<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                      For the Quarter Ended March 31, 2000

                                       OR

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

          For the transition period from ____________ to ______________

                        Commission File number 000-25835


                               MYPOINTS.COM, INC.
             (Exact Name of Registrant as Specified in Its Charter)


<TABLE>
  <S>                                  <C>
             Delaware                               94-3255692
  (State or Other Jurisdiction of      (I.R.S. Employer Identification No.)
  Incorporation or Organization)
</TABLE>


             100 California Street,11th Flr, San Francisco, CA 94111
                    (Address of Principal Executive Offices)

       Registrant's Telephone Number, Including Area Code: (415) 676-3700


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


On March 31, 2000, 29,129,721 shares of the Registrant's Common Stock, $.001 par
value, were outstanding.


<PAGE>   2
                               MYPOINTS.COM, INC.
                                    FORM 10-Q

                          QUARTER ENDED MARCH 31, 2000

                                      INDEX


<TABLE>
<CAPTION>
Part I: Financial Information                                                          Page
                                                                                       ----
<S>                                                                                    <C>
   Item 1:Financial Statements  (Unaudited )

   Consolidated Balance Sheets at March 31, 2000 and
   December 31, 1999

   Consolidated Statements of Operations for the three months ended March 31,
   2000 and March 31, 1999

   Consolidated Statement of Stockholders' Equity for the three months
   ended March 31, 2000

   Consolidated Statements of Cash Flows for the three months ended March 31,
   2000 and March 31, 1999

   Notes to Unaudited Consolidated Financial Statements

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

   Item 3: Quantitative and Qualitative Disclosures about Market Risk

Part II: Other Information

   Item 1: Legal proceedings

   Item 2: Changes in Securities and Use of Proceeds

   Item 6: Exhibits and Reports on Form 8-K

   Item 7: Signatures
</TABLE>


                                       2


<PAGE>   3
                               MYPOINTS.COM, INC.
                           CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                                  March 31,     December 31,
                                                                                    2000            1999
                                                                                  ---------     ------------
                                                                                 (Unaudited)
<S>                                                                              <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                      $ 116,392       $  21,792
   Accounts receivable, net                                                          15,922          12,500
   Unbilled receivables, net                                                            577             257
   Notes and interest receivable                                                      1,996              --
   Deposits and prepaid expenses                                                      1,983           1,702
   Other current assets                                                                 495             484
                                                                                  ---------       ---------
      Total current assets                                                          137,365          36,735
Intangible assets                                                                    21,390           7,757
Restricted cash                                                                       2,508           2,208
Property and equipment, net                                                           9,901           8,891
Other assets                                                                             78              78
                                                                                  ---------       ---------
     Total assets                                                                 $ 171,242       $  55,669
                                                                                  =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
   Accounts payable and accrued liabilities                                       $  14,004       $  13,842
   Notes payable, current portion                                                       326             327
   Obligations under capital leases, current portion                                    112             105
   Deferred revenue                                                                   1,636           1,873
   Points redemption liability                                                       11,458           9,640
                                                                                  ---------       ---------
      Total current liabilities                                                      27,536          25,787
Notes payable, less current portion                                                     836             932
Obligations under capital leases, less current portion                                   71              97
                                                                                  ---------       ---------
                                                                                     28,443          26,816
Commitments and contingencies

Stockholders' equity:
   Preferred stock, $0.001 par value, 10,000,000 shares
       authorized, 0 shares issued and outstanding at March 31, 2000 and
        December 31,1999                                                                 --              --
   Common stock, $.001 par value; 100,000,000
        shares authorized, 29,129,721 and 25,924,533
        shares issued and outstanding at March 31, 2000
        and December 31, 1999, respectively                                              29              26
   Additional paid-in capital                                                       220,428          96,711
   Deferred compensation                                                             (8,306)         (9,406)
   Accumulated deficit                                                              (69,352)        (58,478)
                                                                                  ---------       ---------
      Total stockholders' equity                                                    142,799          28,853
                                                                                  ---------       ---------
          Total liabilities and stockholders' equity                              $ 171,242       $  55,669
                                                                                  =========       =========
</TABLE>


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


                                       3


<PAGE>   4
                               MYPOINTS.COM, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                   Three months ended
                                                         March 31,
                                              -------------------------------
                                                  2000               1999
                                              ------------       ------------
<S>                                           <C>                <C>
Revenues                                      $     15,822       $      1,275
Cost of revenues                                     4,113                878
                                              ------------       ------------
   Gross profit                                     11,709                397
                                              ------------       ------------

Operating expenses:
   Technology costs                                  5,276                968
   Sales and marketing expenses                     11,393              2,564
   General and administrative expenses               4,400              1,074
   Amortization of intangible assets                 1,177                832
   Stock-based compensation                          1,100                449
                                              ------------       ------------
      Total operating expenses                      23,346              5,887
                                              ------------       ------------
Operating loss                                     (11,637)            (5,490)
Interest income                                        816                  9
Interest expense and other, net                        (53)                --
                                              ------------       ------------
       Net loss                                    (10,874)            (5,481)
Dividend related to the beneficial
   conversion feature of preferred stock                --             (9,800)
                                              ------------       ------------
       Net loss attributable to common
           stockholders                       $    (10,874)      $    (15,281)
                                              ============       ============

Net loss per share:
   Basic and diluted                          $      (0.40)      $      (3.00)
                                              ============       ============

   Weighted average shares--basic and
        Diluted                                     26,872              5,097
                                              ============       ============

Pro forma net loss per share:
   Basic and diluted                          $      (0.40)      $      (0.35)
                                              ============       ============

   Weighted average shares--basic and
        Diluted                                     26,872             15,485
                                              ============       ============
</TABLE>


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


                                       4


<PAGE>   5
                               MYPOINTS.COM, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                             Preferred Stock                    Common Stock
                                       ----------------------------    ----------------------------
                                          Shares          Amount          Shares          Amount
                                       ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>
Balance at December 31, 1999                     --    $         --          25,925    $         26
Issuance of common stock for
cash, net of issuance costs of $760                                           2,450               2
Issuance of common stock
  pursuant to acquisition of ADG                                                270
Exercise of stock options for cash                                              485               1
Net loss
Amortization of deferred
  compensation
                                       ------------    ------------    ------------    ------------

Balance at March 31, 2000                        --    $         --    $     29,130    $         29
                                       ============    ============    ============    ============
</TABLE>


<TABLE>
<CAPTION>
                                       Additional
                                          Paid-in         Deferred      Accumulated
                                          Capital       Compensation       Deficit         Total
                                       ------------     ------------    ------------    ------------
<S>                                    <C>              <C>             <C>             <C>
Balance at December 31, 1999           $     96,711     $     (9,406)   $    (58,478)   $     28,853
Issuance of common stock for
cash, net of issuance costs of $760         106,151                                          106,153
Issuance of common stock
  pursuant to acquisition of ADG             16,562                                           16,562
Exercise of stock options for cash            1,004                                            1,005
Net loss                                                                     (10,874)        (10,874)
Amortization of deferred
  compensation                                                 1,100                           1,100
                                       ------------     ------------    ------------    ------------

Balance at March 31, 2000              $    220,428     $     (8,306)   $    (69,352)   $    142,799
                                       ============     ============    ============    ============
</TABLE>


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


                                       5


<PAGE>   6
                               MYPOINTS.COM, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                        Three months ended
                                                                             March 31,
                                                                   -----------------------------
                                                                       2000             1999
                                                                   ------------     ------------
<S>                                                                <C>              <C>
Cash flows from operating activities:
   Net loss                                                        $    (10,874)    $     (5,481)
   Adjustments to reconcile net loss to net cash used
      in operating activities:
      Depreciation and amortization                                       2,570              964
      Provision for bad debts                                               805              185
      Points redemption liability                                         1,818            1,113
      Barter revenues, net                                                   --               67
      Stock-based compensation                                            1,100              449
      Changes in operating assets and liabilities:
         Accounts receivable and unbilled receivables                    (3,967)            (469)
         Notes and interest receivable                                     (170)              --
         Deposits and prepaid expenses                                     (374)            (386)
         Other assets                                                        --              (26)
         Accounts payable, accrued and other liabilities                   (625)             534
         Deferred revenue                                                  (237)             597
                                                                   ------------     ------------
             Net cash used in operating activities                       (9,954)          (2,453)
                                                                   ------------     ------------

