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UNITED
  STATES
  SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
  D.C. 20549

FORM 10-Q


| |                                                                 | (Mark
      One)
| | --------------------------------------------------------------- | ----------------
| |                                                                 |                 
| |                                                                 |                 
| |                                                                 |                 
| | For
        the quarterly period ended June 30, 2004           
| |                                                                 |                 
| | OR                                                             
| |                                                                 |                 
| |                                                                 |                 
| |                                                                 |                 
| |                                                                 |                 
| | For
        the transition period from __________ to __________
| |                                                                 |                 
| | Commission
        File Number 000-25469                       
| |                                                                 |                 

iVillage
  Inc.(Exact Name of Registrant
  as Specified in Its Charter)

|                                                                                                   |                                                        
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------
|Delaware(State or Other
      Jurisdiction of
      Incorporation
      or Organization)           | 13-3845162(IRS Employer
      Identification
      No.)
|                                                                                                   |                                                        
|500 Seventh
      Avenue, New York, New York                                                       | 10018                                                  
|(Address of
      Principal Executive Offices)                                                     | (Zip
Code)                                             
|                                                                                                   |                                                        
|(212)
      600-6000                                                                              
|(Registrants
      Telephone Number, Including Area Code)                                        
|                                                                                                   |                                                        
|                                                                                                  
|(Former
          Name, Former Address and Former Fiscal Year, if Changed since Last
      Report)

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        No


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


As of August 11, 2004, the registrant had outstanding 71,460,441 shares of
common stock.


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iVillage
  Inc.
  Form 10-QFor the Quarter
  ended June 30, 2004

INDEX

|              |    |                                                                                                                          | Page
|------------- | -- | ------------------------------------------------------------------------------------------------------------------------ | ----
|PART
    I.   |    | FINANCIAL
           INFORMATION                                                                                         |     
|              |    |                                                                                                                          |     
|Item 1.       |    | Financial Statements (Unaudited):                                                                                        |     
|              |    |                                                                                                                          |     
|              |    | Condensed
    Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003                                      | 1   
|              |    |                                                                                                                          |     
|              |    | Condensed
           Consolidated Statements of Operations for the three and six months
    ended June 30, 2004 and 2003 | 2   
|              |    |                                                                                                                          |     
|              |    | Condensed
           Consolidated Statements of Cash Flows for the three and six months
    ended June 30, 2004 and 2003 | 3   
|              |    |                                                                                                                          |     
|              |    | Notes
    to Condensed Consolidated Financial Statements                                                                 | 4   
|              |    |                                                                                                                          |     
|              |    |                                                                                                                          |     
|Item 2.       |    | Managements
         Discussion and Analysis of Financial Condition and Results of
         Operations                  | 16  
|              |    |                                                                                                                          |     
|Item 3.       |    | Quantitative and Qualitative Disclosures About Market Risk                                                               | 56  
|              |    |                                                                                                                          |     
|Item 4.       |    | Controls and Procedures                                                                                                  | 56  
|              |    |                                                                                                                          |     
|PART II.      |    | OTHER INFORMATION                                                                                                        |     
|              |    |                                                                                                                          |     
|Item
      6. |    | Exhibits
      and Reports on Form 8-K                                                                                   | 57  
|              |    |                                                                                                                          |     
|Signatures    | 58
|              |    |                                                                                                                          |     
|Exhibit Index | 59

TRADEMARKS

iVillage®, iVillage.com®, gURL.com®, Newborn Channel®, WebStakes.com®, iVillage Consulting®, iVillage Solutions® and iVillageAccess® are registered trademarks of iVillage Inc. The stylized iVillage logo, the Internet for Women, Astrology.com, Baby Steps, Public Affairs Group, Inc., Business Womens Network, Business Womens Network Government, Diversity Best Practices, Best Practices In Corporate Communications and Promotions.com are trademarks of iVillage Inc. All other brand names, trademarks or service marks referred to in this report are the property of their owners.


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PART IFINANCIAL INFORMATION

Item
1.  Financial Statements.

iVillage Inc. and Subsidiaries
  Condensed Consolidated Balance Sheets(in thousands,
  except share data)
  (Unaudited)



|                                                                                                                                                                                                                                                                                               | June
         30,
2004 |          | December
         31,
2003 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | -------- | -------------------------- | -
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Assets                                                                                                                                                                                                                                                                                         |                        |          |                            |  
|Current assets:                                                                                                                                                                                                                                                                                |                        |          |                            |  
|Cash and cash equivalents.                                                                                                                                                                                                                                                                     | $                      | 17,438   |                            | $
|Accounts
    receivable, less allowance for doubtful accounts of $1,099 and $1,134 as
    of June 30, 2004 and December 31, 2003, respectively                                                                                                                                                 |                        | 7,447    |                            |  
|Accounts receivable – related parties                                                                                                                                                                                                                                                          |                        | 1,041    |                            |  
|Prepaid rent                                                                                                                                                                                                                                                                                   |                        | 318      |                            |  
|Other current assets                                                                                                                                                                                                                                                                           |                        | 4,343    |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Total current assets                                                                                                                                                                                                                                                                           |                        | 30,587   |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Fixed assets, net                                                                                                                                                                                                                                                                              |                        | 7,447    |                            |  
|Goodwill, net                                                                                                                                                                                                                                                                                  |                        | 22,580   |                            |  
|Intangible assets, net                                                                                                                                                                                                                                                                         |                        | 9,662    |                            |  
|Prepaid rent, net of current portion                                                                                                                                                                                                                                                           |                        | 3,279    |                            |  
|Other assets                                                                                                                                                                                                                                                                                   |                        | 158      |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Total assets                                                                                                                                                                                                                                                                                   | $                      | 73,713   |                            | $
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Liabilities
    and Stockholders Equity                                                                                                                                                                                                                                                       |                        |          |                            |  
|Current liabilities:                                                                                                                                                                                                                                                                           |                        |          |                            |  
|Accounts payable and accrued expenses                                                                                                                                                                                                                                                          | $                      | 10,291   |                            | $
|Accounts payable and accrued expenses – related
    parties                                                                                                                                                                                                                                    |                        | 247      |                            |  
|Deferred revenue                                                                                                                                                                                                                                                                               |                        | 3,904    |                            |  
|Deferred rent                                                                                                                                                                                                                                                                                  |                        | 144      |                            |  
|Other current liabilities.                                                                                                                                                                                                                                                                     |                        | 97       |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Total current liabilities                                                                                                                                                                                                                                                                      |                        | 14,683   |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Deferred rent, net of current portion                                                                                                                                                                                                                                                          |                        | 1,411    |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Total liabilities                                                                                                                                                                                                                                                                              |                        | 16,094   |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Commitments and contingencies (Note 7)                                                                                                                                                                                                                                                         |                        |         |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Stockholders equity:                                                                                                                                                                                                                                                                          |                        |          |                            |  
|Preferred
    stock  par value $.01, 5,000,000 shares authorized; no shares issued
    and outstanding as of June 30, 2004 and December 31, 2003, respectively                                                                                                                                |                        |         |                            |  
|Common stock
       – par value $.01, 200,000,000 shares authorized; 60,273,349 and
       57,233,470 shares issued at June 30, 2004 and
    December 31, 2003, respectively;
    59,269,903 and 56,230,024 shares outstanding as of
    June 30, 2004
    and December 31, 2003, respectively |                        | 603      |                            |  
|Additional paid-in capital                                                                                                                                                                                                                                                                     |                        | 552,116  |                            |  
|Treasury stock at cost (1,003,446 shares)                                                                                                                                                                                                                                                      |                        | (430     | )                          |  
|Stockholders notes receivable                                                                                                                                                                                                                                                                 |                        | (44      | )                          |  
|Accumulated deficit                                                                                                                                                                                                                                                                            |                        | (494,626 | )                          |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Total
    stockholders equity                                                                                                                                                                                                                                                                 |                        | 57,619   |                            |  
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  
|Total liabilities and stockholders equity                                                                                                                                                                                                                                                     | $                      | 73,713   |                            | $
|                                                                                                                                                                                                                                                                                               |                        |          |                            |  

The accompanying notes are an integral part of these condensed consolidated financial statements

1

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iVillage
Inc. and SubsidiariesCondensed
Consolidated Statements of Operations(in
thousands, except per share amounts)
(Unaudited)

|                                                                      | Three
         months ended
June 30, |        |   | Six
         months ended
June 30, |        
|--------------------------------------------------------------------- | ------------------------------------ | ------ | - | ---------------------------------- | -------
|                                                                      |                                      |        |   |                                   
|                                                                      |                                      | 2004   |   |                                    | 2003   
|                                                                      |                                      |        |   |                                    |        
|Revenues:                                                             |                                      |        |   |                                    |        
|Revenues                                                              | $                                    | 14,523 |   | $                                  | 11,583 
|Revenues  related parties                                            |                                      | 1,975  |   |                                    | 1,621  
|                                                                      |                                      |        |   |                                    |        
|Total revenues                                                        |                                      | 16,498 |   |                                    | 13,204 
|                                                                      |                                      |        |   |                                    |        
|Operating expenses:                                                   |                                      |        |   |                                    |        
|Editorial, product development and technology                         |                                      | 7,013  |   |                                    | 7,054  
|Sales and marketing                                                   |                                      | 4,723  |   |                                    | 5,033  
|Sales and marketing  Hearst
    Communications, Inc.                 |                                      |       |   |                                    |       
|General and administrative                                            |                                      | 2,885  |   |                                    | 3,065  
|Lease
    restructuring charge and related impairment of fixed assets |                                      |       |   |                                    | 4,025  
|Depreciation and amortization                                         |                                      | 1,953  |   |                                    | 2,225  
|Impairment
    of goodwill, intangible assets and fixed assets        |                                      |       |   |                                    | 4,029  
|                                                                      |                                      |        |   |                                    |        
|Total operating expenses                                              |                                      | 16,574 |   |                                    | 25,431 
|                                                                      |                                      |        |   |                                    |        
|Loss from operations                                                  |                                      | (76    | ) |                                    | (12,227
|Interest income, net                                                  |                                      | 50     |   |                                    | 41     
|Other income, net                                                     |                                      | 34     |   |                                    |       
|Gain on sale of joint venture interest                                |                                      | 76     |   |                                    | 200    
|                                                                      |                                      |        |   |                                    |        
|Net income (loss) before minority interest                            |                                      | 84     |   |                                    | (11,986
|Minority interest                                                     |                                      |       |   |                                    | (73    
|                                                                      |                                      |        |   |                                    |        
|Net income (loss)                                                     | $                                    | 84     |   | $                                  | (12,059
|                                                                      |                                      |        |   |                                    |        
|Per share data:                                                       |                                      |        |   |                                    |        
|Basic net income (loss) per share                                     | $                                    | 0.00   |   | $                                  | (0.22  
|                                                                      |                                      |        |   |                                    |        
|Diluted net income (loss) per share                                   | $                                    | 0.00   |   | $                                  | (0.22  
|                                                                      |                                      |        |   |                                    |        
|Weighted average shares of common stock outstanding                   |                                      |        |   |                                    |        
|used in computing basic net income (loss) per share                   |                                      | 59,079 |   |                                    | 55,550 
|                                                                      |                                      |        |   |                                    |        
|Weighted average shares of common stock outstanding                   |                                      |        |   |                                    |        
|used in computing diluted net income (loss) per share                 |                                      | 64,425 |   |                                    | 55,550 
|                                                                      |                                      |        |   |                                    |        

The accompanying notes are an integral part of these condensed consolidated financial statements

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iVillage Inc.
and SubsidiariesCondensed
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

|                                                                 | Three
         months ended
June 30, |        |   | Six
         months ended
June 30, |        
|---------------------------------------------------------------- | ------------------------------------ | ------ | - | ---------------------------------- | -------
|                                                                 |                                      |        |   |                                   
|                                                                 |                                      | 2004   |   |                                    | 2003   
|                                                                 |                                      |        |   |                                    |        
|Cash flows from operating activities:                            |                                      |        |   |                                    |        
|Net income (loss)                                                | $                                    | 84     |   | $                                  | (12,059
|Adjustments to reconcile net income (loss) to net cash           |                                      |        |   |                                    |        
|provided by (used in) operating activities:                      |                                      |        |   |                                    |        
|                                                                 |                                      |        |   |                                    |        
|Impairment of goodwill, intangible assets and fixed assets       |                                      |       |   |                                    | 4,029  
|Depreciation and amortization                                    |                                      | 1,953  |   |                                    | 2,225  
|Deferred rent amortization                                       |                                      | (36    | ) |                                    | (82    
|Bad debt expense                                                 |                                      |       |   |                                    | 90     
|                                                                 |                                      |        |   |                                    |        
|Non-cash print advertising expense                               |                                      |       |   |                                    |       
|Expense recognized in connection with                            |                                      |        |   |                                    |        
|issuance/modification of terms of stock options                  |                                      | 19     |   |                                    | 29     
|Minority
    interest                                            |                                      |       |   |                                    | 73     
|Lease restructuring charge and related impairment of fixed       |                                      |        |   |                                    |        
|assets                                                           |                                      |       |   |                                    | 4,025  
|Gain on
    sale of joint venture interest                       |                                      | (76    | ) |                                    | (200   
|Changes in operating assets and liabilities:                     |                                      |        |   |                                    |        
|Accounts receivable                                              |                                      | (1,871 | ) |                                    | (1,727 
|Prepaid rent                                                     |                                      | 37     |   |                                    |       
|Restricted cash and other assets                                 |                                      | (423   | ) |                                    | 45     
|Accounts payable and accrued expenses                            |                                      | 1,020  |   |                                    | 109    
|Lease restructuring                                              |                                      |       |   |                                    | (31    
|Deferred revenue                                                 |                                      | 753    |   |                                    | 1,593  
|                                                                 |                                      |        |   |                                    |        
|                                                                 |                                      |        |   |                                    |        
|Net cash provided by (used in) operating activities              |                                      | 1,460  |   |                                    | (1,881 
|                                                                 |                                      |        |   |                                    |        
|Cash flows from investing activities:                            |                                      |        |   |                                    |        
|Purchase of fixed assets                                         |                                      | (1,064 | ) |                                    | (175   
|Cash
         paid less cash acquiredfor
         acquisition of |                                      |        |   |                                    |        
|Promotions.com, Inc.                                             |                                      |       |   |                                    |       
|Proceeds from the sale of joint venture interest                 |                                      | 76     |   |                                    | 75     
|                                                                 |                                      |        |   |                                    |        
|                                                                 |                                      |        |   |                                    |        
|Net cash used in investing activities                            |                                      | (988   | ) |                                    | (100   
|                                                                 |                                      |        |   |                                    |        
|Cash flows from financing activities:                            |                                      |        |   |                                    |        
|Proceeds
    from exercise of stock options and warrants         |                                      | 518    |   |                                    | 67     
|Principal payments on stockholders notes receivable             |                                      | 83     |   |                                    | 14     
|                                                                 |                                      |        |   |                                    |        
|Net cash provided by financing activities                        |                                      | 601    |   |                                    | 81     
|                                                                 |                                      |        |   |                                    |        
|                                                                 |                                      |        |   |                                    |        
|Net increase (decrease) in cash for the period                   |                                      | 1,073  |   |                                    | (1,900 
|Cash and cash equivalents, beginning of period                   |                                      | 16,365 |   |                                    | 18,866 
|                                                                 |                                      |        |   |                                    |        
|Cash and cash equivalents, end of period                         | $                                    | 17,438 |   | $                                  | 16,966 
|                                                                 |                                      |        |   |                                    |        

The accompanying notes are an integral part of these condensed consolidated financial statements

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iVillage
  Inc. and Subsidiaries
  Notes to Condensed Consolidated Financial Statements
  (Unaudited)

Note
    1 - Organization and Basis of Presentation

iVillage
      is the Internet for women and consists of several online and
      offline media-based properties, including the iVillage.com Web site, or
      iVillage.com, Knowledgeweb, Inc., operator of the Astrology.com Web site,
      or Astrology.com, iVillage Consulting, Promotions.com, Inc., or Promotions.com,
      iVillage Parenting Network, Inc., or IVPN, andPublic
      Affairs Group, Inc., or PAG. Following is a synopsis of our principal operational
      activities:


|iVillage.com        | An
       online destination providing practical solutions on a range of     topics
       and everyday support for women 18 years of age and over.                                                                                                                                                                                                                                                                      
|------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|Astrology.com       | An online destination for individuals seeking daily horoscopes,astrological content and personalized forecasts.                                                                                                                                                                                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|iVillage Consulting | Assists companies in the creation and development of Web sites,    digital commerce platforms and other aspects of technological     infrastructures, primarily for Hearst Communications, Inc., and its
    affiliates, or Hearst, a related party.                                                                                                                                                                     
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|Promotions.com      | Includes Promotions.com and Webstakes.com, which offer onlineand offline promotions and direct marketing programs that areintegrated with customers marketing initiatives.                                                                                                                                                                                                                                              
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|IVPN                | Through
       IVPN, iVillage operates iVillage Integrated Properties,
   Inc.,
   or IVIP, the operator of The Newborn Channel, and Lamaze   Publishing
   Company, or Lamaze Publishing, publisher of Lamaze
   Parents,
   which collectively provide informational and instruction almagazines, custom publications, television programming, videos   and online properties of interest to expectant and new parents.
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|PAG                 | Comprised of Business Womens Network, Diversity BestPractices and Best Practices in Corporate Communications, eachoffering an extensive database of pertinent information and eventsto subscribing companies and members, and relevant publications.                                                                                                                                                                    

iVillage has historically incurred net losses and negative cash flows on an annual
basis. However, management believes that iVillages current funds, together
with the recently completed securities offering (See Note 9  Subsequent
Events  Securities Offering) and past cost reductions, will be sufficient
to enable iVillage to meet its planned expenditures through the next twelve months.
Factors that could adversely affect iVillages ability to achieve profitable
operations include the loss of any of iVillages major customers, a significant
downturn in the advertising market or economy in general, and iVillages
ability to generate significantly increased annual revenues.


iVillage is subject to the risks and uncertainties frequently encountered by
companies in the rapidly evolving markets for Internet and media products and
services. These risks include the failure to develop and extend iVillages
brands, the non-acceptance or rejection of iVillages services by Web consumers,
vendors, sponsors and/or advertisers and the inability of iVillage to maintain
and increase the levels of traffic on its online services. In the event iVillage
does not successfully implement its business plan, certain assets may not be
recoverable.


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iVillage
      Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
  (Unaudited)

Unaudited Interim Financial Information

The unaudited interim
condensed consolidated financial statements of iVillage as of June 30, 2004 and
for the three and six months ended June 30, 2004 and 2003, respectively, included
herein, have been prepared in accordance with the instructions for Form 10-Q
under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and
Article 10 of Regulation S-X of the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and regulations
relating to interim financial statements. These financial statements should be
read in conjunction with iVillages Annual Report on Form 10-K for the fiscal
year ended December 31, 2003.


