<Page>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark one)

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002

                                       or

/ /  TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to

                         Commission file number 0-29768
                              24/7 Real Media, Inc.
             (Exact name of registrant as specified in its charter)

        DELAWARE                                       13-3995672
(STATE OR OTHER JURISDICTION OF                      (IRS EMPLOYER
INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)

                                      7319
                    (STANDARD INDUSTRIAL CLASSIFICATION CODE)

1250 BROADWAY, NEW YORK, NY                                  10001
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                   (ZIP CODE)

                                 (212) 231-7100
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark whether the registrant has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES /X/ NO / /

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

             CLASS                                  OUTSTANDING AT May 13, 2002
Common Stock, par value $.01 per share                    50,707,670 Shares

<Page>

                              24/7 REAL MEDIA, INC.
                                 MARCH 31, 2002
                                    FORM 10-Q
                                      INDEX

<Table>
<S>                                                                                                        <C>
Part I.  Financial Information
Item 1.  Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2002 (unaudited) and December 31, 2001.....................     2
Consolidated Statements of Operations for the three months ended
       March 31, 2002 and  2001 (unaudited)............................................................     3
Consolidated Statements of Cash Flows for the three months ended
       March 31, 2002 and 2001 (unaudited).............................................................     4
Notes to Unaudited Interim Consolidated Financial Statements...........................................     5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations..........................................................................................    16
Item 3.  Quantitative and Qualitative Disclosure about Market Risk.....................................    24
Part II. Other Information
Item 1.  Legal Proceedings.............................................................................    38
Item 2.  Changes in Securities and Use of Proceeds.....................................................    38
Item 3.  Defaults Upon Senior Securities...............................................................    38
Item 4.  Submission of Matters to a Vote of Security Holders...........................................    38
Item 5.  Other Information.............................................................................    38
Item 6.  Exhibits and Reports on Form 8-K..............................................................    38
Item 7.  Signatures....................................................................................    38
</Table>

                                        1
<Page>

                              24/7 REAL MEDIA, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                                      March 31,      December 31,
                                                                        2002             2001
                                                                    ------------   ---------------
                                                                    (unaudited)    (notes 1 and 3)
<S>                                                                 <C>            <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents........................................ $      4,668   $         6,974
  Restricted cash..................................................            -             1,500
  Accounts receivable, less allowances of $2,269 and
   $2,493, respectively............................................        8,820             9,623
  Net current assets of discontinued operation.....................            -               738
  Receivable from related party....................................          600                 -
  Prepaid expenses and other current assets........................        2,252             1,931
                                                                    ------------   ---------------

    Total current assets...........................................       16,340            20,766

Property and equipment, net........................................        5,217             6,308
Intangible assets, net.............................................       13,979            14,518
Net long-term assets of discontinued operation.....................            -             1,700
Receivable from related party......................................            -               600
Other assets.......................................................        2,332             1,452
                                                                    ------------   ---------------
    Total assets                                                    $     37,868   $        45,344
                                                                    ============   ===============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable................................................. $      7,947   $         8,781
  Accrued liabilities..............................................       13,495            16,306
  Current installments of obligations under capital leases.........           47                42
  Deferred revenue.................................................        2,134             2,422
  Deferred gain on sale of subsidiary..............................          684             2,308
                                                                    ------------   ---------------

    Total current liabilities......................................       24,307            29,859

Obligations under capital leases, excluding current installments...           97               112
Loan payable - related party.......................................        6,000             4,500
Minority interest..................................................           21                21

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value; 10,000,000 shares authorized
   and no shares issued and outstanding............................            -                 -
  Common stock, $.01 par value; 140,000,000 shares authorized;
   50,220,440 and 49,532,127 shares issued and outstanding,
   respectively....................................................          502               495
  Additional paid-in capital.......................................    1,070,528         1,070,403
  Deferred stock compensation......................................         (531)             (670)
  Accumulated other comprehensive loss.............................          (77)              (62)
  Accumulated deficit..............................................   (1,062,979)       (1,059,314)
                                                                    ------------   ---------------
    Total stockholders' equity.....................................        7,443            10,852
                                                                    ------------   ---------------

    Total liabilities and stockholders' equity..................... $     37,868   $        45,344
                                                                    ============   ===============
</Table>

 See accompanying notes to unaudited interim consolidated financial statements.

                                        2
<Page>

                              24/7 REAL MEDIA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXPECT SHARE AND PER SHARE DATA)

<Table>
<Caption>
                                                                   Three months ended March 31,
                                                                   ----------------------------
                                                                        2002           2001
                                                                   -------------   ------------
                                                                    (unaudited)     (unaudited)
<S>                                                                <C>             <C>
Revenues:
  Integrated media solutions.......................................$       7,516   $     12,360
  Technology solutions.............................................        3,235          5,248
                                                                   -------------   ------------
    Total revenues.................................................       10,751         17,608
                                                                   -------------   ------------

Cost of revenues:
  Integrated media solutions.......................................        5,236          9,827
  Technology solutions (exclusive of $7 in 2002
   reported below as stock-based compensation).....................          852          1,241
                                                                   -------------   ------------
   Total cost of revenues..........................................        6,088         11,068
                                                                   -------------   ------------

   Gross profit....................................................        4,663          6,540
                                                                   -------------   ------------

Operating expenses:
  Sales and marketing (exclusive of $41 and $358,
   respectively, reported below as stock-based compensation).......        3,044          8,015
  General and administrative (exclusive of $186 and $711,
   respectively, reported below as stock-based compensation).......        3,970         12,210
  Product technology (exclusive of $36 and ($53),
   respectively, reported below as stock-based compensation).......        1,338          4,986
  Amortization of goodwill and intangible assets...................          542          6,944
  Stock-based compensation.........................................          270          1,016
  Restructuring costs..............................................            -            347
  Gain on sale of assets, net......................................         (874)             -
  Impairment of intangible assets..................................            -         35,547
                                                                   -------------   ------------

    Total operating expenses.......................................        8,290         69,065
                                                                   -------------   ------------

    Loss from operations...........................................       (3,627)       (62,525)

Interest income (expense), net.....................................          (38)           345
Gain on sale of investments, net...................................            -          3,998
Impairment of investments..........................................            -         (3,089)
                                                                   -------------   ------------

Loss from continuing operations....................................       (3,665)       (61,271)
Loss from discontinued operations..................................            -        (17,416)
                                                                   -------------   ------------
Net loss...........................................................$      (3,665)  $    (78,687)
                                                                   =============   ============

Loss per common share - basic and diluted
Loss from continuing operations....................................$       (0.07)  $      (1.43)
Loss from discontinued operations..................................            -          (0.41)
                                                                   -------------   ------------
Net loss...........................................................$       (0.07)  $      (1.84)
                                                                   =============   ============
Weighted average shares outstanding................................   49,873,034     42,691,843
                                                                   =============   ============
</Table>

 See accompanying notes to unaudited interim consolidated financial statements.

                                        3
<Page>

                             24/7 REAL MEDIA, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                   Three Months Ended March 31,
                                                                   ----------------------------
                                                                        2002           2001
                                                                   -------------   ------------
                                                                     (unaudited)    (unaudited)
<S>                                                                <C>             <C>
Cash flows from operating activities:
Net loss.........................................................  $      (3,665)  $    (78,687)
Adjustments to reconcile net loss to net cash used in operating
activities:
Loss from discontinued operation.................................              -         17,416
Depreciation and amortization....................................          1,041          4,084
Provision for doubtful accounts and sales reserves...............            388            472
Amortization of goodwill and other intangible assets.............            542          6,944
Non-cash compensation............................................            270          1,016
Gain on sale of investments, net.................................              -         (3,998)
Gain on sale of non-core assets, net.............................           (874)             -
Loss on disposal of fixed assets.................................             80            625
Warrants issued for services.....................................              -            100
Impairment of investments........................................              -          3,089
Impairment of intangible assets..................................              -         35,547
Changes in operating assets and liabilities, net of
 effect of acquisitions and dispositions:
  Accounts receivable............................................            415         12,027
  Prepaid assets and other current assets........................            (21)          (649)
  Other assets...................................................            795            802
  Accounts payable and accrued liabilities.......................         (3,745)       (13,315)
  Deferred revenue...............................................           (288)        (1,282)
                                                                   -------------   ------------

    Net cash used in operating activities........................         (5,062)       (15,809)
                                                                   -------------   ------------

Cash flows from investing activities:
Proceeds from sale of investments................................              -          6,113
Capital expenditures, including capitalized software.............            (32)          (159)
                                                                   -------------   ------------

    Net cash (used in) provided by investing activities..........            (32)         5,954
                                                                   -------------   ------------

Cash flows from financing activities:
Proceeds from issuance of note payable...........................          1,500              -
Proceeds from exercise of stock options..........................              -             36
Payment of capital lease obligations.............................            (10)            (9)
Proceeds from sale of non core assets............................          1,272              -
                                                                   -------------   ------------

    Net cash provided by financing activities....................          2,762             27
                                                                   -------------   ------------

    Net change in cash and cash equivalents......................         (2,332)        (9,828)
Effect of foreign currency on cash...............................             26            228
Cash used by discontinued operations.............................              -         (5,529)
Cash and cash equivalents at beginning of period.................          6,974         25,653
                                                                   -------------   ------------

Cash and cash equivalents at end of period.......................   $      4,668   $     10,524
                                                                   =============   ============
</Table>

 See accompanying notes to unaudited interim consolidated financial statements.

                                        4
<Page>

(1)  SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF OPERATIONS AND GOING CONCERN

On November 9, 2001, the Company amended its Certificate of Incorporation to
change its name from 24/7 Media, Inc. to 24/7 Real Media, Inc ("24/7 Real Media"
or the "Company"). 24/7 Real Media together with its subsidiaries is a provider
of marketing solutions to the digital advertising industry including Web
publishers, online advertisers, advertising agencies, e-marketers and e-commerce
merchants. In October 2001, through the merger with Real Media, the Company has
expanded its operations into Europe. The Company operates in two principal lines
of business: Integrated Media Solutions and Technology Solutions.

     -  Integrated Media Solutions connects advertisers to audiences via
        Web-based advertising including banner ads, sponsorships, targeted
        search traffic delivery, and promotions as well as serves as a list
        broker for permission-based email lists.
     -  Technology Solutions, through Open Adstream, its propriety technology,
        provides advertising delivery and management.

The Company's business is characterized by rapid technological change, new
product development and evolving industry standards. Inherent in the Company's
business are various risks and uncertainties, including its limited operating
history, unproven business model and the limited history of commerce and
advertising on the Internet. The Company's success may depend, in part, upon the
continued expansion of the Internet as a communications medium, prospective
product development efforts and the acceptance of the Company's solutions by the
marketplace.

The Company's independent public accountants have included a "going concern"
explanatory paragraph in their audit report accompanying the 2001 consolidated
financial statements which have been prepared assuming that the Company will
continue as a going concern. The explanatory paragraph states that the Company's
recurring losses from operations since inception and working capital deficiency
raise substantial doubt about the Company's ability to continue as a going
concern and that the consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

ORGANIZATION AND BASIS OF PRESENTATION

PRINCIPLES OF CONSOLIDATION

The Company's consolidated financial statements as of March 31, 2002 and
December 31, 2001 and for the three months ended March 31, 2002 and 2001 include
the accounts of the Company and its majority-owned and controlled subsidiaries
from their respective dates of acquisition (see note 2). When losses applicable
to minority interest holders in a subsidiary exceed the minority interest in the
equity capital of the subsidiary, these losses are included in the Company's
results, as the minority interest holder has no obligation to provide further
financing to the subsidiary. All significant intercompany transactions and
balances have been eliminated in consolidation.

INTERIM RESULTS

The consolidated financial statements as of March 31, 2002 and for the three
months ended March 31, 2002 and 2001 have been prepared by 24/7 Real Media and
are unaudited. In the Company's opinion, the unaudited consolidated financial
statements have been prepared on the same basis as the annual consolidated
financial statements and reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the financial position as of
March 31, 2002 and the results of the Company's operations and cash flows for
the interim periods ended March 31, 2002 and 2001. The financial data and other
information disclosed in these notes to the consolidated results for the three
months ended March 31, 2002 and 2001 are not necessarily indicative of the
results to be expected for any subsequent quarter or the entire fiscal year
ending December 31, 2002.

                                        5
<Page>

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the Securities and Exchange
Commission's rules and regulations. It is suggested that these unaudited
consolidated financial statements be read in conjunction with our audited
consolidated financial statements and notes thereto for the year ended December
31, 2001 as included in the Company's report on Form 10-K.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid securities, with original maturities of
three months or less, to be cash equivalents. Cash and cash equivalents
consisted principally of money market accounts.

UNBILLED RECEIVABLES

At March 31, 2002 and December 31, 2001, accounts receivable included
approximately $2.8 million and $2.4 million, respectively, of earned but
unbilled receivables, which are a normal part of the Company's business. The
terms of the related advertising contracts typically require billing at the
end of each month. All unbilled receivables as of March 31, 2002 have been
subsequently billed.

COMPREHENSIVE LOSS

Total comprehensive loss for the three month periods ended March 31, 2002 and
2001 was $(3.7) million and $(82.1) million, respectively. Comprehensive loss
resulted primarily from net losses of $(3.7) million and $(78.7) million,
respectively, as well as a change in unrealized gains (losses)(net of tax), of
marketable securities of $0 and $(3.6) million, respectively, and foreign
currency translation adjustments of $0 and $0.2 million, respectively. The net
change in unrealized gains (losses) of $3.6 million for the three months ended
March 31, 2001 is comprised of net unrealized holding losses arising during the
period of $5.1 million related to chinadotcom, a reclassification adjustment of
$4.0 million for net gains of the sale of investments in marketable securities
and a reclassification adjustment of $2.5 million for other-than-temporary
losses related to available-for-sale securities of Network Commerce and
i3Mobile.

