UNITED STATES
                       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 [June 30, 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 August 4, 1998,  3,200,141  shares of the  Registrant's  common stock were
issued and outstanding.

                                       1

<PAGE>

<TABLE>
                         PART I - FINANCIAL INFORMATION
Item 1.
                         HYPERMEDIA COMMUNICATIONS, INC.
                                  BALANCE SHEET
                                   (UNAUDITED)
<CAPTION>
                                                                                     June 30,              December 31,
                                                                                       1998                     1997
                                                                                ------------------      -----------------
<S>                                                                             <C>                     <C>
ASSETS
Current assets:
     Cash and cash equivalents                                                  $        887,000        $        269,000
     Accounts receivable, net of allowance for
           doubtful accounts of $143,000 and $110,000                                  1,136,000               1,165,000
     Prepaid expenses and other assets                                                   618,000                 567,000
                                                                                ------------------      ------------------
             Total current assets                                                      2,641,000               2,001,000

Property and equipment, net                                                              424,000                 451,000
                                                                                ------------------      ------------------
                                                                                $      3,065,000        $      2,452,000
                                                                                ==================      ==================


Current liabilities:
     Accounts payable                                                           $        672,000        $        956,000
     Accrued liabilities                                                                 313,000                 439,000
     Deferred revenue                                                                     54,000                  31,000
                                                                                ------------------      ------------------
             Total current liabilities                                                 1,039,000               1,426,000
                                                                                ------------------      ------------------

Shareholders' equity:
     Convertible Preferred Stock, $.001 par value; 10,064,516
          shares authorized; 8,512,191 and 8,342,910 shares                            3,928,000               2,003,000
          issued and outstanding
     Common Stock, $.001 par value; 50,000,000 shares
          authorized; 3,200,141 shares issued and                                     10,427,000              10,427,000
          outstanding
     Accumulated deficit                                                             (12,329,000)            (11,404,000)
                                                                                ------------------      ------------------
             Total shareholders' equity                                                2,026,000               1,026,000
                                                                                ------------------      ------------------
                                                                                $      3,065,000     $         2,452,000
                                                                                ==================      ==================

<FN>
      See the accompanying notes to these condensed financial statements.
</FN>
</TABLE>
                                       2

<PAGE>

<TABLE>
                                             HYPERMEDIA COMMUNICATIONS, INC.
                                                 STATEMENT OF OPERATIONS
                                                       (UNAUDITED)
<CAPTION>
                                                      Three months ended June 30,           Six months ended June 30,
                                                 ------------------------------------  ----------------------------------
                                                       1998               1997                1998             1997
                                                 ----------------  ------------------  ----------------  ----------------
<S>                                              <C>               <C>                 <C>               <C>            
Revenues                                         $     1,329,000   $       1,801,000   $     3,083,000   $     3,716,000
                                                 ----------------  ------------------  ----------------  ----------------
Expenses:
    Editorial                                            239,000             284,000           522,000           575,000
    Production                                           381,000             471,000           884,000           947,000
    Circulation                                          471,000             532,000           995,000         1,096,000
    Sales and marketing                                  553,000             384,000         1,079,000           804,000
    Product development                                   11,000              10,000            23,000            19,000
    General and administrative                           232,000             210,000           503,000           453,000
                                                 ----------------  ------------------  ----------------  ----------------
            Total expenses                             1,887,000           1,891,000         4,006,000         3,894,000
                                                 ----------------  ------------------  ----------------  ----------------

Loss from operations                                    (558,000)            (90,000)         (923,000)         (178,000)

Interest and other (income) expense, net                  (3,000)              7,000             2,000            17,000
                                                 ----------------  ------------------  ----------------  ----------------
Net loss                                         $      (555,000)  $         (97,000)  $      (925,000)  $      (195,000)
                                                 ================  ==================  ================  ================

Basic and diluted net loss per share             $         (0.17)  $           (0.03)  $         (0.29)  $         (0.06)
                                                 ================  ==================  ================  ================


Weighted average common and
    common equivalent shares                           3,200,141           3,200,141         3,200,141         3,200,141
                                                 ================  ==================  ================  ================

<FN>
      See the accompanying notes to these condensed financial statements.
</FN>
</TABLE>
                                       3