In the opinion of management, the accompanying unaudited interim condensed consolidated
    financial statements reflect all adjustments, consisting only of normal recurring
    adjustments and appropriate intercompany elimination adjustments, necessary
    to present fairly the financial position of iVillage at June 30, 2004 and
    the results of its operations and its cash flows for the three and six months
    ended June 30, 2004 and 2003, respectively. The results for the three and
    six months ended June 30, 2004 are not necessarily indicative of the expected
    results for the full fiscal year or any future period.


Principles of Consolidation

The unaudited interim condensed consolidated financial statements include the
    accounts of iVillage and its subsidiaries. Intercompany balances and transactions
    have been eliminated in consolidation.


In accordance with Statement
of Financial Accounting Standard, or SFAS, No. 131, Disclosures About Segments of an Enterprise and Related Information, or SFAS 131, segment information is being reported consistent with iVillages method of internal reporting. In accordance with SFAS 131, operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. iVillage is organized primarily by subsidiaries and divisions. iVillages subsidiaries and divisions have no operating managers who report to the chief operating decision maker. The chief operating decision maker reviews information at a consolidated results of operations level, although the chief operating decision maker does review revenue results of subsidiaries and divisions. As a result, iVillages
discussion of revenue has been organized into separate subsidiaries and divisions,
however operating expenses and results of operations are discussed on a combined
basis.




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iVillage
      Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
(Unaudited)

Revenues,
  Receivables and Customer Concentration

One customer,
    Hearst, a related party, accounted for approximately 12% of total revenues
    for the three months ended June 30, 2004. Wal-Mart Stores, Inc. and its affiliates,
    or Wal-Mart, and Hearst, each accounted for approximately 12% of total revenues
    for the six months ended June 30, 2004. iVillages five largest customers
    accounted for approximately 28% of totalrevenues
    for the three months ended June 30, 2004, and approximately 32% of total revenues
    for the six months ended June 30, 2004. One customer, Hearst, accounted for
    approximately 12% of total revenues for the three months ended June 30, 2003
    and approximately 13% of total revenues for the six months ended June 30,
    2003. iVillages five largest customers accounted for approximately 26%
    of total revenues for the three months ended June 30, 2003 and approximately
    27% of total revenues for the six months ended June 30, 2003. At June 30,
    2004, Hearst accounted for approximately 12% of total net accounts receivable
    and at December 31, 2003, Hearst accounted for approximately 20% of total
    net accounts receivable. The significance of revenues from any of iVillages
    customers can vary on a quarter to quarter basis as a result of the number
    and timing of such customers advertising and marketing initiatives.


Included in total revenues are barter transactions which totaled approximately
    $1.1 million, or 7% of total revenues, for the three months ended June 30,
    2004, and approximately $2.0 million, or 6% of total revenues, for the six
    months ended June 30, 2004. For the corresponding periods in 2003, barter
    transactions totaled approximately $1.0 million, or 7% of total revenues,
    for the three months ended June 30, 2003, and approximately $2.0 million,
    or 8% of total revenues, for the six months ended June 30, 2003.


Fixed Assets and Intangibles

Depreciation of equipment,
furniture and fixtures, and computer software is provided for by the straight-line
method over their estimated useful lives ranging from one to five years. Amortization
of leasehold improvements is provided for over the lesser of the term of the
related lease or the estimated useful life of the improvement. The cost of additions
and expenditures which extend the useful lives of existing assets are capitalized,
and repairs and maintenance costs are charged to operations as incurred. Amortization
of intangible assets are over the expected life of the related asset and range
from one to ten years. Effective January 1, 2002, iVillage adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
or SFAS 144, regarding the recognition and measurement of the impairment of long-lived
assets to be held and used.


iVillage assesses the
recoverability of its fixed assets and intangible assets by determining whether
the unamortized balance over the assets remaining lives can be recovered through undiscounted forecasted cash flows. If undiscounted forecasted cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce the net amounts to an amount consistent with forecasted future cash flows, discounted at a rate commensurate with the risk associated when estimating future discounted cash flows. Future cash flows are based on trends of historical performance and iVillages
estimate of future performance, giving consideration to existing and anticipated
competitive and economic conditions.




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iVillage
  Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
  (Unaudited)

Goodwill

Goodwill
    is not subject to amortization and is tested for impairment annually, or more
    frequently if events or changes in circumstances indicate that the asset may
    be impaired in accordance with SFAS No. 142, Goodwill and Other Intangible
    Assets, or SFAS 142. The impairment test consists of a comparison of
    the fair value of goodwill with its carrying amount.If
    the carrying amount of goodwill exceeds its fair value, an impairment loss
    will be recognized in an amount equal to that excess. Fair value is typically
    based upon future cash flows discounted at a rate commensurate with the risk
    involved. After an impairment loss is recognized, the adjusted carrying amount
    of goodwill is its new accounting basis. (See Note 2  Goodwill).


Reclassifications

Certain reclassifications have been made in the prior period condensed consolidated
    financial statements to conform to the current period presentation.


Use of Estimates

The preparation of financial statements in conformity with accounting principles
    generally accepted in the United States of America requires management to
    make estimates and assumptions that affect the reported amount of assets
    and liabilities, disclosure of contingent assets and liabilities at the date
    of the financial statements, and the reported amounts of revenues and expenses
    during the reporting period. Actual results could differ from these estimates.
    Significant estimates and assumptions made by iVillage include those related
    to the useful lives of fixed assets and intangible assets, the recoverability
    of fixed assets, goodwill, intangible assets and deferred tax assets, the
    allowance for doubtful accounts and the assessment of expected probable losses
    (if any) of claims and potential claims.


Accrued Expenses

In the ordinary course of business, iVillage utilizes estimates to determine
    the accrual of certain operating expenses. These estimates are reviewed on
    an ongoing basis to determine the adequacy of these accruals. iVillage reversed
    approximately $0.3 million of accruals included in operating expenses primarily
    due to the renegotiation of a vendor contract with substantial changes in
    the terms and conditions of the original contract which provided a one-time
    benefit in each of the three and six months ended June 30, 2004. iVillage
    reversed no amount and approximately $0.1 million due to changes in estimates
    previously provided for in the three and six months ended June 30, 2003,
    respectively. These amounts were offset by additional accruals for various
    operating expenses.


Net Income/(Loss) Per Share

Basic net income/(loss) per share is computed using the weighted-average number
    of common shares outstanding during the period. Diluted net income/(loss)
    per share is computed using the weighted-average number of common shares
    and common stock equivalents outstanding during the period. Common stock
    equivalent shares are excluded from the computation if their effect is anti-dilutive.


Included in the June 30,
2004 and June 30, 2003 calculation of weighted average number of shares of common
stock outstanding are 58,394 shares and 189,404 shares, respectively, which have
not been issued. These shares are being held, respectively, for former Women.com
Networks, Inc., or Women.com, and Promotions.com stockholders that have not yet
exchanged their
respective shares for shares of iVillage during the periods presented, but are
entitled to do so.


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iVillage
  Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
  (Unaudited)

Stock options
    and warrants in the amount of 901,811 shares for the three months ended June
    30, 2004, were not included in the computation of diluted net income per
    share as they were anti-dilutive. Stock options and warrants in the amount
    of 8,445,590 shares for the six months ended June 30, 2004, were not included
    in the computation of diluted net loss per share as they were anti-dilutive
    as a result of net losses during the period. Stock options and warrants in
    the amount of 12,157,010 shares for each of the three and six months ended
    June 30, 2003, were not included in the computation of diluted net loss per
    share as they were anti-dilutive as a result of net losses during the periods
  presented.


|                                             | Three
      months ended June 30, |                                              | Six
      months ended June 30, |  
|-------------------------------------------- | --------------------------------- | -------------------------------------------- | ------------------------------- | -
|                                             |                                   |                                              |                                 |  
|                                             | 2004                              |                                              | 2003                            |  
|                                             |                                   |                                              |                                 |  
|                                             |                                   | ($
      in thousands except per share data) |                                
|Net income/(loss)as
      reported          | $                                 | 84                                           |                                 | $
|                                             |                                   |                                              |                                 |  
|Weighted
      average shares of common      |                                   |                                              |                                 |  
|stock
      outstandingbasic                |                                   | 59,079                                       |                                 |  
|Assumed
    conversion of dilutivesecurities |                                   | 5,346                                        |                                 |  
|                                             |                                   |                                              |                                 |  
|Weight average
      shares of common        |                                   |                                              |                                 |  
|stock
      outstanding  diluted            |                                   | 64,425                                       |                                 |  
|                                             |                                   |                                              |                                 |  
|Basic net
      income/(loss) per share      | $                                 | 0.00                                         |                                 | $
|                                             |                                   |                                              |                                 |  
|Diluted
      net income/(loss) per share    | $                                 | 0.00                                         |                                 | $
|                                             |                                   |                                              |                                 |  

Stock-Based Compensation

iVillage applies
    Accounting Principles Board Opinion, or APB, No. 25, Accounting for
    Stock Issued to Employees, or APB 25, and related interpretations in
    accounting for its stock option issuances, and has adopted the disclosure-only
    provisions of SFAS No. 123, Accounting for Stock-Based Compensation,
    or SFAS 123. No compensation cost related to grants of stock options was
    reflected in iVillages net income/(loss), as all options granted under
    the plans had an exercise price at least equal to the market value of the
    underlying common stock on the date of grant. Compensation cost related to
    the modification of stock option terms is measured at the quoted market price
    of iVillages common stock at the measurement date and is amortized
    to expense over the vesting period. Compensation costs related to the modification
    of stock option terms was approximately $19,000 for the three months ended
    June 30, 2004, and $29,000 for the comparable period in 2003. For the six
    months ended June 30, 2004, compensation costs related to the modification
    of stock option terms was approximately $19,000, and $0.1 million for the
    comparable period in 2003. If compensation cost for iVillages stock
    options, utilizing the Black Scholes model, had been determined based on
    the fair value of the stock options at the grant date for awards in the three
    and six months ended June 30, 2004 and 2003 consistent with the provisions
    of SFAS 123, iVillages net income/(loss) would have been adjusted to
  the pro forma amounts indicated below:


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iVillage
  Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
  (Unaudited)

|                                             | Three
      months ended June 30, |                                              | Six
      months ended June 30, |  
|-------------------------------------------- | --------------------------------- | -------------------------------------------- | ------------------------------- | -
|                                             |                                   |                                              |                                 |  
|                                             | 2004                              |                                              | 2003                            |  
|                                             |                                   |                                              |                                 |  
|                                             |                                   | ($
      in thousands except per share data) |                                
|Net income/(loss)as
      reported          | $                                 | 84                                           |                                 | $
|Stock-based
      compensation expense       |                                   |                                              |                                 |  
|determined
      under SFAS 123              |                                   | (201                                         | )                               |  
|                                             |                                   |                                              |                                 |  
|Net losspro
      forma                     | $                                 | (117                                         | )                               | $
|                                             |                                   |                                              |                                 |  
|Basic and
      diluted net income/(loss)    |                                   |                                              |                                 |  
|per
      share  as reported                | $                                 | 0.00                                         |                                 | $
|                                             |                                   |                                              |                                 |  
|Basic and
      diluted net loss per share  |                                   |                                              |                                 |  
|pro
      forma                              | $                                 | (0.00                                        | )                               | $
|                                             |                                   |                                              |                                 |  

Because options
    vest over several years and additional option grants are expected to be made
    in future years, the above pro forma results are not representative of the
    pro forma results for the full fiscal year or any future periods.


The weighted
  average assumptions used for grants made in 2004 and 2003 are as follows:


|                              | Options
      granted during the | 
|----------------------------- | -------------------------------- | 
|six
      months ended       
|June
      30,               
|                              |                                  | 
|                              | 2004                             | 
|                              |                                  | 
|Risk-free
      interest rate | 2.71%                            | 
|Expected
      option life    | 4
      years                    | 
|Dividend
      yield          | 0.00%                            | 
|Volatility                    | 91.00%                           | 

Recent Accounting Pronouncements

In December
    2003, the Financial Accounting Standards Board, or FASB, issued Interpretation
    No., or FIN, 46R, Consolidation of Variable Entities, or FIN
    46R. FIN 46R replaces the same titled FIN 46 that was issued in January 2003.
    FIN 46R requires the consolidation of a variable interest entity by a company
    that bears the majority of risk of loss from the variable entitys activities,
    is entitled to receive a majority of the variable interest entitys
    residual returns, or both. The provisions of this interpretation are effective
    for iVillage beginning in the first quarter of fiscal 2004. iVillages
    adoption of this interpretation did not have a material impact on its financial
  position, cash flows or results of operations.


Note
  2
  Goodwill

Intangible
    assets with indefinite lives and goodwill are not amortized, but are tested
    at least annually for impairment, or if circumstances change that will more
    likely than not reduce the fair value of the reporting unit below its carrying
    amount. iVillage performs its annual impairment analysis in the fourth quarter
    of the fiscal year. In December 2003, iVillage completed the annual impairment
  test and no impairment was recognized.


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iVillage
  Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
  (Unaudited)

The following
  table sets forth the components of goodwill, net as of December 31, 2003 and
  June 30, 2004 (in thousands):


|                         | December
      31, |        |             |   | Impairment |  | June
      30, |  
|------------------------ | ------------------ | ------ | ----------- | - | ---------- |  | -------------- | -
|                         | 2003               |        | Acquisition |   | losses     |  | 2004           |  
|                         |                    |        |             |   |            |  |                |  
|Reporting
      unit  1 | $                  | 19,084 |             | $ |           |  | $              | 
|Reporting
      unit  2 |                    | 1,693  |             |   |           |  |                | 
|Reporting
      unit  3 |                    | 1,803  |             |   |           |  |                | 
|                         |                    |        |             |   |            |  |                |  
|                         | $                  | 22,580 |             | $ |           |  | $              | 
|                         |                    |        |             |   |            |  |                |  

|                       |                                                                                                                            
|---------------------- | ---------------------------------------------------------------------------------------------------------------------------
|Reporting
      unit  | 1 includes iVillage Inc., Women.com Networks, Inc., Knowledgeweb, Inc.,
      and Cooperative Beauty Ventures, L.L.C.      
|                       |                                                                                                                            
|Reporting
      unit  | 2 includes
      iVillage Parenting Network, Inc., Lamaze Publishing Company and iVillage
      Integrated Properties, Inc.
|                       |                                                                                                                            
|Reporting
      unit  | 3 includes
      Public Affairs Group, Inc.                                                                                

Note
  3
  Intangible Assets

iVillage
    reviews for the impairment of long-lived assets and certain identifiable
    intangibles whenever events or changes in circumstances indicate that the
    carrying amount of an asset may not be recoverable in accordance with the
  provisions of SFAS 144.


Identifiable
    intangible assets are amortized under the straight-line method over the period
    of expected benefit ranging from one to ten years. The following table sets
    forth the components of the intangible assets subject to amortization as
  of June 30, 2004 and December 31, 2003 (in thousands):


|                            |                  |              | June
      30, 2004 |        | December
      31, 2003 |            
|--------------------------- | ---------------- | ------------ | ------------------- | ------ | ----------------------- | -----------
|                            |                  |             
|Range
      of              | Gross            |              |                     |        |                         |            
|useful                      | carrying         | Accumulated  |                     |        | carrying                | Accumulated
|life                        | amount           | amortization | Net                 | amount | amortization            | Net        
|                            |                  |              |                     |        |                         |            
|Advertiser
      and member |                  |              |                     |        |                         |            
|lists
      and customer    |                  |              |                     |        |                         |            
|contracts                   | 2-10
      years |              | $                   | 20,727 |                         | $          
|Trademarks
      and        |                  |              |                     |        |                         |            
|domain
      names          | 3
      years    |              |                     | 3,227  |                         |            
|Licensing
      agreement   | 10
      years   |              |                     | 2,900  |                         |            
|Technology                  | 3
      years    |              |                     | 935    |                         |            
|Non-competition             |                  |              |                     |        |                         |            
|agreements                  | 1
      years    |              |                     | 810    |                         |            
|Content                     | 3
      years    |              |                     | 600    |                         |            
|                            |                  |              |                     |        |                         |            
|                            |                  |              | $                   | 29,199 |                         | $          
|                            |                  |              |                     |        |                         |            

Amortization
  expense for the three months ended June 30, 2004 was approximately $1.2 million
  and $2.3 million for the six months ended June 30, 2004. Amortization expense
  for the three months ended June 30, 2003 was approximately $1.3 million and
  $2.5 million for the six months ended June 30, 2003.


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iVillage
  Inc. and Subsidiaries Notes to Condensed Consolidated
  Financial Statements
  (Unaudited)

Estimated amortization expense for the twelve months ending June 30 are as follows (in thousands):


|2005 | $ | 2,237 | 
|---- | - | ----- | 
|2006 |   | 1,873 | 
|2007 |   | 1,785 | 
|2008 |   | 1,760 | 
|2009 |   | 1,760 | 
|     |   |       | 
|     | $ | 9,415 | 
|     |   |       | 

Note 4  Deferred
Gain on Sale of Joint Venture Interest

In
      March 2003, iVillage and Tesco.com Limited, a division of Tesco, PLC, or
      Tesco, restructured the terms of their joint venture so that Tesco purchased
      iVillages entire ownership interest in iVillage UK. iVillage and
      Tesco also entered into a twenty-year license agreement for the use of
      certain of iVillages content and intellectual property subject to
      earlier termination upon the occurrence of certain events, for the greater
      of a minimum monthly license fee or a percentage of iVillage UKs
      gross revenues.


All
      monies received by iVillage under the license agreement will be classified
      as other income and will be included in the condensed consolidated statements
      of operations as a gain on sale of joint venture interest. iVillage has
      earned $0.8 million in year one and $0.1 million in year two of the license
      agreement for services provided. As of June 30, 2004, iVillage was owed
      approximately $0.1 million and at December 31, 2003, iVillage was owed
      approximately $49,000.


Note 5  Discontinued
Operations

As
      of June 30, 2004 and December 31, 2003, included in Other current
      liabilities in the consolidated balance sheets is approximately $0.1
      million of current liabilities of discontinued operations.


Note 6  Related
Party Transactions

America Online, Inc., a division of Time Warner Inc.

America Online, Inc., a division of Time Warner Inc.,
or AOL, is a stockholder of iVillage. Additionally, an employee of AOL is a member of the board
of directors. During 2003, iVillage
signed six advertising agreements with AOL to promote various AOL products. Of these six agreements,
five were completed as of December
31, 2003 and the remaining agreement was completed in January 2004. In consideration
of these services, AOL paid iVillage approximately $0.5 million, of which $0.1
million was received in the first quarter of 2004.


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iVillage
      Inc. and Subsidiaries Notes to Condensed
  Consolidated Financial Statements
(Unaudited)

In
      January 2004, AOL signed a contract for various services offered by PAG,
      and in June 2004, iVillage signed an advertising agreement with AOL to
      promote various AOL products.


