U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-Q

      [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2004

                                       or

      [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the transition period from _____ to _____

                         Commission File Number 0-21989

                        Medialink Worldwide Incorporated
             (Exact name of registrant as specified in its charter)

                  Delaware                             52-1481284
                  --------                             ----------
        (State or other jurisdiction                (I.R.S. Employer
             of incorporation or                 Identification Number)
                organization)

                   708 Third Avenue, New York, New York 10017
                   ------------------------------------------
               (Address of principal executive offices) (Zip Code)
                                 (212) 682-8300
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)
Yes [  ]    No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of business on August 13, 2004:

                  Common Stock - 5,993,656



<PAGE>


<TABLE>
<CAPTION>

                                TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

<S>                <C>                                                                                     <C>
ITEM 1.           Financial Statements                                                                      3

                  Consolidated Balance Sheets as of June 30,
                  2004 (unaudited) and December 31, 2003                                                    3

                  Unaudited Consolidated Statements of Operations
                  for the six months ended June 30, 2004 and 2003                                           4

                  Unaudited Consolidated Statements of Operations
                  for the three months ended June 30, 2004 and 2003                                         5

                  Unaudited Consolidated Statements of Cash Flows
                  for the six months ended June 30, 2004 and 2003                                           6

                  Notes to Unaudited Consolidated Financial Statements                                 7 - 14

ITEM 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                                       15 - 25

ITEM 3.           Quantitative and Qualitative Disclosure About Market Risk                                26

ITEM 4.           Controls and Procedures                                                                  26

PART II. OTHER INFORMATION

ITEM 1.           Legal Proceedings                                                                        27

ITEM 2.           Changes in Securities, Use of Proceeds and Issuer Purchases
                  of Equity Securities                                                                     27

ITEM 3.           Defaults Upon Senior Securities                                                          27

ITEM 4.           Submission of Matters to a Vote of Security Holders                                      27

ITEM 5.           Other Information                                                                        27

ITEM 6.           Exhibits and Reports on Form 8-K                                                         27

</TABLE>


                                       2
<PAGE>

<TABLE>
<CAPTION>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    As of June 30, 2004 and December 31, 2003

                                                                          June 30,     December 31,
                                                                            2004           2003
                                                                        ------------    ------------
                                                                        (Unaudited)
                                           ASSETS
Current Assets:
<S>                                                                     <C>             <C>
   Cash and cash equivalents                                            $  1,462,553    $  3,708,130
   Accounts receivable, net of allowance for doubtful accounts of
     $855,355 and $683,420                                                 7,738,298       7,225,166
   Prepaid expenses and other current assets                               2,704,482       2,183,011
   Prepaid and refundable taxes                                              754,995         690,657
   Deferred tax assets                                                       199,000         199,000
                                                                        ------------    ------------
       Total current assets                                               12,859,328      14,005,964
                                                                        ------------    ------------

Property and equipment, net                                                5,204,097       5,800,070

Goodwill                                                                  13,234,051      13,234,051
Customer list and other intangibles,net of accumulated amortization
  of $4,480,481 and $4,440,485                                                19,519          59,515
Investment in joint venture                                                  229,407         365,483
Deferred tax assets                                                        1,920,000       1,805,000
Other assets                                                               1,218,189       1,441,802
                                                                        ------------    ------------
       Total assets                                                     $ 34,684,591    $ 36,711,885
                                                                        ============    ============

                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Current portion of obligations under capital leases                  $     95,139    $     96,248
   Borrowings on credit facilities                                         4,000,000       5,500,000
   Accounts payable                                                        2,573,074       1,692,713
   Accrued expenses and other current liabilities                          3,626,188       3,948,809
                                                                        ------------    ------------
       Total current liabilities                                          10,294,401      11,237,770
Obligations under capital leases, net of current portion                     114,654         173,000
Other long term liabilities                                                  401,406         503,336
                                                                        ------------    ------------
       Total liabilities                                                  10,810,461      11,914,106
                                                                        ------------    ------------
Stockholders' Equity:
   Common stock; $.01 par value. Authorized 15,000,000 shares; issued
      6,050,780 shares in 2004 and  6,040,173 shares in 2003                  60,508          60,401
   Additional paid-in capital                                             25,079,155      25,047,284
   Retained earnings (accumulated deficit)                                  (769,998)        238,477
   Accumulated other comprehensive loss                                     (295,601)       (348,449)
                                                                        ------------    ------------
                                                                          24,074,064      24,997,713
   Less common stock in treasury (at cost, 57,124 shares)                   (199,934)       (199,934)
                                                                        ------------    ------------

       Total stockholders' equity                                         23,874,130      24,797,779
                                                                        ------------    ------------
       Total liabilities and stockholders' equity                       $ 34,684,591    $ 36,711,885
                                                                        ============    ============

</TABLE>

             See notes to unaudited condensed finanical statements

                                       3
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                 For the Six Months Ended June 30, 2004 and 2003

                                                   2004            2003
                                               ------------    ------------

Revenues                                       $ 22,576,007    $ 22,654,155

Direct costs                                      7,439,461       7,384,696
                                               ------------    ------------

     Gross Profit                                15,136,546      15,269,459

Operating Expenses:
Selling, general and administrative expenses     14,320,360      15,286,167
Depreciation and amortization                     1,284,128       1,118,603
Loss from joint venture                             136,076         186,964
Loss on impairment of investments                   342,000              --
                                               ------------    ------------

     Operating loss                                (946,018)     (1,322,275)

Interest expense, net                              (152,457)       (153,681)
                                               ------------    ------------

     Net loss before income taxes                (1,098,475)     (1,475,956)

Benefit from income taxes                           (90,000)       (200,000)
                                               ------------    ------------

     Net loss                                  $ (1,008,475)   $ (1,275,956)
                                               ============    ============

Basic and diluted loss per share               $      (0.17)   $      (0.21)
                                               ============    ============

             See notes to unaudited condensed finanical statements

                                       4
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                For the Three Months Ended June 30, 2004 and 2003

                                                     2004            2003
                                                  ------------    ------------

Revenues                                          $ 12,007,987    $ 11,693,163

Direct costs                                         4,161,314       3,835,393
                                                  ------------    ------------

     Gross Profit                                    7,846,673       7,857,770

Operating Expenses:
Selling, general and administrative expenses         7,032,216       7,823,940
Depreciation and amortization                          630,878         579,788
Loss from joint venture                                 41,388          86,964
                                                  ------------    ------------

     Operating income (loss)                           142,191        (632,922)

Interest expense, net                                  (72,900)        (64,965)
                                                  ------------    ------------

     Net income (loss) before income taxes              69,291        (697,887)

