**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

---

**FORM 10-Q**

---

(Mark One)

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

**For the Quarterly Period Ended March 31, 2002**

**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 000-25113**

**MARKETWATCH.COM, INC.**
(Exact name of Registrant as specified in its Charter)



|**Delaware**                                                   | **94-3315360**                         
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

**825 Battery StreetSan Francisco, California     94111**(Address of Principal Executive Offices)

**(415) 733-0500**(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required
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 [  ]

The number of shares of the Registrants' Common Stock outstanding as of May 1,
2002 was 16,990,063.







MarketWatch.com, Inc.

Quarterly Report on Form 10-Q for the Period Ended March 31, 2002

Table of Contents







|**PART I. FINANCIAL INFORMATION**                                                                | **Page No.**
|------------------------------------------------------------------------------------------------ | ------------
|                                                                                                 |             
|Item 1. Interim Condensed Financial Statements:                                                  |             
|                                                                                                 |             
|Condensed Balance Sheets 
at March 31, 2002 (unaudited) and December 31, 2001                    | 3           
|                                                                                                 |             
|Unaudited Condensed Statements of Operations 
for the three months ended March 31, 2002 and 2001 | 4           
|                                                                                                 |             
|Unaudited Condensed Statements of Cash Flows 
for the three months ended March 31, 2002 and 2001 | 5           
|                                                                                                 |             
|Notes to Condensed Financial Statements (unaudited)                                              | 6           
|                                                                                                 |             
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations    | 9           
|                                                                                                 |             
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                               | 25          
|                                                                                                 |             
|**PART II. OTHER INFORMATION**                                                                   |             
|                                                                                                 |             
|Item 1. Legal Proceedings                                                                        | 26          
|                                                                                                 |             
|Item 2. Changes in Securities and Use of Proceeds                                                | 26          
|                                                                                                 |             
|Item 3. Defaults Upon Senior Securities                                                          | 26          
|                                                                                                 |             
|Item 4. Submission of Matters to a Vote of Security Holders                                      | 26          
|                                                                                                 |             
|Item 5. Other Information                                                                        | 26          
|                                                                                                 |             
|Item 6. Exhibits and Reports on Form 8-K                                                         | 26          
|                                                                                                 |             
|**Signatures**                                                                                   | 27          
|                                                                                                 |             
|                                                                                                 |             

---

Part I -- FINANCIAL INFORMATION

Item 1. Interim Condensed Financial Statements

MarketWatch.com, Inc.

Condensed Balance Sheets

(in thousands)



`March 31,    December 31,
                                                           2002          2001
                                                       ------------  ------------
                                                       (unaudited)
                          Assets
Current assets:
  Cash and cash equivalents .......................... $    37,358   $    37,637
  Accounts receivable, net ...........................       7,344         8,263
  Prepaid expenses ...................................       1,415           756
                                                       ------------  ------------
          Total current assets .......................      46,117        46,656
                                                       ------------  ------------

Property and equipment, net ..........................       8,480         9,533
Goodwill, net ........................................      21,179        21,179
Other assets .........................................         145           145
                                                       ------------  ------------
          Total assets ............................... $    75,921   $    77,513
                                                       ============  ============

         Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable ................................... $     3,255   $     4,004
  Accrued expenses ...................................       3,963         4,162
  Deferred revenue ...................................         258           296
                                                       ------------  ------------
          Total current liabilities ..................       7,476         8,462
                                                       ------------  ------------

Stockholders' equity
  Preferred stock ....................................         --            --
  Common stock .......................................         169           168
  Additional paid-in capital .........................     320,134       319,940
  Contribution receivable ............................      (5,049)       (9,899)
  Accumulated deficit ................................    (246,809)     (241,158)
                                                       ------------  ------------
          Total stockholders' equity .................      68,445        69,051
                                                       ------------  ------------
          Total liabilities and
             stockholders' equity .................... $    75,921   $    77,513
                                                       ============  ============`



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



---

MarketWatch.com, Inc.

Unaudited Condensed Statements of Operations

(in thousands, except per share data)



`Three Months Ended
                                           March 31,
                                    ---------------------
                                       2002       2001
                                    ---------- ----------
Net revenues:
  Advertising...................... $   2,904  $   5,179
  Licensing........................     6,246      5,865
  Other............................       666        769
                                    ---------- ----------
       Total net revenues..........     9,816     11,813
Cost of revenues...................     3,874      4,810
                                    ---------- ----------
       Gross profit................     5,942      7,003
                                    ---------- ----------
Operating expenses:
  Product development..............     1,431      2,485
  General and administrative.......     2,825      3,645
  Sales and marketing..............     7,519      7,538
  Amortization of goodwill
    and intangibles................        --     12,801
                                    ---------- ----------
       Total operating expenses....    11,775     26,649
                                    ---------- ----------
Loss from operations...............    (5,833)   (19,466)
Interest income ...................       182        602
Loss in joint venture..............        --     (1,055)
                                    ---------- ----------
Net loss........................... $  (5,651) $ (19,919)
                                    ========== ==========
Basic and diluted net loss per
  share............................ $   (0.34) $   (1.20)
                                    ========== ==========
Shares used in the calculation
  of basic and diluted net loss
  per share........................    16,792     16,573
                                    ========== ==========`

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

---

MarketWatch.com, Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)



`Three Months Ended
                                                             March 31,
                                                     ------------------------
                                                         2002          2001
                                                     -----------  -----------
Cash flows used in operating activities:
  Net loss.......................................... $   (5,651)  $  (19,919)
  Adjustments to reconcile net loss to net
     cash used in operating activities:
     Provision for bad debt.........................         --          405
     Depreciation and amortization..................      1,205       14,147
     Loss in joint venture..........................         --        1,055
     Noncash charges from stockholder...............      4,850        1,317
     Changes in operating assets and liabilities:
       Accounts receivable..........................        919        1,829
       Prepaid expenses and other assets............       (659)          (4)
       Accounts payable and accrued expenses........       (948)      (1,369)
       Deferred revenue.............................        (38)        (193)
                                                     -----------  -----------
        Net cash used in operating activities.......       (322)      (2,346)
                                                     -----------  -----------
Cash flows used in investing activities:
  Purchase of property and equipment................       (152)      (1,743)
  Investment in joint venture.......................         --       (1,476)
                                                     -----------  -----------
        Net cash used in investing activities.......       (152)      (3,219)

                                                     -----------  -----------
Cash flows provided by financing activities:
  Issuance of common stock..........................        195          279
                                                     -----------  -----------
        Net cash provided by financing activities...        195          279
                                                     -----------  -----------
Net change in cash..................................       (279)      (5,286)
Cash and cash equivalents at the beginning
  of the period.....................................     37,637       45,356
                                                     -----------  -----------
Cash and cash equivalents at the end of the period.. $   37,358   $   40,070
                                                     ===========  ===========`

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



---

MARKETWATCH.COM, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)



Note 1 - Organization and Nature of Business

Basis of Presentation

The interim financial data as of March 31, 2002 and for the three months
ended March 31, 2002 and 2001 is unaudited; however, in the opinion of
MarketWatch.com, Inc. (the "Company"), the interim data includes all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the results for the interim periods. The results of operations
for such periods are not necessarily indicative of the results expected for a
full year or for any future period. These financial statements should be read in
conjunction with the financial statements and related notes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001.