Revenues
      from AOL were approximately $47,000 for the three months ended June 30,
      2004, and approximately $0.1 million for the six months ended June 30,
      2004. Revenues from AOL were approximately $32,000 for each of the three
      and six months ended June 30, 2003. At each of June 30, 2004 and December
      31, 2003, iVillage was owed a receivable of approximately $0.1 million.
      At each of June 30, 2004 and December 31, 2003, no amounts were owed by
      iVillage to AOL.


Hearst Communications, Inc.

As
      of June 30, 2004, Hearst owned approximately 31% of iVillages outstanding
      common stock and had representation on iVillages board of directors.
      (For a further discussion of Hearsts ownership of iVillage securities,
      please see Note 8  Capital Stock  Warrants).


As
      part of the acquisition of Women.com, iVillage acquired approximately $4.9
      million of prepaid print advertising in certain Hearst magazines. These
      ads appeared through December 2003. iVillage recognized a non-cash print
      advertising expense from this advertising of no amount for the three months
      ended June 30, 2003 and approximately $0.1 million for the six months ended
      June 30, 2003.


Additionally,
      from time to time, iVillage has provided other production services outside
      the scope of its Web site services and amended and restated magazine content
      and hosting agreements with Hearst.


Revenues,
      net of royalty payments, from Hearst were approximately $1.9 million for
      the three months ended June 30, 2004, and approximately $3.8 million for
      the six months ended June 30, 2004. Revenues, net of royalty payments,
      from Hearst were approximately $1.6 million for the three months ended
      June 30, 2003, and approximately $3.2 million for the six months ended
      June 30, 2003. iVillage was owed a net receivable from this stockholder
      of approximately $1.0 million as of June 30, 2004, and approximately $1.3
      million as of December 31, 2003. (See Note 9  Subsequent Events  Hearst
      Communications, Inc.).


Waterfront Media, Inc.

The Chief Executive Officer
and another board member of iVillage serve on the board of directors of one of
iVillages customers, Waterfront Media Inc., or Waterfront Media. Through
June 30, 2004, iVillage has signed five new advertising agreements with Waterfront
Media. Amounts due from Waterfront Media were approximately $44,000 as of June
30, 2004, and approximately $0.1 million as of December 31, 2003. Revenues from
Waterfront Media were no amount for the three months ended June 30, 2004, and
approximately $0.2 million for the sixmonths
ended June 30, 2004. There were no revenues from Waterfront Media for each of
the three and six months ended June 30, 2003.


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iVillage
      Inc. and SubsidiariesNotes
to Condensed Consolidated Financial Statements
(Unaudited)

Stockholder Note Receivable

During the first six months of 2004, we received approximately $0.2 million from
the repayment of stockholder notes.


Note 7  Commitments
and Contingencies

Leases

iVillage
      leases office space and equipment under non-cancelable operating leases
      expiring at various dates through April 2015. The following is a schedule
      of future minimum lease payments under non-cancelable operating leases
      as of June 30, 2004, for the next five years:


|Twelve
    months ending June 30: | (in
    thousands) |       
|--------------------------------- | ------------------ | ------
|                                  |                    |       
|2005                              | $                  | 2,139 
|2006                              |                    | 1,839 
|2007                              |                    | 1,633 
|2008                              |                    | 1,495 
|2009                              |                    | 1,481 
|Thereafter                        |                    | 6,615 
|                                  |                    |       
|                                  | $                  | 15,202
|                                  |                    |       

In
      addition, in the ordinary course of business, iVillage enters into agreements
      with various service providers for ad serving, satellite transmissions
      and license/content arrangements.


Technology

Upon
      the expiration of the contract related to the satellite technology used
      by iVillage Parenting Network, Inc. to transmit its television channels,
      or in the event of an unforeseen earlier interruption of such service,
      iVillage would need to either negotiate a new contract, find another satellite
      provider and/or invest in alternative technology to distribute this service.


Litigation

In the
      normal course of business, iVillage is subject to proceedings, lawsuits
      and other claims. Such matters are subject to many uncertainties, and outcomes
      are not predictable with assurance. Consequently, the ultimate aggregate
      amount of monetary liability or financial impact with respect to these
      matters at June 30, 2004 cannot be ascertained. While these matters could
      affect the operating results of any one quarter when resolved in future
      periods and while there can be no assurance with respect thereto, management
      believes, with the advice of outside legal counsel, that after final disposition
      any monetary liability or financial impact to iVillage from these matters
      would not be material to iVillages results of operations and financial
      condition.


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iVillage
      Inc. and SubsidiariesNotes
to Condensed Consolidated Financial Statements
(Unaudited)

Several plaintiffs
have filed class action lawsuits in federal court against iVillage,
severalof its present and former
executives and its underwriters in connection with its March 1999 initial public
offering. A similar class action lawsuit was filed against Women.com, several
of its former executives and its underwriters in connection with Women.coms October 1999 initial public offering.  The complaints generally assert claims under the Securities Act of 1933, as amended, the Exchange Act and rules and regulations of the Securities and Exchange Commission, or SEC. The complaints seek class action certification, unspecified damages in an amount to be determined at trial, and costs associated with the litigation, including attorneys fees.


In February
    2003, the defendants motion to dismiss certain of the plaintiffs claims
    was granted in part, but, for the most part, denied. In June 2003, a proposed
    settlement of this litigation was structured between the plaintiffs, the
    issuer defendants, the issuer officers and directors named as defendants,
    and the issuers insurance companies. The proposed settlement generally
    provides that the issuer defendants and related individual defendants will
    be released from the litigation without any liability other than certain
    expenses incurred to date in connection with the litigation, the issuer defendants insurers
    will guarantee $1.0 billion in recoveries by plaintiff class members, the
    issuer defendants will assign certain claims against the underwriter defendants
    to the plaintiff class members, and the issuer defendants will have the opportunity
    to recover certain litigation-related expenses if the plaintiffs recover
    more than $5.0 billion from the underwriter defendants. The respective boards
    of directors of iVillage and Women.com each approved the proposed settlement
    in July 2003.


On June 25,
    2004, the plaintiffs filed a motion for preliminary approval of the settlement
    with the court, which was accompanied by a brief filed by the issuer defendants
    in support of the plaintiffs motion. The court requested that any objections
    to preliminary approval of the settlement be submitted by July 14, 2004,
    and certain underwriter defendants formally objected to the settlement. The
    plaintiffs and issuer defendants separately filed replies to the underwriter
    defendants objections to the settlement on August 4, 2004. There can
    be no assurance that this proposed settlement would be approved and implemented
    in its current form, or at all.


In June 2001,
    Euregio.net commenced an action in Belgium against Women.com claiming damages
    in excess of one million Euros in connection with certain alleged copyright
    infringements. Despite Women.coms arguments challenging the jurisdiction
    of the Belgian court, the alleged infringements and the amount of damages,
    in January 2003 a Belgian court issued a judgment against Women.com in the
    amount of approximately 850,000 Euros (approximately $1.0 million based on
    the Euro exchange rate as of June 30, 2004). Women.com has been advised by
    outside legal counsel that Euregio.net would have to commence legal proceedings
    in the United States to enforce this judgment. Women.com has appealed this
    judgment in the Belgian courts and will also oppose any effort by the plaintiffs
    to enforce this judgment in the United States court system.


iVillage,
    with the advice of outside legal counsel, believes that the lawsuits and
    claims asserted against iVillage and Women.com pursuant to these complaints
    are without merit and intends to vigorously defend against these claims.
    iVillage does not believe that any of these legal proceedings will have a
    material and adverse effect on iVillages results of operations or financial
    condition.


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iVillage
      Inc. and SubsidiariesNotes
to Condensed Consolidated Financial Statements
(Unaudited)

Note 8  Capital Stock  Warrants

On January 14, 2004, Hearst exercised a warrant it received in connection with
a securities purchase agreement related to iVillage's acquisition of Women.com
and purchased 2,065,695 shares of common stock for $0.01 per share. Pursuant
to its terms, the warrant became exercisable when the average closing price of
our common stock had exceeded $3.75 for 15 consecutive trading days prior to
January 14, 2004, entitling Hearst to purchase each share for $0.01.


During February
    2004, an aggregate of 29,449 shares of common stock were issued to our existing
    investors in exchange for warrants they had acquired in connection with a
    securities purchase agreement related to our acquisition of Women.com. The
    remaining 4,856 warrants acquired in connection with our acquisition of Women.com
    went unexercised and expired on February 18, 2004.


As of June
    30, 2004, there were outstanding warrants to purchase 5,282 shares of iVillage
    common stock with an exercise price of $14.35 per share.


Note 9  Subsequent
Events

Securities Offering

On July 6,
    2004, iVillage completed a public offering of 11,560,032 shares of its common
    stock generating total estimated proceeds, net of underwriting discounts
    and commissions and estimated costs of the offering, of approximately $64.8
    million to iVillage.


Hearst Communications, Inc.

In July 2004,
    iVillage and Hearst entered into a Web site services agreement that supersedes
    and replaces the amended and restated magazine content license and hosting
    agreement. Pursuant to the agreement, which has a three-year term, Hearst
    will pay iVillage approximately $12.5 million over three years for hosting
    and production services related to Hearst magazine Web sites residing on
    iVillage.com. In addition, iVillage will receive a commission on magazine
    subscription sales. Hearst will receive a revenue share from iVillage on
    a percentage of the advertising sales from Hearst magazine Web sites hosted
    by iVillage. These commissions to and from Hearst will vary based on performance.


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

Certain statements
    in this Quarterly Report on Form 10-Q, including certain statements contained
    in this Item 2, constitute forward-looking statements within
    the meaning of Section 27A of the Securities Act of 1933, as amended, or
    the Securities Act, and Section 21E of the Securities Exchange Act of 1934,
    as amended, or the Exchange Act. The words or phrases can be, expects, may
    affect, anticipates, may depend, believes, estimates, plans, projects and
    similar words and phrases are intended to identify such forward-looking statements.
    These forward-looking statements are subject to various known and unknown
    risks and uncertainties and we caution you that any forward-looking information
    provided by or on our behalf is not a guarantee of future results, performance
    or achievements. Actual results could differ materially from those anticipated
    in these forward-looking statements due to a number of factors, some of which
    are beyond our control. In addition to those risks discussed below in the
    section entitled Risk Factors and in our other public filings,
    press releases and statements by our management, factors that may cause our
    actual results, performance or achievements to differ materially from any
    future results, performance or achievements expressed or implied in such
    forward looking statements include: (i) the volatile and competitive nature
    of the Internet industry and media industry, (ii) changes in domestic and
    foreign economic, political and market conditions, (iii) the effect of federal,
    state and foreign regulation on our business, (iv) the impact of recent and
    future acquisitions and joint ventures by us on our business and financial
    condition, (v) our ability to establish and maintain relationships with advertisers,
    sponsors, and other third party providers and partners, (vi) our ability
    to maintain or increase user traffic levels, (vii) the loss of one or more
    of our largest customers, and (viii) the impact of pending litigation on
    our business, results of operations and financial condition. All such forward-looking
    statements are current only as of the date on which such statements were
    made. We do not undertake any obligation to publicly update any forward-looking
    statement to reflect events or circumstances after the date on which any
    such statement is made or to reflect the occurrence of unanticipated events.


In this Quarterly
    Report on Form 10-Q, iVillage, we, our and us refer
    to iVillage Inc. and its consolidated subsidiaries.


Overview

The following
    managements discussion and analysis is intended to provide information
    necessary to understand our unaudited interim condensed consolidated financial
    statements and highlight certain other information which, in the opinion
    of management, will enhance a readers understanding of our financial
    condition, changes in financial condition and results of operations. It is
    organized as follows:


| |  | The section
        entitled iVillage Background, briefly describes our principal
    operational activities.                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                
| |  | Critical
        Accounting Policies discusses each of our most critical accounting
        policies including revenue recognition, fixed assets and intangibles,
    goodwill,  income taxes, allowance for doubtful accounts, and management
    estimates and assumptions.

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| |  | Results
        of Operations discusses the primary factors that are likely to
        contribute to significant variability of our results of operations from
        period to period and then provides detailed narrative regarding significant
        changes in our results of operations for the three and six months ended
    June 30, 2004 compared to the three and six months ended June 30, 2003.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Liquidity
        and Capital Resources discusses our liquidity, cash flows for the
        three and six months ended June 30, 2004 compared to those for the three
        and six months ended June 30, 2003, factors that may influence our future
        cash requirements and the status of certain contractual obligations as
    of June 30, 2004.                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Recent
        Accounting Pronouncements discusses the significance of various
    recent accounting pronouncements to our financial reporting                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Legal
    Proceedings discusses the status of certain litigation.                                                                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Risk
        Factors discusses various risks and uncertainties associated with
    our business.                                                                                                                                                                                                                                                                                                              

iVillage Background

iVillage is the
    Internet for women and consists of several online and offline media-based
    properties, including iVillage.com Web site, or iVillage.com, Knowledgeweb,
    Inc., operator of the Astrology.com Web site, or Astrology.com, iVillage
    Consulting, Promotions.com, Inc., or Promotions.com, iVillage Parenting Network,
    Inc., or IVPN, and Public Affairs Group, Inc., or PAG. Following is a synopsis
    of our principal operational activities:


|iVillage.com        | An online
       destination providing practical solutions on a range of topics and everyday
       support for women 18 years of age and over.                                                                                                                                                                                                                                                                              | 
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Astrology.com       | An online
       destination for individuals seeking daily horoscopes, astrological content
       and personalized forecasts.                                                                                                                                                                                                                                                                                               | 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|iVillage Consulting | Assists
       companies in the creation and development of Web sites, digital commerce
       platforms and other aspects of technological infrastructures, primarily
       for Hearst Communications, Inc., and its affiliates, or Hearst, a related
       party.                                                                                                                                                        | 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Promotions.com      | Includes
       Promotions.com and Webstakes.com, which offer online and offline promotions
       and direct marketing programs that are integrated
    with customers marketing initiatives.                                                                                                                                                                                                                              | 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|IVPN                | Through
       IVPN, we operate iVillage Integrated Properties, Inc., or IVIP, the operator
       of The Newborn Channel, and Lamaze Publishing Company, or
      Lamaze Publishing, publisher of Lamaze Parents, which collectively provide
      informational and instructional magazines, custom publications, television
      programming, videos and online properties of interest to expectant and
    new parents. | 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|PAG                 | Comprised
      of Business
Womens Network, Diversity Best Practices and Best Practices Corporate Communications,
each offering an extensive database of pertinent information and events to subscribing
companies and members, and relevant     publications.                                                                                                                                                              | 

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Critical Accounting Policies

Revenue Recognition

iVillage.com

Our revenues are derived primarily from the sale of sponsorship and advertising
contracts. Sponsorship revenues are derived principally from contracts designed
to support a customers broad marketing objectives, including brand promotion,
awareness, product introductions and online research. Sponsorship agreements
typically include the delivery of impressions on our Web sites and occasionally
the design and development of customized sites that enhance the promotional objectives
of the sponsor. An impression is the viewing of promotional material on a Web
page, which may include rich media and display or banner advertisements, links,
or other text or images. As part of a small number of sponsorship agreements,
sponsors selling products may provide us with a commission on sales of their
products generated through our Web sites. To date, amounts received from the
sale of sponsors products have not been significant.


Advertising revenues are derived principally from short-term advertising contracts
in which we typically guarantee a minimum number of impressions or pages to be
delivered to users over a specified period of time for a fixed fee or based on
actual impressions delivered. Sponsorship and advertising revenues for fixed
fee contracts that are both time and impression based are recognized ratably
in the period in which the advertisement is displayed, provided that we have
no continuing obligations and the collection of the receivable is reasonably
assured, at the lesser of the ratio of impressions delivered over total guaranteed
impressions or the straight-line basis over the term of the contract. To the
extent that minimum guaranteed impressions are not met, we defer recognition
of the corresponding revenues until the guaranteed impressions are achieved.
Sponsorship and advertising revenues in which the customer specifies the timing
of the delivery of impressions and payment is due upon delivery of impressions
are recognized when the impressions are delivered and the collection of the receivable
is reasonably assured.


We also derive sponsorship and advertising revenues from sponsored links appearing
on our Web site that are based upon relevant content or a World Wide Web search
query result. These revenues are earned on a cost per thousand impressions and/or
a percentage of the advertisers net revenue and are recognized upon notification
from the search engine provider.


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For contracts with multiple elements, namely those that include delivered and undelivered products, or advertising and production revenue, we allocate revenue to each element based on evidence of its fair value under the Financial Accounting Standards Board, or FASB, Emerging Issues Task Force Issue No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables, or EITF 00-21. Evidence of fair value is the price of a deliverable when it is regularly sold on a stand-alone basis. We recognize revenue allocated to each element when the criteria for revenue set forth above are met.


Barter revenues
    generally represent exchanges by us of advertising space on our Web sites
    for reciprocal advertising space on or traffic from other Web sites. Revenues
    and expenses from these barter transactions are recorded based upon the fair
    value of the advertisements delivered. Fair value of advertisements delivered
    is based upon our recent practice of receiving cash for similar advertisements.
    Barter revenues are recognized when the advertisements are displayed on iVillage.com
    and its affiliated properties. Barter expenses are generally recognized when
    our advertisements are displayed on reciprocal Web sites or properties, generally
    in the same period as when advertisements are displayed on iVillage.com and
    its affiliated properties. Barter expenses are included as part of sales
    and marketing expenses.


We recognize
    revenues from iVillage Consultings services based upon a number of
    factors, including actual hours worked at negotiated hourly rates, completed
  contract or straight-line over the life of the contract.


We have received
    revenues from initiatives involving subscription-based properties, the sale
    of iVillage-branded products and services, the sale of third-party products,
    the licensing of portions of our content and services and the sale of research.
    We recognize revenues from these initiatives when products are shipped and/or
    provided to the customer, or straight-line over the life of the agreement
    and when the collection of the receivable is reasonably assured and no further
  obligation remains.


Astrology.com

Revenues from
    Astrology.com consist primarily of the sale of astrological charts and other
    related products to users of our astrology-related Web sites. We recognize
    revenues from astrological product sales, net of any discounts, when products
    are delivered to customers, the collection of the receivable is reasonably
  assured and no further obligations remain.


Promotions.com

Promotions.com,
    Inc. generates revenues through Promotions.com, an online and offline full
    service promotions services group, and Webstakes.com, a division dedicated
  to Internet sweepstakes and promotions.


Promotions.com revenues are derived principally from contracts in which Promotions.com
provides custom services for the creation, administration and implementation
of a promotion on a customers Web site. Promotions.coms revenue recognition
policy related to its services is to recognize revenues as deliverables are met
and/or ratably over the period of the promotion, provided that no significant
obligations remain and collection of the receivable
is reasonably assured.


