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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|ý | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2001

or

|o | 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 0-31043

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STYLECLICK, INC.(Exact name of registrant as specified in its charter)

|Delaware                                                       |  | 13-4106745                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)
|111. E. Wacker Drive, Chicago, IL                              |  | 60601                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrant's
telephone number, including area code(312) 856-1081

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:

|Title of each class  |  | Name of each exchange
on which registered:
|-------------------- |  | ------------------------------------------
|Class A Common Stock |  | None                                      

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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 ý    No o

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (sect. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o

The
aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant was $2,944,871 based on the average bid and asked prices
of $0.33 per share as quoted on the OTC Bulletin Board on March 26, 2002. The number of outstanding shares of the registrant's common stock as of March 26, 2002, was:

Class A common stock

9,872,653
*Class B common stock

23,039,70632,912,359


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Only
Class A common stock is publicly traded.

Documents Incorporated by Reference:

Portions of the Registrant's proxy statement for its 2002 Annual Meeting of Stockholders are incorporated by reference into Part III herein.

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STYLECLICK, INC.        INDEX TO ANNUAL REPORT ON FORM 10-K        For The Fiscal Year Ended December 31, 2001

|         |  |                                                                                       |  | Page
|-------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I   |  |                                                                                       |  |     
|Item 1.  |  | Business                                                                              |  | 2   
|Item 2.  |  | Properties                                                                            |  | 8   
|Item 3.  |  | Legal Proceedings                                                                     |  | 8   
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                   |  | 8   
|PART II  |  |                                                                                       |  |     
|Item 5.  |  | Market for Registrant's Common Equity and Related Stockholder Matters                 |  | 9   
|Item 6.  |  | Selected Financial Data                                                               |  | 9   
|Item 7.  |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 10  
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risks                           |  | 14  
|Item 8.  |  | Consolidated Financial Statements and Supplementary Data                              |  | 15  
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 32  
|PART III |  |                                                                                       |  |     
|Item 10. |  | Directors and Executive Officers of the Registrant                                    |  | 32  
|Item 11. |  | Executive Compensation                                                                |  | 32  
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 32  
|Item 13. |  | Certain Relationships and Related Transactions                                        |  | 32  
|PART IV  |  |                                                                                       |  |     
|Item 14. |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  | 33  

1

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PART I

Item 1.Business

Corporate Overview

Styleclick, Inc. ("Styleclick" or the "Company") is a provider of electronic commerce (e-commerce) technologies and services enabling its
customers to sell their products online. Styleclick's offerings include website design, development and hosting, product imaging, online sales and merchandising technologies. Styleclick integrates its
online storefront application and merchandising and inventory management technology with reporting systems and back-end fulfillment and customer care to create commerce-driven offerings to
help clients expand sales to customers across the Web. Styleclick's technology platform leverages a central CRM-driven database for consumer profiling and direct marketing capabilities.

Styleclick
was incorporated in Delaware on March 22, 2000 by USANi Sub LLC, a subsidiary of USA Networks, Inc. ("USA"), in connection with the merger of
Styleclick.com Inc. ("Styleclick.com") and Internet Shopping Network LLC ("ISN"), a subsidiary of USA prior to the merger. Upon consummation of the merger, which was completed on
July 27, 2000, Styleclick.com and ISN became wholly-owned subsidiaries of Styleclick, and Styleclick became a majority-owned subsidiary of USA.

Styleclick's
capital stock currently consists of Class A common stock and Class B common stock. All of the outstanding shares of Styleclick's Class B common stock
are held by USA. Subject to certain conditions, each share of Class B common stock is convertible into one share of Class A common stock. Except as otherwise provided by applicable law,
each share of Class B common stock has 10 votes on any matter submitted to a vote of Styleclick's stockholders and each share of Class A common stock has one vote on any matter submitted
to a vote of its stockholders.

USA
currently holds approximately 72% of Styleclick's outstanding capital stock and approximately 96% of the total voting power of Styleclick. As a result, USA is effectively able to
control the outcome of nearly all matters submitted to a vote of Styleclick's stockholders.

In
2001, Styleclick began to focus on e-commerce services and technology while eliminating its online consumer retail business. During this transition, Styleclick continued
to incur significant net losses from continuing operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Styleclick is considering its
options with respect to the situation.

In
March 2001, Styleclick announced certain changes including a new company organization designed to advance its offering of scalable commerce services. At that time, Styleclick
announced that its Board of Directors had elected Lisa Brown to the office of Chief Executive Officer of Styleclick and Robert Halper to the office of President and Chief Operating Officer of
Styleclick. Ms. Brown also serves as Chief Executive Officer and President of USA Electronic Commerce Solutions LLC ("ECS"), a wholly-owned subsidiary of USA, and Mr. Halper also
serves as Executive Vice President, Operations and Finance, of ECS.

Also
in conjunction with the new company organization, Styleclick received a revolving line of credit for $15 million from USA. As of March 26, 2002, Styleclick had drawn
down $12 million under the line of credit, including $4 million which was drawn down on March 25, 2002. For additional information, please see the description under the heading
"Relationship with USA".

Styleclick
entered into a services agreement with ECS that became effective on March 20, 2001. Pursuant to the services agreement, ECS provides certain business operations and
financial services to Styleclick at market. As of September 30, 2001 all of these functions were transitioned to ECS pursuant to the services agreement. The services agreement is more fully
described below under the heading "Relationship with USA".

On
January 25, 2002, Styleclick was delisted from NASDAQ and currently trades over the counter.

2

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Forward-looking Statements

This report contains "forward-looking statements" within the meaning of the securities laws. Styleclick has based these forward-looking
statements on its current expectations and projections about future
events, based on the information currently available to Styleclick. Such forward-looking statements are principally contained in the sections "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business." The forward-looking statements include, among other things, statements relating to Styleclick's anticipated financial performance, business
prospects, new developments, evolving business strategy and similar matters. These forward-looking statements are subject to risks, uncertainties and assumptions that may affect the operations,
performance, development and results of Styleclick's business and include, but are not limited to, the following:



Styleclick undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any
other reason. In light of these risks, uncertainties and assumptions, the forward-looking statements in this report may not be accurate.

Business Overview

Styleclick provides e-commerce technologies and services enabling business customers to sell their products online. At the time of the merger, which
was consummated on July 27, 2000, Styleclick.com and ISN were engaged in different but related Internet e-commerce businesses. Styleclick.com was primarily in the business of
developing and selling technologies and services that enabled other
companies to engage in e-commerce over the Internet, while ISN was principally a direct e-commerce retailer, operating two websites: FirstAuction.com and FirstJewelry.com. Also
at the time of the merger, all of Styleclick's operations were located in Los Angeles, California.

From
the time of the merger through May 2001, Styleclick operated FirstAuction.com and FirstJewelry.com as retail websites, having combined the two in March 2001. These
websites operated on Styleclick's Los Angeles-based technology platform. Styleclick discontinued these retail operations in May 2001. Since that time, Styleclick has focused its efforts solely
on enabling e-commerce for third party businesses by providing them with technology and services.

In
March 2001, Styleclick acquired the hardware and proprietary software comprising the technology platform formerly owned by MVP.com (the "Chicago Platform"), a former provider
of e-commerce services located in Chicago, Illinois, through a newly created wholly-owned subsidiary. In connection with this transaction, Styleclick also entered into employment
agreements with certain key technologists responsible for developing the Chicago Platform. Following the acquisition, Styleclick initially launched two ECS-managed e-commerce
storefronts, the PGA Tour and SportsLine.com, Inc. on the Chicago Platform. In March 2001, Styleclick commenced the transfer of its third-party businesses to the Chicago Platform and
completed this transfer by July 31, 2001. Additionally, by

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July 31, 2001, Styleclick consolidated all of its operations to offices in Chicago and closed its Los Angeles premises.

Styleclick
entered into a services agreement with ECS that became effective on March 20, 2001. Pursuant to the services agreement, ECS provides certain business operations and
financial services to Styleclick at market. As of September 30, 2001 all of these functions were transitioned to ECS pursuant to the services agreement. The services agreement is more fully
described below under the heading "Relationship with USA".

Styleclick's
evolving business model makes the prediction of future operating results difficult, and Styleclick expects to incur net losses for the foreseeable future. As part of its
evolving strategy, Styleclick may decide to reduce the development and marketing cost associated with, shift the focus of, or substantially reduce its interest in some or all of its operations, which
may cause a decrease in Styleclick's anticipated revenue or increase net losses. Styleclick intends to continue to explore ways to reduce expenses and increase efficiencies.

During
Styleclick's transition since the second quarter of 2001 to focus on e-commerce services and technology, it has continued to incur significant net losses from
operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Styleclick is considering its options with respect to the situation.

Products and Services; Customers

Styleclick provides e-commerce technology and services to companies in search of effective and profitable out-sourced online strategies.
Styleclick offers such business clients a range of services and products, including website design and development; product imaging and presentation; merchandising; and online sales, visualization and
merchandising technologies. Clients' websites are hosted on servers owned or leased by Styleclick and rely on a combination of third party and Styleclick proprietary technology to operate. Styleclick
generates revenue from clients via service fees charged for such design, construction, operations and maintenance services.

In
addition, Styleclick provides services to ECS. ECS was Styleclick's largest customer during 2001. During the three months ended December 31, 2001, 98% of Styleclick's revenues
came from ECS as a customer of Styleclick with respect to Styleclick's provision of services to four of ECS's third party customers: NASCAR, SportsLine.com, Inc., the PGA Tour and the NHL.
ECS-related business accounted for 40% of Styleclick's 2001 revenues, and 80% of Styleclick's 2001 revenues exclusive of revenues attributable to FirstJewelry.com and FirstAuction.com,
websites which Styleclick shut down in May 2001. Styleclick expects that ECS will continue to represent substantially all of Styleclick's revenue in 2002. Accordingly, Styleclick is dependent
upon ECS's ability to sell services, including the services provided by Styleclick, to its existing and future customers. ECS's inability to achieve significant new sales or its decision not to
utilize the services of Styleclick would have a material adverse effect on Styleclick's business, financial condition, and results of operations. The relationship between ECS and Styleclick is more
fully described below under the heading "Relationship with USA".

Relationship with USA

ECS engaged Styleclick to build the online stores for NASCAR, the PGA Tour, Sportsline.com, Inc. and the NHL as part of the overall services offered by ECS
in connection with such websites. With respect to such stores, Styleclick provides ECS with various services which may include website design, development and hosting, product imaging, and online
sales and merchandising.

Styleclick
entered into a services agreement with ECS that became effective on March 20, 2001. Pursuant to the services agreement, ECS provides certain business operations and
financial services to Styleclick at market. As of September 30, 2001, all of these functions were transitioned to ECS pursuant to the services agreement. The services agreement expires on
March 20, 2003 and ECS is

4

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under no obligation to renew the agreement on its current terms or at all. Pursuant to the services agreement, ECS has agreed to use its reasonable efforts, as determined by ECS, to engage Styleclick
to provide ECS's non-affiliated customers with technological services of the type provided by Styleclick to third parties to the extent that Styleclick has the capability to provide such
services itself in a timely manner. Compensation to be paid to Styleclick in respect of such services shall be negotiated by the parties in good faith prior to Styleclick's engagement. ECS was
Styleclick's largest customer in 2001. Styleclick anticipates that ECS will represent substantially all of Styleclick's revenue in 2002, as a result
of ECS's NASCAR, Sportsline.com, Inc., PGA Tour and NHL relationships. Although Styleclick and ECS continue to seek opportunities to expand Styleclick's role as a vendor of ECS, Styleclick can
not ensure that ECS will successfully attract new clients or that it will engage Styleclick to provide services to it for any particular project or at all. Additionally, Styleclick continues to incur
significant net losses from operations that could affect its ability to provide services to ECS in a timely manner, in which case ECS would have no obligation to use its reasonable efforts to engage
Styleclick in connection with ECS's non-affiliated customers. ECS's inability to achieve significant new sales, or its decision not to utilize the services of Styleclick, would have a
material adverse effect on Styleclick's business, financial condition and results of operations.