Provision for income taxes (income tax benefit)         60,000        (100,000)
                                                  ------------    ------------

     Net income (loss)                            $      9,291    $   (597,887)
                                                  ============    ============

Basic and diluted earnings (loss) per share       $       0.00    $      (0.10)
                                                  ============    ============

             See notes to unaudited condensed finanical statements

                                       5
<PAGE>

<TABLE>
<CAPTION>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                For the Six Months Ended June 30, 2004 and 2003

                                                                         2004           2003
                                                                      -----------    -----------

<S>                                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                         $(1,008,475)   $(1,275,956)
     Adjustments to reconcile net loss to net cash
        used in operating activities:
     Depreciation and amortization                                      1,284,128      1,118,603
     Deferred income taxes                                               (115,000)       250,000
     Equity loss from joint venture                                       136,076        186,964
     Loss on impairment of investments                                    342,000             --
     Changes in assets and liabilities
       Accounts receivable                                               (460,284)    (1,511,244)
       Other assets                                                      (311,013)        55,446
       Prepaid expenses and other current assets                         (521,471)      (304,714)
       Accounts payable and accrued expenses                              557,740        491,239
       Other long term liabilities                                       (101,930)            --
       Prepaid and refundable taxes                                       (64,338)      (371,668)
                                                                      -----------    -----------
          Net cash used in operating activities                          (262,567)    (1,361,330)
                                                                      -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Cash paid for earn out payments on acquisitions                           --       (341,229)
     Purchases of property and equipment                                 (455,533)    (1,063,879)
                                                                      -----------    -----------
          Net cash used in investing activities                          (455,533)    (1,405,108)
                                                                      -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from the issuance of common stock in connection
       with the exercise of stock options                                  31,978             --
     Repayments of long term debt                                         (59,455)       (31,013)
     Borrowings on line of credit - bank                                  106,203        153,900
     Payments on line of credit - bank                                 (1,606,203)      (690,565)
                                                                      -----------    -----------
          Net cash used in financing activities                        (1,527,477)      (567,678)
                                                                      -----------    -----------
          Net decrease in cash and cash equivalents                    (2,245,577)    (3,334,116)
Cash and cash equivalents at the beginning of period                    3,708,130      6,389,650
                                                                      -----------    -----------
Cash and cash equivalents at end of period                            $ 1,462,553    $ 3,055,534
                                                                      ===========    ===========

Supplemental disclosure of non-cash activities:
   Common stock issued in connection with acquisitions                $        --    $   275,277
                                                                      ===========    ===========

   Transfer of software to property and equipment from other assets   $        --    $   366,000
                                                                      ===========    ===========

</TABLE>


                                       6
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1)   Basis of presentation

The  consolidated  financial  statements  included  herein have been prepared by
Medialink Worldwide Incorporated and Subsidiaries  (collectively,  the "Company"
or  "Medialink"),  without audit,  pursuant to the rules and  regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in consolidated  financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant  to  such  rules  and  regulations.   The  Company  believes  that  the
disclosures are adequate to make the information presented not misleading. These
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's  annual  report on Form 10-K  filing for the year ended  December  31,
2003.

The unaudited  consolidated  financial  statements  included  herein reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of  management,  necessary  to state  fairly the results for the six and
three months ended June 30, 2004. The results for the six and three months ended
June 30, 2004 are not  necessarily  indicative  of the results  expected for the
full fiscal year.


                                       7
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(2)      Earnings (Loss) per Share

Basic  earnings  (loss) per common  share is  computed  using net income  (loss)
applicable  to  common  stock  and  the  weighted   average   number  of  shares
outstanding.  Diluted  earnings  (loss) per common  share is computed  using the
weighted  average  number of shares  outstanding  adjusted  for the  incremental
shares from assumed conversion of all potentially dilutive securities attributed
to outstanding options to purchase common stock. For the six month periods ended
June 30, 2004 and 2003, the Company had common stock  equivalents of 143,587 and
36,312,  respectively,  related to stock  options  that were not included in the
computation of diluted loss per common share because they were antidilutive. For
the three  month  period  ended June 30,  2003,  the  Company  had common  stock
equivalents  of 31,663,  related to stock  options that were not included in the
computation of diluted loss per common share because they were antidilutive. The
weighted  average  number of shares for the six and three  months ended June 30,
2004 and 2003 are as follows:

Weighted Average Shares Outstanding

                                          For the six months ended June 30,
                                          --------------------------------
                                            2004                    2003
                                            ----                    ----

         Basic and diluted                 5,988,058               5,951,852
                                           =========               =========


                                         For the three months ended June 30,
                                         ----------------------------------
                                            2004                    2003
                                            ----                    ----

         Basic                             5,991,546               5,989,849
                                           =========               =========

         Diluted                           6,131,060               5,989,849
                                           =========               =========


                                       8
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(3)      Accumulated Other Comprehensive Loss and Comprehensive Loss

The components of comprehensive loss consist of the following:

                                           For the six months ended June 30,
                                           --------------------------------
                                             2004                    2003
                                             ----                    ----

         Net loss                        $(1,008,475)            $(1,275,956)

         Other comprehensive income:
            Foreign currency translation
              adjustments                     52,848                  39,991
                                        ------------             -----------

         Comprehensive loss             $   (955,627)            $(1,235,965)
                                        ============             ===========


                                          For the three months ended June 30,
                                          ----------------------------------
                                             2004                    2003
                                             ----                    ----

         Net income (loss)                    $9,291               $(597,887)

         Other comprehensive (loss) income:
            Foreign currency translation
              adjustments                   $(50,807)                 90,328
                                             --------              ---------

         Comprehensive loss                 $(41,516)              $(507,559)
                                             =======                ========

Accumulated other comprehensive loss at June 30, 2004 and December 31, 2003
consists of foreign currency translation adjustments.

(4)      Recent Accounting Pronouncements

In  January   2003,   the  FASB  issued   Interpretation   No.  46  ("FIN  46"),
"Consolidation of Variable Interest  Entities",  and amended the  interpretation
with FIN 46(R) in December 2003. This interpretation and its amendment set forth
a  requirement  for an investor  with a majority of the variable  interests in a
variable  interest  entity ("VIE") to  consolidate  the entity and also requires
majority  and  significant   variable  interest  investors  to  provide  certain
disclosures.  A VIE is an  entity in which the  equity  investors  do not have a
controlling  interest,  or the  equity  investment  at risk is  insufficient  to
finance  the  entity's  activities  without  receiving  additional  subordinated
financial  support  from  the  other  parties.  The  provisions  of FIN 46  were
effective  immediately for all  arrangements  entered into with new VIEs created
after January 31, 2003. The Company has not entered into any  arrangements  with
VIEs after  January 31, 2003.  For  arrangements  entered into with VIEs created
prior to January 31,  2003,  the  provisions  of FIN 46 have been delayed to the
first interim or annual period  beginning  after  December 15, 2003. The Company
has evaluated the impact of adoption of FIN 46(R) for its  arrangements  created
before  January 31, 2003.  The adoption of this standard did not have a material
impact on the Company's financial statements.


