<PAGE>

--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


X     Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
--
      of 1934 for the quarterly period ended June 30, 1999

                                       OR

--    Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

                        Commission file number 0-21379


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


           Delaware                                            04-3370008
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

                    725 Concord Avenue, Cambridge, MA 02138
                    (Address of principal executive office)

                                (617) 497-5800
             (registrant's telephone number, including area code)


                                      None
                     (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),

                                                  Yes X  No
                                                     ---   ---
                                       and

     (2) has been subject to such filing requirements for the past 90 days.

                                                  Yes X  No
                                                     ---   ---

--------------------------------------------------------------------------------

<PAGE>

                                  ROWECOM INC.

                                      INDEX

<TABLE>
<CAPTION>

 Item                                                                                                           Page
Number                                                                                                          Number
------                                                                                                          ------
<S>                                                                                                               <C>
PART I.           Financial Information

     Item 1.      Consolidated Financial Statements

                  RoweCom Inc.
                  ------------

                  Consolidated Balance Sheets as of June 30, 1999 (unaudited) and
                      December 31, 1998  .................................................................         3

                  Consolidated Statements of Operations for the three and six months ended
                      June 30, 1999 (unaudited) and June 30, 1998 (unaudited).............................         4

                  Consolidated Statements of Cash Flows for the six months ended June 30, 1999
                      (unaudited) and June 30, 1998 (unaudited)...........................................         5

                  Notes to Consolidated Financial Statements (unaudited)..................................         6

     Item 2.      Management's Discussion and Analysis of Financial Condition and Results
                       of Operations......................................................................         8


PART II.          Other Information

     Item 2.      Changes in Securities and Use of Proceeds...............................................         14

     Item 5.      Other Information.......................................................................         14

     Item 6.      Exhibits and Reports on Form 8-K........................................................         14

                  Signatures..............................................................................         15



</TABLE>

                                      -2-
<PAGE>

                                    PART I -- Financial Information

Item 1.     Consolidated Financial Statements

                                  RoweCom Inc.
                           Consolidated Balance Sheets
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                            At June 30,    At December 31,
                                                                               1999              1998
                                                                          -------------      ------------
                                                                           (unaudited)
<S>                                                                        <C>              <C>
ASSETS:
Current assets:
     Cash and cash equivalents                                               $ 42,021         $  16,051
     Marketable securities                                                      8,424                 -
     Accounts  receivable  (net of allowance for doubtful  accounts
     of $170,000 and $60,000)                                                     613             1,982
     Restricted cash                                                            2,833               923
     Other current assets                                                         170               604
                                                                           -----------        ----------
         Total current assets                                                  54,061            19,560

Goodwill, net                                                                   7,142                 -
Marketable securities, long term                                                4,063                 -
Equipment and furnishings, net                                                  1,297               632
Deferred tax asset                                                                 76                76
Other assets, net                                                                  94                16
                                                                           ===========        ==========
         Total assets                                                        $ 66,733         $  20,284
                                                                           ===========        ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
Current liabilities:
     Accounts payable                                                             740               366
     Accrued expenses                                                           1,199               629
     Accrued compensation                                                         825               538
     Customer advances                                                          2,833               923
     Loans payable                                                                246             1,657
                                                                           -----------        ----------
         Total current liabilities                                              5,843             4,113


Commitments
Class A Redeemable,  Convertible  Preferred stock,  $.01 par value,
5,000,000  shares  authorized,  0 and  1,772,857  shares issued and
outstanding, respectively                                                           -             4,636
Class B Redeemable,  Convertible  Preferred stock,  $.01 par value,
8,000,000  shares  authorized,  0 and  6,326,610  shares issued and
outstanding, respectively                                                           -             8,198
Class C Redeemable,  Convertible  Preferred stock,  $.01 par value,
5,000,000  shares  authorized,  0 and  4,586,599  shares issued and
outstanding, respectively                                                           -            15,588
Stockholders' equity (deficit):
     Common  stock,  $.01 par value per  share,  34,000,000  shares
     authorized,   10,107,945  and  1,526,180   shares  issued  and
     outstanding, respectively                                                    101                15
     Additional paid-in capital                                                82,347             1,710
     Treasury stock, at cost                                                      (53)              (53)
     Accumulated deficit                                                      (21,465)          (13,901)
     Accumulated other comprehensive loss                                         (40)              (22)
                                                                           -----------        ----------
         Total stockholders' equity (deficit)                                   60,890          (12,251)

                                                                           ===========        ==========
         Total liabilities and stockholders' equity (deficit)                 $ 66,733          $ 20,284
                                                                           ===========        ==========
</TABLE>
 The accompanying notes to the unaudited consolidated financial statements are
                     an integral part of these statements.

