SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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, 1998

                                       or

         Transition  Report  Pursuant  to Section 13 or 15(d) of the  Securities
---      Exchange Act of 1934 For the transition period from_____to_____.

Commission File Number  1-11624



                         HyperMedia Communications, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         California                                              94-3104247
-------------------------------                               ----------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


901 Mariner's Island Blvd., Suite 365,
          San Mateo, California                                     94404
----------------------------------------                          ----------
(Address of principal executive offices)                          (Zip Code)


                                 (650) 573-5170
                                 --------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) 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 _


As of May 5, 1998, 3,200,137 shares of the Registrant's common stock were issued
and outstanding.



<PAGE>


                         PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
                                                   HYPERMEDIA COMMUNICATIONS, INC.
                                                            BALANCE SHEET
                                                             (UNAUDITED)

<CAPTION>
                                                                                                  March 31,             December 31,
                                                                                                    1998                    1997
                                                                                                  ---------             ------------
<S>                                                                                             <C>                    <C>         
ASSETS
Current assets:
        Cash                                                                                    $    770,000           $    269,000
        Accounts receivable, net of allowance for
                 doubtful accounts of $131,000 and $110,000                                        1,505,000              1,165,000
        Prepaid expenses and other assets                                                            587,000                567,000
                                                                                                ------------           ------------
                        Total current assets                                                       2,862,000              2,001,000

Property and equipment, net                                                                          426,000                451,000
                                                                                                ------------           ------------
                                                                                                $  3,288,000           $  2,452,000
                                                                                                ============           ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
        Accounts payable                                                                        $    821,000           $    956,000
        Accrued liabilities                                                                          404,000                439,000
        Deferred revenue                                                                              27,000                 31,000
        Note payable                                                                                    --                     --
                                                                                                ------------           ------------
                        Total current liabilities                                                  1,252,000              1,426,000
                                                                                                ------------           ------------
Shareholders' equity:
        Convertible Preferred Stock, $.001 par value; 10,064,516
                shares authorized; 8,454,660 and 8,342,910 shares                                  3,383,000              2,003,000
                issued and outstanding
        Common Stock, $.001 par value; 50,000,000 shares
                authorized; 3,200,137 shares issued and                                           10,427,000             10,427,000
                outstanding
        Accumulated deficit                                                                      (11,774,000)           (11,404,000)
                                                                                                ------------           ------------
                        Total shareholders' equity                                                 2,036,000              1,026,000
                                                                                                ------------           ------------
                                                                                                $  3,288,000           $  2,452,000
                                                                                                ============           ============
</TABLE>

<PAGE>
<TABLE>
                                                  HYPERMEDIA COMMUNICATIONS, INC.
                                                      STATEMENT OF OPERATIONS
                                                            (UNAUDITED)

<CAPTION>
                                                                                                    Three months ended March 31,
                                                                                               ------------------------------------
                                                                                                   1998                     1997
                                                                                                   ----                     ----
<S>                                                                                            <C>                      <C>        
Revenues                                                                                       $ 1,754,000              $ 1,915,000

Expenses:
        Editorial                                                                                  283,000                  291,000
        Production                                                                                 503,000                  476,000
        Circulation                                                                                524,000                  564,000
        Sales and marketing                                                                        526,000                  420,000
        Product development                                                                         12,000                    9,000
        General and administrative                                                                 271,000                  243,000
                                                                                               -----------              -----------
                        Total expenses                                                           2,119,000                2,003,000
                                                                                               -----------              -----------

Loss from operations                                                                              (365,000)                 (88,000)

Interest and other expense, net                                                                      5,000                   10,000
                                                                                               -----------              -----------
Net loss                                                                                       $  (370,000)             $   (98,000)
                                                                                               ===========              =========== 
Basic and diluted net loss per common share (Note 2)                                           $     (0.12)             $     (0.03)
                                                                                               ===========              =========== 
Weighted average common shares                                                                   3,200,137                3,109,570
                                                                                               ===========              =========== 
</TABLE>

<PAGE>

<TABLE>
                                                  HYPERMEDIA COMMUNICATIONS, INC.
                                                      STATEMENT OF CASH FLOWS
                                                    Increase (Decrease) in Cash
                                                            (UNAUDITED)