LOSS PER SHARE

Loss per share is presented in accordance with the provisions of Statement of
Financial Accounting Standards No. 128, Earnings Per Share ("EPS"). Basic EPS
excludes dilution for potentially dilutive securities and is computed by
dividing income or loss available to common shareholders by the weighted average
number of common shares outstanding for the period. 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 and resulted in the
issuance of common stock. Diluted net loss per share is equal to basic net loss
per share since all potentially dilutive securities are anti-dilutive for each
of the periods presented. Diluted net loss per common share for the three months
ended March 31, 2002 and 2001 does not include the effects of options to
purchase 8.3 million and 11.9 million shares of common stock, respectively; 4.0
million and 2.8 million common stock warrants; and 0.1 million and 0.3 million
shares of unvested restricted stock, respectively, on an "as if" converted
basis, as the effect of their inclusion is anti-dilutive during each period.

RECLASSIFICATIONS

Certain reclassifications have been made to prior year consolidated financial
statements to conform to current year's presentation.

                                        6
<Page>

(2) BUSINESS COMBINATIONS

ACQUISITION OF REAL MEDIA

On October 30, 2001, the Company entered into a merger agreement with Real
Media, Inc. ("Real Media"), a privately-held Delaware Corporation. Pursuant to
the Agreement and Plan of Merger, the Company acquired all the outstanding
common and preferred shares of Real Media in a merger transaction whereby an
indirect subsidiary of the Company was merged with and into Real Media, in
exchange for approximately 8.2 million shares valued at $2.2 million of the
Company's common stock, equal to 19.9 percent of the Company common stock prior
to the merger. The total purchase price of $6.7 million also included
acquisition and transaction costs of $0.9 million and assumption of $3.6 million
in net liabilities. The merger created cost reductions for the combined Company,
one of which was to focus on Real Media's proprietary Open AdStream technology
("OAS") and abandon the Company's existing technology, 24/7 Connect. Other cost
reductions were achieved through the elimination of redundant personnel,
renegotiating affiliate contracts with low split rates on the Real Media
network, renegotiation of supplier contracts at better rates due to increased
volume and the consolidation of numerous offices. The Company also adopted a new
name "24/7 Real Media, Inc." to capitalize on the Real Media and 24/7 brand
names. The purchase price in excess of the value of net liabilities acquired of
$6.7 million has been allocated $3.5 million to acquired technology, $0.5
million to tradename and $2.7 million to goodwill. The acquired technology and
tradename are being amortized over the expected period of benefit of four years.
The acquisition was accounted for as a purchase business combination in
accordance with Statement of Financial Accounting Standards Board 141, "Business
Combinations" and Statement of Financial Accounting Standards Board 142,
"Goodwill and Other Intangible Assets". Accordingly, goodwill was not amortized.

The Company also guaranteed a Promissory Note for $4.5 million issued by
Publigroupe USA Holding, Inc. ("Publigroupe"), former principal shareholder of
Real Media, as of the acquisition date, which was to be used primarily to
finance Real Media's restructuring plan. The note bears interest at 4.5% and
principal and interest are due on October 30, 2006. The restructuring plan
provides for office closings of $0.2 million, workforce reduction of
approximately 120 employees for $3.1 million and other related obligations of
$1.2 million (see note 9). Publigroupe also promised to provide additional
funding in the form of three-year notes of $1.5 million which was received in
January 2002 and $1.5 million based on the Company achieving certain target
operating results for the three months ended March 31, 2002, which was received
on May 13, 2002. In addition, certain key executives had clauses in their Real
Media employment agreements that called for transactional bonuses to be paid in
the case of a change in control. These bonuses of $0.5 million were assumed as
part of the acquisition and were paid in November 2001.

The net liabilities acquired consist of the following:

<Table>
<Caption>
           ASSET/LIABILITY                                               AMOUNT
           ---------------                                              --------
           <S>                                                          <C>
           Cash ........................................................$  6,343
           Accounts receivable .........................................   6,405
           Fixed assets ................................................   2,248
           Receivable--Publigroupe .....................................     600
           Other assets ................................................   1,411
           Accounts payable and accrued liabilities .................... (13,870)
           Deferred revenue ............................................  (2,249)
           Note payable--Publigroupe ...................................  (4,500)
                                                                        --------
                                                                        $ (3,612)
                                                                        ========
</Table>

The following unaudited pro forma consolidated amounts give effect to the
Company's acquisition of Real Media accounted for by the purchase method of
accounting as if it had occurred at the beginning of the period by consolidating
the results of operations of the acquired entity for the three month period
ended March 31, 2001.

                                        7
<Page>

The unaudited pro forma consolidated statements of operations are not
necessarily indicative of the operating results that would have been achieved
had the transactions been in effect as of the beginning of the periods presented
and should not be construed as being representative of future operating results.

<Table>
<Caption>
                                                                             THREE MONTHS ENDED
                                                                               MARCH 31, 2001
                                                                       -------------------------------
                                                                       (IN THOUSANDS, EXCEPT SHARE AND
                                                                               PER SHARE DATA)
<S>                                                                    <C>
Total revenues.........................................................$                        25,401
                                                                       -------------------------------
Loss from continuing operations........................................                        (67,460)
Loss from discontinued operations......................................                        (17,416)
                                                                       -------------------------------
Net loss...............................................................$                       (84,876)
                                                                       ===============================
Basic and diluted loss per share
Loss from continuing operations........................................$                         (1.33)
Loss from discontinued operations......................................                          (0.34)
                                                                       -------------------------------
Net loss...............................................................$                         (1.67)
                                                                       ===============================
Weighted average shares used
  in net loss per share calculation (1)................................                     50,908,711
                                                                       ===============================
</Table>

(1)  The weighted average shares used to compute pro forma basic and diluted net
loss per share for the period ended March 31, 2001 includes the 8,216,868 shares
issued for Real Media as if the shares were issued on January 1, 2001.

(3)  DISCONTINUED OPERATIONS

EUROPE
On August 6, 2001, the Company, determined that it would cease funding its
European subsidiaries and communicated that to 24/7 Europe NV's management
team and Board of directors. Management of 24/7 Europe advised the Company
that 24/7 Europe NV was insolvent and shut down all operations in the third
quarter of 2001. During the second quarter of 2001, the Company had reduced
the carrying value of the net assets of the European operations to zero. The
write down included $12.3 million in impairment charges related to goodwill
and other intangible assets, which was included within discontinued
operations in the second quarter of 2001 statement of operations.

IMAKE
In accordance with SFAS 144, operations meeting the definition of a component of
an entity are treated as discontinued operations when sold. On January 22, 2002,
the Company completed the sale of its wholly owned subsidiary, IMAKE Software &
Services, Inc, to Schaszberger Corporation, the previous owner and officer of
IMAKE. Under the terms of the sale, the purchase price payable by the buyer was
approximately $6.5 million for the stock of IMAKE of which $2.0 million was in
the form of a 6% four year secured note, approximately $500,000 in cash
consideration, a potential earnout of up to $4 million over the next three years
based on gross revenue as defined in the agreement and Series A preferred stock
of Schaszberger Corp which as of the closing date represented 19.9% of the
buyer. The Note secured by certain assets of IMAKE is guaranteed by Schaszberger
Corporation. In the event that the earnout is not met within the three year
period, the Company is entitled to receive a $1.00 Warrant for common stock
equivalent to the difference between $3.0 million and actual earn out paid to
date. The shares to be received is based on a third party outside valuation of
the Buyer at December 31, 2005 and a ratio set forth in the agreement. The
consideration paid to the Company was determined as a result of negotiations
between the buyer and the

                                        8
<Page>

Company. The Company has discounted the note receivable and recorded the net
present value of the earnout based on its estimates of projected revenues and
reflected $0.5 million and $1.5 million, respectively. In January, the Company
received the upfront cash consideration of $0.5 million and has been receiving
the monthly earnout payments as scheduled. As of March 31, 2002, there are
approximately $0.3 million in prepaid expenses and other current assets and $1.7
million in other assets related to IMAKE on the consolidated balance sheet.

The consolidated financial statements of the Company have been restated to
reflect the disposition of the international segment and the sale of the
IMAKE subsidiary as a discontinued operation in accordance with SFAS 144 and
APB Opinion No. 30. Accordingly, revenues, costs and expenses, assets,
liabilities, and cash flows of Europe and IMAKE have been excluded from the
respective captions in the Consolidated Statements of Operations,
Consolidated Balance Sheets and Consolidated Statements of Cash Flows, and
have been reported through the date of disposition as "Loss from discontinued
operations," "Net assets of discontinued operations," and "Net cash used by
discontinued operations," for all periods presented.

Summarized financial information for the discontinued operations is as follows
(in thousands):

STATEMENT OF OPERATIONS DATA

<Table>
<Caption>
                                                  THREE MONTHS ENDED
                                                    MARCH 31, 2001
                                                  ------------------
<S>                                               <C>
Revenue.......................................... $            7,669
Net loss.........................................             17,416
</Table>

BALANCE SHEET DATA

<Table>
<Caption>
                                                               DECEMBER 31,
                                                                  2001
                                                             ---------------
<S>                                                          <C>
Net current assets of discontinued operation................ $           738
Net total assets of discontinued operation.................. $         2,438
</Table>

(4)  DISPOSAL OF NON-CORE ASSETS

On May 23, 2001, the Company completed the sale of Exactis to Direct Marketing
Technologies, Inc., a subsidiary of Experian Marketing Solutions, Inc.
("Experian"). The purchase price was $15.25 million of which $1.5 million was
deposited into escrow until August 2002 as security for the Company's
indemnification obligations under the Stock Purchase Agreement and $1.75 million
was retained as a prepayment for future services that are to be purchased by the
Company from Experian pursuant to a services agreement that expires on December
31, 2002. During the second quarter of 2001, the $1.5 million in escrow and
$1.75 million prepayment had been reflected as deferred gain on sale of non-core
assets on the consolidated balance sheet.

In September 2001, the Company received a letter from Experian alleging that the
Company made certain misrepresentations and omissions in connection with the
Stock Purchase Agreement relating to the sale of Exactis. On March 27, 2002, the
Company and Experian reached a settlement agreement whereby the Company
authorized the escrow agent to release $750,000 to Experian, and Experian
authorized the escrow agent to release the remaining balance of approximately
$780,000 to the Company. On March 28, 2002, the funds were released to the
Company. Upon release of the escrow balance, the Company recognized $750,000 of
the deferred gain related to the sale as gain on sale of non-core assets in the
2002 statement of operations and $30,000 as interest income.

During the quarter ended March 31, 2002, the Company was billed
approximately $124,000 in services which have been reflected as cost of
revenues and gain on sale of non core assets in the statement of operations.
Through March 31, 2002, the sale has resulted in a cumulative loss of $3.5
million, not including the

                                        9
<Page>

remainder of the aforementioned deferred gains of $0.7 million. The Company has
reflected the remaining $0.7 million of prepaid services in prepaid and other
current assets on the consolidated balance sheet.

(5)  INTANGIBLE ASSETS, NET

The Company performs on-going business reviews and, based on quantitative and
qualitative measures, assesses the need to record impairment losses on
long-lived assets used in operations when impairment indicators are present.
Where impairment indicators were identified, the Company determined the
amount of the impairment charge by comparing the carrying values of goodwill
and other long-lived assets to their fair values.

Through August 2000, the Company completed numerous acquisitions that were
financed principally with shares of the Company's common stock and were valued
based on the price of the common stock at that time. Starting with the fourth
quarter of 2000, the Company reevaluated the carrying value of its businesses on
a quarterly basis. The revaluation was triggered by the continued decline in the
Internet advertising and marketing sectors throughout 2000 and 2001. In
addition, each of these entities have experienced declines in operating and
financial metrics over several quarters, primarily due to the continued weak
overall demand of on-line advertising and marketing services, in comparison to
the metrics forecasted at the time of their respective acquisitions. These
factors significantly impacted current projected revenue generated from these
businesses. The Company's evaluation of impairment was also based on achievement
of the unit's business plan objectives and milestones, the fair value of each
business unit relative to its carrying value, the financial condition and
prospects of each business unit and other relevant factors. The business plan
objectives and milestones that were considered included, among others, those
related to financial performance, such as achievement of planned financial
results, and other non-financial milestones such as successful deployment of
technology or launching of new products and the loss of key employees. The
impairment analysis also considered when these properties were acquired and that
the intangible assets recorded at the time of acquisition were being amortized
over useful lives of 2 - 4 years. The amount of the impairment charge was
determined by comparing the carrying value of goodwill and other long-lived
assets to fair value at each respective period end.

Where impairment was indicated, the Company determined the fair value of its
business units based on a market approach, which included an analysis of market
price multiples of companies engaged in similar businesses. To the extent that
market comparables were not available, the Company used discounted cash flows in
determining the value. The market price multiples are selected and applied to
the business based on the relative performance, future prospects and risk
profile of the business in comparison to the guideline companies. The
methodology used to test for and measure the amount of the impairment charge was
based on the same methodology used during the initial acquisition valuations. As
a result, during the Company's review of the value and periods of amortization
of both goodwill and certain other intangibles it was determined that the
carrying value of goodwill and certain other intangible assets were not
recoverable. The other intangible assets that were determined to be impaired
related to the decline in fair market value of acquired technology, a
significant reduction in the acquired customer bases and turnover of workforce
which was in place at the time of the acquisition of these companies.