<PAGE>

<TABLE>
                                    HYPERMEDIA COMMUNICATIONS, INC.
                                        STATEMENT OF CASH FLOWS
                                              (UNAUDITED)
<CAPTION>
                                                                       Six months ended June 30,
                                                               ------------------------------------------
                                                                       1998                    1997
                                                               -------------------      -----------------
<S>                                                            <C>                      <C>
Cash flow from operating activities:
    Net loss                                                   $         (925,000)      $       (195,000)
    Adjustments to reconcile net loss to net
       cash used in operating activities:
       Depreciation and amortization                                      114,000                119,000
       Allowance for doubtful accounts                                     33,000                (73,000)
       Other                                                                   --                 20,000
       Change in assets and liabilities:
           Accounts receivable                                             (4,000)                71,000
           Prepaid expenses and other assets                              (51,000)                61,000
           Accounts payable                                              (284,000)               (88,000)
           Accrued liabilities                                           (126,000)               (44,000)
           Deferred revenue                                                23,000                118,000
                                                               -------------------      -----------------
Net cash used in operating activities                                  (1,220,000)               (11,000)
                                                               -------------------      -----------------

Net cash used in investing activities for
    purchase of fixed assets                                              (87,000)               (24,000)
                                                               -------------------      -----------------
Cash flows from financing activities:
    Proceeds from issuance of Preferred Stock                           1,925,000                 98,000
    Proceeds from issuance of Common Stock                                     --                 50,000
    Repayment of note payable                                                  --               (110,000)
                                                               -------------------      -----------------
Net cash provided by financing activities                               1,925,000                 38,000
                                                               -------------------      -----------------

Net increase in cash                                                      618,000                  3,000

Cash and cash equivalents at beginning of period                          269,000                107,000
                                                               -------------------      -----------------

Cash and cash equivalents at end of period                     $          887,000       $        110,000
                                                               ===================      =================

Supplemental disclosure of cash flow information:
    Cash paid during the period for interest                   $            2,000       $         17,000
                                                               ===================      =================

<FN>
      See the accompanying notes to these condensed financial statements.
</FN>
</TABLE>
                                       4

<PAGE>


                         HYPERMEDIA COMMUNICATIONS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

The financial statements of HyperMedia  Communications,  Inc. (the "Company") as
of June 30,  1998 and 1997 and for the  three  and six  months  then  ended  are
unaudited, and in the opinion of management, 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 have been included.
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 and six months ended June 30, 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 month periods ended June 30, 1998 and 1997 and for the
six month periods ended June 30, 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. An additional 57,531
Series J Preferred  Stock shares were issued  during the quarter  ended June 30,
1998.

                                       5

<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 was  implemented  in the second  quarter,
returned NewMedia to a monthly publishing  frequency.  This publishing  schedule
was   implemented  in  response  to  the  expressed   preference  of  NewMedia's
advertising  clients 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  debuted  with the July 1998 issue.  * The redesign was 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
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       6

<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

The Company's  gross  revenues were  $1,329,000  and $1,801,000 for the quarters
ended June 30, 1998 and 1997,  respectively,  and  $3,083,000 and $3,716,000 for
the six months then ended,  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 second
quarter of 1998,  the Company  also reduced the  frequency of NewMedia  magazine
from a sixteen time publishing schedule to a monthly publishing schedule.

The Company's  total  expenses were  $1,887,000  and $1,891,000 for the quarters
ended June 30, 1998 and 1997,  respectively,  and  $4,006,000 and $3,894,000 for
the six months then ended.  The reduction in expenses  associated with the lower
number of issues  published  in 1998 was offset by an  increased  investment  in
sales and marketing.

The net loss for the first six months of 1998 was  $925,000  as  compared to the
loss of $195,000 for the first six months of 1997. The Company posted a net loss
of $555,000  in the second  quarter of 1998 as compared to a net loss of $97,000
for the same period of 1997.  The increase in net loss in the second  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  in the first half of 1998
compared to the first half of 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
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       7

<PAGE>


Editorial  expenses,  comprised  principally  of  salaries  and fees paid to the
writers for the  Company's  publications,  were  $239,000  and  $284,000 for the
quarters ended June 30, 1998 and 1997,  respectively,  and $522,000 and $575,000
for the six  months  then  ended.  The  reductions  in  editorial  expenses  are
primarily attributable to cost control programs.  Editorial expenses represented
18% and  16% of  revenue  for  the  quarters  ended  June  30,  1998  and  1997,
respectively.  The Company expects that editorial  expenses will decrease in the
balance of 1998 versus the second  half of 1997 as a result of the lower  number
of issues associated with the 1998 publishing strategy. *