Conflicts
of interest may arise between Styleclick, on the one hand, and USA and its affiliates, including without limitation ECS, on the other hand, in areas relating to past, ongoing
and future relationships, corporate opportunities, indemnity agreements, tax and intellectual property matters, potential acquisitions or financing transactions, sales or other dispositions by USA of
shares of Styleclick common stock held by it, acquisitions by USA of additional shares of Styleclick common stock and the exercise by USA of its ability to control Styleclick's management and affairs.
For example, USA is engaged in a diverse range of interactive and transactional based media businesses and these businesses may have interests that conflict or compete in some manner with Styleclick's
business. In particular, ECS packages end-to-end e-commerce services for third parties, including commerce platform development, merchandising, database marketing,
teleservicing, online customer care and fulfillment. Consequently, there is significant overlap in the services offered by ECS, a wholly-owned subsidiary of USA, and Styleclick. In addition, Lisa
Brown serves both as Chief Executive Officer of Styleclick and as President and Chief Executive Officer of ECS, and Robert Halper serves both as President and Chief Operating Officer of Styleclick and
as Executive Vice President, Operations and Finance, of ECS. However, USA and its affiliates, including ECS, are under no obligation to share any future business opportunities available to it with
Styleclick, unless Delaware law requires them to do so, and Styleclick's certificate of incorporation specifically includes provisions that release USA from this obligation and any liability that
would result from a breach of these obligations. There can be no assurance that any conflicts that may arise between Styleclick and USA or any of its affiliates, including ECS, any loss of a corporate
opportunity to USA that may otherwise be available to Styleclick or any engagement by USA in any activity that is similar to Styleclick's business, will not harm Styleclick's business or negatively
impact its financial condition or results of operations because these conflicts of interest or a loss of a corporate opportunity could result in a loss of customers and, therefore, revenue.

In
connection with the new organization, Styleclick received a revolving line of credit for $15 million from USA. The credit line matures on January 26, 2003, or, at USA's
option, anytime thereafter. The line of credit carries an interest rate of USA's average blended cost of borrowing, currently LIBOR plus .75%. The credit line can be drawn against only with the
approval of Styleclick's Board of Directors, and Styleclick can not ensure that any such approval will be given in the future. As of March 26, 2002, Styleclick had drawn down $12 million
under the line of credit, including $4 million drawn down on March 25, 2002. The line of credit provides that USA has the right to declare the principal amount borrowed and unpaid,
including interest thereon, immediately due and payable in the event of a "Material Adverse Change", which includes, among other things, an event, action or condition that would or is likely to
materially adversely affect the business, operations, assets or

5

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condition (financial or otherwise) of Styleclick, or the ability of Styleclick to perform its obligations under the credit agreement. Styleclick continues to suffer significant net losses from
continuing
operations and currently does not have an operating plan that anticipates Styleclick being able to repay the amount borrowed under the credit agreement on the maturity date. In addition, Styleclick
owes USA required monthly interest payments under the credit agreement. It is possible that USA could claim that Styleclick has suffered a "Material Adverse Change" and demand immediate repayment,
which decision would have a material adverse effect on Styleclick's business, financial condition and results of operations. In addition, USA is not obligated to make any additional advances under the
credit agreement if, among other reasons, a "Material Adverse Change" exists.

Competition

Styleclick faces competition from companies that currently, or could readily, provide e-commerce services similar to those offered by Styleclick.
Certain of Styleclick's competitors may be advantaged as compared to Styleclick with respect to technology, client lists, scale and access to capital. In addition, Styleclick potentially faces
competition from companies that possess the technology and expertise necessary to effectively operate large-scale e-commerce businesses, but that may not currently offer such services to
third-parties. Styleclick's challenges in meeting its obligations to its existing customers may make it difficult for Styleclick to attract or adequately service new customers. Styleclick believes
that the principal competitive factors in this market are selection of goods, customer service, reliability of delivery, brand recognition, website convenience and accessibility, price, quality of
search tools and system reliability. There can be no assurance that Styleclick will be able to compete successfully against current and future competitors.

Technologies

Styleclick believes that its technology provides capabilities in conducting electronic commerce over the Internet, including:



Currently,
Styleclick's technology development focuses on:



The
e-commerce markets for shopping and related services are characterized by rapid changes in technology, customer needs and preferences and evolving industry standards. If
Styleclick fails to anticipate or respond adequately to changes in technology and customer requirements and preferences, or if it encounters any significant delays in developing or enhancing its
products or services, such failure or delays may make it difficult for Styleclick to effectively compete in the marketplace, and result in a reduction in anticipated revenues.

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Data Centers

Styleclick's hardware is currently located in two sites in Chicago, one of which is a data center hosted by Level 3 Communications, Inc. Styleclick
believes that it has the ability to expand its hardware capacity and maintain a secure environment.

Intellectual Property and Proprietary Rights

Styleclick maintains certain technologies as proprietary and seeks to protect them under existing United States and international laws relating to the protection
of intellectual property. Styleclick also utilizes contractual restrictions in an effort to protect its intellectual property, including confidentiality and invention assignment and nondisclosure
agreements with its partners, employees, contractors and
suppliers. Styleclick pursues the registration of certain of its key trademarks and service marks in the United States and internationally.

Effective
patent, trademark, service mark, copyright and trade secret protection may not be available or sought by Styleclick in every country in which its products and services are made
available online. There can be no assurance that the steps taken by Styleclick to protect its proprietary rights will be adequate or that third parties will not infringe or misappropriate its patents,
copyrights, trademarks, trade dress and similar proprietary rights. In addition, there can be no assurance that other parties will not assert infringement claims, including patent infringement claims,
against Styleclick.

Regulation

Although there are currently relatively few laws and regulations directly applicable to the protections of consumers with respect to Internet commerce, the
Federal Trade Commission and state and local legislative bodies are debating many proposed new Internet related laws and regulations, covering, among other things, permissible online content and user
privacy (including the collection, use, retention and transmission of personal information provided by an online user) and it is possible that legislation will be enacted in this area. Furthermore,
the growth and demand for online commerce could result in more stringent consumer protection laws that impose additional compliance burdens on online companies.

Moreover,
in many states there is currently great uncertainty whether or how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy
apply to the Internet and commercial online services. These issues may take years to resolve. For example, tax authorities in a number of states, as well as a Congressional advisory commission, are
currently reviewing the appropriate tax treatment of companies engaged in online commerce, and new state tax regulations may subject Styleclick and its customers to additional state sales and income
taxes. New legislation or regulation, the application of laws and regulations from jurisdictions whose laws do not currently apply to Styleclick's business, or the application of existing laws and
regulations to the Internet and commercial online services could result in significant additional taxes on Styleclick's business. There is a possibility that Styleclick may be subject to significant
fines or other payments for any past failures to comply with these requirements.

Federal
legislation imposing some limitations on the ability of states to impose taxes on Internet-based sales was enacted in 1998. The Internet Tax Freedom Act, as this legislation is
known, imposed a three-year moratorium on state and local taxes on Internet access (unless these taxes were in effect prior to October 1, 1998) but only where these taxes are
multiple or discriminatory on electronic commerce. The legislation was renewed in November 2001 for an additional two years, thereby extending the moratorium until November 2003. Failure
to renew the legislation again, however, could allow state and local governments to impose taxes on Internet-based sales, and these taxes could hurt Styleclick's business.

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Employees

As of December 31, 2001, Styleclick employed 63 full-time employees, including 2 in sales and marketing, 9 in product development and systems,
46 in operations, and 6 in executive areas. None of Styleclick's employees are represented by a labor union, and Styleclick has never experienced a work stoppage. Styleclick believes its employee
relations are good.

Item 2.Properties

Styleclick's headquarters are in Chicago, Illinois, where it leases 10,500 square feet under a lease expiring in 2006. In addition, Styleclick leases
approximately 120 square feet in New York, New York for a sales representative under a month-to-month arrangement with ECS. Styleclick also leases a 23,000 square feet facility
in Culver City, California under a lease expiring in 2006, a 4,800 square foot facility in High Point, North Carolina under a lease that expires in 2004, and an additional 10,000 square feet in Los
Angeles, under a lease expiring in 2002, each of which it subleases to third parties. Styleclick believes that its leased properties are adequate and suitable for its current and foreseeable business
needs.

Item 3.Legal Proceedings

From time to time Styleclick may be subject to legal proceedings and claims in the ordinary course of its business, including claims of alleged infringement of
the trademarks and other intellectual property rights of third parties by Styleclick. In addition, litigation may be necessary in the future to enforce Styleclick's intellectual property rights, to
protect its trade secrets or to determine the validity and scope of the proprietary rights of others. This litigation, regardless of outcome or merit, could result in substantial costs and diversion
of management and technical resources, any of which could materially harm Styleclick's business.



ISN is a party to arbitration in the State of Florida with respect to certain claims by ISN's former CEO and President, Kirk Loevner, following the termination of
his employment. Mr. Loevner claims entitlement to options on 250,000 shares of stock of Internet Shopping Network, Inc., among other claims. Mr. Loevner seeks damages of up to
approximately $10,000,000, which, if awarded, would have a
material adverse effect on Styleclick. Styleclick is vigorously defending against the allegations, but can give no assurances that it will not incur material costs and damages in connection therewith.

Fagen

On November 7, 2001, Michael Fagen, former VP of Sales for Styleclick, filed a complaint in New York State Supreme Court against Styleclick and certain
officers and affiliates of Styleclick. The complaint seeks damages of up to approximately $480,000, which if awarded, would have a material adverse effect on Styleclick. The complaint makes
allegations against one or more of the defendants for fraudulent inducement to contract, breach of contract, unpaid wages and wrongful termination. It is the defendants' position that the claims made
in the complaint are without merit and the defendants are vigorously defending the lawsuit. However, given the uncertainty of litigation generally, Styleclick can give no assurances that it will not
incur material damages in connection therewith.

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

No matters were submitted to a vote of security holders during the fourth quarter of 2001.

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PART II

Item 5.Market for Registrant's Common Stock and Related Stockholder Matters

Trading Prices of Securities

Following the merger of Styleclick.com and ISN on July 27, 2000, Styleclick's Class A common stock was quoted on the NASDAQ National Market under
the symbol "IBUY", until January 25, 2002, when the stock was delisted by NASDAQ and began trading over the counter under the symbol "IBUYA". There is no established public trading market for
Styleclick's Class B common stock. The following table sets forth the high and low sales prices per share for Styleclick's Class A common stock for the period from July 27, 2000
to December 31, 2001:

Sales PricesHigh

LowYear Ended December 31, 20011st Quarter

$
5.50

$
0.972nd Quarter

$
1.65

$
0.673rd Quarter

$
1.50

$
0.554th Quarter

$
0.85

$
0.14Year Ended December 31, 20003rd Quarter (from July 27, 2000)

$
12.50

$
7.504th Quarter

$
9.44

$
1.25


The
bid prices reported for these periods reflect inter-dealer prices and do not include retail markups, markdowns or commissions, and may not represent actual transactions.

