<PAGE>   1

                       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 June 30, 2001

                                       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: 000-25577

                                AUTOWEB.COM, INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                                    <C>
                Delaware                                    77-0412737
     (State or other jurisdiction                        (I.R.S. Employer
   of incorporation or organization)                   Identification Number)
</TABLE>

                                 3270 Jay Street
                          Santa Clara, California 95054
          (Address of principal executive offices, including zip code)


                                 (408) 970-9100
              (Registrant's telephone number, including area code)


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 and Exchange Act
of 1934 during the preceding 12 month (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 [ ]


As of July 31, 2001, there were 29,566,117 shares of the Registrant's common
stock outstanding.


<PAGE>   2

                                AUTOWEB.COM, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
                                              PART I. FINANCIAL INFORMATION
ITEM 1:    Condensed Financial Statements:
           Condensed Balance Sheets as of June 30, 2001 and December 31, 2000.................................   3
           Condensed Statements of Operations for the three and six months ended June 30, 2001 and 2000.......   4
           Condensed Statements of Cash Flows for the six months ended June 30, 2001 and 2000.................   5
           Notes to Condensed Financial Statements............................................................   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.........................................  22

                                               PART II. OTHER INFORMATION
ITEM 1:    Legal Proceedings..................................................................................  23
ITEM 2:    Changes in Securities and Use of Proceeds..........................................................  23
ITEM 3:    Defaults upon Senior Securities....................................................................  23
ITEM 4:    Submission of Matters to a Vote of Security Holders................................................  23
ITEM 5:    Other Information..................................................................................  23
ITEM 6:    Exhibits and Reports on Form 8-K...................................................................  24
Signatures....................................................................................................  25
</TABLE>


                                       2
<PAGE>   3

                          PART I: FINANCIAL INFORMATION

                     ITEM 1: CONDENSED FINANCIAL STATEMENTS

                                AUTOWEB.COM, INC.

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        JUNE 30,      DECEMBER 31,
                                                                          2001            2000
                                                                       ---------      ------------
                                                                             (IN THOUSANDS)
                                                                               (UNAUDITED)
<S>                                                                   <C>             <C>
                                   ASSETS
Current assets:
  Cash and cash equivalents .....................................      $  11,211       $  27,137
  Accounts receivable, net ......................................          8,016           8,518
  Prepaid expenses and other current assets .....................          5,611          10,149
                                                                       ---------       ---------
      Total current assets ......................................         24,838          45,804
Property and equipment, net .....................................          1,480           2,285
Purchased technology and other intangible assets, net ...........          8,327          11,878
Deposits and other assets .......................................            177             177
                                                                       ---------       ---------
      Total assets ..............................................      $  34,822       $  60,144
                                                                       =========       =========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Account payable and other accrued expenses ....................      $   2,387       $   3,705
  Accrued payroll and related expenses ..........................            814             991
  Deferred revenue ..............................................            717             773
  Notes and capital lease obligations payable ...................            434             314
                                                                       ---------       ---------
      Total current liabilities .................................          4,352           5,783
                                                                       ---------       ---------
Stockholders' equity:
  Common stock ..................................................             26              26
  Additional paid-in capital ....................................        131,767         131,761
  Notes receivable from stockholders ............................           (786)           (786)
  Unearned stock-based compensation .............................         (1,861)         (2,489)
  Accumulated deficit ...........................................        (98,676)        (74,151)
                                                                       ---------       ---------
      Total stockholders' equity ................................         30,470          54,361
                                                                       ---------       ---------
      Total liabilities and stockholders' equity ................      $  34,822       $  60,144
                                                                       =========       =========
</TABLE>


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


                                       3
<PAGE>   4

                                AUTOWEB.COM, INC.

                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED                         SIX MONTHS ENDED
                                                                  JUNE 30,                                  JUNE 30,
                                                        ---------------------------               ---------------------------
                                                          2001               2000                   2001               2000
                                                        --------           --------               --------           --------
                                                   (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)   (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                                                 (UNAUDITED)                              (UNAUDITED)
<S>                                                    <C>                <C>                    <C>                <C>
Net revenues .....................................      $  9,100           $ 15,193               $ 19,194           $ 30,986
Cost of net revenues .............................         2,019              1,506                  3,938              3,167
                                                        --------           --------               --------           --------
    Gross profit .................................         7,081             13,687                 15,256             27,819
Operating expenses:
    Sales and marketing ..........................         6,113             13,100                 14,506             27,872
    Sales and marketing--settlement charge .......             0                  0                 12,635                  0
    Product development ..........................         1,379              2,371                  2,980              4,254
    General and administrative ...................         3,054              2,964                  5,421              6,243
    Merger related costs .........................           226                  0                  1,076                  0
    Amortization of intangible assets ............         1,776              1,715                  3,551              3,460
                                                        --------           --------               --------           --------
         Total operating expenses ................        12,548             20,150                 40,169             41,829
                                                        --------           --------               --------           --------
Loss from operations .............................        (5,467)            (6,463)               (24,913)           (14,010)
Interest and other income, net ...................            63                463                    388                781
                                                        --------           --------               --------           --------
Net loss .........................................      $ (5,404)          $ (6,000)              $(24,525)          $(13,229)
                                                        ========           ========               ========           ========
Net loss per share:
    Basic and diluted ............................      $  (0.18)          $  (0.21)              $  (0.83)          $  (0.49)
                                                        ========           ========               ========           ========
    Weighted average shares--basic and diluted ...        29,560             28,745                 29,551             27,143
                                                        ========           ========               ========           ========
</TABLE>


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


                                       4
<PAGE>   5

                                AUTOWEB.COM, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                             SIX MONTHS ENDED
                                                                                                                 JUNE 30,
                                                                                                          -----------------------
                                                                                                            2001           2000
                                                                                                          --------       --------
                                                                                                               (IN THOUSANDS)
                                                                                                                 (UNAUDITED)
<S>                                                                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss .........................................................................................    $(24,525)      $(13,229)
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
         Depreciation and amortization ...............................................................       1,030            957
         Amortization of purchased technology and other intangible assets ............................       3,551          3,460
         Provision for doubtful accounts .............................................................      (1,073)           760
         Stock-based compensation expense for employee options granted, net ..........................         623            829
         Change in assets and liabilities:
               Decrease in restricted cash ...........................................................          --          2,550
               Accounts receivable ...................................................................       1,575         (4,200)
               Prepaid expenses and other current assets .............................................      (4,538)        (6,941)
               Deposits and other assets .............................................................          --            354
               Accounts payable and other accrued expenses ...........................................      (1,319)        (1,597)
               Accrued payroll and related expenses ..................................................        (177)        (1,407)
               Deferred revenue ......................................................................         (56)          (458)
                                                                                                          --------       --------
                     Net cash used in operating activities ...........................................     (15,833)       (18,922)
                                                                                                          --------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Maturity of short-term investments ...............................................................          --         20,897
    Purchases of long-term investments ...............................................................          --         (2,400)
    Acquisition of property and equipment ............................................................        (219)        (1,118)
    Acquisition of purchased technology ..............................................................          --           (263)
                                                                                                          --------       --------
                     Net cash provided (used in) by investing activities .............................        (219)        17,116
                                                                                                          --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments under notes payable and capital lease obligations .............................        (379)          (198)
    Proceeds from borrowing under debt facilities ....................................................         499             --
    Proceeds from issuance of common stock, net of issuance costs ....................................           6         30,385
                                                                                                          --------       --------
                     Net cash provided by financing activities .......................................         126         30,187
                                                                                                          --------       --------
Net increase (decrease) in cash and cash equivalents .................................................     (15,926)        28,381
Cash and cash equivalents, at the beginning of period ................................................      27,137          9,387
                                                                                                          --------       --------
Cash and cash equivalents, at end of period ..........................................................    $ 11,211       $ 37,768
                                                                                                          ========       ========
Supplemental disclosure of noncash investing and financing activities:
    Unearned stock-based compensation (cancellations) related to employee stock option grants, net ...    $     (5)      $ (2,046)
    Revenue from barter transactions .................................................................    $    145       $    113
    Advertising expense from barter transactions .....................................................    $    249       $    113
</TABLE>


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


                                       5
<PAGE>   6

                                AUTOWEB.COM, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1--The Company

       Autoweb.com, Inc. (the "Company") was incorporated in California on
October 3, 1995 as Downtown Web, Inc. and reincorporated in Delaware on March
16, 1999. The Company provides a consumer automotive Internet service, whereby
its Web site enables consumers to select new or pre-owned vehicles from member
dealers, and also offers services that enable consumers to purchase
automotive-related products and services such as insurance and financing. The
Company also provides, through its division Automotive Information Center
("AIC"), automotive and on-line research tools for automotive manufacturers,
major web portals and other industries. The Company markets and sells it's
services primarily in North America and operates in one business segment.

