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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

| |                                                                     | (Mark One)
| | ------------------------------------------------------------------- | ----------
| |                                                                     |           
| |                                                                     |           
| |                                                                     |           
| | For
        the quarterly period ended September 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 November 10, 2004, the registrant had
    outstanding 71,601,345 shares of common stock.


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

INDEX

|           |    |                                                                                                                             | Page
|---------- | -- | --------------------------------------------------------------------------------------------------------------------------- | ----
|PART I.    |    | FINANCIAL INFORMATION                                                                                                       |     
|           |    |                                                                                                                             |     
|Item 1.    |    | Financial Statements (Unaudited):                                                                                           |     
|           |    |                                                                                                                             |     
|           |    | Condensed Consolidated Balance
      Sheets as of September 30, 2004 and December 31, 2003                                  | 1   
|           |    |                                                                                                                             |     
|           |    | Condensed Consolidated
      Statements of Operations for the three and nine months ended
      September 30, 2004 and 2003 | 2   
|           |    |                                                                                                                             |     
|           |    | Condensed Consolidated
      Statements of Cash Flows for the three and nine months ended September
      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                                 | 18  
|           |    |                                                                                                                             |     
|Item 3.    |    | Quantitative and Qualitative
      Disclosures About Market Risk                                                            | 60  
|           |    |                                                                                                                             |     
|Item 4.    |    | Controls and Procedures                                                                                                     | 60  
|           |    |                                                                                                                             |     
|PART II.   |    | OTHER INFORMATION                                                                                                           |     
|           |    |                                                                                                                             |     
|Item 6.    |    | Exhibits                                                                                                                    | 61  
|           |    |                                                                                                                             |     
|Signatures | 62
|           |    |                                                                                                                             |     

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)



|                                                                                                                                                                                                                                                                                                           |   | September 30, |   |   | December 31, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                                                                                                                                                                                                                                                           |   | 2004          |   |   | 2003         |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Assets                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|Current assets:                                                                                                                                                                                                                                                                                            |   |               |   |   |              |  
|Cash and cash equivalents.                                                                                                                                                                                                                                                                                 | $ | 84,465        |   | $ | 15,823       |  
|Accounts receivable, less allowance
        for doubtful accounts of $1,003 and $1,134 as of September 30, 2004 and
        December 31, 2003, respectively                                                                                                                                                |   | 7,456         |   |   | 5,980        |  
|Accounts receivablerelated parties                                                                                                                                                                                                                                                                        |   | 447           |   |   | 1,537        |  
|Prepaid rent                                                                                                                                                                                                                                                                                               |   | 318           |   |   | 318          |  
|Other current assets                                                                                                                                                                                                                                                                                       |   | 4,530         |   |   | 3,520        |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Total
      current assets                                                                                                                                                                                                                                                                                 |   | 97,216        |   |   | 27,178       |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Fixed assets, net                                                                                                                                                                                                                                                                                          |   | 7,483         |   |   | 7,269        |  
|Goodwill, net                                                                                                                                                                                                                                                                                              |   | 22,580        |   |   | 22,580       |  
|Intangible assets, net                                                                                                                                                                                                                                                                                     |   | 9,153         |   |   | 11,989       |  
|Prepaid rent, net of current portion                                                                                                                                                                                                                                                                       |   | 3,241         |   |   | 3,354        |  
|Other assets                                                                                                                                                                                                                                                                                               |   | 135           |   |   | 158          |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Total
      assets                                                                                                                                                                                                                                                                                         | $ | 139,808       |   | $ | 72,528       |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Liabilities and Stockholders Equity                                                                                                                                                                                                                                                                       |   |               |   |   |              |  
|Current liabilities:                                                                                                                                                                                                                                                                                       |   |               |   |   |              |  
|Accounts payable and accrued expenses                                                                                                                                                                                                                                                                      | $ | 10,720        |   | $ | 10,237       |  
|Accounts payable and accrued expenses 
      related parties                                                                                                                                                                                                                                              |   | 44            |   |   | 204          |  
|Deferred revenue                                                                                                                                                                                                                                                                                           |   | 3,008         |   |   | 3,323        |  
|Deferred rent                                                                                                                                                                                                                                                                                              |   | 144           |   |   | 144          |  
|Other current liabilities.                                                                                                                                                                                                                                                                                 |   | 97            |   |   | 190          |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Total
      current liabilities                                                                                                                                                                                                                                                                            |   | 14,013        |   |   | 14,098       |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Deferred rent, net of current portion                                                                                                                                                                                                                                                                      |   | 1,375         |   |   | 1,483        |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Total
      liabilities                                                                                                                                                                                                                                                                                    |   | 15,388        |   |   | 15,581       |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Commitments and contingencies (Note 7)                                                                                                                                                                                                                                                                     |   |              |   |   |             |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Stockholders equity:                                                                                                                                                                                                                                                                                      |   |               |   |   |              |  
|Preferred stock  par
        value $.01, 5,000,000 shares authorized; no shares issued and outstanding
        as of September 30, 2004 and December 31, 2003,
        respectively                                                                                                                       |   |              |   |   |             |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Common stock  par value
        $.01, 200,000,000 shares authorized; 72,629,409 and 57,233,470 shares
        issued at September 30, 2004 and December 31, 2003, respectively; 71,588,558
        and 56,230,024 shares outstanding as of September 30, 2004 and December
        31, 2003, respectively |   | 726           |   |   | 572          |  
|Additional paid-in capital                                                                                                                                                                                                                                                                                 |   | 617,868       |   |   | 550,892      |  
|Treasury stock at cost (1,040,851
        and 1,003,446 shares as of September 30, 2004 and December 31, 2003, respectively)                                                                                                                                                                               |   | (643          | ) |   | (430         | )
|Stockholders notes receivable                                                                                                                                                                                                                                                                             |   | (44           | ) |   | (241         | )
|Accumulated deficit                                                                                                                                                                                                                                                                                        |   | (493,487      | ) |   | (493,846     | )
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Total
      stockholders equity                                                                                                                                                                                                                                                                           |   | 124,420       |   |   | 56,947       |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  
|Total
      liabilities and stockholders equity                                                                                                                                                                                                                                                           | $ | 139,808       |   | $ | 72,528       |  
|                                                                                                                                                                                                                                                                                                           |   |               |   |   |              |  

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

1

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

|                                                                                                                  | Three months ended |        | Nine months ended |  
|----------------------------------------------------------------------------------------------------------------- | ------------------ | ------ | ----------------- | -
|September 30,                                                                                                     | September 30,     
|                                                                                                                  |                   
|2004                                                                                                              |                    | 2003   | 2004              |  
|                                                                                                                  |                    |        |                  
|Revenues:                                                                                                         |                    |        |                   |  
|Revenues                                                                                                          | $                  | 15,015 |                   | $
|Revenues  related
    parties                                                                                    |                    | 1,683  |                   |  
|                                                                                                                  |                    |        |                   |  
|Total revenues                                                                                                    |                    | 16,698 |                   |  
|                                                                                                                  |                    |        |                   |  
|Operating expenses:                                                                                               |                    |        |                   |  
|Editorial, product development and technology                                                                     |                    | 7,740  |                   |  
|Sales and marketing                                                                                               |                    | 4,562  |                   |  
|Sales and marketing  Hearst
    Communications, Inc..                                                            |                    |       |                   |  
|General and administrative                                                                                        |                    | 2,440  |                   |  
|Lease restructuring
    charge and related impairment of fixed assets                                             |                    |       |                   |  
|Depreciation and amortization                                                                                     |                    | 1,140  |                   |  
|Impairment of goodwill,
         intangible assets and fixedassets                                                |                    |       |                   |  
|                                                                                                                  |                    |        |                   |  
|Total operating expenses                                                                                          |                    | 15,882 |                   |  
|                                                                                                                  |                    |        |                   |  
|Income (loss) from operations                                                                                     |                    | 816    |                   |  
|Interest income, net                                                                                              |                    | 236    |                   |  
|Other income, net                                                                                                 |                    | 11     |                   |  
|Gain on sale of joint venture interest                                                                            |                    | 76     |                   |  
|                                                                                                                  |                    |        |                   |  
|Net income (loss) before minority interest                                                                        |                    | 1,139  |                   |  
|Minority interest                                                                                                 |                    |       |                   |  
|                                                                                                                  |                    |        |                   |  
|Net income (loss)                                                                                                 | $                  | 1,139  |                   | $
|                                                                                                                  |                    |        |                   |  
|Per share data:                                                                                                   |                    |        |                   |  
|Basic net income (loss) per share                                                                                 | $                  | 0.02   |                   | $
|                                                                                                                  |                    |        |                   |  
|Diluted net income (loss) per share                                                                               | $                  | 0.02   |                   | $
|                                                                                                                  |                    |        |                   |  
|Weighted average shares of common stock outstandingused
         in computing basic net income (loss) per share   |                    | 70,891 |                   |  
|                                                                                                                  |                    |        |                   |  
|Weighted average shares of common stock outstandingused
         in computing diluted net income (loss) per share |                    | 75,230 |                   |  
|                                                                                                                  |                    |        |                   |  