As a result, the Company determined that the fair value of goodwill and other
intangible assets attributable to several of its operating units were less than
their recorded carrying values. Accordingly, the Company recognized $35.5
million in impairment charges to adjust the carrying values in 2001 - $20.1
million related to Mail, $10.9 million related to WSR and $4.5 million related
to Exactis.

The impairment factors evaluated may change in subsequent periods, given that
the Company's business operates in a highly volatile business environment. This
could result in significant additional impairment charges in the future.

As of March 31, 2002, the goodwill and other intangibles, net was $14.0 million:
$6.6 million related to Real Media, $3.8 million related to Mail, $2.5 million
related to WSR and $1.1 million related to ClickThrough.

                                       10
<Page>

<Table>
<Caption>
                                                                  March 31,        December 31,         Estimated
                                                                    2002               2001           Useful Lives
                                                              ---------------     --------------      ------------
                                                                        (in thousands)
<S>                                                           <C>                 <C>                            <C>
UNAMORTIZED INTANGIBLE ASSETS
  Goodwill..................................................  $         8,321     $        7,901

AMORTIZED INTANGIBLE ASSETS WITH FINITE LIVES
  Technology................................................            6,004              6,001                 4
  Assembled workforce (1)...................................                -                730                 2
  Trademark.................................................              500                500                 4
                                                              ---------------     --------------
                                                                        6,504              7,231
  Less accumulated amortization.............................             (846)              (614)
                                                              ---------------     --------------
                                                                        5,658              6,617

                                                              ---------------     --------------
Total                                                         $        13,979     $       14,518
                                                              ===============     ==============
</Table>

(1)  In connection with the adoption of SFAS 142, on January 12, 2002, the
Company reclassified $420 in net book value associated with its assembled
workforce to goodwill.

Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards Board No. 142, "Goodwill and Other Intangible Assets"
("SFAS 142") and Statement of Financial Accounting Standards Board No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Asset ("SFAS 144").
SFAS 142 eliminates the amortization of goodwill and indefinite-lived
intangible assets, addresses the amortization of intangible assets with
finite lives and addresses impairment testing and recognition for goodwill
and intangible assets. SFAS 144 establishes a single model for the impairment
of long-lived assets and broadens the presentation of discontinued operations
to include more disposal transactions on a prospective basis (see notes 3 and
13). In accordance with SFAS 144, no impairment charges resulted from the
required impairment evaluations.

The Company assesses goodwill for impairment annually unless events occur that
require more frequent reviews. Long-lived assets, including amortizable
intangibles, are tested for impairment if impairment triggers occur. Discounted
cash flow analyses are used to assess nonamortizable intangible impairment while
undiscounted cash flow analyses are used to assess long-lived asset impairment.
If an assessment indicates impairment, the impaired asset is written down to its
fair market value based on the best information available. Estimated fair market
value is generally measured with discounted estimated future cash flows.
Considerable management judgment is necessary to estimate undiscounted and
discounted future cash flows. Assumptions used for these cash flows are
consistent with internal forecasts. The Company will have an external valuation
performed on its goodwill by June 30, 2002 and impairment that arise, if any,
will be reflected as a cumulative effect of change in accounting principle as of
January 1, 2002.

The amortization expense and net loss for the periods ended March 31, 2002 and
2001 had SFAS 142 been applied for both periods is as follows:

                                       11
<Page>

<Table>
<Caption>
                                                                     2002        2001
                                                                   --------    ---------
<S>                                                                <C>         <C>
Loss from continuing operations(1)..............................   $ (3,665)   $ (61,271)
Add back: goodwill amortization.................................          -        3,811
                                                                   --------    ---------
  Adjusted loss from continuing operations......................     (3,665)     (57,460)
Loss from discontinued operations...............................          -      (17,416)
                                                                   --------    ---------
  Adjusted net loss.............................................   $ (3,665)   $ (74,876)
                                                                   ========    =========

Basic and diluted net loss per share:
Loss from continuing operations.................................   $  (0.07)   $   (1.43)
Add back: goodwill amortization.................................          -         0.09
                                                                   --------    ---------
  Adjusted loss from continuing operations......................      (0.07)       (1.34)
Loss from discontinued operations...............................          -        (0.41)
                                                                   --------    ---------
  Adjusted net loss per share...................................   $  (0.07)   $   (1.75)
                                                                   ========    =========

(1) Includes $35.5 million of goodwill impairment charges recorded in the
    three month period ended March 31, 2001.
</Table>

(6)  INVESTMENTS

The fair value of the available-for-sale marketable securities is based on the
quoted market values reported on NASDAQ. As of September 30, 2001, the Company
has sold all of its marketable and cost based securities.

During the three months ended March 31, 2001, the Company sold approximately 1.1
million shares of chinadotcom stock at prices ranging from $2.38 to $7.69 per
share. The shares had a cost basis of $1.5 million, which resulted in a gain of
approximately $4.5 million. The Company also sold a portion of its investments
in Network Commerce and i3Mobile, which resulted in proceeds of $0.6 million and
a loss of approximately $0.5 million. The Company's net gain on the sale of
these investments are included in "Gain on sale of investments, net" within
other income (expense) in the Company consolidated statement of operations.

During the first quarter of 2001, the Company wrote down certain of its
investments and recognized impairment charges of approximately $3.1 million for
other-than-temporary declines in value of certain investments. The Company's
management made an assessment of the carrying value of its cost-based
investments and determined that they were in excess of their carrying values due
to the significance and duration of the decline in valuations of comparable
companies operating in the Internet and technology sectors. The write down of
cost based investments was $0.6 million related to Media-Asia. The Company's
management also recognized that the decline in value of its available-for-sale
investments in Network Commerce and i3Moble were other-than-temporary and
recorded an impairment of $2.3 million and $0.2 million, respectively. These
impairment charges are included in "Impairment of investments" within other
income (expense) in the Company's 2001 consolidated statement of operations.

(7)  COMMON STOCK

During the first quarter of 2002, approximately 52 employees including
members of senior management agreed to receive between 5-20% of their
compensation in the form of the Company's common stock in lieu of cash. As a
result, approximately 682,000 shares, with a fair market value of $0.2
million, were issued by March 31, 2002. These shares were issued out of the
Company's 2001 Equity Compensation Plan ("2001 Equity Plan").

On March 23, 2001, the Company issued 710,000 shares of common stock to
employees of the Company for meeting the earn-out provisions in the WSR merger
agreement, as amended. The related compensation expense of approximately $0.2
million is reflected as stock based compensation expense in the

                                       12
<Page>

consolidated statements of operations. Substantially all of these shares were
returned as part of the settlement with the former principal stockholders on
September 25, 2001.

On May 23, 2000, the Company offered certain members of management the option
of exchanging their January 1, 2000 option grants for restricted stock in a
ratio of one share for three options. As a result, the Company cancelled
832,500 options and issued approximately 285,000 shares of restricted stock
to these employees of the Company, which vest over a period of three to four
years. Such grants resulted in a deferred compensation expense of
approximately $4.5 million, which is being amortized over the vesting period
of those shares. For the three month periods ended March 31, 2002 and 2001,
7,000 and 120,000 shares, respectively, were granted to employees according
to their vesting schedule.

(8)  STOCK INCENTIVE PLAN

For the three month period ended March 31, 2002, the Company granted
approximately 6.4 million stock options under the 1998 Stock Incentive Plan and
1.5 million stock options under the 2001 Stock Incentive Plan for Non-officers
to employees at exercise prices based on the fair market value of the Company's
common stock at the respective dates of grant.

On January 1, 2002, in accordance in the terms of the Plan, shares available
under the Plan were increased by 1,485,230.

(9)  RESTRUCTURING CHARGES

During the first quarter 2001, restructuring charges of approximately $0.3
million were recorded by the Company in accordance with the provisions of EITF
94-3, and Staff Accounting Bulletin No. 100. The Company's restructuring
initiatives were to reduce employee headcount by the involuntary termination of
approximately 100 employees.

The following sets forth the activities in the Company's restructuring reserve
for the three months ended March 31, 2002, which is included in accrued expenses
in the consolidated balance sheet (in thousands):

<Table>
<Caption>
                                        Beginning     Current year     Current year        Ending
                                         Balance       provision       utilization         Balance
                                      ------------   --------------   -------------     ------------
<S>                                   <C>            <C>              <C>               <C>
Employee termination benefits......   $      2,489   $            -   $       1,504     $        985
Office closing costs...............            266                -             129              137
Other exit costs...................          1,512                -             225            1,287
                                      ------------   --------------   -------------     ------------
                                      $      4,267   $            -   $       1,858     $      2,409
                                      ============   ==============   =============     ============
</Table>

(10) SEGMENT INFORMATION

On October 30, 2001, the Company merged with Real Media. As a result of this
merger and the restructuring performed by both companies, the Company has
changed how it operates its businesses and views its reportable segments. Based
on these operational changes the consolidated financial statements presented
have been restated to reflect these new reportable segments. The Company's
business is currently comprised of two reportable segments: integrated media
solutions and technology solutions. The integrated media solutions segment
generates the majority of its revenues by delivering advertisements and
promotions to affiliated Web sites, search engine traffic delivery and marketing
services to target online users compiled by list management. The technology
solutions segment generates revenue by providing third party ad serving, email
delivery service bureau, broadband software solutions and technology services.
The Company's management reviews corporate assets and overhead expenses for each
segment.

                                       13
<Page>

The summarized segment information as of and for the three months ended
March 31, 2002 and 2001, is as follows:

<Table>
<Caption>
                                   THREE MONTHS ENDED MARCH 31, 2002   THREE MONTHS ENDED MARCH 31, 2001
                                  -----------------------------------  ----------------------------------
                                   INTEGRATED                          INTEGRATED
                                     MEDIA     TECHNOLOGY                MEDIA     TECHNOLOGY
                                   SOLUTIONS   SOLUTIONS     TOTAL     SOLUTIONS   SOLUTIONS     TOTAL
                                  ------------ ----------- ----------  ----------- ----------- ----------
                                                              (IN THOUSANDS)
<S>                               <C>          <C>         <C>         <C>         <C>         <C>
Revenues......................... $     7,516  $    3,235  $   10,751  $   12,360  $    5,248  $   17,608
Segment loss from operations.....      (3,551)        (76)     (3,627)    (55,968)     (6,557)    (62,525)
Amortization of goodwill
   and intangibles...............         292         250         542       6,290         654       6,944
Stock-based compensation (1).....          37           -         270         471        (112)      1,016
Restructuring costs..............           -           -           -         174         173         347
Gain on sale of assets, net......         874           -         874           -           -           -
Impairment of intangible assets..           -           -           -      31,046       4,501      35,547

Total assets:
   March 31, 2002................      25,125      12,743      37,868
   December 31, 2001(2)..........      29,936      12,970      42,906
</Table>

(1)  Not included in the segment columns are stock based compensation of
     $233,000 and $657,000 for the periods ended March 31, 2002 and 2001,
     respectively, related to corporate employees.
(2)  Not included above at December 31, 2001 are $2.4 million in assets related
     to discontinued operations.

Geographical information is as follows:

<Table>
<Caption>
                                                      US          INTERNATIONAL        TOTAL
                                                 -------------    -------------     ------------
                                                                 (IN THOUSANDS)
<S>                                              <C>              <C>               <C>
THREE MONTHS ENDED MARCH 31, 2002
Revenues ...................................     $       7,549    $       3,202     $     10,751
Long-lived assets ..........................            12,578            8,950           21,528

THREE MONTHS ENDED MARCH 31, 2001
Revenues ...................................     $      16,077    $       1,531     $     17,608
Long-lived assets at December 31, 2001 .....            14,877            8,001           22,878
</Table>

Not included above at December 31, 2001 are $1.7 million in long-lived assets
related to discontinued operations.

(11)  SUPPLEMENTAL CASH FLOW INFORMATION

The amount of cash paid for interest was $4,000 for both the three month periods
ended March 31, 2002 and 2001.

(12)  RELATED PARTY

LOAN PAYABLE
In conjunction with the merger with Real Media, the Company also guaranteed a
Promissory Note for $4.5 million issued by Publigroupe as of the acquisition
date, which was to be used in accordance with Real Media's restructuring plan
and in payment of transactional bonuses. The restructuring plan provides for
office closings, workforce reduction and other related obligations (see note 9
for details).

The note bears interest at 4.5% and principal and interest are due on October
30, 2006. In addition, in accordance with the Real Media purchase agreement in
January 2002, the Company received cash of $1.5 million and signed a promissory
note bearing interest at 6%, with interest and principal due in January 2006.
Based on the Company achieving certain target operating results for the three
months ended March 31, 2002 it received another $1.5 million in the form of a 6%
three year promissory note on May 13, 2002.

                                       14
<Page>

RECEIVABLE FROM RELATED PARTY
As of March 31, 2002, the Company has a $0.6 million receivable from a wholly
owned subsidiary of Publigroupe, a principal stockholder.

(13) SUBSEQUENT EVENTS

STOCK BASED COMPENSATION
During the second quarter of 2002, approximately 19 employees including members
of senior management agreed to receive between 5-20% of their compensation in
the form of the Company's common stock in lieu of cash. As a result,
approximately 274,000 shares will be issued by July 31, 2002.