                                      -3-
<PAGE>

<TABLE>
<CAPTION>
                                  RoweCom Inc.
                      Consolidated Statements of Operations
                      (in thousands, except per share data)

                                             Three Months Ended           Six Months Ended
                                            June 30,     June 30,     June 30,        June 30,
                                             1999          1998         1999            1998
                                         ------------  ------------ ------------ ---------------
                                          (unaudited)   (unaudited)  (unaudited)    (unaudited)

<S>                                     <C>            <C>         <C>             <C>
Revenues                                  $   1,981     $    865    $    3,680       $  2,172
Cost of revenues                              1,868          819         3,395          2,103
                                          ----------    ---------   -----------      ---------

         Gross profit                           113           46           285             69

Operating expenses:
     Sales and marketing                      2,653        1,311         4,547          1,918
     Research and development                 1,027          261         1,844            470
     General and administrative               1,172          310         1,898            598
     Goodwill amortization                      204            -           204              -
                                          ----------    ---------   -----------      ---------

         Total operating expenses             5,056        1,882         8,493          2,986
                                          ----------    ---------   -----------      ---------

           Loss from operations              (4,943)      (1,836)       (8,208)        (2,917)

Interest and other income, net                  817           18         1,068             46
                                          ----------    ---------   -----------      ---------

           Loss before income taxes          (4,126)      (1,818)       (7,140)        (2,871)

Provision for income taxes                       55           28            55             56
                                          ----------    ---------   -----------      ---------

           Net loss                       $  (4,181)    $ (1,846)  $    (7,195)     $  (2,927)
                                          ==========    =========   ===========      =========



Basic and Diluted net loss per share
  Net loss applicable to common           $  (4,181)    $ (2,009)   $   (7,564)     $  (3,159)
    stockholders
  Basic and diluted weighted average
   shares outstanding                        10,090        1,532         6,873          1,538
  Basic and diluted loss per share        $    (.41)    $  (1.31)   $    (1.10)     $   (2.05)
Pro forma Basic and Diluted net loss
    per share
  Pro forma net loss applicable to        $  (4,181)    $ (1,846)   $   (7,195)     $  (2,927)
   common stockholders
  Basic and diluted weighted average
   shares outstanding                        10,090        3,561         8,750          2,879
  Basic and diluted pro forma loss per    $    (.41)    $   (.52)   $     (.82)     $   (1.02)
   share


</TABLE>

The accompanying notes to the unaudited consolidated financial statements are an
integral part of these statements.

                                      -4-
<PAGE>

                                  RoweCom Inc.
                      Consolidated Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                     Six Months Ended
                                                                             -------------------------------
                                                                             June 30, 1999     June 30, 1998
                                                                             -------------     -------------
                                                                             (unaudited)        (unaudited)
<S>                                                                          <C>               <C>
Cash flows from operating activities:
     Net loss                                                                 $  (7,195)         $ (2,927)
     Adjustments to reconcile net loss to net cash used in operating
     activities:
         Depreciation and amortization                                              412                58
Changes in operating assets and liabilities, net of assets and
liabilities acquired:
         Accounts receivable                                                      1,374                83
         Other current and long term assets                                         562               158
         Accounts payable                                                           301               295
         Income taxes payable                                                         -              (115)
         Accrued expenses and accrued compensation                                 (782)             (360)
         Deferred revenue                                                             -                 4
                                                                             -----------        ---------

         Net cash used in operating activities                                   (5,328)           (2,804)

Cash flows from investing activities:
         Purchase of equipment and furnishings                                     (826)             (240)
         Purchase of marketable securities                                      (12,487)                -
         Purchase of intangible assets                                               (2)               (1)
         Cash paid to acquire business, net of cash acquired                     (5,620)                -
                                                                             -----------        ---------

         Net cash used in investing activities                                  (18,935)             (241)

Cash flows from financing activities:
         Net proceeds from the issuance of common stock                          51,681             7,909
         Loan repayments                                                         (1,412)             (850)
         Loan proceeds                                                                -               850
         Purchase of treasury stock                                                   -               (53)
                                                                             -----------        ---------

         Net cash provided by financing activities                               50,269             7,856
                                                                             -----------        ---------

         Effect of exchange rates on cash                                           (36)              (22)

         Net increase in cash and cash equivalents                               25,970             4,789

Cash and cash equivalents, beginning of period                                   16,051               691

                                                                             ===========        =========
Cash and cash equivalents, end of period                                      $  42,021         $   5,480
                                                                             ===========        =========

Supplementary information:
     Accretion of preferred stock                                             $     369         $     232
     Issuance of common stock in connection with a purchase acquisition       $     250         $       -
     Cash paid for interest                                                   $      30         $      11
     Cash paid for taxes                                                      $      99         $      55


</TABLE>

Supplemental disclosure of non-cash transactions:

     During the three months ended March 31, 1999, RoweCom converted all of the
     shares of Class A Redeemable Convertible Preferred Stock, Class B
     Redeemable Convertible Preferred Stock, Class C Redeemable Convertible
     Preferred Stock, and the stock purchase warrants of RoweCom Canada and
     RoweCom, into 4,996,290 shares of the RoweCom's common stock.