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 |        | Nine
           months ended |  
|------------------------------------------------------------------------------------------------------ | ----------------------------- | ------ | ---------------------------- | -
|September
           30,                                                                               | September
           30,     
|                                                                                                       |                              
|2004                                                                                                   |                               | 2003   | 2004                         |  
|                                                                                                       |                               |        |                             
|Cash flows from operating activities:                                                                  |                               |        |                              |  
|Net income (loss)                                                                                      | $                             | 1,139  |                              | $
|Adjustments to reconcile net income (loss) to
    net cash provided by (used in) operating activities: |                               |        |                              |  
|Impairment of goodwill, intangible assets and fixed assets                                             |                               |       |                              |  
|Depreciation and amortization                                                                          |                               | 1,140  |                              |  
|Deferred rent amortization                                                                             |                               | (36    | )                            |  
|Bad debt expense                                                                                       |                               | (62    | )                            |  
|Non-cash print advertising expense                                                                     |                               |       |                              |  
|Expense recognized in connection with issuance/modification
    of terms of stock options              |                               |       |                              |  
|Minority interest                                                                                      |                               |       |                              |  
|Lease restructuring charge and related impairment of fixedassets                                       |                               |       |                              |  
|Gain on sale of joint venture interest                                                                 |                               | (76    | )                            |  
|Changes in operating assets and liabilities:                                                           |                               |        |                              |  
|Accounts receivable                                                                                    |                               | 647    |                              |  
|Prepaid rent                                                                                           |                               | 38     |                              |  
|Restricted cash and other assets                                                                       |                               | (306   | )                            |  
|Accounts payable and accrued expenses                                                                  |                               | 226    |                              |  
|Lease restructuring                                                                                    |                               |       |                              |  
|Deferred revenue                                                                                       |                               | (896   | )                            |  
|                                                                                                       |                               |        |                              |  
|Net cash provided by (used in) operating activities                                                    |                               | 1,814  |                              |  
|                                                                                                       |                               |        |                              |  
|Cash flows from investing activities:                                                                  |                               |        |                              |  
|Purchase of fixed assets                                                                               |                               | (592   | )                            |  
|Purchase of intangible assets                                                                          |                               | (75    | )                            |  
|Cash paid less cash
         acquiredfor acquisition of 
               Promotions.com,
         Inc.  |                               |       |                              |  
|Proceeds from the sale of joint venture interest                                                       |                               | 76     |                              |  
|                                                                                                       |                               |        |                              |  
|Net cash used in investing activities                                                                  |                               | (591   | )                            |  
|                                                                                                       |                               |        |                              |  
|Cash flows from financing activities:                                                                  |                               |        |                              |  
|Proceeds from exercise of stock options and warrants                                                   |                               | 1,130  |                              |  
|Proceeds from securities offering, net of offering costs                                               |                               | 64,674 |                              |  
|Principal payments on stockholders notes
    receivable                                               |                               |       |                              |  
|                                                                                                       |                               |        |                              |  
|Net cash provided by financing activities                                                              |                               | 65,804 |                              |  
|                                                                                                       |                               |        |                              |  
|Net increase (decrease) in cash for the period                                                         |                               | 67,027 |                              |  
|Cash and cash equivalents, beginning of period                                                         |                               | 17,438 |                              |  
|                                                                                                       |                               |        |                              |  
|Cash and cash equivalents, end of period                                                               | $                             | 84,465 |                              | $
|                                                                                                       |                               |        |                              |  

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

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iVillage Inc. and SubsidiariesNotes 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, iVillage Consulting, Promotions.com,
        Inc., or Promotions.com, Knowledgeweb, Inc., operator of the Astrology.com Web
        site, or Astrology.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.                                                                                                                                                                                                                                                                             
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                         
|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.                                                                                                                                                                                                                                
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                         
|Astrology.com       | An online destination
       for individuals seeking daily horoscopes, astrological content and personalized
    forecasts.                                                                                                                                                                                                                                                                                             
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                         
|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
    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 in Corporate Communications,
    each offering an extensive database of pertinent information and events to
    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 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 SubsidiariesNotes to Condensed Consolidated Financial Statements 
(Unaudited)

Unaudited Interim Financial Information

The unaudited interim condensed consolidated
      financial statements of iVillage as of September 30, 2004 and for the three
      and nine months ended September 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 September 30, 2004
      and the results of its operations and its cash flows for the three and
      nine months ended September 30, 2004 and 2003, respectively. The results
      for the three and nine months ended September 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 SubsidiariesNotes to Condensed Consolidated Financial Statements 
(Unaudited)

Revenues, Receivables and Customer Concentration

Wal-Mart Stores, Inc. and its affiliates, or
      Wal-Mart, accounted for approximately 11% of total revenues for the three
      months ended September 30, 2004. No other single customer accounted for
      more than 10% of total revenues for the three months ended September 30,
      2004. Both Hearst, a related party, and Wal-Mart accounted for approximately
      11% of total revenues for the nine months ended September 30, 2004. No
      other single customer accounted for more than 10% of total revenues for
      the nine months ended September 30, 2004. iVillages fivelargest
      customers accounted for approximately 30% of total revenues for the three
      months ended September 30, 2004, and approximately 31% of total revenues
      for the nine months ended September 30, 2004. Wal-Mart accounted for approximately
      12% of total revenues and Hearst accounted for approximately 11% of total
      revenues for the three months ended September 30, 2003. One customer, Hearst,
      accounted for approximately 12% of total revenues for the nine months ended
      September 30, 2003. No other single customer accounted for more than 10%
      of total revenues for both the three and nine months ended September 30,
      2003. iVillages five largest customers accounted for approximately
      32% of total revenues for the three months ended September 30, 2003 and
      approximately 28% of total revenues for the nine months ended September
      30, 2003. At September 30, 2004, no single customer accounted for more
      than 10% 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.


Wal-Mart recently
      indicated to us that they would no longer be utilizing our subsidiary,
      IVPN, to create and distribute custom publications which were used for
      baby promotions in Wal-Marts United States stores. These publications
      accounted for approximately $4.8 million, or 10% of our total revenues,
      for the nine months ended September 30, 2004, and approximately $2.8 million,
      or 7% of our total revenues, for the nine months ended September 30, 2003. A failure
      to enter into contracts to replace these revenues would adversely affect
      our business, financial condition and results of operations.


Included in total revenues are barter transactions which totaled approximately
$1.2 million, or 7% of total revenues, for the three months ended September 30,
2004, and approximately $3.2 million, or 7% of total revenues, for the nine months
ended September 30, 2004. For the corresponding periods in 2003, barter transactions
totaled approximately $1.1 million, or 9% of total revenues, for the three months
ended September 30, 2003, and approximately $3.0 million, or 9% of total revenues,
for the nine months ended September 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 thatthe
      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 SubsidiariesNotes to Condensed Consolidated Financial
Statements 
(Unaudited)

Web Site Development Costs

iVillage accounts
      for Web site development costs in accordance with the provisions of Emerging
      Issues Task Force, or EITF, Issue No. 00-2, Accounting for Web Site
      Development Costs, or EITF 00-2, which requires that certain costs
      to develop Web sites be capitalized or expensed, depending on the nature
      of the costs. Amortization of Web site development costs is provided for
      by the straight-line method over the estimated useful life of two years.
      Development costs of approximately $0.3 million for the three months ended
      September 30, 2004, and approximately $0.4 million for the nine months
      ended September 30, 2004, were capitalized. The development costs capitalized
      for the nine months ended September 30, 2004 were associated with the redesign
      of iVillages and gURL.coms Web sites. Amortization expense
      of Web site development costs was approximately $30,000 for the three months
      ended September 30, 2004 and approximately $0.1 million for the nine months
      ended September 30, 2004. No development costs were capitalized for both
      the three and nine months ended September 30, 2003. No amortization expense
      was recorded for the three months ended September 30, 2003, and approximately
      $0.3 million was recorded for the nine months ended September
30, 2003.


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.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.


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

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 $0.1 million for the three months ended September 30, 2004, and approximately $0.4 million for the nine months ended September 30, 2004, of accruals included in operating expenses.  The reversal of
accruals for the nine months ended September 30, 2004 was primarily due to the renegotiation of a vendor contract in the second quarter of 2004 which had substantial changes in the terms and conditions from the original contract and provided for a
one-time benefit of approximately $0.3 million.. iVillage reversed approximately $0.1 million for the three months ended September 30, 2003, and approximately $0.2 million for the nine months ended September 30, 2003, of accruals included in
operating expenses due to changes in estimates previously provided for. These amounts were offset by additional accruals for various operating expenses.


Income Taxes

The difference between iVillages
    U.S. federal statutory rate of 34%, as well as its state and local rate,
    net of federal benefit of 7%, when compared to its actual effective tax rate
    of 0% is principally attributed to a partial reversal of the valuation allowance
    related to its deferred tax assets. iVillage has a full valuation allowance
    on its net deferred tax assets. If iVillage continues to generate net income
    for the remainder of the year, it expects to record no provision for income
    taxes for the full year as a result of an expected partial reversal of an
    equivalent amount of the deferred tax asset valuation allowance. In addition,
    if iVillage continues to generate pre tax income in future periods a partial
    or full reversal of the valuation allowance against the deferred tax assets
    may be required, and such reversal may be material in the period in which
    the reversal is recorded. The decision to reverse the valuation allowance
    will, among other things, consider the profitability of iVillage in recent
    periods, as well as consideration of iVillages future profitability and
    available tax planning strategies.