The Company

The Company, a leading provider of comprehensive, real-time business
news, financial programming and analytic tools, was formed on October 29, 1997
in the state of Delaware as a limited liability company and was jointly owned by
Data Broadcasting Corporation, now known as Interactive Data Corporation ("IDC")
and CBS Broadcasting Inc. ("CBS"), with each owning a 50% interest in the
Company. In January 1999, the Company converted into a corporation and completed
an initial public offering of 3,162,500 shares of common stock. In February
2000, DBC completed a merger with the specialist asset valuation business, or
the FTAM, of the Financial Times Group, which is a part of Pearson, plc. Upon
the closing of the merger, the Financial Times Group transferred the FTAM to DBC
in exchange for approximately 60% of the outstanding common stock of DBC. In
January 2001, an affiliate of Pearson plc acquired DBC's 34.1% stake in
MarketWatch.com, Inc.

Note 2 - Recent Accounting Pronouncements

On July 20, 2001, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 141,
("SFAS No. 141"), "Business Combinations", and Statement of
Financial Accounting Standards No. 142, ("SFAS No. 142"),
"Goodwill and Other Intangible Assets". These statements made
significant changes to the accounting for business combinations, goodwill, and
intangible assets.

SFAS No. 141 established new standards for accounting and reporting
requirements for business combinations and requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
SFAS No. 142 established new standards for goodwill acquired in a business
combination, eliminates amortization of goodwill and instead sets forth methods
to periodically evaluate goodwill for impairment. Intangible assets with a
determinable useful life will continue to be amortized over that period. The
Company adopted the provisions of SFAS No. 142 on January 1, 2002. As a result,
the Company has ceased amortization of $21.2 million in goodwill.

On October 3, 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, ("SFAS No. 144"), "Accounting for the Impairment or
Disposal of Long-Lived Assets". SFAS No. 144 supercedes Statement of Financial
Accounting Standards No. 121, (SFAS No. 121), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 144
applies to all long-lived assets (including discontinued operations) and
consequently amends Accounting Principles Board Opinion No. 30 (APB 30),
Reporting Results of Operations Reporting the Effects of Disposal of a Segment
of a Business. SFAS No. 144 develops one accounting model for long-lived assets
that are to be disposed of by sale. SFAS No. 144 requires that long-lived assets
that are to be disposed of by sale be measured at the lower of book value or
fair value less the cost to sell. The Company adopted the provisions of SFAS No.
144 on January 1, 2002 and the adoption did not have a material effect on its
results of operations or financial position.

Note 3 - Net Loss Per Share

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

Options to purchase 2,535,102 and 2,902,111 shares of common stock were
outstanding at March 31, 2002 and 2001, respectively, but were not included in
the computation of diluted net loss per share because either the options'
exercise price was greater than the average market price of the common shares
during the period or inclusion of such options would have been anti-
dilutive.

Note 4 - Related Party Transactions

Under its license agreement with CBS, the Company expensed $412,000 and
$580,000 for the three months ended March 31, 2002 and 2001, respectively,
related to licensing of CBS news content and trademarks. In addition, the
Company has recorded advertising expenses of $4.9 million and $1.3 million at
rate card value for the three months ended March 31, 2002 and 2001,
respectively, for advertising and promotion provided by CBS. Rental payments to
CBS for leasing of certain facilities were $273,000 and $268,000 for the three
months ended March 31, 2002 and March 31, 2001, respectively.

Licensing revenues from IDC were $300,000 and $434,000 for the three months
ended March 31, 2002 and 2001, respectively. In addition, the Company recognized
revenues of $409,000 and $686,000 for the three months ended March 31, 2002 and
2001, respectively, from television and radio programming on CBS stations, and
costs to CBS of $300,000 and $363,000 for the three months ended March 31, 2002
and 2001, respectively, for production of the television programming.

IDC purchased $25,000 and $33,000 for the three months ended March 31, 2002
and 2001, respectively, of advertising under an insertion order.

At March 31, 2002 and 2001, $770,000 and $1.3 million, respectively, were
included in accounts receivable for radio and television revenue due from CBS.
In addition, $339,000 and $818,000, respectively, were included in the Company's
accounts receivable related to license and subscription revenues due from IDC.
At March 31, 2002 and 2001, the Company had a liability of $412,000 and
$580,000, respectively, owed to CBS for royalty fees.

Direct charges for subscription revenues for certain IDC data feeds were
$20,000 and $55,000 for the three months ended March 31, 2002 and 2001,
respectively. Under the terms of the Amended and Restated Services Agreement,
IDC agreed to provide the Company with certain general services including
accounting, network operations, hosting of the Company's Web pages and data
feeds. Allocated charges for these services totaled $0 and $106,000 for the
three months ended March 31, 2002 and 2001, respectively.

An executive of the Company was also a member of the Board of Directors of a
customer. For the three months ended March 31, 2001, $80,000 of advertising
revenues were attributable to this customer.

Note 5 - Restructuring Charges

In the second quarter of 2001, the Company implemented a plan to reduce
costs and improve operating efficiencies by discontinuing initiatives and
enhancements of our wireless and broadband businesses, and recorded a
restructuring charge of $1.4 million. The restructuring charge consisted
primarily of severance and benefits of $300,000 related to the involuntary
termination of approximately 35 employees; the estimated lease costs of $510,000
pertaining to future obligations for non-cancelable lease payments for excess
facilities; and the write-off of leasehold improvements, furniture and fixtures,
software and computer equipment with a net book value of $530,000. The assets
were taken out of service as they were deemed unnecessary due to the reductions
in workforce. In addition, the Company accrued for legal and consulting costs of
$70,000 related to the restructuring. As of March 31, 2002 $294,000 remains for
lease costs and other expenses.  The remaining accrual will be paid in cash and
the restructuring will be complete by December 31, 2003.

Note 6 - Change in Accounting for Goodwill and Certain Other
Intangibles

In accordance with SFAS No. 142, goodwill amortization was discontinued
as of January 1, 2002.  The carrying amount of goodwill at March 31, 2002
totaled $21.2 million.  SFAS No. 142 prescribes a two-phase process for
impairment testing of goodwill. The first phase screens for impairment; while
the second phase (if necessary), measures the impairment. The Company completed
its first phase impairment analysis during the current quarter and found no
instances of impairment of its recorded goodwill; accordingly, the second
testing phase, absent future indicators of impairment, is not necessary during
2002.

In accordance with SFAS No. 142, the effect of this accounting change is
reflected prospectively. Supplemental comparative disclosure as if the change
had been retroactively applied to the prior year period is as follows (in
thousands, except per share amounts):

`For the
                                                        Three Months Ended
                                                             March 31,
                                                     ------------------------
                                                         2002          2001
                                                     ------------------------
Reported net loss                                    $   (5,651)  $  (19,919)
Addback: Goodwill amortization                                        12,708
Addback: Intangibles amortization                                         93
                                                     ------------------------
Adjusted net loss                                    $   (5,651)  $   (7,118)
                                                     ------------------------

Basic and diluted net loss per share:

  Reported net loss per share                        $    (0.34)  $    (1.20)
  Goodwill amortization                                                  .77
  Intangibles amortization                                              0.01
                                                     ------------------------
  Adjusted net loss per share                        $    (0.34)  $    (0.42)
                                                     ------------------------`

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS

This report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including, without limitation, statements regarding our
expectations, beliefs, intentions or future strategies that are signified by the
words "expects", "anticipates", "intends", "believes", or similar language. All
forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements. In evaluating our business,
prospective investors should carefully consider the information set forth below
under the caption "Factors That May Affect Our Operating Results" in addition to
the other information set forth herein. We caution investors that our business
and financial performance are subject to substantial risks and
uncertainties.