     The accompanying notes to the unaudited consolidated financial statements
are an integral part of these statements.

                                      -5-
<PAGE>

                                  RoweCom Inc.

                   Notes to Consolidated Financial Statements
                                   (unaudited)


1.        The Company

The consolidated financial statements include the accounts of RoweCom Inc.
("RoweCom") and its wholly owned subsidiary, Rowe Communications, Ltd., a
  -------
Canadian company ("RoweCom Canada"). All significant intercompany accounts and
                   --------------
transactions between RoweCom and its sole subsidiary, RoweCom Canada, included
in the accompanying consolidated financial statements have been eliminated.

2.       Interim Results

As permitted by the rules of the Securities and Exchange Commission applicable
to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain
all the disclosures required by generally accepted accounting principles.
Reference should be made to the consolidated financial statements and related
notes included in the Company's Registration Statement on Form S-1 for the year
ended December 31, 1998, as filed with the Securities and Exchange Commission on
March 8, 1999.

In the opinion of the management of RoweCom, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting primarily
of normal recurring accruals) considered necessary for a fair statement of the
results for the interim period.

The results disclosed in the Consolidated Balance Sheet at June 30, 1999, the
Consolidated Statement of Operations for the three and six months ended June 30,
1999, and the Consolidated Statement of Cash Flows for the six months ended
June 30, 1999 are not necessarily indicative of the results to be expected for
the full year.

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of the contingent assets and liabilities at the date of the financial
statements and the reported amounts of expense during the reporting period.
Actual results could differ from those estimates.

3.        Initial Public Offering

RoweCom completed an initial public offering of its common stock on March 8,
1999 (the "IPO"). A total of 3,565,000 shares of common stock were sold by
           ---
RoweCom to the public at a price of $16.00 per share. The underwriting discount
was $1.12 per share. The net proceeds after the underwriting discount and other
IPO expenses were $51.7 million. Concurrent with the IPO, all of the shares of
Class A Redeemable Convertible Preferred Stock, Class A-1 Redeemable Convertible
Preferred Stock, Class B Redeemable Convertible Preferred Stock, Class C
Redeemable Convertible Preferred Stock, and all outstanding stock purchase
warrants (the "Convertible Stock") of RoweCom Canada and RoweCom, were converted
               -----------------
into 4,996,290 shares of RoweCom's common stock.

4.        Earnings Per Share

Net loss per share is presented under Statement of Financial Accounting
Standards No. 128, "Earnings per Share." In accordance with this pronouncement,
the net loss applicable to common stockholders includes the accretion of
dividends on the redeemable convertible preferred stock through the date of
conversion to common stock. Weighted average shares outstanding includes the
common stock resulting from the conversion of the Convertible Stock from the
date of conversion through the end of the period.

Pro forma net loss per share has been computed under FAS 128, except that it
reflects the conversion of the Convertible Stock as of the beginning of the
earliest period presented or date of issuance, whichever is later. Therefore,
the pro forma net loss per share does not include the accretion of dividends on
the redeemable convertible preferred stock. The pro forma weighted average

                                      -6-

<PAGE>

shares outstanding includes the common stock resulting from the conversion of
the Convertible Stock as of the beginning of the earliest period presented or
the date of issuance, whichever is later.

The following is a calculation of net loss per share
(dollars in thousands, except per share data)


<TABLE>
<CAPTION>

                                                              Three Months Ended                         Six Months Ended
                                                         ----------------------------------     ------------------------------------
                                                          June 30, 1999     June 30, 1998         June 30, 1999      June, 30 1998
                                                         ---------------- -----------------     ----------------- ------------------

<S>                                                      <C>                 <C>                    <C>             <C>
Historical
     Basic and diluted:
          Net loss to common stockholders                      $(4,181)          $(2,009)              $(7,564)           $(3,159)
          Weighted average number of common shares              10,090             1,532                 6,873              1,538
          Net loss per common share--basic and diluted            (.41)            (1.31)                (1.10)             (2.05)
Pro forma
     Basic and diluted:
          Net loss                                             $(4,181)          $(1,846)              $(7,195)           $(2,927)
          Weighted average number of common shares              10,090             1,532                 6,873              1,538
       Weighted average assumed number of shares upon the            -             2,029                 1,877              1,341
       conversion of preferred stock and the
          net exercise of all outstanding stock purchase
          warrants
          Total weighted average number of shares used          10,090             3,561                 8,750              2,879
          in computing pro forma net loss per share
          Basic and diluted pro forma net loss per              $ (.41)           $ (.52)               $ (.82)           $ (1.02)
          common share

</TABLE>

Options to purchase shares of RoweCom's common stock totaling 750,367 and
392,125 at June 30, 1999 and 1998, respectively, were outstanding but not
included in the computation of diluted earnings per share as the inclusion of
these shares would have been anti-dilutive.