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 both the three and nine months ended September 30, 2004 and September 30, 2003 calculation of weighted average number of shares of common stock outstanding are 58,394 shares and 189,478
shares, respectively, which have not been issued.  These shares are being held 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 2,039,900 shares for the three months ended September 30, 2004 and 2,038,400 shares for the nine months ended September 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 11,353,254 shares for each of the three and nine months ended September 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
         September 30, |                                        | Nine months ended
         September 30, |     
|----------------------------------- | ----------------------------------------- | -------------------------------------- | ---------------------------------------- | ----
|                                    |                                           |                                        |                                          |     
|                                    |                                           | 2004                                   |                                          | 2003
|                                    |                                           |                                        |                                          |     
|                                    |                                           | ($ in thousands except per share data) |                                         
|Net income (loss)  as reported     | $                                         | 1,139                                  |                                          | $   
|                                    |                                           |                                        |                                          |     
|Weighted average shares of common   |                                           |                                        |                                          |     
|stock
      outstanding  basic     |                                           | 70,891                                 |                                          |     
|Assumed conversion of dilutive      |                                           |                                        |                                          |     
|securities                          |                                           | 4,339                                  |                                          |     
|                                    |                                           |                                        |                                          |     
|Weight average shares of common     |                                           |                                        |                                          |     
|stock
    outstanding  diluted     |                                           | 75,230                                 |                                          |     
|                                    |                                           |                                        |                                          |     
|Basic net income (loss) per share   | $                                         | 0.02                                   |                                          | $   
|                                    |                                           |                                        |                                          |     
|Diluted net income (loss) per share | $                                         | 0.02                                   |                                          | $   
|                                    |                                           |                                        |                                          |     

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 new measurement date and is amortized to expense over the remaining vesting period. Compensation costs related to the modification of stock option terms was no amount for the three months ended September
30, 2004, and approximately $0.3 million for the comparable period in 2003. For the nine months ended September 30, 2004, compensation costs related to the modification of stock option terms was approximately $19,000, and approximately $0.4 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 nine months
ended September 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:


|                                                        | Three months ended September 30,             |        | Nine months ended September 30, |  
|------------------------------------------------------- | -------------------------------------------- | ------ | ------------------------------- | -
|                                                        |                                              |        |                                 |  
|                                                        | 2004                                         |        | 2003                            |  
|                                                        |                                              |        |                                 |  
|                                                        | ($ in thousands except per share
      data) |       
|Net income (loss)  as reported                         | $                                            | 1,139  |                                 | $
|Stock-based compensation expense                        |                                              |        |                                 |  
|determined under SFAS
      123                         |                                              | (1,189 | )                               |  
|                                                        |                                              |        |                                 |  
|Net loss  pro forma                                    | $                                            | (50    | )                               | $
|                                                        |                                              |        |                                 |  
|Basic and diluted net income (loss)                     |                                              |        |                                 |  
|per
      share  as reported                           | $                                            | 0.02   |                                 | $
|                                                        |                                              |        |                                 |  
|Basic and diluted net loss per share pro
        forma | $                                            | (0.00  | )                               | $

| |  |  |  |  |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  |  |  |  |  | 

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

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 |  
|----------------------- | ------------------------------ | -
|                        | nine months ended              |  
|                        | September 30,                  |  
|                        |                                |  
|                        | 2004                           |  
|                        |                                |  
|Risk-free interest rate | 3.08                           | %
|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.


In March 2004, the FASB issued a proposed Statement, Share-Based Payment,
an amendment of FASB Statements Nos. 123 and 95, that addresses the accounting
for share-based payment transactions in which iVillage receives employee services
in exchange for either equity instruments of iVillage or liabilities that are
based on the fair value of iVillages equity instruments or that may be
settled by the issuance of such equity instruments. The proposed statement would
require that such transactions be accounted for using a fair-value-based method
and recognized as expense in the consolidated statement of operations. The effective
date of the proposed standard is for periods beginning after June 15, 2005. It
is expected that the final standard will be issued before December 31, 2004 and
should it be finalized in its current form, it could have a significant impact
on the consolidated statement of operations as iVillage will be required to expense
the fair value of stock option grants.


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

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, iVillagecompleted
      the annual impairment test and no impairment was recognized.
      Due to a loss of a major customer, iVillage completed an impairment
      test on Reporting unit - 2 and no impairment was identified for the third
      quarter of 2004.


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


|                   | December 31, |        |          |   | Impairment |  | September |  
|------------------ | ------------ | ------ | -------- | - | ---------- |  | --------- | -
|2003               | Acquisition  | losses | 30, 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

During the third quarter
      of 2004, iVillage acquired the Web site, database structure and content
      of Astrology Corporation for $75,000.


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 September 30, 2004 and December 31, 2003 (in thousands):


|                      |            |  | September
    30, 2004 |        | December
    31, 2003 |  
|--------------------- | ---------- |  | ---------------------- | ------ | --------------------- | -
|                      |            |  |                        |        |                       |  
|                      | Range of   |  | Gross                  |        |                       |  
|                      | useful     |  | carrying               |        |                       |  
|                      | life       |  | amount                 |        | Acquisition           |  
|                      |            |  |                        |        |                       |  
|Advertiser and member |            |  |                        |        |                       |  
|lists
    andcustomer |            |  |                        |        |                       |  
|contracts             | 2-10 years |  | $                      | 20,727 |                       | $
|Trademarks and        |            |  |                        |        |                       |  
|domain names          | 3 years    |  |                        | 3,227  |                       |  
|Licensingagreement    | 10 years   |  |                        | 2,900  |                       |  
|Technology            | 3 years    |  |                        | 935    |                       |  
|Non-competition       |            |  |                        |        |                       |  
|agreements            | 1 years    |  |                        | 810    |                       |  
|Content               | 3 years    |  |                        | 600    |                       |  
|                      |            |  |                        |        |                       |  
|                      |            |  | $                      | 29,199 |                       | $
|                      |            |  |                        |        |                       |  

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

Amortization expense
      for the three months ended September 30, 2004 was approximately $0.6 million
      and $2.9 million for the nine months ended September 30, 2004. Amortization
      expense for the three months ended September 30, 2003 was approximately
      $1.1 million and $3.7 million for the nine months ended September 30, 2003.


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


|2005 | $ | 2,147 | 
|---- | - | ----- | 
|2006 |   | 1,890 | 
|2007 |   | 1,790 | 
|2008 |   | 1,760 | 
|2009 |   | 1,565 | 
|     |   |      
|     | $ | 9,152 | 
|     |   |      

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 approximately
      $0.1 million for the three months ended September 30, 2004, and approximately
      $0.3 million for the nine months ended September 30, 2004 for services
      provided. iVillage earned approximately $0.2 million for the three months
      ended September 30, 2003, and approximately $0.4 million for the nine months
      ended September 30, 2003. As of September 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 September 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.


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

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, a member of the board of directors was an employee
of AOL through June 2004. 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.


In 2004, AOL has signed
      two contracts for various services offered by PAG, and iVillage has signed
      two advertising agreements with AOL to promote various AOL products.


Revenues from AOL
      were approximately $0.1 million for each of the three and nine months ended
      September 30, 2004. Revenues from AOL were approximately $0.3 million for
      each of the three and nine months ended September 30, 2003. At September
      30, 2004, iVillage was owed a receivable of approximately $45,000, and
      at December 31, 2003, iVillage was owed a receivable of approximately $0.1
      million. At each of September 30, 2004 and December 31, 2003, no amounts
      were owed by iVillage to AOL.


Hearst Communications, Inc.

As of September 30,
      2004, Hearst owned approximately 25% 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. During the third quarter of 2003, iVillage expensed approximately
      $0.1 million of non-cash print advertising expense, and included in the
      caption Other income, net in the condensed consolidated statements
      of operations, iVillage expensed approximately $0.2 million for expired
      prepaid print advertising credits. For the nine months ended September
      30, 2003, iVillage expensed approximately $0.4 million of non-cash print
      advertising expense and expired credits from this
advertising.


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

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 $1.5 million for the three months ended September 30, 2004, and approximately $5.3 million for the nine months ended September 30,
2004. Revenues, net of royalty payments, from Hearst were approximately $1.5 million for the three months ended September 30, 2003, and approximately $4.8 million for the nine months ended September 30, 2003.  iVillage was owed a net receivable from
this stockholder of approximately $0.3 million as of September 30, 2004, and approximately $1.3 million as of December 31, 2003.


Waterfront Media, Inc.

Our Chief Executive Officer and another board member of iVillage, Habib Kairouz, both serve on the board of directors of one of our customers, Waterfront Media Inc., or Waterfront Media. Our Chief Executive Officer owns less
than one percent of Waterfront Medias fully diluted securities. As a Managing Partner of Rho Capital Partners, Inc., Habib Kairouz may be deemed to have indirect beneficial ownership of approximately 33% of Waterfront Medias fully
diluted voting securities as a result of shares owned directly by affiliates of Rho Capital Partners, Inc.


Through September 30, 2004, iVillage has signed seven new advertising agreements with Waterfront Media. Amounts due from Waterfront Media were approximately $35,000 as of September 30, 2004, and
approximately $0.1 million as of December 31, 2003. Revenues from Waterfront Media were approximately $0.1 million for the three months ended September 30, 2004, and approximately $0.3 million for the nine months ended September 30, 2004. Revenues
from Waterfront Media were approximately $0.1 million for each of the three and nine months ended September 30, 2003.


Stockholder Note Receivable

During the first nine 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 September 30, 2004, for the next five years:


|Twelve months ending September 30: |  | (in thousands) |       
|---------------------------------- |  | -------------- | ------
|                                   |  |                |       
|2005                               |  | $              | 2,089 
|2006                               |  |                | 1,793 
|2007                               |  |                | 1,568 
|2008                               |  |                | 1,493 
|2009                               |  |                | 1,477 
|Thereafter                         |  |                | 6,247 
|                                   |  |                |       
|                                   |  | $              | 14,667
|                                   |  |                |       
|                                   |  |                |       

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

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 September 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.


Several plaintiffs have filed class action lawsuits
    in federal court against iVillage, several of 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.


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

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.


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.