Overview

We completed our initial public offering in January 1999. Prior to
our initial public offering, we were a joint venture owned 50% each by DBC, now
IDC, and CBS, and were formed as a limited liability company in October 1997. We
were formed as the successor to DBC's Online/News Business, which commenced
operations in October 1995. Immediately prior to the closing of our initial
public offering, we were re-organized from a limited liability company into a
corporation.

Since our formation, we have operated as a provider of business news,
financial programming and analytic tools, with services including news articles,
feature columns and analytic tools, such as stock quotes and charting. Most of
these services are available free of charge. We sell advertising banners and
sponsorships on our Web sites; license our content and tools to electronic
brokers, financial publishers and portals; generate revenue from advertising
through our television and radio programs; and sell subscriptions to certain IDC
products.

We have several agreements with CBS and IDC that include the following:

- Upon our formation into a corporation, CBS agreed to contribute $30.0
million in advertising valued at rate card through October 2002. The $30.0
million contribution was delivered in full by June 30, 2000;
- CBS licenses its trademark and certain news content to us for royalties
approximating 8% of all of our net revenues other than revenue attributable to
IDC and certain other revenue. The license agreement expires in October 2005;
- IDC provided us with part of our Web site infrastructure and certain
operational and administrative services at IDC's cost. IDC's service obligation
expires on October 29, 2005. In addition, IDC pays us a monthly, per subscriber
fee for delivery of our news to IDC subscribers, subject to a minimum payment of
$100,000 per month. This obligation will expire in October 2002; and
- In May 2000, CBS contributed an additional $30.0 million in rate card
advertising and promotion to be delivered between March 1, 2000 and December 31,
2002. CBS has delivered $25.0 million of the additional $30.0 million in
advertising as of March 31, 2002.

In January 2000, we entered into a joint venture agreement with the Financial
Times Group, a part of Pearson plc, to establish Financial Times Marketwatch.com
(Europe) Limited, an Internet-based provider of real-time business news,
financial programming and analytical tools. In November 2001, we signed a sale
and purchase agreement with the Financial Times Group to transfer our ownership
of the joint venture to the Financial Times Group. As part of the ownership
transfer, we signed a transitional services agreement with the Financial Times
Group under which we would migrate the technology developed for the joint
venture Web site to the Financial Times Group for a fee. The agreement also
assigned certain equipment to us that was owned by the joint venture. In
addition, we signed a license agreement with the Financial Times Group under
which we will provide certain content and tools for a monthly fee. Our portion
of the loss in the joint venture was $1.1 million for the three months ended
March 31, 2001.

In January 2001, an affiliate of Pearson, plc acquired a stake in
MarketWatch.com, Inc. and held 33.5% of our outstanding common stock as of March
31, 2002.

Our ability to generate significant revenue or reach profitability in the
future is uncertain. Further, in view of the rapidly evolving nature of our
business and the volatile advertising market, we have little experience
forecasting our revenues. Therefore, we believe that period-to-period
comparisons of our financial results are not necessarily meaningful and you
should not rely upon them as an indication of our future performance. To date,
we have incurred substantial costs to create, introduce and enhance our
services, to develop content, to build brand awareness and to grow our business.
As a result, we have incurred operating losses in each fiscal quarter since we
were formed. We may continue to experience operating losses in the future. We
may also incur additional costs and expenses related to content creation,
technology, marketing or acquisitions of businesses and technologies to respond
to changes in our rapidly changing industry. These costs could have an adverse
effect on our future financial condition or operating results.

Results of Operations

Net Revenues

Net revenues are derived from the licensing of our content, sale of
advertising on our Web sites, distribution of television and radio broadcasts,
subscription sales of IDC products, and the sale of news to IDC, CBS and other
customers.  Net revenues decreased by 17% to $9.8 million for the three months
ended March 31, 2002 from $11.8 million for the three months ended March 31,
2001.  The decrease is a result of a reduction in advertising revenue partially
offset by an increase in licensing revenue. Advertising revenue declined due to
a decrease in the number of advertisers on our Web sites and smaller advertising
buys from some existing customers. We believe that spending by our customers on
Web advertising has primarily decreased in response to generally uncertain
economic conditions. We cannot assure you that our customers will continue to
purchase advertising on our Web sites at historic levels or at all, or that we
will obtain new customers.

Substantially all of our advertising customers purchase advertising under
short-term contracts. Customers can and have ceased advertising on short notice
without penalty. Advertising revenues would be adversely affected if we were
unable to renew advertising contracts with existing customers or obtain new
customers. We expect to continue to derive a significant amount of our future
net revenues from selling advertisements. The market for Web advertising is
intensely competitive and has experienced a recent significant softening in
demand, therefore advertising rates could be subject to pricing pressure in the
future. If we are forced to reduce our advertising rates or we experience lower
CPM's (cost per thousand page views) across our Web sites for any reason, future
advertising revenues could be adversely affected.

The increase in license revenue was caused by several interrelated factors
including an increase in the number of licensees, the increase in license
products available and the increased size and productivity of our sales force.

License revenues depend on customer contract renewals and could decrease if
customers choose to renew for lesser amounts, terminate early or forego renewal,
or we do not obtain new customers. A significant amount of our license revenue
is earned from brokerages and financial service companies. The amount of license
revenues depends on the number of users these customers have each month. If the
number of users were to decrease, our license revenue would decrease. The growth
of our license revenues could also be limited as there are a limited number of
brokerages and financial service companies to license our content. In addition,
certain license contracts guarantee the performance of our Web sites. If our
sites do not perform as guaranteed, license revenue would be adversely
affected.

Cost of Revenues

Cost of revenues primarily consists of costs related to advertising and
news, including compensation, royalties payable to CBS and content providers,
bandwidth costs associated with serving pages on our Web properties, fees paid
for data, amortization of intangibles associated with the purchase of BigCharts,
Web site infrastructure costs, costs of serving ads, costs related to license
revenues including bandwidth and data fees, and costs related to subscriptions
including exchange fees and communication lines.

Cost of revenues decreased by 19% to $3.9 million for the three months ended
March 31, 2002 from $4.8 million for the three months ended March 31, 2001. Cost
of revenues decreased primarily due to the decrease in news production personnel
and CBS production costs, a decrease in the royalties payable due to CBS
resulting from decreased revenues, a decrease in data source fees and a decrease
in ad serving costs due to the change from outside ad serving fees to the
internal use of an ad serving software solution.  As a percentage of net
revenues, cost of revenues were 39% and 41% for the three months ended March 31,
2002 and March 31, 2001, respectively.

Product Development

Product development expenses primarily consist of data source fees,
compensation and benefits for Web site developers, designers and engineers to
maintain the sites and software engineers, and expenses for contract programmers
and developers.  Product development expenses decreased by 44% to $1.4 million
for the three months ended March 31, 2002 from $2.5 million for the three months
ended March 31, 2001. Product development expenses decreased due to a decrease
in personnel costs and data source fees as a result of  renegotiated vendor
contracts.  Product development expenses were 15% and 21% of net revenues for
the three months ended March 31, 2002 and March 31, 2001, respectively.

General and Administrative

General and administrative expenses primarily consist of compensation and
benefits for finance, business development and administrative personnel,
occupancy costs, professional fees, depreciation charges and charges for bad
debt. General and administrative expenses decreased by 22% to $2.8 million for
the three months ended March 31, 2002 from $3.6 million for the three months
ended March 31, 2001. General and administrative expenses decreased due
primarily to a decrease in headcount, bad debt, travel and consulting expenses.
As a percentage of net revenues, general and administrative costs were 29% and
31% for the three months ended March 31, 2002 and March 31, 2001, respectively.