                                       9
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(5)      Investments and Acquisitions

On April 8, 2002,  TTX Limited  ("Teletrax(TM)"),  a subsidiary  of the Company,
entered into a Technology License Agreement with Koninklijke Philips Electronics
N.V.  ("Philips") for the use of Philips' WaterCast  technology.  Medialink owns
76% of  Teletrax(TM).  The minority  shareholder of  Teletrax(TM)  has no future
funding obligations and, accordingly,  the Company has recorded 100% of the loss
from operations of this subsidiary, which it consolidates.

On August 1, 1999 the Company entered into a joint venture with Business Wire to
form Business Wire/Medialink, LLC ("Newstream") for the purpose of providing its
clients with  distribution of their news to multimedia  Internet news sites. The
Company,  which  has a 50%  interest  in the  joint  venture,  accounts  for its
interest in Newstream under the equity method, as it does not have a controlling
interest in the entity.

For the six month  period  ended June 30,  2003 the  Company  recorded  goodwill
related to earn-out  payments on acquisitions  of $380,000.  As of June 30, 2003
the  Company had no future  commitments  on any of its  acquisitions  that would
result in additional goodwill to be recorded.

During the six months  ended June 30, 2004,  the Company  recorded a loss on the
impairment of investments of $342,000  related to two investments  accounted for
under the cost method.

(6)      Line of Credit

The  Company  has a line  of  credit  facility  with a bank  which  allowed  for
borrowings  of up to $7.50  million  through  April 15,  2004.  At June 30, 2004
maximum  borrowing  under the line of credit was $4.00 million.  Loans under the
Credit  Facility bore interest at the 30-Day LIBOR Rate (1.36% at June 30, 2004)
plus 2.25% through 3.25% per annum, as defined.

Covenants  under the line of  credit  agreement  required  the  Company  to meet
certain  financial  ratios,  including  minimum  tangible  net worth and minimum
earnings before interest, taxes,  depreciation,  amortization and other charges,
as defined  in the  agreement.  At  December  31,  2003 the  Company  was not in
compliance with the minimum  tangible net worth covenant which was waived by the
bank  through  April  15,  2004  through  the  issuance  of  a  forbearance.  In
conjunction  with the  forbearance,  the bank required that the Company pay down
the line of credit by $500,000, reduce the maximum borrowings under the facility
to $5.00 million and put into place a minimum cash balance and limits on capital
expenditure covenants, as defined in the forbearance.


                                       10
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In April 2004 the bank  issued an  additional  forbearance  (the  "Forbearance")
expiring January 31, 2005. The Forbearance reduces the maximum line to the lower
of (i) $4.00 million,  $3.75  million,  $3.50 million and $3.00 million at April
15, 2004, July 1, 2004, October 1, 2004 and December 31, 2004, respectively,  or
(ii)  80%  of  eligible  accounts  receivable   balances,   as  defined  in  the
Forbearance.  Interest under the  Forbearance is payable  monthly at the rate of
the 30-Day LIBOR Rate plus 5.5% per annum.  In accordance  with the  forbearance
agreement,  the Company  made a  principal  payment of $250,000 on July 1, 2004.
Covenants under the Forbearance include limits on capital expenditures,  minimum
earnings before  interest,  taxes,  depreciation  and  amortization  and minimum
tangible net worth, as defined in the agreement.  Additionally,  the Forbearance
requires  the  Company to obtain  financing  by  January  15,  2005,  to support
Teletrax(TM)'s operations.

The Company is subject to a forbearance fee of $30,000 for the period from April
15, 2004 through January 31, 2005.

Substantially  all of the assets of the Company are pledged as collateral  under
the credit facility.

(7)      Intangible Assets

Intangible assets consist of the following:

<TABLE>
<CAPTION>

                                            June 30, 2004                             December 31, 2003
                                           (in thousands)                             (in thousands)
                                     Gross                                      Gross
                Amortization       Carrying     Accumulated                   Carrying     Accumulated
                   Period           Amount     Amortization     Net            Amount     Amortization      Net
                   ------           ------     ------------     ---            ------     ------------      ---

<S>               <C>                <C>         <C>            <C>            <C>           <C>             <C>
Customer List     5 years            $4,000      $(4,000)       $ -            $4,000        $(4,000)        $ -
Non-competes      4-7.5 years           500         (480)        20               500           (440)         60
                                     ------       ------         --            ------         ------          --
Total                                $4,500      $(4,480)       $20            $4,500        $(4,440)        $60
                                      =====        =====         ==             =====          =====          ==
</TABLE>

Aggregate  amortization  expense for the six months ended June 30, 2004 and 2003
was $40,000 for each period.

Aggregate amortization expense for the three months ended June 30, 2004 and 2003
was $20,000 for each period.


Estimated future amortization expense is as follows:

         For the six months ending December 31, 2004             $20,000
                                                                  ======

(8)      Stock Based Compensation

In December 2002, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation
- Transition and Disclosure" ("SFAS 148"). SFAS 148 provides alternative methods
of transition for a voluntary  change to the fair value method of accounting for
stock-based  employee  compensation  as  originally  provided  by SFAS No.  123,
"Accounting for  Stock-Based  Compensation".  Additionally,  SFAS 148 amends the
disclosure requirements of SFAS 123 to require prominent disclosure in both the


                                       11
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

annual and  interim  financial  statements  about the method of  accounting  for
stock-based  compensation and the effect of the method used on reported results.
The  transitional  requirements  of SFAS  148 are  effective  for all  financial
statements  for fiscal  years ending  after  December  15, 2002.  We adopted the
disclosure portion of this statement in the fiscal quarter ended March 31, 2003.
The  application of the disclosure  portion of this standard will have no impact
on our consolidated  financial position or results of operations.  The Financial
Accounting Standards Board recently indicated that they will require stock-based
employee  compensation  to be recorded as a charge to earnings  during 2004.  We
will continue to monitor their progress on the issuance of this standard as well
as evaluate our position with respect to current guidance.