<CAPTION>
                                                                                                   Three months ended March 31,
                                                                                               ------------------------------------
                                                                                                   1998                    1997
                                                                                                   ----                    ----
<S>                                                                                            <C>                      <C>         
Cash flow from operating activities:
        Net loss                                                                               $  (370,000)             $   (98,000)
        Adjustments to reconcile net loss to net
                cash used in operating activities:
                Depreciation and amortization                                                       56,000                   59,000
                Allowance for doubtful accounts                                                     21,000                   21,000
                Change in assets and liabilities:
                        Accounts receivable                                                       (361,000)                (111,000)
                        Prepaid expenses and other assets                                          (21,000)                  57,000
                        Accounts payable                                                          (136,000)                 (27,000)
                        Accrued liabilities                                                        (34,000)                  29,000
                        Deferred revenue                                                            (4,000)                   3,000
                                                                                               -----------              -----------
Net cash used in operating activities                                                             (849,000)                 (67,000)
                                                                                               -----------              -----------
Net cash used in investing activities for:
        Purchase of fixed assets                                                                   (30,000)                 (14,000)
                                                                                               -----------              -----------
Cash flows from financing activities:
        Proceeds from issuance of preferred stock                                                1,380,000                        0
        Proceeds from issuance of common stock                                                        --                     50,000
        Repayment of shareholder note receivable                                                      --                       --
        Proceeds from note payable                                                                    --                      5,000
                                                                                               -----------              -----------
Net cash provided by financing activities                                                        1,380,000                   55,000
                                                                                               -----------              -----------

Net increase (decrease) in cash                                                                    501,000                  (26,000)

Cash at beginning of period                                                                        269,000                  107,000
                                                                                               -----------              -----------
Cash at end of period                                                                          $   770,000              $    81,000
                                                                                               ===========              ===========
Supplemental disclosure of cash flow information:
        Cash paid during the period for interest                                               $     5,000              $    10,000
                                                                                               ===========              ===========
</TABLE>



<PAGE>

                         HYPERMEDIA COMMUNICATIONS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

The financial statements of HyperMedia  Communications,  Inc. (the "Company") as
of March 31, 1998 and 1997 and for the three  months  then ended are  unaudited,
and in the opinion of management,  include all  adjustments  (consisting of only
normal  recurring  items)  necessary for the fair  presentation of the financial
position and results of  operations  for the interim  periods.  These  financial
statements  should be read in conjunction with the Financial  Statements for the
year ended December 31, 1997 and notes thereto  included in the Company's annual
report on Form 10-K.  The results of operations for the three months ended March
31, 1998 are not necessarily  indicative of the results  expected for the entire
year.

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


NOTE 2 - BASIC AND DILUTED NET LOSS PER SHARE

Basic and diluted net loss per share is based upon the weighted  average  number
of  outstanding  shares of Common  Stock.  Common stock  equivalent  shares from
Convertible  Preferred Stock (using the  if-converted  method) and stock options
and warrants  (using the treasury  stock  method)  have been  excluded  from the
computation  for the three  months ended March 31, 1998 and 1997 as their effect
is anti-dilutive.

NOTE 3 - STATEMENT OF SHAREHOLDER'S EQUITY

In the first  quarter of 1998,  the Board of Directors  approved the issuance of
the Series J Preferred Stock. The Series J Preferred Stock ranks pari passu with
the Series F, G, H and I  Preferred  Stock.  111,750  Series J  Preferred  Stock
shares were issued during the quarter ended March 31, 1998.

<PAGE>

Item 2. -  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations

This  section  and other  parts of this  Quarterly  Report on Form 10-Q  contain
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may  differ  significantly  from  those  anticipated  in  these
forward-looking  statements  as a result of the  factors  set forth below and in
"Factors  Affecting  Operating  Results and Market Price of Stock".  Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Forward-looking statements are indicated by an
asterisk (*).

General

HyperMedia  Communications,  Inc.  (the  "Company" or  "HyperMedia"),  publishes
NewMedia Magazine  ("NewMedia"),  the largest  publication serving the corporate
digital  content  market.   "Digital  content"  is  information   created  using
computer-based  video,  audio,  graphics,  animation and Internet  technologies.
Companies use digital  content in building brand  awareness  through  marketing,
advertising,   promotions,  corporate  presentations  and  sales  and  technical
training.  Corporate  digital content  creators  utilize a wide array of digital
communications technologies,  including Internet development tools and services,
desktop and portable  personal  computers,  workstations,  servers,  audio/video
compression and editing equipment, graphics hardware and software,  high-density
storage devices and video conferencing systems. Digital media output is actively
employed in a broad range of businesses and disciplines,  such as brand identity
(including  presentations,  training and collateral),  advertising,  publishing,
brand merchandising,  film, music, radio,  television,  cable television,  video
production, theme parks and computer media.