As
of March 26, 2002, Styleclick believes it has approximately 180 shareholders of record. The closing price of Styleclick's Class A common stock on March 26, 2002
was $0.33. Styleclick has not paid dividends on its common stock to date and does not intend to pay dividends in the foreseeable future.

Item 6.Selected Financial Data

The following table presents selected historical financial data of Styleclick, ISN and ISN's predecessor company for each of the years in the five year period
ended December 31, 2001. The data was derived from Styleclick's audited financial statements and should be read in conjunction with the financial statements, related notes and other financial
information pertaining to Styleclick included herein.

|                                        |  | Years Ended December 31, |        
|--------------------------------------- |  | ------------------------ | -------
|
|
|Statements of Operation Data:           |  |                          |        
|Net revenues                            |  | $                        | 7,508  
|Net loss                                |  |                          | (44,214
|Basic and diluted loss per common share |  |                          | (1.39  
|Balance Sheet Data:                     |  |                          |        
|Total assets                            |  |                          | 10,233 
|Long-term debt                          |  |                          | 8,039  

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Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and the notes thereto appearing elsewhere in this report. This
discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of
certain factors, including, but not limited to, those set forth below and elsewhere in this report.

General

Styleclick was incorporated in Delaware on March 22, 2000 by USANi Sub LLC, a subsidiary of USA, in connection with the merger of
Styleclick.com Inc. and Internet Shopping Network LLC, a wholly-owned subsidiary of USA prior to the merger. Upon consummation of the merger, which was completed on July 27, 2000,
Styleclick.com and ISN became wholly-owned subsidiaries of Styleclick, and Styleclick became a majority-owned subsidiary of USA.

Styleclick
is a provider of electronic commerce (e-commerce) technologies and services enabling its customers to sell their products online. Styleclick's offerings include
website design, development and hosting, product imaging, online sales and merchandising technologies. Styleclick integrates its online storefront application and merchandising and inventory
management technology with reporting systems and back-end fulfillment and customer care to create commerce-driven offerings to help clients expand sales to customers across the Web.
Styleclick's technology platform leverages a central CRM-driven database for consumer profiling and direct marketing capabilities.

Styleclick's
evolving business model makes the prediction of future operating results difficult, and Styleclick expects to incur net losses for the foreseeable future. As part of its
evolving strategy, Styleclick may decide to reduce the development and marketing cost associated with, shift the focus of, or substantially reduce its interest in some or all of its operations, which
may cause a decrease in Styleclick's anticipated revenue or increase net losses. Styleclick intends to continue to explore ways to reduce expenses and increase efficiencies.

In
connection with its increased focus on its e-commerce service provider business, Styleclick has ceased operations of its direct online retail business. Such changes have
and will result in substantially reduced revenues from product sales when compared to historical results.

During
Styleclick's transition since the second quarter of 2001 to focus on e-commerce services and technology, it has continued to incur significant net losses from
operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management is considering its options with respect to the situation.

Results of Operations

The results of operations discussed below for the year ended December 31, 2001 include Styleclick's restructuring during 2001. The results of operations
discussed below for the year ended December 31, 2000 include Styleclick.com's results of operations from the date of acquisition (July 27, 2000). The results for the year ended
December 31, 1999 reflect only the historical financial position and results of operations of ISN. As stated above, the Company has discontinued its

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business-to-consumer business to focus exclusively on its business to business e-commerce service provider business. Consequently, the following discussion is not
necessarily relevant to an analysis and understanding of the future prospects of Styleclick.

2001 Compared with 2000

Revenue and Gross Profit

For the year ended December 31, 2001, net revenues decreased by $14.8 million, or 66%, to $7.5 million compared to $22.3 million in
2000. Merchandise sales decreased $16.9 million primarily due to Styleclick transitioning out of the business-to-consumer market in the 2001 period. The decrease in
merchandise
sales was partially offset by a $2.1 million increase in service revenues. Service revenue from ECS, a related party for the year ended December 31, 2001 was $2.9 million, or 39%
of total revenue.

ECS
was Styleclick's largest customer during 2001. During the three months ended December 31, 2001, 98% of Styleclick's revenues came from ECS as a customer with respect to
services provided to four of ECS's third party customers: NASCAR, SportsLine.com, Inc., the PGA Tour and the NHL. ECS-related business accounted for 40% of Styleclick's 2001
revenues, and 80% of Styleclick's 2001 revenues exclusive of revenues attributable to FirstJewelry.com and FirstAuction.com, websites which Styleclick shut down in May 2001. Styleclick expects
that ECS will continue to represent substantially all of Styleclick's revenue in 2002. Accordingly, Styleclick is dependent upon ECS's ability to sell services, including the services provided by
Styleclick, to its existing and future customers. ECS's inability to achieve significant new sales or its decision not to utilize the services of Styleclick would have a material adverse effect on
Styleclick's business, financial condition, and results of operations.

Gross
profit decreased by $2.5 million to ($2.5) million in 2001 compared to 2000 primarily due to the $2.7 million increase in inventory reserves which was recorded
during the second and fourth quarters in 2001 to reduce the value of the inventory to be sold through alternative distribution channels. The decrease was offset by the $1.6 million gross margin
generated from Styleclick's service revenues after the restructuring.

Operating Costs and Expenses

For the year ended December 31, 2001, total operating costs and expenses decreased by $164 million or 79%, to $43 million compared to
$207 million in 2000. The 2001 operating expenses included a $13.3 million restructuring charge recorded in the second and third quarter related to the transitioning from
business-to-consumer sales to service sales. The restructuring expense included the write-off of capitalized software development costs, loss on disposition of
fixed assets (leasehold improvements), accrued office lease expense related to the termination of office lease agreements, and employee termination expenses. 2000 expenses include amortization of
goodwill expense of $23.6 million and a write-down of goodwill of $145.6 million related to the 2000 merger. Operating expenses in 2000 excluding the amortization of goodwill
related to the 2000 merger were $37.8 million. Operating expenses in 2001 excluding the $13.3 million restructuring charges were $29.9 million, a decrease of $7.9 million
from 2000. The increase in selling and marketing expense of $0.3 million was due to a $5 million write off of deferred advertising and promotion. Selling and marketing expenses excluding
the $5 million reserve reflects reduced spending of $4.7 million due to a decrease in personnel and sales. Product development costs increased by $1.0 million due to development
costs related to the launch of the four web sites currently operated by Styleclick. Exclusive of restructuring charges, general and administrative expenses were $7.4 million less than those
incurred in 2000 due to reduced headcount, reduced office space and a significant decrease in monthly operating costs. Write-off of capitalized software costs increased by
$4.7 million in 2001 due to the write-off of software developed for the First Auction and First Jewelry sites, which no longer operate. The Company

11

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wrote-off capitalized software products that were not in use and had no realizable value to Styleclick. Depreciation and amortization expense was $1.2 million lower than during
2000 due to the reduced asset balance after the second quarter restructuring.

For
the year ended December 31, 2001, net loss decreased $162.5 million. Net loss for 2001, excluding the amortization of goodwill recorded in 2000 ($169.2 million)
and the restructuring costs recorded in 2001 ($13.3 million), was reduced by $6.6 million.

Since
the merger of Styleclick.com and ISN on July, 27, 2000, Styleclick is subject to tax as a "C" Corporation. Styleclick recorded no provision for income taxes in 2001 or 2000 due to
its net operating losses. Prior to July 27, 2000, the company was treated as a partnership for income tax purposes and was not subject to federal and state income tax.

2000 Compared with 1999

Revenue and Gross Profit

For the year ended December 31, 2000, net revenues decreased by $6.7 million, or 23%, compared to the year ended December 31, 1999.
Merchandise sales decreased $8.0 million primarily due to the decrease in sales in the computer and consumer electronic categories (less profitable categories) in 2000 as compared to 1999.
Styleclick continued to focus its sales on more profitable home and accessories categories in 2000. As a result, the sales from the less profitable categories were not yet fully replaced in 2000. The
decrease was also caused by Styleclick's decision in the fourth quarter of 2000 to transition out of the business-to-consumer market in order to focus on growing its technology
and service offerings. The decrease in merchandise sales was partially offset by a $1.4 million increase in service revenues generated by Styleclick after the merger.

Gross
profit decreased by $0.8 million primarily due to the $0.9 million inventory reserve which was recorded during the second quarter in 2000 to reduce the value of the
inventory to be sold through alternative distribution channels (the entire large-ticket furniture inventory has been liquidated). The $0.9 million expense was offset by the $1.3 million
gross margin generated from Styleclick's service revenues after the merger.

Operating Costs and Expenses

For the year ended December 31, 2000, total operating costs and expenses of $206.7 million increased by $164.2 million or 378% compared to
1999. The increase included a $169.2 million amortization of goodwill expense recorded in 2000. The $169.2 million amortization expense included a $145.6 million
write-down of Styleclick's goodwill value in 2000. In connection with its announcement of a new company organization in March 2001, Styleclick evaluated its operations and
technology as well as the current and anticipated operating losses and determined to record a $145.6 million write-down of the goodwill related to the merger in the fourth quarter
of 2000. Excluding this amortization expense, the operating costs and expenses were $5.5 million less in 2000 as compared to 1999. The decrease in selling and marketing expense of
$5.1 million reflects reduced advertising spending on the FirstAuction.com website as part of Styleclick's decision to accelerate its move away from the
business-to-consumer market. Product development costs decreased by $1.3 million due to software development costs which did not reoccur in 2000 related to the
FirstJewelry.com website. These preliminary project stage costs were expensed in the first quarter of 1999. General and administrative expenses were $0.4 million higher than those incurred in
1999 due to an increased headcount and greater recruiting expenses after the merger. Write-off of capitalized software cost decreased by $2.2 million in 2000 resulting from the
excess of the $4.5 million write-off of ISN's software costs associated with the FirstOutlet website in 1999 over the $2.3 million write-off of capitalized
software costs related to an accounting software package and electronic data interchange software. The Company wrote-off capitalized software products that not in use and had no realizable

12

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value to Styleclick. Depreciation and amortization expense was $2.6 million higher than during 2000 due to greater capital spending for hardware, software and software development primarily
related to the FirstJewelry.com website and the acquisition of Styleclick.com. In addition to the $2.3 million write-off of capitalized software costs in 2000, a $1 million
expense related to restructuring costs incurred in 2000 was also recorded.

For
the year ended December 31, 2000, net loss increased $164.5 million primarily due to increased operating expenses (primarily amortization expense of goodwill and the
write-off of capitalized software costs) and the write-off of inventory. However, absent this goodwill and inventory write-down net loss for 2000 was
$42.2 million.

Since
the merger of Styleclick.com and ISN on July, 27, 2000, Styleclick is subject to tax as a "C" Corporation. Styleclick recorded no provision for income taxes in 2000 due to its net
operating loss. Prior to July 27, 2000, the company was treated as a partnership for income tax purposes and was not subject to federal and state income tax.