       The Company has sustained net losses and negative cash flows from
operations since its inception. The Company's ability to meet its obligations in
the ordinary course of business is dependent on its ability to achieve
profitable operations and/or raise additional financing through public or
private equity financings or other sources of financing to fund operations.
However, there is no assurance that the Company will achieve profitable
operations or that it will be able to raise adequate financing from other
sources. Management believes that its current funds will be sufficient to enable
the Company to meet its planned expenditures through at least June 30, 2002. If
anticipated operating results are not achieved, management has the intent and it
believes that it has the ability to delay or reduce expenditures so as not to
require additional financial resources, if such resources were not available on
terms acceptable to the Company.

Note 2--Summary of Significant Accounting Policies

Basis of Preparation

       The accompanying condensed financial statements as of June 30, 2001, and
for the six months ended June 30, 2001 and 2000, are unaudited. These unaudited
interim condensed financial statements have been prepared on the same basis as
the annual financial statements and, in the opinion of management, reflect all
adjustments, which include only normal recurring adjustments, necessary to
present fairly the Company's financial position, results of operations and cash
flows as of June 30, 2001 and for the six months ended June 30, 2001 and 2000.
These unaudited interim condensed financial statements and notes thereto should
be read in conjunction with the Company's financial statements included in the
Company's 2000 10-K/A filed with the Securities and Exchange Commission on April
30, 2001. The results for the six months ended June 30, 2001 are not necessarily
indicative of the expected results for the year ending December 31, 2001 or any
other future period.

Concentration of Credit Risk

       Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents and accounts
receivable. Cash and cash equivalents are deposited with six high credit quality
financial institutions in the United States. The Company maintains allowances
for potential credit losses, and such losses have been within management's
expectation. The Company's accounts receivable are derived from revenues earned
primarily from customers located in the United States and the Company performs
ongoing credit evaluations of its customers' financial condition.

Fair Value of Financial Instruments

       Carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and
other accrued liabilities, approximate fair value due to their relatively short
maturities.

Cash and Cash Equivalents

       The Company considers all highly liquid investments purchased with
original maturities or remaining maturities at the time of purchase of ninety
days or less to be cash equivalents. Cash equivalents consist primarily of
deposits in money market funds.


                                       6
<PAGE>   7

Stock-Based Compensation

In 1997, the Company adopted the disclosure provisions of Financial Accounting
Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS")
No. 123, "Accounting for Stock-based Compensation." The Company has elected to
continue accounting for stock-based compensation issued to employees using
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees." Under APB No. 25, compensation expense is based on the
difference, if any, on the date of the grant between the fair value of the
Company's stock and the exercise price. Stock issued to non-employees has been
accounted for in accordance with SFAS No. 123 and valued using the Black-Scholes
option pricing model.

Net Loss Per Share

The Company computes net loss per share in accordance with SFAS No. 128,
"Earning per Share" and SEC Staff Accounting Bulletin ("SAB") 98. Under the
provisions of SFAS No. 128, basic net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average
number of common shares outstanding during the period. Diluted net loss per
share is computed by dividing the net loss for the period by the weighted
average number of common and common equivalent shares outstanding during the
period. Common equivalent shares, composed of common shares issuable upon the
exercise of stock options are included in the diluted net loss per share
computation to the extent such shares are dilutive.

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED,                        SIX MONTHS ENDED,
                                                                  JUNE 30,                                  JUNE 30,
                                                       -------------------------------           -----------------------------
                                                          2001                 2000                 2001                2000
                                                       ----------           ----------           ----------           --------
                                                  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                    <C>                  <C>                  <C>                  <C>
Numerator:
  Net loss ......................................      $   (5,404)          $   (6,000)          $  (24,525)          $(13,229)
                                                       ==========           ==========           ==========           ========
Denominator:
  Weighted average shares--basic and diluted ....          29,560               28,745               29,551             27,143
                                                       ==========           ==========           ==========           ========

  Net loss per share--basic and diluted .........      $    (0.18)          $    (0.21)          $    (0.83)          $  (0.49)
                                                       ==========           ==========           ==========           ========
</TABLE>

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations."
SFAS 141 requires the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the pooling-of-interest method.

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other
Intangible Assets", which is effective for The Company on January 1, 2002. SFAS
142 requires, among other things, the discontinuance of goodwill amortization
and includes provisions for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of existing recognized
intangibles, and reclassification of certain intangibles out of previously
reported goodwill. SFAS 142 also requires The Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
currently reviewing and assessing the impact of SFAS 141 and 142 on its
financial statements.


Note 3--Common Stock

Unearned Stock-Based Compensation

       In connection with certain employee stock option grants during the six
months ended June 30, 2001 and 2000, the Company recognized unearned
compensation and related amortization expense as displayed in the table below.
Amortization expense is being recognized over the vesting periods of the related
options.

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                      JUNE 30,                     JUNE 30,
                                                               -----------------------        -------------------
                                                                2001           2000             2001         2000
                                                               -------        --------        ------     --------
<S>                                                            <C>            <C>             <C>        <C>
Unearned stock-based compensation (cancellations).........     $    (5)       $ (1,172)       $   (5)    $ (2,046)
Amortization expense, net of cancellations................     $   311        $    410        $  623     $    829
</TABLE>


                                       7
<PAGE>   8

Note 4--Related Party Transactions

       At June 30, 2001, the Company had full recourse promissory notes
receivable in the amount of approximately $960,000, approximately $922,000 of
which is from Dean DeBiase, our Chairman and approximately $38,000 of which is
from Samuel Hedgpeth, our former President and Chief Executive Officer. Of this
amount, approximately $174,000 is included in "prepaid expenses and other
current assets" and approximately $786,000 is included in stockholders' equity
as "notes receivable from stockholders." Notes receivable totaling approximately
$922,000 are interest free and collateralized by 595,660 shares of common stock
and the remaining note receivable for approximately $38,000 bears interest at a
rate of 5.59% per annum and is collateralized by 177,012 shares of common stock.

       On March 22, 2001, the Company entered into a three year non-exclusive
agreement with Lycos, Inc., a stockholder of the Company. Under the agreement,
the Company receives certain content and customer referrals from a co-branded
site, along with certain advertising revenue generated from the co-branded site.
For the quarter and six months period ended June 30, 2001, the Company
recognized revenues of $454,000 and expenses of $249,000 under this agreement.

Note 5--Commitments

       Through June 30, 2001, the Company had agreements with two global
Internet media companies to maintain certain exclusive promotional rights and
linkage with the media companies and to receive certain advertising. In
addition, the Company shares in certain advertising revenues earned by the media
companies. Through June 30, 2001, the Company paid $13.0 million under the terms
of these agreements. Cash commitments under these two agreements total $11.4
million and expire in March 2004 and April 2004. The Company expenses all
amounts ratably over the term of the agreement.

       The company also has multi-year agreements with other Internet
advertisers and automotive information providers that make available to
consumers vehicle research data over the Internet. Such agreements require that
the Company pay fees to these companies based on the volume of referrals
received by the Company from these services. The company expenses these amounts
as the services are provided.

Note 6--Subsequent Events

Pursuant to the definitive acquisition agreement entered into with
Autobytel.com, Inc. on April 11, 2001, Amendment Number 1 to Form S-4 was filed
with the Securities Exchange Commission on July 17, 2001.


                                       8
<PAGE>   9

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

This Form 10-Q, including the discussion of our business, should be read in
conjunction with the Condensed Financial Statements and Notes, thereto, of
Autoweb.com, Inc.

       The following discussion contains forward-looking statements.
Forward-looking statements involve risks and uncertainties that could cause
actual results to differ from anticipated results. In particular, factors that
could cause Autoweb not to meet revenue expectations for the any quarter  or
year-end include, but are not limited to: our ability to attract consumers
through existing portal relationships; the combined viability of current and new
car buying process on our site; the effect of the restructuring of certain
marketing agreements; lower revenue per purchase request associated with certain
fixed price agreements with dealers; the inability to adjust the size of dealer
network areas for certain fixed price agreements with dealers; and general
market trends and conditions in the automotive sales market. Autoweb has also
entered into an Acquisition by Merger Agreement with Autobytel.com. Failure to
realize anticipated synergies related to the proposed merger, failure of the
combined company to retain and hire key employees, difficulties in successfully
integrating the parties' businesses and technologies, or failure of the
companies to obtain the required stockholder or regulatory approvals or that the
merger does not close for any other reason could adversely impact Autoweb. Other
risks and uncertainties include the fact that the Company received a Nasdaq
Staff Determination letter on March 1, 2001, indicating that the Company has
failed to comply with the minimum bid price requirement for continued listing,
and is subject to delisting from the Nasdaq National Market; changes in
competitive behavior or market forces; uncertainties regarding response from the
vehicle manufacturers; changes in the legal or regulatory environment, changes
or lack of changes in consumer preferences over time, technological challenges
and an inability to forecast future traffic and transactions.