If the  Company had elected to  recognize  compensation  cost at the grant date,
based on the fair value of the options granted,  in 2004 and 2003, as prescribed
by SFAS 123,  the  Company's  net loss and loss per share for the periods  ended
June 30,  2004 and 2003 would  approximate  the pro forma  amounts as  indicated
below:

                                    For the six months ended June 30,
                                          2004          2003
                                      -----------    -----------

Net loss - as reported                $(1,008,475)   $(1,275,956)
Deduct:  total stock-based
  employee compensation expense
  determined under the fair
  value method, net of related tax
  effects                                 (64,332)      (140,304)
                                      -----------    -----------
Net loss - pro forma                  $(1,072,807)   $(1,416,260)
                                      ===========    ===========


Basic and diluted EPS - as reported   $      (.17)   $      (.21)
Basic and diluted EPS - pro forma     $      (.18)   $      (.24)




                                       12
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                 For the three months ended June 30,
                                         2004        2003
                                      ---------    ---------

Net income (loss) - as reported       $   9,291    $(597,887)
Deduct:  total stock-based
  employee compensation expense
  determined under the fair
  value method, net of related tax
  effects                               (30,199)     (60,094)
                                      ---------    ---------
Net loss - pro forma                  $ (20,908)   $(657,981)
                                      =========    =========


Basic and diluted EPS - as reported   $     .00    $    (.10)
Basic and diluted EPS - pro forma     $     .00    $    (.11)

The fair  value of each  grant is  estimated  using  the  Black-Scholes  Options
Pricing Model with the following assumptions:  risk free interest rate of 4.25%,
expected  life of 5 years and  dividend  yield of 0% for all grants and expected
volatility of 5% in 2003.  There were no options  granted  during the six months
ended June 30, 2004.

(9) Supplemental Cash Flow Information:

Cash paid for  interest  and income  taxes  during the six months ended June 30,
2004 and 2003 was as follows:

                                                    2004       2003
                                                  --------   --------

Interest                                          $152,000   $154,000
                                                  ========   ========

Income Taxes                                      $ 72,000   $ 78,000
                                                  ========   ========


                                       13
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(10) Provision for Income Taxes (Income Tax Benefit)

Medialink's  effective tax rates were  significantly  impacted by the accounting
for the losses from foreign operations. The income tax benefit (expense) amounts
in 2004 and 2003 were calculated using Medialink's effective tax rates on its US
pretax earnings of 41% in all periods presented. In addition, both 2004 and 2003
the  Company  was also  subject  to minimum  state and local  taxes and taxes on
capital.  Additionally,  as a result of the limited historical results of its UK
operations,  including  Teletrax(TM) and management's limited ability to project
its UK future  results,  the  Company  has  recorded a  valuation  allowance  of
($5,000) and $174,000 for the three and six month  periods  ended June 30, 2004,
respectively,  and $104,000  and  $223,000  for the three and six month  periods
ended June 30, 2003,  respectively,  which completely offset the related foreign
deferred  tax  asset  generated  by  its UK  losses.  Recording  the  additional
valuation   allowance  and  the  minimum  state  and  local  taxes  resulted  in
consolidated effective tax rates of 87% and (14%) in the three months ended June
30, 2004 and 2003,  respectively and (8%) and (14%) in the six months ended June
30, 2004 and 2003.

(11)     Liquidity

The  Company had  suffered  recurring  losses for the  three-year  period  ended
December  31, 2003 and through  March 31, 2004,  and has  reported  positive net
income for the second  quarter  ended June 30, 2004.  At December 31, 2003,  the
Company was not in compliance with the minimum tangible net worth covenant under
the Company's line of credit  agreement,  which was waived by the lender through
April 15,  2004  through the  issuance of a  forbearance.  The  forbearance  was
extended  through  January 31, 2005.  The covenants  under the  forbearance  are
discussed  further  in  note  6.  Based  on  its  2004  projections,  management
anticipates  that it will remain in  compliance  with these  revised  covenants.
Management will take all necessary steps to meet these  projections.  Should the
Company  be unable to meet its  projections,  management  will take  appropriate
measures, which could include seeking alternative sources of funding, including,
the factoring of receivables or the sale of a division, or headcount reductions.


                                       14
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

RESULTS OF OPERATIONS

Summary and Outlook

For the first  half of 2004  revenue  for the  Company  was  relatively  flat as
compared  to 2003.  The public  relations  industry  continued  to show signs of
rebounding  during  the  second  quarter  of 2004  and  client  activity  in the
Company's principal media  communications and research  communications  services
recorded  strong  performance  despite a  significant  decline  in demand on its
strategic services as a result of fewer issues-related needs from one client.

For the second quarter of 2004 revenues from  Medialink's  core services,  Media
Communications and Media Research services, increased $96,000, or 1% as compared
to 2003.  At the same  time,  the  Company  has  continued  to invest in its new
Teletrax(TM)  service and  increased  revenue  from its  Teletrax(TM)  services,
excluding sales of equipment,  by $193,000, from $122,000 in 2003 to $315,000 in
2004.

During  the  second  quarter  the  Company  continued  to focus its  efforts  on
maintaining  the operating  efficiencies  it  implemented  over the past several
quarters and continued to create new efficiencies, maintaining high gross profit
margins,  reducing its headcount,  where  practicable,  and identifying  further
savings in selling, general and administrative expenses ("S, G & A").

The Company finances its operations from cash generated from operations and from
its line of credit  facility.  During  2003 the  Company  was in  default of its
tangible net worth covenant under the line of credit  facility and, during 2004,
in accordance with provisions under its line of credit,  the Company reduced its
outstanding  borrowings  under the line by $1.0  million  to $4.0  million.  The
Company  believes the current line of credit  facility,  in conjunction with the
costs  savings  implemented  in 2003  and  2004,  will be  adequate  to fund the
Company's needs during 2004. The Company has agreed to find additional financing
to fund the operations of Teletrax(TM) by January 15, 2005.


                                       15
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Six months ended June 30, 2004 compared to Six months ended June 30, 2003

Revenues for the six months ended June 30, 2004 ("2004") were $22.58  million as
compared $22.65 million for the six months ended June 30, 2003 ("2003"),  broken
out as follows:

                                             (in thousands)
                                    For the Six Months Ended June 30,
                                  --------------------------------------
                                   2004      2003     Change        %
                                  -------   -------   -------    -------


Media Communication Services      $17,469   $18,054   $  (585)        (3%)
Research Communication Services     4,286     4,331       (45)        (1%)

Teletrax:
Service Revenue                       583       215       368        171%
Equipment Sales                       238        54       184        341%
                                  -------   -------   -------    -------
Total Teletrax                        821       269       552        205%
                                  -------   -------   -------    -------

Total Revenue                     $22,576   $22,654   $   (78)        (0%)
                                  =======   =======   =======    =======


While the Company  detected a slight rebound in spending in the public relations
industry  during the first  quarter and stronger  into the second  quarter,  the
Company  experienced  a  decrease  in demand  for its  strategic  services  as a
significant  client had fewer  issue-related  needs  during  2004 as compared to
2003.