Sales and Marketing

Sales and marketing expenses primarily consist of promotion and
advertising provided by CBS, online and offline advertisements, promotional
materials, compensation, benefits and sales commissions to our direct sales
force. Sales and marketing expenses were $7.5 million for the three months ended
March 31, 2002 and 2001. An increase in CBS in-kind advertising in the current
quarter was offset by a decrease in cash advertising and compensation expense.
As a percentage of net revenues, sales and marketing expenses were 77% and 64%
for the three months ended March 31, 2002 and March 31, 2001, respectively.

Amortization of Intangibles

Of the $157.5 million purchase price for BigCharts, $152.5 million
was allocated to goodwill, which was being amortized over 3 years, and $3.6
million was allocated to intangible assets, which was being amortized over
periods ranging from 1.5 to 3.5 years. On January 1, 2002, we adopted SFAS 142
and ceased amortization of our goodwill balance and instead periodically
evaluate goodwill for impairment.

2001 Restructuring Plan

In response to the continuing economic slowdown, we implemented a
plan in the second quarter of 2001 to reduce costs and improve operating
efficiencies by discontinuing initiatives and enhancement of our wireless and
broadband businesses. We recorded a restructuring charge of $1.4 million
consisting primarily of severance and benefits of $300,000 related to the
involuntary termination of approximately 35 employees; lease costs of $510,000
pertaining to the estimated future obligations for non-cancelable lease payments
for excess facilities in California, New York and Minnesota that were vacated
due to the reductions in workforce; write-off of leasehold improvements,
furniture and fixtures, software and computer equipment with a net book value
totaling $530,000; and legal and consulting costs of $70,000 related to the
restructuring. At March 31, 2002, we had $294,000 remaining in our restructuring
accrual.  The remaining accrual will be paid in cash and the restructuring will
be complete by December 31, 2003.

Interest Income

Interest income of $182,000 for the three months ended March 31, 2002
and $602,000 for the three months ended March 31, 2001, resulted from interest
earned on the proceeds from additional financing from CBS and DBC received on
May 5, 2000. Interest income for the three months ended March 31, 2002 decreased
as a result of continued depletion of proceeds and a decline in returns due to
the current market conditions.

Loss of Joint Venture

In November 2001, we signed a sale and purchase agreement with the
Financial Times Group to transfer our ownership of the joint venture to the
Financial Times Group.  Prior to the signing of the agreement, we recorded 50%
of the loss incurred by FTMarketWatch.com based on our ownership in the joint
venture through August 31, 2001. Our portion of the loss was $1.1 million for
the three months ended March 31, 2001.

Liquidity and Capital Resources

Since inception on October 29, 1997, we have funded our operations primarily
from cash contributed and advanced by DBC and CBS, revenues from advertising and
licensing sales and the proceeds from our initial public offering. Our cash,
cash equivalents and short term investments totaled $37.4 million at March 31,
2002, compared to $37.6 million at December 31, 2001.

Cash used in operating activities was $322,000 for the quarter ended March
31, 2002, primarily due to a net loss of $5.7 million, offset by non-cash
charges of  $4.9 million in advertising provided by CBS and $1.2 million in
depreciation and amortization of property and equipment.  Significant uses of
cash in operations for the quarter ended March 31, 2001 included a decrease in
accounts payable and accrued expenses and an increase in prepaid expenses offset
by a decrease in accounts receivable.

Cash used in operating activities was $2.3 million for the quarter ended
March 31, 2001, primarily due to a net loss of $19.9 million, offset by non-cash
charges of  $14.1 million in depreciation and amortization of goodwill,
intangibles and property and equipment, $1.3 million in advertising provided by
CBS and the loss in the joint venture of $1.1 million.  Significant uses of cash
in operations for the quarter ended March 31, 2001 included a decrease in
accounts payable and accrued expenses offset by a decrease in accounts
receivable.

Cash used in investing activities was $152,000 for the quarter ended March
31, 2002 and consisted of capital expenditures for purchases of computer
hardware and leasehold improvements related to leased facilities.

Cash used in investing activities was $3.2 million for the quarter ended
March 31, 2001 and consisted of capital expenditures and the investment in our
joint venture with the Financial Times Group. Capital expenditures have
generally consisted of purchases of leasehold improvements related to leased
facilities and computer hardware.

Cash provided by financing activities was $195,000 for the quarter ended
March 31, 2002 and primarily reflected proceeds from the sale of common stock
through the employee stock purchase plan in February 2002.

Cash provided by financing activities was $279,000 for the quarter ended
March 31, 2001 and primarily reflected proceeds from the sale of common stock
through the employee stock purchase plan in February 2001.

As of March 31, 2002, commitments under noncancellable operating leases
totaled $12.2 million through December 31, 2010. We have entered into certain
agreements with America Online, Inc., or AOL, to make payments for advertising
and slotting over the next two years. As of March 31, 2002, we are committed to
pay $2.3 million to AOL over the next two years.

We believe our current cash position will be sufficient to meet our
anticipated needs for working capital and capital expenditures for at least the
next 12 months. We may need to raise funds sooner if we acquire any additional
businesses, products or technologies. If additional funds were raised through
the issuance of equity securities, the percentage ownership of our then-current
stockholders would be reduced. However, if CBS or Pearson elects to maintain its
percentage interest pursuant to the exercise of the purchase right under its
stockholders' agreements, then CBS or Pearson would not necessarily suffer a
reduction in its ownership. Furthermore, such equity securities might have
rights, preferences, or privileges senior to those of our common stock.

Factors that May Affect Our Operating Results

We May Experience Potential Fluctuations in Our Quarterly Operating
Results, and Face Unpredictability of Future Revenue, and Continue to Incur
Losses in the Future

Our quarterly operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside our control.
These factors include:

- Fluctuations in traffic levels on our Web sites, which can be significant as
a result of business, financial and other news events;
- Weakening demand for advertising on our Web sites as well as on the Web in
general;
- Reductions in rates paid for Web advertising resulting from softening
demand, competition or other factors;
- Changes in demand for licenses of our technology and news;
- The ability to develop new products and services;
- Our ability to enter into or renew on favorable terms our marketing and
distribution agreements;
- The amount and timing of our costs related to our marketing efforts or other
initiatives;
- The amount and timing of costs related to our new product development
efforts;
- Fees we may pay for distribution or content agreements or other costs we
incur;
- New services introduced by us or our competitors;
- The level of Web usage;
- Competitive factors;
- Costs associated with restructuring activity;
- Technical difficulties or system downtime affecting the Web generally or the
operation of our Web sites; or
- Economic conditions specific to the Web as well as general economic
conditions.

We have incurred operating losses in each fiscal quarter since we were
formed. We may continue to experience operating losses in the future. Although
we became operating cash flow positive for the first time in the fourth quarter
of 2001, you should not rely on the results for that quarter as an indication of
future performance. In particular, given the general economic uncertainty and
the softening of the advertising market, we may not remain cash flow positive
for fiscal 2002 or any particular quarter in fiscal 2002.

Over time, our revenues have come from a mix of advertising, content
licensing, broadcasting and subscription service fees. Our revenue has declined
over the past year primarily due to decreased spending by companies on Web
advertising together with increasingly uncertain economic and market conditions.
We expect our quarterly revenues and operating results to be particularly
affected by the changes in the level of our advertising revenue in each quarter.
Our operating expenses are based on our expectations of our future revenues and
are relatively fixed in the short term. If we have lower revenues than we
expect, we may not be able to quickly reduce our spending in response. Any
shortfall in our revenues would have a direct impact on our operating results
for a particular quarter and these fluctuations could affect the market price of
our common stock in a manner unrelated to our long-term operating performance.