The 1998 publishing  strategy,  which will be implemented in the second quarter,
will  return  NewMedia  to a monthly  publishing  frequency.  * This  publishing
schedule is the result of  NewMedia's  advertising  clients  expressing a strong
preference  for a  standard  monthly  publishing  frequency  as  opposed  to the
previous 16 times  schedule.  The Company  intends to  continue  the  guaranteed
average  circulation  base of 215,000 in 1998. * According to a recent  analysis
conducted for the Company by BPA  International  ("BPA") of NewMedia  subscriber
demographic data, the average subscriber to the publication has represented that
they are personally  involved in the purchase of approximately  $1,080,000 worth
of digital  content-related  hardware,  software and services in a  twelve-month
period.* This  represents a more than 100 percent  increase from the approximate
$516,000 average purchasing power for NewMedia subscribers in 1996. In addition,
a redesign of NewMedia will debut with the July 1998 issue.  * The redesign is a
culmination of a repositioning  strategy that was initiated in 1996. The goal is
to target the most senior  managers and  professionals  responsible  for driving
digital-content strategies within business today - the Digital Elite.*

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>


HyperMedia  also produces the NewMedia  INVISION  Awards  Festival,  the largest
juried digital media competition in the world. The program seeks out the highest
achievements in digital content creation for business, entertainment, marketing,
government and  education.  The 1998 NewMedia  INVISION  Festival will include a
6,000 square foot PLAYLAND  Gallery,  Evening New Media  Showcases and a two day
Digital Creativity conference.*

HyperMedia also publishes newmediaocom,  an award-winning World Wide Web site of
news,  information,  products  and  services  for the digital  content  creation
market. The Company recently introduced ioServ, an innovative  electronic reader
service  capability  that uses the  immediacy  and  interactivity  of the Web to
respond to readers' product information requests in minutes instead of months.

Results of Operations

Revenues  decreased  to  $1,754,000  in the first  fiscal  quarter  of 1998 from
$1,915,000 in a comparable period in 1997, primarily as a result of decreases in
advertising  sales in  NewMedia.  The  Company  believes  that the  decrease  in
advertising  revenue  is related to a number of market  factors,  including  the
migration of digital content development from CD-ROM based media to the Internet
and shifts in the Macintosh  hardware and software  market,  as digital  content
creators make a transition toward increased use of Windows based workstations.

In the first quarter of 1998,  Windows- and  Unix-based  systems  advertising in
NewMedia  magazine  grew  by 43  percent  vs.  the  prior-year  period,  led  by
advertising from Compaq, Dell, Digital,  IBM, and Silicon Graphics.  The Company
believes that part of this increase was driven by the strong results reported in
NewMedia  magazine's  most  recent  BPA  International  circulation  audit.  The
magazine's  average  annual  subscriber  purchase power has more than doubled in
1997 to $1.08 million from $516,000 in 1996, according to the audit conducted by
BPA International.

The Company incurred a net loss of $370,000 and $98,000 in the first quarters of
1998 and 1997,  respectively.  The increase in net loss in the first  quarter of
1998 as compared to 1997 is  primarily a result of an  increased  investment  in
sales and marketing and to the decrease in NewMedia  advertising  revenues.  The
NewMedia  magazine sales force has almost doubled from the first quarter of 1997
to 1998.