Direct costs  increased by $55,000,  or 1%, from $7.38  million in 2003 to $7.44
million in 2004.  Included in direct  costs were direct  costs  associated  with
Teletrax  Service  Revenue of $440,000 and $249,000,  respectively,  in 2004 and
2003, and direct costs associated with Teletrax  equipment sales of $161,000 and
$46,000,  respectively,  in 2004 and 2003. The Company's gross profit percentage
was 67% in both 2004 and 2003. The Company was able to maintain its gross profit
margins as a result of  continued  adjustments  the  Company  made over the last
several quarters to its direct cost structure,  including  renegotiating  vendor
rates and improving the efficiency of its operating processes.

Selling, general and administrative expenses ("S, G & A") decreased by $966,000,
or 6%, from $15.29 million in 2003 to $14.32 million in 2004. The decrease in S,
G & A includes  decreases in payroll and  payroll-related  costs  ("Payroll") of
approximately  $482,000.  Included  in 2003  Payroll  was  $430,000  related  to
termination costs. Not including the decrease in Payroll,  the Company decreased
its S, G & A expenses by $483,000,  substantially the result of reduced spending
on advertising  and marketing,  travel and  entertainment,  insurance,  rent and
office costs.

Depreciation and amortization expense increased by $165,000,  or 15%, from $1.12
million  in  2003 to  $1.28  million  in  2004.  Included  in  depreciation  and
amortization  is  depreciation  related to Teletrax of $264,000  and $162,000 in
2004 and 2003,  respectively.  The  increase  was due to fixed  asset  additions
during  the  last  twelve  months,  substantially  related  to  the  rollout  of
Teletrax(TM).


                                       16
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

During 2004 the Company  recorded a loss on the  impairment  of  investments  of
$342,000 related to two investments accounted for under the equity cost method.

As a result of the  foregoing,  the Company had an operating loss of $946,000 in
2004 as compared to an operating  loss of $1.32  million in 2003.  The operating
loss in 2004 and 2003  included  operating  losses  of $1.00  million  and $1.35
million,  respectively,  from the Company's 76% owned subsidiary,  Teletrax(TM),
which was formed in April 2002. The minority  shareholder of Teletrax(TM) has no
future funding  obligations and,  accordingly,  the Company has recorded 100% of
the loss from this subsidiary.

Income tax benefit was calculated  using  Medialink's  effective tax rates on US
pretax  earnings of 41% in both 2004 and 2003. In both 2004 and 2003 the Company
was also  subject  to  minimum  state  and local  taxes  and  taxes on  capital.
Additionally,  as  a  result  of  the  limited  historical  results  of  its  UK
operations,  including  Teletrax(TM) and management's limited ability to project
its UK future  results,  the Company has recorded a valuation  allowance of $1.1
million related to the foreign deferred tax asset generated by its cumulative UK
losses. Tax assets are recognized based upon expected taxable income.  Recording
the additional valuation allowance and the minimum state and local taxes reduces
the effective tax rates to 8% and 14% in 2004 and 2003, respectively.

The Company had a net loss of $1.01 million in 2004 as compared to a net loss of
$1.28  million  in 2003.  In 2004  the  Company  had a loss  per  share of $0.17
compared to a loss per share of $0.21 in 2003.


                                       17
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Three months ended June 30, 2004 compared to Three months ended June 30, 2003

Revenues  for the three  months  ended June 30, 2004 (the "2004  Quarter")  were
$12.01  million as compared  $11.69  million for the three months ended June 30,
2003 (the "2003 Quarter"), broken out as follows:

                                              (in thousands)
                                    For the Three Months Ended June 30,
                                  --------------------------------------
                                   2004      2003     Change        %
                                  -------   -------   -------    -------

Media Communication Services      $ 9,410   $ 9,471   $   (61)        (1%)
Research Communication Services     2,206     2,049       157          8%

Teletrax:
Service Revenue                       315       122       193        158%
Equipment Sales                        77        51        26         51%
                                  -------   -------   -------    -------
Total Teletrax                        392       173       219        127%
                                  -------   -------   -------    -------

Total Revenue                     $12,008   $11,693   $   315          3%
                                  =======   =======   =======    =======

While the Company  experienced strong performances from its core services from a
continuing  rebound in spending in the public  relations  industry,  the Company
experienced a significant  decrease in demand for its strategic  services as one
of its'  clients  had fewer  issue-related  needs  during  the 2004  Quarter  as
compared to the 2003 Quarter.

Direct  costs  increased  by  $326,000,  or 9%,  from $3.84  million in the 2003
Quarter to $4.16  million in the 2004  Quarter.  Included  in direct  costs were
direct costs  associated with Teletrax Service Revenue of $253,000 and $148,000,
respectively,  in the 2004 and 2003  Quarters and direct costs  associated  with
Teletrax equipment sales of $43,000 and $41,000,  respectively,  in the 2004 and
2003 Quarters. The Company's gross profit percentage was 65% and 67% in the 2004
Quarter and the 2003  Quarter,  respectively.  The  decrease in the gross profit
percentage was due to product mix, primarily as a result of a decrease in demand
on our  strategic  services.  The Company was able to remain  within its desired
gross  profit  margin  range due to  adjustments  the Company made over the last
several quarters to its direct cost structure,  including  renegotiating  vendor
rates and improving the efficiency of its operating processes.

S, G & A decreased by $792,000,  or 10%,  from $7.82 million in the 2003 Quarter
to $7.03  million  in the 2004  Quarter.  The  decrease  in S, G & A  includes a
decrease in payroll  and  payroll-related  costs  ("Payroll")  of  approximately
$579,000.  Included in Payroll  for the 2003  Quarter  was  $430,000  related to
termination costs.  Excluding the decrease in Payroll, the Company decreased its
S, G & A expenses by $212,000.  This  decrease was  substantially  the result of
reduced spending in advertising and marketing,  travel and  entertainment,  rent
and office costs.


                                       18
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Depreciation and amortization expense increased by $51,000, or 9%, from $580,000
in the 2003 Quarter to $631,000 in the 2004  Quarter.  Included in  depreciation
and amortization is depreciation related to Teletrax of $134,000 and $100,000 in
the 2004 Quarter and 2003 Quarter,  respectively.  The increase was due to fixed
asset  additions  during the last twelve  months,  substantially  related to the
rollout of Teletrax(TM).