SALE OF CERTAIN EMAIL ASSETS On May 3, 2002, the Company completed the sale
of certain assets related to its Email management product, including customer
contracts, certain intangibles and employee relationships, to 24/7 Mail,
Inc., a wholly owned subsidiary of Naviant, Inc. The Company adopted the
provisions of SFAS 144 on January 1, 2002. Under the terms of the sale, the
purchase price payable is up to $4.5 million. The purchase price is comprised
of (i) $1.0 million that was paid at closing; (ii) $1.0 million in the form
of a non-interest bearing installment note with $350,000 due in ninety days,
$350,000 due in one hundred and eighty days and $300,000 due in two hundred
seventy days from closing; (iii) an earn-out payable quarterly over the next
45 months, based on 5% of Net Revenue (as defined in the Asset Purchase
Agreement), with minimum payments of $600,000 and a maximum of $2.0 million.
Lastly, pursuant to a $500,000 non-interest bearing installment note, half of
which is payable on each of April 30, 2004 and April 30, 2005, Naviant has
the option either to (i) issue to the Company a number of shares currently
comprising 19.9% of 24/7 Mail, Inc., or (ii) pay the Company cash in lieu of
the shares. The consideration paid to the Company was determined as a result
of arms-length negotiations between the buyer and the Company.

ISSUANCE OF STOCK FOR BONUSES
In April 2002, the Company issued 416,784 shares, valued at $0.1 million, for
2001 bonuses as reported in the Company's 10-K and accrued as of December 31,
2001, principally to the CEO.

2002 EQUITY COMPENSATION PLAN
On April 22, 2002, the Board approved the 24/7 Real Media, Inc. 2002 Equity
Compensation Plan to enable the Company to offer and issue to certain
employees, former employees, advisors and consultants of the Company and its
affiliates its common stock in payment of amounts owed to such employees and
third parties. The aggregate number of shares of common stock that may be
issued pursuant to the 2002 Equity Compensation Plan shall not exceed
3,000,000 shares. The Company may from time to time issue to employees,
former employees, advisors and consultants to the Company or its affiliates
shares of its common stock in payment or exchange for or in settlement or
compromise of amounts due by the Company to such persons for goods sold and
delivered or to be delivered or services rendered or to be rendered. Shares
of the Company's common stock issued pursuant to the 2002 Equity Compensation
Plan will be issued at a price per share of not less than eighty-five percent
(85%) of the fair market value per share on the date of issuance and on such
other terms and conditions as determined by the Company. The Chief Executive
Officer of the Company is authorized to issue shares pursuant to and in
accordance with the terms of the 2002 Equity Compensation Plan, provided that
all issuances shall be co-authorized by at least one of the President, any
Executive Vice President, the Chief Financial Officer or the General Counsel.
The plan may be amended at any time by the Company.

                                       15
<Page>

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

THE TERMS "WE" AND "OUR COMPANY" MEAN 24/7 Real Media, OUR SUBSIDIARIES AND EACH
OF OUR PREDECESSOR ENTITIES.

FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, and Section 21E of the Securities Exchange
Act of 1934. We intend such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we are including this statement
for purposes of complying with these safe harbor provisions. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions, including
those set forth under "--Risk Factors" below.

Words such as "expect", "anticipate", "intend", "plan", "believe", "estimate"
and variations of such words and similar expressions are intended to identify
such forward-looking statements. We undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this report might not
occur.

GENERAL

24/7 Real Media provides marketing solutions to the digital advertising
industry. Through its comprehensive suite of online marketing and technologies
services, 24/7 Real Media connects media buyers and media sellers across
multiple digital platforms and works closely with individual clients to develop
a comprehensive, customized, value-enhancing solution. Our business is organized
into two principal lines of business:

     -  Integrated Media Solutions: 24/7 Real Media connects advertisers to
        high-quality audiences through four products: (i) the 24/7 Network of
        marquee branded Web sites and prestigious niche Web sites; (ii) one of
        the largest permission based email databases; (iii) a comprehensive
        promotions suite; and (iv) a leading search engine results listings
        service.
     -  Technology Solutions: OpenAdstream, our proprietary advertising delivery
        and management technology suite was developed by Real Media, which was
        subsequently acquired by 24/7 Media on October 30, 2001. 24/7 Real Media
        also partners with other companies to offer complementary plug-ins and
        modules. Through a global sales force and account management team, both
        local and centrally-served solutions are offered to Web sites, ad
        networks, ad agencies, and advertisers.

On May 3, 2002, we sold certain assets of our email management product to 24/7
Mail, Inc., a wholly owned subsidiary of Naviant. Going forward the Company will
no longer recognize revenue from managed lists. The sale combines 24/7 Mail
which already has one of the largest and broadest permission email databases,
with Naviant, a leading collector of opt-in consumer data and an industry leader
in permission-based email marketing. Under the terms of the agreement, we will
still act as brokers for email campaigns. We will recognize as revenue only the
commission due to us as a broker.

CRITICAL ACCOUNTING POLICIES

Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission (SEC), requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Note 1 of the Notes to the Consolidated Financial
Statements includes a summary of the significant accounting policies and methods
used by the Company. In addition, Financial Reporting Release No. 61 was
recently released by the SEC to require all companies to include a discussion to
address, among other things, liquidity, off balance sheet arrangements,
contractual obligations and commercial commitments.

                                       16
<Page>

GENERAL
The consolidated financial statements of the Company are prepared in conformity
with accounting principles generally accepted in the United States of America.
As such, the Company is required to make certain estimates, judgments and
assumptions that management believes are reasonable based upon the information
available. These estimates and assumptions affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the
dates of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting periods. The significant accounting
policies which the Company believes are the most critical to aid in fully
understanding and evaluating the reported consolidated financial results include
the following:

REVENUE RECOGNITION

INTEGRATED MEDIA SOLUTIONS
Our network revenues are derived principally from short-term advertising
agreements in which we deliver advertising impressions for a fixed fee to
third-party Web sites comprising our Network. Our email related revenues were
derived principally from short-term delivery based agreements in which we
deliver advertisements to email lists for advertisers and Web sites. Revenues
are recognized as services are delivered provided that no significant
obligations remain outstanding and collection of the resulting receivable is
probable. Service revenue is derived from driving traffic to a client website or
the delivery of email messages for clients both of which are recognized upon
delivery. On May 3, 2002 the Company sold its email business and starting in May
2002 we will only recognize commissions from brokerage sales as revenue. Third
party Web sites that register Web pages with our network and display advertising
banners on those pages are commonly referred to as "Affiliated Web sites." These
third party Web sites are not "related party" relationships or transactions as
defined in Statement of Financial Accounting Standards No. 57, "Related Party
Disclosures." We pay Affiliated Web sites a fee for providing advertising space
to our network. We also have agreements with various list owners in which we
service its advertisers and other customers through the use of these lists. We
become obligated to make payments to Affiliated Web sites, which have contracted
to be part of our network, and list owners in the period the advertising
impressions or emails are delivered. Such expenses are classified as cost of
revenues in the consolidated statements of operations.

TECHNOLOGY SOLUTIONS
Our technology revenues are derived from licensing of our ad serving software
and related maintenance and support contracts. In addition, we derived revenue
from our broadband and professional services subsidiary, IMAKE, which was sold
in January, 2002; and our email service bureau subsidiary, Exactis, and our
third party ad serving subsidiary, Sabela, both of which were sold in May of
2001.

Revenue from software licensing agreements is recognized in accordance with
Statements of Position ("SOP") 97-2, "Software Revenue Recognition," and Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" upon
delivery of the software, which is generally when customers begin utilizing the
software, there is pervasive evidence of an arrangement, collection is
reasonably assured, the fee is fixed or determinable, and vendor-specific
objective evidence exists to allocate the total fees to all elements of the
arrangement. Revenue related to the central ad serving product is recognized
based on monthly usage fees. Revenue from software maintenance and support
services is recognized ratably over the life of the maintenance agreements,
which typically do not exceed one year. Maintenance revenue invoiced in advance
of the related services is recorded as deferred revenue. Expense from our
licensing, maintenance and support revenues are primarily payroll costs incurred
to deliver, modify and support the software. These expenses are classified as
cost of revenues in the accompanying consolidated statements of operations.

ACCOUNTS RECEIVABLE
We perform ongoing credit evaluations of our customers and adjust credit limits
based upon payment history and the customer's current credit worthiness, as
determined by a review of their current credit information. We continuously
monitor collections and payments from our customers and maintain a provision for
estimated credit losses based upon historical experience and any specific
customer collection issues that have been identified. While such credit losses
have historically been within our expectations and the provisions

                                       17
<Page>

established, we cannot guarantee that we will continue to experience the same
credit loss rates that have been experienced in the past.

IMPAIRMENT OF LONG-LIVED ASSETS
We assess the need to record impairment losses on long-lived assets, including
fixed assets, goodwill and other intangible assets, to be held and used in
operations whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable, we estimate the undiscounted future cash flows to result from the
use of the asset and its ultimate disposition. If the sum of the undiscounted
cash flows is less than the carrying value, we recognize an impairment loss,
measured as the amount by which the carrying value exceeds the fair value of the
asset. Assets to be disposed of are carried at their lower of carrying value or
fair value less costs to sell. On an on-going basis, management reviews the
value and period of amortization or depreciation of long-lived assets, including
goodwill and other intangible assets. During this review, we reevaluate the
significant assumptions used in determining the original cost of long-lived
assets. Although the assumptions may vary from transaction to transaction, they
generally include revenue growth, operating results, cash flows and other
indicators of value. Management then determines whether there has been an
impairment of the value of long-lived assets based upon events or circumstances,
which have occurred since acquisition. The impairment policy is consistently
applied in evaluating impairment for each of our wholly owned subsidiaries and
investments. The impairment factors evaluated by us may change in subsequent
periods, given that our business operates in a highly volatile business
environment. This could result in significant additional impairment charges in
the future.

RESULTS OF OPERATIONS

FACTORS AFFECTING COMPARABILITY OF 2002 TO 2001
On October 30, 2001, we acquired Real Media. The merger created cost synergies
for our combined company, one of which was to focus on Real Media's proprietary
Open Adstream technology and abandon our existing ad serving technology, 24/7
Connect. The transition of the network business onto the Open Adstream platform
began in December 2001 and was completed in February 2002 resulting in the
elimination of redundant personnel and operating costs associated with the two
ad serving platforms, Open Adstream and 24/7 Connect. Throughout 2001, in
accordance with our business plan, we divested or discontinued many of our
non-core assets, including:
     -  In May 2001, we completed the sale of certain technology assets and
        intellectual property of Sabela and completed the shut down of Sabela
        operations on June 30, 2001.
     -  In May 2001, we completed the sale of Exactis, our email service bureau.
     -  In August 2001, the operations of 24/7 Europe were shut down, which have
        been restated in our consolidated financial statements to reflect the
        disposition of this international segment.
     -  In January 2002, we completed the sale of our IMAKE subsidiary. The
        financial statements of prior periods have been restated to reflect the
        disposition of IMAKE.

The decline in 2002 revenue attributed to the disposition of these non-core
assets was approximately $5.3 million as there was no revenue related to these
entities in the first quarter of 2002. The decline does not include $7.7 million
for 2001, related to Europe and IMAKE, which are shown as part of discontinued
operations in the 2001 consolidated statement of operations.

As a result of our cost-cutting and divestiture efforts, which began in November
2000 through December 31, 2001, we reduced our headcount by approximately 1,000
and closed several offices, both domestic and foreign. The core elements of our
business that remain are:
     -  Open Adstream ad serving technology, with one of the largest installed
        base of any ad serving solution in the world;
     -  The 24/7 Network, one of the largest branded ad networks online;
     -  24/7 iPromotions, one of the most innovative online promotions and
        sweepstakes services; and
     -  24/7 Website Results, a leading traffic driving and keyword monetizing
        solution.

                                       18
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In addition, in May 2002, we completed the sale of certain assets related to our
email management product, which had $1.3 million in revenue for the three months
ended March 31, 2002. Starting in May 2002, we will no longer generate revenue
from the sale of managed email lists. We will recognize only the commissions due
to us from being a broker.

RESULTS OF OPERATIONS

REVENUES

INTEGRATED MEDIA SOLUTIONS. Our Integrated Media Solutions revenues decreased
$4.8 million, or 39.2% to $7.5 million for the three month period ended March
31, 2002 from $12.4 million for the three month period ended March 31, 2001. The
decrease in revenue was due to a dramatic decrease in advertising dollars spent
as the economy continued to deteriorate through-out the end of the first quarter
of 2002 as a result of the economic recession. Online advertising was especially
hard hit due to the collapse of other Internet companies, which were a
significant portion of our customer base and as the advertising dollars
available went toward traditional media. The declines in revenue were partially
offset by our merger with Real Media on October 30, 2001. The US Email
management product, which was sold on May 3, 2002 accounted for $1.3 million
and $3.3 million for the periods ended March 31, 2002 and 2001, respectively.
Our second quarter results will include only one month's revenue contribution
from the US Email management product.

TECHNOLOGY SOLUTIONS. Our Technology Solutions revenue decreased $2.0 million,
or 38.4% to $3.2 million for the three month period ended March 31, 2002 from
$5.2 million three month period ended March 31, 2001. The periods are not
comparable as the revenue in 2002 is derived solely from operations that were
acquired with Real Media on October 30, 2001, while the revenue in 2001 relates
to operations that have been sold, including Exactis.com and Sabela.