Editorial  expenses,  comprised  principally  of  salaries  and fees paid to the
writers for the  Company's  publications,  were  $283,000 for the quarter  ended
March 31, 1998, as compared to $291,000 for the same quarter in 1997.  Editorial
expenses stayed  approximately the same in the first quarter of 1998 as a result
of various offsetting factors.  As a percentage of revenues,  editorial expenses
increased  slightly  from 15% in the first  quarter  of 1997 to 16% in the first
quarter of 1998. The Company  expects that  editorial  expenses will decrease in
the balance of 1998 as a result of the lower  number of issues  associated  with
the 1998 publishing strategy. *

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>


Production expenses,  including costs for design,  materials and printing of the
Company's publications, were $503,000 for the quarter ended March 31, 1998. This
compares to $476,000  for the quarter  ended  March 31,  1997.  The  increase of
$27,000,  or 6%, is primarily  attributable  to higher paper prices.  Production
expenses are expected to remain  relatively  flat during the balance of 1998, as
the result of a projected  increase in  advertising  pages,  if any,  and higher
paper costs,  which will be offset by the lower number of issues to be published
in 1998.*

Circulation expenses, consisting primarily of costs associated with subscription
fulfillment,   mailing  and  the  direct  mail   promotions   of  the  Company's
publications,  were $524,000 and $564,000 for the quarters  ended March 31, 1998
and 1997,  respectively.  The  Company  currently  capitalizes  its  circulation
development expenditures and amortizes them over a 12 month period. The decrease
of  $40,000,  or  7%,  is  primarily  attributable  to  the  smaller  amount  of
circulation development  expenditure  amortization included in the first quarter
of 1998 as  compared  to the  same  period  in  1997.  As part of the  Company's
publishing  strategy in 1996 and 1997, the minimum readership  qualifications to
receive the magazine were significantly more stringent. As a result of these new
criteria, the purchasing power of new media products and services of the average
subscriber  increased  to  approximately  $1,100,000  at the end of  1997,  from
approximately  $500,000 at the end of 1996 and less than  $200,000 in 1995.  The
Company  intends to maintain the higher  minimum  readership  qualifications  to
receive the magazine in 1998. * Circulation expenses represented 30% of revenues
for the first quarter of 1998 as compared to 29% of revenues for the same period
of 1997. Circulation expenses are expected to decrease in the balance of 1998 as
the  result  of the  impact  of the  frequency  based  on  the  1998  publishing
strategy.*

Sales and marketing expenses were $526,000 for the quarter ended March 31, 1998,
as compared to $420,000 for the same quarter in 1997.  The increase of $106,000,
or 25%, is attributable to higher  expenditures on sales and marketing  programs
and increased sales compensation expenses, including those related to the hiring
of new sales  personnel in the fourth  quarter of 1997 and the first  quarter of
1998.  The  NewMedia  magazine  sales  force has almost  doubled  from the first
quarter  of 1997 to  1998.  Sales  and  marketing  expenses  represented  30% of
revenues  for the first  quarter of 1998 as compared to 22% of revenues  for the
same  period of 1997.  Sales and  marketing  expenses  are  expected to increase
during the balance of 1998 because of higher sales compensation  expenses due to
increased  headcount,  and higher expenditures  associated with the expansion of
the NewMedia INVISION Awards Festival which will include a conference program. *

Product  development costs totaled $12,000 for the quarter ended March 31, 1998,
as compared to $9,000 for the  comparable  quarter in 1997, and consist of costs
incurred in the  development of new products,  including the Internet World Wide
Web site,  Hyperstand.  The Company  plans to continue  its product  development
efforts during 1998. *


---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.

<PAGE>

General and administrative  expenses were $271,000 and $243,000 for the quarters
ended March 31, 1998 and 1997,  respectively.  The increase of $28,000,  or 12%,
primarily  reflects  increased  compensation  costs.  General and administrative
expenses  represented  15% of revenues for the first quarter of 1998 as compared
to 13% for the same  period  in  1997.  General  and  administrative  costs  are
expected to grow in the balance of 1998 with  expected  increases in general and
administrative expenses that accompany anticipated revenue growth, if any.*

Liquidity and Capital Resources

At March 31,  1998,  the Company  had  approximately  $1,610,000  in net working
capital  and its  principal  sources of  liquidity  consisted  of  approximately
$770,000  in cash,  a $1  million  line of credit  limited  to 70% of  qualified
accounts  receivable and an agreement with MK Global  Ventures to purchase up to
$600,000 of the Company's  Series J Preferred  Stock at the  Company's  request,
subject to MK Global's  acceptance,  at any time up to and including  August 21,
1998. At March 31, 1998, there were no borrowings outstanding under this line of
credit.  As a result  of the  conditions  of the line of  credit  and  financial
results of the 1998 first  fiscal  quarter,  the  Company  had unused  borrowing
capacity  of  $872,000.  Partial  usage of unused  borrowing  capacity  could be
restricted by financial operating covenants.  In March 1998, the $1,000,000 line
of credit  secured by 70% of  qualified  accounts  receivable  was renewed  with
similar terms, conditions and covenants for a period through March 1999.