As a result of the foregoing, the Company had an operating income of $142,000 in
the 2004  Quarter as  compared  to an  operating  loss of  $633,000  in the 2003
Quarter.  The operating income (loss) in 2004 and 2003 included operating losses
of $489,000 and $732,000, respectively, from the Company's 76% owned subsidiary,
Teletrax(TM),  which was  formed in April  2002.  The  minority  shareholder  of
Teletrax(TM) has no future funding obligations and, accordingly, the Company has
recorded 100% of the loss from this subsidiary.

Provision for income taxes (income tax benefit) was calculated using Medialink's
effective tax rates on US pretax  earnings of 41% in both 2004 and 2003. In both
2004 and 2003 the Company was also subject to minimum  state and local taxes and
taxes on capital. Additionally, as a result of the limited historical results of
its UK operations,  including  Teletrax(TM) and management's  limited ability to
project its UK future results, the Company has recorded a valuation allowance of
$1.1  million  related  to the  foreign  deferred  tax  asset  generated  by its
cumulative UK losses.  Tax assets are  recognized  based upon  expected  taxable
income.  Recording the additional  valuation allowance and the minimum state and
local  taxes  increase  the  effective  tax rate to 86% in the 2004  Quarter and
reduces the effective tax rate to 14% in the 2003 Quarter.

The  Company  had net income of $9,000 in the 2004  Quarter as compared to a net
loss of $598,000  in the 2003  Quarter.  In 2004 the  Company  had a  break-even
earnings per share compared to a loss per share of $0.10 in 2003.

LIQUIDITY AND CAPITAL RESOURCES

Medialink has financed its  operations  primarily  through cash  generated  from
operations  and  its  line of  credit  facility.  Net  cash  used  in  operating
activities  amounted to $263,000  for the six month  period ended June 30, 2004,
while net cash used in operating  activities for the  comparable  period in 2003
was $1.36 million.  The change was the result of the changes in operating assets
and  liabilities.  Most  notably,  during  the six months  ended  June 30,  2004
accounts  receivable  increased $460,000 as compared to the comparable period in
2003 where accounts  receivable  increased $1.51 million.  Capital  expenditures
which are primarily  incurred to support the Company's  sales and operations and
the  continuing  roll-out  of the  Teletrax(TM)  network  were  $456,000 in 2004
compared to $1.06  million in 2003.  Cash flows  related to earn out payments on
the Company's various acquisitions  amounted to $341,000 in 2003. As of June 30,
2003 and 2004 the Company had no future  obligation for earn-out payments on its
acquisitions.


                                       19
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

The  Company  has a line  of  credit  facility  with a bank  which  allowed  for
borrowings  of up to $7.50  million  through  April 15,  2004.  At June 30, 2004
maximum  borrowing  under the line of credit was $4.00 million.  Loans under the
Credit  Facility bore interest at the 30-Day LIBOR Rate (1.36% at June 30, 2004)
plus 2.25%  through  3.25% per annum,  as defined.  Covenants  under the line of
credit agreement require the Company to meet certain financial ratios, including
minimum  tangible  net  worth  and  minimum  earnings  before  interest,  taxes,
depreciation,  amortization and other charges,  as defined in the agreement.  At
December 31, 2003 the Company was not in  compliance  with the minimum  tangible
net worth  covenant  which was been waived by the lender  through April 15, 2004
through the issuance of a forbearance. In conjunction with the forbearance,  the
lender  required the Company to pay down its line of credit by $500,000,  reduce
the maximum  borrowings under the facility to $5.00 million and put into place a
minimum cash balance and limits on capital expenditure covenants,  as defined in
the forbearance.

In April 2004 the bank  issued an  additional  forbearance  (the  "Forbearance")
expiring January 31, 2005. The Forbearance reduces the maximum line to the lower
of (i) $4.00 million,  $3.75  million,  $3.50 million and $3.00 million at April
15, 2004, July 1, 2004, October 1, 2004 and December 31, 2004, respectively,  or
(ii)  80%  of  eligible  accounts  receivable   balances,   as  defined  in  the
Forbearance.  Interest under the  Forbearance is payable  monthly at the rate of
the  30-Day  LIBOR  Rate plus 5.5% per annum.  Covenants  under the  Forbearance
include limits on capital expenditures, minimum earnings before interest, taxes,
depreciation  and amortization and minimum tangible net worth, as defined in the
agreement.   Additionally,  the  Forbearance  requires  the  Company  to  obtain
financing by January 15, 2005 to support its Teletrax(TM)'s operations.

As of June 30, 2004 Medialink had $1.46 million in cash and cash  equivalents as
compared to $3.71 million as of December 31, 2003. In addition,  the Company had
a  balance  due under its line of credit  facility  of $4.00  million  and $5.50
million at June 30, 2004 and December 31,  2003,  respectively.  The decrease in
cash and cash equivalents of $2.25 million includes purchases of fixed assets of
$456,000,  and pay  downs,  net of  borrowings  on its line of  credit  facility
aggregating $1.50 million.  The remaining change was substantially  attributable
to the changes in its operating assets and liabilities.

The Company believes,  based upon its financial forecast, that it has sufficient
capital  resources,  including  availability  under its line of credit facility,
alternate  sources of funding,  and cash flow from  operations,  to fund its net
cash needs for at least the next twelve  months.  The Company also believes that
in the event that actual 2004  revenues  are lower than its  forecast,  that the
Company's Direct,  Selling,  General and Administrative  costs can be reduced to
minimize the effect on forecasted results.

Contractual Obligations
There were no material  changes to our contractual  obligations  during the 2004
Quarter. For information  regarding our contractual  obligations at December 31,
2003,  see our Annual Report on Form 10-K for the fiscal year ended December 31,
2003.


                                       20
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Off Balance Sheet Arrangements
We do not have any off-balance  sheet  arrangements  that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources that are material to investors.


RISK FACTORS

Major News Events
Events which dominate news broadcasts,  such as the events of September 11, 2001
and the war in Iraq,  may cause the  Company's  clients  to delay or not use the
Company's  services for a particular project as these clients may determine that
their  messages may not receive  adequate  attention in light of the coverage of
other news events.  These  circumstances could have a material adverse effect on
the Company's business, operating results and financial condition.

Susceptibility to General Economic Conditions
The Company's  revenues are affected by its clients'  marketing  communications,
spending  and  advertising  budgets.  The  Company's  revenues  and  results  of
operations may be subject to fluctuations based upon general economic conditions
in the  geographic  locations  where it offers its services or  distributes  its
material.  If  there  were to be  continued  economic  downturn  or a  continued
recession in these  geographic  locations,  the Company  expects  that  business
enterprises,  including its clients and potential clients,  could  substantially
and immediately reduce their marketing and communications  budgets. In the event
of such an economic  climate,  there would be a material  adverse  effect on the
Company's  business,  operating  results,  financial  condition  and  ability to
refinance its existing line of credit agreement.