We believe that traffic levels on our Web sites typically fluctuate with the
occurrence of significant events in business, financial and other news, such as
fluctuations in the stock markets, which could cause changes in our audience
size.

We Depend on the Sale of Advertisements on Our Web Sites, and If Demand
for Web Advertising Continues to Soften, Our Business Would Be Harmed

We expect to derive a substantial amount of our revenues from advertising
for the foreseeable future. Over the last year, we and other Web advertisers
have experienced a significant softening in demand for our advertising services
due to decreased spending on Web advertising by companies and due to general
uncertainty in the economy. We expect this reduced demand to continue for the
foreseeable future. This continued decline would substantially harm our business
and could result in a further decline in the trading price of our common stock.

Furthermore, we also must compete with traditional advertising media, such as
print, radio and television, for a share of advertisers' total advertising
budgets. We would lose revenue if the Web were not perceived as an effective
advertising medium. Also, advertisers that have traditionally relied upon other
advertising media may be reluctant to advertise on the Web especially given the
general uncertainty in the economy. Advertisers that already have invested
substantial resources in other advertising methods may be reluctant to adopt a
new advertising strategy and may find it more difficult to measure the
effectiveness of Web advertising. In addition, our advertising packages are sold
in campaigns ranging from less than two weeks to a year or more. Advertisers
generally have the right to cancel a campaign with two weeks notice without
penalty. Therefore, advertising revenues would be adversely affected if we fail
to offer a desirable opportunity for on-line advertising.

Moreover, a significant portion of our advertising revenue comes from
Internet commerce and financial services companies which have been adversely
affected by the recent market downturn. If we do not diversify our advertiser
base and continue to attract advertisers from other industries, our business
could be adversely affected.

We Rely Significantly on Revenue from Advertising, Which Is Difficult to
Forecast Accurately

Currently, a significant amount of our revenues come from advertisements
displayed on our Web sites. We derive the majority of our revenues from the sale
of advertisements under short-term contracts, which are difficult to forecast
accurately. In addition, our advertising packages are sold in campaigns ranging
from less than two weeks to a year or more. Advertisers generally have the right
to cancel a campaign with two weeks notice without penalty. In cases where the
advertiser is providing services, the agreements often have payments contingent
on usage levels. Some of our advertisers are Internet companies which, in
certain cases, may lack financial resources to fulfill their commitments.
Accordingly, it is difficult to accurately forecast these revenues. However, our
expense levels are based in part on expectations of future revenues and are
fixed over the short term with respect to certain categories. We may be unable
to adjust spending quickly enough to compensate for any unexpected revenue
shortfall. Accordingly, the cancellation or deferral of advertising agreements
could have a material adverse effect on our financial results.

No Standard Has Been Widely Accepted to Measure the Effectiveness of Web
Advertisement and Changes in Current Pricing Models Could Seriously Harm Our
Operating Results

Different pricing models are used to sell advertising on the Web. It is
difficult to predict which, if any, will emerge as the industry standard. This
makes it difficult to project our future advertising rates and revenues. For
example, advertising rates based on the number of "click throughs," or user
requests for additional information made by clicking on the advertisement,
instead of rates based solely on the number of impressions, or times an
advertisement is displayed, could adversely affect our revenues because
impression-based advertising comprises a substantial majority of our current
advertising revenues. In addition, our advertising revenues could be adversely
affected if we are unable to adapt to new forms of Web advertising. Moreover,
"filter" software programs that limit or prevent advertising from being
delivered to a Web user's computer are available. Widespread adoption of this
software could adversely affect the commercial viability of Web advertising.

We Depend on License Revenues, and If License Revenues Were to Decline,
Our Business Would Be Harmed

We expect to derive a substantial amount of our revenues from licensing
of our content for the foreseeable future. License revenues depend on new
customer contracts and customer contract renewals and could decrease if new
business is not found or customers choose to renew for lesser amounts, terminate
early or forego renewal. We derive a significant percentage of our licensing
revenue from a small number of large clients. Also, a significant amount of our
license revenues is earned from brokerages and financial service companies. The
amount of license revenues depends on the number of users these customers have
each month. If the number of users were to decrease, our license revenues would
decrease. The growth of our license revenues could also be limited as there are
a limited number of brokerages and financial service companies. Further, the
existing brokerage and financial service companies may merge which would further
reduce the number of customers. In addition, certain license contracts guarantee
the performance of our Web sites. If our sites do not perform as guaranteed,
license revenue would be adversely affected.

Moreover, a substantial portion of our license revenue comes from Internet
commerce and financial services companies, which have been adversely affected by
the recent market downturn. If we do not diversify our client base and continue
to attract customers from other industries, our business could be adversely
affected.

Because We Depend on CBS and Pearson for a Number of Services and Other
Rights, Our Business Would Be Materially Adversely Affected if Either One of
Them Terminates Their Strategic Relationships With Us

Pursuant to our license agreement with CBS, we were granted the right to
use the CBS name and logo, as well as CBS Television Network news content in
connection with the CBS MarketWatch.com Web site. This license agreement will
expire on October 29, 2005 and CBS has no obligation to renew it. Also, under
specific circumstances, CBS may terminate the license agreement earlier. If we
are not able to renew our license agreement with CBS or CBS terminates the
license agreement earlier than October 29, 2005, we would need to change the
name of our Web site and devote substantial resources towards building a new
brand name. Regardless of such expenditures, we may not be able to continue to
attract a sufficient amount of user traffic and advertisers to our Web sites
without the CBS name and logo or promotion from CBS.

Moreover, we are subject to a number of restrictions in consideration for the
license grant and provision of news content from CBS. For example, CBS can
require us to remove any content on our Web sites that it determines conflicts,
interferes with or is detrimental to its reputation or business or which CBS
deems inappropriate. We are also required to conform to CBS's guidelines for the
use of its trademarks. CBS has the right to approve all materials, such as
marketing materials, that include any CBS trademarks. CBS also has control over
the visual and editorial presentation of its television news content on our Web
sites. Because of these restrictions, we may not be able to perform our desired
marketing activities. However, if we fail to comply with these restrictions, CBS
may terminate the license agreement.

Similarly, pursuant to the service agreement, Pearson provides us with real-
time financial data for dissemination to subscribers of certain of
MarketWatch.com subscription services. If Pearson suspends delivery of delayed
financial data or fails to provide such financial data satisfactorily, we would
be required to perform these services ourselves or obtain these services from
another provider. Replacing these services could cause us to incur additional
costs. We may not be able to replace these services on commercially reasonable
terms or, if we choose to perform these services ourselves, we may not be able
to perform them adequately. During any such transition, our services could be
disrupted for an indefinite period of time and, as a result, we could lose a
substantial number of users and advertisers.

The Interests of CBS and Pearson Could Conflict with the Interests of Our
Stockholders and Given Their Substantial Stock Ownership in the Company, We May
Not Be Able to Resolve Any Future Conflict with Either of Them on Terms
Favorable to Us

CBS and Pearson may experience conflicts of interest in their business
dealings with us with respect to decisions involving business opportunities and
other similar matters. For example:

- CBS could license its name and logo to other Web sites or Internet services
that deliver general news, sports and entertainment. These sites or services
could also offer financial news, as long as delivering comprehensive stock
quotes and financial news to consumers in the English language is not their
primary function and their principal theme and format;
- Pearson may provide hosting services to other Web sites;
- Pearson could also establish an advertising-supported Web site that does not
have as its primary function and its principal theme and format the delivery of
financial news and stock quotes;
- CBS or Pearson could license their respective content to other Web sites or
Internet services; or
- CBS or Pearson could make certain investments in other Web sites or Internet
services.