Liquidity and Capital Resources

Net cash used in operating activities was $21.1 million, which primarily resulted from the $44.2 million operating loss and the $2.8 million
of payments on accounts payable and accrued expenses offset by a
decrease in inventories ($6.8 million), an increase in related party payable ($4.0 million) and four non-cash expense items: depreciation and amortization
($4.7 million), amortization and write-down of goodwill ($1.0 million), reserve for deferred advertising and promotion ($7.0 million) and the write-off of
Styleclick's capitalized software costs ($7.0 million). Additionally, cash used in connection with investing activities for capital expenditures was $3.1 million in 2001. Net working
capital at December 31, 2001 was ($2.5 million).

In
connection with the new organization, Styleclick received a revolving line of credit for $15 million from USA. The credit line matures on January 26, 2003, or, at USA's
option, anytime thereafter. The line of credit carries an interest rate of USA's average blended cost of borrowing, currently LIBOR plus .75%. The credit line can be drawn against only with the
approval of Styleclick's Board of Directors, and Styleclick can not ensure that any such approval will be given in the future. As of March 26, 2002, Styleclick had drawn down $12 million
under the line of credit, including $4 million which was drawn down on March 25, 2002. The line of credit provides that USA has the right to declare the principal amount borrowed and
unpaid, including interest thereon, immediately due and payable in the event of a "Material Adverse Change", which includes, among other things, an event, action or condition that would or is likely
to materially adversely affect the business, operations, assets or condition (financial or otherwise) of Styleclick, or the ability of Styleclick to perform its obligations under the credit agreement.
Styleclick continues to suffer significant net losses from continuing operations and currently does not have an operating plan that anticipates Styleclick being able to repay the amount borrowed under
the credit agreement on the maturity date. It is possible that USA could claim that Styleclick has suffered a "Material Adverse Change" and demand immediate repayment, which decision would have a
material adverse effect on Styleclick's business, financial condition and results of operations. In addition, USA is not obligated to make any additional advances under the credit agreement if, among
other reasons, a "Material Adverse Change" exists.

Styleclick
has experienced significant operating losses and used significant cash in operations in the past two years. The Company believes that cash on hand, including the recent
$4 million drawdown on the line of credit, should be sufficient to fund its operating activities through at least May 2002. As described in the preceding paragraph, Styleclick can
provide no assurances that it will be able to draw down the remaining funds on the line of credit or obtain additional financing.

13

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Item 7A.Quantitative and Qualitative Disclosure of Market Risk

The company's exposure to market rate risk for changes in interest rates relates primarily to the company's revolving line of credit with USA. The line of credit
carries an interest rate based upon LIBOR plus 0.75%. Significant increases in LIBOR would result in the Company recording greater interest expense based upon the level of borrowings.

The
company does not conduct business in foreign markets.

SIGNIFICANT ACCOUNTING POLICIES

In connection with the issuance of Securities and Exchange Commission FR-60, the following disclosure is provided to supplement Styleclick's
accounting policies in regard to significant areas of judgment. Management of the Company is required to make certain estimates and assumptions during the preparation of consolidated financial
statements in accordance with generally accepted accounting principles. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and
liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Because
of the size of the financial statement elements they relate to, some of our accounting policies and estimates have a more significant impact on our financial statements than others:

Our
revenue recognition is described in Footnote 2. As noted, Styleclick receives fees for development, operation, and maintenance of client websites. Styleclick also receives license
fees for the use of its software. Revenues for development and licenses are recognized on a straight-line basis over the life of the underlying contract. Revenues for operation and
maintenance are recognized in the period that such services are provided.

Software
costs are capitalized and depreciated over a 3 year period. Software costs include purchased software plus salaries of employees associated with the development of
Styleclick's core platform.

The
Company has entered into various arrangements with related parties. The key arrangements are with ECS for e-commerce services, Home Shopping Network for fulfillment
related services and Precision Response Corporation for customer service related services. Services are provided at market rates.

Estimates
as to the recoverability of the deferred advertising and promotional assets have been made by management, giving consideration to the Company's future plans and other factors.
As discussed in Footnote 6, Styleclick has $10 million in deferred advertising and promotion services available for its use. However, as of December 31, 2001, Styleclick has not used any
of these services. Per the merger terms, unused media in excess of $5 million will expire on December 31, 2002 with the remaining unused commitment to expire on December 31, 2003.
Styleclick does not believe that its new business model will allow for full use of the $10 million in advertising and promotion and therefore the Company recorded a reserve of $5 million
for this asset at December 31, 2001.

14

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Item 8.Consolidated Financial Statements and Supplementary Data

REPORT OF INDEPENDENT AUDITORS

The
Board of Directors and Stockholders
Styleclick, Inc.

We
have audited the accompanying consolidated balance sheets of Styleclick, Inc. as of December 31, 2001 and 2000, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2001. Our audits also included the financial statement schedule listed in the Index at
Item 14(a). These consolidated financial statements and the consolidated financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and the financial statement schedule based on our audits.

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

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Styleclick, Inc. at December 31,
2001 and 2000, and the results of its operations and its cash flows for the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the
United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

The
accompanying consolidated financial statements have been prepared assuming that Styleclick, Inc. will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, Styleclick Inc. has suffered recurring losses and negative cash flows from continuing operations and has a net capital deficiency. These conditions raise
substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters is also described in Note 2. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.



New
York, New York
January 29, 2002

15

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Styleclick, Inc.        Consolidated Balance Sheets

|                                                                                            |                                                                                                                                     | December 31, |       
|------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------
|
|
|Assets                                                                                      |                                                                                                                                     |              |       
|Current assets:                                                                             |                                                                                                                                     |              |       
|                                                                                            | Cash and cash equivalents                                                                                                           |              | $     
|                                                                                            | Accounts receivable, net of allowance of $136 and $700, respectively                                                                |              |       
|                                                                                            | Related party receivable                                                                                                            |              |       
|                                                                                            | Inventories, net                                                                                                                    |              |       
|                                                                                            | Deferred advertising and promotion                                                                                                  |              |       
|                                                                                            | Prepaid expenses and other current assets                                                                                           |              |       
|                                                                                            |                                                                                                                                     |              |       
|Total current assets                                                                        |                                                                                                                                     |              | 1,767 
|Property and equipment, net of accumulated depreciation of $6,473 and $13,238, respectively |                                                                                                                                     |              | 3,420 
|Goodwill, net                                                                               |                                                                                                                                     |              |      
|Deferred advertising and promotion, non-current                                             |                                                                                                                                     |              | 5,000 
|Other assets                                                                                |                                                                                                                                     |              | 46    
|                                                                                            |                                                                                                                                     |              |       
|                                                                                            |                                                                                                                                     | Total assets |       
|                                                                                            |                                                                                                                                     |              |       
|Liabilities and Stockholders' Equity                                                        |                                                                                                                                     |              |       
|Current liabilities:                                                                        |                                                                                                                                     |              |       
|                                                                                            | Accounts payable                                                                                                                    |              | $     
|                                                                                            | Accrued liabilities                                                                                                                 |              |       
|                                                                                            | Deferred income                                                                                                                     |              |       
|                                                                                            | Due ot related parties                                                                                                              |              |       
|                                                                                            |                                                                                                                                     |              |       
|Total current liabilities                                                                   |                                                                                                                                     |              | 4,272 
|Long-term liabilities                                                                       |                                                                                                                                     |              |       
|                                                                                            | Notes payablerelated party                                                                                                         |              |       
|                                                                                            |                                                                                                                                     |              |       
|Total long-term liabilities                                                                 |                                                                                                                                     |              | 8,039 
|Stockholders' equity:                                                                       |                                                                                                                                     |              |       
|                                                                                            | Preferred stock$0.01 par value; 25,000,000 shares authorized, none issued and outstanding                                          |              |       
|                                                                                            | Class A common stock$0.01 par value, 150,000,000 shares authorized, 8,923,853 and 7,975,053 issued and outstanding, respectively   |              |       
|                                                                                            | Class B common stock$0.01 par value, 112,500,000 shares authorized, 23,039,706 and 23,039,706 issued and outstanding, respectively |              |       
|                                                                                            | Additional paid-in capital                                                                                                          |              |       
|                                                                                            | Accumulated deficit                                                                                                                 |              |       
|                                                                                            | Deferred employee compensation                                                                                                      |              |       
|                                                                                            |                                                                                                                                     |              |       
|Total stockholders' equity                                                                  |                                                                                                                                     |              | (2,078
|                                                                                            |                                                                                                                                     |              |       
|Total liabilities and stockholders' equity                                                  |                                                                                                                                     | $            | 10,233
|                                                                                            |                                                                                                                                     |              |       

See
accompanying notes to consolidated financial statements.

16

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Styleclick, Inc.        Consolidated Statements of Operations

|                                                             |                                                                                                      | Year Ended December 31,            |           
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------- | ---------------------------------- | ----------
|
|
|Net revenues:                                                |                                                                                                      |                                    |           
|                                                             | Product sales                                                                                        |                                    | $         
|                                                             | Service revenues ($2.9 million and $0.1 million from related parties in 2001 and 2000, respectively) |                                    |           
|                                                             |                                                                                                      |                                    |           
|                                                             |                                                                                                      |                                    | 7,508     
|Cost of sales:                                               |                                                                                                      |                                    |           
|                                                             | Product sales                                                                                        |                                    |           
|                                                             | Service revenues                                                                                     |                                    |           
|                                                             |                                                                                                      |                                    |           
|                                                             |                                                                                                      |                                    | 10,024    
|Gross profit                                                 |                                                                                                      |                                    | (2,516    
|Operating costs and expenses:                                |                                                                                                      |                                    |           
|Selling and marketing                                        |                                                                                                      |                                    | 6,047     
|Product development costs                                    |                                                                                                      |                                    | 5,268     
|General and administrative                                   |                                                                                                      |                                    | 19,083    
|Write-off of capitalized software costs                      |                                                                                                      |                                    | 6,965     
|Depreciation                                                 |                                                                                                      |                                    | 4,697     
|Impairment and amortization of goodwill                      |                                                                                                      |                                    | 1,000     
|                                                             |                                                                                                      |                                    |           
|                                                             |                                                                                                      | Total operating costs and expenses |           
|                                                             |                                                                                                      |                                    |           
|Operating loss                                               |                                                                                                      |                                    | (45,576   
|Other income (expense), net                                  |                                                                                                      |                                    | 1,362     
|                                                             |                                                                                                      |                                    |           
|Loss before income taxes                                     |                                                                                                      |                                    | (44,214   
|Income tax expense                                           |                                                                                                      |                                    |          
|                                                             |                                                                                                      |                                    |           
|Net loss                                                     |                                                                                                      | $                                  | (44,214   
|                                                             |                                                                                                      |                                    |           
|Basic and diluted loss per share                             |                                                                                                      | $                                  | (1.39     
|                                                             |                                                                                                      |                                    |           
|Basic and diluted weighted average common shares outstanding |                                                                                                      |                                    | 31,726,359
|                                                             |                                                                                                      |                                    |           

See
accompanying notes to consolidated financial statements.