Competition
The markets for the  Company's  services are highly  competitive.  The principal
competitive factors affecting the Company are effectiveness, reliability, price,
technological  sophistication  and  timeliness.   Numerous  specialty  companies
compete with the Company in each of its service lines although no single company
competes  across  all  service  lines.  Some  of the  Company's  competitors  or
potential   competitors   have  longer   operating   histories,   longer  client
relationships and significantly  greater financial,  management,  technological,
sales,  marketing and other  resources  than the Company.  In addition,  clients
could perform  internally all or certain of the services provided by the Company
rather than outsourcing  such services.  The Company could face competition from
companies in related  communications markets which could offer services that are
similar or superior to those offered by the Company.  In addition,  national and
regional  telecommunications  providers  could enter the market with  materially
lower electronic  delivery costs,  and radio and television  networks could also
begin transmitting business communications separate from their news programming.
The Company's  ability to maintain and attract  clients depends to a significant
degree on the quality of services  provided and its reputation among its clients
and potential  clients as compared to that of its  competitors.  There can be no
assurance that the Company will not face increased  competition in the future or
that such  competition  will not have a material adverse effect on the Company's
business, operating results and financial condition.


                                       21
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

New Services
The Company must develop new  services to remain  competitive,  maintain or grow
market share and to operate in new markets.  There can be no assurance  that the
Company  will be  successful  in  developing  new  services,  or that  those new
services  will meet  customer  needs.  As a result of the  expenses  incurred in
developing  new  services and the  potential  inability of the Company to market
these services  successfully,  the Company's operating results may be negatively
affected.

Provisions of Our Charter  Documents May Have  Anti-takeover  Effects that Could
Prevent a Change in Control Even if the Change in Control Would be Beneficial to
our  Stockholders   Provisions  of  our  amended  and  restated  certificate  of
incorporation, by-laws and Delaware law could make it more difficult for a third
party to acquire us, even if doing so would be beneficial to our stockholders.

Line of credit
The  Company  has a line  of  credit  facility  with a bank  which  allowed  for
borrowings  of up to $7.50  million  through  April 15,  2004.  At June 30, 2004
maximum  borrowing  under the line of credit was $4.00 million.  Loans under the
Credit  Facility bore interest at the 30-Day LIBOR Rate (1.36% at June 30, 2004)
plus 2.25% through  3.25%,  per annum,  as defined in the  agreement.  Covenants
under the line of credit agreement require the Company to meet certain financial
ratios,  including  minimum  tangible  net worth  and  minimum  earnings  before
interest, taxes, depreciation, amortization and other charges, as defined in the
agreement.  At December  31, 2003 the  Company  was not in  compliance  with the
minimum  tangible net worth covenant which has been waived by the lender through
April 15, 2004 through the issuance of a forbearance.  In  conjunction  with the
forbearance,  the lender  required the Company to pay down its line of credit by
$500,000,  reduce the maximum borrowings under the facility to $5.00 million and
put into  place a  minimum  cash  balance  and  limits  on  capital  expenditure
covenants, as defined in the forbearance.

In April 2004 the bank  issued an  additional  forbearance  (the  "Forbearance")
expiring January 31, 2005. The Forbearance reduced the maximum line to the lower
of (i) $4.00 million,  $3.75  million,  $3.50 million and $3.00 million at April
15, 2004, July 1, 2004, October 1, 2004 and December 31, 2004, respectively,  or
(ii)  80%  of  eligible  accounts  receivable   balances,   as  defined  in  the
Forbearance.  Interest under the  Forbearance is payable  monthly at the rate of
the  30-Day  LIBOR  Rate plus 5.5% per annum.  Covenants  under the  Forbearance
include limits on capital expenditures, minimum earnings before interest, taxes,
depreciation  and amortization and minimum tangible net worth, as defined in the
agreement.   Additionally,  the  Forbearance  requires  the  Company  to  obtain
financing by January 15, 2005 to support Teletrax(TM)'s operations.

While management believes the Company is currently in compliance with the
covenants under the line of credit agreement and related forbearance agreement,
there can be no assurance that the Company will continue to be in compliance in
the future. In that event, the Company may be required to raise additional funds
in order to repay the outstanding balance under the line of credit and there can
be no assurance that, if required, the Company would be able to raise such funds
on favorable terms, if at all.


                                       22
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Capital Requirements
One or more  of our  businesses  could  require,  or  benefit  from,  additional
investment  beyond our current  capability.  Such  additional  funding  could be
raised by the Company,  or one or more of its  business  units  separately,  and
could have the effect of diluting shareholders' interests.

Other Risk Factors
Other risk factors include our recent history of losses,  our ability to achieve
or maintain  profitability,  effectiveness of our cost reduction  programs,  our
ability to develop new services and market acceptance of such services,  such as
Teletrax(TM),  our ability to develop new products  and services  that keep pace
with technology,  our ability to develop and maintain  successful  relationships
with critical vendors and the potential  negative  effects of our  international
operations on the Company. In addition,  future acquisitions or divestitures and
the absence of long term  contracts  with  customers  and vendors may  adversely
effect our  operations and have an adverse  effect on pricing,  revenues,  gross
margins and our customer base.

CRITICAL ACCOUNTING POLICIES
We have identified the policies below as significant to our business  operations
and  the  understanding  of our  results  of  operations.  The  impact  and  any
associated  risks  related  to these  policies  on our  business  operations  is
discussed throughout Management's Discussion and Analysis of Financial Condition
and Results of Operations  where such policies  affect our reported and expected
financial  results.  For a detailed  discussion on the  application of these and
other accounting policies, see Note 1 in the Notes to the Consolidated Financial
Statements in the Company's Form 10-K for the year ended December 31, 2003.

Revenue Recognition
Revenue earned from the  distribution  and monitoring of video news releases and
the  distribution  of printed news releases is recognized in the period that the
release is  distributed.  Fees earned for  webcasts,  satellite  media tours and
other  live  events  and  the  production  of  video  news  releases  and  still
photographs  are recognized in the period that the services are performed.  Fees
earned from research  services are recognized using the percentage of completion
method.  Invoices to clients are generated in  accordance  with the terms of the
applicable  contract,  which may not be directly  related to the  performance of
services.  Unbilled  receivables  are  invoiced  based upon the  achievement  of
specific events as defined by each agreement including deliverables,  timetables
and  incurrence  of certain  costs.  Unbilled  receivables  are  classified as a
current  asset.  Advanced  billings  to clients in excess of revenue  earned are
recorded as deferred revenues and are classified as a current liability.


