated to goodwill in the above table may be
allocated to in-process research and development, developed technology and other
identifiable intangible assets.
A detailed description of the periods of historical financial information for
the acquired companies included in the pro forma financial information appears
in the introduction to the pro forma financial information.
(A) The pro forma adjustments reflect the elimination of transactions between
AdForce, uBid and CMGI's majority-owned companies during the periods
reflected in the pro forma financial information.
(B) The pro forma adjustment reflects the elimination of in-process research
and development charges recorded in CMGI's consolidated statement of
operations during the nine months ended April 30, 2000 related to the
acquisitions of AdForce ($9.3 million) and Flycast ($29.3 million). These
charges have been excluded from the pro forma results as they are non-
recurring and not indicative of normal operating results.
(C) The pro forma adjustment represents the elimination of merger related
expenses recorded in the historical financial statements of AdForce,
yesmail.com, Tallan and uBid in the periods included in the pro forma
financial information. These costs consist primarily of legal, accounting
and investment banker fees incurred by the acquired entities. These
charges have been eliminated from the pro forma results as they are non-
recurring and not indicative of normal operating results.
(D) The pro forma adjustments include an incremental $38.2 million and $789.4
million in amortization of goodwill and other intangible assets that would
have been recorded during the nine months ended April 30, 2000 and the
twelve months ended July 31, 1999 related to the acquisition of the
AltaVista Business. The amounts identified as goodwill and other
intangible assets in CMGI's acquisition of the AltaVista Business are
being amortized on a straight-line basis over a three-year period. The
adjustment amounts also include a net reduction of $11.9 million and
$107.1 million in amortization of goodwill and other intangible assets for
the nine months ended April 30, 2000 and the twelve months ended July 31,
1999, respectively. These amounts relate to the reduction in historical
amortization expense to reflect only the 18.505% carry-over basis in the
historical goodwill and other intangible assets of the AltaVista Business.
The historical financial statements of the AltaVista Business represented
in the pro forma statements of operations include amortization of goodwill
and other intangible assets relating to Compaq's acquisition of Digital in
June 1998 and Compaq/Digital's acquisitions of Shopping.com and Zip2
Corporation in January 1999 and April 1999, respectively.
5
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION--CONTINUED
(E) The pro forma adjustments relate to stock-based compensation charges
recorded in the historical financial statements of the AltaVista Business.
The value of the stock options, to which these charges relate, is included
in the calculation of the purchase consideration. Accordingly, on a pro
forma basis, these expenses have been eliminated.
(F) The pro forma adjustments represent amortization of goodwill and other
intangible assets (per the allocation above) that would have been recorded
during the periods covered by the pro forma statements of operations
related to the acquisition of AdForce. The goodwill, developed technology
and other intangible assets related to the acquisition of AdForce are
being amortized over periods ranging from two and a half to three years.
(G) The pro forma adjustments represent amortization of goodwill and other
intangible assets (per the allocation above) that would have been recorded
during the periods covered by the pro forma statements of operations
related to the acquisition of Flycast. The goodwill, developed technology
and other intangible assets related to the acquisition of Flycast are
being amortized over a three-year period.
(H) The pro forma adjustments represent amortization of goodwill and other
intangible assets (per the allocation above) that would have been recorded
during the periods covered by the pro forma statements of operations
related to the acquisition of yesmail.com. The pro forma adjustments are
based on the assumption that the entire amounts identified as goodwill and
other intangible assets in CMGI's acquisition of yesmail.com will be
amortized on a straight-line basis over a three-year period. The valuation
of the actual intangible assets acquired has not yet been completed. When
completed, certain amounts identified as intangible assets may be
amortized over periods other than the three-year period represented in the
pro forma statement of operations. Additionally, a portion of the purchase
price may be identified as in-process research and development. This
amount, if any, will be charged to operating results in CMGI's fiscal year
2000 financial statements when the acquisition accounting and valuation
amounts are finalized. The pro forma statements of operations do not give
effect to any potential in-process research and development charge related
to the acquisition of yesmail.com.
(I) The pro forma adjustments represent amortization of goodwill and other
intangible assets (per the allocation above) that would have been recorded
during the periods covered by the pro forma statements of operations
related to Tallan. The pro forma adjustments are based on the assumption
that the entire amounts identified as goodwill and other intangible assets
in CMGI's acquisition of Tallan will be amortized on a straight-line basis
over a five-year period. The valuation of the actual intangible assets
acquired has not yet been completed. When completed, certain amounts
identified as intangible assets may be amortized over periods other than
the five-year period represented in the pro forma statement of operations.
Additionally, a portion of the purchase price may be identified as in-
process research and development. This amount, if any, will be charged to
operating results in CMGI's fiscal year 2000 financial statements when the
acquisition accounting and valuation amounts are finalized. The pro forma
statements of operations do not give effect to any potential in-process
research and development charge related to the acquisition of Tallan.