Cash flows from investing activities:
         Purchase of property and equipment                              (2,013)          (1,076)
         Acquisition of ADG, Inc., net of cash acquired                    (175)              --
         Deposit of restricted cash                                        (300)              --
                                                                   ------------     ------------
             Net cash used in investing activities                       (2,488)          (1,076)
                                                                   ------------     ------------

Cash flows from financing activities:
         Proceeds from issuance of common stock, net                    106,153               --
         Repayment of borrowings under line of credit                        --              (42)
         Repayments of borrowings                                           (97)              --
         Principal payments under capital lease obligations                 (19)             (12)
         Proceeds from exercise of stock options                          1,005               12
         Receipt of subscription receivable                                  --              350
                                                                   ------------     ------------
              Net cash provided by financing activities                 107,042              308
                                                                   ------------     ------------
              Net increase in cash and cash equivalents                  94,600           (3,221)
Cash and cash equivalents, beginning of period                           21,792            5,089
                                                                   ------------     ------------
Cash and cash equivalents, end of period                           $    116,392     $      1,868
                                                                   ============     ============

Supplemental disclosure of cash flow information:
         Cash paid during the period for interest                  $         53     $         11
                                                                   ============     ============
</TABLE>


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


                                       6


<PAGE>   7
                               MYPOINTS.COM, INC.
                                  (unaudited)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.      BASIS OF PRESENTATION

        The accompanying unaudited consolidated financial statements include
the accounts of MyPoints.com, Inc. and its wholly owned subsidiaries ("the
Company"), and, in the opinion of management, reflect all adjustments
(consisting only of normal recurring adjustments) necessary to fairly state the
Company's consolidated financial position, results of operations, and cash flows
as of and for the dates and periods presented. The consolidated balance sheet as
of December 31, 1999 has been prepared from the audited consolidated financial
statements of the Company.

        These unaudited consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements
included in its Form 10-K filed with the Securities and Exchange Commission on
March 30, 2000. The results of operations for the three month period ended March
31, 2000 are not necessarily indicative of results for the entire fiscal year
ending December 31, 2000.

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

        The Company earns revenues from corporate advertisers by charging fees
for sending targeted email to its members. Under the terms of advertising
contracts, the Company earns revenues generally based on three components: (1)
transmission of email advertisements to enrolled members, (2) receipt of
qualified responses to email sent and (3) actual purchases of goods by members
over the internet. It is the Company's policy to recognize revenues when email
is transmitted to members, when responses are received and when the Company is
notified of purchases. Each of these activities are discrete, independent
activities, which generally are specified in the advertising sales agreement
entered into with the customer. As the earning activities take place, activity
measurement data (e.g., number of emails sent, and number of responses received)
is accumulated and the related revenues and unbilled receivables are recorded.
Thus, unbilled receivables are recorded as the earning activities for a campaign
are being performed.

Under new and certain existing advertising contracts and partnerships, the
Company sells points to private label partners and to advertisers for use in
such partner's or advertiser's promotional campaigns . The Company is
responsible for redeeming a member's points upon the balance reaching required
thresholds and request by the member recipients of points. Revenues and
estimated point costs under these contracts are deferred until the time points
are redeemed and an award is provided by the Company. The Company expects that
sales of points will likely represent a decreasing percentage of its business in
the future but has continued to participate in the sale of points business.


                                       7


<PAGE>   8
3.      POINTS REDEMPTION LIABILITY

        Points redemption liability represents the estimated costs associated
with the Company's obligation to redeem outstanding points, less an allowance
for points expected to expire prior to redemption, which may be converted by
enrolled members into various third party gift certificates, frequent travel
programs, coupons and other awards. Points are awarded to members when they
respond to direct marketing offers delivered by the Company, or purchase goods
from the advertisers. The Company is liable for purchasing the rewards provided
to members, if and when such members seek to redeem accumulated points upon
reaching required redemption thresholds. The liability for the cost of points is
estimated based upon the weighted average cost of awards that may be redeemed in
the future. The liability is based upon redemption cost trends and management
estimates of future point redemption costs. Under the current program, points
are valid through December 31st of the third calendar year following the date
they are awarded to a member and may be redeemed at any time prior to
expiration. The Company bases its estimate of points that will not be redeemed
on an analysis of historical point earning trends, redemption activity and
individual member accounts. This analysis is updated quarterly. At December 31,
1999 and March 31, 2000, the allowance for unredeemed points was $ 2.8 million
and $2.9 million ( unaudited ) respectively. As of March 31, 2000, the gross
points redemption liability was $14.4 million ( unaudited).

Following is a summary of points redemption liability activity for the three
months ended March 31, 2000 and 1999 (in thousands):


<TABLE>
<CAPTION>
                                                   Three months ended
                                                       March 31,
                                                      (Unaudited)
                                              -----------------------------
                                                  2000             1999
                                              ------------     ------------
<S>                                           <C>              <C>
Outstanding at beginning of period            $      9,640     $      2,727
Accrual for new point redemption liability           3,876            2,006
Allowance for unredeemed points                       (266)            (839)
Points redemption                                   (1,792)             (54)
                                              ------------     ------------
Outstanding at end of period                  $     11,458     $      3,840
                                              ============     ============
</TABLE>


4.      NET LOSS PER SHARE

        The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Share, and SEC Staff Accounting Bulletin ("SAB") No. 98. Under the
provisions of SFAS No. 128 and SAB No. 98, basic net income per share is
computed by dividing the net income available to common stockholders for the
period by the weighted average number of vested common shares outstanding during
the period. Diluted net income per share is computed by dividing the net income
for the period by the weighted average number of vested common and common
equivalent shares outstanding during the period. However, as the Company has
generated net losses in all periods presented, common equivalent shares,
composed of incremental common shares issuable upon the exercise of stock
options and warrants and upon conversion of Series A, Series B, Series C, Series
D and Series E


                                       8


<PAGE>   9
convertible preferred stock, are not included in diluted net loss per share
(prior to conversion on August 19, 1999) because such shares are anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per
share for the periods indicated (in thousands, except per share amounts):


<TABLE>
<CAPTION>
                                                   Three months ended
                                                       March 31,
                                                      (unaudited)
                                            -----------------------------
                                                2000             1999
                                            ------------     ------------
<S>                                         <C>              <C>
Numerator:
Net loss                                    $    (10,874)    $     (5,481)
Dividend related to beneficial
    conversion feature of preferred
    stock                                             --           (9,800)
                                            ------------     ------------
Net loss available to common
    stockholders                            $    (10,874)    $    (15,281)
                                            ============     ============

Denominator:
Weighted average shares                           27,177            6,039
Weighted average unvested
   common shares subject to
    repurchase agreements                           (305)            (942)
                                            ------------     ------------
Denominator for basic calculation                 26,872            5,097
Weighted average effect of
   dilutive securities:
   Net effect of dilutive stock options               --               --
   Net effect of dilutive stock warrants              --               --
                                            ------------     ------------
Denominator for diluted calculation               26,872            5,097
                                            ============     ============

Net loss per share:
   Basic                                    $      (0.40)    $      (3.00)
                                            ============     ============
   Diluted                                  $      (0.40)    $      (3.00)
                                            ============     ============
</TABLE>


        Pro forma net loss per share (presented earlier) has been computed by
dividing net loss applicable to common shareholders by the pro forma weighted
average number of shares outstanding. Pro forma weighted average shares assume
the conversion of all preferred stock (which were ultimately converted to common
stock in conjunction with the initial public offering, as if the conversion
occurred at the beginning of the period or at date of issuance, if later).