COST OF REVENUE AND GROSS PROFIT

INTEGRATED MEDIA SOLUTIONS COST OF REVENUES AND GROSS PROFIT. The cost of
revenues consists primarily of fees paid to affiliated Web sites, which are
calculated as a percentage of revenues resulting from ads delivered on our
Network; list providers and traffic providers; depreciation of our 24/7 Connect
ad serving system (in 2001) and internet access costs. In 2002, cost associated
with ad serving is accounted for in our Technology Solutions segment cost of
revenues and an allocation based on usage is reflected in the Integrated Media
Solutions cost of revenues, making these costs variable versus fixed as they
were under 24/7 Connect. Gross margin increased from 20.5% in 2001 to 30.3% in
2002. The increase is due to lower adserving costs as the operations in 2001
could not support the fixed costs of 24/7 Connect which adversely affected the
gross margin. Excluding the Email management product in the US, the margins
increased from 15.3% for the three month period ended March 31, 2001 to 28.3%
for the three month period ended March 31, 2002.

TECHNOLOGY SOLUTIONS COST OF REVENUES AND GROSS PROFIT. The cost of technology
revenues consists of the cost of equipment and broadband for our third party
adserving solutions and payroll costs to deliver, modify and support software
offset by the portion allocated to integrated media solutions for adserving.
Gross margin decreased from 76.4% for the period ended March 31, 2001 to 73.7%
for the period ended March 31, 2001. As noted above, the periods are not
comparable as the segment is comprised of completely different operations.

OPERATING EXPENSES. Each of sales and marketing, general and administrative
and product technology expenses decreased significantly in the three month
period ended March 31, 2002 compared to the three month period ended March
31, 2001 as a result of our restructuring activities, the decisions to and
exit Latin America and the sale of Sabela and Exactis. The disposal of these
divisions resulted in a decrease of the above expenses by 66.9% or $16.9
million from prior year.

SALES AND MARKETING EXPENSES. Sales and marketing expenses consist primarily of
sales force salaries and commissions, advertising expenditures and costs of
trade shows, conventions and marketing materials. Sales and marketing expenses
decreased as a percentage of revenue from 45.5% for the period ended

                                       19
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March 31, 2001 to 28.3% for the period ended March 31, 2002. This decrease is
due to our successful rationalization efforts and reduction of discretionary
expenses.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
primarily of compensation, facilities expenses and other overhead expenses
incurred to support the business. General and administrative expenses decreased
as a percentage of revenue from 69.3% for the period ended March 31, 2001 to
36.9% for the period ended March 31, 2002. The significant decrease is due to
our rationalization efforts both in eliminating headcount, office space and
unnecessary expenses.

PRODUCT TECHNOLOGY EXPENSES. Product technology expenses consist primarily of
compensation and related costs incurred to further enhance our ad serving and
other technology capabilities. Product technology expenses decreased as a
percentage of revenue from 28.3% for the period ended March 31, 2002 to 12.4%
for the period ended March 31, 2001. The decrease is due to the sale of Exactis
on whose technology we spent significant dollars and our focus on OAS which
requires less enhancements than did 24/7 Connect.

AMORTIZATION OF GOODWILL AND INTANGIBLES. Amortization of goodwill and
intangibles was $0.5 million for the period ended March 31, 2002 and $7.0
million for the period ended March 31, 2001. The decrease is due to impairment
charges taken during 2001 for Exactis, Sabela, AwardTrack, iPromotions,
ConsumerNet and Website Results. The sale of Exactis in May 2001 and the
adoption of FAS 142 which states that goodwill is no longer amortized also
contributed to the decline.

Had we not adopted FAS 142, the amortization related to goodwill and other
intangibles would have been approximately $1.1 million higher than reported
under FAS 142.

STOCK-BASED COMPENSATION. Stock based compensation of $0.3 million for the
period ended March 31, 2002 consists of $0.2 million in salary for certain
employees who elected to receive stock instead of cash and $0.1 million in
amortization of deferred compensation for restricted shares issued to certain
employees. The $1.0 million for period ended March 31, 2001 consists of a $0.7
million in amortization of deferred compensation for restricted shares issued to
certain employees, $0.1 million in amortization of deferred compensation from
acquisitions and $0.2 million in stock to be given as bonuses to certain
employees.

RESTRUCTURING COSTS. During the period ended March 31, 2001 a restructuring
charge of approximately $0.3 million was recorded related to the reduction of
employee headcount. This restructuring involved the involuntary termination of
approximately 100 employees.

GAIN ON SALE OF ASSETS, NET. The $0.9 million gain for the period ended March
31, 2002 relates to the sale of Exactis. As part of the sale, there were
approximately $1.5 million in deferred gains related to an escrow balance and
$1.75 million in deferred gains related to prepaid service amounts. The gains
are recognized as the escrow balance is released and the prepaid services are
utilized. During the first quarter of 2002, we agreed to pay Experian, the
acquirer of Exactis, $750,000 of the escrow balance, with the remainder released
to the Company immediately. Therefore, $750,000 of the previous gain was
recognized and $750,000 reversed. The remaining amount of the gain relates to
the use of prepaid services.

IMPAIRMENT OF INTANGIBLE ASSETS. We perform on-going business reviews and, based
on quantitative and qualitative measures, assess the need to record impairment
losses on long-lived assets used in operations when impairment indicators are
present. Where impairment indicators were identified, we determined the amount
of the impairment charge by comparing the carrying values of goodwill and other
long-lived assets to their fair values.

Through August 2000, we completed numerous acquisitions that were financed
principally with shares of our common stock and were valued based on the price
of the common stock at that time. Starting with the fourth quarter of 2000, we
reevaluated the carrying value of our businesses on a quarterly basis. The
revaluation was triggered by the continued decline in the Internet advertising
and marketing sectors throughout 2000 and 2001. In addition, each of these
entities have experienced declines in operating and financial metrics over
several quarters, primarily due to the continued weak overall demand of on-line
advertising and marketing services, in comparison to the metrics forecasted at
the time of their respective acquisitions. These factors significantly

                                       20
<Page>

impacted current projected revenue generated from these businesses. Our
evaluation of impairment was also based on achievement of the unit's business
plan objectives and milestones, the fair value of each business unit relative to
its carrying value, the financial condition and prospects of each business unit
and other relevant factors. The business plan objectives and milestones that
were considered included, among others, those related to financial performance,
such as achievement of planned financial results, and other non-financial
milestones such as successful deployment of technology or launching of new
products and the loss of key employees. The impairment analysis also considered
when these properties were acquired and that the intangible assets recorded at
the time of acquisition were being amortized over useful lives of 2 - 4 years.
The amount of the impairment charge was determined by comparing the carrying
value of goodwill and other long-lived assets to fair value at each respective
period end.

Where impairment was indicated, we determined the fair value of its business
units based on a market approach, which included an analysis of market price
multiples of companies engaged in similar businesses. To the extent that market
comparables were not available, we used discounted cash flows in determining the
value. The market price multiples are selected and applied to the business based
on the relative performance, future prospects and risk profile of the business
in comparison to the guideline companies. The methodology used to test for and
measure the amount of the impairment charge was based on the same methodology
used during the initial acquisition valuations. As a result, during our review
of the value and periods of amortization of both goodwill and certain other
intangibles it was determined that the carrying value of goodwill and certain
other intangible assets were not recoverable. The other intangible assets that
were determined to be impaired related to the decline in fair market value of
acquired technology, a significant reduction in the acquired customer bases and
turnover of workforce which was in place at the time of the acquisition of these
companies.

As a result, we determined that the fair value of goodwill and other intangible
assets attributable to several of its operating units were less than their
recorded carrying values. Accordingly, we recognized $35.5 million in impairment
charges to adjust the carrying values in 2001 - $20.1 million related to Mail,
$10.9 million related to WSR and $4.5 million related to Exactis.

The impairment factors evaluated may change in subsequent periods, given that
our business operates in a highly volatile business environment. This could
result in significant additional impairment charges in the future.

INTEREST INCOME (EXPENSE), NET. Interest income, net primarily includes interest
income from our cash and cash equivalents and short-term investments and
interest expense related to our capital lease obligations. Interest income, net
was approximately zero for the period ended March 31, 2002 and $0.3 million for
the period ended March 31, 2001. The decrease was due to the addition of debt as
the related interest expense offset any interest income.

GAIN ON SALE OF INVESTMENTS. The gain on sale of investments was $4.0 million
for the period ended March 31, 2001. This gain relates to the sale of the
Company's remaining available-for-sale securities.

IMPAIRMENT OF INVESTMENTS. During 2001, the Company wrote down certain of its
investments and recognized impairment charges of approximately $3.1 million for
other-than-temporary declines in value. Management made an assessment of the
carrying value of our cost-based investments and determined that they were in
excess of their carrying values due to the significance and duration of the
decline in valuations of comparable companies operating in the Internet and
technology sectors. The write down of cost based investments was $0.6 million
related to Media-Asia. Management also recognized that the decline in value of
our available-for-sale investments in Network Commerce and i3Mobile were
other-than-temporary and recorded an impairment of $2.3 million and $0.2
million, respectively.

LOSS FROM DISCONTINUED OPERATIONS. On August 6, 2001, the Company determined
that it would cease funding to its European subsidiaries and communicated that
to 24/7 Europe NV's Board of directors. Management of 24/7 Europe has shut down
all operations.

                                       21
<Page>

On January 22, 2002 we completed the sale of our wholly owned subsidiary, IMAKE.
In accordance with FAS 144, we accounted for the operations of this component as
a discontinued operation.

All revenue, cost and expenses related to these discontinued businesses are
included in this line for the current period and prior periods have been
reclassified to reflect this presentation.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2002, we had cash and cash equivalents of $4.7 million versus $7.0
million at December 31, 2001. Cash and cash equivalents are comprised of highly
liquid short term investments with maturities of three months or less.

In the first quarter of 2002, we generated much of our liquidity through $1.5
million in debt financing from a related party. In 2001, we generated a
portion of our liquidity through monetization of our investments primarily in
chinadotcom common stock; which generated approximately $6.1 million in
proceeds. The debt financing and proceeds from the sale of investments were
used to finance restructurings and sustain operations during periods of
declining revenues. We used approximately $5.1 million and $15.8 million of
cash in operating activities during 2002 and 2001, respectively, generally as
a result of our net operating losses, adjusted for certain non-cash items
such as amortization of goodwill and other intangible assets and gains on
sales of investments, gain on sale of non-core assets, impairment of
investments and intangibles and non-cash related equity transactions and
restructuring and exit costs, and also significant decreases in accounts
receivable and prepaid and other current assets which were partially offset
by decreases in accounts payable and accrued expenses and deferred revenue.

Net cash provided by (used in) investing activities was approximately $0 million
in 2002 versus $6.0 million in 2001. The majority of the cash provided by
investing activities during 2001 related to proceeds received from the sale of
our investments, primarily chinadotcom. During 2001, as a result of divestitures
of non-core assets and numerous restructurings, we had significantly scaled back
our capital expenditures. As a result of the merger with Real Media and the
decision to consolidate onto the Open Adstream technology platform, we have
sufficient equipment and did not budget for a significant amount of capital
expenditures in 2002.

The Company has various employment agreements with employees, the majority of
which are for one year with automatic renewal. The obligation under these
contracts is approximately $2.8 million for 2002 including salary and
performance based target bonuses. These contracts call for severance in the
event of involuntary termination which range in amount from two months to two
years' salary. All European employees have employment contracts as required by
local law. The majority of these contracts allow for resignation or termination
by either party at any time, according to the notice period provisions contained
in the employment contracts, or according to the minimum notice period as
mandated by local law. The contracts, or if no expressed provision is included
in the contract, local law, also require severance for involuntary terminations
ranging from one to six months. As of May 1, 2002, there were approximately 77
employees in Europe whose annualized base salaries were approximately $3.1
million.

As of March 31, 2002, we had approximately $2.4 million remaining of cash outlay
obligations relating to restructuring and exit costs. These amounts consist
primarily of severance and rent exit costs which are being paid ratably. We
expect to pay the majority of these costs by the end of the third quarter of
2002.

Our capital requirements depend on numerous factors, including market demand of
our services, the capital required to maintain our technology, and the resources
we devote to marketing and selling our services. We have received a report from
our independent accountants containing an explanatory paragraph stating that our
recurring losses from operations since inception and working capital deficiency
raise substantial doubt about our ability to continue as a going concern.
Management believes that the support of our vendors, customers, stockholders,
and employees, among other, continue to be key factors affecting our future
success. Moreover, management's plans to continue as a going concern rely
heavily on achieving revenue targets, raising additional financing and
controlling our operating expenses. Management believes that

                                       22
<Page>

significant progress has been made in reducing operating expenses since the Real
Media merger. In addition, management is currently exploring a number of
strategic alternatives and is also continuing to identify and implement internal
actions to improve our liquidity. These alternatives may include selling assets
which could result in changes in our business plan. To the extent we encounter
additional opportunities to raise cash, we may sell additional equity
securities, which would result in further dilution of our stockholders.
Stockholders may experience extreme dilution due to both our current stock price
and the significant amount of financing we may be required to raise. These
securities may have rights senior to those of holders of our common stock. We do
not have any contractual restrictions on our ability to incur debt. Any
indebtedness could contain covenants, which would restrict our operations.

With the acquisition of Real Media, Inc. in October 2001, the Company
acquired cash of $6.3 million and a note payable of $4.5 million to
Publigroupe, who as a result of the merger is a significant shareholder. The
note bears interest at 4.5% and principal and interest are due on October 30,
2006. In addition, in accordance with the Real Media purchase agreement in
January 2002, the Company received cash of $1.5 million and signed a
promissory note bearing interest at 6%, with interest and principal due in
January 2005. The Company achieved certain target operating results for the
three months ended March 31, 2002. As a result, we became entitled to and on
May 13, 2002, we received another $1.5 million in exchange for a 6%
three-year promissory note. These related party notes call for all principal
and interest due at maturity.