17

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Styleclick, Inc.        Consolidated Statements of Stockholders' Equity

|                             |                                                         | Common Stock |    |    |   |     |    |   |         |         |  
|---------------------------- | ------------------------------------------------------- | ------------ | -- | -- | - | --- | -- | - | ------- | ------- | -
|
|
|
|Balance at December 31, 1998 |                                                         | $            | 2  |    | $ | 146 |    | $ | 51,846  |         | $
|                             | Issuance of common stock                                |              |    |   |   |     | 57 |   |         | 51,367  |  
|                             | Net loss                                                |              |    |   |   |     |   |   |         |        |  
|                             |                                                         |              |    |    |   |     |    |   |         |         |  
|Balance at December 31, 1999 |                                                         |              | 2  |    |   | 203 |    |   | 103,213 |         |  
|                             | Issuance of common stock to USAi LLC                    |              |    |    |   |     | 27 |   |         | 231,903 |  
|                             | Issuance of common stock in connection with acquisition |              |    | 77 |   |     |   |   |         | 210     |  
|                             | Issuance of common stock for stock options exercised    |              |    | 1  |   |     |   |   |         | 256     |  
|                             | Net loss                                                |              |    |   |   |     |   |   |         |        |  
|                             |                                                         |              |    |    |   |     |    |   |         |         |  
|Balance at December 31, 2000 |                                                         |              | 80 |    |   | 230 |    |   | 335,582 |         |  
|                             | Issuance of common stock upon exercise of stock options |              |    | 1  |   |     |   |   |         | 12      |  
|                             | Issuance of restricted stock to employees               |              |    | 8  |   |     |   |   |         | 1,042   |  
|                             | Amortization of deferred compensation                   |              |    |   |   |     |   |   |         |        |  
|                             | Net loss                                                |              |    |   |   |     |   |   |         |        |  
|                             |                                                         |              |    |    |   |     |    |   |         |         |  
|Balance at December 31, 2001 |                                                         | $            | 89 |    | $ | 230 |    | $ | 336,636 |         | $
|                             |                                                         |              |    |    |   |     |    |   |         |         |  

See
accompanying notes to consolidated financial statements.

18

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Styleclick, Inc.        Consolidated Statements of Cash Flows

|                                                                            |                                                  | Years Ended December 31,                  |        
|--------------------------------------------------------------------------- | ------------------------------------------------ | ----------------------------------------- | -------
|
|
|Cash flow from operating activities                                         |                                                  |                                           |        
|Net loss                                                                    |                                                  | $                                         | (44,214
|Adjustments to reconcile net loss to net cash used in operating activities: |                                                  |                                           |        
|                                                                            | Depreciation and amortization                    |                                           |        
|                                                                            | Amortization and write-off of goodwill           |                                           |        
|                                                                            | Write-off of capitalized software costs          |                                           |        
|                                                                            | Loss on disposition of fixed assets              |                                           |        
|                                                                            | Non-cash deferred advertising and promotion      |                                           |        
|                                                                            | Allowance for deferred advertising and promotion |                                           |        
|                                                                            | Amortization of deferred compensation            |                                           |        
|                                                                            | Changes in operating assets and liabilities:     |                                           |        
|                                                                            |                                                  | Accounts receivable                       |        
|                                                                            |                                                  | Inventories                               |        
|                                                                            |                                                  | Prepaid expenses and other current assets |        
|                                                                            |                                                  | Accounts payable                          |        
|                                                                            |                                                  | Accrued liabilities                       |        
|                                                                            |                                                  | Deferred income                           |        
|                                                                            |                                                  | Due from related parties                  |        
|                                                                            |                                                  | Other, net                                |        
|                                                                            |                                                  |                                           |        
|Net cash used in operating activities                                       |                                                  |                                           | (21,079
|Cash flow from investing activities                                         |                                                  |                                           |        
|MVP.com acquisition                                                         |                                                  |                                           | (458   
|Capital expenditures                                                        |                                                  |                                           | (2,689 
|                                                                            |                                                  |                                           |        
|Net cash used in investing activities                                       |                                                  |                                           | (3,147 
|Cash flow from financing activities                                         |                                                  |                                           |        
|Proceeds from loan from USANi LLC                                           |                                                  |                                           | 8,039  
|Proceeds from issuance of common stock upon exercise of stock options       |                                                  |                                           | 13     
|Capital contributed by USANi LLC                                            |                                                  |                                           |       
|Proceeds from issuance of common stock                                      |                                                  |                                           |       
|Repayment of bridge loan to USANi LLC                                       |                                                  |                                           |       
|                                                                            |                                                  |                                           |        
|Net cash provided by financing activities                                   |                                                  |                                           | 8,052  
|                                                                            |                                                  |                                           |        
|Net (decrease) increase in cash and cash equivalents                        |                                                  |                                           | (16,174
|Cash and cash equivalents at beginning of period                            |                                                  |                                           | 16,201 
|                                                                            |                                                  |                                           |        
|Cash and cash equivalents at end of period                                  |                                                  | $                                         | 27     
|                                                                            |                                                  |                                           |        

19

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Supplemental disclosure of non-cash transactions

In connection with the merger on July 27, 2000, Styleclick, Inc. ("Styleclick") issued 7,725,592 shares of its Class A common stock to the
stockholders of Styleclick.com Inc. ("Styleclick.com"). Each former Styleclick.com stockholder received one share of Styleclick's Class A common stock for each Styleclick.com common
stock share owned on that date.

During
the years ended December 31, 2001, 2000 and 1999, Styleclick paid no income taxes or interest.

See
accompanying notes to consolidated financial statements.

20

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Styleclick, Inc.        Notes to Consolidated Financial Statements

1.    Organization

Styleclick, Inc. ("Styleclick") was incorporated in the State of Delaware on March 22, 2000 as a subsidiary of USANi LLC, which is a
subsidiary of USA Networks, Inc. ("USA"). On July 27, 2000, USA contributed the Internet Shopping Network LLC ("ISN") to Styleclick in conjunction with the acquisition of
Styleclick.com Inc. ("Styleclick.com") by Styleclick (see note 3).

2.    Basis of Presentation

The consolidated financial statements for the years ended December 31, 2001 and 2000 reflect Styleclick's acquisition of Styleclick.com on July 27,
2000. The results for the year ended December 31, 1999 reflect only the consolidated historical financial position and results of operations of ISN.

Weighted
average basic and diluted shares outstanding and earnings per share data for the years ended December 31, 2000 and 1999 are presented as if all shares issued to USA and
its subsidiaries in consideration of the contribution of ISN were outstanding for those two years.

Styleclick's
evolving business model makes the prediction of future operating results difficult, and Styleclick expects to incur net losses for the foreseeable future. As part of the
evolving strategy, Styleclick may decide to reduce the development and marketing cost associated with, shift the focus of, or substantially reduce its interest in some or all of its operations, which
may cause a decrease in
Styleclick's anticipated revenue or an increase in net losses. Styleclick intends to continue to explore ways to reduce expenses and increase efficiencies.

In
2001, Styleclick began to focus on e-commerce services and technology while eliminating its online consumer retail businesses First Auction and First Jewelry. During this
transition, Styleclick continued to incur significant net losses and negative cash flows from continuing operations and has a net capital deficiency. These conditions raise substantial doubt about its
ability to continue as a going concern. Styleclick is considering its options with respect to the situation.

In
addition, Styleclick provides services to USA Electronic Commerce Solutions LLC ("ECS"). ECS was Styleclick's largest customer during 2001. During the three months ended
December 31, 2001, 98% of Styleclick's revenues came from ECS as a customer with respect to services provided by Styleclick to four of ECS's third party customers: NASCAR,
SportsLine.com, Inc., the PGA Tour and the NHL. ECS-related business accounted for 40% of Styleclick's 2001 revenues, and 80% of Styleclick's 2001 revenues exclusive of revenues
attributable to FirstJewelry.com and FirstAuction.com, websites which Styleclick shut down in May 2001. Styleclick expects that ECS will continue to represent substantially all of Styleclick's
revenue in 2002. Accordingly, Styleclick is dependent upon ECS's ability to sell services, including the services provided by Styleclick, to its existing and future customers. ECS's inability to
achieve significant new sales, or its decision not to utilize the services of Styleclick would have a material adverse effect on Styleclick's business, financial condition, and results of operations.

3.    Summary of Significant Accounting Policies

Cash and Cash Equivalents

Styleclick considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.

21

---

Inventories, Net

Inventories are valued at the lower of cost or market, cost being determined using the first-in, first-out method. Cost includes freight
and certain other related costs. Market is determined on the basis of net realizable value, giving consideration to obsolescence and other factors. All inventories are finished
goods. Inventories are presented net of an inventory reserve adjustment of $2.7 million, $1.4 million and $1.7 million at December 31, 2001, 2000 and 1999, respectively.

Property and Equipment

Property and equipment, including significant improvements, are recorded at cost. Costs incurred for computer software and websites developed or obtained for
internal use during the application development stage are capitalized and classified as computer equipment and software costs. Repairs and maintenance and any gains or losses on dispositions are
included in operations. Depreciation and amortization is provided for on a straight-line basis to over the estimated service life of the asset.

Asset Category

Depreciation PeriodComputer equipment and software costs

3 to 7 yearsLeasehold improvements

4 yearsFurniture and other equipment

3 to 10 years


Long-Lived Assets Including Intangibles

Styleclick's accounting policy regarding the assessment of the recoverability of the carrying value of long-lived assets, including property and
equipment and goodwill, is to review the carrying value of the assets if the facts and circumstances suggest they may be impaired. If this review indicates that the carrying value will not be
recoverable, as determined based on the undiscounted future cash flows of the assets, the carrying value is reduced to its estimated fair value.

Fair Value of Financial Instruments

The carrying amounts for Styleclick's cash, prepaid assets, other assets, accounts payable and accrued liabilities approximate fair value.

Revenue Recognition

Product Sales

Product sales primarily consist of merchandise sales and shipping and handling revenues. Merchandise sales are reduced by incentive discounts and sales returns.
Revenue from merchandise sales is recognized upon shipment of the merchandise. Styleclick's sales policy allowed jewelry sold over the FirstJewelry.com website to be returned at the customer's
discretion within 30 days of the date of receipt and merchandise sold on the FirstAuction.com website to be returned within 30 days of the date of receipt if it is damaged or defective.
Allowances for returned merchandise and other adjustments are provided based upon historical experience.

Service Revenues

In the second quarter of 2001 Styleclick redirected its operating focus to the provision of e-commerce services and technology. In exchange for these
services Styleclick receives fees for development, operation, and maintenance of client websites. Styleclick also receives license fees for the use of its software. Revenues for development and
licenses are recognized on a straight-line basis over the life of the underlying contract. Revenues for operation and maintenance are recognized in the period that such services are
provided.

22

---

Income Taxes

Since the Styleclick.com/ISN merger, Styleclick accounts for income taxes under the liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Software Development Costs

Software development costs include expenses incurred by Styleclick to develop, enhance, manage, monitor and operate Styleclick's and its vendors' websites. These
costs are expensed as incurred during the preliminary project and post-implementation stages. Once technological feasibility has been achieved, these costs are capitalized during the
application development stage and are amortized over the estimated useful lives of 3 years.

Advertising

Advertising costs are expensed in the period incurred. Advertising expense was $7.9 million, $5.1 million and $9.9 million for the years
ended December 31, 2001, 2000, and 1999, respectively.