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.
Women.com appealed the judgment in the Belgian court system, and on September 15, 2004 a judgment in the appeal awarded Euregio.net 251,000 Euros (approximately $0.3 million based on the Euro exchange rate as of September 30, 2004).


On October 27, 2004, Women.com and Euregio.net
    entered into a settlement agreement  pursuant to which Women.com paid Euregio.net
    150,000 Euros, or approximately $0.2 million, of which $0.1 million was
charged to operations and is included in general and administrative in the condensed
    consolidated statements of  operations, with the remainder charged against
    a previously established reserve. Women.com is also required to pay the amount
    of any
income tax obligation of Euregio.net and its founder related to the settlement
    in an amount up to 7,500 Euros,  or approximately $10,000 based on the Euro
    exchange rate as of November 10, 2004 (the Euro Exchange
Rate). In addition, Women.com is required to purchase an advertising campaign
from EasyScopes Entertainment Network, a compilation of Web sites affiliated
with Euregio.net, for 101,000 Euros, or approximately $0.1 million based on the
Euro Exchange
Rate, which will be run for 15 consecutive months commencing January 2005. The
101,000 Euros must be paid prior  to December 31, 2004 and will be held in a
joint escrow account. During the advertising campaign, Euregio.net has
guaranteed a certain amount of traffic will be directed to the Women.com Web
site, and in the event that such  traffic is not delivered, Euregio.net will
deliver additional advertising impressions until such time as the
guarantee is met. Pursuant to the terms of the settlement agreement, both parties
have waived their respective  right to appeal the judgment of the Belgium court,
the settlement fully and finally satisfies all of Euregio.nets rights

under such judgment, and the litigation is concluded.


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

Note 8  Capital Stock

Securities Offering

On July 6, 2004, iVillage completed a public offering of 11,560,032 shares of its common stock generating total proceeds, net of underwriting discounts and commissions and estimated costs of the offering, of approximately $64.7
million to iVillage.


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 September 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  Treasury Stock

On September 3, 2004, the former owners of StudentCenter LLC, the assets of which
were purchased by iVillage in September 1997 and sold in May 1998, exercised
41,666 options. The options had a grant price of $5.10 per share representing
gross proceeds of approximately $0.2 million. In lieu of cash payment, the former
owners of StudentCenter LLC remitted 37,405 shares with an average price of $5.68
per share to iVillage.


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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, website development costs, 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 nine months ended September 30, 2004 compared to the three
    and nine months ended September 30, 2003.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Liquidity and Capital Resources discusses
       our liquidity, cash flows for the three and nine months ended September
       30, 2004 compared to those for the three and nine months ended September
       30, 2003, factors that may influence our future cash requirements and
    the status of certain contractual obligations as of September 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, iVillage Consulting, Promotions.com,
    Inc., or Promotions.com, Knowledgeweb, Inc., operator of the Astrology.com
    Web site, or Astrology.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.                                                                                                                                                                                                                                                                                        | 
|------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|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.                                                                                                                                                                                                                                         | 
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|Astrology.com             | An online destination
         for individuals seeking daily horoscopes,astrological
    content and personalized forecasts.                                                                                                                                                                                                                                                                                                       | 
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|IVPN                      | Through IVPN, we operate
         iVillage Integrated Properties, Inc., orIVIP,
         the operator of The Newborn Channel, and LamazePublishing
         Company, or Lamaze Publishing, publisher of LamazeParents,
         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 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.


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 and other requirements under the Financial Accounting Standards Board,
    or FASB, Emerging Issues Task
Force, or EITF, 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.


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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.


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.


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.


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Astrology.com

Revenues from Astrology.com consist 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. In
    addition, Astrology.com earns revenues through the licensing of its content
    and revenue share agreements. We recognize revenues from these products when the
collection of the receivable is reasonably assured or as cash is received,
and no further obligations remain.


IVPN

IVPNs revenues have been derived primarily
    from advertising placements in IVPNs publications, videos, and broadcasts
    of The Newborn 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 the
other requirements of EITF 00-21 are fulfilled.


IVPN also charges 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.


Web Site Development Costs

iVillage accounts for Web site development costs
    in accordance with the provisions of EITF Issue No. 00-2, Accounting
    for Web Site Development Costs, or EITF 00-2, which requires that certain
    costs to develop Web sites be capitalized or expensed, depending on the nature
    of the costs. Amortization of Web site development costs is provided for
    by the straight-line method over the estimated useful life of two years.


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.




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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 whichthe
      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. The difference between our U.S. federal
    statutory rate of 34%, as well as our state and local rate, net of federal
    benefit of 7%, when compared to our actual effective tax rate of 0% is principally
    attributed to a partial reversal of the valuation allowance related to our
    deferred tax assets. We have a full valuation allowance on our net deferred
    tax assets. If we continue to generate net income for the remainder of the
    year, we expect to record no provision for income taxes for the full year
    as a result of an expected partial reversal of an equivalent amount of the
    deferred tax asset valuation allowance. In addition, if we continue to generate
    pre tax income in future periods a partial or full reversal of the valuation
    allowance against the deferred tax assets may be required, and such reversal
    may be material in the period in which the reversal is recorded. The decision
    to reverse the valuation allowance will, among other things, consider our
    profitability in recent periods, as well as consideration of our future profitability
    and available tax planning strategies.


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, June 30, 2004 and September 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 September 30, |        | Nine Months Ended
    September 30, |     
|-------------- | ------------------------------------ | ------ | ----------------------------------- | ----
|               |                                      |        |                                     |     
|               |                                      |        |                                     |     
|               |                                      |        |                                     |     
|               | 2004                                 |        | (1)                                 |     
|               |                                      |        |                                     |     
|iVillage.com   | $                                    | 9,524  |                                     | 57  
|               |                                      |        |                                     |     
|Astrology.com  |                                      | 908    |                                     | 5   
|               |                                      |        |                                     |     
|IVPN           |                                      | 5,351  |                                     | 32  
|               |                                      |        |                                     |     
|PAG            |                                      | 915    |                                     | 5   
|               |                                      |        |                                     |     
|               |                                      |        |                                     |     
|Total revenues | $                                    | 16,698 |                                     | 100%
|               |                                      |        |                                     |     
|               |                                      |        |                                     |     

|(1) | Percent of total revenues.                                       
|--- | -----------------------------------------------------------------
|(2) | The aggregate of this column does not equal 100% due to rounding.

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iVillage.com

|                                           | Three Months Ended September 30, |       | Nine Months Ended September 30, |    
|------------------------------------------ | -------------------------------- | ----- | ------------------------------- | ---
|                                           |                                  |       |                                 |    
|                                           | (dollars in thousands)          
|                                           |                                  |       |                                 |    
|                                           | 2004                             |       | (1)                             |    
|                                           |                                  |       |                                 |    
|Sponsorship & advertising                  | $                                | 5,706 |                                 | 60 
|                                           |                                  |       |                                 |    
|Barter                                     |                                  | 1,188 |                                 | 12 
|                                           |                                  |       |                                 |    
|iVillage Consulting                        |                                  | 1,346 |                                 | 14 
|                                           |                                  |       |                                 |    
|Promotions.com                             |                                  | 1,030 |                                 | 11 
|                                           |                                  |       |                                 |    
|Online services/other                      |                                  | 254   |                                 | 3  
|                                           |                                  |       |                                 |    
|                                           | $                                | 9,524 |                                 | 100
|                                           |                                  |       |                                 |    
|                                           |                                  |       |                                 |    
|(1)Percent
    of iVillage.coms revenues.

Three Months Ended September 30

Revenues from iVillage.com accounted for approximately 57% of total revenues for the three months ended September 30, 2004, and approximately 53% for the three months ended September 30, 2003. Revenues from iVillage.com
increased approximately $2.3 million, or 33%, for the three months ended September 30, 2004, as compared to the corresponding period in 2003.


The increase in revenues for the three months
    ended September 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 $1.2 million,
    and an increase in iVillage Consulting revenues of approximately $0.6 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 $1.0 million. Revenues from sponsored
    links, which commenced in the third quarter of 2003, contributed approximately
    $0.2 million in revenues for the three months ended September 30, 2004, compared
    to approximately $38,000 for the corresponding period in 2003. The increase
    in iVillage Consulting revenues of approximately 81% for the three months
    ended September 30, 2004, as compared to the corresponding period in 2003,
    was primarily due to the three-year renewal of a Web Site services agreement
    signed with Hearst in July 2004 which provides for an increase in fees and
    lower royalty payments. The increase in iVillage Consulting revenues is also
    due to a two-year Web site services agreement signed with Hearst 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 23% for the three months ended September 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.


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Nine Months Ended September 30

Revenues from iVillage.com
      accounted for approximately 57% of total revenues for both the nine months
      ended September 30, 2004 and September 30, 2003. Revenues from iVillage.com
      increased approximately $5.5 million, or 25%, for the nine months ended
      September 30, 2004, as compared to the corresponding period in 2003.


The increase in revenues for the nine months ended
    September 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 $3.4 million, and
    an increase in iVillage Consulting revenues of approximately $1.1 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 $2.8 million. Revenues from sponsored
    links contributed approximately $0.6 million in revenues for the nine months
    ended September 30, 2004, compared to approximately $38,000 for the corresponding
    period in 2003. The increase in iVillage Consulting revenues of approximately
    47% for the nine months ended September 30, 2004, as compared to the corresponding
    period in 2003, was primarily due to the three-year renewal of a Web Site
    services agreement signed in July 2004 with Hearst to provide hosting and
    production services related to several of Hearst magazine Web sites. The
    renewal provides for an increase in fees and lower royalty payments. In addition,
    iVillage Consulting fees increased due to a two-year Web site services agreement
    signed in December 2003 with Hearst for providing production, maintenance
    and
hosting services for three teen Web sites.