The occurrence of any of the above actions could adversely affect our
business. For example, these sites or services supported by CBS or Pearson could
compete with us or CBS and Pearson might promote these other sites or services
more actively than they promote our Web sites.

We Depend on Our Strategic Relationships with Other Web Sites

We depend on establishing and maintaining distribution relationships with
high-traffic Web sites for a portion of our traffic. There is
intense competition for placements on these sites, and we may not be able to
enter into such relationships on commercially reasonable terms, if at all. Even
if we enter into distribution relationships with these Web sites, they
themselves may not attract significant numbers of users. Therefore, our sites
may not receive additional users from these relationships. Moreover, we may have
to pay significant fees to establish these relationships and continue to pay
significant fees to maintain these types of relationships.

Occasionally, we enter into agreements with advertisers, content providers or
other high-traffic Web sites that require us to exclusively feature these
parties in certain sections of our Web sites. Existing and future exclusivity
arrangements may prevent us from entering into other content agreements,
advertising or sponsorship arrangements or other strategic relationships. Many
companies we may pursue for a strategic relationship also offer competing
services. As a result, these competitors may be reluctant to enter into
strategic relationships with us. Our business could be adversely affected if we
do not establish and maintain additional strategic relationships on commercially
reasonable terms or if any of our strategic relationships do not result in
increased use of our Web sites.

We Are in a Highly Competitive Industry and Some of Our Competitors May Be
More Successful in Attracting and Retaining Customers

The market for Web services and products is relatively new, intensely
competitive and rapidly changing.  The number of Web sites on the Internet
competing for consumers' attention and spending has proliferated and we expect
that competition will continue to intensify.  We compete, directly and
indirectly, for advertisers, viewers, members and content licensing clients with
the following categories of companies:

- publishers and distributors of traditional off-line media, such as
television, radio and print, including those targeted to business, finance and
investing needs, many of which have established or may establish Web sites, such
as The Wall Street Journal and CNN;
- general purpose consumer online services such as AOL and Microsoft Network,
each of which provides access to financial and business-related content and
services;
- Web sites targeted to business, finance and investing needs, such as
TheStreet.com and Motley Fool; and
- Web search and retrieval and other online services, such as Lycos, Yahoo!,
and other high-traffic Web sites, which offer quotes, financial news and other
programming and links to other business and finance-related Web sites.
- data companies that provide value-added tools, including charts, portfolios,
and stock screeners, such as Reuters and Thomson;
- providers of standardized and customized investment research tools, such as
ScreamingMedia and SmartMoney.

We anticipate that the number of direct and indirect competitors will
increase in the future.  This could result in price reductions for our
advertising and licensing products, reduced margins, greater operating losses or
loss of market share, any of which would materially adversely affect our
business, results of operations and financial condition.  In addition, many of
our existing competitors, as well as a number of potential new competitors, have
longer operating histories in the Web market, greater name recognition, larger
customer bases, higher amounts of user traffic and significantly greater
financial, technical and marketing resources.  Such competitors may be able to
undertake more extensive marketing campaigns, adopt more aggressive pricing
policies, make more attractive offers to potential employees, distribution
partners, advertisers and content providers and may be able to respond more
quickly to new or emerging technologies and changes in Web user requirements.
Further, we cannot assure you that they will not develop services that are equal
or superior to ours or that achieve greater market acceptance than our
offerings.  Increased competition could also result in price reductions, reduced
margins or loss of market share, any of which could seriously harm our business,
results of operations and financial condition.

Our Intellectual Property Rights Are Costly and Difficult to Protect.  We
May be Subject to Intellectual Property Infringement Claims, Which Are Costly to
Defend and Could Limit Our Ability to Use Certain Technologies in the Future

We rely primarily on a combination of copyrights, trademarks, trade
secret laws, our user policy and restrictions on disclosure and use to protect
our intellectual property, such as our content, copyrights, trademarks, and
trade secrets.  We also enter into confidentiality agreements with our employees
and consultants, and seek to control access to and distribution of our other
proprietary information.  Despite these precautions, it may be possible for a
third-party to copy or otherwise obtain and use the content on our Web sites or
our other intellectual property without authorization.  However, these
precautions may not prevent misappropriation or infringement of our intellectual
property.  A failure to protect our intellectual property in a meaningful manner
could seriously harm our business, operating results and financial condition.
In addition, we may need to engage in litigation in order to enforce our
intellectual property rights in the future or to determine the validity and
scope of the proprietary rights of others.  Such litigation could result in
substantial costs and diversion of management and other resources, either of
which could have an adverse effect on our business, operating results and
financial condition.

We license the CBS logo, trademarks and certain news content from CBS
pursuant to the amended and restated license agreement.  This agreement could
terminate in certain circumstances and also involves a number of other
risks.

We also use certain licensed technology, data and content from third parties.
In these license agreements, the licensors have generally agreed to defend,
indemnify and hold us harmless with respect to any claim by a third-party that
the licensed software or content infringes any person's intellectual property
rights.  We cannot assure you that the outcome of any litigation between such
licensors and a third-party or between us and a third-party will not lead to
royalty obligations for which we are not indemnified or for which such
indemnification is insufficient, or that we will be able to obtain any
additional license on commercially reasonable terms, if at all.  In the future,
we may seek to license additional technology or content in order to enhance our
current features or to introduce new services, such as certain of the community
features we may introduce.  However, any such licenses may not be available on
commercially reasonable terms, if at all.  The loss of or inability to obtain or
maintain any of these technology licenses could result in delays in introduction
of new services until equivalent technology, if available, is identified,
licensed and integrated, which could harm our business, results of operations
and financial condition.

Infringement or other claims may be asserted or prosecuted against us in the
future whether resulting from our internally developed intellectual property or
licenses or content from third parties.  Any future assertions or prosecutions
could materially adversely affect our business, results of operations and
financial condition.  Any such claims, with or without merit, could be
time-consuming, result in costly litigation and diversion of technical and management
personnel or require us to introduce new content or trademarks, develop non-
infringing technology or enter into royalty or licensing agreements.  Such
royalty or licensing agreements, if required, may not be available on acceptable
terms, if at all.  In the event of a successful claim of infringement and our
failure or inability to introduce new content or trademarks, develop
non-infringing technology or license the infringed or similar technology on a timely
basis, our business, results of operations and financial condition could be
materially adversely affected.

We Depend on Third-party Software to Track and Measure the Delivery of
Advertisements and It Could Be Difficult to Replace These Services

It is important to our advertisers that we accurately measure the
demographics of our user base and the delivery of advertisements on our Web
sites. We depend on third-party software to provide these measurement services.
If the implementation of the software is unsuccessful or the third-party is
unable to provide these services in the future, we would be required to perform
them ourselves or obtain them from another provider. This could cause us to
incur additional costs or cause interruptions in our business during the time we
are replacing these services. We are implementing additional systems designed to
record demographic data on our users. If we do not develop these systems
successfully, we may not be able to accurately evaluate the demographic
characteristics of our users. Companies may not advertise on our Web sites or
may pay less for advertising if they do not perceive our measurements or
measurements made by third parties to be reliable.