       Other statements that could cause actual results to differ from those
projected in these forward-looking statements include without limitation those
discussed below in the "Factors That May Affect Future Results". Readers are
urged to carefully review and consider the various disclosures made by us in
this report and those detailed from time to time in our reports and filings with
the Securities and Exchange Commission that attempt to advise interested parties
of the risks and factors that are likely to affect our business.

OVERVIEW

       Autoweb.com is a leading consumer automotive Internet service. Our Web
site centralizes an extensive collection of automotive-related commerce, content
and community offerings to assist consumers in researching, evaluating and
buying vehicles and automotive-related products and services such as insurance
and financing. In addition, we provide automotive content, Web hosting and
development services and sales automation services to vehicle manufacturers,
dealers and online partners. Through our acquisition of Automotive Information
Center ("AIC"), in 1999, we now provide consumers and automotive professionals
with Autosite.com, a 20,000-page online vehicle buyer's guide and a rich suite
of related services information and original automotive editorial content.

       We began selling our services to automobile dealers and launched the
Autoweb.com Web site for consumer use in October 1995. Currently, our network of
member dealers (where each franchise and pre-owned location for a particular
vehicle manufacturer is defined as a member dealer) is approximately 4,100. We
currently derive approximately 60% of our revenues from fees charged to our
member dealers in exchange for qualified purchase inquiries. The revenue related
to each fee is recognized in the month the qualified purchase inquiry is
provided to the member dealer. We also provide online advertising space on the
Autoweb.com site. Revenues from advertising contracts, which typically have
terms of less than three months, are recognized as the contracts are fulfilled.
In addition, we offer automotive-related services on the Autoweb.com site
through agreements with third-party category partners. We derive revenues from
third parties for the right to provide its consumer services, such as automobile
financing and insurance, on our Web site. Revenues from these agreements are
generally recognized ratably over the terms of the agreements.

       We incurred a net loss of $24.5 million for the six months ended June 30,
2001. Our limited operating history makes it difficult to forecast future
operating results. We cannot be certain that net 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.

       On April 11, 2001, Autoweb entered into a definitive acquisition
agreement with Autobytel.com, Inc. The merger is expected to close early in the
third calendar quarter of 2001 upon satisfaction of customary and other closing
conditions and receipt of governmental and stockholder approvals. Under the
terms of the agreement, Autoweb stockholders will receive 0.3553 shares of
Autobytel common stock in exchange for each share of Autoweb common stock.
Outstanding stock options to purchase shares of Autoweb common stock will be
assumed after adjustment at the same exchange ratio.


                                       9
<PAGE>   10

Results of Operations

       The following table sets forth, for the periods presented, certain data
derived from our unaudited condensed statements of operations as a percentage of
net revenues. The operating results for the six months ended June 30, 2001 are
not necessarily indicative of the results that may be expected for any future
period.

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED       SIX MONTHS ENDED
                                                                    JUNE 30,                JUNE 31,
                                                               ------------------       ----------------
                                                                2001        2000        2001        2000
                                                                ----        ----        ----        ----
<S>                                                            <C>         <C>         <C>         <C>
Net revenues .............................................       100%        100%        100%        100%
Cost of net revenues .....................................        22          10          21          10
                                                                ----        ----        ----        ----
Gross profit .............................................        78          90          79          90
                                                                ----        ----        ----        ----
Operating expenses:
           Sales and marketing ...........................        67          86          76          90
           Sales and marketing -- Settlement charge ......         0           0          66           0
           Product development ...........................        15          16          15          14
           General and administrative ....................        34          20          28          20
           Merger related costs ..........................         2           0           6           0
           Amortization of intangible assets .............        20          11          18          11
                                                                ----        ----        ----        ----
                              Total operating expense ....       138         133         209         135
                                                                ----        ----        ----        ----
Loss from operations .....................................       (60)        (43)       (130)        (45)
Interest and other income, net ...........................         1           4           2           2
                                                                ----        ----        ----        ----
Net loss .................................................       (59)%       (39)%      (128)%       (43)%
                                                                ====        ====        ====        ====
</TABLE>

Net Revenues

Net revenues decreased to $9.1 million in the second quarter of 2001, from $15.2
million in the second quarter of 2000, an overall decrease of 40%. Approximately
78% of the decrease in net revenues was due to lower net dealer fees with the
remaining decrease primarily attributable to lower business development
revenues. Net revenues decreased to $19.2 million for the six months ended June
30, 2001 from $31.0 million for the six months ended June 30, 2000, an overall
decrease of 38%. Approximately 88% of the decrease in net revenues was due to
lower net dealer fees with the remaining decrease primarily attributable to
lower business development fees. The decrease in net dealer fee revenue is
primarily the result of decreases in the number of purchase inquiries that we
provided to our member dealers, and automotive-related vendors or category
partners.

Cost of Net Revenues

Cost of net revenues increased to $2.0 million in the second quarter of 2001
from $1.5 million in the second quarter of 2000. The increase was due to higher
revenue sharing costs partially offset by lower web site operation costs
including personnel and site content. Cost of net revenues increased to $3.9
million for the six months ended June 30, 2001 from $3.2 million for the six
months ended June 30, 2000. The increase was due to higher revenue sharing costs
partially offset by lower web site operation costs including personnel and site
content. The increase in revenue sharing costs is the result of the increase in
pay-for-performance marketing arrangements.

Sales and Marketing

Sales and marketing expenses decreased to $6.1 million in the second quarter of
2001 from $13.1 million in the second quarter of 2000. Approximately 47% of the
decrease in sales and marketing expense was due to lower online advertising
while 32% of the decrease was due to lower offline advertising, with the
remaining decrease primarily attributable to lower salary and salary related
expenses. Sales and marketing expenses decreased to $14.5 million for the six
months ended June 30, 2001 from $27.9 million for the six months ended June 30,
2000. Approximately 50% of the decrease in sales and marketing expense was due
to lower offline advertising while 25% of the decrease was due to lower online
advertising, with the remaining decrease primarily attributable to lower salary
and salary related expenses as well as lower tradeshow costs.


                                       10
<PAGE>   11

Sales and Marketing -- Settlement Charge

The sales and marketing -- settlement charge for the six months ended June 30,
2001 was $12.6 million. The settlement charge is the result of a payment made to
a related party stockholder to terminate and settle all outstanding commitments
under an advertising agreement.

Product Development

Product development expenses decreased to $1.4 million in the second quarter of
2001 from $2.4 million in the second quarter of 2000. The decrease is primarily
due to lower salary and salary related costs. Product development expenses
decreased to $3.0 million for the six months ended June 30, 2001 from $4.3
million for the six months ended June 30, 2000. The decrease in product
development costs is primarily due to lower salary and salary related costs.

General and Administrative

General and administrative expenses increased to $3.1 million in the second
quarter of 2001 from $3.0 million in the first quarter of 2000. For the second
quarter, higher bad debt expense and an increase in stock compensation were
partially offset by lower salary and salary related costs. General and
administrative expenses decreased to $5.4 million for the six months ended June
30, 2001 from $6.2 million for the six months ended June 30, 2000. Approximately
82% of the decrease is due to lower salary and salary related costs.

Merger Related Costs

Merger related costs in the second quarter of 2001 and six months ended June 30,
2001 were $226,000 and $1.1 million, respectively. The merger related costs
represent investment banking, legal fees, and accounting fees for services
related to the definitive acquisition agreement entered into with Autobytel.

Amortization of Intangible Assets

Amortization of intangible assets expense was $1.8 million in the second quarter
of 2001 and $1.7 million in the second quarter of 2000. Amortization of
intangible assets expense was $3.6 million for the six months ended June 30,
2001 and $3.5 million for the six months ended June 30, 2000. All of the
amortization expense was due to the acquisition of certain intangibles. In July
1999, the Company entered into an agreement with SalesEnhancer.com, LLC
(SalesEnhancer) to acquire certain technology and other assets and certain
liabilities for $3.7 million in cash. In October 1999, the Company entered into
an agreement with The Gale Group, Inc., a subsidiary of the Thompson Company,
Inc., to acquire certain assets and liabilities of AIC for $19.3 million in cash
and common stock.