                                       9


<PAGE>   10
5.      ACQUISITION

On January 12, 2000, the Company agreed to acquire all the outstanding shares of
Alliance Development Group, Inc. ("ADG"). ADG operates offline customer reward
programs including rewards based credit card loyalty programs. The total
purchase price of approximately $16.7 million included 270,000 shares of the
Company's common stock with an estimated fair value of $16.6 million based upon
its value at the closing of the transaction. Following the acquisition, ADG is
now a wholly owned subsidiary of the Company.

6.      SUBSEQUENT EVENT

On April 17, 2000, the Company agreed to acquire Cybergold, Inc. in a tax-free,
stock-for-stock, fixed-share transaction wherein each share of Cybergold will be
exchanged for 0.4800 shares of the Company. Based on closing prices on April 14,
2000, the transaction is valued at approximately $157 million. The acquisition
is scheduled to close in the third quarter of 2000.


                                       10


<PAGE>   11
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements based upon current
expectations that involve risks and uncertainties. When used in this Form 10-Q,
the words "intend," "anticipate," "believe," "estimate," "plan" and "expect" and
similar expressions are included to identify forward-looking statements. Our
actual results and the timing of certain events could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth under "Future Operating Results" and
elsewhere in this Form 10-Q.


OVERVIEW

        MyPoints.com, Inc. was founded as Intellipost Corporation in November
1996. In May 1997, we launched our email direct marketing and rewards program.
In November and December 1998, through our acquisition of Enhanced Response
Technologies, Inc. and a company affiliated with Experian, we acquired internet
and electronic commerce related assets and technologies through a series of
related transactions. Through these transactions, we acquired a technology
license for the operation of a web-based rewards program. In early March 1999,
we changed our corporate name to MyPoints.com, Inc. in order to unify our
corporate and brand identities. During March and April 1999, we integrated our
email and web-based direct marketing and rewards programs under the MyPoints
brand. In August 1999, we completed our initial public offering and in February
2000 we completed an additional public offering of shares of our common stock.

        We generate substantially all of our revenues by delivering email and
web-based direct marketing offers for our advertising customers. In exchange for
these services, we receive fees from our advertisers based on any or all of the
following:

        -       the number of offers delivered to members;

        -       the number of qualified responses generated; and

        -       the number of qualified purchases made.

        For direct marketing services, we recognize revenues when an offer is
delivered, when a qualified response is received or when a product or service is
purchased, depending upon the pricing arrangement used. Pricing of our direct
marketing services is not based on the issuance of points to our members.

        Under new and some existing advertising contracts and partnerships, we
sell points to private label partners and to advertisers for use in their
promotional campaigns. We initially defer revenue and estimated point costs
associated with the sale of points and recognize this revenue upon the
expiration or redemption of the underlying points. Under some new contracts, we
may amortize some associated fees and related costs over the life of these
contracts.


                                       11


<PAGE>   12
        Our revenues depend on a number of factors. These include the number of
advertisers engaging us to send direct marketing offers to our membership base,
the size of our membership base, and the responsiveness of our members to these
direct marketing offers. We believe that our revenues will be subject to
seasonal fluctuations as a result of general patterns of retail advertising,
which are typically higher during the fourth calendar quarter. In addition,
expenditures by advertisers tend to be cyclical, reflecting overall economic
conditions and consumer buying patterns.


        We also offer technology licensing arrangements to customers seeking to
develop email or web-based direct marketing and loyalty programs. We entered
into our first license agreement in December 1998 with Sweden Post, the Swedish
postal service. Sweden Post is establishing a version of the MyPoints BonusMail
program for the Swedish market. This license agreement provides for a licensing
fee, technical support fees and royalties based on a percentage of revenues from
the program site. We recognized revenue under this agreement when the custom
development work that we performed for Sweden Post was completed and accepted by
Sweden Post. In addition, we will recognize royalty revenue as it is received
from Sweden Post. We expect to enter into additional licensing and royalty
arrangements, particularly for international markets. We also expect to derive
revenues from several pending international initiatives.

        We incurred a net loss of $37.5 million in 1999, and $10.9 million in
the three months ended March 31, 2000. We intend to implement our strategies by
spending substantial amounts on member acquisition and retention, new product
offerings, sales and marketing strategic relationships, brand development and
technology and operating infrastructure development. As a result, we expect to
incur net losses at least through 2001 and negative cash flows for the next
several quarters. Our limited operating history makes it difficult to forecast
future operating results. Although we have experienced revenue growth in recent
quarters, we cannot be certain that revenues will increase at a rate sufficient
to achieve and maintain profitability. Even if we were to achieve profitability
in any period, we might fail to sustain or increase that profitability on a
quarterly or annual basis.

RESULTS OF OPERATIONS

Revenues

        Revenues increased to $15.8 million in the three months ended March 31,
2000 as compared to $1.3 million in the three months ended March 31, 1999. This
increase was primarily attributable to the following: (i) an increase in the
number of direct marketing offers to our members, (ii) an increase in our
advertising customer base, and (iii) an increase in average spending per
advertiser.

Cost of Revenues

        Cost of revenues represents the costs of points awarded to our members
for responding to advertisements and related purchasing activities associated
with our direct marketing offers as well as personnel costs associated with
creating, delivering and monitoring email campaigns. Cost of revenues increased
to $4.1 million in the three months ended March 31, 2000 from $0.9 million in
the three months ended March 31, 1999. As a percentage of revenues, these costs
decreased to 26% in


                                       12


<PAGE>   13
the three months ended March 31, 2000 from 69% in the three months ended March
31, 1999. The decrease in the cost of revenues as a percentage of revenues in
the three months ended March 31, 2000 as compared to the three months ended
March 31,1999 is primarily attributable to a higher number of revenue-generating
responses to direct marketing offers, the elimination of points cost associated
with members' receipt of email direct marketing offers, partially offset by an
increase in personnel costs associated with creating, delivering and monitoring
email campaigns. The cost of personnel included in cost of revenue increased to
$0.9 million in the three months ended March 31, 2000 as compared to zero in the
three months ended March 31, 1999. Also contributing to a lower cost of revenue
was reduced costs associated with redemption award purchases. As redemption
volume has increased, we have been able to negotiate volume purchase discounts
when purchasing gift awards.

Technology Costs

        Technology costs primarily consist of compensation for personnel
associated with the development of our technology and the maintenance of our
proprietary database. Presently, we expense technology costs as incurred.
However, in the future, certain technology costs may be capitalized, as
appropriate. Technology costs increased to $5.3 million in the three months
ended March 31, 2000 from $1.0 million in the three months ended March 31,1999.
This increase was primarily due to increases in personnel and consulting costs
and related expenses used to enhance and support our proprietary database and
products. We expect our technology costs to increase in future periods as we
continue to improve and enhance our direct marketing technology and expand our
membership database.

Sales and Marketing Expenses

        Sales and marketing expenses consist primarily of payroll, sales
commissions and related expenses for personnel engaged in sales, marketing and
customer support, as well as advertising and promotional expenditures including
member acquisition costs. Member acquisition costs consist primarily of online
advertising, promotional costs and payments to partners, which may be in the
form of cash or points, to attract members to our email and web-based programs.
Sales and marketing expenses increased to $11.4 million in the three months
ended March 31, 2000 from $ 2.6 million in the three months ended March 31,
1999. This increase was primarily attributable to increases in personnel costs,
including sales commissions, member acquisition costs and related expenses
required to implement our sales and marketing strategy. We expect increases in
sales and marketing expenses to continue in future periods as we continue to
hire additional marketing and sales employees, and continue to spend more on
member acquisition and promotions.