Production expenses,  including costs for design,  materials and printing of the
Company's  publications,  were $381,000 and $471,000 for the quarters ended June
30, 1998 and 1997,  respectively  and  $884,000  and $947,000 for the six months
then ended.  The decrease in production  expenses for the second fiscal  quarter
and first six months of 1998 as compared  to the same  quarter and six months of
1997 is  primarily  attributable  to the  reduction  of the number of issues per
quarter (from 4 to 3), starting in the second fiscal quarter of 1998. Production
expenses  represented  29% of revenue in the second  quarter of 1998 compared to
26% for the same  period in 1997.  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  $471,000 and $532,000 for the quarters  ended June 30, 1998
and 1997,  respectively,  and  $995,000 and  $1,096,000  for the six months then
ended.   The  Company   currently   capitalizes  its   circulation   development
expenditures and amortizes them over a 12 month period. The decrease of $61,000,
or  11%,  is  primarily  attributable  to  the  smaller  amount  of  circulation
development  expenditure  amortization included in the second 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  power  the  average  subscriber  represents  he has to  purchase  new media
products and services 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 35% of revenues
for the  second  quarter of 1998 as  compared  to 30% of  revenues  for the same
period of 1997.  Circulation expenses are expected to decrease in the balance of
1998 versus 1997 as the result of the impact of the frequency  based on 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" for a discussion of factors that could affect future performance.

                                       8

<PAGE>


Sales and marketing  expenses were $553,000 and $384,000 for the quarters  ended
June 30, 1998 and 1997,  respectively,  and  $1,079,000 and $804,000 for the six
months then ended. The increase 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 half of 1998. The NewMedia magazine sales force has almost doubled
from the first  half of 1997 to the  first  half of 1998.  Sales  and  marketing
expenses  represented  35% of revenues for the first half of 1998 as compared to
22% of  revenues  for the same  period  of 1997.  Sales and  marketing  expenses
represented  42% of revenue for the second quarter of 1998 as compared to 21% of
revenue 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  expenses  were $11,000 and $10,000 for the quarters  ended
June 30, 1998 and 1997, respectively, and $23,000 and $19,000 for the six months
then ended,  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.*

General and administrative  expenses were $232,000 and $210,000 for the quarters
ended June 30, 1998 and 1997,  respectively,  and  $503,000 and $453,000 for the
six months then ended. The increase of $50,000,  or 11%, in the first six months
of 1998 as compared to 1997 and $22,000,  or 10%, in the second  quarter of 1998
as compared to the same period in 1997 primarily reflects  increased  consulting
costs.  General and administrative  expenses  represented 17% of revenue for the
second quarter of 1998 as compared to 12% for the same period in 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
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       9

<PAGE>


Liquidity and Capital Resources

At June 30,  1998,  the  Company  had  approximately  $1,602,000  in net working
capital  and its  principal  sources of  liquidity  consisted  of  approximately
$887,000  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
$50,000 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. The revolving  credit facility is secured by the assets of the Company and
requires the Company to maintain certain  quarterly  financial  ratios.  For the
quarter  ended June 30,  1998,  the Company was not in  compliance  with certain
financial  covenants.  However,  the  Company  obtained a waiver for the quarter
ended June 30, 1998 and the line of credit remains available to the company.  No
borrowings were outstanding under this agreement at quarter end.

The Company  signed an agreement in February 1998 with its largest  shareholder,
MK Global  Ventures in  association  with its MK GVD Fund, to invest  additional
capital  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,  approximately an additional  $100,000 of this capital commitment in March
1998, and an additional  $550,000 in June 1998.  These capital draws were offset
by $25,000 in issuance costs.

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 any cash generated from
operations and borrowings  potentially  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
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       10

<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 could 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
and quarterly report on Form 10-Q for the quarter ended March 31, 1998.

History of Losses and Accumulated Deficits

The Company has incurred total net losses of $12,329,000  from inception to June
30, 1998,  including a net loss of $555,000 for the quarter ended June 30, 1998.
The Company  expects to incur losses for at least the next two 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,  control  its  costs,  and  successfully
implement  its  marketing  and product  strategy  in  relation to the  corporate
digital  content  creation  marketplace.   The  Company  has  recently  hired  a
significant  portion of its sales staff who must be trained and integrated  into
the operation.  There can be no assurance that the Company will be successful in
any of these efforts. See "Risks Associated with Sales and Marketing Strategy."

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

                                       11

<PAGE>


increased  revenues  or in  profitability.  Certain  components  of  production,
circulation and editorial expenses associated with this publishing strategy will
increase.* As 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 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 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
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  for a discussion of factors that could affect future
performance.