Revenues from Promotions.com increased approximately
    $0.5 million, or 19% for the nine months ended September 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, generating incremental
    revenues of approximately $1.0 million. The increase in revenues is offset
    by lower revenues of approximately $0.5 million for the nine months ended
    September 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
    September 30, |     | Nine Months Ended
    September 30, |    
|--------------------------------------- | ------------------------------------ | --- | ----------------------------------- | ---
|                                        |                                      |     |                                     |    
|                                        |                                      |     |                                     |    
|                                        |                                      |     |                                     |    
|                                        | 2004                                 |     | (1)                                 |    
|                                        |                                      |     |                                     |    
|Online services                         | $                                    | 793 |                                     | 87 
|Other                                   |                                      | 115 |                                     | 13 
|                                        |                                      |     |                                     |    
|                                        | $                                    | 908 |                                     | 100
|                                        |                                      |     |                                     |    
|                                        |                                      |     |                                     |    
|(1)Percent of Astrology.coms revenues.

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Three Months
Ended September 30

Revenues from Astrology.com accounted for approximately 5% of total revenues for the three months ended September 30, 2004, and approximately 6% for the three months ended September 30, 2003. Revenues from Astrology.com
  increased approximately $0.1 million, or 19%, for the three months ended September 30, 2004, as compared to the corresponding period in 2003, primarily due to an increase in astrological charts sold and revenue share payments received from third
  parties.


Nine Months Ended September 30

Revenues from Astrology.com accounted for approximately
    5% of total revenues for both the nine months ended September 30, 2004 and
    September 30, 2003. Revenues from Astrology.com increased approximately $0.4
    million, or 17%, for the nine months ended September 30, 2004, as compared
    to the corresponding period in 2003, primarily due to an increase in astrological
    charts sold and revenue share
payments received from third parties.


IVPN

|                          | Three Months Ended
    September 30, |       | Nine Months Ended
    September 30, |     
|------------------------- | ------------------------------------ | ----- | ----------------------------------- | ----
|                          |                                      |       |                                     |     
|                          |                                      |       |                                     |     
|                          |                                      |       |                                     |     
|                          | 2004                                 |       | (1)                                 |     
|                          |                                      |       |                                     |     
|Sponsorship & advertising | $                                    | 3,031 |                                     | 57  
|                          |                                      |       |                                     |     
|Custom publications       |                                      | 1,963 |                                     | 37  
|                          |                                      |       |                                     |     
|Licensing fees            |                                      | 357   |                                     | 7   
|                          |                                      |       |                                     |     
|Barter                    |                                      |      |                                     | 0   
|                          |                                      |       |                                     |     
|                          | $                                    | 5,351 |                                     | 100%
|                          |                                      |       |                                     |     
|                          |                                      |       |                                     |     

|(1) | Percent of IVPNs revenues.                                      
|--- | -----------------------------------------------------------------
|(2) | The aggregate of this column does not equal 100% due to rounding.

Three Months Ended September 30

Revenues from IVPN accounted for approximately 32% of total revenues for the
three months ended September 30, 2004, and approximately 38% for the three months
ended September 30, 2003. Revenues from IVPN increased approximately $0.3 million,
or 5%, for the three months ended September 30, 2004, as compared to the corresponding
period in 2003.


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The increase in revenues for the three months
    ended September 30, 2004, as compared to the corresponding period in 2003,
    was primarily due to an increase of approximately $0.4 million in revenues
    from custom publications and an increase of approximately $0.3 million in
    licensing fees. The increase in revenues is primarily offset by lower sponsorship
    and advertising revenues of approximately $0.3 million for the three months
    ended September 30, 2004, as compared to the corresponding period in 2003,
    mainly due to a decrease in the number of advertising placements in IVPNs
    publications and video. The increase in revenues from custom publications
    for the three months ended September 30, 2004, as compared to the corresponding
    period in 2003, was primarily due to revenue recognized for three publications
    created and/or distributed in the third quarter of 2004, as compared to
  only one publication created and distributed for the same period in 2003. Licensing
  fee revenues increased approximately $0.3 million, or 280%, for the three months
  ended September 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 September 30, 2004, 566 hospitals
  had agreed to pay a fee for The Newborn Channel and 518 contracts had commenced.
  As of September 30, 2003, 286 hospitals had agreed to pay a fee for The Newborn
  Channel and 195 contracts had commenced. Revenues from IVPN may vary based upon
  the timing and volume of customers advertising and marketing initiatives.


Nine Months Ended September 30

Revenues from IVPN accounted for approximately 32% of
    total revenues for both the nine months ended September 30, 2004 and September
    30, 2003. Revenues from IVPN increased approximately $3.2 million, or 26%,
    for the nine months ended September 30, 2004, as compared to the corresponding
    period in 2003.


The increase in revenues for the nine months ended September
    30, 2004, as compared to the corresponding period in 2003, was primarily due
    to an increase of approximately $3.1 million in revenues from custom publications
    and an increase of approximately $0.9 million in licensing fees. The increase
    in revenues is primarily offset by lower sponsorship and advertising revenues
    of approximately $0.6 million for the nine months ended September 30, 2004,
    as compared to the corresponding period in 2003. Revenues from custom publications
    increased approximately 109% for the nine months ended September 30, 2004,
    as compared to the corresponding period in 2003, primarily due to an increase
    in the number of publications created and distributed. Licensing fee revenues
    increased approximately $0.9 million, or 545%, for the nine months ended September
    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 6% for the nine months ended September 30, 2004,
    as compared to the corresponding period in 2003, was primarily due a decrease
    in advertising placements in IVPNs publications and video, and a lower
    number of customers advertising on The Newborn Channel in 2004.


Wal-Mart Stores, Inc. and its affiliates, or Wal-Mart,
    recently indicated to us that they would no longer be utilizing IVPN to create
    and distribute custom publications which were used for baby promotions in
    Wal-Marts United States stores. These publications accounted for approximately
    $4.8 million, or 31%, of IVPNs total revenues for the nine months ended
    September 30, 2004, and approximately $2.8 million, or 22%, for the nine months
    ended September 30, 2003. A failure to enter into contracts to replace these
    revenues would adversely affect IVPNs business, financial condition
    and results of operations.


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PAG

|                            | Three Months Ended
      September 30, |     | Nine Months Ended
      September 30, |    
|--------------------------- | -------------------------------------- | --- | ------------------------------------- | ---
|                            |                                        |     |                                       |    
|                            | (dollars in thousands)                 |    
|                            |                                        |     |                                       |    
|                            | 2004                                   |     | (1)                                   |    
|                            |                                        |     |                                       |    
|Subscription-based programs | $                                      | 456 |                                       | 50 
|                            |                                        |     |                                       |    
|Events                      |                                        | 339 |                                       | 37 
|                            |                                        |     |                                       |    
|Consulting/other            |                                        | 104 |                                       | 11 
|                            |                                        |     |                                       |    
|Barter                      |                                        | 16  |                                       | 2  
|                            |                                        |     |                                       |    
|                            | $                                      | 915 |                                       | 100
|                            |                                        |     |                                       |    

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

Three Months Ended September 30

Revenues from PAG accounted for approximately 5% of total
  revenues for the three months ended September 30, 2004, and approximately 4%
  for the three months ended September 30, 2003. Revenues from PAG increased approximately
  $0.4 million, or 74%, for the three months ended September 30, 2004, as compared
  to the corresponding period in 2003. The increase in revenues for the three
  months ended September 30, 2004, as compared to the corresponding period in
  2003, was primarily due to an increase of approximately $0.3 million generated
  mainly from an event in July 2004 where higher revenues were generated as a
  result of higher sale prices, as compared to the same event held in 2003.


Nine Months Ended September 30

Revenues from PAG accounted for approximately 5% of total
  revenues for the nine months ended September 30, 2004, and approximately 6%
  for the nine months ended September 30, 2003. Revenues from PAG increased approximately
  $0.2 million, or 10%, for the nine months ended September 30, 2004, as compared
  to the corresponding period in 2003. The revenue increase for the nine months
  ended September 30, 2004 was primarily due to an increase in the number of participating
  members in subscription-based programs resulting in incremental revenues of
  approximately $0.1 million.


Revenues, Receivables and Customer Concentration

Our five largest customers accounted for approximately
    30% of total revenues for the three months ended September 30, 2004, and approximately
    32% of total revenues for the corresponding period in 2003. Our five largest
    customers accounted for approximately 31% of total revenues for the nine months
    ended September 30, 2004, and approximately 28% of total revenues for the
    corresponding period in 2003. Wal-Mart accounted for approximately 11% of
    total revenues for the three months ended September 30, 2004. No other single
    customer accounted for more than 10% of our total revenues for the three months
    ended September 30, 2004. Both Hearst and Wal-Mart accounted for approximately
    11% of total revenues for the nine months ended September 30, 2004. No other
    single customer accounted for more than 10% of our total revenues for the
    nine months ended September 30, 2004. Wal-Mart accounted for approximately
    12% of total revenues and Hearst accounted for approximately 11% of total
    revenues for the three months ended September 30, 2003. One customer, Hearst,
    accounted for approximately 12% of total revenues for the nine months ended
    September 30, 2003. No other single customer accounted for more than 10% of
    total revenues for the nine months ended September 30, 2003. At September
    30, 2004, no single customer accounted for more than 10% 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.