General and Administrative Expenses

        General and administrative expenses consist primarily of payroll and
related costs for general corporate functions, including finance, accounting,
business development, human resources, investor relations, facilities and
administration, as well as legal fees, insurance, bad debt and fees for
professional services. General and administrative expenses increased to $4.4
million in the three months ended March 31, 2000 from $1.1 million in the three
months ended March 31, 1999. This increase was primarily due to the expansion of
our corporate infrastructure, including the addition of finance


                                       13


<PAGE>   14
and administrative personnel. We expect general and administrative expenses to
increase in future periods as we expand our administrative staff to support the
growth of our operations.

Amortization of Intangible Assets

The Company acquired various intangible assets as part of the acquisition of
Enhanced Response Technologies, Inc. ("ERT") and a company affiliated with
Experian in the fourth quarter of 1998, and the acquisition of ADG in the first
quarter of 2000. In regards to the acquisition of ERT and a company affiliated
with Experian, the Company recorded intangible assets of $11.2 million. These
intangible assets are being amortized over their estimated useful lives of six
months to five years. In regards to the acquisition of ADG in the first quarter
of 2000, the Company recorded intangible assets of $14.8 million. These
intangible assets are being amortized over their estimated useful lives of
thirty-six to ninety months.

We recorded amortization of intangible assets of $1.2 million in the three
months ended March 31, 2000 as compared to $0.8 million in the three months
ended March 31, 1999. The increase in amortization of intangible assets in the
three months ended March 31, 2000 as compared to the three months ended March
31, 1999 relates to the acquisition of ADG in January, 2000.


Stock-Based Compensation

        As of March 31, 2000, we recorded aggregate deferred compensation
totaling $12.7 million in connection with the grant of stock options to
employees and consultants. This charge is being amortized over the vesting
periods of the options, which generally range from three to four years.
Stock-based compensation increased to $1.1 million in the three months ended
March 31, 2000 from $0.4 million in the three months ended March 31, 1999.

Interest Income

        Interest income increased to $0.8 million in the three months ended
March 31, 2000 from $9,000 in the three months ended March 31, 1999. This
increase is due to interest earned on higher average cash and investment
balances resulting from proceeds received from our initial public offering which
was completed in August 1999 and our follow-on offering which was completed in
February 2000.

Income Taxes

        We recorded a net loss of $37.5 million for 1999 and a net loss of $10.9
million in the three months ended March 31, 2000. Accordingly, no provision for
income taxes was recorded in the year and no tax benefit has been recognized due
to the uncertainty of realizing a future tax deduction for these losses.


                                       14


<PAGE>   15
LIQUIDITY AND CAPITAL RESOURCES

Since incorporation, we have financed our operations primarily from the sale of
equity securities to venture capital firms and other individual, institutional
and strategic investors as well as our initial public offering in August 1999
and our follow-on public offering in February 2000. We have also borrowed funds
under long-term capital lease and equipment financing facilities.

The total number of outstanding points issued to members for which we have a
recognized liability as of March 31, 2000 was approximately 1.5 billion points
with a redemption liability of $11.5 million. This liability was calculated
based on certain assumptions, including the assumption that 80% of the
outstanding points would be redeemed in the future. We also use historical
redemption activity and individual member account activity to determine our
estimated redemption liability. The factors that were considered in our
estimated redemption liability include points held by terminated and inactive
members, as well as those members we believe will not respond to our direct
marketing offers with sufficient frequency to accumulate points to meet our
minimum redemption levels. This information is updated on a quarterly basis. The
total number of points redeemed by members was 227.0 million in 1999 and 179.0
million in the three months ended March 31, 2000.

Points issued by us have a life of three to four years. Our current policy is
that unredeemed points will expire on December 31 of the third calendar year
following the calendar year in which such points are first deemed earned.
Although we do not anticipate making changes to our current policy we reserve
the right to alter point expiration terms at anytime. In the past, we have both
extended as well as reduced expiration terms of points. Members may redeem
points in their discretion at any time prior to the expiration of the points. We
fund point redemptions through our working capital resources. Because we cannot
control the timing of members' decisions to redeem points, should the rate of
redemption of points exceed our estimates, it could be necessary for us to
obtain additional working capital and our results of operations could be
materially and adversely affected.

Net cash used in operating activities was $10.0 million in the three months
ended March 31, 2000. This cash used in operating activities was due to our
expanded operations and primarily resulted from the net loss and higher accounts
receivable. Net cash used in investing activities was $2.5 million in the three
months ended March 31, 2000 which was primarily used to acquire property and
equipment, primarily computer equipment and software. Net cash provided by
financing activities was $107.0 million in the three months ended March 31,
2000 which includes net proceeds of $105.7 million from our follow-on offering
in February 2000.

At March 31, 2000 we had cash and cash equivalents of $116.4 million.

We currently anticipate that our available cash resources will be sufficient to
meet our anticipated working capital and capital expenditure


                                       15


<PAGE>   16
requirements for at least the next 12 months. Thereafter, we may need to raise
additional funds to fund more rapid expansion, to develop new or enhance
existing services or products, to respond to competitive pressures or to acquire
complementary products, businesses or technologies. If adequate funds are not
available on acceptable terms, our business, results of operations and financial
condition could be materially and adversely affected.


FACTORS AFFECTING OPERATING RESULTS


     All statements in this Form 10-Q that do not discuss past results are
forward-looking statements. Forward-looking statements are based on management's
current expectations and are therefore subject to certain risks and
uncertainties. Any of the following risks could seriously harm our business,
financial condition or results of operations. As a result, these risks could
cause the decline of the trading price of our common stock. The risks described
below, however, are not the only ones that we face. You should also refer to the
other information set forth in this Form 10-Q, including our financial
statements and the related notes.

                       RISKS ASSOCIATED WITH OUR BUSINESS

WE HAVE ONLY A LIMITED OPERATING HISTORY THAT INVESTORS MAY USE TO ASSESS OUR
FUTURE PROSPECTS

        We have only a limited operating history upon which you can evaluate our
business. We commenced operations in November 1996 and did not begin to generate
revenues until July 1997. We have not and may never generate sufficient revenues
to achieve profitability. Although we have experienced revenue growth in recent
periods, these growth rates may not be sustainable or indicative of our future
growth. We have limited experience addressing challenges frequently encountered
by early-stage companies in the electronic commerce and direct marketing
industries. We may not be successful in addressing these risks, and our business
strategy may not be successful. In addition, we have never operated during a
general economic downturn in the United States, which typically adversely
affects advertising and marketing expenditures and retail sales. Accordingly,
our limited operating history does not provide investors with a meaningful basis
for evaluating an investment in our common stock.

WE HAVE A HISTORY OF LOSSES AND EXPECT LOSSES TO CONTINUE AT LEAST THROUGH 2001

        Our accumulated deficit as of March 31, 2000 was $69.4 million. We have
never operated profitably and, given our planned level of operating expenses, we
expect to continue to incur losses at least through 2001. We plan to increase
our operating expenses as we continue to build infrastructure to support the
expansion of our business. Our losses may increase in the future, and even if we
achieve our revenue targets, we may not be able to sustain or increase
profitability on a quarterly or annual basis. If our revenues grow more slowly
than we anticipate, or if our operating expenses exceed our expectations and
cannot be adjusted accordingly, our losses could continue beyond our present
expectations.


                                       16


<PAGE>   17
OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS, WHICH COULD AFFECT
OUR STOCK PRICE

        Our revenue and operating results may vary significantly from quarter to
quarter due to a number of factors, some of which are outside of our control. As
a result, our operating results may be below the expectations of public market
analysts and investors. In this event, the price of our common stock may fall.
The factors most likely to produce varied results include:

        -       the advertising budget cycles of individual advertisers;

        -       the number of reward points redeemed by our members and the
                costs associated with these redemptions;

        -       changes in the mix of our business;

        -       changes in marketing and advertising costs that we incur to
                attract and retain members;

        -       changes in our pricing policies, the pricing policies of our
                competitors or the pricing policies for internet advertising
                generally; and

        -       unexpected costs and delays relating to the expansion of our
                operations.

        Due to these factors, revenues and operating results are difficult to
forecast and you should not rely on period to period comparisons of results of
operations as an indication of our future performance.