                                       23
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Allowance for Doubtful Accounts
Management must make estimates of the uncollectibility of the Company's accounts
receivable. Management specifically analyzes accounts receivable, historical bad
debt, customer concentrations, customer creditworthiness and current trends when
evaluating the adequacy of the allowance for doubtful accounts.

Goodwill and Intangible Assets
Goodwill  represents  the excess of purchase  price and  related  costs over the
value assigned to the net tangible and intangible assets of businesses acquired.
In 2001 and 2000,  goodwill  was  amortized  on a  straight-line  basis over its
expected useful life, not to exceed 40 years,  and we periodically  reviewed the
recoverability of goodwill and intangible assets.  Effective January 1, 2002, we
adopted the provisions of Financial  Accounting Standards Board (FASB) Statement
of Financial  Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
Assets,  which required us to cease  amortizing  goodwill and to assess goodwill
for  impairment  at least  annually in the absence of an  indicator  of possible
impairment and immediately upon an indicator of possible impairment.  The annual
impairment testing required by SFAS No. 142 also requires the Company to use its
judgment and could  require the Company to write down the carrying  value of its
goodwill and other intangible assets in future periods.

Other intangible assets,  including customer lists and covenants not to compete,
are being amortized on a  straight-line  basis over the term of the agreement or
the estimated future period of benefit, which ranges from 3 to 7 1/2 years.

The agreements pursuant to which the Company acquired certain companies included
provisions that could require the Company to issue  additional cash or shares of
common  stock if  certain  performance  targets  are met.  The value of any such
additional  consideration was added to the goodwill related to such acquisition.
As of June 30, 2004 and 2003 the Company had no future commitments on any of its
acquisitions that would result in additional goodwill to be recorded.

Long-lived Assets
Long-lived  assets,  such as  property,  plant,  and  equipment,  and  purchased
intangibles subject to amortization, are reviewed for impairment whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be recoverable.  Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to estimated undiscounted future
cash flows expected to be generated by the asset.  If the carrying  amount of an
asset  exceeds  its  estimated  future  cash  flows,  an  impairment  charge  is
recognized  by the amount by which the carrying  amount of the asset exceeds the
fair value of the asset. Assets to be disposed of would be separately  presented
in the balance  sheet and reported at the lower of the  carrying  amount or fair
value  less  costs  to sell  and  are no  longer  depreciated.  The  assets  and
liabilities of a disposed  group  classified as held for sale would be presented
separately in the appropriate asset and liability sections of the balance sheet.


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MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)

Income Taxes
Income taxes are accounted for under the asset and  liability  method.  Deferred
tax assets  and  liabilities  are  recognized  for the  future tax  consequences
attributable to differences  between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and for operating
loss and tax credit  carryforwards.  Deferred  tax assets  and  liabilities  are
measured  using  enacted tax rates  expected  to apply to taxable  income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled.  The effect on deferred tax assets and  liabilities  of a change in tax
rates is recognized in income in the period that includes the enactment date. We
considered  all of the  available  evidence to arrive at our position on the net
deferred tax assets;  however, should circumstances change which would alter our
judgment in this regard, it may have an impact on future operating results.


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MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Debt
The Company has a line of credit agreement which exposes the Company to the risk
of earnings or cash flow loss due to changes in market  interest  rates. At June
30,  2004,  $4.00  million  was  outstanding  on the line of credit  which has a
maturity date of January 2005.  The interest rate is based upon the 30-day LIBOR
rate plus 5.50%, per annum, as defined in the agreement.  All other Company debt
is fixed-rate and, therefore, does not expose the Company to the risk of earning
or cash flow loss due to changes in market  interest rate. See footnote 6, "Line
of Credit".

Foreign Operations
In the normal  course of  business,  through its UK  operations,  the Company is
exposed to the effect of foreign exchange rate fluctuations on the United States
dollar value of its foreign  subsidiaries'  results of operations  and financial
condition.  At June 30, 2004,  the Company's  primary  foreign  currency  market
exposure was the British pound.

Market Risk
Our accounts  receivables  are  subject,  in the normal  course of business,  to
collection risks. We regularly assess these risks and have established  policies
and business  practices  to protect  against the adverse  effects of  collection
risks. As a result we do not anticipate any material losses in this area.

Item 4.  CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report,  we carried out an  evaluation,
under the supervision and with the participation of our chief executive officer,
principal   accounting  officer  and  principal   financial   officer,   of  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based on this evaluation,  our chief executive  officer,  principal
accounting officer and principal financial officer concluded that our disclosure
controls and  procedures,  as of the date of the  evaluation,  are  effective in
timely  alerting  them to  material  information  required to be included in our
periodic  SEC  reports.  It should  be noted  that the  design of any  system of
controls  is based in part upon  certain  assumptions  about the  likelihood  of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all potential future conditions,  regardless of
how remote.

In  addition,  we  reviewed  our  internal  controls,  and  there  have  been no
significant   changes  in  those   controls  or  in  other  factors  that  could
significantly  affect  those  controls  subsequent  to the  date of  their  last
evaluation.


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MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings.

                           From time to time, the Company becomes involved in
         various legal matters that the Company considers to be in the ordinary
         course of business. While the Company is not presently able to
         determine the potential liability, if any, related to any such matters,
         the Company believes that none of such matters, individually or in the
         aggregate, will have a material adverse effect on its financial
         position.

ITEM 2.  Changes in Securities, and Use of Proceeds and Issuer Purchases of
         Equity Securities.

         None

ITEM 3.  Defaults Upon Senior Securities.

         None

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

         None

ITEM 5.  Other Information.

         None

ITEM 6.  Exhibits and Reports on Form 8-K.

         (a) Exhibits:

            31.1  Certifications  pursuant to Section 302 of the  Sarbanes-Oxley
                  Act of 2002.


            31.2  Certification  pursuant to Section  302 of the  Sarbanes-Oxley
                  Act of 2002.

            32.2  Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         (b)Report on Form 8-K:

            Report  on Form 8-K dated May 4,  2004  regarding  earnings  for the
            three months ended March 31, 2004.


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MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

                                   SIGNATURES

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

                  MEDIALINK WORLDWIDE INCORPORATED

                By: /s/ Laurence Moskowitz
                    ----------------------
                    Laurence Moskowitz,
                    Chairman of the Board, Chief Executive Officer and President

                By: /s/ J. Graeme McWhirter
                    -----------------------
                    J. Graeme McWhirter
                    Executive Vice President, Assistant Secretary,
                    Chief Financial Officer and Director

Dated: August 13, 2004


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