Stock-Based Compensation

Stock-based compensation expense decreased to $311,000 in the second quarter of
2001 from $410,000 in the second quarter of 2000. Stock-based compensation
expense decreased to $623,000 for the six months ended June 30, 2001 from
$829,000 for the six months ended June 30, 2000. The decrease reflects
cancellations of previously recorded unearned stock based compensation charges
due to employee terminations. Stock based compensation expense has been
allocated to the relevant functional expense categories within operating
expenses.

Interest and Other Income, Net

Interest and other income, net, decreased to $63,000 in the second quarter of
2001 from $463,000 in the second quarter of 2000. The decrease is attributable
to a lower average cash balance during the quarter. Interest and other income,
net, decreased to $388,000 for the six months ended June 30, 2001 from $781,000
for the six months ended June 30, 2000. The decrease is attributable to a lower
average cash balance during the period.


                                       11
<PAGE>   12

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations."
SFAS 141 requires the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the pooling-of-interest method.

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other
Intangible Assets", which is effective for The Company on January 1, 2002. SFAS
142 requires, among other things, the discontinuance of goodwill amortization
and includes provisions for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of existing recognized
intangibles, and reclassification of certain intangibles out of previously
reported goodwill. SFAS 142 also requires The Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
currently reviewing and assessing the impact of SFAS 141 and 142 on its
financial statements.

Liquidity and Capital Resources

       Net cash used in operating activities was $15.8 million in the six months
ended June 30, 2001 compared to net cash used in operations of $18.9 million in
the six months ended June 30, 2000. Net cash used in operating activities in the
six months ended June 30, 2001 was primarily due to the net loss of $24.5
million for the period which includes the settlement charge of $12.6 million,
decreases in accounts payable and other accrued expenses of $1.3 million, and
increase in the provision for doubtful accounts of $1.1 million, partially
offset by decreases in prepaid expenses of $4.5 million, depreciation and
amortization expense of $4.6 million and stock based compensation expense of
$623,000. Net cash used in operating activities in the six months ended June 30,
2000 of $18.9 million was primarily due to the net loss of $13.2 million,
increases in prepaid expenses and other assets of $6.9 million, increases in
accounts receivable of $4.2 million, partially offset by depreciation and
amortization expense of $4.4 million.

       Net cash used in investing activities was $211,000 in the first six
months of 2001 and was primarily the result of the acquisition of property and
equipment. Net cash provided by investing activities was $17.1 million in the
first six months of 2000 and was primarily the result of the maturity of short
term investments of $20.9 million partially offset the purchase of long-term
investments of $2.4 million, and the acquisition of property and equipment of
$1.1 million.

       Net cash provided by financing activities was $126,000 for the first six
months of 2001 and was the result of proceeds from borrowing under debt
facilities of $499,000 partially offset by principal payments under notes
payable and capital lease obligations of $379,000. Net cash provided by
financing activities was $30.2 million for the first six months of 2000 and
resulted primarily from the issuance of common stock of $30.4 million.

       At June 30, 2001, the total of our cash and cash equivalents was $11.2
million. We believe that our current cash position together with anticipated
future revenues will be sufficient to meet our cash requirements for at least
the next 12 months. Depending on our rate of growth and cash requirements, we
may require additional equity or debt financing to meet future working capital
or capital expenditure needs. There can be no assurance that such additional
financing will be available or, if available, that such financing can be
obtained on terms satisfactory to us.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Autoweb will face significant challenges related to its merger with Autobytel.
Failure to adequately integrate the two companies or consummate the merger may
have a material adverse effect on the company's business.

       The merger between Autoweb and Autobytel involves the integration of two
companies that have previously operated independently. Combining the operations
of Autoweb and Autobytel will be a complex process that will require, among
other things, integration of various functional areas, such as finance, human
resources and sales and marketing groups, and coordination of development
efforts. Autoweb cannot be certain that the integration will be completed in a
timely manner or that it will achieve the anticipated benefits of the merger. In
addition, circumstances may arise that prevent Autoweb from consummating the
merger with Autobytel. Failure to adequately manage the integration process and
to coordinate the joint efforts of the two companies or failure to close the
merger may have a material adverse effect on the business of the company.


                                       12
<PAGE>   13

Autoweb will incur significant costs associated with the merger which could
negatively affect the company's financial performance.

       Autoweb expects to incur significant costs and commit significant
management time integrating Autoweb's operations, technology, development
programs, products, clients and personnel with Autobytel. These costs may be
substantial and may include costs for: integration of operations, including
combining teams and processes in various functional areas; - fees and expenses
of professionals and consultants involved in completing the integration process;
- reorganization or closure of facilities; - incurring potential existing
liabilities of Autoweb; - employee severance costs; and - integration of
technology and products.

Other factors to consider if the merger is not consummated.

       If the merger is not completed for any reason, Autoweb will be subject to
a number of material risks, including: the provision in the merger agreement
that Autoweb could be required to pay Autobytel a termination fee of up to $1
million and/or that Autoweb could be required to reimburse Autobytel for costs
and expenses incurred in connection with the merger; the market price of Autoweb
common stock may decline to the extent that the current market price of such
shares may reflect a market assumption that the merger will be completed; costs
related to the merger, such as legal and accounting fees and a portion of the
investment banking fees, must be paid even if the merger is not completed;
benefits that Autoweb expects to realize from the merger, such as the
potentially enhanced financial and competitive position of the combined
companies, would not be realized; the diversion of management attention from
day-to-day business, and the potential to disrupt employees and relationships
with customers and dealers during the period before consummation of the merger,
may affect the financial and market position of Autoweb if the merger does not
occur; and if the merger is terminated and the Autoweb board of directors seeks
another merger or business combination, Autoweb stockholders cannot be certain
that Autoweb will be able to find a partner willing to pay an equivalent or more
attractive price than the price to be paid by Autobytel. Additionally, failing
to complete the merger could adversely affect Autoweb's continued listing on the
Nasdaq National Market. In considering these factors, you should be aware that
either Autobytel or Autoweb can terminate the merger for various reasons.

We have a limited operating history under our current business model

       As part of our business strategy, we acquired AIC in 1999. As a result of
the acquisition, approximately 40% of our employees are now based outside of our
Santa Clara headquarters. If we are unable to effectively manage a large and
geographically dispersed group of employees, our business will be adversely
affected. In addition, we have a limited operating history and unproven business
model as a combined company. A number of risks and challenges accompany our
model, including:

       -      the difficulty of continuing to assimilate the operations and
              personnel of the combined entities;

       -      the impairment or integration of relationships with employees or
              customers as a result of any integration of the combined
              companies;

       -      the ability of the combined company to continue to generate
              revenue streams from fees for consumer inquiries, advertising,
              automotive content and technology;

       -      the difficulty in maintaining a consumer, dealer, OEM, and
              affiliate or category partner customer base; and

       -      the ability to continue to develop our technology infrastructure
              in order to handle greater Internet traffic efficiently.

       We may not be successful in addressing these risks or any other problems
encountered in connection with our current business model.

If we are unable to maintain our Nasdaq National Market Listing, the liquidity
of our common stock would be seriously limited.

       On March 1, 2001, the Company received a Nasdaq Staff Determination
indicating that the Company has failed to comply with the minimum bid price
requirement for continued listing, and is subject to delisting from the Nasdaq
National Market. The Company has filed a request for a hearing before the Nasdaq
Qualifications Panel ("Panel") to review the staff determination. The hearing
was held on April 12, 2001. The Panel ultimately decided to allow Autoweb stock
to continue to trade on the Nasdaq National Market on the condition that the
merger with Autobytel closes by August 16, 2001, and the shares of Autoweb stock
are then voluntarily delisted from the Nasdaq National Market pursuant to the
terms of the merger agreement.


                                       13
<PAGE>   14

       There can be no assurance that the Panel will decide to allow the Company
to remain listed in the meantime, or that the Company's actions will prevent the
delisting of its common stock in the event that the merger is not completed. .
In the event the Company's shares are delisted from the Nasdaq National Market,
we will attempt to have our common stock traded on the NASD over-the counter
Bulletin Board.

       If our common stock is delisted, it would seriously limit the liquidity
of our common stock and limit our potential to raise future capital through the
sale of our common stock, which could have a material adverse effect on our
business.