The Company  signed an agreement in February 1998 with its largest  shareholder,
MK Global Ventures in association  with its MK GVD Fund, to invest in additional
capital of the Company to finance operations. Under the Series J Preferred Stock
Purchase  Agreement,  MK GVD Fund  agreed  to  invest,  subject  to MK  Global's
acceptance,  up to $2,000,000 on or before August 21, 1998.  The price per share
of this Series J Preferred Stock, which the Company has not registered under the
Securities  Act of 1933,  as amended,  was 85% of the fair  market  value of the
Company's common stock,  based on the average of the closing bid price per share
for the ten trading  days ending  five  business  days before the closing of the
investment. The Company drew approximately $1,300,000 of this capital commitment
in February  1998 and  approximately  an  additional  $100,000  of this  capital
commitment in March 1998.

The Company expects that it will continue to require significant amounts of cash
to finance  operations.*  The  Company  has not  committed  to make  significant
capital expenditures, but may make such expenditures in the future.* The Company
believes that the existing cash  balances,  together  with cash  generated  from
operations and borrowings available under its line of credit, will be sufficient
to meet its cash requirements through at least the end of 1998.* There can be no
assurance,   however,  that  the  Company's  anticipation  of  its  future  cash
requirements  will be  correct.  Thereafter,  the  Company  may  seek  to  raise
additional   working  capital,   primarily  through  sales  of  debt  or  equity
securities.*  In  addition,  the  Company may seek to raise  additional  working
capital  prior to the end of 1998 if it can raise  such  capital  on  acceptable
terms.* See "Factors  Affecting  Operating  Results and Market Price of Stock --
Possible  Delisting of Securities  from Nasdaq  SmallCap  Market;  Need to Raise
Additional Capital."
---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>

The terms of the Series E Preferred Stock,  Series F Preferred  Stock,  Series G
Preferred Stock,  Series H Preferred Stock,  Series I Preferred Stock,  Series J
Preferred  Stock and  outstanding  warrants  grant the holders  thereof  certain
preferential rights including  conversion and/or registration  rights, which may
have a dilutive  effect on existing  shareholders  and may  therefore  limit the
availability of financing,  particularly  equity  financing.  The Company has no
commitments for any such financing,  and there can be no assurance that any such
debt or equity  financing will be available on terms  acceptable to the Company,
or at all. The  Company's  ability to borrow under the line of credit is subject
to compliance with certain financial covenants,  including,  but not limited to,
quarterly  profitability  beginning  with the fourth fiscal  quarter of 1998 and
maintaining a minimum  $1,500,000  tangible net worth. There can be no assurance
that the Company will be successful in complying with these financial covenants.
The Company's  failure to comply with the financial  covenants could preclude it
from utilizing the line of credit, which would have a material adverse effect on
the  Company's  liquidity and financial  condition.  In addition,  the Company's
inability to raise capital, if required, could have a material adverse effect on
the Company's business and results of operations.

Factors Affecting Operating Results and Market Price of Stock

This  section  and other  parts of this  Quarterly  Report on Form 10-Q  contain
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may  differ  significantly  from  those  anticipated  in  these
forward-looking  statements  as a result of the  factors  set forth below and in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations".  Readers  are  cautioned  not to  place  undue  reliance  on  these
forward-looking   statements,   which   speak  only  as  of  the  date   hereof.
Forward-looking statements are indicated by an asterisk (*).

Among the factors that could cause actual results to differ materially are those
listed below and those listed in the  Company's  SEC reports  including  but not
limited to the annual report on Form 10-K for the year ended December 31, 1997.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>

History of Losses and Accumulated Deficits

The Company incurred total net losses of $11,773,000 from inception to March 31,
1998, including a net loss of $370,000 for the quarter ended March 31, 1998. The
Company  expects to incur losses for at least the first three  quarters of 1998,
as it  continues  to  increase  expenditures  to promote  and expand its current
publications  and develop and launch new  products.*  There can be no  assurance
that during 1998 or thereafter the Company will be able to increase its revenues
or become  profitable.  The Company's  potential  future growth  depends on many
factors,  including the ability of the Company to attract sufficient advertising
customers  for  NewMedia,  maintain the  circulation  base of  NewMedia,  have a
productive  advertising sales force that includes  recently-hired  sales people,
control its costs, and successfully implement its marketing and product strategy
in relation to the corporate digital content creation marketplace.* There can be
no assurance that the Company will be successful in any of these efforts.