OUR OPERATING RESULTS ARE SUBJECT TO SEASONAL FLUCTUATIONS THAT COULD IMPACT OUR
GROWTH AND AFFECT OUR STOCK PRICE

        We believe that our revenues will be subject to seasonal fluctuations as
a result of general patterns of retail advertising, which are typically higher
during the fourth calendar quarter. In addition, expenditures by advertisers
tend to be cyclical, reflecting general economic conditions and consumer buying
patterns. The extent of these seasonal fluctuations in any period may be
difficult to predict and, if the fluctuations are greater than our expectations,
our growth rate would decline. In this event, the price of our common stock may
fall.


                                       17


<PAGE>   18
WE MAY HAVE DIFFICULTIES INTEGRATING RECENT AND FUTURE ACQUISITIONS AND ANY
FAILURE TO SUCCESSFULLY INTEGRATE ACQUIRED COMPANIES WOULD REDUCE OUR ABILITY TO
REALIZE THE ANTICIPATED VALUE OF THE ACQUISITION

In the first quarter of 2000, we acquired ADG. We announced the acquisition of
Cybergold in the second quarter of 2000. We may pursue other acquisitions in the
future. Based on our experiences with our first acquisition in 1998, we expect
to face numerous risks and uncertainties generally associated with acquisitions,
including:

        -       potentially adverse effects on our reported results of
                operations from acquisition-related charges and amortization of
                goodwill and purchased technology;

        -       our ability to maintain customers or the reputation of the
                acquired businesses;

        -       potential dilution to current stockholders from the issuance of
                additional equity securities;

        -       difficulties integrating operations, personnel, technologies,
                products and information systems of the acquired businesses;

        -       diversion of management's attention from other business
                concerns; and

        -       potential loss of key employees of acquired businesses.

        In November and December 1998, through our acquisition of Enhanced
Response Technologies, Inc. and a company affiliated with Experian Information
Solutions, Inc., we acquired internet and electronic commerce related assets and
technologies to support a web-based rewards program known as MyPoints. We
integrated MyPoints with our BonusMail email service during March and April
1999. This integration involved the combination of two different marketing
programs and technology platforms, as well as operations in San Francisco and
Chicago. In connection with this integration, we incurred substantial costs.
During the relaunch of the integrated MyPoints program, we encountered several
unanticipated problems which resulted in significant periods of system downtime
during April 1999. During these periods of downtime, our web site was not
accessible by members. We believe that we have resolved the problems that caused
this downtime; however, there can be no assurance that we will not encounter
additional system-related problems.

        In January 2000, we acquired Alliance Development Group, Inc., a company
that operates offline customer rewards programs. In connection with this
acquisition, we intend to integrate our technology with ADG's offline programs
to help make them more efficient. If we are unable to do this in a timely
manner, we may be unable to realize the anticipated benefits of this
acquisition.


                                       18


<PAGE>   19
In April 2000, we announced the acquisition of Cybergold. We expect to face
numerous risks and uncertainties generally associated with this acquisition,
including:

MYPOINTS AND CYBERGOLD MAY NOT ACHIEVE THE BENEFITS THEY EXPECT FROM THE MERGER,
WHICH MAY HAVE A MATERIAL ADVERSE EFFECT ON THE COMBINED COMPANY'S BUSINESS,
FINANCIAL CONDITION AND OPERATING RESULTS AND/OR COULD RESULT IN LOSS OF KEY
PERSONNEL.

We will need to overcome significant issues in order to realize any benefits
from the merger, including the timely, efficient and successful execution of a
number of post-merger events. Key events include:

     -    Integrating the operations of the two companies;

     -    Retaining and assimilating the key personnel of each company;

     -    Offering the existing services of each company to the other company's
          customers;

     -    Retaining the existing customers and strategic partners of each
          company;

     -    Developing new services that utilize the assets of both companies; and

     -    Maintaining uniform standards, controls, procedures and policies

The successful execution of these post-merger events will involve considerable
risk and may not be successful. These risks include:

     -    The potential disruption of the combined company's ongoing business
          and distraction of it's management;

     -    The difficulty of incorporating acquired technology and rights into
          the combined company's products and services;

     -    Unanticipated expenses related to technology integration;

     -    The impairment of relationships with employees and customers as a
          result of any integration of new management personnel; and

     -    Potential unknown liabilities associated with the acquired business.

THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE AS A RESULT OF THE MERGER.

     The market price of our common stock may decline as a result of the merger
for a number of reasons including if:

     -    The integration of MyPoints and Cybergold is unsuccessful;

     -    We do not achieve the perceived benefits of the merger as rapidly or
          to the extent anticipated by financial or industry analysts; or

     -    The effect of the merger in our financial results is not considered
          with the expectations of financial or industry analysts

FAILURE TO COMPLETE THE MERGER COULD NEGATIVELY IMPACT OUR STOCK PRICE, FUTURE
BUSINESS AND OPERATIONS.

     If the merger is not completed for any reason, we may be subject to a
number of material risks, including the following:

     -    The price of our common stock may decline to the extent that the
          relevant current market price reflects a market assumption that the
          merger will be completed; and

     -    Costs related to the merger, such a legal, accounting, and financial
          advisor fees, must be paid even if the merger is not completed.

          In addition, our customers and strategic partners, in response to the
     announcement of the merger, may delay or defer decisions concerning the
     relevant company. Any delay or deferral in those decisions by customers,
     strategic partners or suppliers could have a material adverse effect on
     business of the relevant company, regardless of whether the merger is
     ultimately completed. Similarly, current and prospective employees may
     experience uncertainty about their future roles with us until our
     strategies with regard to Cybergold are announced or executed. This may
     adversely affect our ability to attract and retain key management, sales,
     marketing and technical personnel.

WE ARE GROWING RAPIDLY, AND THE FAILURE TO MANAGE OUR GROWTH COULD STRAIN OUR
MANAGEMENT SYSTEMS AND RESOURCES

As we continue to increase the scope of our operations, we may not have an
effective planning and management process in place to implement our business
plan successfully. We have grown from 24 employees on January 1, 1998 to 249
employees on March 31, 2000. We plan to continue the expansion of our
technology, sales, marketing and administrative organizations. This growth will
continue to strain our management systems and resources. We anticipate the need
to continue to improve our financial and managerial controls and our reporting
systems. In addition, we will need to expand, train and manage our rapidly
growing work force.

OUR SUCCESS DEPENDS ON OUR ABILITY TO MAINTAIN AND EXPAND AN ACTIVE MEMBERSHIP
BASE

Our success largely depends on our ability to maintain and expand an active
membership base. Our revenues are primarily driven by fees paid by advertisers
and direct marketers based on specific actions taken by our members. If we are
unable to induce existing and new members to actively participate in our
programs, our business, results of operations and financial condition will be
harmed. We generate a significant portion of our revenues based on the activity
of a small percentage of our members, and we cannot assure you that the
percentage of active members will increase. In addition, some of our members
have requested to limit the number of emails they receive from us. Although our
membership has grown in prior periods, we cannot be sure that our membership
growth will continue at current rates or increase in the future.

WE FACE INTENSE COMPETITION, AND THE FAILURE TO COMPETE EFFECTIVELY COULD
ADVERSELY AFFECT OUR MARKET SHARE AND RESULTS OF OPERATIONS

We face intense competition from both traditional and online advertising and
direct marketing businesses. We expect competition to increase due to the lack
of significant barriers to entry for online business generally. As we expand the
scope of our product and service offerings, we may compete with a greater number
of media companies across a wide range of advertising and direct marketing
services. Our ability to generate significant revenue from advertisers and
loyalty partners will depend on our ability to differentiate ourselves through
the technology and services we provide and to obtain adequate participation from
consumers in our online direct marketing and rewards programs. Rewards providers
are also a critical element of our business. The attractiveness of our program
to current and potential members and loyalty partners depends in large part on
the attractiveness of the rewards and point


                                       19


<PAGE>   20
redemption opportunities that we offer. Currently, several companies offer
competitive online products or services, including Netcentives. We also expect
to face competition from established online portals and community web sites that
engage in direct marketing and loyalty point programs, as well as from
traditional advertising agencies and direct marketing companies that may seek to
offer online products or services.