Our revenue growth rates, if any, may not be sustainable.

       Our results of operations have varied widely in the past, and we expect
that they will continue to vary significantly from quarter to quarter due to a
number of factors described below and elsewhere in this Form 10-Q.

       Our revenue growth rates, if any, may not be sustainable. Any shortfall
in our revenues would immediately increase our operating losses and would
adversely affect the market price of our common stock. We continue to be
substantially dependent on member dealer fees. Quarterly revenues and operating
results for this quarter have been negatively affected by weaker than expected
market trends, as well as, a reduced average selling price per customer purchase
request, or PR. The reduction in price was driven primarily by higher than
expected delivery of PRs under certain fixed price agreements with dealers.
Autoweb is working with the affected dealers to adjust territories in an attempt
to correct pricing issues. However, there can be no assurances that this effort
will result in an incremental increase in revenue. Therefore, our quarterly
revenues and operating results are likely to be particularly affected by the
level of member dealer fees in each quarter. If revenues from dealer sales
continues to fall below our expectations or is not stabilized, we will not be
able to reduce our spending rapidly in response to such a shortfall. This will
adversely affect our operating results.

Autoweb may lose subscribing dealers because of the reconfiguration of the
dealer territories.

       If the volume of purchase requests increases, Autoweb may need to reduce
or reconfigure the exclusive territories currently assigned to dealers to serve
consumers more effectively. If a dealer is unwilling to accept a reduction or
reconfiguration of its territory, it may terminate its relationship with
Autoweb. A dealer also could sue Autoweb to prevent such reduction or
reconfiguration, or collect damages from Autoweb. Autoweb has experienced one
such lawsuit. A material decrease in the number of dealers subscribing to
Autoweb's network or litigation with dealers could have a material adverse
effect on the companys' business, results of operations and financial condition.

       It is likely that our results of operations in some future quarter may be
below the expectations of public market analysts and investors. In this event,
the price of our common stock is likely to decline.

We have a history of net losses and expect net losses for the foreseeable future

       We have incurred net losses in each fiscal year since our inception,
including a net loss of $38.4 million in 2000. We had an accumulated deficit of
$98.7 million as of June 30, 2001. The size of future net losses will depend, in
part, on the rate of growth in our revenues from member dealer fees, category
partners fees, advertising sales and other e-commerce activities. It is critical
to our success that we continue to expend financial and management resources to
develop Autoweb.com brand awareness and loyalty through marketing and promotion,
expansion of our member dealer network, development of our online content and
expansion of our other services. As a result, a significant portion of our
operating expenses for the next several years will continue in sales and
marketing. With these expenses, we will need to generate significant additional
revenues to achieve profitability. As a result, we may never achieve or sustain
profitability, and, if we do achieve profitability in any period, we may not be
able to sustain or increase profitability on a quarterly or annual basis.

Autoweb's quarterly financial results are subject to significant fluctuations
which make it difficult for investors to predict Autoweb's future performance.

       Each of Autoweb's quarterly operating results have fluctuated in the
past, and may fluctuate in the future due to many factors. Autoweb's expense
levels are based in part on its expectations of future revenues which may vary
significantly. If revenues do not increase faster than expenses, Autoweb's
business, results of operations and financial condition will be materially and
adversely affected even after giving effect to the merger. Other factors that
may adversely affect Autoweb's quarterly operating results include, but are not
limited to: Autoweb's ability to consummate the merger with Autobytel, retain
existing dealers, attract new dealers and maintain dealer and customer
satisfaction; general economic conditions and economic conditions specific to
the Internet, online


                                       14
<PAGE>   15

commerce or the automobile industry; a decline in the usage levels of online
services and consumer acceptance of the Internet and commercial online services
for the purchase of consumer products and services such as those offered by
Autoweb; Autoweb's ability to maintain the proper level of traffic on its Web
sites, governmental regulation; and unforeseen events affecting the industry.

Seasonality is likely to cause fluctuations in Autoweb's operating results.
Investors may not be able to predict Autoweb's annual operating results based on
a quarter to quarter comparison.

       Autoweb's business experiences seasonality. The seasonal patterns of
Internet usage and vehicle purchasing do not completely overlap. Historically,
Internet usage typically declines during summer and certain holiday periods,
while vehicle purchasing in the United States is strongest in the spring and
summer months. If seasonality occurs, investors may not be able to predict
Autoweb's annual operating results based on a quarter to quarter comparison of
Autoweb's operating results. The merger will make comparison to historical
results more difficult. Seasonality in the automotive industry, Internet and
commercial online service usage and advertising expenditures is likely to cause
fluctuations in the combined companies' operating results and could have a
material adverse effect on the company's business, operating results and
financial condition.

Internet commerce is still new and evolving with few profitable business models.
Autoweb cannot assure that its business model will profitable.

       The market for Internet-based purchasing services has only recently begun
to develop and is rapidly evolving. While many Internet commerce companies have
grown in terms of revenues, few are profitable. Autoweb cannot assure that it
will be profitable. As is typical for a new and rapidly evolving industry,
demand and market acceptance for recently introduced services and products over
the Internet are subject to a high level of uncertainty and there are few proven
services and products. Moreover, since the market for such services is still
evolving, it is difficult to predict the future growth rate, if any, and size of
this market. The extent to which other participants in the automotive industry
will accept the role of third-party, all-make, all-model services such as
Autobytel and Autoweb is not yet known.

Our business is dependent on the economic strength of the automotive industry

       The economic strength of the automotive industry significantly impacts
the revenues we derive from our member dealers, vehicle manufacturers and
category partners, advertising revenues and consumer traffic to our Web site.
The automotive industry is cyclical, with vehicle sales fluctuating due to
changes in national and global economic forces. Vehicle sales in the United
States have been declining in the latter part of 2000. We cannot assure you that
vehicle sales will increase or stay at their current levels. A further decrease
in the current level of vehicle sales could have a material adverse effect on
our business, results of operations and financial condition.

We currently rely heavily on member dealers

       We derive the majority of our revenues from member dealer fees (payments
from member dealers for each purchase inquiry that we provide to them), and we
expect to continue to do so for the foreseeable future. Member dealer fees
represented approximately 60%, 66%, and 78% of our net revenues in 2000, 1999,
and 1998 respectively. Consequently, our business is highly dependent on
consumers' use of Autoweb.com to purchase vehicles so that member dealers will
achieve a satisfactory return on their investment in the Autoweb.com program.

       The success of our business strategy depends on our member dealers'
adherence to the Autoweb.com purchase process, including responding to consumer
purchase inquiries within 24 hours, providing a competitive, firm quote to
consumers during the initial communication, explaining the Autoweb.com purchase
process to the consumer and answering any consumer questions. We devote
significant efforts and resources to certifying and supporting participating
member dealers in these practices that are intended to increase consumer
satisfaction. Our inability to certify and support member dealers effectively,
or member dealers' failure to adopt such practices, respond rapidly and
professionally to vehicle purchase inquiries, or sell vehicles in accordance
with our marketing strategies, could result in low consumer satisfaction and
materially adversely affect our business, results of operations and financial
condition.

       To maintain and increase our network of member dealers, we must reduce
the rate of turnover of our member dealers. Commencing in February 1998, we
introduced a new "pay for performance" pricing model and began actively to
convert our existing member dealers to this model. Prior to that time, all of
our member dealers were on a subscription model under which they paid a fixed
amount per month regardless of the number of purchase inquiries that we provided
to them. During 1998, we lost approximately 60% of the member dealers that we


                                       15
<PAGE>   16
had at the beginning of the year and converted approximately 30% to the new
pricing model. During 1998, we lost approximately 22% of the performance-based
member dealers that we converted or with which we first entered into a contract
in 1998. During 1999, we lost approximately 31% of the performance-based member
dealers that we had at the beginning of the year or first entered into a
contract during the year. During 2000, we lost approximately 49% of the
performance-based member dealers that we had at the beginning of the year.

       In February 2001, we introduced a flat fee pricing model and began to
offer the flat fee option to new and existing dealers. The results of the flat
fee program pricing model has been lower than expected quarterly revenues and
operating results. The flat fee program had the unexpected result of reducing
the average selling price per customer purchase request, or PR. The reduction in
price was driven primarily by higher than expected delivery of PRs under certain
fixed price agreements with dealers. Autoweb is working with the affected
dealers to adjust territories in an attempt to correct pricing issues. However,
there can be no assurances that this effort will result in an incremental
increase in revenue.