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Wal-Mart recently indicated to us that they would no longer
  be utilizing our subsidiary, IVPN, to create and distribute custom publications
  which were used for baby promotions in Wal-Marts United States stores.
  These publications accounted for approximately $4.8 million, or 10% of our total
  revenues, for the nine months ended September 30, 2004, and approximately $2.8
  million, or 7% of our total revenues, for the nine months ended September 30, 2003.
  A failure to enter into contracts to replace these revenues would adversely
  affect our business, financial condition and results of operations.


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 September 30, |        | Nine Months
      Ended September 30, |   
|------------------------------------------------------------------------------------------- | -------------------------------------- | ------ | ------------------------------------- | --
|                                                                                            |                                        |        |                                       |   
|                                                                                            | 2004                                   |        | (1)                                   |   
|                                                                                            |                                        |        |                                       |   
|Editorial, product development                                                              |                                        |        |                                       |   
|and technology                                                                              | $                                      | 7 ,740 |                                       | 46
|                                                                                            |                                        |        |                                       |   
|Sales and marketing                                                                         |                                        | 4,562  |                                       | 27
|                                                                                            |                                        |        |                                       |   
|General and administrative                                                                  |                                        | 2,440  |                                       | 15
|                                                                                            |                                        |        |                                       |   
|Lease restructuring charge
          and  relatedimpairment
          of fixed
      assets |                                        |       |                                       | 0 
|                                                                                            |                                        |        |                                       |   
|Depreciation and amortization                                                               |                                        | 1,140  |                                       | 7 
|                                                                                            |                                        |        |                                       |   
|Impairment of goodwill,  intangible
          assets,and fixed
      assets                 |                                        |       |                                       | 0 
|                                                                                            |                                        |        |                                       |   
|Total
      operating expenses                                                              | $                                      | 15,882 |                                       | 95
|                                                                                            |                                        |        |                                       |   

|   
|---
|(1)

Total operating expenses for the three and nine
  months ended September 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.


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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;                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                            
| |  | 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, custom publications, 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 September 30

Editorial, product
      development and technology expenses for the three months ended September
      30, 2004 were approximately $7.7 million, or 46% of total revenues. Editorial,
      product development and technology expenses for the three months ended
      September 30, 2003 were approximately $7.6 million, or 56% of total revenues.


Editorial, product development and technology expenses increased approximately $0.2 million, or 3%, for the three months ended September 30, 2004, as compared to the corresponding period in 2003,
primarily due to an increase of approximately $0.6 million for costs associated with three custom publications created and/or distributed in the third quarter of 2004, as compared with only one custom publication created and distributed in the
corresponding period in 2003, and increased consultant expenses of approximately $0.2 million primarily from the Promotions.com division which stems from an increase in the number of promotional campaigns created and managed for a customer. These
amounts were partially offset by a decrease in payroll, severance and related expenses of approximately $0.1 million, licensing fees of approximately $0.1 million, hardware and software maintenance expenses of approximately $0.1 million, as well as
a decrease in facility costs resulting in a decreased facilities allocation of approximately $0.2 million. The decrease in payroll, severance and related expenses was partially due to the capitalization of salaries associated with the redesign of
our Web site in accordance with EITF 00-2 of approximately $0.1 million. Licensing fees decreased due to the renegotiation of a vendor contract in the second quarter of 2004 which had substantial changes in the terms and conditions from the original
contract which reduces future obligations. Hardware and software maintenance expenses decreased due to a change in prior estimates. Facility costs decreased in 2004, as compared to the corresponding period in 2003, 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 September 30, 2004 decreased approximately $0.1 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 September 30, 2004, as compared to the corresponding
period in 2003.


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


Nine Months Ended September 30

Editorial, product development and technology expenses for the nine months ended September 30, 2004 were approximately $22.3 million, or 46% of total revenues. Editorial, product development and
  technology expenses for the nine months ended September 30, 2003 were approximately $22.2 million, or 56% of total revenues.


Editorial, product development
    and technology expenses increased approximately $0.1 million, or less than
    1%, for the nine months ended September 30, 2004, as compared to the corresponding
    period in 2003, primarily due to an increase of approximately $1.3 million
    of costs associated with three custom publications in 2004, as compared with
    only one custom publication in 2003, and increased consultant expenses of
    approximately $0.8 million
  primarily from the Promotions.com division which stems from an increase in
    the number of promotional campaigns created and managed for a customer. These
    amounts were primarily offset by a decrease in payroll, severance and related
    expenses of approximately $0.7 million, licensing fees of approximately $0.4
    million, production costs associated with IVPNs magazines, videos and
    promotional programs of approximately $0.1 million, hardware and software
    maintenance expenses of approximately $0.1 million, as well as a decrease
    in facility costs resulting in a decreased facilities allocation of approximately
    $0.6 million. The decrease in payroll, severance and related expenses was
    primarily due to the capitalization of
  salaries associated with the redesign of our Web site in accordance with EITF
    00-2 of approximately $0.3 million and lower severance expenses of approximately
    $0.1 million. Licensing fees decreased due to the renegotiation of a vendor
    contract in the second quarter of 2004 which had substantial changes in the
    terms and conditions from the original contract, and provided a one-time
    benefit of approximately $0.3 million, as well as reduces future obligations.
    Hardware and software maintenance
  expenses decreased due to a change in prior estimates. 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 nine months ended September 30, 2004 decreased approximately
    $0.7 million, as compared to the corresponding period in 2003. In addition,
    several vendor contracts were renegotiated which decreased facility costs
    by approximately $0.4 million
  for the three months ended September 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 nine months ended September 30, 2004, when compared to
      the corresponding period in 2003, primarily as a result of an increase
      in total revenues.


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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 September 30

Sales and marketing
      expenses for the three months ended September 30, 2004 were approximately
      $4.6 million, or 27% of total revenues. Sales and marketing expenses for
      the three months ended September 30, 2003, were approximately $4.5 million,
      or 33% of total revenues.


Sales and marketing
      expenses increased approximately $0.1 million, or 2%, for the three months
      ended September 30, 2004, as compared to the corresponding period in 2003,
      primarily due to an increase in media and advertising expenses of approximately
      $0.1 million resulting from an increase in barter transactions, and payroll,
      commission, severance and related expenses of approximately $0.1 million.
      These expenses were offset by a decrease in market research costs of approximately
      $0.1 million. Market research costs decreased for the three months ended
      September 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 September
      30, 2004, when compared to the corresponding period in 2003, due to an
      increase in
total revenues.


Included in sales
      and marketing expenses are barter transactions, which amounted to approximately
      28% of total sales and marketing costs during the three months ended September
      30, 2004, compared to approximately 22% of such costs for the corresponding
      three months in 2003.


Nine Months Ended September 30

Sales and marketing
      expenses for the nine months ended September 30, 2004 were approximately
      $13.7 million, or 28% of total revenues. Sales and marketing expenses for
      the nine months ended September 30, 2003 were approximately $15.0 million,
      or 38% of total revenues.


Sales and marketing expenses decreased approximately $1.4 million, or 9%, for the nine months ended September 30, 2004, as compared to the corresponding period in 2003, primarily due to a decrease in
market research costs of approximately $0.4 million, consultant expenses of approximately $0.2 million, payroll, commissions, severance and related expenses of approximately $0.1 million, media and advertising expenses of approximately $0.2 million,
as well as lower facility costs, resulting in a decreased facilities allocation of approximately $0.4million.
Market research costs decreased for the nine months ended September 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. Media and advertising expenses decreased due to non-cash
print advertising run in certain Hearst magazines in 2003, with no comparable
expense in 2004. The print advertising was acquired as part of the Women.com
acquisition. Sales and marketing expenses decreased as a percentage of total
revenues for the nine months ended September 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 nine months ended September 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.    

Three Months Ended September 30

General and administrative expenses for the three
    months ended September 30, 2004 were approximately $2.4 million, or 15% of
    total revenues. General and administrative expenses for the three months
    ended September 30, 2003 were approximately $4.2 million, or 31% of total
    revenues.


General and administrative expenses decreased approximately $1.8 million for the three months ended September 30, 2004, or 42%, as compared to the corresponding period in 2003, primarily due to a
decrease in payroll, severance and related expenses of approximately $1.5 million, insurance costs of approximately $0.2 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 primarily offset by an increase in professional fees of approximately $0.2 million for the three months ended September 30, 2004, as compared to the corresponding period in
2003. Payroll, severance and related expenses decreased in the third quarter of 2004, as compared to the corresponding period in 2003, primarily due to the departure of some management personnel in the third quarter of 2003 which resulted in aseverance
charge of approximately $0.9 million. Professional fees increased in 2004 primarily
due to costs of compliance with the Sarbanes-Oxley Act of 2002 and the settlement
of the Euregio.net litigation. General and administrative expenses decreased
as a percentage of total revenues for the three months ended September 30, 2004,
when compared to the corresponding period in 2003, primarily as a result of a
decrease in payroll, severance and related expenses, coupled with 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 both the three months ended
September 30, 2004 and the three months ended September 30, 2003, we reversed
approximately $0.1 million of accruals included in operating expenses due to
a change in estimate on services previously provided for. These amounts were
offset by additional accruals for various operating expenses.


Nine Months Ended September 30

General and administrative expenses for the nine months ended September 30, 2004
were approximately $8.2 million, or 17% of total revenues. General and administrative
expenses for the nine months ended September 30, 2003 were approximately $10.3
million, or 26% of total revenues.