$5.0 million
of the Styleclick's 2001 advertising expense relates to a reserve for unused deferred advertising and promotion that was provided by USA as part of the merger with
ISN (see Note 6).

Segment Information

Styleclick views its operations as principally one segment and the financial information disclosed herein materially represents all of the financial information
related to Styleclick's principal operating segment. Styleclick manages its online business as one combined entity, allocates resources and analyzes information used to operate the business on a
combined basis.

Stock-Based Compensation

Styleclick is subject to the Statement of Financial Accounting Standards No. 123 "Accounting and Disclosure of Stock-Based Compensation"
("SFAS 123"). As allowed by SFAS 123, Styleclick accounts for stock-based compensation in accordance with APB 25, "Accounting for Stock Issued to Employees." In cases where
exercise prices are less than fair value as of the grant date, compensation is recognized over the vesting period.

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates underlying the accompanying
consolidated financial statements and notes include inventory reserves, deferred advertising and promotion reserves, and the allowance for doubtful accounts.

Basic and Diluted Loss Per Share

Basic loss per share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the reported
period. Diluted net loss per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock

23

---

were exercised using the treasury stock method. There were no dilutive securities in all periods presented.

Concentrations of Credit Risk

Financial instruments which potentially subject Styleclick to concentrations of credit risk consist of cash and trade receivables. Styleclick places its cash with
high quality financial institutions. Styleclick extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral. Exposure to losses on receivables
is principally dependent on each customer's financial condition. Styleclick monitors its exposure for credit losses and maintains allowances for anticipated losses. Generally, credit risk to
Styleclick is low due to the fact that 96% of accounts receivable at December 31, 2001 are from ECS, a related party.

4.    Restructuring Charges

In March 2001, Styleclick announced its decision to exit its online consumer retail business and focus solely on e-commerce services and
technology. At that time, the Company's existing business was relocated from Los Angeles, California to Chicago, Illinois. In connection with this decision, Styleclick incurred a non-recurring charge
of $13.3 million primarily related to software and equipment impairment, the termination of approximately 150 employees, and rent expense for the vacated Los Angeles office space. These charges
have been classified as general and administrative expense in the December 31, 2001 consolidated statement of operations. These restructuring activities were completed
during fiscal year 2001. As of December 31, 2001, $0.4 million of accrued charges remain, consisting primarily of lease obligations related to the vacated Los Angeles office space.

5.    The Styleclick.com/ISN Merger

In connection with the contribution of ISN to Styleclick, USA received 0.601 shares of Styleclick's Class B common stock for each ISN unit owned on that
date. All other ISN unit holders received 0.601 shares of Styleclick's Class A common stock for each ISN unit owned on that date. Further, USA contributed approximately $40 million in
cash and $10 million in dedicated media and promotion in exchange for 2,693,603 shares of Class B common stock. In connection with the acquisition of Styleclick.com, each former
Styleclick.com stockholder received one share of Styleclick's Class A common stock for each Styleclick.com share owned on that date. Holders of the Class A common stock are entitled to
one vote per share and holders of the Class B common stock are entitled to ten votes per share. Subsequent to the acquisition of Styleclick.com, USA and its subsidiaries control approximately
97% of the total outstanding voting power and are effectively able to control the outcome of nearly all matters submitted to vote of Styleclick's stockholders. Following the merger transactions,
Styleclick owned and operated the combined properties of Styleclick.com and ISN, which includes Styleclick.com's network of branded e-commerce websites and ISN's FirstAuction.com and
FirstJewelry.com websites.

Total
acquisition costs were $211,914. The acquisition of Styleclick.com was accounted for using the purchase method of accounting. Accordingly, the acquisition cost was assigned to the
net assets acquired based on their estimated fair values.

Goodwill
was originally being amortized according to the straight-line method over three years from the merger date. The results of operations of Styleclick.com are included
in the results of operations of Styleclick from the date of acquisition.

The
following pro forma condensed consolidated financial information has been prepared to give effect, with pro forma adjustments including amortization of goodwill of
$112.5 million and

24

---

$56.7 million for the years ended December 31, 2000 and 1999, respectively, to the acquisition of Styleclick.com by Styleclick:

Year Ended December 31,2000

1999Revenues

$
24,197

$
35,136Net loss

$
(161,619
)
$
(115,121
)Basic and diluted earnings per share

$
(6.50
)
$
(3.72
)


As
a result of the then current and anticipated operating losses of Styleclick and the continuing evaluation of operations and technology, management determined as of December 31,
2000 the goodwill recorded in conjunction with the merger was impaired and recorded a write-down of $145.6 million as goodwill amortization. Management amortized the remaining
balance of $1 million as goodwill during the year ended December 31, 2001.

6.    Deferred Advertising and Promotion

In connection with the merger on July 27, 2000, USA provided Styleclick $10 million in advertising and promotion services in its dedicated media
over a three-year period. Within this 3-year period, no more than $5 million can be spent in any one year. As of December 31, 2001, Styleclick has not used any of
these services. Per the merger terms, unused media in excess of $5 million will expire on December 31, 2002 with the remaining unused commitment to expire on December 31, 2003.

Styleclick
does not believe that its new business model will allow for full use of the $10 million in advertising and promotion and therefore the Company recorded a reserve of
$5 million for this asset at December 31, 2001.

7.    Property and Equipment

Property and equipment at December 31, 2001 and 2000 consisted of the following:

2001

2000Computer equipment and software costs

$
9,239

$
23,704Leasehold improvements


21


1,260Furniture and other equipment


256


1,229Projects in progress


377


5429,893


26,735Less accumulated depreciation and amortization


(6,473
)

(13,238
)$
3,420

$
13,497


During
2001 and 2000, the company wrote-off $7 million and $2 million, respectively of capitalized software costs related to software products that were not in
use and had no realizable value to Styleclick.

8.    Commitments

Styleclick leases certain facilities for its corporate and operations facilities under long-term, non-cancelable operating lease
agreements which expire through April 30, 2006. Future minimum

25

---

aggregate lease payments under non-cancelable operating leases with initial or remaining terms of one year or more at December 31, 2001 are as follows:

Years ending December 31,

Operating leases

Sub-lease rental income

Net2002

$
796

$
405

$
3912003


774


418


3562004


758


388


3702005


769


378


3912006


448


63


385$
3,545

$
1,652

$
1,893


Rent
expense for the years ended December 31, 2001, 2000, and 1999 was approximately $1.0 million each year.

During
2000, Styleclick entered into two employment agreements expiring on July 27 and December 13, 2002, respectively, with two executive officers of Styleclick. Under the
agreements, the officers are to receive aggregate annual salaries of $500,000. In addition, Styleclick may pay aggregate annual performance bonuses of $100,000 to the officers if certain sales targets
were met.

9.    Warrants

Warrants Issued by Styleclick.com

In connection with the merger on July 27, 2000, warrants issued by Styleclick.com to purchase shares of common stock of Styleclick.com were converted into
warrants to purchase the same number of shares of Class A common stock of Styleclick, on the same terms and conditions and at the same per share exercise price that applied before the merger.
As of December 31, 2000, the warrants to purchase 2,247,026 shares of Styleclick's Class A common stock were outstanding with an average life of 2.2 years and a weighted average
exercise price of $13.14 per share. Of these outstanding shares, the warrants to purchase 2,147,026 shares of Styleclick's Class A common stock were exercisable at a weighted average exercise
price of $13.18 at December 31, 2000. As of December 31, 2001, none of the warrants had been exercised.

Warrants Issued to USA

In connection with the merger on July 27, 2000 and the $10 million line of credit provided by USA to Styleclick.com, Styleclick.com entered into a
bridge loan warrant agreement with USA and delivered to USA a warrant, expiring in January 2010, for 328,084 shares of Styleclick.com's common stock at an exercise price of $19.05 per share.
Upon completion of the merger, the warrant was converted into warrants to purchase the same number of shares of Class B common stock of Styleclick, on the same terms and conditions and at the
same per share exercise price that applied before the merger. As of December 31, 2001, none of the warrants had been exercised.

In
connection with the merger on July 27, 2000, Styleclick also issued USA a warrant, expiring in July 2010, to purchase 12,579,176 shares of Class B common stock of
Styleclick at $11.50 per share. Under the terms of the agreement, USA may exercise the warrant without payment of cash by electing to receive only the number of shares equal to the increase in the
value of the warrant divided by the market price of the shares at the time of exercise. USA may pay up to 50% of the exercise price of the warrant in the form of advertising and promotional services
provided to Styleclick. As of December 31, 2001, none of the warrants had been exercised.

26

---

10.  Stock Options

Styleclick has a stock option plan (the "Plan") under which options to purchase shares of Styleclick's Class A common stock may be granted to any employee,
officer or director of Styleclick or its subsidiaries. The authorized number of shares under the Plan include 15,000,000 shares of Styleclick's Class A common stock.

In
connection with the merger on July 27, 2000, all options to purchase Styleclick.com common stock and ISN units outstanding were converted into options covered by the Plan. Each
outstanding Styleclick.com stock option that was not exercised became and represents an option to purchase one share of Styleclick's Class A common stock. The exercise price per share of
Styleclick's common stock was equal to the exercise price per share of Styleclick.com common stock. Each outstanding option to purchase a limited liability company unit of ISN that was not exercised
became and represents an option to purchase 0.601 shares of Styleclick's Class A common stock.

A
summary of changes in outstanding options under the Plan with respect to employees and/or directors of Styleclick are as follows:

|                        |                                   | December 31,
|----------------------- | --------------------------------- | ------------
|
|
|Beginning balance       |                                   | 3,652,443   
|                        | Styleclick.com options conversion |             
|                        | Granted                           |             
|                        | Exercised                         |             
|                        | Canceled                          |             
|                        |                                   |             
|Ending balance          |                                   | 1,324,653   
|                        |                                   |             
|Options exercisable     |                                   | 10,560      
|                        |                                   |             
|Available for grant     |                                   | 13,670,276  
|                        |                                   |             
|Total shares registered |                                   | 15,000,000  
|                        |                                   |             

The weighted average exercise prices were $1.12 and $9.64 for options granted and canceled, respectively, during the year ended
December 31, 2001. The weighted average fair value of options granted during the year was $1.18.

The
weighted average exercise prices were $9.15 and $13.25 for options granted and canceled, respectively, during the year ended December 31, 2000. The weighted average fair value
of options granted during the year was $9.15.

The
weighted average exercise prices during the year ended December 31, 1999, were $8.90 and $5.51 for options granted and canceled, respectively. The weighted average fair value
of options granted during the year was $8.90.

27

---

The
following present the employees stock options which were outstanding and exercisable at December 31, 2001 and their respective weighted average exercise prices. The weighted
average remaining contractual life of all options outstanding is also presented.

|               |  | Options Outstanding |  | Options Exercisable
|-------------- |  | ------------------- |  | -------------------
|
|$0.87 to $1.25 |  | 1,207,900           |  | 9.4                
|$1.26 to $4.00 |  | 99,700              |  | 9.4                
|$4.01 to $6.75 |  | 5,048               |  | 8.2                
|$6.76 to $9.50 |  | 12,005              |  | 7.4                
|               |  |                     |  |                    
|               |  | 1,324,653           |  | 9.3                
|               |  |                     |  |                    

Pro
forma information regarding net income and earnings per share is required by Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation." The
information is determined as if Styleclick has accounted for its employee stock options using the fair value method. The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average assumptions for all periods: risk-free interest rate of 5.0%, dividend yield of zero, volatility factor of 142% and
weighted-average expected life nine years.