On March 21, 2001, we entered into a common stock purchase agreement with
Maya Cove Holdings. The agreement gives us the ability to sell our common
stock to Maya pursuant to periodic draw downs once a Registration Statement
covering these shares has been declared effective by the SEC. The draw downs
would be subject to our ability to continue trading on the Nasdaq, our
trading volumes and prices and our ability to comply with securities
registration requirements for this type of facility. Based on current market
price, we estimate the maximum potential draw down is approximately $2.0
million. To date, the registration statement has not been filed and no
amounts have been drawn under this facility. There can be no assurances that
it will provide the resources necessary to fund our needs and we are
continuing to evaluate other fund raising vehicles.

On January 22, 2002, we completed the sale of our wholly owned subsidiary,
IMAKE, to Schaszberger Corporation. Under the terms of the sale, the purchase
price payable to Schaszberger Corporation payable to us was up to approximately
$6.5 million for the stock of IMAKE consisting of $2.0 million in the form of a
6% four year secured note due in January 2006, approximately $0.5 million in
cash consideration, and a potential earnout of up to $4.0 million over the next
three years based on gross revenue. Additionally, we received Series A preferred
stock of Schaszberger Corp which, as of the closing date, represented 19.9% of
the buyer. The note is secured by certain assets of IMAKE and is guaranteed by
Schaszberger Corporation. We have recorded the consideration received at its
estimated fair value of $0.5 million for the note receivable and $1.5 million
for the earnout as part of assets held for sale at December 31, 2001. In January
2002, we received the cash consideration of $0.5 million for the note receivable
and have received the first monthly earnout payment as scheduled.

On May 3, 2002, the Company completed the sale of certain assets related to its
email business, including customer contracts, certain intangibles and employee
relationships, to 24/7 Mail, Inc., a wholly owned subsidiary of Naviant, Inc.
Under the terms of the sale, the purchase price payable is up to $4.5 million.
The purchase price is comprised of (i) $1.0 million that was paid at closing;
(ii) $1.0 million in the form of a non-interest bearing installment note with
$350,000 due in ninety days, $350,000 due in one hundred and eighty days and
$300,000 due in two hundred seventy days from closing; (iii) an earn-out payable
quarterly over the next 45 months, based on 5% of Net Revenue (as defined in the
Asset Purchase Agreement), with minimum payments of $600,000 and a maximum of
$2.0 million. Lastly, pursuant to a $500,000 non-interest bearing installment
note, half of which is payable on each of April 30, 2004 and April. 30, 2005,
Naviant has the option either to (i) issue to the Company a number of shares
currently comprising 19.9% of 24/7 Mail, Inc., or (ii) pay the Company cash in
lieu of the shares. The consideration paid to the Company was determined as a
result of arms-length negotiations between the buyer and the Company.

                                       23
<Page>

MARKET FOR COMPANY'S COMMON EQUITY

The shares of our common stock are currently listed on the Nasdaq national
market. Due to the low share price of our common stock, in February 2002, we
received a letter from Nasdaq stating that they have determined that we have
failed to meet Nasdaq's minimum listing requirements and as a result, our
common stock could be delisted as we did not satisfy the minimum $1.00 bid
price requirement for at least ten consecutive days by May 15, 2002.

As a result, the Company has applied to transition its listing to the Nasdaq
SmallCap Market. If such application is accepted by Nasdaq, we will remain
listed on Nasdaq SmallCap through at least August 15, 2002, and up to 180 days
additional time if our stockholders'equity is at least $5 million at the
measurement time. Should our stock price remain consistently below $1.00, we
will be deemed to be out of compliance with the Nasdaq requirements and will
have to explore certain avenues, including a potential reverse stock split, to
increase our stock price above $1.00 and thus regain compliance. There can be no
assurance that the Company will be able to maintain its Nasdaq listing in the
future.

Our failure to meet NASDAQ's maintenance criteria may result in the delisting of
our common stock from Nasdaq. In such event, trading, if any, in the securities
may then continue to be conducted in the non-NASDAQ over-the-counter market in
what are commonly referred to as the electronic bulletin board and the "pink
sheets". As a result, an investor may find it more difficult to dispose of or
obtain accurate quotations as to the market value of the securities. In
addition, we would be subject to a Rule promulgated by the Securities and
Exchange Commission that, if we fail to meet criteria set forth in such Rule,
imposes various practice requirements on broker-dealers who sell securities
governed by the Rule to persons other than established customers and accredited
investors. For these types of transactions, the broker-dealer must make a
special suitability determination for the purchaser and have received the
purchaser's written consent to the transactions prior to sale. Consequently, the
Rule may have a materially adverse effect on the ability of broker-dealers to
sell the securities, which may materially affect the ability of shareholders to
sell the securities in the secondary market.

Delisting could make trading our shares more difficult for investors,
potentially leading to further declines in share price. It would also make it
more difficult for us to raise additional capital. We would also incur
additional costs under state blue sky laws to sell equity if we are delisted.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

Cash and cash equivalents are investments with original maturities of three
months or less. Therefore, changes in the market's interest rates do not affect
the value of the investments as recorded by 24/7 Real Media.

Our accounts receivables are subject, in the normal course of business, to
collection risks. We regularly assess these risks and have established policies
and business practices to protect against the adverse effects of collection
risks. Due to the current economic environment, we believe that we have
sufficiently provided for any material losses in this area, however, there can
be no assurance that unanticipated material losses may not result.

We transact business in various foreign countries. Accordingly, we are subject
to exposure from adverse movements in foreign currency exchange rates. This
exposure is primarily related to revenue and operating expenses in the United
Kingdom and in countries which the currency is the Euro. The effect of foreign
exchange rate fluctuations for 2002 and 2001 was not material. We do not use
derivative financial instruments to limit our foreign currency risk exposure.

Our debt is at fixed rates; therefore, there is no rate risk.

                                       24
<Page>

RISK FACTORS

WE MAY NEED TO RAISE ADDITIONAL FUNDS TO CONTINUE OPERATIONS AND OUR RECURRING
OPERATING LOSSES AND WORKING CAPITAL DEFICIENCY RAISE SUBSTANTIAL DOUBT ABOUT
OUR ABILITY TO CONTINUE AS A GOING CONCERN.

     Our current cash may not be sufficient to meet our anticipated operating
cash needs for 2002 and there can be no assurance that new funds can be secured
when needed. The support of our vendors, customers, stockholders and employees
will continue to be key to our future success. There can be no assurance that we
will be able to raise additional financing to meet our cash and operational
needs or reduce our operating expenses or increase revenues significantly to
address this going concern issue.

     Since our inception, we have incurred significant operating losses and we
believe we will continue to incur operating losses for the foreseeable future.
We also expect to incur negative cash flows for the foreseeable future as a
result of our operating losses.

     We have received a report from our independent accountants on our December
31, 2001 consolidated financial statements containing an explanatory "going
concern" paragraph stating that our recurring losses from operations and working
capital deficiency since inception raise substantial doubt about our ability to
continue our business as a going concern. Management's plans to continue as a
going concern rely heavily on achieving revenue targets, reducing operating
expenses and raising additional financing. Management is currently exploring a
number of strategic alternatives and is also continuing to identify and
implement internal actions to improve our liquidity. These alternatives may
include selling assets, which could result in changes in our business plan.

     To the extent we encounter additional opportunities to raise cash, we may
sell additional equity or debt securities. Stockholders may experience extreme
dilution due to our current stock price and the significant amount of financing
we need to raise and these securities may have rights senior to those of holders
of our common stock. We do not have any contractual restrictions on our ability
to incur debt. Any indebtedness could contain covenants that restrict our
operations.

     We have limited access to the capital markets to raise capital. The capital
markets have been unpredictable in the past, especially for unprofitable
companies such as ours. In addition, it is difficult to raise capital in the
current market conditions. The amount of capital that a company such as ours is
able to raise often depends on variables that are beyond our control, such as
the share price of our stock and its trading volume. As a result, there is no
guarantee that our efforts to secure financing will be available on terms
attractive to us, or at all. Due to our operating losses, it may be difficult to
obtain debt financing. If we are able to consummate a financing arrangement,
there is no guarantee that the amount raised will be sufficient to meet our
future needs. If adequate funds are not available on acceptable terms, or at
all, our business, results of operation, financial condition and continued
viability will be materially adversely affected.

THE LOW PRICE OF OUR COMMON STOCK COULD RESULT IN ITS DELISTING FROM THE NASDAQ
NATIONAL MARKET.

     The shares of our common stock are currently listed on the Nasdaq national
market. Due low share price of our common stock, on February 14, 2002, we
received a letter from Nasdaq

                                       25
<Page>

stating that they have determined that we have failed to meet Nasdaq's minimum
listing requirements and as a result, our common stock could be delisted as we
did not satisfy these requirements by May 15, 2002.

     As a result, the Company has applied to transition its listing to the
Nasdaq SmallCap Market. If such application is accepted by Nasdaq, we will
remain listed on Nasdaq SmallCap through at least August 15, 2002, and up to 180
days additional time if our stockholders'equity is at least $5 million at the
measurement time. Should our stock price remain consistently below $1.00, we
will be deemed to be out of compliance with the Nasdaq requirements and will
have to explore certain avenues, including a potential reverse stock split, to
increase our stock price above $1.00 and thus regain compliance. There can be no
assurance that the Company will be able to maintain its Nasdaq listing in the
future.

     Our failure to meet Nasdaq's maintenance criteria may result in the
delisting of our common stock from Nasdaq. In such event, trading, if any, in
the securities may then continue to be conducted in the non-NASDAQ
over-the-counter market in what are commonly referred to as the electronic
bulletin board and the "pink sheets". As a result, an investor may find it more
difficult to dispose of or obtain accurate quotations as to the market value of
the securities. In addition, we would be subject to a Rule promulgated by the
Securities and Exchange Commission that, if we fail to meet criteria set forth
in such Rule, imposes various practice requirements on broker-dealers who sell
securities governed by the Rule to persons other than established customers and
accredited investors. For these types of transactions, the broker-dealer must
make a special suitability determination for the purchaser and have received the
purchaser's written consent to the transactions prior to sale. Consequently, the
Rule may have a materially adverse effect on the ability of broker-dealers to
sell the securities, which may materially affect the ability of shareholders to
sell the securities in the secondary market.

     Delisting could make trading our shares more difficult for investors,
potentially leading to further declines in share price. It would also make it
more difficult for us to raise additional capital. We would also incur
additional costs under state blue sky laws to sell equity if we are delisted.

HIGH VOLATILITY OF STOCK PRICE.

     The market price of our common stock has fluctuated in the past and may
continue to be volatile. In addition, the stock market has experienced extreme
price and volume fluctuations. The market prices of the securities of
Internet-related companies have been especially volatile. Investors may be
unable to resell their shares of our common stock at or above the purchase
price. In the past, following periods of volatility in the market price of a
particular company's securities, securities class action litigation has often
been brought against that company. Many companies in our industry have been
subject to this type of litigation in the past. We may also become involved in
this type of litigation. Litigation is often expensive and diverts management's
attention and resources, which could materially and adversely affect our
business, financial condition and results of operations.

REVENUE GROWTH IN PRIOR PERIODS MAY NOT BE INDICATIVE OF FUTURE GROWTH.

     At times in the past, our revenues have grown significantly, primarily as a
result of our numerous acquisitions. Our limited operating history makes
prediction of future revenue growth difficult. Accurate predictions of future
revenue growth are also difficult because of the rapid

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changes in our markets and the possible need by us to sell assets to fund
operations. Accordingly, investors should not rely on past revenue growth rates
as a prediction of future revenue growth.

WE HAVE A LIMITED OPERATING HISTORY ON WHICH AN INVESTOR CAN EVALUATE OUR
BUSINESS.

     We have a limited operating history. You must consider the risks, expenses
and difficulties typically encountered by companies with limited operating
histories, particularly companies in new and rapidly expanding markets such as
Internet advertising. These risks include our ability to:

     -  develop new relationships and maintain existing relationships with our
        Web sites, advertisers, and other third parties;

     -  further develop and upgrade our technology;

     -  respond to competitive developments;

     -  implement and improve operational, financial and management information
        systems; and

     -  attract, retain and motivate qualified employees.

WE ANTICIPATE CONTINUED LOSSES AND WE MAY NEVER BE PROFITABLE.

     We have not achieved profitability in any period and we may not be able to
achieve or sustain profitability in the future. We incurred net losses of $3.7
million and $78.7 million for the three months ended March 31, 2002 and 2001,
respectively. Even if we do achieve profitability, we cannot assure you that we
can sustain or increase profitability on a quarterly or annual basis in the
future.

OUR FUTURE REVENUES AND RESULTS OF OPERATIONS MAY BE DIFFICULT TO FORECAST.

     Our results of operations have fluctuated and may continue to fluctuate
significantly in the future as a result of a variety of factors, many of which
are beyond our control. These factors include:

     -  the addition of new or loss of existing clients;

     -  changes in fees paid by advertisers and direct marketers or other
        clients;

     -  changes in service fees payable by us to owners of Web sites or email
        lists, or ad serving fees payable by us to third parties;

     -  the demand by advertisers, Web publishers and direct marketers for our
        advertising solutions;

     -  the introduction of new Internet marketing services by us or our
        competitors;

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     -  variations in the levels of capital or operating expenditures and other
        costs relating to the maintenance or expansion of our operations,
        including personnel costs;

     -  changes in governmental regulation of the Internet; and

     -  general economic conditions.