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Webstakes.com revenues are derived primarily from service contracts whereby Webstakes.com
recognizes
revenues based on either a cost-per-click or a cost-per-action pricing
model. Webstakes.com recognizes revenue related to its cost-per-click pricing
model when a user has been delivered to the customers Web site, the customer
has reported such activity to us and the collection of the corresponding receivable
is reasonably assured. Revenue is recognized differently in a cost-per-action
pricing model, which requires Webstakes.com to not only deliver the aforementioned
user to a customers Web site, but also requires a specific user action
such as purchasing a product or registering for more information as a member
of the customers Web site in order for Webstakes.com to earn revenue. Webstakes.com
recognizes revenue related to the cost-per-action pricing model when the specific
action has been performed on its customers Web site, the customer has reported
such activity to us, and the collection of the corresponding receivable is reasonably
assured.


IVPN

IVPNs revenues have been derived primarily from advertising placements
in IVPNs publications, videos and Web site, and broadcasts of The Newborn
Channel, The Newborn Channel-Spanish, currently offered as an audio overlay to
The Newborn Channel, and The Wellness Channel. In addition, sponsorship and advertising
revenues are generated through a sampling and coupon program, which offers advertisers
the ability to distribute samples, coupons and promotional literature to new
and expectant parents. Sponsorship and advertising revenues are recognized on
a straight-line basis over the term of the contract, provided that IVPN has no
continuing obligations and the collection of the receivable is reasonably assured.


IVPN creates and distributes custom publications and mailings primarily on behalf
of one advertiser. Revenues from the sale of custom publications and mailings
are recognized when IVPN completes its creative responsibilities and receives
the appropriate approvals from the customer and/or through the distribution of
the custom publications, provided that evidence of fair value is obtained at
a minimum on the undelivered deliverable, and collection of the receivables is
reasonably assured. If evidence of fair value cannot be obtained on each deliverable,
revenues from the sale of custom publications and mailings are recognized when
IVPN fulfills all obligations under the terms of the contract and the collection
of the receivable is reasonably assured.


IVPN has also commenced the collection of an annual fee paid by hospitals for
their receipt of broadcasts of the Newborn Channel. Contracts related to this
fee typically range from three to five years in length. IVPN recognizes revenues
from these fees ratably over the term of the agreement provided the collection
of the receivable is reasonably assured.


PAG

Revenues from PAG are generated primarily through subscription-based programs
that convey current best practices for both diversity issues in the workplace
and corporate communications, the hosting of events, most notably an annual two-day
summit and gala event that focuses on diversity and women and consulting agreements.
    PAG recognizes revenue from subscriptions ratably over the term of the subscription
    agreement,
from the events when the events are held, and from the consulting agreements
ratably over the term of the agreement or upon completion of the deliverable,
provided the collection of the receivable is reasonably assured.


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Fixed Assets and Intangibles

Depreciation of equipment, furniture and fixtures, and computer software is provided
for by the straight-line method over their estimated useful lives ranging from
one to five years. Amortization of leasehold improvements is provided for over
the lesser of the term of the related lease or the estimated useful life of the
improvement. The cost of additions and expenditures which extend the useful lives
of existing assets are capitalized and repairs and maintenance costs are charged
to operations as incurred. Amortization of intangible assets are over the expected
life of the related asset and range from one to ten years. Effective January
1, 2002, we adopted Statement of Financial Accounting Standard, or SFAS, No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets,
regarding the recognition and measurement of the impairment of long-lived assets
to be held and used.


We assess the recoverability of our fixed assets and intangible assets by determining
whether the unamortized
balance over the assets remaining life can be recovered through undiscounted
forecasted cash flows. If undiscounted forecasted cash flows indicate that the
unamortized amounts will not be recovered, an adjustment will be made to reduce
the net amounts to an amount consistent with forecasted future cash flows discounted
at a rate commensurate with the risk associated when estimating future discounted
cash flows. Future cash flows are based on trends of historical performance and
our estimate of future performance giving consideration to existing and anticipated
competitive and economic conditions.


Goodwill

Goodwill is not subject to amortization and is tested for impairment annually,
or more frequently if events or changes in circumstances indicate that the asset
may be impaired in
accordance with SFAS No. 142, Goodwill and Other Intangible Assets.
The impairment test consists of a comparison of the fair value of goodwill with
its carrying amount. If the carrying amount of goodwill exceeds its fair value,
an impairment loss will be recognized in an amount equal to that excess. Fair
value is typically based upon future cash flows discounted at a rate commensurate
with the risk involved. After an impairment loss is recognized, the adjusted
carrying amount of goodwill is its new accounting basis.


Income Taxes

We recognize deferred taxes by the asset and liability method of accounting for
income taxes in accordance
with the provisions of SFAS No. 109, Accounting for Income Taxes.
Deferred income taxes are recognized for differences between the financial statement
and tax bases of assets and liabilities at enacted statutory tax rates in effect
for the years in which the differences are expected to reverse. The effect on
deferred taxes of a change in tax rates is recognized in income in the period
that includes the enactment date. In assessing the realizability

of deferred tax assets, we consider whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future
taxable income or reversal of deferred tax liabilities during the periods in
which those temporary differences become deductible. We consider the scheduled
reversal of deferred tax liabilities, projected future taxable income, and tax
planning strategies in making this assessment. Based on this consideration, we
believe it is more likely than not that the net deferred tax assets will not
be realized.


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Allowance for Doubtful Accounts

We assess the required amount of allowance for doubtful accounts based on past
experience, our review of the accounts receivable agings and our analysis of
specific customer accounts.


Management Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amount of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates. Significant estimates
and assumptions made by us include those related to the useful lives of fixed
assets and intangible assets, the recoverability of fixed assets, goodwill, intangible
assets and deferred tax assets, the allowance for doubtful accounts and the assessment
of expected probable losses (if any) of claims and potential claims.


Results of Operations

In accordance with SFAS
No. 131, Disclosures About Segments of an Enterprise and Related Information,
or SFAS 131, segment information is being reported consistent with our method
of internal reporting. In accordance with SFAS 131, operating segments are defined
as components of an enterprise for which separate financial information is available
that is evaluated regularly by the chief operating decision maker in deciding
how to allocate resources and in assessing performance. We are organized primarily
by subsidiaries and divisions. Our subsidiaries and divisions have no operating
managers who report to the chief operating decision maker. The chief operating
decision maker reviews information at a consolidated results of operations level,
although the chief operating decision maker does review revenue results of subsidiaries
and divisions. As a result, our discussion of revenue has been organized into
separate subsidiaries and divisions, however, operating expenses and results
of operations are discussed on a combined basis.


Our quarterly results of operations fluctuate due to a variety of factors. For
example, we achieved net income for each of the three months ended December 31,
2003 and June 30, 2004. However, we incurred a net loss for each of our other
historical quarters. We believe the following factors may contribute to the variability
of our results of operations from period to period:


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| |  | the timing
      of our recognition of revenue;                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                    
| |  | the volatility
      of the online advertising market;                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                    
| |  | the timing
      of our sponsored events and symposiums;                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                    
| |  | the loss
      of a contract from a major customer;                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                    
| |  | an interruption
      or malfunction in service from our primary third party service providers;                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                    
| |  | the date
      of commencement of a sponsorship and advertising campaign; and                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                    
| |  | the date
      of completion, and the receipt of customer approval, for the creative services
      and/or distribution services of a custom publication or magazine, which
      is based upon a customers advertising and marketing initiatives.

Revenues

Beginning in
  the quarterly report for the three months ended March 31, 2004, we reclassified
  Promotions.com revenues to add revenues from Promotions.com and Webstakes.com
  under iVillage.com. Consequently, the following discussion of our revenues may
  not correspond to similar discussions in prior quarterly and annual reports.
  The following table sets forth revenues by property:


|               | Three
      Months Ended June 30, |        | Six
      Months Ended June 30, |    
|-------------- | --------------------------------- | ------ | ------------------------------- | ---
|               |                                   |        |                                 |    
|               | (dollars
      in thousands)      |       
|               |                                   |        |                                 |    
|               | 2004                              |        | (1)                             |    
|               |                                   |        |                                 |    
|iVillage.com   | $                                 | 9,717  |                                 | 59 
|               |                                   |        |                                 |    
|Astrology.com  |                                   | 788    |                                 | 5  
|               |                                   |        |                                 |    
|IVPN           |                                   | 5,013  |                                 | 30 
|               |                                   |        |                                 |    
|PAG            |                                   | 980    |                                 | 6  
|               |                                   |        |                                 |    
|Total revenues | $                                 | 16,498 |                                 | 100
|               |                                   |        |                                 |    

|   
|---
|(1)
|(2)

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iVillage.com

|                          | Three
      Months Ended June 30, |       | Six
      Months Ended June 30, |    
|------------------------- | --------------------------------- | ----- | ------------------------------- | ---
|                          |                                   |       |                                 |    
|                          | (dollars
      in thousands)      |      
|                          |                                   |       |                                 |    
|                          | 2004                              |       | (1)                             |    
|                          |                                   |       |                                 |    
|Sponsorship & advertising | $                                 | 6,283 |                                 | 65 
|                          |                                   |       |                                 |    
|Barter                    |                                   | 1,092 |                                 | 11 
|                          |                                   |       |                                 |    
|iVillage
      Consulting |                                   | 1,083 |                                 | 11 
|                          |                                   |       |                                 |    
|Promotions.com            |                                   | 1,071 |                                 | 11 
|                          |                                   |       |                                 |    
|Online services/other     |                                   | 188   |                                 | 2  
|                          |                                   |       |                                 |    
|                          | $                                 | 9,717 |                                 | 100
|                          |                                   |       |                                 |    
|                          |                                   |       |                                 |    

|   
|---
|(1)

Three Months
  Ended June 30

Revenues from iVillage.com
  accounted for approximately 59% of total revenues for the three months ended
  June 30, 2004, and approximately 61% for the three months ended June 30, 2003.
  Revenues from iVillage.com increased approximately $1.7 million, or 21%, for
  the three months ended June 30, 2004, as compared to the corresponding period
  in 2003.


The increase
in revenues for the three months ended June 30, 2004, as compared to the corresponding
period in 2003, was primarily due to an increase in sponsorship and advertising
revenues, which includes revenues from sponsored links, of approximately $1.0
million, and an increase in iVillage Consulting revenues of approximately $0.3
million. The increase in sponsorship and advertising revenues was primarily due
to an increase in the number of contracts and advertisers, coupled with higher
pricing in 2004, as compared to the corresponding period in 2003, generating
incremental revenues of approximately $0.7 million. In addition, iVillages
gURL.com division, the assets of which were purchased by iVillage in July 2003,
contributed approximately $0.1 million in identifiable revenues for the three
months
ended
June 30, 2004, with no amounts for the corresponding period in 2003. Revenues
from sponsored links, which commenced in the third quarter of 2003, also contributed
approximately $0.2 million in revenues for the three months ended June 30, 2004,
with no amounts for the corresponding period in 2003. The increase in iVillage
Consulting revenues of approximately 36% for the three months ended June 30,
2004, as compared to the corresponding period in 2003, was primarily due to a
two-year Web site services agreement signed with Hearst, a related party, in
December 2003 for providing production, maintenance and hosting services for
three teen Web sites.


Revenues from
Promotions.com increased approximately $0.2 million, or 20% for the three months
ended June 30, 2004, as compared to the corresponding period in 2003, primarily
due to a larger number of promotional campaigns created and managed by the Promotions.com
division for a customer in 2004, as compared to the corresponding period in 2003.
The increase in revenues is offset by lower revenues of approximately $0.1 million
for the three months ended June 30, 2004, as compared to the corresponding period
in 2003, from the Webstakes.com division due to the modification of its business
model during 2003, in anticipation of the federal CAN-SPAM Act of 2003, as well
as a deteriorating environment for email direct marketers. Revenues from the
Webstakes.com division have continued to decline, and if such trend continues
we believe we have the ability to delay or reduce expenditures associated with
this property.


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Six Months Ended June 30

Revenues from iVillage.com accounted for approximately 57% of total revenues for the six months ended June 30, 2004, and approximately 59% for the corresponding period in 2003. Revenues from iVillage.com increased approximately $3.2 million, or 21%, for the six months ended June 30, 2004, as compared to the corresponding period in 2003.


The increase
      in revenues for the six months ended June 30, 2004, as compared to the
      corresponding period in 2003, was primarily due to an increase in sponsorship
      and advertising revenues, which includes revenues from sponsored links,
      of approximately $2.2 million, and an increase in iVillage Consulting revenues
      of approximately $0.5 million. The increase in sponsorship and advertising
      revenues was primarily due to an increase in the number of contracts and
      advertisers, coupled with higher pricing in 2004, as compared to the corresponding
      period in 2003, generating incremental revenues of approximately $1.6 million.
      In addition, iVillages gURL.com division contributed approximately
      $0.1 million in identifiable revenues for the six months ended June 30,
      2004, with no amounts for the corresponding period in 2003. Revenues from
      sponsored
      links
      also contributed approximately $0.5 million inidentifiable revenues for
      the six months ended June 30, 2004, with no amounts for the corresponding
      period
      in 2003.
      The increase in iVillageConsulting
       revenues of approximately 32% for the six months ended June 30, 2004,
      as compared
    to the corresponding period in 2003, was primarily due to the two-year Web
       site services agreement signed with Hearst for providing production, maintenance

    and hosting services for three teen Web sites.


Revenues from
Promotions.com increased approximately $0.3 million, or 18% for the six months
ended June 30, 2004, as compared to corresponding period in 2003, primarily due
to a larger number of promotional campaigns created and managed by the Promotions.com
division for a customer in 2004, as compared to the corresponding period in 2003.
The increase in revenues is offset by lower revenues of approximately $0.4 million
for the six months ended June 30, 2004, as compared to the corresponding period
in 2003, from the Webstakes.com division due to the modification of its business
model during 2003, in anticipation of the federal CAN-SPAM Act of 2003, as well
as a deteriorating environment for email direct marketers.


Astrology.com

Three Months Ended June
30

Revenues from Astrology.com accounted for approximately 5% of total revenues for both the three months ended June 30, 2004 and June 30, 2003. Revenues from Astrology.com increased approximately $0.1 million, or 10%, for the three months ended June, 2004, as compared to the corresponding period in 2003, primarily due to an increase in astrological charts sold through third parties.


Six Months Ended June 30

Revenues
    from Astrology.com accounted for approximately 5% of total revenues for both
    the six months ended June 30, 2004 and June 30, 2003. Revenues from Astrology.com
    increased approximately $0.2 million, or 17%, for the six months ended June
    30, 2004, as compared to thecorresponding
    period in 2003, primarily due to an increase in astrological charts sold through
    third parties, as well as a larger sales volume of astrological charts on
    the Astrology.com Web site.


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IVPN

|                            |                            | Three
          Months Ended June 30, |  | Six
    Months Ended June 30, |  
|--------------------------- | -------------------------- | ------------------------------------- |  | ----------------------------- | -
|                            |                            |                                       |  |                               |  
|                            | (dollars
    in thousands) |                                      
|                            |                            |                                       |  |                               |  
|                            |                            | 2004                                  |  | (1)                           |  
|                            |                            |                                       |  |                               |  
|Sponsorship & advertising   | $                          | 3,091                                 |  | 62                            | %
|                            |                            |                                       |  |                               |  
|Custom
        publications |                            | 1,623                                 |  | 32                            | %
|                            |                            |                                       |  |                               |  
|Licensing
        fees      |                            | 299                                   |  | 6                             | %
|                            |                            |                                       |  |                               |  
|                            | $                          | 5,013                                 |  | 100                           | %
|                            |                            |                                       |  |                               |  

|   
|---
|(1)

Three Months
Ended June 30

Revenues from IVPN accounted for approximately 30% of total revenues for the three months ended June 30, 2004, and approximately 24% for the corresponding period in 2003. Revenues from IVPN increased approximately $1.8 million, or 58%, for the three months ended June 30, 2004, as compared to the corresponding period in 2003.


The increase in revenues for the three months ended June 30, 2004, as compared
to the corresponding period in 2003, was primarily due to an increase of approximately
$1.6 million in revenues from custom publications and an increase of approximately
$0.3 million in licensing fees. The increase in revenues from custom publications
for the three months ended June 30, 2004, as compared to the corresponding period
in 2003, was primarily due to revenue recognized for publications created and
accepted by the customer in the second quarter of 2004, as compared to no publications
created and/or distributed for the same period in 2003. Licensing fee revenues
increased approximately 550% for the three months ended June 30, 2004, as compared
to the corresponding period in 2003, primarily due to the commencement of a larger
number of agreements in which hospitals pay an annual fee for The Newborn Channel.
As of June 30, 2004, 506 hospitals had agreed to pay a fee for The Newborn Channel
and 467 contracts had commenced. As of June 30, 2003, 161 hospitals had agreed
to pay a fee for The Newborn Channel and 129 contracts had commenced. Revenues
from IVPN may vary based upon the timing and volume of customers advertising
and marketing initiatives


Six Months Ended June 30

Revenues from IVPN accounted for approximately 32% of total revenues for the
six months ended June 30, 2004, and approximately 29% for the corresponding period
in 2003. Revenues from IVPN increased approximately $2.9 million, or 40%, for
the six months ended June 30, 2004, as compared to the corresponding period in
2003.


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The increase in revenues for the six months ended June 30, 2004, as compared to the corresponding period in 2003, was primarily due to an increase of revenues from custom publications of approximately $2.6 million and licensing fees of approximately $0.6 million, offset by a decrease in sponsorship and advertising revenues of approximately $0.3 million. Revenues from custom publications increased approximately 210% for the six months ended June 30, 2004, as compared to the corresponding period in 2003, primarily due to an increase in the number of publications created and/or distributed. Licensing fee revenues increased approximately 892% for the six months ended June 30, 2004, as compared to the corresponding period in 2003, primarily due to the commencement of a larger number of agreements in which hospitals pay an annual fee for The Newborn Channel. The decrease in sponsorship and advertising revenues of approximately 5% for the six
months ended June 30, 2004, as compared to the corresponding period in 2003, was primarily due to the loss of two customers advertising on The Newborn Channel in the first quarter of 2004.


PAG

|                            |   | Three Months Ended June 30, |  | Six Months Ended June 30, |     
|--------------------------- | - | --------------------------- |  | ------------------------- | ----
|                            |   |                             |  |                           |     
|                            |   |                             |  |                           |     
|                            |   |                             |  |                           |     
|                            |   | 2004                        |  | (1)                       |     
|                            |   |                             |  |                           |     
|Subscription-based programs | $ | 459                         |  | 47                        | %   
|                            |   |                             |  |                           |     
|Events                      |   | 359                         |  | 37                        | %   
|                            |   |                             |  |                           |     
|Consulting/other            |   | 135                         |  | 14                        | %   
|                            |   |                             |  |                           |     
|Barter                      |   | 27                          |  | 3                         | %   
|                            |   |                             |  |                           |     
|                            | $ | 980                         |  | 100                       | %(2)
|                            |   |                             |  |                           |     

|   
|---
|(1)
|(2)

Three Months Ended June 30

Revenues from PAG accounted for approximately 6% of total revenues for the three
months ended June 30, 2004, and approximately 10% for the three months ended
June 30, 2003. Revenues from PAG decreased approximately $0.3 million, or 22%,
for the three months ended June 30, 2004, as compared to the corresponding period
in 2003. The decrease in revenues for the three months ended June 30, 2004, as
compared to the corresponding period in 2003, was primarily due to a decrease
of approximately $0.2 million generated from events, since 2004 is the off year
in PAGs every-other-year schedule for publishing the comprehensive WOW!
Facts book.