5.       Comprehensive Loss

<TABLE>
<CAPTION>
                                             Three Months Ended               Six Months Ended
                                             ------------------               ----------------
                                      June 30, 1999    June 30, 1998   June 30, 1999    June 30, 1998
                                      -------------    -------------   -------------    -------------
<S>                                   <C>            <C>              <C>             <C>
Net loss                                    $ (4,181)       $ (1,846)       $ (7,195)         $ (2,927)
Other comprehensive loss:
    Foreign currency translation
    adjustment                                   (16)            (19)            (17)              (22)
                                       -------------    ------------   -------------    --------------
Comprehensive loss                          $ (4,197)       $ (1,865)       $ (7,212)         $ (2,949)
                                       =============    ============   =============    ==============
</TABLE>


6.       Acquisition of Corporate Subscription Services, Inc.

In June 1999, RoweCom acquired all of the issued and outstanding capital stock
of Corporate Subscription Services, Inc., ("CSS"), a New Jersey Corporation, in
a transaction accounted for using purchase method of accounting.

The total consideration of $5,976,493 consisted of $5,726,493 in cash (subject
to certain post-closing adjustments as provided in the Agreement), and 16,260
shares of RoweCom's common stock, which were valued at $250,000. The

                                      -7-
<PAGE>

total purchase price of $6,203,197 includes the consideration as well as
acquisition costs of $226,704, which related to legal and accounting fees. The
terms of the Agreement were determined in arms length negotiations between
RoweCom and the shareholders of CSS. The cash portion of the purchase price came
from the proceeds of RoweCom's initial public offering, which closed on March
12, 1999.

The purchase price was allocated to the acquired assets and assumed liabilities
as follows (in thousands):


        Cash                                                   $233
        Other assets                                            269
        Equipment and furnishings, net                           43
        Liabilities                                          (1,688)
        Goodwill                                              7,346
                                                  ------------------
                                                            $ 6,203
                                                  ==================


A final allocation of purchase price will be determined during 1999 and changes,
if any, will result in a change to the amount of goodwill recorded in connection
with the acquisition. Goodwill is being amortized on a straight-line basis over
3 years. Pro forma financials statements will be included on Form 8-K/A.


Item 2.  Management's Discussion And Analysis Of Financial Condition
            And Results Of Operations

Cautionary Note

This quarterly report on Form 10-Q may contain "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities and Exchange Act of 1934, as amended, including, but not limited to,
(i) statements about the possibility of higher transaction volume or revenues
from new or existing clients; (ii) the impact on financial condition of RoweCom
Inc. ("RoweCom") of its strategic partnerships; and (iii) the amount and
sufficiency of RoweCom's planned expenditures to address the year 2000 dating
problem; (iv) statements about the sufficiency of the proceeds from RoweCom's
IPO and cash balances to meet currently planned working capital and capital
expenditure requirements; and (v) certain other statements identified or
qualified by words such as "likely," "will," "suggests," "may," "would,"
"could," "should," "expects," "anticipates," "estimates," "plans," "projects,"
"believes," or similar expressions (and variants of such words or expressions).
Investors are cautioned that forward-looking statements are inherently
uncertain. These forward-looking statements represent the best judgment of
RoweCom as of the date of this Quarterly Report on Form 10-Q, and RoweCom
cautions readers not to place undue reliance on such statements. Actual
performance and results of operations may differ materially from those projected
or suggested in the forward-looking statements due to certain risks and
uncertainties, including, but not limited to, the risks and uncertainties
described or discussed in the section "Risk Factors" in the Prospectus dated
March 8, 1999 of RoweCom. These risks include, among others, the following:

 . Risks relating to RoweCom's limited operating history.
 . Risks pertaining to RoweCom's reliance on a single service.
 . Risks that uncertainty in RoweCom's ability to maintain existing strategic
   alliances and enter into new alliances may negatively impact RoweCom's
   operating results.
 . Risks of increased competition in the knowledge resource sales market.
 . Risks relating to reliance on a small number of clients and industries for
   substantially all of our revenues.
 . Risks that RoweCom will be unable to expand internationally.

Description of Business

RoweCom provides businesses and their employees with an e-commerce solution for
purchasing and managing the acquisition of magazines, newspapers, journals,
books and other knowledge resources through a corporate intranet or the
Internet. RoweCom's principal product is the knowledgeStore (the "kStore/tm/").
                                                                  ----------
                                      -8-
<PAGE>

Through the kStore RoweCom's clients have access to the largest catalog of
magazines, newspapers, journals, books and other knowledge resources on the
Internet. RoweCom's service allows employees of our clients to purchase
knowledge resources easily and conveniently from their desktop computers and
provides businesses with a highly effective means of managing and controlling
purchases of knowledge resources and reducing costs.

RoweCom's services initially focused on academic libraries and centralized
purchasing groups, which tended to purchase or renew subscriptions in the fourth
quarter of the year. Beginning in 1998, we have increasingly focused our sales
and marketing efforts on corporate clients and on desktop purchases by
individuals rather than centralized purchasing groups. We believe that an
increase in the number of desktop purchasers at a client will increase the
amount of revenue generated by such client. As a result of our efforts,
purchases by corporate clients during the three and six months ended June 30,
1999 have increased more rapidly than purchases by academic clients during the
three and six months ended June 30, 1998. Although there can be no assurance
that this trend will continue, we believe that increased desktop purchases will
result in a lower average selling price and a higher gross margin to RoweCom.