                                       12

<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  net  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 closing bid price for the Company's Common Stock 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 pro forma 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 and June 30, 1998 balance sheets.  Based on current  financial  projections
for the  third  and  fourth  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 addition,  the Company's  Common Stock has failed to meet
the minimum $1.00 closing bid price and the Company must  demonstrate  to Nasdaq
its ability to regain  compliance  with the minimum  bid price  criteria  and to
sustain long term  compliance  with all  applicable  maintenance  criteria.  The
Company will  participate in a written hearing before a Panel  authorized by the
NASD in early  September  1998. The Panel will  determine  whether the Company's
Common Stock will remain listed on the Nasdaq SmallCap Market and their decision
is subject to appeal. 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
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  for a discussion of factors that could affect future
performance.

                                       13

<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 July 1998, the
Company  hired a new  Publisher.  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.

                                       14

<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.

Uncertainty of 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.  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
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  for a discussion of factors that could affect future
performance.

                                       15

<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.  In June 1998,  the  Company  issued an
additional  57,531  shares of Series J Preferred  Stock under the agreement at a
price of $9.56 per share for an additional aggregate proceeds of $550,000.  Each
share of Series J Preferred Stock is currently  convertible at the option of the
holder into 25.9 shares of the Company's  common stock,  subject to  adjustment.
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 net tangible assets
based on the Company's June 30, 1998 balance sheet. The issuance of the Series J
Preferred  Stock  to  the MK GVD  Fund,  an  affiliate  of  the  Company  and an
accredited  investor,  was exempt from registration  under the Securities Act of
1933, as amended,  pursuant to section 4 (2) as a transaction  not involving any
public offering.

Item 4.  Submission of Matters to a Vote of Security Holders

         The Company held its annual  meeting of  shareholders  on May 21, 1998.
         The results of the items submitted for vote were as follows:

         1.       Election of directors to serve until the next annual meeting.

                  Nominee                   Votes for         Withheld
                  -------                   ---------         --------
                  Patrick Ferrell           3,004,029          17,150
                  John Griffin              3,004,029          17,150
                  Michael Kaufman           3,004,029          17,150
                  Greg Lahann               3,004,029          17,150
                  Richard Landry            3,004,029          17,150

         2.       Ratification  and  approval of an amendment of the Articles of
                  Incorporation  to reduce  the number of  designated  shares of
                  each  series  of Series F,  Series G,  Series H, and  Series I
                  Preferred Stock to the actual number of shares for each of the
                  respective  series of Preferred  Stock that is outstanding and
                  to return such  previously  designated and unissued  shares to
                  the pool of undesignated Preferred Stock.

                  Votes for:       1,994,031

                                       16

<PAGE>


                  Votes against:   18,700
                  Abstain:         3,600
                  Non-votes:       1,183,810

         3.       Ratification  and  approval of an  amendment to the 1993 Stock
                  Plan increasing the aggregate number of shares of Common Stock
                  reserved for issuance thereunder by 700,000 to 1,400,000.

                  Votes for:       1,883,586
                  Votes against:   130,545
                  Abstain:         2,200
                  Non-votes:       1,183,810

         4.       Ratify the appointment of Price  Waterhouse LLP as independent
                  accountants of the Company for the fiscal year ending December
                  31, 1998.

                  Votes for:       3,015,479
                  Votes against:   13,500
                  Abstain:         2,200
                  Non-votes:       178,962

                                       17

<PAGE>


Item 5.  Other Information

Proposals  of  shareholders  of the Company that are intended to be presented by
such  shareholders at the Company's 1999 Annual Meeting of  Shareholders,  which
are not eligible for inclusion in the proxy statement and form of proxy relating
to that  meeting,  must be received by the Company no later than March 10, 1999.
If such shareholders  fail to comply with the foregoing notice  provision,  then
the proxy  holders will be allowed to use their voting  discretionary  authority
when the proposal is raised at the 1999 Annual Meeting.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits
                  3.1.1A   Amended and Restated Articles of Incorporation  filed
                           as of 6/2/98

                  3.1.1B   Certificate  of  Correction  of Amended and  Restated
                           Articles of Incorporation filed as of 7/2/98

                  27.1     Financial Data Schedule

         (b)      No reports on Form 8-K were  filed by the  Company  during the
                  fiscal quarter ended June 30, 1998.


Items 1 and 3 are not applicable  and have  been omitted.

                                       18

<PAGE>


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:    August  14, 1998                  HyperMedia Communications, Inc.


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

                                       19