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Six Months Ended June
30

Revenues
        from PAG accounted for approximately 5% of total revenues for the six
        months ended June 30, 2004, and approximately 7% for the six months ended
        June 30, 2003.Revenues from PAG decreased approximately $0.2 million, or 8%, for the six months ended June 30, 2004, as compared to the corresponding period in 2003. Revenues decreased for the six months ended June 30, 2004, as compared to the corresponding period in 2003, primarily due to a decrease of approximately $0.3 million in generated from events as described above, offset by an increase of approximately $0.1 million in revenues from subscription-based programs. The increase in revenues from subscription-based programs was primarily due to an increase in the number of participating members.


Revenues, Receivables and Customer Concentration

Our five largest customers accounted for approximately 28% of total revenues for the three months ended June 30, 2004, and approximately 26% of total revenues for the corresponding period in 2003. Our five largest customers accounted for approximately 32% of total revenues for the six months ended June 30, 2004, and approximately 27% of total revenues for the corresponding period in 2003.  One customer, Hearst, a related party, accounted for approximately 12% of total revenues for the three months ended June 30, 2004.  Wal-Mart Stores, Inc. and its affiliates, or Wal-Mart, and Hearst, each accounted for approximately 12% of total revenues for the six months ended June 30, 2004. No other single customer accounted for more than 10% of our total revenues for the three and six months ended June 30, 2004. One customer, Hearst, accounted for approximately 12% of total revenues for the three months ended June 30, 2003, and approximately 13%
of total revenues for the six months ended June 30, 2003. At June 30, 2004, Hearst accounted for approximately 12% of total net accounts receivable, and at December 31, 2003, Hearst accounted for approximately 20% of total net accounts receivable. The significance of revenues from any of our customers can vary on a quarter to quarter basis as a result of the number and timing of such customers advertising and marketing initiatives. We anticipate that our results of operations in any given period will continue to depend to a significant extent on revenues from a small number of customers.


In July 2004, iVillage and Hearst entered into a Web site services agreement with a three-year term that supersedes and replaces the amended and restated magazine content license and hosting agreement iVillage assumed as part of the acquisition of Women.com. Pursuant to the Web site services agreement:


| |  | Hearst
        will pay to us a production and service fee of $4.0 million during the
        first year of the renewed agreement which would increase by approximately
    $0.2 million in each subsequent year;                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                          
| |  | We will
        continue to receive a commission on magazine subscription sales and if
        magazine subscription sales do not reach a certain threshold in the second
        year of the new agreement, then we will not be entitled to any commission
    from magazine subscriptions sales in the third year of the new agreement;
| |   |                                                                                                                                                                                                                                                                                                                                          
| |  | We will
        no longer be required to offer Hearst, and Hearst would no longer be
    obligated to purchase, advertising on iVillage.com; and                                                                                                                                                                                         

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| |  | Hearst
        will continue to receive a commission from us on a percentage of the
        advertising sales from the Hearst magazine Web sites we host, the commissions
    paid to and received from Hearst will vary based on performance.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because our largest customers have varied over time in the past, we anticipate that they will continue to do so in the future. Consequently, the loss of even a small number of our largest customers at any one time may adversely affect our business, financial condition and results of operations, unless we are able to enter into contracts to replace lost revenues.


Operating Expenses

The following table sets forth our operating expenses by type (dollars in thousands)


|                                                                      | Three Months Ended June 30, |        | Six Months Ended June 30, |    
|--------------------------------------------------------------------- | --------------------------- | ------ | ------------------------- | ---
|                                                                      |                             |        |                           |    
|                                                                      |                             | 2004   |                           | (1)
|                                                                      |                             |        |                           |    
|Editorial,
    product development and technology                     |                             | 7,013  |                           | 43 
|                                                                      |                             |        |                           |    
|Sales and marketing                                                   |                             | 4,723  |                           | 29 
|                                                                      |                             |        |                           |    
|General and administrative                                            |                             | 2,885  |                           | 17 
|                                                                      |                             |        |                           |    
|Lease restructuring
    charge and related impairment of fixed assets |                             | —      |                           | 0  
|                                                                      |                             |        |                           |    
|Depreciation
    and amortization                                     |                             | 1,953  |                           | 12 
|                                                                      |                             |        |                           |    
|Impairment
    of goodwill, intangible assets, and fixed assets       |                             | —      |                           | 0  
|                                                                      |                             |        |                           |    
|Total operating expenses                                              | $                           | 16,574 |                           | 100
|                                                                      |                             |        |                           |    

|   
|---
|(1)

Total operating expenses for the three and six months ended June 30, 2004, as compared to the corresponding periods in 2003, have declined primarily as a result of cost reductions, reduced depreciation and amortization and non-cash charges incurred in 2003. In the past, we have achieved cost reductions through increased managerial efficiencies and several expense reduction initiatives targeted at certain expenses, including reduced advertising, reduced lease commitments, targeted staff reductions and reduced employee benefit plan costs.


Editorial, Product Development and Technology

Editorial, product development and technology expenses consist primarily
    of the following:


| |  | payroll,
        severance and related expenses for the editorial, technology, Web site
    design and production staffs;
| | - | -------------------------------------------------------------------------------------------------------------------------

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| |  | the
    cost of communications;                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                      
| |  | related
        expenditures necessary to support iVillages Web sites, software
    development, technology and support operations;                                                                 
| |   |                                                                                                                                                                                                      
| |  | costs
        associated with IVPNs magazines, onsert program, which bundles
        samples and promotional literature in a poly-bag with a magazine, and
    the broadcasting of its programs; and
| |   |                                                                                                                                                                                                      
| |  | an
        allocation of facility expenses, which is based on the number of personnel
    in editorial, product development and technology roles.                                                    

Three Months Ended June 30

Editorial, product development and technology expenses for the three months ended June 30, 2004 were approximately $7.0 million, or 43% of total revenues. Editorial, product development and technology expenses for the three ended June 30, 2003 were approximately $7.1 million, or 53% of total revenues.


Editorial, product development
    and technology expenses decreased approximately $41,000, or 1%, for the three
    months ended June 30, 2004, as compared to the corresponding period in 2003,
    primarily due to a decrease in licensing fees of approximately $0.3 million
    and payroll, severance and related expenses of approximately $0.1 million,
    as well as a decrease in facility costs resulting in a decreased facilities
    allocation of approximately $0.1 million. These amounts were offset by approximately
    $0.3 million of costs associated with two custom publications created in
    the second quarter of 2004, with no such expense in the corresponding period
    of 2003, and increased consultant expenses from the Promotions.com division
    of approximately $0.2 million. Licensing fees decreased due to the renegotiation
    of a vendor contract with substantial changes in the terms and conditions
    of the original contract, which provided  a one-time benefit of approximately
    $0.3 million, and reduces future obligations as well. Facility costs decreased
    in 2004, as compared to the corresponding period in 2003, primarily due to
    a lease amendment entered into with the landlord of our New York leased space,
    in the third quarter of 2003, whereby we received a reduction in leased space,
    as well as a reduction in our rent per square foot. As a result, total costs
    for the New York leased facility for the three months ended June 30, 2004
    decreased approximately $0.3 million, as compared to the corresponding period
    in 2003. In addition, several vendor contracts were renegotiated which decreased
    facility costs by approximately $0.1 million for the three months ended June
    30, 2004, as compared to the corresponding period in 2003.


Editorial, product development and technology expenses decreased as a percentage of total revenues for the three months ended June 30, 2004, when compared to the corresponding period in 2003, primarily as a result of an increase in revenues.


Six Months Ended June 30

Editorial, product development and technology expenses for the six months ended June 30, 2004 were approximately $14.5 million, or 45% of total revenues. Editorial, product development and
      technology expenses for the six months ended June 30, 2003 were approximately
      $14.6 million, or 57% of total revenues.


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Editorial, product development
      and technology expenses decreased approximately $0.1 million, or 1%, for
      the six months ended June 30, 2004, as compared to the corresponding period
      in 2003, primarily due to a decrease in licensing fees of approximately
      $0.2 million and payroll, severance and related expenses of approximately
      $0.6 million as well as lower facility costs resulting in a decreased facilities
      allocation of approximately $0.4 million. These amounts were offset by
      approximately $0.7 million of increased costs associated with four custom
      publications in 2004, as compared with only one publication in 2003, and
      increased consultant expenses from the Promotions.com division of approximately
      $0.6 million. Licensing fees decreased due to the renegotiation of a vendor
      contract with substantial changes in the terms and conditions of the original
      contract which provided a one-time benefit of approximately $0.3 million.
      Facility  costs decreased in 2004, as compared to the corresponding period
      in 2003, primarily due to a lease amendment described above. As a result,
      total costs for the New York leased facility for the six months ended June
      30, 2004 decreased approximately $0.6 million, as compared to the corresponding
      period in 2003. In addition, several vendor contracts were renegotiated
      which decreased facility costs by approximately $0.3 million for the six
      months ended June 30, 2004, as compared to the corresponding period in
      2003.


Editorial, product development and technology expenses decreased as a percentage of total revenues for the six months ended June 30, 2004, when compared to the corresponding period in 2003, primarily as a result of an increase in revenues.


Sales and Marketing

Sales and marketing expenses consist primarily of the following:


| |  | payroll, commissions,
    severance and related expenses for sales and marketing personnel;                            
| | - | -----------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                        
| |  | advertising and
    other marketing-related expenses; and                                                              
| |   |                                                                                                                        
| |  | an allocation
        of facility expenses, which is based on the number of personnel in sales
    and marketing roles.

Three Months Ended June 30

Sales and marketing expenses for the three months ended June 30, 2004 were approximately $4.7 million, or 29% of total revenues. Sales and marketing expenses for the three months ended June 30, 2003, were approximately $5.0 million, or 38% of total revenues.


Sales and marketing expenses decreased approximately $0.3 million, or 6%, for the three months ended June 30, 2004, as compared to the corresponding period in 2003, primarily due to a decrease in market research costs of approximately $0.2 million, consultant expenses of approximately $0.1 million, and lower facility costs resulting in a decreased facilities allocation of approximately $0.1 million. The expenses were offset by an increase in payroll, commissions, severance and related expenses of approximately $0.1 million. Market research costs decreased for the three months ended June 30, 2004, as compared to the corresponding period in 2003, primarily due to a research study conducted by a third party vendor in 2003, with no comparable study performed in 2004. Sales and marketing expenses decreased as a percentage of total revenues for the three months ended June 30, 2004, when compared to the
corresponding period in 2003, due to a decrease in sales and marketing expenses as a result of our overall effort to manage costs, coupled with an increase in
revenues.


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Included in sales and marketing expenses are barter transactions, which amounted to approximately 23% of total sales and marketing costs during the three months ended June 30, 2004, compared to approximately 21% of such costs for the corresponding three months
in 2003.


Six Months Ended June 30

Sales and marketing expenses for the six months ended June 30, 2004 were approximately $9.1 million, or 28% of total revenues. Sales and marketing expenses for the six months ended June 30, 2003 were approximately $10.6 million, or 41% of total
revenues.


Sales and marketing expenses
    decreased approximately $1.5 million, or 14%, for the six months ended June
    30, 2004, as compared to the corresponding period in 2003, primarily due
    to a decrease in market research costs of approximately $0.3 million, consultant
    expenses of approximately $0.1 million, payroll, commissions, severance and
    related expenses of approximately $0.2 million and media expenses of approximately
    $0.3 million, as well as lower facility costs, resulting in a decreased facilities
    allocation of approximately $0.3 million. Market research costs decreased
    for the six months ended June 30, 2004, as compared to the corresponding
    period in 2003, primarily due to a research study conducted by a third party
    vendor in 2003, with no comparable research study performed in 2004. Sales
    and marketing expenses decreased as a percentage of total revenues for the
    six months ended June 30, 2004, when compared  to the corresponding period
    in 2003, due to a decrease in sales and marketing expenses as a result of
    our overall effort to manage costs, coupled with an increase in revenues.


Included in sales and marketing expenses are barter transactions, which amounted to approximately 21% of total sales and marketing costs during the six months ended June 30, 2004, compared to approximately 21% of such costs for the corresponding period in 2003.


General and Administrative

General and administrative expenses consist primarily of the following:


| |  | payroll,
        severance and related expenses for executive management, finance, human
    resources and in-house legal counsel;
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                   
| |  | directors and
    officers insurance;                                                                                           
| |   |                                                                                                                                   
| |  | general
    corporate overhead;                                                                                                   
| |   |                                                                                                                                   
| |  | professional
    fees; and                                                                                                        
| |   |                                                                                                                                   
| |  | an allocation
        of facility expenses, which is based on the number of personnel in general
    and administrative roles.    

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Three Months Ended June 30

General and administrative expenses for the three months ended June 30, 2004 were approximately $2.9 million, or 17% of total revenues. General and administrative expenses for the three months ended June 30, 2003 were approximately $3.1 million, or 23% of total
revenues.


General and administrative expenses decreased approximately $0.2 million for the three months ended June 30, 2004, or 6%, as compared to the corresponding period in 2003, primarily due to a decrease in payroll, severance and related expenses of approximately $0.1 million, insurance costs of approximately $0.1 million and bad debt expenses of approximately $0.1 million, as well as lower facility costs, resulting in a decreased facilities allocation of approximately $0.1 million. These amounts were partially offset by an increase in professional fees of approximately $0.1 million for the three months ended June 30, 2004, as compared to the corresponding period in 2003. Professional fees increased in 2004 primarily due to costs of compliance with the Sarbanes-Oxley Act of 2002. General and administrative expenses decreased as a percentage of total revenues for the three months ended June 30, 2004, when compared
to the corresponding period in 2003, primarily as a result of an increase in revenues.


In the ordinary course of business, we utilize estimates to determine the accrual of certain operating expenses. These estimates are reviewed on an ongoing basis to determine the adequacy of these accruals. For the three months ended June 30, 2004, we reversed approximately $0.3 million, as compared with no amount for the corresponding period, of accruals included in operating expenses due to the renegotiation of a vendor contract with substantial changes in the terms and conditions of the original contract which provided a one-time benefit. These amounts were offset by additional accruals for various operating expenses.


Six Months Ended June 30

General and administrative expenses for the six months ended June 30, 2004 were approximately $5.8 million, or 18% of total revenues. General and administrative expenses for the six months ended June 30, 2003 were approximately $6.1 million, or 24% of total
revenues.


General
      and administrative expenses decreased approximately $0.3 million for the
      six months ended June 30, 2004, or 5%, as compared to the corresponding
      period in 2003, primarily due to a decrease in payroll, severance and related
      expenses of approximately $0.3 million, insurance costs of approximately
      $0.2 million and bad debt expenses of approximately $0.2 million, as well
      as lower facility costs, resulting in a decreased facilities allocation
      of approximately $0.2 million. These amounts were partially offset by an
      increase in professional fees of approximately $0.4 million for the six
      months ended June 30, 2004, as compared to the corresponding period in
      2003. Professional fees increased in 2004 primarily due to costs of compliance
      with the Sarbanes-Oxley Act of 2002. General and administrative expenses
      decreased as a percentage of total revenues for the six months ended June
      30, 2004, when compared to the corresponding period in 2003, primarily
      as a result of an increase in revenues.


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In the ordinary course of business, we utilize estimates to determine the accrual of certain operating expenses. These estimates are reviewed on an ongoing basis to determine the adequacy of these accruals. For the six months ended June 30, 2004, we reversed approximately $0.3 million of accruals included in operating expenses, primarily due to the renegotiation of a vendor contract with substantial changes in the terms and conditions of the original contract which provided for a one-time benefit. For the corresponding period in 2003, we reversed approximately $0.1 million due to changes in estimates on services previously provided for. These amounts were offset by additional accruals for various operating expenses.


Lease Restructuring Charge and Related Impairment of Fixed Assets

In the second quarter of 2003, we abandoned a significant portion of our New York leased real estate. As a result, we incurred a lease restructuring charge of approximately $0.6 million. In addition, we wrote off fixed assets of approximately $5.2 million that were impaired with the abandonment of the leased space and reduced the liability for deferred rent associated with the abandoned leased space by approximately
$1.8 million.


Depreciation and Amortization

Depreciation and amortization expenses were approximately $2.0 million, or 12% of total revenues, for the three months ended June 30, 2004, and approximately $3.8 million, or 12% of total revenues, for the six months ended June 30, 2004. Depreciation and amortization expenses were approximately $2.2 million, or 17% of total revenues, for the three months ended June 30, 2003, and approximately $4.9 million, or 19%, of total revenues, for the six months ended June 30, 2003. The decrease in depreciation and amortization for the three and six months ended June 30, 2004, as compared to the corresponding periods in 2003, was primarily due to the impairment of intangible assets and fixed assets in the second and third quarters of 2003 associated with the restructuring of our headquarters lease, the restructuring of the business operations of the Promotions.com division, and by changing the Webstakes.com
business model, which each reduced the cost basis on which depreciation and amortization is calculated. In addition, depreciation and amortization expenses decreased in 2004 as a result of certain assets being fully depreciated or
amortized in 2003.


Impairment of Goodwill, Intangible Assets and Fixed Assets

In
      the second quarter of 2003, a $4.0 million impairment was recorded for
      the restructuring of the business operations of the Promotions.com division
      and for changing the Webstakes.com business model.


Interest Income, Net

Interest income, net includes primarily interest income from our cash balances and interest earned on stockholders notes receivable. Interest income, net for both the three and six months ended June 30, 2004 was approximately $0.1 million, or less than 1% of total revenues. Interest
income, net was approximately $41,000, or less than 1% of total revenues, for
the three months ended June 30, 2003. Interest income, net was approximately
$0.1 million, or 1% of total revenues, for the six months ended June 30, 2003.
Interest income decreased for the six months ended June 30, 2004 primarily due
to lower average cash and cash equivalents balances in 2004.


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Other Income, Net

Other income,
    net for the three months ended June 30, 2004 was approximately $34,000. Other
    income, net for the six months ended June 30, 2004 was approximately $0.1
    million. Both amounts represent less than 1% of total revenues. There was
    no amount for the comparable periods in 2003. Other income, net primarily
    includes moneys received from a legal settlement and from a distribution
    in a bankruptcy claim acquired in the acquisition of Promotions.com.


Gain on Sale of Joint Venture Interest

Gain on sale
    of joint venture interest was approximately $0.1 million, or less than 1%
    of total revenues, for the three months ended June 30, 2004, and approximately
    $0.2 million, or approximately 1% of total revenues, for the six months ended
    June 30, 2004. Gain on sale of joint venture interest was approximately $0.2
    million for both the three and six months ended June 30, 2003, or approximately
    2% of total revenues, for the three months ended June 30, 2003, or less than
    1% of total revenues, for the six months ended June 30, 2003. Gain on sale
    of joint venture interest resulted from the restructuring of our Tesco, PLC,
    or Tesco, relationship in March 2003, under which a division of Tesco purchased
    our entire ownership interest in iVillage UK. The gain on sale also related
    to amounts we received pursuant to the license agreement entered into with
    the Tesco division contemporaneously with such restructuring.