       Attrition remains high and there is increased competition from the
automobile manufacturers and dealers entering this market on their own. We
cannot assure you that we will be able to reduce the level of this attrition,
and our failure to do so could materially and adversely affect our business,
results of operation and financial condition.

We must leverage our current technology assets and develop our information
services business.

       Information and technology has a high value to our customers and
potential customers that may generate significant additional revenue. In order
to capitalize on this revenue stream, we must build on our existing data and
technology business and develop our information services. This undertaking must
be executed rapidly and is likely to be expensive and complex and require
additional technical expertise. Also, as we acquire users who rely upon us for a
wide variety of services, it becomes more technologically complex and costly to
retrieve, store and integrate data that will enable us to track each user's
preferences. Any loss of traffic, increased costs, inefficiencies or failures to
adapt our existing and new technologies and the associated adjustment to our
business plan would have a material effect on our business.

We need to build strong brand loyalty

       We believe that maintaining and expanding the Autoweb brand is critical
to attracting consumers, member dealers, vehicle manufacturers, category
partners and advertisers. Furthermore, we believe that the importance of brand
loyalty will increase as low barriers to entry encourage the proliferation of
Web sites. We have spent considerable monies and resources on the establishment
and maintenance of the Autoweb brand and will continue to do so in the form of
online advertising campaigns, print media, and other forms of traditional
advertising. We may not be able to successfully maintain or enhance consumer
awareness of our brand and, even if we are successful in our branding efforts,
such efforts may be costly. If we are unable to maintain or enhance customer
awareness of the Autoweb brand in a cost-effective manner, our business,
operating results and financial condition would be materially and adversely
affected.

       If the merger is completed between Autoweb and Autobytel, the Autoweb
brand may be confused with the Autobytel brand and have a negative impact on the
perceptions of consumers, business partners, analysts and the media.

We depend on third-party relationships

       We have entered into agreements with various category partners, some of
which require us to feature them exclusively in certain sections of our Web
site. Existing and future exclusive arrangements may prevent us from entering
into other content agreements, advertising or sponsorship arrangements or other
commercial relationships. Many companies that we may pursue for a commercial
relationship may also offer competing services. As a result, these competitors
may be reluctant to enter into commercial relationships with us. Our business
could be adversely affected if we do not maintain our existing commercial
relationships on terms as favorable as currently in effect, if we do not
establish additional commercial relationships on commercially reasonable terms
or if our commercial relationships do not result in the expected increased use
of our Web site.

       Additionally, our sale of automotive content, Web hosting and development
services and sales automation services to vehicle manufacturers and online
partners is dependent upon a few primary relationships, including competitive
online automotive car buying services and various vehicle manufacturers.


                                       16
<PAGE>   17

       We also depend on establishing and maintaining a number of commercial
relationships with high-traffic Web sites to increase traffic on Autoweb.com. We
currently have agreements with major Internet portals, such as America Online
and its related properties and Lycos. There is intense competition for
placements on these sites, and in the future we may not be able to enter into
distribution relationships on commercially reasonable terms or at all. Even if
we enter into distribution relationships with these Web sites, they themselves
may not attract significant numbers of consumers. Therefore, our Web site may
receive less than the number of additional consumers we expect from these
relationships. Moreover, we may have to pay significant fees to establish or
renew these relationships.

       We also depend on establishing and maintaining a number of commercial
relationships with other companies. Our current relationships include:

       -      New Car Test Drive and ASE, under which we purchase content for
              use by our consumers;

       -      America Online's Digital City, iWon.com, AutoNation, CarsDirect,
              Carprices, Lycos, and Homestore.com, under which we share the
              revenue generated from automotive and related purchase inquiries
              submitted by consumers and directed to our Web site through links
              between our Web site and the other company's Web site; and

       -      members of the Autoweb.com Affiliates Program, each of which
              receives a commission from us for traffic or vehicle purchase
              inquiries delivered to us through a link to the affiliate's Web
              site.

       We cannot assure you that we will be able to establish new agreements or
maintain existing agreements or that the above agreements can be renewed on
commercially acceptable terms

       We also may not be able to maintain relationships with third parties that
supply us with software or products that are crucial to our success, and the
vendors of these software or products may not be able to sustain any third-party
claims or rights against their use. Furthermore, we cannot assure you that the
software, services or products of those companies that provide access or links
to our services or products will achieve market acceptance or commercial
success. In addition, we cannot assure you that our existing relationships will
result in sustained business arrangements, successful service or product
offerings or the generation of significant revenues for us. Failure of one or
more of our relationships to achieve or maintain market acceptance or commercial
success or the termination of one or more relationship could have a material
adverse effect on our business, results of operations and financial condition.

We need to continue to develop Autoweb.com content and service offerings

       To remain competitive, we must continue to enhance and improve the ease
of use, responsiveness, functionality and features of the Autoweb.com site and
develop new services in addition to continuing to improve the consumer
purchasing experience. These efforts may require the development or licensing of
increasingly complex technologies. We may not be successful in developing or
introducing new features, functions and services, and these features, functions
and services may not achieve market acceptance or enhance our brand loyalty. If
we fail to develop and introduce new features, functions or services
effectively, it could have a material adverse effect on our business, results of
operations and financial condition.

We are dependent on certain key personnel

       Our future success is substantially dependent on our senior management
and key technical personnel. If one or more of our key employees decided to
leave us, join a competitor or otherwise compete directly or indirectly with us,
this could have a material adverse effect on our business, results of operations
and financial condition. During the second quarter of 2001, we did not have any
senior management changes. However, Autoweb has a history of a high rate of
senior management turnover. Any senior management turnover could have a material
adverse impact on our business, results of operations and financial condition.

       In addition, our future success depends on our continuing ability to
retain and attract highly qualified technical and managerial personnel. As of
June 30, 2001, we had 149 full-time employees. Wages for managerial and
technical employees are increasing and are expected to continue to increase in
the foreseeable future due to the competitive nature of the current employment
market, particularly in Northern California, the location of our headquarters.
We may be unable to retain key technical and managerial personnel or to attract
and retain additional highly qualified technical and managerial personnel in the
future. We have experienced difficulty from time to time attracting the
personnel necessary to support the growth of our business, and we may experience
similar


                                       17
<PAGE>   18

difficulty in the future. Inability to attract and retain the technical and
managerial personnel necessary to support the growth of our business could have
a material adverse effect upon our business, results of operations and financial
condition.

We face risks associated with possible regulation under state or federal
franchise and brokering laws

       In May 1998, the Texas Department of Transportation notified us that, in
their opinion, our performance-based pricing model is illegal, because it makes
us a broker as defined under Texas law. They have taken the position that the
fee paid to us by member dealers for each qualified purchase inquiry is
equivalent to a broker's fee and that we are arranging for two persons to meet
and enter into a transaction that involves the sale of a motor vehicle. In
September 1999 the Texas Department of Transportation sent a letter to the same
effect to our Texas member dealers, and as a result one of our largest member
dealer groups severed its business relationship with us. Shortly after the
Department's letter was sent to our Texas member dealers, we modified our
pricing model. To date the Department has taken no other action against us or
our member dealers based on our pricing model. A proposal to modify the
regulations governing how the Texas brokering law is enforced passed in February
2000. We have received written notice from the Texas Department of
Transportation that our newly revised pricing model conforms to the new
regulations.

       Other states, substantially all of which have laws that broadly define
brokerage activities, could determine that we are acting as a broker. If this
occurs, we may be required to comply with burdensome licensing requirements or
terminate our operations in those states. In either case, our business, results
of operations and financial condition could be materially and adversely
affected. We believe that our service does not qualify as a vehicle brokerage
activity and therefore that state broker licensing requirements do not apply to
us.

       In addition, government authorities may take the position that motor
vehicle dealer franchise laws or related consumer protection or product
liability laws apply to aspects of our business, including advertising vehicles
on the Internet. We do not believe our present business is subject to these
laws, however, we have not sought a legal opinion regarding whether our service
complies with the laws and regulations regarding motor vehicle dealer franchises
in each state.

We generally face risks associated with possible regulation under insurance,
financing or other laws

       State regulatory requirements may also include us within an
industry-specific regulatory scheme, such as those for the vehicle insurance or
vehicle financing industries. In the event that individual states' regulatory
requirements change or additional requirements are imposed on us, we may be
required to modify aspects of our business in those states in a manner that
might undermine the attractiveness of the Autoweb.com purchase process to
consumers, member dealers, vehicle manufacturers, category partners or
advertisers or require us to terminate operations in that state, either of which
could have a material adverse effect on our business, results of operations and
financial condition.