The
Black-Scholes option valuation model was developed for use in estimating the fair market value of traded options which have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because Styleclick's employee stock options have characteristics
significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models
do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to
expense over the options' vesting period. Styleclick's pro forma information follows:

Years Ended December 31,2001

2000

1999Pro forma net loss

$
(44,308
)
$
(208,859
)
$
(43,232
)Pro forma net loss per share

$
(1.40
)
$
(8.36
)
$
(2.11
)


These
pro forma amounts may not be representative of future disclosures since the estimated fair value of stock options is amortized to expense over the vesting period and additional
options may be granted in future years.

11.  Litigation

ISN is a party to arbitration in the State of Florida with respect to certain claims by ISN's former CEO and President, Kirk Loevner, following the termination of
his employment. Mr. Loevner claims entitlement to options on 250,000 shares of stock of Internet Shopping Network, Inc., among other claims. Mr. Loevner seeks damages of up to
approximately $10,000,000, which, if awarded, would have a material adverse effect on Styleclick. Styleclick is vigorously defending against the allegations, but can give no assurances that it will
not incur material costs and damages in connection therewith.

On
November 7, 2001, Michael Fagen, former VP of Sales for Styleclick, filed a complaint in New York State Supreme Court against Styleclick and certain officers and affiliates of
Styleclick. The complaint seeks damages of up to approximately $480,000, which if awarded, would have a material adverse effect on Styleclick. The complaint makes allegations against one or more of
the defendants for

28

---

fraudulent inducement to contract, breach of contract, unpaid wages and wrongful termination. It is the defendants' position that the claims made in the complaint are without merit and the defendants
are vigorously defending the lawsuit. However, given the uncertainty of litigation generally, Styleclick can give no assurances that it will not incur material damages in connection therewith.

12.  Benefit Plans

The Company offers plans pursuant to Section 401(k) of the Internal Revenue Code covering substantially all full-time employees who are not
party to collective bargaining agreements. The company's share of the matching employer contributions is set at the discretion of the Board of Directors or the applicable committee thereof. There were
no significant costs for these plans in any period presented.

13.  Related Party Transactions

Service revenue generated from USA Electronic Commerce Solutions LLC was $2.9 million and $0.1 million for the years ended
December 31, 2001 and 2000, respectively.

The
Home Shopping Network provides warehouse, teleservice, accounting and other administrative services to Styleclick based upon an unwritten agreement. The services are charged on a
monthly basis. Expenses charged to operations for these services were $0.7 million, $4.2 million and $5.4 million the years ended December 31, 2001, 2000 and 1999,
respectively.

In
November 2000, Precision Response Corporation, Inc. began providing Styleclick's customer service function based on an unwritten agreement. Expenses charged to
operations for these services were $1.1 million, and $0.3 million the years ended December 31, 2001 and 2000, respectively.

In
March 2001, Styleclick combined its retail website, FirstJewelry.com, with its business-to-consumer auction website, FirstAuction.com, by making its
existing FirstJewelry.com inventory available through FirstAuction.com and redirecting FirstJewelry.com's URL to the FirstAuction.com site. In May 2001, Styleclick ceased operations of its
FirstAuction.com website. Services provided by Home Shopping Network and Precision Response Corporation in 2001 related to the operation of the FirstAuction.com and FirstJewelry.com are no longer
needed and will not continue through 2002.

Management
believes that Styleclick's transactions as described in this note are materially representative of the market value of services recorded.

ECS
provides certain business operations and financial services to Styleclick as defined in a services agreement entered into in March 2001. Under this agreement, ECS charged the
company $0.2 million for the year ended December 31, 2001.

In
connection with the new organization, Styleclick received a revolving line of credit for $15 million from USA. The credit line matures on January 26, 2003, or, at USA's
option, anytime thereafter. The line of credit carries an interest rate of USA's average blended cost of borrowing, currently LIBOR plus .75%. The credit line can be drawn against only with the
approval of Styleclick's Board of Directors, and Styleclick can not ensure that any such approval will be given in the future. As of March 26, 2002, Styleclick had drawn down $12 million
under the line of credit, including $4 million that was drawn down on March 25, 2002. The line of credit provides that USA has the right to declare the principal amount borrowed and
unpaid, including interest thereon, immediately due and payable in the event of a "Material Adverse Change", which includes, among other things, an event, action or condition that would or is likely
to materially adversely affect the business, operations, assets or condition (financial or otherwise) of Styleclick, or the ability of Styleclick to perform its obligations under the credit agreement.
USA is not obligated to make any additional advances under the credit agreement if, among other reasons, a "Material Adverse Change" exists.

29

---

14.  Income Taxes

Prior to the merger on July 27, 2000, ISN operated as a limited liability company. As a limited liability company, ISN was treated as a partnership for
income tax purposes and was not subject to federal and state income taxation.

The
following is a reconciliation of the statutory federal income tax rate to Styleclick's effective income tax rate for the years ended December 31, 2001 and December 31,
2000.

12/31/2001

12/31/2000Income tax computed at federal statutory rate

34.0
%
34.0
%State taxes (net of federal benefit)

6.0
%
6.0
%Goodwill

(2.3
)%
(27.8
)%Pre-merger ISN losses

0.0
%
(3.6
)%Deferred advertising

(11.3
)%
0.0
%Valuation allowance

(26.4
)%
(8.6
)%Total


%

%


As
of December 31, 2001, Styleclick has federal net operating loss carry forwards of approximately $97.0 million that expire through 2021. In connection with the merger of
July 27, 2000, a portion of Styleclick.com's pre-merger net operating losses will be subject to the annual limitations as imposed by the Internal Revenue Code 382.

Significant
components of Styleclick's deferred tax assets and liabilities consist of the following:

12/31/2001

12/31/2000Deferred Tax Assets:Net operating loss carry-forwards

$
35,077

$
17,619Capitalized research and development cost for tax year





289Allowance for doubtful accounts


54


239Inventory reserves


1,246


626Research credits


1,450


1,303Other


126


8337,953


20,159Valuation allowance for deferred tax asset


(37,095
)

(19,117
)858


1,042Deferred Tax Liabilities:Furniture & equipment





(203
)Deferred state taxes


(858
)

(839
)Net Deferred Tax Asset

$






At
December 31, 2001 Styleclick has provided a valuation allowance for the deferred tax asset since management has not been able to determine that the realization of that asset is
more likely than not.

30

---

15.  Quarterly Results (Unaudited)

|                                     |  | Quarter Ended |         
|------------------------------------ |  | ------------- | --------
|
|
|Year Ended December 31, 2001         |  |               |         
|Net revenues                         |  | $             | 1,285   
|Loss from operations                 |  |               | (7,131  
|Net loss                             |  |               | (5,991  
|Basic and diluted net loss per share |  |               | (0.19   
|Year Ended December 31, 2000         |  |               |         
|Net revenues                         |  | $             | 4,753   
|Loss from operations                 |  |               | (169,582
|Net loss                             |  |               | (169,276
|Basic and diluted net loss per share |  |               | (5.46   

16.  Subsequent Events (Unaudited)

On March 25, 2002, the Company borrowed an additional $4 million under its line of credit with USA. See Note 13.

31

---



Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

PART III

Item 10.Directors and Executive Officers of the Registrant

The information contained under the headings "Directors" and "Executive Officers" in the definitive Proxy Statement for our 2002 Annual Meeting of Stockholders is
incorporated herein by reference.

Item 11.Executive Compensation

The information contained under the headings "Directors" and "Executive Officers" in the definitive Proxy Statement for the Company's 2002 Annual Meeting of
Stockholders is incorporated herein by reference.

Item 12.Security Ownership of Certain Beneficial Owners and Management

The information contained under the heading "Voting Securities and Principal Stockholders" in the definitive Proxy Statement for the Company's 2002 Annual Meeting
of Stockholders is incorporated herein by reference.

Item 13.Certain Relationships and Related Transactions

The information contained under the heading "Certain Transactions" in the definitive Proxy Statement for the Company's 2002 Annual Meeting of Stockholders is
incorporated herein by reference.

32

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PART IV

Item 14.Exhibits, Financial Statement Schedules and Reports on Forms 8-K

(a)(1) and (2)

The following financial statements of the Registrant are presented in Item 8 of this report:



(a)(3)

The exhibits required by Item 601 of Regulation S-K filed as part of, or incorporated by reference in, this report are listed in (c)
below and in the accompanying Exhibit Index. All other financial statements and
schedules not listed have been omitted since the required information is included in the consolidated financial statements or the notes thereto, or is not applicable or required.

(b)  Reports on Form 8-K filed in the fourth quarter of 2001:

On October 25, 2001, Styleclick filed a report on Form 8-K. The item reported was Item 9"Regulation FD Disclosure".

(c)  Exhibits

|Exhibit
Number |  | Exhibit Title                                                                                                                                                    |  | Notes
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----
|2.1            |  | Amended and Restated Agreement and Plan of Merger, dated as of March 23, 2000, by and among Styleclick.com Inc., Internet Shopping Network LLC and USANi SUB LLC |  | (A)  
|2.2            |  | Form of Agreement of Merger of Merger Sub and Styleclick.com, Inc.                                                                                               |  | (B)  
|2.3            |  | Form of Certificate of Merger merging ISN Merger Sub LLC into Internet Shopping Network LLC                                                                      |  | (B)  
|3.1            |  | Certificate of Incorporation of Styleclick, Inc.                                                                                                                 |  | (B)  
|3.2            |  | Bylaws of Styleclick, Inc.                                                                                                                                       |  | (B)  
|4.1            |  | Specimen Class A Common Stock Certificate                                                                                                                        |  | (C)  
|4.2            |  | Form of Stockholders Agreement among Styleclick, Inc., USANi Sub LLC, USA Networks, Inc., Styleclick.com, Inc. and the stockholders named therein                |  | (B)  
|4.3            |  | Form of Registration Rights Agreement among USANi Sub LLC and Styleclick, Inc.                                                                                   |  | (B)  
|9.1            |  | Voting and First Offer Agreement, dated as of January 24, 2000, between Maurizio Vecchione and USANi Sub LLC                                                     |  | (B)  
|9.2            |  | Voting and First Offer Agreement, dated as of January 24, 2000, between Intel Corporation and USANi Sub LLC                                                      |  | (B)  
|               |  |                                                                                                                                                                  |  |      