Our Business Will Be Adversely Affected If We Do Not Develop and Maintain
an Effective Sales Force

We depend on our sales force to sell advertising on our Web sites and
license our content. This involves a number of risks including:

- Our sales personnel have, in a number of cases, only worked for us for a
short period of time;
- Our ability to hire, retain, integrate and motivate sales and sales support
personnel;
- The length of time it takes new sales personnel to become productive; and
- The competition we face from other companies in hiring and retaining sales
personnel.

If we are unable to attract and retain an appropriate sales force, our
revenue may fail to increase or may decline.

If We Don't Expand Our Operations Successfully, Our Business Will be
Harmed

We believe that we will need to expand our operations in order to support
our business. This expansion is likely to continue to place a significant strain
on our resources. As we grow, we may need to implement new operational systems,
procedures and controls. If we are unable to accomplish any of these, our growth
could be constrained and our business could be adversely affected.

We Must Develop New and Enhanced Services and Features for Our Web Sites

We believe that our Web sites will be more attractive to advertisers if
we develop a larger audience comprised of demographically favorable users.
Accordingly, we intend to introduce additional or enhanced services in the
future in order to retain our current users and attract new users. If we
introduce a service that is not favorably received, our current users may not
continue using our service as frequently. New users could also choose a
competitive service over ours.

We may also experience difficulties that could delay or prevent us from
introducing new services. Furthermore, these services may contain errors that
are discovered after the services are introduced. We may need to significantly
modify the design of these services on our Web site to correct these errors. Our
business could be adversely affected if we experience difficulties in
introducing new services or if users do not accept these new services.

We Depend on the Continued Growth in Use of the Web, Particularly for
Financial News and Information

Because we expect to depend significantly on advertising revenue for the
foreseeable future, our business depends on businesses and consumers continuing
to increase their use of the Web for obtaining news and financial information as
well as for conducting commercial transactions. Our advertising revenue and
therefore our business would be adversely affected if Web usage does not
continue to grow. Web usage may be inhibited for a number of reasons, such as:

- Inadequate network infrastructure;
- Security concerns;
- Inconsistent quality of service; and
- Availability of cost-effective, high-speed service.

If Web usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth or its performance and
reliability may decline. In addition, Web sites have experienced interruptions
in their service as a result of outages and other delays occurring throughout
the Internet network infrastructure. If these outages or delays frequently occur
in the future, Web usage, as well as usage of our Web sites, could grow more
slowly or decline.

We Depend on Key Personnel Who May Not Continue to Work for Us

We believe that our future success will depend in part on our continued
ability to attract, integrate, retain and motivate highly qualified sales,
technical, and managerial personnel, and upon the continued service of our
senior management and key sales and technical personnel. Although we have
employment agreements with some of our key executives, none of our personnel are
bound by an employment agreement that prevents such person from terminating his
or her relationship at any time for any reason.

At times we have experienced difficulties in
attracting new personnel. We may not successfully attract, integrate, retain and
motivate a sufficient number of qualified personnel to conduct our business in
the future.

We May Have Difficulty Scaling and Adapting Our Existing Architecture to
Accommodate Increased Traffic and Technology Advances

Our business relies on our ability to serve Web pages in a consistent and
timely manner. In the past, our Web sites have experienced significant increases
in traffic when there are significant business or financial news stories. In
addition, the number of our users has increased over time and we are seeking to
further increase our user base. If the traffic on our Web sites grows at a rate
that our current communication lines cannot support, our pages will be served at
a slower rate or we will be unable to serve pages at all. We also rely on
certain third-party providers for a significant amount of our current bandwidth
capacity. If these providers are unable to maintain their service level
agreements or we are unable to obtain additional bandwidth as our traffic grows,
our business would be adversely affected. Our Web sites have in the past and may
in the future experience slower response times and other problems for a variety
of reasons. Also, our Web sites have in the past and may in the future
experience down time and other problems due to server problems or capacity.

We also depend on multiple information providers, including but not limited
to FT Interactive Data, S&P Comstock and Dow Jones, to provide information
and data feeds on a timely basis. Our Web sites could experience disruptions or
interruptions in service due to the failure or delay in the transmission or
receipt of this information. In addition, our users depend on Internet service
providers, online service providers and other Web site operators for access to
our Web sites. Each of them has experienced significant outages in the past, and
could experience outages, delays and other difficulties due to system failures
unrelated to our systems. These types of occurrences could cause users to
perceive our Web site as not functioning properly and therefore cause them to
use other methods to obtain their business and financial news and other
information.

Our market is characterized by rapidly changing technology, evolving industry
standards and frequent new product announcements. These are exacerbated by the
recent growth of the Web and the intense competition in our industry. We may
fail to successfully adapt to our rapidly changing market by continually
improving the performance, features and reliability of our services. We could
also incur substantial costs if we need to modify our services or infrastructure
in order to adapt to these changes. Our business could be adversely affected if
we incurred significant costs without adequate results or cannot adapt to these
changes.

Unauthorized Break-Ins and Other Disruptions to Our Site Could Harm Our
Business

Our servers are vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions, which could lead to interruptions, delays or
loss of data. In addition, unauthorized persons may improperly access our data.
A number of popular Web sites have experienced attacks from "hackers" and other
intrusions. Any actions like these may harm us and may be very expensive to
remedy and could damage our reputation and discourage new and existing users
from using our site. Also, our operations are dependent upon our ability to
protect systems against damage from fire, earthquakes, power loss,
telecommunications failure, and other events beyond our control. Our insurance
policies have low coverage limits and therefore our insurance may not adequately
compensate us for any losses that may occur due to any failures or interruptions
in our systems.

Web Security Concerns Could Hinder Internet Commerce

The need to securely transmit confidential information over the Internet
has been a significant barrier to electronic commerce and communications over
the Web. Any well-publicized compromise of security could deter more people from
using the Web or from using it to conduct transactions that involve transmitting
confidential information, such as stock trades or purchases of goods or
services. Because many of our advertisers seek to advertise on our Web sites to
encourage people to use the Web to conduct financial transactions or purchase
goods or services, our business could be adversely affected. We may also incur
significant costs to protect against the threat of security breaches or to
alleviate problems caused by such breaches.

We Could Face Liability Related to Our Storage of Personal Information
About Our Users

We have a non-disclosure policy displayed on our Web sites. Our policy is
not to willfully disclose any individually identifiable information about any
user to a third-party without the user's consent. This policy is accessible to
users of our personalized services when they initially register. Despite this
policy, however, if third persons were able to penetrate our network security or
otherwise misappropriate our users' personal information or credit card
information, we could be subject to liability. These could include claims for
unauthorized purchases with credit card information, impersonation or other
similar fraud claims. They could also include claims for other misuses of
personal information, such as for unauthorized marketing purposes. These claims
could result in litigation. In addition, the Federal Trade Commission and
certain states have been investigating certain Internet companies regarding
their use of personal information. We could incur additional expenses if new
regulations regarding the use of personal information are introduced or if
federal and state agencies chose to investigate our privacy practices.

We Could Face Liability for the Information Displayed on Our Web Sites

We may be subjected to claims for defamation, negligence, copyright or
trademark infringement or based on other theories relating to the information we
publish on our Web sites. These types of claims have been brought, sometimes
successfully, against online services as well as other print publications in the
past. We could also be subjected to claims based upon the content that is
accessible from our Web sites through links to other Web sites. Moreover,
because we license some data and content from third parties, our exposure to
copyright infringement actions may increase because we must rely upon such third
parties for information as to the origin and ownership of such licensed content.
We generally obtain representations as to the origins and ownership of such
licensed content and generally obtain indemnification to cover any breach of any
such representations. However, such representations may be in error and any such
indemnification may be insufficient to provide adequate compensation for any
breach of such representations. Our insurance may not adequately protect us
against these types of claims.