Net Income/Net Loss

Three Months Ended June 30

We recorded
    net income of approximately $0.1 million, or $0.00 per share, for the three
    months ended June 30, 2004. For the comparable period in 2003, we recorded
    a net loss of approximately $12.1 million, or $0.22 per share. We generated
    net income for the three months ended June 30, 2004, as compared to a net
    loss in the corresponding period in 2003, primarily due to increased revenues
    of approximately $3.3 million and lower operating expenses, excluding the
    2003 items indicated below, of approximately $0.8 million for the three months
    ended June 30, 2004, coupled with the following  items for the three
    months ended June 30,
    2003 which
    had
    the
    effect
    of increasing our net loss for that period: a lease restructuring charge
    and related impairment of fixed assets associated with our New York office
    leased space of approximately $4.0 million and the impairment of goodwill,
    intangible assets and fixed assets associated with the restructuring of the
  Promotions.com division of approximately $4.0 million.


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Six
Months Ended June 30

We recorded
      a net loss of approximately $0.8 million, or $0.01 per share, for the six
      months ended June 30, 2004. For the comparable period in 2003, we recorded
      a net loss of approximately $18.2 million, or $0.33 per share. We had a
      lower net loss for the six months ended June 30, 2004, as compared to the
      corresponding period in 2003, primarily due to increased revenues of approximately
      $6.2 million and lower operating expenses, excluding the 2003 items indicated
      below, of approximately $3.1 million for the six months ended June 30,
      2004, coupled
      with the following items for the six months ended June 30, 2003, which
      had the effect of increasing our net loss for that period: a lease restructuring
      charge and related impairment of fixed assets associated with our New York
      office leased space of approximately $4.0 million and the impairment of
      goodwill, intangible assets and fixed assets associated with the restructuring
      of the Promotions.com division of approximately $4.0 million.


Liquidity and Capital Resources

Financial Reporting Release No. 61, released by the Securities and Exchange Commission, requires all companies to include a discussion to address, among other things, liquidity, off-balance sheet arrangements, contractual obligations and commercial commitments. iVillage currently does not maintain any off-balance
  sheet arrangements.


As of June 30, 2004, we had approximately $17.4 million in cash and cash equivalents. Cash equivalents include money market accounts. We maintain our cash and cash equivalents in highly rated financial institutions and at times these balances exceed insurable amounts.


On July 6,
    2004, we completed a public offering of 11,560,032 shares of our common stock
    generating total estimated proceeds, net of underwriting discounts and commissions
    and estimated costs of the offering, of approximately $64.8 million to us.


Net cash provided
    by operating activities increased approximately $3.3 million to $1.5 million
    for the three months ended June 30, 2004, from net cash used in operating
    activities of approximately $1.9 million for the comparable period in 2003.
    Net cash provided by operating activities increased approximately $6.2 million
    to $1.8 million for the six months ended June 30, 2004, from net cash used
    in operating activities of approximately $4.4 million for the comparable
    period in 2003. The increase in cash provided for the six months ended June
    30, 2004, as compared to the corresponding period in 2003, was primarily
    attributable to a decrease in net loss, less non-cash adjustments, of approximately
    $7.9 million, offset by an increase in other assets of approximately $0.7
    million in 2004 compared to a utilization of other assets of approximately
    $0.5 million in 2003. The increase in other assets in for the six months
    ended June 30, 2004 is primarily due to an increase in prepaid insurance
    of approximately $0.4 million. The decrease in other assets for the six months
    ended June 30, 2003 was primarily from the receipt of certain construction
    expenses from the landlord of our New York leased headquarters space of approximately
    $0.3 million.


Net cash used in investing activities increased approximately $0.9 million to $1.0 million for the three months ended June 30, 2004, from approximately $0.1 million for the three months ended June 30, 2003. Net cash used in investing activities increased approximately $1.3 million to $1.5 million for the six months ended June 30, 2004, from approximately $0.1 million for the corresponding period in 2003. The increase in net cash used in investing activities for the six months ended June 30, 2004 compared to the corresponding period in 2003 was primarily due to an increase in fixed assets purchased of approximately $0.9 million, consisting mostly of hospital video equipment,
and due to a decrease in cash received in connection with the March 2003 license
agreement with a Tesco division of approximately $0.4 million in 2004.


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Net
    cash provided by financing activities increased approximately $0.5 million
    to $0.6 million for the three months ended June 30, 2004, from approximately
    $0.1 million for the three months ended June 30, 2003. Net cash provided
    by financing activities increased approximately $1.2 million to $1.3 million
    for the six months ended June 30, 2004, from approximately $0.1 million for
    the corresponding period in 2003. The increase in net cash provided by financing
    activities for the six months ended June 30, 2004, as compared to the corresponding
    period in 2003, was primarily attributable to an increase in proceeds from
    the exercise of stock options and warrants of approximately $1.1 million
    and an increase in principal payments received for stockholders notes
    receivable of approximately $0.2 million.


iVillage
    has historically incurred net losses and negative cash flows on an annual
    basis. However, management believes that iVillages current funds, together
    with the recently completed securities offering and past cost reductions,
    will be sufficient to enable iVillage to meet its planned expenditures through
    the next twelve months.


Management has provided guidance that we anticipate achieving profitability on a fiscal year basis in 2004 and achieving net income for 2004 by growing revenues approximately 25% in 2004 as compared to 2003, while holding expenses relatively unchanged year over year. Management has alsoprovided
      guidance that iVillage expects to achieve net income for 2004 of between
      approximately $1.0 million and $1.5 million. However, we may not achieve
      profitable operations or increase revenues as much as we anticipate. Factors
      that could adversely affect our ability to achieve profitable operations
      on a fiscal year basis include the loss of any of our major customers or
      a significant downturn in the advertising market or economy, in general,
      as well as our ability to report increased revenues at the 25% growth rate
      indicated. Additional factors that could adversely affect our ability to
      meet our guidance are described below under Risks as well as elsewhere in this Managements
      Discussion and Analysis of Financial Condition and Results of Operations.


IVPN currently
    broadcasts television programming to hospitals via a 24-hour, 7 days a week
    satellite broadcast. This satellite is scheduled to go offline in 2005. Upon
    the expiration of the contract or in the event of an unforeseen earlier interruption
    of service, we would need to either negotiate a new contract, find another
    satellite provider and/or invest in alternative technology to distribute
    the service. IVPN is in the process of converting many of its hospitals from
    the satellite broadcast to a new system that eliminates the need for a constant
    satellite feed. This new technology will only require a limited amount of
    satellite time each month resulting in reduced operating costs in 2005. IVPN
    estimates that it will cost approximately $3.0 million to $4.0 million to
    convert to the new technology. In 2003, IVPN initiated the collection of
    an annual fee from hospitals to receive programming broadcast by IVPN. These
    fees result from agreements between IVPN and the hospitals that generally
    have a length of three to five years. As of June 30, 2004, approximately
    47% of participating hospitals have agreed to pay this fee, however, we can
    make no assurance that all of the hospitals will agree to pay a fee. The
    total value of signed contracts at June 30, 2004 is in excess of $6.7 million,
    which will be recognized as revenue over the next several years.


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Our February 2000 advertising agreement with Unilever, as amended, provided for a Unilever advertising purchase commitment of $14.5 million. This agreement expired in June 2003. In October 2003, we entered into a new agreement with Unilever that terminates the February 2000 advertising agreement and provides for Unilevers purchase of an additional $0.1 million in advertising and receipt of the remaining advertising not received under the previous agreement of approximately $0.9 million. The new agreement expires in December 2004 and approximately $0.5 million remains to be
earned.


Pursuant
    to the amended and restated magazine content license and hosting agreement
    with Hearst, Hearst committed to purchase from us between approximately $16.4
    million and $18.2 million of production and advertising services over a three-year
    period ending in June 2004. This agreement also provided for revenue sharing
    between Hearst and us with respect to advertising revenues obtained by us
    from the Hearst magazine Web sites and our other Web sites containing substantial
    Hearst content. This revenue-sharing arrangement required that we pay Hearst
    a royalty payment, based on net advertising revenues, of at least approximately
    $2.6 million during the three-year term of the agreement. This amount would
    be reduced on a pro rata basis if Hearst failed to expend its stated annual
    minimum in production fees in any year of the agreement. In addition, if
    a shortfall in production fees occured in any year of the agreement, Hearst
    would be required to place additional advertising in an amount equal to 40%
  of the production fee shortfall.


In July 2004,
    we entered into a Web site services agreement with Hearst that supersedes
    and replaces the amended and restated magazine content license and hosting
    agreement. Pursuant to the agreement, which has a three-year term, Hearst
    will pay us approximately $12.5 million over three years for hosting and
    production services related to Hearst magazine Web sites residing on iVillage.com.
    In addition, we will receive a commission on magazine subscription sales.
    Hearst will receive a revenue share from us on a percentage of the advertising
    sales from Hearst magazine Web sites that we host. These commissions to and
  from Hearst will vary based on performance.


In December
    2003, we signed a Web site services agreement in which Hearst will pay approximately
    $1.9 million for production, maintenance and hosting services for three teen
    Web sites: Seventeen.com, CosmoGirl.com and Teen.com. The agreement terminates
    in December 2005. As of June 30, 2004, we have received approximately $0.3
  million and earned approximately $0.5 million in connection with this agreement.


In March 2003,
    we restructured the terms of our joint venture so that a division of Tesco
    purchased our entire ownership interest in iVillage UK. We also entered into
    a twenty-year agreement with that division, subject to earlier termination
    upon the occurrence of certain events, whereby we will license to iVillage
    UK certain of our content and intellectual property, including trademarks
    and copyrights, for use in the United Kingdom and Ireland in exchange for
    the greater of a minimum monthly license fee or a percentage of iVillage
    UKs gross revenues.


We lease
    office space and equipment under non-cancelable operating leases expiring
    at various dates through April 2015. In addition, in the ordinary course
    of business we enter into agreements with various service providers for ad
    serving, satellite transmissions and license/content arrangements.


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Capital expenditures
    were approximately $1.6 million for the six months ended June 30, 2004 and
    were primarily for hospital video equipment, computer hardware and software
    purchases as well as the capitalization of certain Web site development costs.
  Our capital requirements depend on numerous factors, including:


| |  | market
    acceptance of our services;                                                                                                                             
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                    
| |  | the amount
        of resources we devote to investments in our business, including entering
    into joint ventures with and/or the acquisition of other entities;
| |   |                                                                                                                                                                    
| |  | the resources
    we devote to marketing;                                                                                                                          
| |   |                                                                                                                                                                    
| |  | the resources
        we devote to building the infrastructure necessary to enable us to sell
    subscription-based products and services; and                    
| |   |                                                                                                                                                                    
| |  | the resources
    we devote to selling our products and services.                                                                                                  

Off-Balance Sheet Arrangements

In the ordinary
    course of business, we enter into agreements that contingently require us
    to indemnify counterparties against third-party claims. These may include:
    agreements with advertisers and sponsors, under which we may indemnify them
    against claims arising from their use of our products or services; agreements
    with customers, under which we may indemnify them against claims arising
    from their use of our products or services; real estate and equipment leases,
    under which we may indemnify lessors against third-party claims relating
    to use of their property; agreements with licensees or licensors, under which
    we may indemnify the licensee or licensor against claims arising from their
    use of our intellectual property or our use of their intellectual property;
    and agreements with initial purchasers and underwriters of our securities,
    under which we indemnify them against claims relating to their participation
    in the transactions.


The nature
    and terms of these indemnifications vary from contract to contract, and generally
    a maximum obligation is not stated. Because we are unable to estimate our
    potential obligation, historically we have had no obligation arising from
    these indemnifications, and because management does not expect these indemnifications
    to have a material and adverse effect on our consolidated financial position,
    results of operations or cash flows, no related liabilities are recorded
    as of June 30, 2004. We hold insurance policies that mitigate potential losses
    arising from certain indemnifications and, historically, we have not incurred
  significant costs related to performance under these obligations.


Recent Accounting Pronouncements

In December
    2003, FASB issued Interpretation No., or FIN, 46R, Consolidation of
    Variable Entities, or FIN 46R. FIN 46R replaces the same titled FIN
    46 that was issued in January 2003. FIN 46R requires the consolidation of
    a variable interest entity by a company that bears the majority of risk of
    loss from the variable entitys activities, is entitled to receive a
    majority of the variable interest entitys residual returns or both.
    The provisions of this interpretation are effective for us beginning in the
    first quarter of fiscal 2004. The adoption of this interpretation did not
    have a material impact on our financial position, cash flows or results of
  operations.


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Legal Proceedings

In January
    2003, a Belgian court issued a judgment against Women.com in the amount of
    approximately 850,000 Euros, or approximately $1.0 million based on the Euro
    exchange rate as of August 11, 2004, relating to a claim by Euregio.net of
    copyright infringement. We are appealing the judgment in the Belgian court
    system, and we have been advised by outside counsel that Euregio.net would
    have to commence legal proceedings in the United States in order to enforce
    any judgment by a Belgian court.


Several plaintiffs
    have filed class action lawsuits in federal court against us, several of
    our present and former executives and our underwriters in connection with
    its March 1999 initial public offering. A similar class action lawsuit was
    filed against Women.com Networks, Inc., or Women.com, several of its former
    executives and its underwriters in connection with Women.coms October
    1999 initial public offering. The complaints generally assert claims under
    the Securities Act, the Exchange Act and rules and regulations promulgated
    by the Securities and Exchange Commission, or SEC. The complaints seek class
    action certification, unspecified damages in an amount to be determined at
    trial, and costs associated with the litigation, including attorneys fees.


In February
    2003, the defendants motion to dismiss certain of the plaintiffs claims
    was granted in part, but, for the most part, denied. In June 2003, a proposed
    settlement of this litigation was structured between the plaintiffs, the
    issuer defendants, the issuer officers and directors named as defendants,
    and the issuers insurance companies. The proposed settlement generally
    provides that the issuer defendants and related individual defendants will
    be released from the litigation without any liability other than certain
    expenses incurred to date in connection with the litigation, the issuer defendants insurers
    will guarantee $1.0 billion in recoveries by plaintiff class members, the
    issuer defendants will assign certain claims against the underwriter defendants
    to the plaintiff class members, and the issuer defendants will have the opportunity
    to recover certain litigation-related expenses if the plaintiffs recover
    more than $5.0 billion from the underwriter defendants. The respective boards
    of directors of iVillage and Women.com each approved the proposed settlement
    in July 2003.


On June 25,
    2004, the plaintiffs filed a motion for preliminary approval of the settlement
    with the court, which was accompanied by a brief filed by the issuer defendants
    in support of the plaintiffs motion. The court requested that any objections
    to preliminary approval of the settlement be submitted by July 14, 2004,
    and certain underwriter defendants formally objected to the settlement. The
    plaintiffs and issuer defendants separately filed replies to the underwriter
    defendants objections to the settlement on August 4, 2004. There can
    be no assurance that this proposed settlement would be approved and implemented
  in its current form, or at all.


We
      believe, based upon the advice of outside legal counsel, that the aforementioned
      lawsuits and claims asserted against us and our subsidiary pursuant to
      these complaints are without merit and we intend to vigorously defend against
      these claims. If we lose our appeal of the judgment in the Belgian case
      or if the proposed settlement in the initial public offering laddering cases
      is ultimately not approved by the courts, defending against these claims
      couldrequire
      the expenditure of significant financial and managerial resources, which
  could harm our business.


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We
      are not currently subject to any other material legal proceedings. We may
      from time to time, however, become a party to various legal proceedings
      arising in the ordinary course of business.


RISK
  FACTORS

We
        operate in an environment that involves a number of risks and uncertainties.
        The risks and uncertainties described below are not the only ones we
        face. Additional risks and uncertainties not presently known to us or
        that we currently deem immaterial may also impair our business. If any
        of the following risks actually occur, our business, operating results
        and financial position could be harmed. This could cause the trading
        price of our stock to decline, and you could lose all or part of your
        investment. These risks should be read in conjunction with the other
        information set forth in this Form 10-Q and with iVillages Annual
        Report on Form 10-K for the fiscal year ended December 31, 2003.


Risks
  of Our Business

We
        have a limited history of net income on a quarterly basis and a history
        of losses on an annual basis, and we may have further continuing losses
  from operations.

We
      have incurred operating losses on an annual basis in each year of our operations
      and may continue to incur operating losses for the foreseeable future.
      We have incurred significant net losses on an annual basis in each year
      of our operations, have a history of negative cash flows and may continue
      to incur net losses for the foreseeable future. We achieved net income
      of approximately $0.1 million for the three months ended June 30, 2004,
      and incurred a net loss of $0.8 million for the six months ended June 30,
      2004. We also incurred net losses of approximately $27.1 million for the
      year ended December 31, 2003, and $33.9 million for the year ended December
      31, 2002. As of June 30, 2004, we had an accumulated deficit of approximately
      $494.6 million.


Although
      we achieved net income for the three months ended June 30, 2004, and we
      have had positive cash flows for the past three quarters, we cannot assure
      you that we will be able to achieve, sustain or increase net income and
      cash flows on a quarterly or annual basis. If our revenues grow slower
      than we anticipate, or if our operating expenses exceed expectations or
      cannot be adjusted accordingly, we will continue to suffer substantial
    losses.


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Our
        quarterly and annual revenues and operating results are not indicative
        of future performance, are difficult to forecast and have been and are
  likely to continue to fluctuate.

We do not
      believe that period-to-period comparisons of our operating results are
      necessarily meaningful nor should they be relied upon as reliable indicators
      of future performance. This makes it difficult to forecast with certainty
      quarterly and annual revenues and results of operations. In addition, our
      operating results are likely to fluctuate significantly fromfiscal
    quarter to quarter and year to year as a result of several factors, many of
    which are outside our control, and any of which could materially harm our
    business. Some of these factors include:


| |  | fluctuations
      in the demand for advertising
      or electronic commerce                                                                                                                               |  |  | fluctuations
      in marketing expenses and technology infrastructure costs           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                             |  |   |                                                                                        
| |  | the unpredictability
      of our success in
      new revenue and cost reductioninitiatives                                                                                                                |  |  | changes
      in the level of traffic on our network of Web sites                      
| |   |                                                                                                                                                                                                             |  |   |                                                                                        
| |  | the timing
      of the creative servicesand/or
      distribution services performed
      on custom publicationsor
      magazines based upon customers advertising
      andmarketing
      initiatives |  |  | bankruptcies
      or other payment defaults of companies that are a source of revenues
| |   |                                                                                                                                                                                                             |  |   |                                                                                        
| |  | volatility
      in the media market                                                                                                                                                                        |  |   |                                                                                        

Our revenues
      for the foreseeable future will remain primarily dependent on user traffic
      levels and advertising activity on our Web sites and, as a result, are
      difficult to forecast. In addition, the time between the date of initial
      contact with a potential advertiser or sponsor and the execution of a contract
      with the advertiser or sponsor may be lengthy, especially for larger, higher
      rate contracts, and is subject to delays over which we have little or no
    control, including:


| |  | advertisers
      and sponsors budgetary constraints                                      |  |  | advertisers
      and sponsors internal reviews                                                           
| | - | ------------------------------------------------------------------------------------------- |  | - | ------------------------------------------------------------------------------------------------------------
| |   |                                                                                             |  |   |                                                                                                             
| |  | the
      possibility of cancellation ordelays
      of projects by advertisers or sponsors |  |  | the success
      and continued internal support of advertisers and sponsors own
      development efforts

We
      may be unable to adjust spending quickly enough to offset any unexpected
      reduction in revenues in a particular fiscal quarter or year, which may
      materially and adversely affect our results of operations.