       Government authorities may take the position that state or federal
insurance licensing laws apply to aspects of our business. As we introduce new
services and expand our operations to other countries, we will need to comply
with additional licensing and regulatory requirements.

       Autoweb currently provides a link on its Web site so consumers can
receive real time quotes for insurance coverage and can submit quote
applications online. Autoweb receives fees from its participant in connection
with this advertising activity.

       Autoweb does not believe that the above activity requires Autoweb to be
licensed under state insurance laws. The use of the Internet in the marketing of
insurance products, however, is a relatively new practice. It is not clear
whether or to what extent state insurance licensing laws apply to activities
similar to Autoweb's.

We are subject to U.S. government regulation of the Internet, the impact of
which is difficult to predict

       There are currently laws and regulations directly applicable to the
Internet. Some of these laws are currently in flux. The applications of existing
laws and regulations to Autoweb.com relating to issues such as user privacy,
defamation, pricing, taxation, promotions, content regulation, intellectual
property ownership and infringement can be unclear. In addition, we expect to be
subject to new laws and regulations directly applicable to our activities. Any
existing or new legislation applicable to us could expose us to substantial
liability, including significant expenses necessary to comply with such laws and
regulations.


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<PAGE>   19
       Several recently passed federal laws could have an impact on our
affiliate and other programs. The Digital Millennium Copyright Act is intended
to limit the liability of online services for listing or linking to third-party
Web sites that may include materials that infringe the copyrights or other
rights of others.

       We adhere to industry privacy policies and practices concerning the use
and disclosure of user data. There are a large number of legislative proposals
before the United States Congress and various state legislative bodies regarding
privacy issues related to our business. It is not possible to predict whether or
when such legislation may be adopted, and whether certain proposals, if adopted,
could materially and adversely affect our business.

       Most recently, Congress passed the GrammLeach Bliloy Act which requires
certain companies to send all of its customers an annual privacy policy
statement. Autoweb does not believe that the Act applies to its current
business, however, if the Act is found to apply to AutoWeb, the annual mailing
required under the law will be costly and may have an adverse effect on our
business.

We depend on increased use of the Internet

       Our future success and revenue growth depends substantially upon
continued growth in the use of the Internet. Consumers and businesses will
likely widely accept and adopt the Internet for conducting business and
exchanging information only if the Internet provides these consumers and
businesses with greater efficiencies and improvements in commerce and
communication. In addition, e-commerce generally, and the purchase of automotive
and automotive related products and services on the Internet in particular, must
become widespread. The Internet may prove not to be a viable commercial
marketplace generally, or, in particular, for vehicles and related products and
services. If use of the Internet does not continue to increase, our business,
results of operations and financial condition would be materially and adversely
affected.

We depend on continued improvements in our systems and the Internet
infrastructure

       Our ability to retain and attract consumers, member dealers, vehicle
manufacturers, category partners and advertisers, and to achieve market
acceptance of our services and our brand, depends significantly upon the
performance of our systems and network infrastructure. Any system or network
failure that causes interruption or slower response time of our services could
result in less traffic to our Web site and, if sustained or repeated, could
reduce the attractiveness of our services to consumers, member dealers, category
partners and advertisers. An increase in the volume of our Web site traffic
could strain the capacity of our technical infrastructure, which could lead to
slower response times or system failures. This would cause the number of
purchase inquiries, advertising impressions, other revenue producing e-commerce
offerings and our information and community offerings to decline, any of which
could hinder our revenue growth and our brand loyalty. In addition, if traffic
increases, we cannot assure you that our technical infrastructure, such as a
reliable network backbone with the necessary speed and data capacity and the
development of complementary products such as high-speed modems, will be able to
increase accordingly, and we face risks related to our ability to scale up to
expected consumer levels while maintaining performance. Further, security and
authentication concerns regarding the transmission of confidential information
over the Internet, such as credit card numbers, may continue. Any failure of our
server and networking systems ability to handle current or higher volumes of
traffic would have a material adverse effect on our business, results of
operations and financial condition.

       The recent growth in Internet traffic has caused frequent periods of
decreased performance, requiring Internet service providers and users of the
Internet to upgrade their infrastructures. If Internet usage continues to
increase rapidly, the Internet infrastructure may not be able to support the
demands placed on it by this growth and its performance and reliability may
decline. If outages or delays on the Internet occur frequently, overall Internet
usage or usage of our Web site could increase more slowly or decline. Our
ability to increase the speed with which we provide services to consumers and to
increase the scope of such services is limited by and dependent upon the speed
and reliability of the Internet. Consequently, the emergence and growth of the
market for our services is dependent on future improvements to the entire
Internet.

       In addition, our operations depend upon our ability to maintain and
protect our computer systems, some of which are located at our corporate
headquarters in Santa Clara, California. We do have a backup disaster recovery
program and fully redundant systems for our service at an off-site location
hosted by Exodus Communications, Inc. While this offsite location does provide a
significant amount of security and scalability there is no guarantee that the
system is not vulnerable to damage from fire, floods, earthquakes, power loss,
telecommunications failures and similar events. Although we maintain insurance
against fires, floods, earthquakes and general business interruptions, the
amount of coverage may not be adequate in any particular case. The occurrence of
such an event could have a material adverse effect on our business, results of
operations and financial condition.

The Internet industry is characterized by rapid technological change

       Rapid technological developments, evolving industry standards and
consumer demands, and frequent new product introductions and enhancements
characterize the market for Internet products and services. These market
characteristics are exacerbated by the

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<PAGE>   20

emerging nature of the market and the fact that many companies are expected to
introduce new Internet products and services in the near future. Our future
success will significantly depend on our ability to continually improve the
vehicle purchasing experience, the addition of new and useful services and
content to our Web site, and the performance, features and reliability of our
Web site. In addition, the widespread adoption of developing multimedia-enabling
technologies could require fundamental and costly changes in our technology and
affect the nature, viability and measurability of Internet- based advertising,
which could adversely affect our business, results of operations and financial
condition.

We could face liability for information retrieved from or transmitted over the
Internet and liability for products sold over the Internet

       We could be exposed to liability with respect to third-party information
that may be accessible through our Web site, links or car review services. Such
claims might assert, among other things, that, by directly or indirectly
providing links to Web sites operated by third parties, we should be liable for
copyright or trademark infringement or other wrongful actions by such third
parties through such Web sites. It is also possible that, if any third-party
content information provided on our Web site contains errors, consumers could
make claims against us for losses incurred in reliance on such information.

       We also enter into agreements with other companies under which any
revenue that results from the purchase of services through direct links to or
from our Web site is shared. Such arrangements may expose us to additional legal
risks and uncertainties, including local, state, federal and foreign government
regulation and potential liabilities to consumers of these services, even if we
do not provide the services ourselves. We cannot assure you that any
indemnification provided to us in our agreements with these parties, if
available, will be adequate.

       Even to the extent such claims do not result in liability to us, we could
incur significant costs in investigating and defending against such claims. The
imposition upon us for potential liability of information carried on or
disseminated through our system could require us to implement measures to reduce
our exposure to such liability, which might require the expenditure of
substantial resources or limit the attractiveness of our services to consumers,
member dealers, category partners and others.

       Our general liability insurance and our communications liability
insurance may not cover all potential claims to which we are exposed and may not
be adequate to indemnify us for all liability that may be imposed. Any
imposition of liability that is not covered by insurance or is in excess of
insurance coverage could have a material adverse effect on our business, results
of operations and financial condition.

Our intellectual property protection may be inadequate

       Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related businesses are
uncertain and still evolving, and we can give no assurance regarding the future
viability or value of any of our proprietary rights. Despite the precautions we
have taken, it may be possible for a third party to copy or otherwise obtain and
use our proprietary information without authorization or to develop similar
technology independently.

       We have registered in the United States the "Autoweb" and "Autoweb.com"
trademarks associated with the services we provide and have registered the mark
"Autoweb" in a foreign jurisdiction. We are aware, however, that another party
has registered the "Autoweb" mark internationally. We cannot guarantee,
therefore, that we will be able to continue to use the name "Autoweb" or
"Autoweb.com" worldwide in the future. If we were required to change our name
and adopt a new trademark, we would incur significant expenses related to
marketing a replacement trademark, and such a change would likely have a
material adverse effect on our business, results of operations and financial
condition. We have also registered in the United States "Autokey" trademark
associated with a customized search function.