33

---

|10.1  |  | Form of Media Warrant Agreement between Styleclick, Inc. and USA Networks, Inc.                                                                    |  | (B)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|10.2  |  | Form of License Agreement by and among Styleclick, Inc., Styleclick.com, Inc., Internet Shopping Network LLC and USA Networks, Inc.                |  | (C)
|10.3  |  | Option Agreement, dated as of January 24, 2000, by and between USANi Sub LLC and Styleclick.com, Inc.                                              |  | (B)
|10.4  |  | Waiver Agreements, dated as of January 24, 2000, between Castle Creek Technology Partners, LLC, Styleclick.com Inc. and USANi Sub LLC              |  | (B)
|10.5  |  | Credit Agreement, dated as of January 24, 2000, between Styleclick.com Inc. and USA Networks, Inc.                                                 |  | (B)
|10.6  |  | Bridge Loan Warrant Agreement, dated as of January 24, 2000, between Styleclick.com Inc. and USA Networks, Inc.                                    |  | (B)
|10.7  |  | Warrant to purchase 328,084 Shares of common stock of Styleclick.com Inc. issued to USA Networks, Inc., dated as of January 24, 2000               |  | (B)
|10.8  |  | Collateral Agreement, dated as of January 24, 2000, between Styleclick.com Inc. and USA Networks, Inc.                                             |  | (B)
|10.9  |  | Promissory Note, dated as of January 24, 2000, in a principal amount not to exceed $10 million Issued by Styleclick.com Inc. to USA Networks, Inc. |  | (B)
|10.10 |  | Facilities Lease dated May 30, 2000, by and between W9/WLA Real Estate Limited Partnership, as Landlord, and Styleclick, Inc.                      |  | (D)
|10.11 |  | Employment Agreement between Styleclick, Inc. and Maurizio Vecchione dated as of July 27, 2000                                                     |  | (E)
|10.12 |  | Employment Agreement between Styleclick, Inc. and Edward Zinser dated as of December 14, 2000                                                      |  | (E)
|10.13 |  | 2000 Stock Plan                                                                                                                                    |  | (E)
|10.14 |  | 2000 Director's Stock Option Plan                                                                                                                  |  | (E)
|10.15 |  | Asset Purchase Agreement, dated as of March 21, 2001, by and among Styleclick, Inc., Lakeview Ventures, L.L.C., Ian Drury and Brent Hill           |  | (F)
|10.16 |  | Letter Agreement, dated as of March 21, 2001, by and between Styleclick, Inc. and Maurizio Vecchione                                               |  | (F)
|10.17 |  | Letter Agreement, dated as of March 21, 2001, by and between Styleclick, Inc. and Edward Zinser                                                    |  | (F)
|10.18 |  | Employment Agreement, dated as of March 22, 2001, by and between Styleclick, Inc. and Ian Drury                                                    |  | (F)
|10.19 |  | Employment Agreement, dated as of March 22, 2001, by and between Styleclick, Inc. and Brent Hill                                                   |  | (F)
|10.20 |  | Services Agreement, dated as of May 14, 2001, by and between Styleclick, Inc. and USA Electronic Commerce Services LLC                             |  | (F)
|10.21 |  | Credit Agreement between USA Networks, Inc. and Styleclick, Inc.                                                                                   |  | (G)
|      |  |                                                                                                                                                    |  |    

34

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|10.22 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC |  | 
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | -
|10.23 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC |  | 
|10.24 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC |  | 
|10.25 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC |  | 
|21.1  |  | Subsidiaries of Registrant                                                                                                         |  | 
|23.1  |  | Consent of Ernst & Young LLP                                                                                                       |  | 

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35

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) 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.

|                     |  | STYLECLICK, INC.
|-------------------- |  | ----------------
|Date: March 29, 2002 |  | By:             

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

|                                        |  |                                                                                 |  |                   
|--------------------------------------- |  | ------------------------------------------------------------------------------- |  | ------------------
|/s/LISA BROWNLisa Brown                 |  | Chairman of the Board and Chief Executive Officer (principal executive officer) |  | March 29, 2002Date
|/s/ROBERT HALPERRobert Halper           |  | President and Director (principal financial and accounting officer)             |  | March 29, 2002Date
|/s/JULIUS GENACHOWSKIJulius Genachowski |  | Director                                                                        |  | March 29, 2002Date
|/s/DANIEL MARRIOTTDaniel Marriott       |  | Director                                                                        |  | March 29, 2002Date
|/s/JON MILLERJon Miller                 |  | Director                                                                        |  | March 29, 2002Date
|/s/LESLIE SALESONLeslie Saleson         |  | Director                                                                        |  | March 29, 2002Date
|Hamilton South                          |  | Director                                                                        |  | Date              
|/s/DEIRDRE STANLEYDeirdre Stanley       |  | Director                                                                        |  | March 29, 2002Date
|/s/JOHN TINKERJohn Tinker               |  | Director                                                                        |  | March 29, 2002Date

36

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EXHIBIT INDEX

|Exhibit
Number |  | Exhibit Title                                                                                                                                                    |  | Notes
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----
|2.1            |  | Amended and Restated Agreement and Plan of Merger, dated as of March 23, 2000, by and among Styleclick.com Inc., Internet Shopping Network LLC and USANi SUB LLC |  | (A)  
|2.2            |  | Form of Agreement of Merger of Merger Sub and Styleclick.com, Inc.                                                                                               |  | (B)  
|2.3            |  | Form of Certificate of Merger merging ISN Merger Sub LLC into Internet Shopping Network LLC                                                                      |  | (B)  
|3.1            |  | Certificate of Incorporation of Styleclick, Inc.                                                                                                                 |  | (B)  
|3.2            |  | Bylaws of Styleclick, Inc.                                                                                                                                       |  | (B)  
|4.1            |  | Specimen Class A Common Stock Certificate                                                                                                                        |  | (C)  
|4.2            |  | Form of Stockholders Agreement among Styleclick, Inc., USANi Sub LLC, USA Networks, Inc., Styleclick.com, Inc. and the stockholders named therein                |  | (B)  
|4.3            |  | Form of Registration Rights Agreement among USANi Sub LLC and Styleclick, Inc.                                                                                   |  | (B)  
|9.1            |  | Voting and First Offer Agreement, dated as of January 24, 2000, between Maurizio Vecchione and USANi Sub LLC                                                     |  | (B)  
|9.2            |  | Voting and First Offer Agreement, dated as of January 24, 2000, between Intel Corporation and USANi Sub LLC                                                      |  | (B)  
|10.1           |  | Form of Media Warrant Agreement between Styleclick, Inc. and USA Networks, Inc.                                                                                  |  | (B)  
|10.2           |  | Form of License Agreement by and among Styleclick, Inc., Styleclick.com, Inc., Internet Shopping Network LLC and USA Networks, Inc.                              |  | (C)  
|10.3           |  | Option Agreement, dated as of January 24, 2000, by and between USANi Sub LLC and Styleclick.com, Inc.                                                            |  | (B)  
|10.4           |  | Waiver Agreements, dated as of January 24, 2000, between Castle Creek Technology Partners, LLC, Styleclick.com Inc. and USANi Sub LLC                            |  | (B)  
|10.5           |  | Credit Agreement, dated as of January 24, 2000, between Styleclick.com Inc. and USA Networks, Inc.                                                               |  | (B)  
|10.6           |  | Bridge Loan Warrant Agreement, dated as of January 24, 2000, between Styleclick.com Inc. and USA Networks, Inc.                                                  |  | (B)  
|10.7           |  | Warrant to purchase 328,084 Shares of common stock of Styleclick.com Inc. issued to USA Networks, Inc., dated as of January 24, 2000                             |  | (B)  
|10.8           |  | Collateral Agreement, dated as of January 24, 2000, between Styleclick.com Inc. and USA Networks, Inc.                                                           |  | (B)  
|10.9           |  | Promissory Note, dated as of January 24, 2000, in a principal amount not to exceed $10 million Issued by Styleclick.com Inc. to USA Networks, Inc.               |  | (B)  
|10.10          |  | Facilities Lease dated May 30, 2000, by and between W9/WLA Real Estate Limited Partnership, as Landlord, and Styleclick, Inc.                                    |  | (D)  
|10.11          |  | Employment Agreement between Styleclick, Inc. and Maurizio Vecchione dated as of July 27, 2000                                                                   |  | (E)  
|               |  |                                                                                                                                                                  |  |      

37

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|10.12 |  | Employment Agreement between Styleclick, Inc. and Edward Zinser dated as of December 14, 2000                                            |  | (E)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|10.13 |  | 2000 Stock Plan                                                                                                                          |  | (E)
|10.14 |  | 2000 Director's Stock Option Plan                                                                                                        |  | (E)
|10.15 |  | Asset Purchase Agreement, dated as of March 21, 2001, by and among Styleclick, Inc., Lakeview Ventures, L.L.C., Ian Drury and Brent Hill |  | (F)
|10.16 |  | Letter Agreement, dated as of March 21, 2001, by and between Styleclick, Inc. and Maurizio Vecchione                                     |  | (F)
|10.17 |  | Letter Agreement, dated as of March 21, 2001, by and between Styleclick, Inc. and Edward Zinser                                          |  | (F)
|10.18 |  | Employment Agreement, dated as of March 22, 2001, by and between Styleclick, Inc. and Ian Drury                                          |  | (F)
|10.19 |  | Employment Agreement, dated as of March 22, 2001, by and between Styleclick, Inc. and Brent Hill                                         |  | (F)
|10.20 |  | Services Agreement, dated as of May 14, 2001, by and between Styleclick, Inc. and USA Electronic Commerce Services LLC                   |  | (F)
|10.21 |  | Credit Agreement between USA Networks, Inc. and Styleclick, Inc.                                                                         |  | (G)
|10.22 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC       |  |   
|10.23 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC       |  |   
|10.24 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC       |  |   
|10.25 |  | Amended and Restated Services Agreement dated as of March 25, 2002, by and between Styleclick, Inc. and ECS Sports Fulfillment LLC       |  |   
|21.1  |  | Subsidiaries of Registrant                                                                                                               |  |   
|23.1  |  | Consent of Ernst & Young LLP                                                                                                             |  |   

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38

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39

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Schedule II: Valuation and qualifying accounts

|                             |                                                       |  |   | Additions |  |   |           | 
|---------------------------- | ----------------------------------------------------- |  | - | --------- |  | - | --------- | 
|
|Balance at December 31, 2001 |                                                       |  |   |           |  |   |           | 
|                             | Reserves and allowances deducted from asset accounts: |  |   |           |  |   |           | 
|                             | Allowance for doubtful accounts                       |  | $ | 700,000   |  | $ | 122,000   | 
|                             | Inventory reserve                                     |  |   | 1,391,000 |  |   | 2,925,000 | 
|                             |                                                       |  |   |           |  |   |           | 
|                             | Total                                                 |  | $ | 2,091,000 |  | $ | 3,047,000 | 
|                             |                                                       |  |   |           |  |   |           | 
|Balance at December 31, 2000 |                                                       |  |   |           |  |   |           | 
|                             | Reserves and allowances deducted from asset accounts: |  |   |           |  |   |           | 
|                             | Allowance for doubtful accounts                       |  | $ | 42,000    |  | $ | 473,000   | 
|                             | Inventory reserve                                     |  |   | 1,666,000 |  |   | 1,106,000 | 
|                             |                                                       |  |   |           |  |   |           | 
|                             | Total                                                 |  | $ | 1,708,000 |  | $ | 1,579,000 | 
|                             |                                                       |  |   |           |  |   |           | 
|Balance at December 31, 1999 |                                                       |  |   |           |  |   |           | 
|                             | Reserves and allowances deducted from asset accounts: |  |   |           |  |   |           | 
|                             | Allowance for doubtful accounts                       |  | $ | 41,000    |  | $ | 1,000     | 
|                             | Inventory reserve                                     |  |   | 1,421,000 |  |   | 245,000   | 
|                             |                                                       |  |   |           |  |   |           | 
|                             | Total                                                 |  | $ | 1,462,000 |  | $ | 246,000   | 
|                             |                                                       |  |   |           |  |   |           | 

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