We
        have a small number of major customers and the loss of any number of
        these customers or a material reduction in business we receive from any
        of these customers could adversely affect our business, financial condition
  and results of operations.

We
      anticipate that our results of operations in any given period will continue
      to depend to a significant extent on revenues from a small number of customers.
      As a result, the loss of even a small number of our largest customers or
      a material reduction in the business we receive from any of these customers
      at any one time would significantly reduce our revenue, which would adversely
      affect our business, financial condition and results of operations, unless
      we are able to enter into contracts to replace lost revenues.


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Our
      five largest customers accounted for approximately 28% of our total revenues
      for the three months ended June 30, 2004, approximately 32% of our total
      revenues for the six months ended June 30, 2004, and approximately 27%
      of our total revenues for the year ended December 31, 2003. Hearst accounted
      for approximately 12% of our total revenues for each of the three and six
      months ended June 30, 2004. Wal-Mart Stores, Inc. and its affiliates accounted
      for approximately 12% of our total revenues for the six months ended June
      30, 2004. No other single customer accounted for more than 10% of our total
      revenues for the three and six months ended June 30, 2004.


Our
      five largest customers accounted for approximately 26% of our total revenues
      for the three months ended June 30, 2003, and approximately 27% of our
      total revenues of the six months ended June 30, 2003. One customer, Hearst,
      accounted for approximately 12% of our total revenues for the three months
      ended June 30, 2003, and approximately 13% of our total revenues for the
      six months ended June 30, 2003. No other customer accounted for more than
      10% of our total revenues for the three and six months ended June 30, 2003.


At
      June 30, 2004, Hearst accounted for approximately 12% of our total net
      accounts receivable. At December 31, 2003, Hearst accounted for approximately
      20% of our total net accounts receivable.


Because
      our largest customers have varied over time in the past, we anticipate
      that they will continue to do so in the future.


The
      significance of revenues from any one of our customers can vary on a quarter
      to quarter basis as a result of the number and timing of such customers advertising
      and marketing initiatives and the mix of products and services such customers
      purchase from us.


Restrictions
        on our ability to enter into sponsorship, advertising or other business
        relationships with Hearsts competitors may adversely affect our
        business.

Our Web
      site services agreement governing our magazine content license and hosting
      relationship with Hearst restricts our ability to enter into relationships
      with competitors of Hearst. These restrictions may prevent us from expanding
      our network and enhancing our content and the visibility of our brand,
      and may cause us to forego potential advertising revenues from competitors
      of Hearst. Specifically, the agreement provides that we may not, without
    Hearsts consent:


| |  | enter
      into any agreement to include in our network any Web sites for magazines
      that compete with Hearst magazines                         |  |  | display
      on our Web pages the brands, logos, trademarks or proprietary content of
      both Hearst and a Hearst competitor
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                       |  |   |                                                                                                                                 
| |  | display
      on the Hearst magazine Web sites any advertising or other promotional materials
      from magazines that compete with Hearst magazines |  |   |                                                                                                                                 

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Our principal investors investments in our competitors may result in conflicts of interest that could harm our business.

Our principal investors, such as Hearst, Rho Capital Partners, Inc. and AOL, a division of Time Warner Inc., or Time Warner, may have conflicts of interest by virtue of their own businesses, as in the case of Time Warner and Hearst, or investments in other companies that may compete with us. These investments may result in a conflict of interest for our principal investors or result in the diversion of attractive business opportunities from our principal investors to other companies. We are unable to determine all of the competing investments held by these principal investors. In addition, we do not have the ability to constrain the investment activity of any of our principal investors and therefore cannot predict the extent of any future investments in businesses that are competitive with us.


Our business is highly dependent upon user traffic.

Our business is inherently dependent upon high user traffic levels. The rates we charge to advertisers and sponsors and the number of products and services we sell are directly related to the number of users visiting iVillages Web sites. User traffic from certain Web sites that are non-proprietary to iVillage are generally included in the reported information regarding our network of Web sites. These properties include the Hearst magazine Web sites and other parties who have agreed by contract to have traffic from their Web sites incorporated within our network. The number of users visiting our Web sites may decline. In addition, Hearst or other third parties may discontinue allowing us to include their Web sites as part of our network for traffic reporting purposes. Any decline in user traffic levels may cause our revenues to decrease and could have a material adverse affect on our business, financial
condition and results of operations.


Our business will be materially adversely affected if we cannot maintain
the popularity of our Web site offerings among Internet users.

We will be successful only if a critical mass of Internet users, especially women, continue to view our Web sites as popular destinations on the Internet. It is difficult to predict the rate at which users will sample our offerings and the extent to which they will become members and/or return users. At any time, users of our services might revert to other offerings. We cannot assure you that widespread use and acceptance of our offerings will occur. If we cannot maintain the popularity of our offerings among Internet users, our business, results of operations and financial condition will be materially adversely affected.


There is intense competition among media companies focused on women, and
this competition could result in price reductions, reduced margins or loss of
market share.

Increased competition could result in advertising and sponsorship price reductions, reduced margins or loss of market share, any of which could adversely affect our business, financial condition and results of operations. There are a large number of Web sites competing for the attention and spending of members, users and advertisers. Our Web sites compete for members, users and advertisers with the following types of companies:


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| |  | Web
        search and retrieval and other online service companies, commonly referred
        to as portals, such as Time Warners AOL service, Microsoft Corporations
        MSN service and Yahoo! Inc. |  |  | publishers
        and distributors of traditional media, such as television, radio and
    print
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | - | -------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                              |  |   |                                                                                                  
| |  | cable
        networks targeting women, such as Oxygen Media, Inc., Womens Entertainment
        Network and Lifetime Television                                                                            |  |  | e-commerce
    companies such as Amazon.com, Inc.                                                
| |   |                                                                                                                                                                                                              |  |   |                                                                                                  
| |  | online
        services or Web sites targeted at women, such as lifetime.com                                                                                                                                 |  |   |                                                                                                  

Lamaze Publishings magazines directly compete with publishers of pre- and post-natal publications such as Gruner and Jahr, Primedia and Time Inc. These publishers have substantially greater marketing, research and financial resources than Lamaze Publishing. Increased competition may result in less advertising in Lamaze Publishings magazines and a decline in Lamaze Publishings advertising rates, which could adversely affect our business, financial condition and results of operations.


If we fail to attract and retain key personnel, our business would be materially
adversely affected.

Our future success depends to a significant extent on the continued services of our senior management and other key personnel, particularly Douglas W. McCormick, our Chairman of the Board and Chief Executive Officer. Mr. McCormicks current employment agreement expires in May 2005. The loss of the services of Mr. McCormick would likely harm our business. We currently do not maintain key person life insurance for any of our senior management.


We may be unable to retain our key employees or attract, assimilate or retain other highly qualified employees in the future. We have from time to time experienced, and expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications as a result of our financial condition and relatively low common stock price. As a result, we have in the past and may in the future incur increased salary and benefit costs. If we do not succeed in attracting new personnel or retaining and motivating our current personnel, our business, and our ability to develop and execute on our business strategies, will be materially harmed.


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We
        rely on third parties to provide reliable software, systems and related
services.

We depend
      on various third parties for software, systems and related services, including
      SAAVIS Communications Corporation, or SAAVIS, Verio, Inc., or Verio, Google,
      Inc., DoubleClick, Inc., Tacoda Systems, Inc. and Prospero Technologies
      LLC. If for any reason one or more of these service providers becomes unable or unwilling to continue to provide services of acceptable quality, at acceptable costs and in a timely manner, our ability to deliver our product and service offerings to our advertisers, sponsors and users could be severely impaired. We would have to identify and qualify substitute service providers, which could be time consuming and difficult and could result in unforeseen operational difficulties. Although we are confident that alternative service providers are available, we cannot assure that we will be able to obtain such services on as favorable terms as we currently receive or in a timely manner.


We rely on third parties to adequately measure the demographics of our
user base.

It is important to our advertisers that we accurately measure the demographics of our user base and the delivery of advertisements on our Web sites. We depend on third parties to provide many of these measurement services and to do so accurately and reliably. If these third parties are unable or unwilling to provide these services to us in the future, we would need to perform them ourselves or obtain them from another provider. This could cause us to incur additional costs or cause interruptions in our business until these services are replaced. Companies may choose not to advertise on our Web sites or may pay us less for our sponsorship or advertising if they perceive our demographic measurements as not reliable.


We are subject to legal proceedings that could result in liability and
adversely affect our business.

From time to time, we have been, and expect to continue to be, subject to legal proceedings that individually, or in the aggregate, could adversely affect our business.


| |  | A Belgian
        court issued a judgment in January 2003 against Women.com, relating to
        alleged copyright infringements, in the amount of approximately 850,000
        Euros or approximately U.S. $1.0 million based on the Euro exchange rate
        as of August 11, 2004. The continuing defense of this action could involve
        significant legal expense, diversion of management attention and, ultimately,
    we may be required to pay the judgment awarded by the Belgian court.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | Several
        plaintiffs have filed class action lawsuits in federal court against
        us, several of our former executives, and our underwriters in connection
        with our March 1999 initial public offering. A similar class action lawsuit
        was filed against Women.com, several of our former executives and Women.coms
        underwriters in connection with Women.coms October 1999 initial
        public offering. In June 2003, the parties agreed in principle to settle
        the matter, along with similar lawsuits against other issuers. The plaintiffs
        filed a motion for preliminary approval of the settlement with the court
        in June 2004, which was accompanied by a brief filed by the issuer defendants
        in support of the plaintiffs motion. Certain of the underwriter
        defendants formally objected to the settlement. The plaintiffs and issuer
        defendants separately submitted replies to these objections on August
        4, 2004. If the proposed settlement is ultimately not approved by the
        courts, even if these claims are not meritorious, defending againstthem
        could require the expenditure of significant financial and managerial
    resources, which could harm our business.

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Our operation of IVPN poses a number of risks that could materially adversely affect our business strategy.

There are a number of risks in operating IVPN related to Lamaze Publishing, Baby Steps magazine and The Newborn Channel, including a Spanish audio overlay, and the Wellness Channel, all of which we refer to as the Channels, which are all primarily non-Internet businesses, including:


| |  | the competitiveness
    of the media, television and publishing industries                                               |  |  | our
    ability to continue to commercialize and protect the Lamaze mark                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------ |  | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                          |  |   |                                                                                                                                                                  
| |  | our ability
        to maintain and market the Lamaze.com Web site                                                       |  |  | demand for our
    custom publications and controlled circulation magazines                                                                                      
| |   |                                                                                                                          |  |   |                                                                                                                                                                  
| |  | our ability to
        sell advertising and sponsorships on IVPNs magazines, videos, the
    Channels and our Web sites |  |  | our ability
        to identify and predict trends in a timely manner that may impact consumer
    tastes in baby- and health-related information on the Channels

Our failure to perform the functions required for the operation of IVPN in an efficient and timely manner could result in a disruption of IVPNs operations that could result in a loss of revenues and have a material adverse effect on our business strategy.


Our business could be adversely affected if transmission of the Channels were interrupted.

There is a risk that the satellite or the in-hospital delivery system which transmits the Channels may malfunction, which would result in an interruption of broadcasts. Extreme adverse weather conditions or third parties could damage or disable receivers and transmitters on the ground hindering transmission of the Channels signal. This satellite is scheduled to go offline in 2005. Upon the expiration of the contract or in the event of an unforeseen earlier interruption of service, we would need to either negotiate a new contract, find another satellite provider and/or invest in alternative technology to distribute the service. If any of these events occur, there may be a period of time before transmission of all or some of the Channels could resume. Any interruption in our ability to transmit the Channels could jeopardize our viewer base and negatively impact our revenues related to the Channels.




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We
        may not be able to expand our business through acquisitions and joint
        ventures and, even if we are successful, our operations may be materially
adversely affected as a result of an acquisition or joint venture.

Our business strategy includes growth through business combinations, acquisitions and joint ventures. Our business could be materially adversely affected if we are unable to implement this business strategy. Our ability to implement this business strategy depends in large part on our ability to compete successfully with other entities for acquisition candidates and joint venture partners. Factors affecting our ability to compete successfully in this regard include:


| |  | our financial
    condition relative to the financial condition of our competitors                                                                                                                                      |  |  | our
    ability to obtain additional financing from investors                                                            
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                         |  |   |                                                                                                                          
| |  | the attractiveness
        of our common stock as potential consideration for entering into these
        types of transactions as compared to the common stock of other entities
    competing for these opportunities |  |  | our available
        cash, which in turn depends upon our results of operations and the cash
    demands of our business

Many of the entities with which we compete for acquisition candidates and joint venture partners have greater financial resources than we do. In addition, our ability to make acquisitions using our stock has been materially adversely affected by the overall decline in the trading price of our common stock over the last several years.


If, despite these factors, we are successful in entering into additional business combinations, acquisitions and joint ventures, our business, financial condition and results of operations could be materially adversely affected if we are unable to integrate the operations of the acquired companies or joint ventures. Our ability to integrate the operations of the acquired companies or joint ventures will depend, in part, on our ability to overcome or address:


| |  | the difficulties
        of assimilating the operations and personnel of the acquired companies
    and the potential disruption of our ongoing business                         |  |  | the
        need to incorporate successfully the acquired or shared technology or
    content and rights into our products, services and media properties              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                  |  |   |                                                                                                                                                                        
| |  | the difficulties
        of establishing a new joint venture, including the need to attract and
    retain qualified personnel and the need to attract customers and advertisers |  |  | the potential
        impairment of relationships with employees and customers as a result
    of any integration of new management personnel or reduction of personnel
| |   |                                                                                                                                                                                  |  |   |                                                                                                                                                                        
| |  | the difficulties
    of maintaining uniform standards, controls, procedures and policies                                                                                         |  |   |                                                                                                                                                                        

In addition, completing acquisitions could require use of a significant amount of our available cash. Furthermore, we may have to issue equity or equity-linked securities to pay for future acquisitions, and any of these issuances could be dilutive to existing and future stockholders. Acquisitions and investments may also have negative effects on our reported results of operations due to acquisition-related charges, amortization of acquired technology and other intangibles, and/or actual or potential liabilities, known and unknown, associated with the acquired businesses or joint ventures. Any of these acquisition-related risks or costs could materially adversely affect our business, financial condition and results of
operations.


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If we fail to maintain effective internal financial and managerial systems, controls and procedures, our results of operations may be materially adversely affected.

In the past, we have sought cost reductions through increased managerial efficiencies and expense reduction initiatives, including targeted staff reductions. These reductions in workforce placed a significant strain on our managerial staff, financial controls and operational resources as our employees have assumed greater responsibilities and learned to manage their increased workload with reduced resources. We continue to evaluate our operational and financial systems and our managerial controls and procedures to determine what additional changes, if any, might help us to manage our current operations better. We face the risk that our systems, procedures and controls might not be adequate to support our operations or to maintain accountability for our assets. Any such failure could have a material adverse effect on our business, financial condition and results of operations.


If we account for employee stock options using the fair value method, we could have significant and ongoing accounting charges.

There has been ongoing public debate about whether stock options granted to employees should be treated as a compensation expense and, if so, how to properly value such charges. On March 31, 2004, FASB issued an Exposure Draft, Share-Based Payment: an amendment of FASB statements No. 123 and 95, or Exposure Draft, which would require a company to recognize, as an expense, the fair value of stock options and other stock-based compensation to employees beginning in 2005 and subsequent reporting periods. If we elect or are required to record an expense for our stock-based compensation plans using the fair value method as described in the Exposure Draft, we could have significant and ongoing accounting charges, which could result in increased net losses.


Risks Related to Our Industry

The operating performance of computer systems and Web servers is critical to our business and reputation.

Any system failure, including network, software or hardware failure, due to a computer virus or otherwise, that causes an interruption in our Internet offerings could result in reduced traffic on our Web sites and reduced revenues for our business. Substantially all of our communications hardware and some of our other computer hardware operations are located at SAAVIS facilities in New Jersey and Verios facilities in California. Fire, floods, earthquakes, power loss, telecommunications failures, break-ins and similar events could damage these systems. We do not presently have any secondary off-site systems or a formal disaster recovery plan.


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Our Web sites
    could also be affected by computer viruses, electronic break-ins or other
    similar disruptive problems, such as those historically experienced by several
    leading Web sites. In addition, our users depend on Internet service providers,
    online service providers and other Web site operators for access to our Web
    sites. Many of them have experienced significant outages in the past, and
    could experience outages, delays and other difficulties due to system failures
    unrelated to our systems. If we experience outages or degraded service, user
    satisfaction would decrease, we would likely lose advertising revenue and
  our reputation and brands could be permanently harmed.


Our insurance
    policies may not adequately compensate us for any losses that may occur due
    to any failures or interruptions in our systems. In addition, we cannot assure
    you that SAAVIS, which purchased the assets of Cable and Wireless Plc and
    Exodus Communications, Inc., both of which had filed for bankruptcy protection,
    and Verio will be able to provide sufficient services for us or that we would
    be able to engage satisfactory alternative service providers.


If
        the Internet fails to gain further acceptance as a medium for advertising,
        we would have slower revenue growth than expected and would incur greater
  than expected losses.

We compete
    with traditional advertising media, including television, radio and print,
    along with other high-traffic Web sites, for sponsorships and advertising
    expenditures. Although there are currently several standards to measure the
    effectiveness of Internet advertising, the industry has had difficulty convincing
    potential advertisers that Internet advertising is a significant advertising
    medium. Advertisers and advertising agencies that have historically relied
    on traditional forms of advertising may be reluctant or slow to adopt online
    advertising. In addition, advertisers and advertising agencies that use the
    Internet as an advertising medium may find online advertising to be less
    effective for promoting their products and services than traditional advertising
    media. Advertisers and advertising agencies that have invested substantial
    resources in traditional methods of advertising may also be reluctant to
    reallocate their resources to online advertising. Moreover, software programs
    that limit or prevent advertising from being delivered to an Internet users
    computer are available. Widespread adoption of this software could adversely
    affect the commercial viability of Internet advertising. If the market for
    online advertising fails to develop or develops more slowly than we expect,
    or if we are unable to adapt to new forms of Internet advertising, we would
    have slower than expected revenue growth and would incur greater than expected
    losses, and our business, results of operations and financial condition could
  be materially adversely affected.