Many of our current competitors and potential new competitors have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
These advantages may allow them to respond more quickly to new or emerging
technologies and changes in customer requirements. It may also allow them to
engage in more extensive research and development, undertake more far-reaching
marketing campaigns, adopt more aggressive pricing policies, and make more
attractive offers to potential employees, strategic partners and advertisers. In
addition, current and potential competitors have established or may establish
cooperative relationships among themselves or with third parties to increase the
ability of their products or services to address the needs of our prospective
advertisers and advertising agency customers. As a result, it is possible that
new competitors may emerge and rapidly acquire significant market share. We may
not be able to compete effectively, and competitive pressures may result in
price reductions, reduced gross margins and loss of our market share.

THE FAILURE TO ESTABLISH THE MYPOINTS BRAND WOULD IMPAIR OUR COMPETITIVE
POSITION

We are highly dependent on establishing and maintaining our brand. Any event or
circumstance that negatively impacts our brand could have a direct and material
adverse effect on our business, results of operations and financial condition.
As competitive pressures in the online direct marketing industry increase, we
believe that brand strength will become increasingly important. The reputation
of the MyPoints brand will depend on our ability to provide a high-quality
member experience. We cannot assure you that we will be successful in delivering
this experience. If members are not satisfied with the quality of their
experience with the MyPoints program, their negative experiences might result in
publicity that could damage our reputation. If we expend additional resources to
build the MyPoints brand and do not generate a corresponding increase in
revenues as a result of our branding efforts, or if we otherwise fail to promote
our brand successfully, our competitive position would suffer.


THE FAILURE TO ACCURATELY ESTIMATE LEVELS OF POINT REDEMPTION WOULD ADVERSELY
AFFECT OUR RESULTS OF OPERATIONS AND COULD LEAD TO THE RESTATEMENT OF HISTORICAL
FINANCIAL RESULTS

Our historical and forecasted financial statements reflect our assumptions as to
the percentage of rewards points issued by us that will not be redeemed by
members prior to expiration. This percentage of unredeemed points is known as
"breakage." If our assumptions do not prove accurate, our financial statements
may require restating, which could cause our stock price to decline and damage
our reputation. The breakage rates we have used in preparing our financial
statements and forecasts are based primarily on our limited experience with our


                                       20


<PAGE>   21
own program since its launch in May 1997. We have also reviewed breakage rates
reported by other operators of loyalty and rewards programs, such as airlines.
Although we believe that the breakage rates we have used are reasonable in light
of our analysis and experience, we cannot assure you that our actual breakage
rates will equal or exceed our assumed breakage rates. If our actual breakage
rates are less than our assumed breakage rates, meaning that a greater number of
points are actually redeemed than we had assumed would be redeemed, our results
of operations could be materially and adversely affected. In addition, operators
of loyalty programs have, from time to time, for competitive or other reasons,
extended the expiration dates for points, miles or other rewards currencies. For
example, we extended the expiration date for the points associated with the
email portion of our program when we relaunched our email and web-based
services. If it becomes necessary for us to extend the expiration date of a
significant balance of outstanding points in the future, it is possible that our
actual breakage rates would be lower than our assumed breakage rates, which
could materially and adversely affect our results of operations. In addition,
the timing of members' decisions to redeem points is at the discretion of
members and cannot be controlled by us. Points have a life of three to four
years and can be redeemed by members until their expiration date. To the extent
that members redeem points at a rate that is more rapid than that anticipated by
us, we would experience a need for increased working capital to fund these
redemptions. Accordingly, the timing of points redemptions by members could
materially and adversely affect our results of operations.

A SMALL NUMBER OF OUR ADVERTISING CUSTOMERS ACCOUNTS FOR A SIGNIFICANT PORTION
OF OUR REVENUES; THEREFORE THE LOSS OF PRINCIPAL CUSTOMERS COULD ADVERSELY
AFFECT OUR REVENUES

No single advertising customer accounted for more than 10% of our revenue in
1999 and the three months ended March 31, 2000. Our ten largest advertising
customers were responsible for approximately 25% of our revenues during 1999 and
29% in the three months ended March 31, 2000. We do not have long-term contracts
with most of our customers, and customers can generally terminate their
relationships with us upon specified notice and without penalties. Thus, we may
not be able to retain our principal customers. The loss of one or more of our
principal customers could have a material adverse effect on our revenues.

OUR PROSPECTS FOR OBTAINING ADDITIONAL FINANCING, IF REQUIRED, ARE UNCERTAIN AND
FAILURE TO OBTAIN NEEDED FINANCING COULD AFFECT OUR ABILITY TO PURSUE FUTURE
GROWTH

We may need to raise additional funds to develop or enhance our services or
products, to fund expansion, to respond to competitive pressures or to acquire
complementary products, businesses or technologies. We cannot assure you that
additional financing will be available on terms favorable to us, or at all. If
additional funds are raised through the issuance of equity or convertible debt
securities, the percentage ownership of our stockholders would be reduced and
these securities might have rights, preferences or privileges senior to those of
our current stockholders. If adequate funds are not available on acceptable
terms, our ability to fund our expansion, take advantage of unanticipated
opportunities, develop or enhance services or products, or otherwise respond to
competitive pressures would be significantly limited.


                                       21


<PAGE>   22
WE DEPEND ON THE SERVICES OF OUR EXECUTIVE OFFICERS AND KEY EMPLOYEES TO MANAGE
OUR GROWTH, AND THERE IS NO ASSURANCE WE CAN RETAIN THEIR SERVICES

Our future success depends on the continued service of our key senior management
and technical and sales personnel. The loss of any of these persons could have a
material adverse effect on our business. We do not have key-person insurance on
any of our employees. Robert C. Hoyler, our President and Chief Operating
Officer, Steven E. Parker, our Senior Vice President, Marketing, and Frank J.
Pirri, our Senior Vice President, Offline Commerce, joined us in December 1998
as the result of acquisition transactions that took place in the fourth quarter
of 1998. Charles H. Berman, our Executive Vice President, Sales, also joined us
in 1998. Thomas P. Caldwell, our Senior Vice President, Finance and Chief
Financial Officer, joined us in April 1999. In addition, Eugene A. Pierce, our
Senior Vice President, Technology, joined us in the fourth quarter of 1999. Our
recently integrated management team has limited experience working together.

Our success depends on our ability to attract, retain and motivate highly
skilled employees. Competition for employees in our industry is intense. We may
be unable to retain our key employees or to attract, assimilate and retain other
highly qualified employees in the future. We have experienced difficulty from
time to time in attracting the personnel necessary to support the growth of our
business, and we may experience similar difficulty in the future.

FAILURE TO SAFEGUARD OUR DATABASE AND MEMBER PRIVACY COULD AFFECT OUR REPUTATION
AMONG CONSUMERS

An important feature of the MyPoints program is our ability to develop and
maintain individual member profiles. Security and privacy concerns may cause
consumers to resist providing the personal data necessary to support this
profiling capability. As a result of these security and privacy concerns, we may
incur significant costs to protect against the threat of security breaches or to
alleviate problems caused by such breaches. Usage of our MyPoints program could
decline if any well-publicized compromise of security occurred. In addition,
third parties could alter information in our database that would adversely
affect our ability to target direct marketing offers to members. We could also
be subject to legal claims from members. Any public perception that we engaged
in unauthorized release of member information would adversely affect our ability
to attract and retain members.

As part of our point redemption services, we maintain a database containing
information on our members' account balances. Our database may be subject to
access by unauthorized users accessing our systems remotely. If we experience a
security breach, the integrity of our points database could be affected. This
breach could lead to financial losses through the unauthorized redemption of
points.