1998 Publishing Strategy; Sales and Marketing Strategy

The key elements of the Company's 1998  publishing  strategy are to focus on the
professional  market for digital content creation,  to return to publishing at a
monthly  frequency of 12 times per year starting in the second  quarter of 1998,
to  maintain  the  stringent  minimum  qualification   criteria  that  potential
subscribers were required to meet in order to qualify for a subscription, and to
maintain the guaranteed circulation base of 215,000 qualified NewMedia readers.*
In  addition,  the  Company  increased  the  price it  charges  for a  one-time,
full-page,  four-color  advertisement in NewMedia from $17,845 to $19,995. There
can be no  assurance  that the  Company's  publishing  strategy  will  result in
increased  revenues  or in  profitability.  Certain  components  of  production,
circulation and editorial expenses associated with this publishing strategy will
increase.* When NewMedia's publishing frequency changes in the second quarter of
1998  from 16  times  per  year  to  monthly,  there  can be no  assurance  that
advertising revenues, minus variable production and postage charges from the new
publishing  frequency  of three  issues per  quarter,  will be greater  than the
previous  rate of four issues per quarter.  The Company has been  undergoing  an
advertising  category  transition  since the second half of 1995,  away from the
consumer  market  toward the above  mentioned  professional  market for  digital
content  creation.  To replace these  consumer  market  advertisers  and to grow
advertising revenues,  the Company needs to sell advertisements  oriented to the
professional market for digital content creation. There can be no assurance that
the Company will be able to sell a sufficient  number of  advertisements  to the
professional  market to make its  strategy  successful.  Until  the  circulation
direct  mail  (and  associated)   campaigns  for  qualified  readers  using  the
qualification  criteria  is  completed,  there  can  be no  assurance  that  the
estimated purchasing power of new media products and services will be maintained
with a reasonable level of circulation  expenditures.  As a result,  the Company
does not  expect  growth  in  advertising  revenues  until at least the third or
fourth quarter of 1998, if at all.*

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>


Possible  Delisting of Securities  From Nasdaq  SmallCap  Market;  Need to Raise
Additional Capital

The Nasdaq  SmallCap  Market  ("Nasdaq")  has recently  adopted  more  stringent
financial requirements for listing on Nasdaq, which became effective on February
23, 1998.  With  respect to continued  listing,  such new  requirements  are (i)
either  at  least   $2,000,000  in  tangible   assets,   a  $35,000,000   market
capitalization  or net  income of at least  $500,000  in two of the three  prior
years,  (ii) at least 500,000 shares in the public float valued at $1,000,000 or
more, (iii) a minimum Common bid price of $1.00, (iv) at least two active market
makers,  and (v) at least 300 holders of the Common Stock.  The $1,400,000  that
the Company raised through the issuance of Series J Convertible  Preferred Stock
in February 1998 and March 1998 enabled the Company to meet the new  requirement
of at least  $2,000,000 in tangible net assets on a proforma  basis based on the
Company's December 31, 1997 and January 31, 1998 balance sheets and on an actual
basis based on the  Company's  March 31, 1998  balance  sheet.  Based on current
financial  projections  for the second and third  quarters of 1998,  the Company
will need to sell additional shares of Series J Convertible  Preferred Stock, or
other equity securities,  to continue to meet the new financial requirements for
continued  listing on Nasdaq. In the event of delisting by Nasdaq,  trading,  if
any, in the Common Stock would  thereafter be conducted in the  over-the-counter
market,  in the  so-called  "pink  sheets"  or the NASD's  "Electronic  Bulletin
Board."  Consequently,  the  liquidity  of the  Company's  securities  could  be
impaired,  not only in the number of securities  which could be bought and sold,
but also through delays in the timing of  transactions  and lower prices for the
Company's securities than might otherwise be attained.