To date, a substantial majority of our revenues have been generated in the
fourth quarter of each year, primarily because most subscriptions are purchased
or renewed in that quarter, with subscriptions generally beginning on January
1st. As desktop purchases by individual employees increase as a percentage of
total revenues, the seasonality described above has begun to decrease because
desktop purchases are generally made as required, and thus are more evenly
distributed throughout the year.

In June 1999, RoweCom acquired all of the issued and outstanding capital stock
of CSS for $5,726,493 in cash (subject to certain post-closing adjustments as
provided in the Agreement) and 16,260 shares of RoweCom"s common stock.
Attributable to CSS was revenue of $853,000, cost of revenue of $818,000 and
transaction volume of 5,736 during the three and six months ended June 30, 1999.
CSS added 138 corporations to RoweCom's client base.

Results of Operations

Comparison of the Three Months Ended June 30, 1999 (the "1999 Three Month
"Period") with the Three Months Ended June 30, 1998 (the "1998 Three Month
Period").

Revenues. Revenues consist almost entirely of sales of knowledge resources.
Revenues for the 1999 Three Month Period were $2.0 million as compared to
$865,000 for the 1998 Three Month Period, an increase of $1.1 million or 129%.
This increase resulted primarily from increased sales on a per client basis and
growth in our client base, particularly in the corporate sector where corporate
revenue represented 94% of overall revenue for the 1999 Three Month Period
versus 87% for the 1998 Three Month Period. Transaction volumes for the 1999
Three Month Period also increased significantly by 261% from the 1998 Three
Month Period from 4,272 to 15,406 transactions, primarily due to volume
increases in corporate desktop purchases.

The average selling price per transaction for the 1999 Three Month Period was
$127 as compared to $195 during the 1998 Three Month Period. The decrease in the
average selling price was a result of the increased corporate desktop orders.
Due to the product mix of purchases made from the desktop, the average selling
price per transaction is typically lower for desktop orders than that of
centralized procurement or library orders. This decrease in average selling
price has a positive effect on overall gross margins as discussed below under
cost of revenues.

Cost of Revenues. Cost of revenues consists almost entirely of the cost of
acquiring the knowledge resources sold to clients. Cost of revenues in the 1999
Three Month Period was $1.9 million as compared to $819,000 during the 1998
Three Month Period, an increase of $1.0 million or 128%. As a percentage of
revenues, cost of revenues decreased to 94% during the 1999 Three Month Period
as compared to 95% in the 1998 Three Month Period. This improvement was
primarily due to an increase in the number of transactions executed through the
corporate desktop. Installation revenue was $19,000 during the 1999 Three Month
Period and $30,000 during the 1998 Three Month Period. Cost of revenue as a
percentage of revenues (exclusive of installation revenues) was 95% for the 1999
Three Month Period as compared to 98% for the 1998 Three Month Period, an
improvement of 3%.

                                      -9-
<PAGE>

Sales and marketing. Sales and marketing expenses consist primarily of salaries,
commissions paid to RoweCom's direct sales force, account managers and client
service representatives, travel expenses, and expenses relating to marketing
materials and fulfillment activities. Sales and marketing expenses increased to
$2.6 million during the 1999 Three Month Period from $1.3 million in the 1998
Three Month Period, an increase of $1.3 million or 101%. This growth is
primarily due to an increase of personnel and the associated expenses of
recruiting, hiring, and training the additional personnel. Personnel expenses
increased to approximately $1.6 million in the 1999 Three Month Period from
$729,000 in the 1998 Three Month Period.

Research and development. Research and development expenses consist principally
of compensation and related expenses, including consulting fees, and other
expenses relating to the development and maintenance of our service and
production systems. Research and development expenses increased to $1.0 million
in the 1999 Three Month Period from $261,000 in the 1998 Three Month Period, an
increase of $766,000 or 293%, primarily as a result of increased staffing and
associated costs incurred in an effort to integrate new content into our
catalog, to enhance the user interface and functionality of the kStore, and to
develop the transaction processing systems. Consulting fees in connection with
these improvements increased 1911% to $191,000 during the 1999 Three Month
Period from $9,500 in the 1998 Three Month Period.

General and administrative. General and administrative expenses consist
primarily of salaries and related costs for RoweCom's executive, administrative,
finance and human resources departments as well as professional service fees.
General and administrative expenses increased to $1.2 million in the 1999 Three
Month Period compared to $310,000 in the 1998 Three Month Period, an increase of
$862,000 or 278%. This increase can be primarily attributed to growth in average
headcount in the executive, administrative, finance and human resources
departments. RoweCom also incurred certain additional costs in its operation as
a newly public company, including insurance, investor relations and accounting
fees that resulted in an overall increase in expenses of $150,000.