                                       22


<PAGE>   23
WE ARE VULNERABLE TO SYSTEM FAILURES WHICH COULD CAUSE INTERRUPTIONS OR
DISRUPTIONS IN OUR SERVICE

The hardware infrastructure on which the MyPoints system operates is located at
the Exodus Communications data center in Jersey City, New Jersey. In April 1999,
we completed a transition to Exodus from a combination of internally maintained
systems and systems maintained by another third-party service provider. We
cannot assure you that we will be able to manage this relationship successfully
to mitigate any risks associated with having our hardware infrastructure
maintained by Exodus. Unexpected events such as natural disasters, power losses
and vandalism could damage our systems. Telecommunications failures, computer
viruses, electronic break-ins or other similar disruptive problems could
adversely affect the operation of our systems. Our insurance policies may not
adequately compensate us for any losses that may occur due to any damages or
interruptions in our systems. Accordingly, we could be required to make capital
expenditures in the event of damage. We do not currently have fully redundant
systems or a formal disaster recovery plan.

Periodically we experience unscheduled system downtime, which results in our web
site being inaccessible to members. In particular, during the relaunch of the
integrated MyPoints program in April 1999, we experienced significant periods of
system downtime during which our web site was inaccessible. Although we did not
suffer material losses during these downtimes, if these problems persist in the
future, members and advertisers could lose confidence in our services.

SYSTEM CAPACITY CONSTRAINTS MAY RESULT IN A LOSS OF REVENUES

A substantial increase in the use of our products and services could strain the
capacity of our systems, which could lead to slower response time or system
failures. System failures or slowdowns adversely affect the speed and
responsiveness of our rewards transaction processing. These would diminish the
experience for our members and reduce the number of transactions, and thus,
could reduce our revenue. Although we have designed and tested our system to
handle several times the highest daily transaction volume we have experienced to
date, the ability of our systems to manage this volume of transactions in a
production environment is unknown. As a result, we face risks related to our
ability to scale up to our expected transaction levels while maintaining
satisfactory performance. If our transaction volume increases significantly, we
will need to purchase additional servers and networking equipment to maintain
adequate data transmission speeds. The availability of these products and
related services may be limited or their cost may be significant.


                                       23


<PAGE>   24
WE FACE RISKS ASSOCIATED WITH THIRD PARTY CLAIMS AND PROTECTION OF OUR
INTELLECTUAL PROPERTY RIGHTS, AND ANY LITIGATION RELATING TO INTELLECTUAL
PROPERTY RIGHTS COULD HARM OUR BUSINESS

Our business activities may infringe upon the proprietary rights of others, and
other parties may assert infringement claims against us. We have received three
claims of alleged infringement, one of which has been resolved through a license
agreement. The second claim of infringement is with Cybergold which we announced
the acquisition of in April, 2000. Also, in July 1999, we received an
infringement claim from another party, along with an offer to grant a license to
us at a cost that would not be material. To our knowledge, no litigation has
been filed against us based on this claim. We are evaluating the claim and have
not yet begun substantive discussions regarding it. Litigation may also be
necessary to enforce our intellectual property rights, to protect our trade
secrets or to determine the validity and scope of the proprietary rights of
others. An adverse determination in any litigation of this type could require us
to make significant changes to the structure and operation of our online rewards
program, attempt to design around a third party's patent, or license alternative
technology from another party. Implementation of any of these alternatives could
be costly and time consuming, and might not be possible. In addition, any
intellectual property litigation, even if successfully defended, would result in
substantial costs and diversion of resources and management attention.

Our success and ability to compete depends on our internally developed
technologies and trademarks, which we seek to protect through a combination of
patent, copyright, trade secret and trademark laws. Despite actions we take to
protect our proprietary rights, it may be possible for third parties to copy or
otherwise obtain and use our proprietary information without authorization or to
develop similar technology independently. In addition, legal standards relating
to the validity, enforceability and scope of protection of proprietary rights in
internet-related businesses are uncertain and still evolving. We cannot give any
assurance regarding the future viability or value of any of our proprietary
rights. In addition, we cannot give any assurance that the steps taken by us
will prevent misappropriation or infringement of our proprietary information.
Any infringement or misappropriation, should it occur, could have a material
adverse effect on any competitive advantage incident to our proprietary rights.


AS WE EXPAND OUR BUSINESS INTERNATIONALLY, WE MAY NEED TO ADAPT OUR PRODUCTS AND
SERVICES AND WE MAY BE SUBJECT TO FOREIGN GOVERNMENT REGULATION AND TAXATION,
CURRENCY ISSUES, DIFFICULTIES IN MANAGING FOREIGN OPERATIONS AND FOREIGN
POLITICAL ECONOMIC INSTABILITY

An element of our growth strategy is to further introduce our services in
international markets. Our participation in international markets will be
subject to our potential inability to adapt, expand or enhance our products and
services to suit foreign markets. In addition, international operations are
generally associated with risks such as foreign government regulations, export
license requirements, tariffs and taxes, fluctuations in currency exchange
rates, introduction of the European Union common currency, difficulties in


                                       24


<PAGE>   25
managing foreign operations and political and economic instability. To the
extent our potential international members or our international partners are
impacted by currency devaluations, general economic crises or other
macroeconomic events, the ability of our members to utilize our services could
be diminished. In order to help us address some of the risks associated with
introducing our services internationally, we believe it will be necessary to
establish strategic relationships with international partners. We cannot assure
you that electronic commerce will develop successfully in international markets
or that potential members in these foreign markets will utilize incentives-based
marketing programs. Furthermore, we cannot assure you that we will be able to
overcome any legal restrictions related to offering rewards and incentives that
may exist in foreign jurisdictions. Any failure to develop our business
internationally may harm our competitive position and consequently our business.

                   RISKS ASSOCIATED WITH THE INTERNET INDUSTRY

IF THE ACCEPTANCE OF ONLINE ADVERTISING AND DIRECT MARKETING DOES NOT CONTINUE,
OUR REVENUES WOULD DECLINE

We expect to derive a substantial portion of our revenues from online
advertising and direct marketing, including both email and web-based programs.
If these services do not continue to achieve market acceptance, we cannot assure
you that we will generate business at a sufficient level to support our
continued operations. The internet has not existed long enough as an advertising
medium to demonstrate its effectiveness relative to traditional advertising
media. Advertisers and advertising agencies that have historically relied on
traditional advertising may be reluctant or slow to adopt online advertising.
Many potential advertisers have limited or no experience using email or the web
as an advertising medium. They may have allocated only a limited portion of
their advertising budgets to online advertising, or may find online advertising
to be less effective for promoting their products and services than traditional
advertising media. If the market for online advertising fails to develop or
develops more slowly than we expect, our revenues would decline.

The market for email advertising in general is vulnerable to the negative public
perception associated with unsolicited email, known as "spam." We do not send
unsolicited email. However, public perception, press reports or governmental
action related to spam could reduce the overall demand for email advertising in
general and our MyPoints BonusMail service in particular.

IF ONLINE REWARDS PROGRAMS ARE NOT WIDELY ACCEPTED BY BUSINESSES AND INTERNET
USERS OUR BUSINESS MODEL WILL NOT SUCCEED

Our success depends in large part on the continued growth and acceptance of
online rewards programs. If online rewards programs are not widely accepted by
advertisers and embraced by internet users, our business model will not succeed.
Although loyalty and rewards programs have been used extensively in conventional
marketing and sales channels, they have only recently begun to be used online.
We cannot assure you that online programs will continue to be accepted by
advertisers and that we can continue to offer advertisers attractive promotions
and satisfied members. The success of our business model also will depend on our


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<PAGE>   26
ability to attract and retain members. We cannot assure you that our marketing
efforts and the quality of each member's experience, including the number and
relevance of the direct marketing offers we provide and the perceived value of
the rewards we offer, will generate sufficient satisfied members.