In order  to  continue  to meet the new  financial  requirements  for  continued
listing on Nasdaq,  the Company will need to sell additional  shares of Series J
Convertible  Preferred  Stock or other equity  securities  of the  Company.  The
Series J Convertible  Preferred  Stock,  if sold,  would be issued at 85% of the
fair market value of the  Company's  Common  Stock,  based on the average of the
closing bid price per share for the ten trading days ending five  business  days
before the  closing of the  investment,  and its  issuance  would  therefore  be
dilutive to existing  holders of the Company's  Common Stock.  In addition,  the
Company is likely to require  additional  equity  capital to maintain its Nasdaq
listing  in the  future,  and no  assurance  can be given  that any such  equity
capital will be available on terms acceptable to the Company, or at all, and any
such  equity  capital  is likely  to be  dilutive  to  existing  holders  of the
Company's  Common  Stock.  Further,  issuances of equity  securities at purchase
prices below that of the outstanding Preferred Stock will increase the number of
shares of Common Stock  issuable upon  conversion  of the  Preferred  Stock as a
result of the anti-dilution provisions thereof, resulting in further dilution to
the holders of the Common Stock.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>



Control By Principal Stockholders

The Company's principal stockholders, MK Global Ventures II and its affiliate MK
GVD Fund (together,  the "MK Entities"),  together  beneficially own over 50% of
the outstanding Common Stock (assuming  conversion of all outstanding  Preferred
Stock in Common Stock). In addition, the MK Entities have two representatives on
the five-person Board of Directors of the Company.  Accordingly, the MK Entities
will be able to determine the  composition of the Company's  Board of Directors,
will retain voting power to approve all matters requiring  stockholder  approval
and will continue to have significant influence over the affairs of the Company.
In addition,  this  concentration of ownership could have the effect of delaying
or preventing a change in control of the Company.

Risks Associated With Sales and Marketing Strategy

The Company's ability to achieve future  profitability  depends upon the success
of the Company's  strategy to add and retain sales  personnel in key markets and
to increase the productivity of existing sales personnel.  In the fourth quarter
of 1997,  the Company  appointed  a new East Coast  Advertising  Director  and a
Silicon Valley Senior Advertising  Manager, and the Company has hired additional
advertising  sales  personnel in the first quarter of 1998. New sales  personnel
typically take from six to nine months to become fully productive, and therefore
the Company's  operating  results during such time may be adversely  affected by
the hiring of such personnel.  In addition,  there can be no assurance that such
new sales  personnel  will  achieve  sufficient  advertising  revenue  to become
profitable  for the Company  after the first six to nine  months or at all.  Any
failure of one or more of the new  personnel  to become  productive  will have a
material adverse effect on the Company's  operating  results.  Furthermore,  the
Company's  revenues  from  advertising  sales depends upon a small number of key
sales  personnel.  Any  inability  of such  personnel  to  maintain  or increase
existing sales levels, or any turnover in such personnel,  would have a material
adverse effect on the Company's operating results.

Year 2000 Compliance

Many currently  installed  computer  systems and software  products are coded to
accept  only two digit  entries in the date code  field.  These date code fields
will need to accept four digit  entries to  distinguish  21st century dates from
20th century dates. As a result,  in less than two years,  computer  systems and
software  used by many  companies  may need to be  upgraded  to comply with such
"Year 2000"  requirements.  The Company  believes that its internal  systems are
Year 2000  compliant  and does not expect that costs  associated  with Year 2000
compliance  will be  material.  In  addition,  the  Company  believes  that  the
purchasing  patterns  of  companies  that  subscribe  to NewMedia as well as the
Company's  advertising clients may be affected by Year 2000 issues, as companies
expend significant  resources to correct or patch their current software systems
for Year  2000  compliance.  These  expenditures  may  result in  reduced  funds
available to purchase  advertising in  publications  like NewMedia,  which could
result in a material adverse effect on the Company's business, operating results
and financial condition.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.


<PAGE>



Highly Competitive Market

Revenues from NewMedia are derived primarily from the sale of advertising in the
magazine  and will  continue  to be  derived  primarily  from such  sales in the
foreseeable  future.* The technology  publishing industry is highly competitive.
Many of the Company's  competitors have substantially  greater financial,  sales
and  marketing  resources  than the  Company.  Although  the market for  digital
content  creation  and  Internet  products  is an evolving  market,  the Company
competes  for  advertising  revenue  with  numerous  magazines  and  newspapers,
including  personal  computer  magazines.  There  can be no  assurance  that the
Company  will  not  experience  increased   competition  from  new  or  existing
technology  periodicals  or other media,  such as the Internet.  Such  increased
competition,  if  experienced,  would  have a  material  adverse  impact  on the
Company's ability to increase its advertising revenues.