General and administrative expenses decreased approximately $2.1 million for
the nine months ended September 30, 2004, or 20%, as compared to the corresponding
period in 2003, primarily due to a decrease in payroll, severance and related
expenses of approximately $1.8 million, insurance costs of approximately $0.3
million, bad debt expenses of approximately $0.3 million, as well as lower facility
costs, resulting in a decreased facilities allocation of approximately $0.3 million.
These amounts were primarily offset by an increase in professional fees of approximately
$0.6 million for the nine months ended September 30, 2004, as compared to the
corresponding period in 2003. Payroll, severance and related expenses decreased
for the nine months ended September 30, 2004, as compared to the corresponding
period in 2003, primarily due to the departure of some management personnel in
the third quarter of 2003. Professional fees increased in 2004 primarily due
to costs of compliance with the Sarbanes-Oxley Act of 2002 and the settlement
of the Euregio.net litigation. General and administrative expenses decreased
as a percentage of total revenues for the nine months ended September 30, 2004,
when compared to the corresponding period in 2003, primarily as a result of a
decrease in payroll, severance and related expenses, coupled with 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 nine months ended September
30, 2004, we reversed approximately $0.4 million of accruals included in operating
expenses, primarily due to the renegotiation of a vendor contract in the second
quarter of 2004 which had substantial changes in the terms and conditions from
the original contract and provided for a one-time benefit of approximately $0.3
million. For the corresponding period in 2003, we reversed approximately $0.2
million due to changes in estimates on services previously provided for. These
amounts were offset by additional accruals for various operating expenses.


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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.


In July 2003, we entered into a lease amendment with the landlord of our New York headquarters that became effective on August 15, 2003. The lease amendment provided for a reduction in leased space,
  as well as a reduction in rent per square foot. In connection with the lease amendment, we surrendered the approximately $8.5 million classified as restricted cash to the landlord, resulting in a lease restructuring charge of approximately $4.7
  million and prepaid rent of approximately $3.7 million, which will be amortized over the remaining life of the lease. In addition, we expensed fixed assets of approximately $1.5 million that were transferred to the landlord, reduced the liability
  for deferred rent associated with the reduction of leased space by approximately $0.6 million and reversed the remaining lease restructuring liability of approximately $0.6 million.


Depreciation and Amortization

Depreciation and amortization expenses were approximately $1.1 million, or 7%
of total revenues, for the three months ended September 30, 2004, and approximately
$4.9 million, or 10% of total revenues, for the nine months ended September 30,
2004. Depreciation and amortization expenses were approximately $1.9 million,
or 14% of total revenues, for the three months ended September 30, 2003, and
approximately $6.8 million, or 17%, of total revenues, for the nine months ended
September 30, 2003. The decrease in depreciation and amortization for the three
and nine months ended September 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, as well as the
intangible assets acquired in the Women.com acquisition being fully amortized
in June 2004.


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 the three months ended September 30, 2004 was approximately $0.2
      million and approximately $0.3 million for the nine months ended September
      30, 2004, or 1% of total revenues for both the three and nine months ended
      September 30, 2004. Interest income, net was approximately $0.1
million, or less than 1%of total revenues,
for the three months ended September 30, 2003. Interest income, net was approximately
$0.2 million, or less than 1% of total revenues, for the nine months ended September
30, 2003. Interest income increased for the three and nine months ended September
30, 2004 primarily due to an increase in interest received in the third quarter
of 2004 which was due to larger cash balances stemming from the public offering
completed in July 2004.


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Other Income, Net

Other income, net for the three months ended September 30, 2004 was approximately
$11,000, and was approximately $0.1 million for the nine months ended September
30, 2004. Both amounts represent less than 1% of total revenues. Other income,
net for the three months ended September 30, 2003 was approximately $0.1 million,
or 1% of total revenues. Other income, net for the nine months ended September
30, 2003 was approximately $0.1 million, or less than 1% of total revenues. In
2004, 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. In 2003, other income, net primarily includes a distribution
in a bankruptcy claim acquired in the acquisition of Women.com, offset by the
expiration of some prepaid print advertising credits with Hearst also acquired
as part of the Women.com acquisition.


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 September 30, 2004, and
approximately $0.3 million, or approximately 1% of total revenues for the nine
months ended September 30, 2004. Gain on sale of joint venture interest for the
three months ended September 30, 2003 was approximately $0.2 million, and was
approximately $0.4 million for the nine months ended September 30, 2003. Both
amounts represent approximately 1% of total revenues. 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 September 30

We recorded net income of approximately $1.1 million, or $0.02 per diluted share,
for the three months ended September 30, 2004. For the comparable period in 2003,
we recorded a net loss of approximately $9.3 million, or $0.17 per diluted share.
We generated net income for the three months ended September 30, 2004, as compared
to a net loss in the corresponding period in 2003, primarily due to increased
revenues of approximately $3.1 million and lower operating expenses, excluding
the 2003 event, of approximately $2.2 million in 2004, coupled with the following
2003 item for the three months ended September 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 $5.1 million.


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Nine Months Ended September 30

We recorded net income of approximately $0.4 million, or $0.01 per diluted share,
for the nine months ended September 30, 2004. For the comparable period in 2003,
we recorded a net loss of approximately $27.5 million, or $0.49 per diluted share.
We generated net income for the nine months ended September 30, 2004, as compared
to a net loss in the corresponding period in 2003, primarily due to increased
revenues of approximately $9.3 million and lower operating expenses, excluding
the 2003 events, of approximately $5.2 million for the nine months ended September
30, 2004, coupled with the following items for the nine months ended September
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 $9.1 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.


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 $64.7 million
to us.


As of September 30, 2004, we had approximately $84.5 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.


Net cash provided by operating activities increased approximately $3.5 million
to $1.8 million for the three months ended September 30, 2004, from net cash
used in operating activities of approximately $1.7 million for the comparable
period in 2003. Net cash provided by operating activities increased approximately
$9.7 million to $3.6 million for the nine months ended September 30, 2004, from
net cash used in operating activities of approximately $6.1 million for the comparable
period in 2003. The increase in cash provided for the nine months ended September
30, 2004 was primarily attributable to net income generated in 2004, less non-cash
adjustments, of approximately $4.8 million, as compared to a utilization of cash
due to a net loss, less non-cash adjustments, of $11.8 million for the corresponding
period in 2003. In addition, the increase in cash provided by operations is due
to the utilization of prepaid rent of approximately $0.3 million in 2004, as
compared to an increase of approximately $3.7 million in 2003, as a result of
the lease restructuring completed in 2003. These amounts are offset by an increase
in other assets of approximately $1.0 million in 2004 compared to a utilization
of other assets of approximately $9.1 million in 2003. The decrease in other
assets for the nine months ended September 30, 2003 was primarily due to the
surrender of restricted cash to the landlord in consideration of our lease renegotiation
of approximately $8.5 million.


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Net cash used in investing activities increased
      approximately $0.3 million to $0.6 million for the three months ended September
      30, 2004, from approximately $0.3 million for the three months ended September
      30, 2003. Net cash used in investing activities increased approximately$1.6 million to $2.0 million
    for the nine months ended September 30, 2004, from approximately $0.4 million
    for the corresponding period in 2003. The increase in net cash used in investing
    activities for the nine months ended September 30, 2004 compared to the corresponding
    period in 2003 was primarily due to an increase in fixed assets purchased
    of approximately $1.3 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.


Net cash provided by financing activities increased approximately $65.3 million
to $65.8 million for the three months ended September 30, 2004, from approximately
$0.5 million for the three months ended September 30, 2003. Net cash provided
by financing activities increased approximately $66.6 million to $67.1 million
for the nine months ended September 30, 2004, from approximately $0.5 million
for the corresponding period in 2003. The increase in net cash provided by financing
activities for the nine months ended September 30, 2004, as compared to the corresponding
period in 2003, was primarily attributable to proceeds from the securities offering
completed in July 2004 of approximately $69.4 million, net of offering costs
of approximately $4.7 million, and an increase in proceeds from the exercise
of stock options and warrants of approximately $1.7 million.


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


Management
    has provided recent guidance that we anticipate achieving profitability on
    a fiscal year basis in 2004 by growing revenues approximately 21% in 2004
    as compared to 2003, while holding expenses relatively unchanged year over
    year. The revenue guidance was adjusted from prior estimates due to anticipated
    softness in the fourth quarter of one of our offline properties, PAG, and
    to reflect revenue recognition of the new Hearst agreement on a straight
    line basis. Management believes the expected softness surrounding PAG is
    a result of the recent impending general political election, and expects
    that revenues derived from PAGs summit and gala event may be less
    than those previously projected by management. Management has also provided
    guidance that iVillage expects to achieve net income for 2004 of between
    approximately $2.0 million and $2.5 million. iVillage
    may not, however, achieve profitable operations or increase revenues as much
    as management anticipates. 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 21% 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 September 30, 2004, approximately 54% of participating hospitals have
    agreed to pay thisfee, however, we can
    make no assurance that all of the hospitals will agree to pay a fee. The
    total value of signed contracts at September 30, 2004 is in excess of $7.3
    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 $0.2 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 occurred
    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, 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                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                              
| |  | 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.                                                                                   

Revenues from this agreement will be recognized
on a straight line basis over the life of the contract. Consequently, our work
efforts, which include a significant amount of production services performed
during the third and fourth quarters of 2004, will not coincide with the timing
of our revenue recognition on this agreement. As of September 30, 2004, we have received $1.0
    million and earned approximately $1.0 million in connection with this agreement.


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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 September 30, 2004, we have received approximately $0.5 million and earned
    approximately $0.7 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.


Capital expenditures were approximately $2.2
    million for the nine months ended September 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 theirintellectual
            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.


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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 September 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.