Goodwill amortization. Goodwill amortization was $204,000 in the 1999 Three
Month Period. As a result of the acquisition of CSS, approximately $7.3 million
in goodwill was recorded, which is being amortized over a thirty-six month
period.


Comparison of the Six Months Ended June 30, 1999 (the "1999 Six Month Period")
with the Six Months Ended June 30, 1998 (the "1998 Six Month Period").

Revenues. Revenues for the 1999 Six Month Period were $3.7 million as compared
to $2.2 million for the 1998 Six Month Period, an increase of $1.5 million or
69%. This increase resulted primarily from increased sales per client and growth
in our client base, particularly in the corporate sector where corporate revenue
represented 93% of overall revenue for the 1999 Six Month Period versus 74% for
the 1998 Six Month Period. Transaction volumes for the 1999 Six Month Period
also increased significantly by 241% from the 1998 Six Month Period from 8,778
to 29,920 transactions, primarily due to volume increases in corporate desktop
purchases. The average selling price per transaction for the 1999 Six Month
Period was $119 as compared to $244 during the 1998 Six Month Period.

Cost of Revenues. Cost of revenues in the 1999 Six Month Period was $3.4 million
as compared to $2.1 million during the 1998 Six Month Period, an increase of
$1.3 million or 61%. As a percentage of revenues, cost of revenues decreased to
92% during the 1999 Six Month Period as compared to 97% in the 1998 Six Month
Period. Installation revenue was $133,000 during the 1999 Six Month Period and
$30,000 during the 1998 Six Month Period. Cost of revenue as a percentage of
revenues (exclusive of installation revenues) was 96% for the 1999 Six Month
Period as compared to 98% for the 1998 Six Month Period, an improvement of 2%.

Sales and marketing. Sales and marketing expenses increased to $4.5 million
during the 1999 Six Month Period from $1.9 million in the 1998 Six Month Period,
an increase of $2.6 million or 137%. This growth is primarily due to an increase
of personnel and the associated expenses of recruiting, hiring, and training the
additional personnel. Personnel expenses increased to approximately $2.7 million
in the 1999 Six Month Period from $1.1 million in the 1998 Six Month Period.

                                      -10-
<PAGE>

In addition, during the 1999 Six Month Period, RoweCom incurred a one-time
licensing fee of $160,000 for linking the kStore to certain high traffic news
and information Web pages.

Research and development. Research and development expenses increased to $1.8
million in the 1999 Six Month Period from $470,000 in the 1998 Six Month Period,
an increase of $1.4 million or 292%, primarily as a result of increased staffing
and associated costs incurred in an effort to integrate new content into our
catalog, to enhance the user interface and functionality of the kStore, and to
develop the transaction processing systems. Consulting fees in connection with
these improvements increased 1,452% to $388,000 during the 1999 Six Month Period
from $25,000 in the 1998 Six Month Period. In addition, RoweCom incurred $76,000
in license fees for the use of certain Microsoft Software products by RoweCom
employees.

General and administrative. General and administrative expenses increased to
$1.9 million in the 1999 Six Month Period compared to $598,000 in the 1998 Six
Month Period, an increase of $1.3 million or 217%. This increase can be
primarily attributed to growth in average headcount in the executive,
administrative, finance and human resources departments. RoweCom also incurred
certain additional costs in its operation as a newly public company, including
insurance, investor relations and accounting fees that resulted in an overall
increase in expenses of $229,000.

Goodwill amortization. Goodwill amortization was $204,000 in the 1999 Six Month
Period. As a result of the acquisition of CSS, approximately $7.3 million in
goodwill was recorded and is being amortized over a thirty-six months period.


Liquidity and Capital Resources

Net cash used in operating activities was $5.3 million for the 1999 Six Month
Period as compared to $2.8 million in the 1998 Six Month Period. Cash used
primarily in the 1999 Six Month Period resulted primarily from a net loss of
$7.2 million. This was partially offset by a $1.4 million decrease in accounts
receivable, a $562,000 decrease in other current assets, $301,000 increase in
accounts payable, and $412,000 in depreciation and amortization expense. Cash
used in operating activities in the 1998 Six Month Period was primarily
attributable to a net loss of $2.9 million and a decrease in accrued expenses
and accrued compensation of $360,000. This was partially offset by a $295,000
increase in accounts payable and a $158,000 decrease in other current assets.

Net cash used in investing activities in the 1999 Six Month Period was $18.9
million, as compared to $241,000 in the 1998 Six Month Period. Cash used to
purchase marketable securities totaled $12.5 million in the 1999 Six Month
Period. RoweCom used a portion of the cash proceeds from the initial public
offering to invest in high grade marketable securities with an investment rating
of A or higher, with maturities of twenty-four months or less. In addition, cash
used for the acquisition of CSS, net of cash acquired, was $5.6 million in the
1999 Six Month Period. Substantially all cash used in investing activities
during the 1998 Six Month Period for was the purchase of equipment and
furnishings.