Growth of the Professional Market for Digital Content Creation

NewMedia is  targeted  toward  professional  users of digital  content  creation
products and services in connection  with computers.  The computer  industry has
historically  been  characterized  by  business  cycles.  To the extent that the
computer industry or professional  digital content creation market experiences a
significant  downturn,  the  Company  would  expect a  similar  downturn  in its
business.  The  professional  market for digital content  creation  products and
services is in the early stages of  development,  and predictions as to its size
and the factors  which will affect it are  inconclusive.  To the extent that the
professional  digital content creation market does not develop as quickly as the
Company  anticipates  or that it  experiences a significant  downturn  following
growth,  the Company's  ability to generate  revenue or profits may be adversely
affected.  Furthermore, even if the professional digital content creation market
does  develop  as  anticipated,  there can be no  assurance  that the demand for
NewMedia will also increase.

Dependence on Key Personnel and Sales Personnel

The Company's  success  depends to a large extent upon the efforts and abilities
of key managerial employees,  including without limitation,  Richard Landry, the
Chief Executive Officer,  of the Company.  The Company's success also depends on
the  performance  of key  sales  personnel.  The loss of  certain  of these  key
managers or sales personnel could have a material adverse effect on the Company.
The  Company has not  entered  into  employment  agreements  with its  executive
officers and carries no key man  insurance  on their  lives.  The success of the
Company's  business will also depend upon its ability to continue to attract and
retain qualified employees. Competition for such employees is intense, and there
can be no  assurance  that the  Company  will be  successful  in  attracting  or
retaining such personnel.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" and  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations"  for a discussion  of factors  that could affect  future
performance.












<PAGE>


                           PART II - OTHER INFORMATION


Item 2.  Changes in Securities and Use of Proceeds

The Company  signed an agreement in February 1998 with its largest  shareholder,
MK Global Ventures in association  with its MK GVD Fund, to invest in additional
capital of the Company to finance operations. Under the Series J Preferred Stock
Purchase  Agreement,  MK GVD Fund agreed to invest up to $2,000,000 on or before
August 21, 1998. The price per share of this Series J Preferred Stock, which the
Company has not registered under the Securities Act of 1933, as amended, was 85%
of the fair market value of the  Company's  common stock based on the average of
the closing bid price per share for the ten  trading  days ending five  business
days before the closing of the investment.  Shares of Series J Preferred  Stock,
which carry a 5% dividend,  are  convertible  at the option of the holder at any
time into shares of Common Stock in an amount  equal to the Initial  Sales Price
divided by the  appropriate  Conversion  Price.  In February and March 1998, the
Company issued  105,000 and 6,750 shares of Series J Preferred  Stock under this
agreement at a price of $12.38 and $14.88 per share, respectively, for aggregate
proceeds of approximately $1,400,000.  Each share of Series J Preferred Stock is
convertible  at the option of the holder into 20 shares of the Company's  common
stock.  These  proceeds will be primarily  used by the Company to fund operating
losses and  working  capital  requirements  and to meet the new Nasdaq  SmallCap
Market  ("Nasdaq")  listing  requirements of at least $2,000,000 in tangible net
assets  based on the  Company's  March 31,  1998  balance  sheet.  This leaves a
balance  of up to  approximately  $600,000  which the MK GVD Fund has  agreed to
invest,  subject to MK Global's  acceptance,  in Series J Preferred  Stock on or
before August 21, 1998.

Item 6.  Exhibits and Reports on Form 8-K

                  (a) A Form 8-K was filed  February  20,  1998  which  reported
under  Item 5.  thereof  the  Company's  issuance  of $1.3  million  of Series J
Preferred Stock and the Company's operating results for fiscal 1997.

Items 1, 3, 4, and 5 are not applicable and have been omitted.

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.

Date:    May  12, 1998                    HyperMedia Communications, Inc.


                                          By: /s/ Richard Landry_______
                                          Richard Landry
                                          President and Chief Executive Officer
                                          (Principal Financial and Accounting
                                          Officer)