In March 2004, the FASB issued a proposed Statement, Share-Based
    Payment, an amendment of FASB Statements Nos. 123 and 95, that addresses
    the accounting for share-based payment transactions in which iVillage receives
    employee services in exchange for either equity instruments of iVillage or
    liabilities that are based on the fair value of iVillages equity instruments
    or that may be settled by the issuance of such equity instruments. The proposed
    statement would require that such transactions be accounted for using a fair-value-based
    method and recognized as expense in the consolidated statement of operations.
    The effective date of the proposed standard is for periods beginning after
    June 15, 2005. It is expected that the final standard will be issued before
    December 31, 2004 and should it be finalized in its current form, it could
    have a significant impact on the consolidated statement of operations as
    iVillage will be required to expense the fair value of stock option grants.


Legal Proceedings

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.


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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 for excess compensation. 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. The court has not granted preliminary approval
  of the proposed settlement agreement and has not indicated when, and if, it
  will hear oral arguments on this issue. Accordingly, there can be no assurance
  that this proposed settlement would be approved and implemented in its current
  form, or at all.


If the proposed settlement
    in the initial public offering laddering cases is ultimately
    not approved by the courts, defending against these claims could require
    the expenditure of significant financial and managerial resources, which
    could harm our business.


In January 2003, a
      Belgian court issued a judgment against Women.com in the amount of approximately
      850,000 Euros relating to a claim by Euregio.net of copyright infringement.
      Women.com appealed the judgment in the Belgian court system, and on September
      15, 2004, a judgment in the appeal awarded Euregio.net 251,000 Euros (approximately
      $0.3 million based on the Euro exchange rate as of September 30, 2004).
      On October 27, 2004, Women.com and Euregio.net entered into a settlement
      agreement pursuant to which Women.com paid Euregio.net 150,000 Euros, or
      approximately $0.2 million. Women.com is also required to pay the amount
      of any income tax obligation of Euregio.net and its founder related to
      the settlement in an amount up to 7,500 Euros, or approximately $10,000
      based on the Euro exchange rate as of November 10, 2004 (the Euro
      Exchange Rate). In addition, Women.com is required to purchase an
      advertising campaign from EasyScopes Entertainment Network, a
      compilation of Web sites affiliated with Euregio.net, for 101,000 Euros, or
      approximately $0.1 million based on the Euro Exchange Rate, which will be run for
      15 consecutive months commencing January 2005. The 101,000 Euros must be
      paid prior to December 31, 2004 and will be held in a joint escrow account.
      During the advertising campaign, Euregio.net has guaranteed a certain amount
      of traffic will be directed to the Women.com Web site, and in the event
      that such traffic is not delivered, Euregio.net will deliver additional
      advertising impressions until such time as the guarantee is met.
Pursuant to the terms of the settlement agreement, both parties have waived
their respective right to appeal the judgment of the Belgium court, the settlement
fully and finally satisfies all of Euregio.nets rights under such judgment,
and the litigation is concluded.


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.


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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 $1.1
      million for the three months ended September 30, 2004, and approximately
      $0.4 million for the nine months ended September 30, 2004. We 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 September
      30,
2004, we had an accumulated deficit of approximately $493.5 million.


Although we achieved
      net income for the three and nine months ended September 30, 2004, and
      we have had positive cash flows for the past four 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.


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 from fiscal 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 reduction initiatives                                                                                                  |  |  | changes in the level of traffic on our network
    of Web sites                      
| |   |                                                                                                                                                                                        |  |   |                                                                                      
| |  | the timing of the creative services and/or
        distribution services performed on custom publications or magazines based
    upon customers advertising and marketing initiatives |  |  | bankruptcies or other payment defaults of
    companies that are a source of revenues
| |   |                                                                                                                                                                                        |  |   |                                                                                      
| |  | volatility in the media market                                                                                                                                                         |  |   |                                                                                      
| |   |                                                                                                                                                                                        |  |   |                                                                                      

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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 or delays
    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.


Wal-Mart recently
      indicated to us that they would no longer be utilizing our subsidiary,
      IVPN, to create and distribute custom publications which were used for
      baby promotions in Wal-Marts United States stores. These publications
      accounted for approximately $4.8 million, or 10% of our total revenues,
      for the nine months ended September 30, 2004, and approximately $2.8 million,
      or 7% of our total revenues, for the nine months ended September 30, 2003. A failure
      to enter into contracts to replace these revenues would adversely affect
      our business, financial condition and results of operations.


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Our five largest customers accounted for approximately 30% of our total revenues
for the three months ended September 30, 2004, approximately 31% of our total
revenues for the nine months ended September 30, 2004, and approximately 27%
of our total revenues for the year ended December 31, 2003. Wal-Mart accounted
for approximately 11% of our total revenues for the three months ended September
30, 2004. No other single customer accounted for more than 10% of our total revenues
for the three months ended September 30, 2004. Both Hearst, a related party,
and Wal-Mart accounted for approximately 11% of our total revenues for the nine
months ended September 30, 2004. No other single customer accounted for more
than 10% of our total revenues for
the nine months ended September 30, 2004.


Our five largest customers accounted for approximately 32% of our total revenues
for the three months ended September 30, 2003, and approximately 28% of our total
revenues of the nine months ended September 30, 2003. Wal-Mart accounted for
approximately 12% of our total revenues and Hearst accounted for approximately
11% of our total revenues for the three months ended September 30, 2003. One
customer, Hearst, accounted for approximately 12% of our total revenues for the
nine months ended September 30, 2003. No other customer accounted for more than
10% of our total revenues for the three and nine months ended September 30, 2003.


At September 30, 2004, no single customer accounted for more than 10% 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 otheronline 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.


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.


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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. Notably, 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 against them could require the expenditure of significant financial
and managerial resources, which could harm our business.


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 publicationsand
    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
| |   |                                                                                                                        |  |   |                                                                                                                                                                

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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.


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

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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.


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.


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We may have difficulty implementing in a timely manner the internal controls
necessary to allow our management to report on the effectiveness of our internal
controls, and these reports may not reveal all material weaknesses or significant
deficiencies with our internal controls.

Pursuant to Section
      404 of the Sarbanes-Oxley Act of 2002, or Section 404, we will be required
      to furnish an internal controls report of managements assessment
      of the design and effectiveness of our internal controls as part of our
      Annual Report on Form 10-K beginning with the fiscal year ending December
      31, 2004. Our auditors will then be required to attest to, and report on,
      managements assessment. In order to issue our report, our management
      must document both the design for our internal controls and the testing
      processes that support managements evaluation and conclusion. Our
      management has started the necessary processes and procedures for issuing
      its report on our internal controls. However, the evaluation and attestation
      processes required by Section 404 are new and companies do not have significant
      experience in testing or complying with these requirements. Accordingly,
      we may encounter problems or delays in completing the review and evaluation,
      the implementation of improvements and the receipt of a positive attestation,
      or any attestation at all, by our independent registered public accounting
      firm. Our testing may reveal material weaknesses or significant deficiencies
      in our internal controls. Material weaknesses or significant deficiencies
      in our internal controls could have a material adverse effect on our results
      of operations. Additionally, upon the completion of our testing and documentation,
      certain deficiencies may be discovered that will require remediation. This
      remediation may require implementing additional controls, the costs of
      which could have a material adverse effect on our results of operations.
      Moreover, if we are not able to implement the requirements of Section 404
      in a timely manner or with adequate compliance, our reputation might be
      harmed and we might be subject to sanctions or investigation by regulatory
      authorities, such as the Securities and Exchange Commission, or delisting
      by the Nasdaq Stock Market. Any such action could adversely affect our
      financial results and the market price of our common
stock.


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. FASB has 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 effective for periods beginning after June 15, 2005. 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 would result
      in lower net income or increased net losses.


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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.


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.


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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.


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.


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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. 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.


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 Internetcommentators,
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 November 10, 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 November 10,
      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.


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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.


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 September 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.


In order to achieve compliance with Section 404 of the Sarbanes-Oxley Act of 2002, we have been engaged in a process to document and evaluate our internal control over financial reporting. In this
regard, under the review and approval of the Audit Committee, management has dedicated internal resources and engaged outside consultants to adopt a work plan to (i) assess the adequacy of our internal control over financial reporting, (ii) take
steps to improve control processes, where appropriate, and (iii) validate through testing that controls are functioning as documented. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we
might be subject to sanctions or investigation byregulatory
authorities, such as the Securities and Exchange Commission. Any such action
could adversely affect our financial results and the market price of our Common
Stock.


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We are continuing
      our evaluation of our internal controls versus the standards adopted by
      the Public Company Accounting Oversight Board (PCAOB). During the third
      quarter of 2004, we implemented new procedures and controls that management
      has identified as having certain deficiencies. However, there has been
      no change in our internal controls over financial reporting that occurred
      during the third quarter of 2004 that has materially affected, or are reasonably
      likely to materially affect, our internal controls over financial reporting.
      Areas that management has identified as requiring improvement include documentation
      of controls, additional controls over spreadsheets and timely account reconciliations. Management will consider
      these matters when assessing the effectiveness of the companys internal
      control over financial reporting at year end.


These matters have
      been discussed with the companys Audit Committee, and we are taking appropriate
      steps to make necessary improvements and enhance the reliability of our
      internal control over
financial reporting.


PART IIOTHER INFORMATION

Item 6. 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.


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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: November 12, 2004 | By: | /s/ Douglas W. McCormick            
|                         |     |                                     
|                         |     | Douglas W. McCormick                
|                         |     | Chairman and Chief Executive Officer
|                         |     | (Principal Executive Officer)       
|                         |     |                                     
|                         |     |                                     
|Dated: November 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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