Net cash provided by financing activities was $50.3 million in the 1999 Six
Month Period, as compared to $7.9 million in the 1998 Six Month Period. Proceeds
from the IPO, net of underwriting discounts and offering costs, were $51.7
million, of which $1.4 million was used to pay down existing credit facilities.
During the 1998 Six Month Period, $850,000 in cash provided by financing
activities was the result of loan proceeds. Prior to the IPO, RoweCom financed
its operations primarily through sales of its equity securities in private
placements. At June 30, 1999, RoweCom had cash and cash equivalents of $42.0
million, working capital of $48.2 million, debt of $246,000 and stockholders
equity of $60.9 million.

RoweCom currently believes that cash balances will be sufficient to meet
anticipated cash requirements through at least 2000. However, there can be no
assurance that additional capital beyond the amounts currently forecasted by
RoweCom will not be required nor that any such required additional capital will
be available on reasonable terms, if at all, at such time as required.

                                      -11-
<PAGE>

Impact of Possible Share Transfer

Under an agreement among certain of RoweCom's shareholders, in the event that
the market value of Working Ventures"Canadian Fund, Inc.'s, a stockholder of
RoweCom ("Working Ventures") initial investment in shares of Class A Preferred
Stock of RoweCom Canada increases by 45% or more (on an annually compounded
basis) and Working Ventures is not legally restricted from selling such Class A
Preferred Shares, or any common shares into which such preferred shares have
been converted, Working Ventures must transfer an aggregate of 310,371 shares of
common stock to certain other shareholders or option holders of RoweCom,
substantially all of whom are directors, or former directors, officers and
employees of RoweCom. RoweCom will be required to record a compensation charge
for the period in which these potential transfers occur with respect to the
shares of common stock which are transferred to the RoweCom option and warrant
holders who are eligible to receive such shares as described above. The amount
of this compensation charge will be equal to the aggregate fair market value of
the common stock transferred on the date such stock is transferred to such
option and warrant holders. Approximately 46,000 shares of RoweCom's common
stock may be transferred to certain option and warrant holders. RoweCom is
currently unable to determine whether or when such a charge will be incurred, or
if incurred, the amount of such charge.


Impact of Year 2000 Issue on Operations and Financial Condition of RoweCom

As many computer systems and other equipment with imbedded control chips or
microprocessors use only two digits to represent the year, they may be unable to
process accurately certain data before, during, or after the year 2000. The Year
2000 issue relates to the way that these business systems could fail or make
miscalculations due to interpreting a date including "00" to mean 1900, not
2000. To the extent that a business system does not fail or make miscalculations
as a result of the Year 2000 date change, such a system is described as being
"Year 2000 Ready". While RoweCom believes that it has been taking adequate steps
to make sure that its business systems are Year 2000 Ready, and does not believe
that it will incur material costs to prepare for the Year 2000 date change,
achieving complete Year 2000 Readiness is subject to various risks and
uncertainties, and there can be no assurance that the Year 2000 date change will
not lead to failures of such systems that may have a material adverse effect on
RoweCom's future results of operations and financial condition.

RoweCom has been aware of the possible impact of Year 2000 issue on its
operations since inception and has focused on making its business systems Year
2000 Ready since that time. Most of the effort has been focused upon business
systems owned or operated by RoweCom or third parties, the failure of which
would directly and adversely affect RoweCom's ability to provide its services or
would otherwise affect revenues or reliability for such a period of time as to
lead to unrecoverable consequences. RoweCom has adopted a Year 2000 Readiness
program for these critical systems that is designed to:

 .    assess the readiness of our critical systems to deal with the Year 2000
     date change;
 .    remediate any potential failures through modification or replacement of
     critical systems that may not be Year 2000 Ready;
 .    test the existing and improved critical systems for Year 2000 Readiness
     prior to actual Year 2000 date change; and
 .    develop contingency plans to deal with possible failures by our critical
     systems to be Year 2000 Ready.

At present, approximately 2 employees of RoweCom are working either on a
full-time or part-time basis on Year 2000 Readiness issues and related issues,
such as back-office processing and integration of RoweCom's catalog with its
strategic partners.

Although RoweCom currently believes the critical systems that it operates will
be Year 2000 Ready, there can be no assurance that all of such systems and the
other critical systems maintained by third parties on behalf of RoweCom will be
Year 2000 Ready by the end of 1999. A reasonably possible worst case scenario
might include one or more of the critical systems maintained by one of our
business partners being not Year 2000 Ready. Any such failure could result in a

                                      -12-

<PAGE>

material disruption of our operations. Specifically, we would experience
interruptions in our ability to process orders with certain publishers, collect
and process receipts from credit cards or direct disbursements accounts,
accurately maintain accounting records and perform adequate customer service. A
failure by any of RoweCom's critical systems, or any other systems deployed by
us prior to the Year 2000 date change, to be Year 2000 Ready could have a
material adverse effect upon our future results of operations and financial
condition.