     Our future revenues and results of operations may be difficult to forecast
due to the above factors. In addition, our expense levels are based in large
part on our investment plans and estimates of future revenues. Any increased
expenses may precede or may not be followed by increased revenues, as we may be
unable to, or may elect not to, adjust spending in a timely manner to compensate
for any unexpected revenue shortfall. As a result, we believe that
period-to-period comparisons of our results of operations may not be meaningful.
You should not rely on past periods as indicators of future performance. In
future periods, our results of operations may fall below the expectations of
securities analysts and investors, which could adversely affect the trading
price of our common stock.

OUR FINANCIAL PERFORMANCE AND REDUCTION OF OUR WORKFORCE MAY AFFECT THE MORALE
AND PERFORMANCE OF OUR PERSONNEL.

     We have incurred significant net losses since our inception. In an effort
to reduce our cash expenses, we began to implement certain restructuring
initiatives and cost reductions. During 2001, we reduced our workforce by over
1,000 employees. We have also left positions unfilled when employees have left
the company. In addition, recent trading levels of our common stock have
decreased the value of the stock options granted to employees pursuant to our
stock option plan. As a result of these factors, our remaining personnel may
seek employment with larger, more stable companies they perceive to have better
prospects. Our failure to retain qualified employees to fulfill our current and
future needs could impair our future growth and have a material adverse effect
on our business.

OUR FINANCIAL PERFORMANCE MAY AFFECT OUR ABILITY TO ENTER INTO NEW BUSINESS
RELATIONSHIPS AND TO COLLECT REVENUES.

     The publicity we receive in connection with our financial performance and
our measures to remedy this performance generate negative publicity, which may
negatively affect our reputation and our business partners' and other market
participants' perception of our company. If we are unable to maintain the
existing relationships and develop new ones, our revenues and collections could
suffer materially.

OUR BUSINESS MAY NOT GROW IF THE INTERNET ADVERTISING MARKET DOES NOT CONTINUE
TO DEVELOP.

     The Internet as a marketing medium has not been in existence for a
sufficient period of time to demonstrate its effectiveness. Our business would
be adversely affected if the Internet advertising continues to remain soft or
fails to develop in the near future. There are currently no widely accepted
standards to measure the effectiveness of Internet marketing other than
clickthrough rates, which generally have been declining. We cannot be certain
that such standards will develop to sufficiently support Internet marketing as a
significant advertising medium. Actual or perceived ineffectiveness of online
marketing in general, or inaccurate measurements or database information in
particular, could limit the long-term growth of online advertising and cause our
revenue levels to decline.

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OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS
MODEL

     A significant part of our business model is to generate revenue by
providing interactive marketing solutions to advertisers, ad agencies and Web
publishers. The profit potential for this business model is unproven. To be
successful, both Internet advertising and our solutions will need to achieve
broad market acceptance by advertisers, ad agencies and Web publishers. Our
ability to generate significant revenue from advertisers will depend, in part,
on our ability to contract with Web publishers that have Web sites with adequate
available ad space inventory. Further, these Web sites must generate sufficient
user traffic with demographic characteristics attractive to our advertisers. The
intense competition among Internet advertising sellers has led to the creation
of a number of pricing alternatives for Internet advertising. These alternatives
make it difficult for us to project future levels of advertising revenue and
applicable gross margin that can be sustained by us or the Internet advertising
industry in general.

     Intensive marketing and sales efforts may be necessary to educate
prospective advertisers regarding the uses and benefits of, and to generate
demand for, our products and services. Enterprises may be reluctant or slow to
adopt a new approach that may replace, limit or compete with their existing
direct marketing systems. In addition, since online direct marketing is emerging
as a new and distinct business apart from online advertising, potential adopters
of online direct marketing services will increasingly demand functionality
tailored to their specific requirements. We may be unable to meet the demands of
these clients. Acceptance of our new solutions will depend on the continued
emergence of Internet commerce, communication and advertising, and demand for
its solutions. We cannot assure you that demand for its new solutions will
emerge or become sustainable.

BANNER ADVERTISING, FROM WHICH WE CURRENTLY DERIVE A SIGNIFICANT PORTION OF OUR
REVENUE, MAY NOT BE AN EFFECTIVE ADVERTISING METHOD IN THE FUTURE.

     A significant portion of our revenues are derived from the delivery of
banner advertisements. Online banner advertising has dramatically decreased
since the middle of 2000 and has continued to decline throughout 2001 and is
expected to continue through the second quarter of 2002, which could have a
material adverse effect on our business. If advertisers determine that banner
advertising is an ineffective or unattractive advertising medium, we cannot
assure you that we will be able to effectively make the transition to any other
form of Internet advertising. Also, there are "filter" software programs that
limit or prevent advertising from being delivered to a user's computer. The
commercial viability of Internet advertising, and our business, results of
operations and financial condition, would be materially and adversely affected
by Web users' widespread adoption of such software. In addition, many online
advertisers have been experiencing financial difficulties, which could
materially impact our revenues and our ability to collect our receivables.

GROWTH OF OUR BUSINESS DEPENDS ON THE DEVELOPMENT OF ONLINE DIRECT MARKETING.

     Adoption of online direct marketing, particularly by those entities that
have historically relied upon traditional means of direct marketing, such as
telemarketing and direct mail, is an important part of our business model.
Intensive marketing and sales efforts may be necessary to educate prospective
advertisers regarding the uses and benefits of our products and services to

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generate demand for our direct marketing services. Enterprises may be reluctant
or slow to adopt a new approach that may replace, limit, or compete with their
existing direct marketing systems. In addition, since online direct marketing is
emerging as a new and distinct market apart from online advertising, potential
adopters of online direct marketing services will increasingly demand
functionality tailored to their specific requirements. We may be unable to meet
the demands of our clients.

LOSS OF OUR MAJOR WEB SITES WOULD SIGNIFICANTLY REDUCE OUR REVENUES.

     The 24/7 Network generates a significant portion of our revenues, and we
expect that the 24/7 Network will continue to account for a significant portion
of our revenue for the foreseeable future. The 24/7 Network consists of a
limited number of our Web sites that have contracted for our services under
agreements cancelable generally upon a short notice period. We experience
turnover from time to time among our Web sites, and we cannot be certain that
the Web sites named above will remain associated with us or that such Web sites
will not experience a reduction in online traffic on their sites. We cannot
assure you that we will be able to replace any departed Web site in a timely and
effective manner with a Web site with comparable traffic patterns and user
demographics. Our business, results of operations and financial condition would
be materially adversely affected by the loss of one or more of the Web sites
that account for a significant portion of our revenue from the 24/7 Network.

LOSS OF MAJOR CUSTOMERS WOULD REDUCE OUR REVENUES.

     We generate a significant portion of our revenues from a limited number of
customers. We expect that a limited number of these entities may continue to
account for a significant percentage of our revenues for the foreseeable future.
For the three months ended March 31, 2002, our top ten customers accounted for
approximately 22.1% of our total revenues. Customers typically purchase
advertising or services under agreements on a short-term basis. Since these
contracts are short-term, we will have to negotiate new contracts or renewals in
the future that may have terms that are not as favorable to us as the terms of
existing contracts. We cannot be certain that current customers will continue to
purchase advertising or services from us or that we will be able to attract
additional customers successfully, or that customers will make timely payment of
amounts due to us. In addition, current and potential competitors have
established or may establish cooperative relationships among themselves or with
third parties to increase the ability of their products or services to address
the needs of our prospective clients. Our business, results of operations and
financial condition would be materially adversely affected by the loss of one or
more of our customers that account for a significant portion of our revenue.

WE HAVE GROWN OUR BUSINESS THROUGH ACQUISITION.

     We were formed in February 1998 to consolidate three Internet advertising
companies and have since acquired thirteen more companies. In combining these
entities, we have faced risks and continue to face risks of integrating and
improving our financial and management controls, ad serving technology,
reporting systems and procedures, and expanding, training and managing our work
force. This process of integration may take a significant period of time and
will require the dedication of management and other resources, which may
distract management's attention from our other operations. We may continue
pursuing selective acquisitions of businesses, technologies and product lines as
a key component of our growth strategy. Any future acquisition or investment may
result in the use of significant amounts of cash, potentially dilutive

                                       30
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issuances of equity securities, incurrence of debt and amortization expenses
related to goodwill and other intangible assets. In addition, acquisitions
involve numerous risks, including:

     -  the difficulties in the integration and assimilation of the operations,
        technologies, products and personnel of an acquired business;

     -  the diversion of management's attention from other business concerns;

     -  the availability of favorable acquisition financing for future
        acquisitions; and

     -  the potential loss of key employees of any acquired business.

     Our inability to successfully integrate any acquired company could
adversely affect our business.

OUR ADVERTISING CUSTOMERS AND THE COMPANIES WITH WHICH WE HAVE STRATEGIC
RELATIONSHIPS MAY EXPERIENCE ADVERSE BUSINESS CONDITIONS THAT COULD ADVERSELY
AFFECT OUR BUSINESS.

     As a result of unfavorable conditions in the public equity markets, some of
our customers may have difficulty raising sufficient capital to support their
long-term operations. As a result, these customers have reduced their spending
on Internet advertising, which has materially and adversely affected our
business, financial condition and results of operations. In addition, from time
to time, we have entered into strategic business relationships with other
companies, the nature of which varies, but generally in the context of customer
relationships. These companies may experience similar adverse business
conditions that may render them unable to meet our expectations for the
strategic business relationship or to fulfill their contractual obligations to
us. Such an event could have a material adverse impact on our business,
financial condition and results of operations.

OUR REVENUES ARE SUBJECT TO SEASONAL FLUCTUATIONS.

     Our revenues are subject to seasonal fluctuations because advertisers
generally place fewer advertisements during the first and third calendar
quarters of each year and direct marketers mail substantially more marketing
materials in the third quarter each year. Internet user traffic typically drops
during the summer months, which reduces the number of advertisements to sell and
deliver. Expenditures by advertisers and direct marketers tend to vary in cycles
that reflect overall economic conditions as well as budgeting and buying
patterns. Our revenue could be materially reduced by a decline in the economic
prospects of advertisers, direct marketers or the economy in general, which
could alter current or prospective advertisers' spending priorities or budget
cycles or extend our sales cycle. Due to such risks, you should not rely on
quarter-to-quarter comparisons of our results of operations as an indicator of
our future results.

OUR TECHNOLOGY SOLUTIONS MAY NOT BE SUCCESSFUL AND MAY CAUSE BUSINESS
DISRUPTION.

     Open Adstream is our proprietary next generation ad serving technology that
is intended to serve as our sole ad serving solution. We launched Open Adstream
Central and Network in mid-2001, and we must, among other things, ensure that
this technology will function efficiently at high volumes, interact properly
with our database, offer the functionality demanded by our

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customers and assimilate our sales and reporting functions. This development
effort could fail technologically or could take more time than expected. Our
Open Adstream technology resides on a computer system located in our data
centers housed by Exodus Communications. These systems' continuing and
uninterrupted performance is critical to our success. Customers may become
dissatisfied by any system failure that interrupts our ability to provide our
services to them, including failures affecting our ability to deliver
advertisements without significant delay to the viewer. Sustained or repeated
system failures would reduce the attractiveness of our solutions to advertisers,
ad agencies and Web publishers and result in contract terminations, fee rebates
and make goods, thereby reducing revenue. Slower response time or system
failures may also result from straining the capacity of our deployed software or
hardware due to an increase in the volume of advertising delivered through our
servers. To the extent that we do not effectively address any capacity
constraints or system failures, our business, results of operations and
financial condition could be materially and adversely affected. Our operations
are dependent on our ability to protect our computer systems against damage from
fire, power loss, water damage, telecommunications failures, vandalism and other
malicious acts, and similar unexpected adverse events. In addition,
interruptions in our solutions could result from the failure of our
telecommunications providers to provide the necessary data communications
capacity in the time frame we require. Despite precautions that we have taken,
unanticipated problems affecting our systems have from time to time in the past
caused, and in the future could cause, interruptions in the delivery of our
solutions. Our business, results of operations and financial condition could be
materially and adversely affected by any damage or failure that interrupts or
delays our operations.

OUR FAILURE TO SUCCESSFULLY COMPETE MAY HINDER OUR GROWTH.

     The markets for Internet advertising and related products and services are
intensely competitive and such competition is expected to increase. Our failure
to successfully compete may hinder our growth. We believe that our ability to
compete depends upon many factors both within and beyond our control, including:

     -  the timing and market acceptance of new products and enhancements of
        existing services developed by us and our competitors;

     -  changing demands regarding customer service and support;

     -  shifts in sales and marketing efforts by us and our competitors; and

     -  the ease of use, performance, price and reliability of our services and
        products.

     Many of our competitors have longer operating histories, greater name
recognition, larger customer bases and significantly greater financial,
technical and marketing resources than ours. In addition, current and potential
competitors have established or may establish cooperative relationships among
themselves or with third parties to increase the ability of their products or
services to address the needs of our prospective clients. We cannot be certain
that we will be able to successfully compete against current or future
competitors. In addition, the Internet must compete for a share of advertisers'
total budgets with traditional advertising media, such as television, radio,
cable and print, as well as content aggregation companies and other companies
that facilitate Internet advertising. To the extent that the Internet is
perceived to be a limited or ineffective advertising or direct marketing medium,
advertisers and direct marketers may be reluctant to devote a significant
portion of their advertising budgets to Internet marketing, which could limit
the growth of Internet marketing.

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CHANGES IN LAWS AND STANDARDS RELATING TO DATA COLLECTION AND USE PRACTICES AND
THE PRIVACY OF INTERNET USERS AND OTHER INDIVIDUALS COULD HARM OUR BUSINESS.