Web-based
        business models are still evolving and make it difficult to predict our
  long-term revenues.

A decrease
    in revenues relating to changes in Internet advertising pricing models or
    our inability to convert users to purchasers of our products and services
    could materially adversely affect our business, results of operations and
    financial condition. Different pricing models are used to sell advertising
    on the Internet, including models based on the number of impressions delivered,
    the number of click-throughs by users and the number of key words to which
    an advertisement is linked. It is difficult to predict which, if any, of
    the models will emerge as the industry standard. This uncertainty makes it
  difficult to project our long-term advertising rates and revenues.


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Furthermore,
    consumer reluctance to subscribe to or pay for Internet content may limit
    our ability to supplement Internet advertising as our most significant source
    of revenue in the foreseeable future. Inability to supplement our advertising
  revenues could limit our growth and adversely affect our business.


We
  may be unable to respond to the rapid technological change in our industry.

Our product
    and service offerings compete in a market characterized by rapidly changing
    technologies, frequent innovations and evolving industry standards. A growing
    number of individuals access the Internet through devices other than personal
    computers, such as cell phones, personal digital assistants or television
    set-top devices. The low resolution, functionality and memory currently associated
    with some of these alternative devices might prevent or impede users from
    accessing our graphics-rich Web sites. Our future success will depend on
    our ability to adapt to rapidly changing technologies by continually improving
    the performance features and reliability of our offerings. We could incur
    substantial costs to modify our services or infrastructure to adapt to the
  changing technology environment.


Possible
        infringement by third parties of our intellectual property rights could
        have a material adverse effect on our business, financial condition and
  results of operations.

We cannot
    be certain that the steps we have taken to protect our intellectual property
    rights will be adequate or that third parties will not infringe or misappropriate
    our proprietary rights. Enforcing our intellectual property rights could
    entail significant expense and could prove difficult or impossible. Any infringement
    or misappropriation by third parties could have a material adverse effect
    on our business, financial condition and results of operations.Furthermore,
  we have invested resources in acquiring domain names for existing and potential
  future use. We cannot guarantee that we will be entitled to use these domain
  names under applicable trademark and similar laws or that other desired domain
  names will be available.


New
        privacy and data security laws may require changes in our practices,
  and there is a potential for enforcement actions due to noncompliance.

Any new law
    or regulation pertaining to the Internet, or the application or interpretation
    of existing laws, could decrease the demand for our services, increase our
    cost of doing business or otherwise seriously harm our business. There is,
    and will likely continue to be, an increasing number of laws and regulations
    pertaining to the Internet. These laws or regulations may relate to liability
    for information retrieved from or transmitted over the Internet, online content
    regulation, user privacy, taxation and the quality of products and services.
    There is a trend toward more burdensome regulations and stiffer penalties,
    all of which could negatively impact our business. There is also a trend
    toward giving consumers greater information regarding control over how their
    personal data is used, and requiring notification where unauthorized access
    to such data occurs.


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In particular,
    several jurisdictions, including foreign countries, have recently proposed
    and/or adopted privacy-related laws that restrict or prohibit unsolicited
    email solicitations, commonly known as spamming, and that impose
    significant monetary and other penalties for violations. These laws may increase
    concern on the part of advertisers regarding advertising in our email newsletters,
    and advertisers may seek to impose indemnity obligations on us in an attempt
    to mitigate any liability under these laws. Moreover, Internet service providers
    may increasingly block legitimate marketing emails in an effort to comply
  with these laws.


One such law,
    the CAN-SPAM Act of 2003, or CAN-SPAM, became effective in the United States
    on January 1, 2004. CAN-SPAM imposes complex and often burdensome requirements
    in connection with the sending of commercial email. The language of CAN-SPAM
    contains ambiguities, and CAN-SPAM has yet to be interpreted by the courts.
    Depending on how it is interpreted, CAN-SPAM may impose burdens on our email
    marketing practices, on joint marketing initiatives that we undertake with
    our business partners, and on features of our services. CAN-SPAM also requires
    the Federal Trade Commission to report to Congress regarding the advisability
    of a federal Do-Not-E-Mail Registry. If the registry is created,
    it could have a detrimental effect on our ability to continue our email marketing
    practices as well as advertisers willingness to participate in email
  marketing.


In addition
    to impacting our business through decreased collection and use of user data,
    the enactment of privacy and data security laws may increase our legal compliance
    costs. While we believe that we comply with currently applicable laws, as
    such laws proliferate there may be uncertainty regarding their application
    or interpretation, which increases our risk of non-compliance. Even if a
    claim of non-compliance against us does not ultimately result in liability,
    investigating a claim may present a significant cost. Future legislation
    may also require changes in our data collection practices, which may be expensive
  to implement and may further increase the risk of non-compliance.


Data security
    laws are becoming more stringent in the United States and abroad. Third parties
    are engaging in increased cyber-attacks against companies doing business
    on the Internet, and individuals are increasingly subjected to identity and
    credit card theft on the Internet. Although we use what we consider to be
    industry standard security measures, there is a risk that we may fail to
    prevent such activities and that users or others may assert claims against
    us. In addition, the Federal Trade Commission and state consumer protection
    authorities have brought a number of enforcement actions against U.S. companies
    for alleged deficiencies in those companies data security practices,
    and they may continue to bring such actions. Enforcement actions, which may
    or may not be based upon actual cyber attacks or other breaches in such companies data
    security, present an ongoing risk of liability to us, could result in a loss
  of users and could damage our reputation.


We
        may face potential liability, loss of users and damage to our reputation
  for violation of privacy practices.

Our privacy
    policy prohibits the sale or disclosure to any third party of any members
    personal identifying information without first obtaining the member's permission
    to do so. Growing public concern about privacy and the collection, distribution
    and use of
    information
    about
    individuals
    may
    subject us to increased regulatory scrutiny and/or litigation. In the past,
    the Federal Trade Commission has investigated companies that have used personally
    identifiable information without permission or in violation of a stated privacy
    policy. If we are accused of violating the stated terms of our privacy policy,
    we may face a loss of users and damage to our reputation and be forced to
    expend significant amounts of financial and managerial resources to defend
  against these accusations and we may face potential liability.


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We
        may be liable if third parties misappropriate our users personal
  information.

Third parties
    may be able to hack into or otherwise compromise our network security or otherwise
    misappropriate our users personal information or credit card information.
    If our network security is compromised, we could be subject to liability arising
    from claims related to, among other things, unauthorized purchases with credit
    card information, impersonation or other similar fraud claims or other misuse
    of personal information, such as for unauthorized marketing purposes. Consumer
    protection privacy regulations could impair our ability to obtain information
    about our users, which could result in decreased advertising revenues.


We ask our
    members and users to opt-in to receive special offers and other
    direct marketing opportunities from us, our advertisers and partners. Our
    network also requests and obtains personal data from users who register to
    become members of the network. Registration as a member is required in order
    for users to have full access to the services offered by our network. Personal
    data gathered from members is used to personalize or tailor content to them
    and is provided, on an aggregate basis, to advertisers to assist them in
    targeting their advertising campaigns to particular demographic groups. Current
    or prospective advertisers evaluate our ability to provide user data to support
    targeted advertising. Privacy concerns may cause users to resist providing
    personal data, however. If we become unable to collect personal data from
  a sufficient number of our users, we may lose significant advertising revenues.


Changes in
    public acceptance of email marketing, and the perception of security and
    privacy concerns, may indirectly inhibit market acceptance of our use of
    personal data. Our failure to implement industry-standard Platform for Privacy
    Preferences protocols could discourage users from using our Web sites, products
    and services and from providing their personal data to us. In addition, pending
    and recently enacted legislative or regulatory requirements that businesses
    notify Internet users that their data may be used by marketing entities to
  direct product promotion and advertising to the user may heighten these concerns.


Our network
    also uses cookies to track user behavior and preferences. A cookie
    is information keyed to a specific server, file pathway or directory location
    that is stored on a users hard drive, possibly without the users
    knowledge, but is generally removable by the user. Information gathered from
    cookies is used by us to tailor content to users of our network and may also
    be provided to advertisers on an aggregate basis. In addition, advertisers
    may themselves use cookies to track user behavior and preferences. A number
    of Internet commentators, advocates and governmental bodies in the United
    States and other countries have urged the passage of laws limiting or abolishing
    the use of cookies. If these laws are passed, it may become more difficult
    for us to tailor content to our users, making our network less attractive
    to users. Similarly, the unavailability of cookies may restrict the use of
    targeted advertising, making our network less attractive to advertisers and
  causing us to lose significant advertising revenues.


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We
        may face potential products liability claims based upon our iVillageSolutions
  products.

As with other
    retailers, distributors and manufacturers of products that are ingested,
    we face an inherent risk of exposure to product liability claims in the event
    that the use of our iVillageSolutions products results in injury or death.
    We may be subjected to various product liability claims, including, among
    others, that our products contain contaminants or include inadequate instructions
    as to use or inadequate warnings concerning side effects and interactions
    with other substances. Insurance may not be adequate to cover any liabilities
  and may not continue to be available at a reasonable cost.


Our
        business could be affected by future terrorist attacks or acts of war.

The terrorist
    attacks in the United States in recent years disrupted global commerce. The
    continued threat of future terrorist attacks in the United States, and particularly
    in New York City where our headquarters are located, acts of war involving
    the United States, or any response of the United States government to any
    future terrorist actions or acts of war, may cause future significant disruptions
    in commerce throughout the world. The proximity of our headquarters to certain
    possible targets in New York City could, in the event of war or future terrorist
    attacks, result in damage to or destruction of our headquarters as well as
    the permanent or temporary loss of key personnel. We have not developed a
    disaster recovery plan and we cannot assure that our insurance coverage would
    adequately reimburse us for any damages suffered as a result of a terrorist
  attack or act of war.


Risks
  Related to Our Common Stock

As
        of August 11, 2004, Hearst owned approximately 25% of our outstanding
        common stock and had three representatives on our board of directors.
        As a result, Hearst is able to significantly influence our corporate
  direction and policies.

Hearsts
    board representation and stock ownership allows Hearst to significantly influence
    our corporate direction and policies, including any mergers, acquisitions,
    consolidations, strategic relationships or sales of assets. Hearsts
    board representation and stock ownership may also discourage or prevent transactions
    involving an actual or potential change of control, including transactions
  in which our stockholders would otherwise receive a premium for their shares.


As of August
    11, 2004, Hearst owned approximately 25% of our outstanding common stock.
    Pursuant to an amended and restated stockholder agreement we entered into
    with Hearst on June 20, 2001, we appointed three Hearst representatives to
    our board of directors, with one Hearst designee appointed to each class
    of director. The amended and restated stockholder agreement provides that
    the number of Hearst representatives is subject to reduction if Hearsts
    ownership of our common stock falls below certain threshold levels. There
    is also a Hearst representative on our nominating and compensation committees.


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Although
    Hearst is required to vote all shares that it holds in excess of 25% (subject
    to adjustment) of our outstanding voting securities in accordance with the
    recommendation of our  board of directors, Hearst may effectively control certain
  stockholder actions, including approving changes to our certificate of incorporation
  or by-laws and adopting or changing equity incentive plans. Hearsts effective
  control over stockholder actions may also determine the outcome of any merger,
  consolidation, sale of all or substantially all of our assets or other form
  of change of control that we might consider. In addition, the interests of Hearst,
  which owns or has significant investments in other businesses, including cable
  television networks, newspapers, magazines and electronic media, may from time
  to time compete with, or otherwise diverge from, our interests, particularly
  with respect to new business opportunities and future acquisitions.


Market
        fluctuations or volatility could cause the trading price of our common
  stock to decline and limit our ability to raise capital.

The stock
    market in general and the market for stocks of Internet-based companies in
    particular have experienced extreme price and volume fluctuations, often
    unrelated to the operating performance of the affected companies. The trading
    price of the securities of Internet companies has been highly volatile and
    is likely to remain so in the future. We believe that in the past similar
    levels of volatility have contributed to the decline in the trading price
    of our common stock, and may do so again in the future. Trading volumes of
    our common stock can increase or decrease dramatically, resulting in a volatile
    trading price for our common stock. In addition, the trading price of our
    common stock could decline significantly as a result of sales of a substantial
    number of shares of our common stock, or the perception that significant
    sales could occur. In the past, securities class action litigation has been
    brought against companies that experienced volatility in the trading price
    of their securities. Market fluctuations in the price of our common stock
    could also adversely affect our ability to sell equity securities at a price
    we deem appropriate.


If
        we fail to meet the expectations of public market analysts and investors,
        the market price of our common stock may decrease significantly.

Public market
    analysts and investors have not been able to develop consistent financial
    models for the Internet market because of the unpredictable rate of growth
    of Internet use, the rapidly changing models of doing business on the Internet
    and the Internets relatively low barriers to entry. Our sales cycle
    is also unpredictable and sales to advertisers or sponsors forecast in a
    particular period may be delayed or may not otherwise occur based upon the
    timing of our customers own marketing initiatives. As a result, and
    because of the other risks and uncertainties noted in this report, our actual
    results might not meet the expectations of public market analysts and investors
    in future periods. If this occurs, the price of our common stock will likely
    decrease.


Our
        future capital-raising activities could involve the issuance of equity
        securities, which would dilute your investment and could result in a
  decline in the trading price of our common stock.

We may sell
    securities in the public or private equity markets if and when conditions
    are favorable, even if we do not have an immediate need for additional capital
    at that time. Raising funds through the issuance of equity securities will
    dilute the ownership of our existing stockholders. Furthermore, we may enter
    into financing transactions at prices that represent a substantial discount
    to the market price of our common stock. A negative reaction by investors
    and securities analysts to any discounted sale of our equity securities could
  result in a decline in the trading price of our common stock.


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Future sales of our stock could affect our share price.

If our stockholders sell substantial amounts of our common stock, including shares sold by directors or officers and shares issued upon the exercise of outstanding options or in connection with acquisitions, the trading price of our common stock could fall. These sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.


Item 3.  Quantitative
and Qualitative Disclosures About Market Risk.

As of June 30, 2004 and December 31, 2003, our financial instruments include cash and cash equivalents. Cash equivalents include interest bearing accounts. We do not use derivative financial instruments in our investment portfolio. Our exposure to market risk for changes in interest rates relates primarily to our interest bearing accounts. We do not expect interest rate fluctuations to materially affect the aggregate value of our financial assets. While we maintain our cash and cash equivalents in highly rated financial institutions, at times these balances exceed insurable amounts.


Item
4.  Controls and Procedures.

(a)  Evaluation of Disclosure Controls and Procedures.


Our chief executive officer and our chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report, have concluded that, as of that date, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.


(b)  Changes in Internal Controls over Financial Reporting.


There were no changes in our internal controls over financial reporting during the three and six months ended June 30, 2004 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.


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PART
      IIOTHER
INFORMATION

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

(a)  Exhibits.


The exhibits
      listed on the accompanying Exhibit Index are filed or incorporated by reference
      as a part of this report and such Exhibit Index is incorporated herein by
      reference. (b)  Reports
    on Form 8-K.


|Item
    #    |  | Description                                                                                                                                                                                                                                                              |  | Date          
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------
|              |  |                                                                                                                                                                                                                                                                          |  |               
|(i)
    7, 12 |  | Reporting
       our financial results for the three months ended March 31, 2004 (The
    information furnished under Items 7 and 12 and Exhibit 99.1 is not incorporated
    by reference into existing or future registration statements).                             |  | April 29, 2004
|              |  |                                                                                                                                                                                                                                                                          |  |               
|(ii)
    7, 9 |  | Reporting the signing of a Memorandum
    of Understanding between Hearst Communications, Inc. and
    us (The information furnished under
    Items 7 and 9 and Exhibit 99.1 is not
    incorporated by reference into existing
    or future registration statements). |  | May 18, 2004  
|              |  |                                                                                                                                                                                                                                                                          |  |               
|(iii)
    5   |  | Reporting that Steven A. Elkes has been appointed Chief Financial Officer.                                                                                                                                                                                               |  | June 14, 2004 
|              |  |                                                                                                                                                                                                                                                                          |  |               
|(iv)
    5    |  | Reporting our commencement of a public
    offering pursuant to a shelf registration
    statement.                                                                                                                                                                      |  | June 17, 2004 
|              |  |                                                                                                                                                                                                                                                                          |  |               
|(v)
    5     |  | Reporting
       the public offering of 10,428,974 shares of our common stock by us and
       571,026 shares of our common stock by certain selling stockholders.                                                                                                       |  | June 30, 2004 
|              |  |                                                                                                                                                                                                                                                                          |  |               

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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.


|                      |     | iVILLAGE
        INC.                                                                                                                                  
|--------------------- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|                      |     | (Registrant)                                                                                                                                           
|                      |     |                                                                                                                                                        
|Dated:August 12, 2004 | By: | /s/ Douglas W. McCormick                                                                                                                               
|                      |     |                                                                                                                                                        
|                      |     | Douglas
    W. McCormick
    Chairman and Chief Executive Officer
    (Principal Executive Officer)                                                    
|                      |     |                                                                                                                                                        
|Dated:August 12, 2004 | By: | /s/ Steven A. Elkes                                                                                                                                    
|                      |     |                                                                                                                                                        
|                      |     | Steven
    A. Elkes
    Chief Financial Officer and
    Executive Vice President, Operations
    and Business Affairs
    (Principal Financial Officer)
|                      |     |                                                                                                                                                        

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EXHIBIT INDEX

|Number |  | Description                                                                                                                                                                                                                                                                                                  
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                              
|3.1    |  | Restated
       Certificate of Incorporation, as amended, of the Registrant (incorporated
    by reference from Exhibit 3.1 to the Registrants Form 8-A/A registration
    statement, filed on April 4, 2004).                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                              
|3.2    |  | By-Laws of the Registrant, as amended through July 15, 2004.                                                                                                                                                                                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                              
|10     |  | Website
       Services Agreement, dated as of July 1, 2004, between the Registrant and
    Hearst Communications, Inc.                                                                                                                                                                                      
|       |  |                                                                                                                                                                                                                                                                                                              
|11     |  | Statement re: computation of earnings per share.                                                                                                                                                                                                                                                             
|       |  |                                                                                                                                                                                                                                                                                                              
|31.1   |  | Certification
       of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)
    under the Securities Exchange Act of 1934, as amended.                                                                                                                                                     
|       |  |                                                                                                                                                                                                                                                                                                              
|31.2   |  | Certification
       of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
    under the Securities Exchange Act of 1934, as amended.                                                                                                                                                     
|       |  |                                                                                                                                                                                                                                                                                                              
|32     |  | Certifications
       of Principal Executive Officer and Principal Financial Officer furnished
    pursuant to Rules 13a-14(b) and 15d-14(b) under the Securities Exchange Act
    of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.

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