Future Regulation of the Internet May Slow Its Growth, Resulting in
Decreased Demand for Our Products and Services and Increased Costs of Doing
Business

There are currently few laws or regulations that specifically regulate
communications or commerce on the Web. However, laws and regulations may be
adopted in the future that address issues such as user privacy, pricing, and the
characteristics and quality of products and services. For example, the
Telecommunications Act sought to prohibit transmitting certain types of
information and content over the Web. Several telecommunications companies have
petitioned the Federal Communications Commission to regulate Internet service
providers and online services providers in a manner similar to long distance
telephone carriers and to impose access fees on these companies. This could
increase the cost of transmitting data over the Internet. Moreover, it may take
years to determine the extent to which existing laws relating to issues such as
property ownership, libel and personal privacy are applicable to the Web. Any
new laws or regulations relating to the Web could adversely affect our business.

Terrorist Attacks and Threats or Actual War May Negatively Impact All
Aspects of Our Operations, Revenues, Costs and Stock Price

Recent terrorist attacks in the United States, as well as future events
occurring in response or connection to them, including future terrorist attacks
against United States targets, rumors or threats of war, actual conflicts
involving the United States or its allies or military disruptions may impact our
operations. For example, the disruption of the global financial markets due to
September 11th events, including the shutdown of Nasdaq and NYSE, impacted the
reporting of financial information on our Web sites. More generally, any of
these events could cause consumer confidence and spending, including spending on
the Web, to decrease, which may impact our advertising revenues. Also,
volatility in the United States and worldwide financial markets and economy have
contributed to volatility in the stock prices of United States publicly traded
companies. Further acts of terrorism and civil disturbances in the United States
or elsewhere could have a significant impact on our operating results, revenues
and costs.

We Are Involved in a Securities Class Action Litigation and Are At Risk of
Additional Similar Litigation

In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of
securities. We are a party to the securities class action litigation described
in Item 1, "Legal Proceedings." The defense of the litigation described in Item
1 may increase our expenses and divert our management's attention and resources,
and an adverse outcome in this litigation could seriously harm our business and
results of operations. In addition, we may in the future be the target of other
securities class action or similar litigation.

We Face Risks Associated with Potential Acquisitions

We have made acquisitions in the past and may make acquisitions in the
future. Acquisitions of companies, products or technologies entail numerous
risks, including an inability to successfully assimilate acquired operations and
products, diversion of management's attention, loss of key employees of acquired
companies and substantial transaction costs. Some of the services acquired may
require significant additional development before they can be marketed and may
not generate revenue at anticipated levels. Moreover, future acquisitions by us
may result in dilutive issuances of equity securities, the incurrence of
additional debt, large one-time write-offs and the creation of goodwill or other
intangible assets that could result in significant amortization expense. Any of
these problems or factors could seriously harm our business, financial condition
and operating results.

Because Two of Our Large Stockholders Beneficially Own Approximately 66%
of Our Stock, They Have Substantial Control Over the Management of Our Company
and Significant Sales of Stock Held by Them Could Have a Negative Effect on Our
Stock Price

CBS and Pearson beneficially owned approximately 66% of our outstanding
common stock as of May 1, 2002. Each of CBS and Pearson has four representatives
on our board of directors. As a result of their ownership and board positions,
CBS and Pearson individually and collectively are able to significantly
influence all matters requiring stockholder approval, including the election of
directors and approval of significant corporate transactions. Such concentration
of ownership may also have the effect of delaying or preventing a change in
control of our company. In addition, sales of significant amounts of shares held
by either of CBS or Pearson or collectively, or the prospect of these sales,
could adversely affect the market price of our common stock.

Our Common Stock Price Is Volatile and Could Fluctuate Significantly

The trading price of our stock has been and may continue to be subject to
wide fluctuations. During the last 52 week period ended March 31, 2002, the
closing sale prices of our common stock on the NASDAQ National Market ranged
from $1.26 to $4.40. On May 1, 2002, the closing sale price was $4.50. Our stock
price may fluctuate in response to a number of events and factors, such as
quarterly variations in operating results, announcements of technological
innovations or new products and media properties by us or our competitors,
changes in financial estimates and recommendations by securities analysts, the
operating and stock price performance of other companies that investors may deem
comparable, news reports relating to trends in our markets and general economic
conditions. In addition, the stock market in general, and the market prices for
Internet-related companies in particular, have experienced extreme volatility.
These broad market and industry fluctuations may adversely affect the price of
our common stock, regardless of our operating performance.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Interest rate sensitivity. The primary objective of our investment
activities is to preserve principal while maximizing the income we receive from
our investments without significantly increasing risk. Some of the securities
that we have invested in may be subject to market risk. This means that a change
in prevailing interest rates may cause the principal amount of the investment to
fluctuate. For example, if we hold a security that was issued with a fixed
interest rate at the then-prevailing rate and the prevailing interest rate later
rises, the principal amount of our investment will probably decline. To minimize
this risk, we maintain our portfolio of cash in money market funds and cash
equivalents.  In general, money market funds and short-term investments are not
subject to market risk because the interest paid on such funds fluctuates with
the prevailing interest rate. As of March 31, 2002, all of our investments
mature in 90 days or less.

Exchange Rate Sensitivity.We consider our exposure to foreign
currency exchange rate fluctuations to be minimal, as we do not have any sales
denominated in foreign currencies. We have not engaged in any hedging
transactions to date.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On and after April 17, 2001, five punitive shareholder class action lawsuits
were filed against us, certain of our current and former officers and directors,
and a number of investment banks, including some of the underwriters of our
initial public offering. The lawsuits were filed in the Southern District of New
York.  The complaints have been consolidated into a single action and a
consolidated amended complaint has been filed.  The lawsuit purports to be a
class action filed on behalf of purchasers of our stock during the period
January 15, 1999 through December 6, 2000. Plaintiffs allege that the
underwriter defendants agreed to allocate stock in the initial public offering
to certain investors in exchange for excessive and undisclosed commissions and
agreements by those investors to make additional purchases of stock in the
aftermarket at pre-determined prices. Plaintiffs allege that the registration
statement and prospectus for our initial public offering was false and
misleading in violation of the securities laws because it did not disclose these
arrangements. We and our current and former officers and directors vigorously
deny all allegations of wrongdoing and intend to vigorously defend the actions.
The action seeks damages in an unspecified amount.  The action against us is
being coordinated with approximately three hundred other nearly identical
actions filed against other companies and no date has been set for any response
to the complaints. Due to the inherent uncertainties of litigation, we cannot
accurately predict the ultimate outcome of the litigation. Any unfavorable
outcome of this litigation could have an adverse impact on our business,
financial condition, and results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURTIY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

1. Index to Exhibits
2. Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended March 31,
2002.





---

MarketWatch.com, Inc.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| |                      
| | ---------------------
| | MarketWatch.com, Inc.
| | (Registrant)         



Dated: May 15, 2002

| |                                              |                  
| | -------------------------------------------- | -----------------
| | By:                                          | /s/ JOAN P. PLATT
| |                                             
| | Joan P. Platt                               
| | Chief Financial Officer                     
| | (Principal Financial and Accounting Officer)

---