     The U.S. federal and various state governments have recently proposed
limitations on the collection and use of information regarding Internet users.
In October 1998, the European Union adopted a directive that may limit our
collection and use of information regarding Internet users in Europe. The
effectiveness of our Open Adstream technology could be limited by any regulation
limiting the collection or use of information regarding Internet users. Since
many of the proposed laws or regulations are just being developed, we cannot yet
determine the impact these regulations may have on its business. In addition,
growing public concern about privacy and the collection, distribution and use of
information about individuals has led to self-regulation of these practices by
the Internet advertising and direct marketing industry and to increased federal
and state regulation. The Network Advertising Initiative, or NAI, of which 24/7
Real Media is a member along with other Internet advertising companies, has
developed self-regulatory principles for online preference marketing. These
principles were recently endorsed by the Federal Trade Commission, and are in
the process of being adopted by the NAI companies. The Direct Marketing
Association, or DMA, the leading trade association of direct marketers, has
adopted guidelines regarding the fair use of this information which it
recommends participants, such as us, through our services, in the direct
marketing industry follow. We are also subject to various federal and state
regulations concerning the collection, distribution and use of information
regarding individuals. These laws include the Children's Online Privacy
Protection Act, and state laws that limit or preclude the use of voter
registration and drivers license information, as well as other laws that govern
the collection and use of consumer credit information. Although our compliance
with the DMA's guidelines and applicable federal and state laws and regulations
has not had a material adverse effect on us, we cannot assure you that the DMA
will not adopt additional, more burdensome guidelines or that additional, more
burdensome federal or state laws or regulations, including antitrust and
consumer privacy laws, will not be enacted or applied to us or our clients,
which could materially and adversely affect our business, financial condition
and results of operations.

IF WE LOSE OUR CEO OR OTHER SENIOR MANAGERS OUR BUSINESS WILL BE ADVERSELY
EFFECTED.

     Our success depends, to a significant extent, upon our senior management
and key sales and technical personnel, particularly David J. Moore, Chief
Executive Officer. The loss of the services of one or more of these persons
could materially adversely affect our ability to develop our business. Our
success also depends on our ability to attract and retain qualified technical,
sales and marketing, customer support, financial and accounting, and managerial
personnel. Competition for such personnel in the Internet industry is intense,
and we cannot be certain that we will be able to retain our key personnel or
that we can attract, integrate or retain other highly qualified personnel in the
future. We have experienced in the past, and may continue to experience in the
future, difficulty in hiring and retaining candidates with appropriate
qualifications, especially in sales and marketing positions.

OUR INTERNATIONAL OPERATIONS MAY POSE LEGAL AND CULTURAL CHALLENGES.

     We have operations in a number of international markets, including Canada,
Europe and Asia. To date, we have limited experience in marketing, selling and
distributing our solutions

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internationally. International operations are subject to other risks, including
changes in regulatory requirements, reduced protection for intellectual property
rights in some countries, potentially adverse tax consequences, general
import/export restrictions relating to encryption technology and/or privacy,
difficulties and costs of staffing and managing foreign operations, political
and economic instability, fluctuations in currency exchange rates; and seasonal
reductions in business activity during the summer months in Europe and certain
other parts of the world.

     In addition to these factors, due to our minority stake in 24/7 Real Media
Korea in Asia, we are relying on our partner to conduct operations, build the
network, aggregate Web publishers and coordinate sales and marketing efforts.
The success of the 24/7 Network in Asia is directly dependent on the success of
our partner and its dedication of sufficient resources to our relationship.

DEPENDENCE ON PROPRIETARY RIGHTS AND RISK OF INFRINGEMENT.

     Our success and ability to compete are substantially dependent on our
internally developed technologies and trademarks, which we protect through a
combination of patent, copyright, trade secret and trademark law. We have
received two patents in the United States, and have filed and intend to file
additional patent applications in the United States. In addition, we apply to
register our trademarks in the United States and internationally. We cannot
assure you that any of our patent applications or trademark applications will be
approved. Even if they are approved, such patents or trademarks may be
successfully challenged by others or invalidated. If our trademark registrations
are not approved because third parties own such trademarks, our use of such
trademarks will be restricted unless we enter into arrangements with such third
parties that may be unavailable on commercially reasonable terms.

     We generally enter into confidentiality or license agreements with our
employees, consultants and corporate partners, and generally control access to
and distribution of our technologies, documentation and other proprietary
information. Despite our efforts to protect our proprietary rights from
unauthorized use or disclosure, parties may attempt to disclose, obtain or use
our solutions or technologies. We cannot assure you that the steps we have taken
will prevent misappropriation of our solutions or technologies, particularly in
foreign countries where laws or law enforcement practices may not protect our
proprietary rights as fully as in the United States.

     We have licensed, and we may license in the future, elements of our
trademarks, trade dress and similar proprietary rights to third parties. While
we attempt to ensure that the quality of our brand is maintained by these
business partners, such partners may take actions that could materially and
adversely affect the value of our proprietary rights or our reputation. We
cannot assure you that any of our proprietary rights will be of value in the
future since the validity, enforceability and scope of protection of certain
proprietary rights in Internet-related industries is uncertain and still
evolving.

     We may be subject to claims of alleged infringement of the trademarks and
other intellectual property rights of third parties by us or the Web publishers
with Web sites in the 24/7 Network. Such claims and any resultant litigation
could subject us to significant liability for damages and could result in the
invalidation of our proprietary rights. In addition, even if we prevail, such
litigation could be time-consuming and expensive to defend, and could result in
the diversion of our time and attention, any of which could materially and
adversely affect our business, results of operations and financial condition.
Any claims or litigation from third parties may also result in limitations on
our ability to use the trademarks and other intellectual property subject to
such claims or litigation unless we enter into arrangements with the third
parties

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responsible for such claims or litigation which may be unavailable on
commercially reasonable terms.

INTELLECTUAL PROPERTY LIABILITY.

     We may be liable for content available or posted on the Web sites of our
publishers. We may be liable to third parties for content in the advertising we
serve if the music, artwork, text or other content involved violates the
copyright, trademark or other intellectual property rights of such third parties
or if the content is defamatory. Any claims or counterclaims could be time
consuming, result in costly litigation or divert management's attention.

PRIVACY CONCERNS MAY PREVENT US FROM COLLECTING USER DATA.

     Growing concerns about the use of "cookies" and data collection may limit
our ability to develop user profiles. Web sites typically place small files of
information commonly known as "cookies" on a user's hard drive, generally
without the user's knowledge or consent. Cookie information is passed to the Web
site through the Internet user's browser software. Our Open Adstream technology
targets advertising to users through the use of identifying data, or "cookies"
and other non-personally-identifying information. Open Adstream enables the use
of cookies to deliver targeted advertising and to limit the frequency with which
an advertisement is shown to the user. Most currently available Internet
browsers allow users to modify their browser settings to prevent cookies from
being stored on their hard drive, and a small minority of users are currently
choosing to do so. Users can also delete cookies from their hard drive at any
time. Some Internet commentators and privacy advocates have suggested limiting
or eliminating the use of cookies. Any reduction or limitation in the use of
cookies could limit the effectiveness of our sales and marketing efforts and
impair our targeting capabilities. Recently, Microsoft Corporation changed the
design and instrumentation of its Web browser in such a way as to give users the
option to accept or reject third party cookies. Giving users the option to
decline such cookies could result in a reduction of the number of Internet users
we are capable of profiling anonymously. Such changes also could adversely
affect our ability to determine the reach of advertising campaigns sold and
delivered by us and the frequency with which users of sites in the 24/7 Network
see the same advertisement.

     If the use or effectiveness of cookies is limited, we would likely have to
switch to other technology that would allow us to gather demographic and
behavioral information. While such technology currently exists, it is
substantially less effective than cookies. Replacement of cookies could require
significant reengineering time and resources, might not be completed in time to
avoid negative consequences to our business, financial condition or results of
operations, and might not be commercially feasible. In addition, privacy
concerns may cause some Web users to be less likely to visit Web sites that
contribute data to our databases. This could have a material adverse effect on
our financial condition. In addition, we are developing our database to collect
data derived from user activity on our networks and from other sources. We
collect and compile information in databases for the product offerings of all
our businesses. Individuals or entities may claim in the future, that our
collection of this information is illegal. Although we believe that we have the
right to use and compile the information in these databases, we cannot assure
you that our ability to do so will remain lawful, that any trade secret,
copyright or other intellectual property protection will be available for our
databases, or that statutory protection that is or becomes available for
databases will enhance our rights. In addition, others may claim rights to the
information in our databases. Further, pursuant to our contracts with Web
publishers using our solutions, we are obligated to keep certain information
regarding each Web publisher confidential and, therefore, may be restricted from
further using that information in our business.

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WE MAY HAVE TO CHANGE OUR BUSINESS PLANS BASED UPON CHANGES IN INFORMATION
COLLECTION PRACTICES.

There has been public debate about how fair information collection practices
should be formulated for the online and offline collection, distribution and use
of information about a consumer. Some of the discussion has focused on the fair
information collection practices that should apply when information about an
individual that is collected in the offline environment is associated with
information that is collected over the Internet about that individual. We are
working with industry groups, such as the NAI and the Online Privacy Alliance,
to establish such standards with the U.S. government regarding the merger of
online and offline consumer information. We cannot assure you that we will be
successful in establishing industry standards acceptable to the U.S. government
or the various state governments, or that the standards so established will not
require material changes to our business plans. We also cannot assure you that
our business plans, or any U.S. industry standards that are established, will
either be acceptable to any non-U.S. government or conform to foreign legal and
business practices. As a consequence of governmental legislation or regulation
or enforcement efforts or evolving standards of fair information collection
practices, we may be required to make changes to our products or services in
ways that could diminish the effectiveness of the product or service or their
attractiveness to potential customers. In addition, given the heightened public
discussion about consumer online privacy, we cannot assure you that our products
and business practices will gain market acceptance, even if they do conform to
industry standards.

CHANGES IN GOVERNMENT REGULATION COULD DECREASE OUR REVENUES AND INCREASE OUR
COSTS.

     Laws and regulations directly applicable to Internet communications,
commerce and advertising are becoming more prevalent, and new laws and
regulations are under consideration by the United States Congress and state
legislatures. Any legislation enacted or restrictions arising from current or
future government investigations or policy could dampen the growth in use of the
Internet generally and decrease the acceptance of the Internet as a
communications, commercial and advertising medium. State governments or
governments of foreign countries might attempt to regulate our transmissions or
levy sales or other taxes relating to our activities. The European Union has
enacted its own privacy regulations that may result in limits on the collection
and use of certain user information by us. The laws governing the Internet,
however, remain largely unsettled, even in areas where there has been some
legislative action. It may take years to determine whether and how existing laws
such as those governing intellectual property, privacy, libel and taxation apply
to the Internet and Internet advertising. In addition, the growth and
development of Internet commerce may prompt calls for more stringent consumer
protection laws, both in the United States and abroad, that may impose
additional burdens on companies conducting business over the Internet. Our
business, results of operations and financial condition could be materially and
adversely affected by the adoption or modification of laws or regulations
relating to the Internet.

DEPENDENCE ON THE WEB INFRASTRUCTURE.

     Our success will depend, in large part, upon the maintenance of the Web
infrastructure, such as a reliable network backbone with the necessary speed,
data capacity and security, and timely development of enabling products such as
high speed modems, for providing reliable Web access and services and improved
content. We cannot assure you that the Web infrastructure will continue to
effectively support the demands placed on it as the Web continues to experience

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increased numbers of users, frequency of use or increased bandwidth requirements
of users. Even if the necessary infrastructure or technologies are developed, we
may have to spend considerable amounts to adapt our solutions accordingly.
Furthermore, the Web has experienced a variety of outages and other delays due
to damage to portions of its infrastructure. Such outages and delays could
impact the clients using our solutions and the level of user traffic on Web
sites on our networks.

RISKS ASSOCIATED WITH TECHNOLOGICAL CHANGE.

         The Internet and Internet advertising markets are characterized by
rapidly changing technologies, evolving industry standards, frequent new product
and service introductions, and changing customer demands. Our future success
will depend on our ability to adapt to rapidly changing technologies and to
enhance existing solutions and develop and introduce a variety of new solutions
to address our customers' changing demands. We may experience difficulties that
could delay or prevent the successful design, development, introduction or
marketing of our solutions. In addition, our new solutions or enhancements must
meet the requirements of our current and prospective customers and must achieve
significant market acceptance. Material delays in introducing new solutions and
enhancements may cause customers to forego purchases of our solutions and
purchase those of our competitors.

EFFECTS OF ANTI-TAKEOVER PROVISIONS COULD INHIBIT THE ACQUISITION OF OUR
COMPANY.

     Some of the provisions of our certificate of incorporation, our bylaws and
Delaware law could, together or separately:

     -  discourage potential acquisition proposals;

     -  delay or prevent a change in control;

     -  impede the ability of our stockholders to change the composition of our
        board of directors in any one year; and

     -  limit the price that investors might be willing to pay in the future for
        shares of our common stock.

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<Page>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits.

None.

(b)      Reports on Form 8-K.

               Report on Form 8-K dated February 6, 2002 (file no. 0-29768). The
               report contained information about the sale of our IMAKE
               subsidiary.

ITEM 7. SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

24/7 Real Media, Inc.

Date:  May 15, 2002

                                   By:  /s/  David J. Moore
                                        ----------------------------------------
                                        David J. Moore
                                        Chairman and Chief Executive Officer

                                   By:  /s/  Norman M. Blashka
                                        ----------------------------------------
                                        Norman M. Blashka
                                        EVP and Chief Financial Officer

                                       38