TO REMAIN COMPETITIVE, WE MUST KEEP PACE WITH RAPID TECHNOLOGICAL CHANGES IN OUR
INDUSTRY

Our market is characterized by rapidly changing technologies, frequent new
product and service introductions, short development cycles and evolving
industry standards. The recent growth of the internet and intense competition in
our industry exacerbate these market characteristics. We must adapt to rapidly
changing technologies by maintaining and improving the performance features and
reliability of our services. We may experience technical difficulties that could
delay or prevent the successful development, introduction or marketing of new
products and services. In addition, any new enhancements to our products and
services must meet the requirements of our current and prospective users. We
could incur substantial costs to modify our services or infrastructure to adapt
to rapid technological change.

CONTINUED DEVELOPMENT AND USE OF THE INTERNET INFRASTRUCTURE IS CRITICAL TO OUR
ABILITY TO OFFER OUR SERVICES

Our members depend on internet service providers for access to our web site.
Internet service providers and web sites have experienced significant outages in
the past, and could experience outages, delays and other difficulties due to
system failures unrelated to our systems. If outages or delays occur frequently
in the future, internet usage, as well as electronic commerce and the usage of
our products and services, could grow more slowly or decline.

A number of factors may inhibit internet usage, including inadequate network
infrastructure, security concerns, inconsistent quality of service, and lack of
availability of cost-effective, high-speed service. If internet usage grows, the
internet infrastructure may not be able to support the demands placed on it by
this growth and its performance and reliability may decline.

OUR BUSINESS DEPENDS ON OUR ABILITY TO COLLECT MEMBER INFORMATION; FUTURE
REGULATION OF THE INTERNET COULD RESTRICT OUR ACCESS TO THIS INFORMATION

Laws and regulations that apply to the internet may become more prevalent in the
future. The laws governing the internet and email services remain largely
unsettled. There is no single governmental body overseeing our industry, and
many state laws that have been enacted in recent years have different and
sometimes inconsistent application to our business. In particular, our business
model could be severely damaged if regulations were enacted that restricted our
ability to collect or use information about our members.

The governments of foreign countries may also attempt to regulate electronic
commerce. New laws could dampen the growth in use of the internet generally and
decrease the acceptance of the internet as a commercial medium. In addition,
existing laws such as those governing intellectual property and


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<PAGE>   27
privacy may be interpreted to apply to the internet. The federal government,
state governments or other governmental authorities could also adopt or modify
laws or regulations relating to the internet.

In 1998, the United States government enacted a three-year moratorium
prohibiting states and local governments from imposing new taxes on electronic
commerce transactions. Upon expiration of this moratorium, if it is not
extended, states or other governments might levy sales or use taxes on
electronic commerce transactions. An increase in the taxation of electronic
commerce transactions might also make the internet less attractive for consumers
and businesses. In addition, the Federal Trade Commission is considering the
adoption of regulations regarding the collection and use of personal information
obtained from individuals, especially children, when accessing web sites. These
regulations could restrict our ability to provide demographic data to our
advertising and marketing clients. At the international level, the European
Union has adopted a directive that will impose restrictions on the collection
and use of personal data. This directive could affect U.S. companies that
collect information over the internet from individuals in European Union member
countries and may impose restrictions that are more stringent than current
internet privacy standards in the United States. These developments could have
an adverse effect on our business, results of operations and financial
condition.

            OTHER RISKS ASSOCIATED WITH OWNERSHIP OF OUR COMMON STOCK

SUBSTANTIAL CONTROL WILL REMAIN WITH OUR MANAGEMENT AND MAJOR STOCKHOLDERS AND
THIS COULD DELAY OR PREVENT A CHANGE OF CONTROL

Our executive officers, our directors and entities affiliated with them and our
5% stockholders together currently beneficially own approximately 30% of our
outstanding common stock. These stockholders, if they vote together, will retain
substantial control over matters requiring approval by our stockholders, such as
the election of directors and approval of significant corporate transactions.
This concentration of ownership might also have the effect of delaying or
preventing a change in control.

PROVISIONS OF OUR CORPORATE CHARTER DOCUMENTS COULD DELAY OR PREVENT A CHANGE OF
CONTROL

Various provisions of our certificate of incorporation and bylaws could have the
effect of delaying or preventing a change in control and make it more difficult
for a third party to acquire us, even if doing so would be beneficial to our
stockholders. These provisions, if used by our management, could negatively
affect our stock price.

FUTURE SALES OF OUR COMMON STOCK COULD CAUSE THE PRICE OF OUR SHARES TO DECLINE

As a result of an offering of common stock which we completed in February 2000,
approximately 13.6 million shares of our common stock are subject to lock-up
agreements between the holders of those shares and the representatives


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<PAGE>   28
of the underwriters in the offering, under which the holders have agreed not to
offer, sell, contract to sell or grant any option to purchase or otherwise
dispose of their common stock until May 14, 2000, subject to limited exceptions.
FleetBoston Robertson Stephens Inc., one of the managing underwriters in the
offering, may release stockholders from the lockup agreement at any time and
without notice. Following the expiration of this lock-up period, approximately
13.1 million shares subject to the lock-up agreements will become available for
immediate resale in the public market subject, in some instances, to the volume
and other limitations of Rule 144. Resales of a substantial number of shares of
our common stock into the public market could cause its price to decline. This
is particularly the case because a substantial portion of our outstanding shares
of common stock are held by persons who purchased their shares at prices below
recent market prices of our stock.

OUR STOCK PRICE HAS BEEN VOLATILE, AND YOU MAY NOT BE ABLE TO SELL YOUR SHARES
AT A PROFIT

 The stock market has experienced significant price and volume fluctuations, and
the market prices of technology companies, particularly internet-related
companies, have been highly volatile. Investors may not be able to resell their
shares at or above the price which they paid for their shares. In addition, our
results of operations during future fiscal periods might fail to meet the
expectations of stock market analysts and investors. This failure could lead the
market price of our common stock to decline and cause us to become the subject
of securities class action lawsuits.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk for changes in interest rates is limited to the
exposure related to our debt instruments which are tied to market rates. We do
not plan to use derivative financial instruments in our investment portfolio. We
plan to ensure the safety and preservation of our invested principal funds by
limiting default risks, market risk and reinvestment risk. We plan to invest in
high-credit quality securities.


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<PAGE>   29
                           PART II: OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, the Company is at times subject to pending and
threatened legal actions and proceedings. After reviewing pending and threatened
actions and proceedings with counsel, management believes that the outcome of
such actions or proceedings is not expected to have a material adverse effect on
the financial position or results of operations of the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS


On February 23, 2000 we completed a follow-on stock offering in which we sold
2,450,000 shares of common stock at $45.88 per share. The total aggregate gross
proceeds amounted to $112.4 million. Underwriters' discounts and other related
costs were $6.7 million resulting in net proceeds of $105.7 million. On August
19, 1999, we completed our initial public offering, in which we sold 5,750,000
shares of common stock at $8 per share. The total aggregate gross proceeds
amounted to $46 million. Underwriters' discounts and other related costs were
$4.8 million resulting in net proceeds of $41.2 million. From August 19,1999 to
March 31, 2000, the Company estimates that it has used a portion of the net
proceeds of the two offerings as follows: (i) investments in cash and cash
equivalents of $116.4 million; and (ii) working capital of $ 30.5 million.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


(a) Exhibits

        27 Financial Data Schedule

(b) Reports on Form 8-K:

The Registrant filed Form 8-K on March 28, 2000 with respect to the acquisition
of Alliance Development Group, Inc.


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<PAGE>   30
                                    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,


May 14, 2000             MYPOINTS.COM, INC.


                            By /s/ THOMAS P. CALDWELL
                         -------------------------------------------------
                            Thomas P. Caldwell
                            Senior Vice President, Finance and Chief
                            Financial Officer (Principal Financial and
                            Accounting Officer)


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<PAGE>   31
                                 EXHIBIT INDEX

Exhibit No.    Description
----------     -----------------------

Exhibit 27     Financial Data Schedule




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