RoweCom is not able to assess the Year 2000 Readiness of its clients. In the
event that a significant number of our clients face difficulties as a result of
the Year 2000 date change, such clients may be unable to process purchases
through the kStore, or may face budgetary constraints that limit knowledge
resource purchasing. Any diminished purchasing by our clients as a result of
Year 2000 difficulties could have a material adverse effect on RoweCom's future
results of operations and financial condition.

                                      -13-
<PAGE>

                          PART II -- OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

On March 8, 1999, in connection with the RoweCom's initial public offering, a
Registration Statement on Form S-1 Reg. No. 333-68761 was declared effective by
the Securities and Exchange Commission, pursuant to which 3,565,000 shares of
the RoweCom's Common Stock were offered and sold at a price of $16.00 per share,
generating gross offering proceeds of $57.0 million. The managing underwriters
were J.P Morgan & Co., CIBC Oppenheimer, and Volpe Brown Whelan & Company. After
deducting approximately $4.0 million in underwriting discounts and $1.4 million
in other related expenses, the net proceeds to RoweCom were approximately $51.7
million. The proceeds have been invested in short-term, interest bearing
accounts and high grade marketable securities with an investment rating of A or
higher, with maturities of twenty-four months.

In June 1999, RoweCom acquired all of the issued and outstanding capital stock
of Corporate Subscription Services, Inc., ("CSS"), a New Jersey Corporation in a
transaction accounted for using the purchase method of accounting.

The total consideration of $5,976,493 consisted of $5,726,493 in cash (subject
to certain post-closing adjustments as provided in the agreement), and 16,260
shares of RoweCom's common stock, which were valued at $250,000. The total
purchase price of $6,203,197 included the consideration as well as assumed
liabilities of $2,467,624 and acquisition costs of $226,704, which related to
legal and accounting fees. The terms of the agreement were determined in arms
length negotiations between RoweCom and the shareholders of CSS. The cash
portion of the purchase price came from the proceeds of RoweCom's initial public
offering, which closed on March 12, 1999.

RoweCom intends to use the balance of the net proceeds of the offering for
working capital and general corporate purposes, including making capital
expenditures in the ordinary course of business. RoweCom may also apply a
portion of the net proceeds of the offering to acquire additional businesses,
products and technologies that are complementary to RoweCom's business. From
time to time, in the ordinary course of business, RoweCom expects to evaluate
potential acquisitions of such businesses, products or technologies. The use of
proceeds set forth above does not represent a material change in the use of
proceeds described in the Registration Statement.

An aggregate of 96,400 options were granted to purchase common stock under the
Company's, Amended and Restated 1998 Stock Incentive Plan and the 1999 Non-
Employee Director Stock Option Plan during the 1999 Three Month Period. These
grants of options were made in reliance on the exemptions from registration
under the Securities Act of 1933, as amended (the "Securities Act") provided by
Rule 701 thereunder. A total of 157 stock options were exercised during the 1999
Three Month Period.

Item 5.  Other Information

RoweCom recently announced alliances with Internet procurement solution
providers Concur Technologies, Sun-Netscape, Clarus, Commerce One, and
Rightworks. RoweCom's kStore will be integrated into the partner's existing
Internet procurement applications, giving corporate clients access to RoweCom
knowledge resources, such as magazines, newspapers, journals and books.

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits
             3.1  -- Certificate of Incorporation RoweCom*.
             3.2  -- By-laws of RoweCom*.
             10.1 -- Supplier Agreement between RoweCom and Commerce One dated
                     April 20, 1999**.

                                      -14-
<PAGE>

             10.2 -- Stock Purchase Agreement dated June 14, 1999.+
             11   -- Computation of Loss Per Share***.

         (b) Reports on Form 8-K

             On June 22, 1999, the Company filed a report on Form 8-K in
             connection with its acquisition of Corporate Subscription
             Services, Inc.

             On August 13, 1999, the Company filed a report on Form 8-K/A in
             connection with the audited financial statements of Corporate
             Subscription Services, Inc., a business that the Company
             acquired in June 1999.


_________________
             *   Incorporated  by reference to the same numbered exhibit to the
                 Company's registration statement on Form S-1.
                 (Reg. No. 333-68761).
             **  Confidential treatment requested.
             *** Statement  regarding  computation of per share earnings is not
                 required because the computation can be readily determined from
                 the material contained in the financial statements included
                 herein.
             +   Incorporated by reference to Exhibit 2 to the Company's
                 Report on Form 8-K filed June 22, 1999.






                                    SIGNATURE


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.


                               ROWECOM INC.

August 13, 1999                By: /s/ Louis Hernandez, Jr.,
                                  -----------------------------------------
                                  Louis Hernandez, Jr.,
                                  Executive Vice President and
                                  Chief Financial Officer
                                  (Authorized Officer and Principal
                                  Financial and Accounting Officer)

                                      -15-