(J) The pro forma adjustments represent amortization of goodwill and other
intangible assets (per the allocation above) that would have been recorded
during the periods covered by the pro forma statements of operations
related to uBid. The pro forma adjustments are based on the assumption
that the entire amounts identified as goodwill and other intangible assets
in CMGI's acquisition of uBid will be amortized on a straight-line basis
over a three-year period. The valuation of the actual intangible assets
acquired has not yet been completed. When completed, certain amounts
identified as intangible assets may be amortized over periods other than
the three-year period represented in the pro forma statement of
operations. Additionally, a portion of the purchase price may be
identified as in-process research and development. This amount, if any,
will be charged to operating results in CMGI's fiscal year 2000
6
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION--CONTINUED
financial statements when the acquisition accounting and valuation amounts
are finalized. The pro forma statements of operations do not give effect
to any potential in-process research and development charge related to the
acquisition of uBid.
(K) The pro forma adjustments reflect the incremental interest expense that
would have been recorded by CMGI related to the $220 million of aggregate
principal amounts of notes payable issued in the acquisition of the
AltaVista Business. The notes bear interest at an annual rate of 10.5%.
(L) The pro forma adjustments reflect the incremental interest expense and
amortization of debt discount that would have been recorded by CMGI
related to the $368.7 million of notes payable that were issued in the
acquisition of Tallan. The three notes bear interest at an annual rate of
6.5%. The duration of each of the three notes is less than one year and as
a result, on a pro forma basis, interest expense and amortization of debt
discount related to these notes for the nine-month period ended April 30,
2000 have been eliminated.
(M) The pro forma adjustments reflect the 18.505% minority interest in the
results of operations of the AltaVista Business assuming that CMGI's
acquisition of 81.495% of the AltaVista Business occurred on August 1,
1998 and the 5.8% minority interest in the results of operations of
Tallan, assuming that CMGI's acquisition of 94.2% of Tallan occurred on
August 1, 1998.
(N) The pro forma adjustments reflect the income tax benefit that would have
been recorded by CMGI in its consolidated statements of operations related
to the historical losses of the AltaVista Business, AdForce, Flycast,
yesmail.com and uBid for the comparable periods presented and the income
tax effect, if any, of the other pre-tax pro forma adjustments related to
the AltaVista Business, AdForce, Flycast, yesmail.com, Tallan and uBid.
The pro forma adjustments assume that CMGI would recognize a federal tax
benefit for the amortization of goodwill and other intangible assets
related to the acquisition of the AltaVista Business, but would not
recognize a federal tax benefit for the amortization of goodwill and other
intangible assets related to the acquisitions of AdForce, Flycast,
yesmail.com, Tallan and uBid. The pro forma adjustments also assume that
CMGI would record a valuation allowance for all state tax benefits
associated with the AltaVista Business, AdForce, Flycast, yesmail.com and
uBid. Actual effective tax rates may differ from pro forma rates reflected
in this pro forma financial information.
(O) The pro forma adjustments reflect the elimination of preferred stock
accretion or deemed preferred dividend charges recorded in Flycast's and
Tallan's historical financial statements. Assuming the acquisitions of
Flycast and Tallan occurred on August 1, 1998, the preferred stock, to
which these charges relate, would not have been outstanding during the
periods covered by the pro forma statements of operations.
(P) Since the pro forma statements of operations each result in a loss from
continuing operations, the pro forma basic and diluted loss from
continuing operations per common share are computed by dividing the loss
from continuing operations available to common stockholders by the
weighted average number of common shares outstanding. The calculations of
the weighted average number of common shares outstanding assume that the
aggregate 72,060,213 shares of CMGI's common stock issued in the
acquisitions of the AltaVista Business, AdForce, Flycast, yesmail.com and
uBid were outstanding for the entire period. The calculations of the
weighted average number of common shares outstanding also assume that the
18,090.45 shares of CMGI's Series D preferred stock were converted into
3,618,090 shares of CMGI common stock on October 11, 1998 (the 71st day
after the assumed acquisition date of August 1, 1998) and that such common
shares were outstanding for the entire period thereafter. The Series D
preferred shares were converted into common stock on October 28, 1999 (the
71st day after the actual acquisition date of August 18, 1999). The notes
payable that were issued as a component of the Tallan purchase
consideration can be settled in either
7
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION--CONTINUED
cash or CMGI common stock, at the option of CMGI. For purposes of the pro
forma financial information, it has been assumed that the notes will be
settled in cash. The effect of the additional CMGI common stock shares
that would be outstanding if it was assumed that the notes were settled in
CMGI common stock rather than cash would be antidilutive.
8