We face risks associated with litigation

       Litigation may be necessary in the future to enforce our intellectual
property rights, to protect our trade secrets or trademarks or to determine the
validity and scope of the proprietary rights of others. Such litigation might
result in substantial costs and diversion of resources and management attention.
Furthermore, our business activities may infringe upon the proprietary rights of
others and other parties may assert infringement claims against us, including
patent claims or claims that arise from directly or indirectly providing
hyperlink text links to Web sites operated by third parties. Moreover, from time
to time, we may be subject to claims of alleged infringement by us or our member
dealers of the trademarks, service marks, patents and other intellectual
property rights of third parties. Such claims and any resultant litigation,
should it occur, might subject us to significant liability for damages, might
result in


                                       20
<PAGE>   21

invalidation of our proprietary rights and, even if not meritorious, could
result in substantial costs and diversion of resources and management attention
and have a material adverse effect on our business, results of operations and
financial condition.

       Between April and June 2001, eight purported class action lawsuits were
filed in the United States District Court, Southern District of New York against
certain of Autoweb's current and former directors and officers and underwriters
involved in Autoweb's initial public offering. The foregoing actions purport to
allege violations of the Securities Act of 1933 and the Securities Exchange Act
of 1934. The enumerated complaints have only recently been filed. Two motions
seeking lead counsel status were filed on June 19, 2001. Autoweb anticipates
that all actions, except for possibly one separate lawsuit, will ultimately be
consolidated into one action and that a consolidated complaint will be filed
after appointment of lead plaintiff(s). All of the cases have been assigned to
one judge in the Southern District of New York. As of July 13, 2001 Autoweb and
the other defendants had not yet answered any of the complaints listed above,
and discovery had not yet commenced. Autoweb believes that it has meritorious
defenses to the complaints and intends to vigorously defend the actions. In
addition, Autoweb believes that its underwriters may have an obligation to
indemnify Autoweb against these claims under the terms of the underwriter
engagement letter for the initial public offering.

We depend on third party technology

       We currently license from third parties certain technologies and
information incorporated into our Web site. As we continue to introduce new
services that incorporate new technologies and information, we may be required
to license additional technology and information from others. We cannot assure
you that these third-party technology and information licenses will continue to
be available to us on commercially reasonable terms, if at all. Additionally, we
cannot assure you that the third parties from which we currently license our
technology and information will be able to defend their proprietary rights
successfully against claims of infringement. Any failure to obtain any of these
technology and information licenses could result in delays or reductions in the
introduction of new features, functions or services. It could also adversely
affect the performance of our existing services until equivalent technology or
information can be identified, obtained and integrated.

We may be affected by general economic conditions

       Purchases of new vehicles are typically discretionary for consumers and
may be particularly affected by negative trends in the general economy. The
success of our operations depends to a significant extent upon a number of
factors relating to discretionary consumer spending, including economic
conditions (and perceptions by consumers) affecting disposable consumer income
(such as employment, wages and salaries, business conditions, interest rates,
availability of credit and taxation) for the economy as a whole and in regional
and local markets where we operate. In addition, because the purchase of a
vehicle is a significant investment and is relatively discretionary, any
reduction in disposable income in general may affect us more significantly than
companies in other industries. In addition, our business strategy relies on
advertising by and agreements with other Internet companies. Any significant
deterioration in general economic conditions that adversely affects these
companies could also have a material adverse effect on our business, results of
operations and financial condition.

We have security risks

       On occasion, some experienced programmers ("hackers") have attempted to
penetrate our network security. We expect that these attempts, some of which
have succeeded, will continue to occur from time to time. Because a hacker who
penetrates our network security could misappropriate proprietary information or
cause interruptions in our services, we might be required to expend significant
capital and resources to protect against, or to alleviate, problems caused by
hackers. Additionally, we may not have a timely remedy against a hacker who is
able to penetrate our network security. In addition to purposeful security
breaches, the inadvertent transmission of computer viruses could expose us to
litigation or to a material risk of loss. Such security breaches and inadvertent
transmissions could have a material adverse effect on our business, results of
operations and financial condition.

       In offering certain online payment services, we may increasingly rely on
technology licensed from third parties to provide the security and
authentication necessary to effect secure transmission of confidential
information, such as consumer credit card numbers. Advances in computer
capabilities, new discoveries in the field of cryptography, or other events or
developments may result in a compromise or breach of the algorithms that we use
to protect our consumers' transaction data or our software vendors' products.
Any well-publicized compromise of security could deter use of the Internet in
general or use of the Internet to conduct transactions that involve transmitting
confidential information or downloading sensitive materials.

Power shortages in California may adversely affect us

       We conduct most of our operations in the state of California and rely on
a continuous power supply to conduct operations. California's current energy
crisis could substantially disrupt our operations and increase our expenses.
California has recently implemented, and may in the future continue to
implement, rolling blackouts throughout the state. Although state lawmakers are


                                       21
<PAGE>   22

working to minimize the impact, if blackouts interrupt our power supply, we may
be temporarily unable to continue operations at our facilities. Any such
interruption in our ability to continue operations at our facilities could delay
the development of our products and disrupt communications with our customers,
suppliers or manufacturing operations. Future interruptions could damage our
reputation and could result in lost revenue, either of which could substantially
harm our business and results of operations. In addition, Autoweb currently
hosts its Web sites with a third party service provider. Although this service
provider maintains backup generation capabilities, it recently suffered a power
disruption that caused its backup system to fail. This recent power disruption
did not affect Autoweb's Web site, however, there is no guarantee that future
disruptions in power at Autoweb's service provider facility will not affect
Autoweb and interrupt the availability of its web site. Interruptions in the
accessibility of Autoweb's Web site by consumers and others will have a negative
effect on our business and operating results. Furthermore, shortages in
wholesale electricity supplies have caused power prices to increase. If
wholesale prices continue to increase, our operating expenses will likely
increase which will have a negative effect on our operating results.

We have risks associated with international operations and expansions

       A part of our long-term strategy is to establish Autoweb.com and AIC in
international markets. However, the Internet, or our commerce, content and
community services model, may not become widely accepted in any market. In
addition, we expect that the success of any additional foreign operations we
initiate will be substantially dependent upon our member dealers, category
partners and content services. We may experience difficulty in managing
international operations as a result of failure to identify an effective foreign
partner, competition, technical problems, local laws and regulations, distance
and language and cultural differences. Our international partners may not be
able to successfully market and operate our community model in foreign markets.
There are also certain risks inherent in doing business internationally,
including:

       -      cultural and business practices differences;

       -      fluctuations in currency exchange rates;

       -      political issues;

       -      legal and economic instability;

       -      seasonal reductions in business activity in certain other parts of
              the world; and

       -      potentially adverse tax consequences.

       One or more of such factors could have a material adverse effect on our
future international operations and, consequently, on our business, results of
operations and financial condition.

Our Certificate of Incorporation and Bylaws and Delaware law contain provisions
that could discourage a takeover.

Certain provisions of Delaware law and our Certificate of Incorporation and
Bylaws could have the effect of delaying or preventing a change in control.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We considered the provisions of Financial Reporting Release No. 48, "Disclosure
of Accounting Policies for Derivative Financial Instruments and Derivative
Commodity Instruments, and Disclosure of Quantitative and Qualitative
Information about Market Risk Inherent in Derivative Financial Instruments,
Other Financial Instruments and Derivative Commodity Instruments." We had no
holdings of derivative financial or commodity instruments at June 30, 2001.
However, we are exposed to financial market risks, including changes in foreign
currency exchange rates and interest rates. The majority of our revenue,
expenses and capital expenditures are transacted in U.S. dollars.

At June 30, 2001, we had no assets classified as short-term investments. The
objectives of our investment policy are the safety and preservation of invested
funds, and liquidity of investments that is sufficient to meet cash flow
requirements. Our policy is to place our cash, cash equivalents, and investments
available for sale with high credit quality financial institutions, commercial
companies, and government agencies in order to limit the amount of credit
exposure. Our investment policy also provides that our investment portfolio


                                       22
<PAGE>   23

must not have an average portfolio maturity of beyond one year and that we must
maintain liquidity positions. Our investment policy prohibits investments in
industries and speculative activities and requires investments be denominated in
U.S. dollars.

                           PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

       Between April and June 2001, eight purported class action lawsuits were
filed in the United States District Court, Southern District of New York against
certain of Autoweb's current and former directors and officers and underwriters
involved in Autoweb's initial public offering. The foregoing actions purport to
allege violations of the Securities Act of 1933 and the Securities Exchange Act
of 1934. The enumerated complaints have only recently been filed. Two motions
seeking lead counsel status were filed on June 19, 2001. Autoweb anticipates
that all actions, except for possibly one separate lawsuit, will ultimately be
consolidated into one action and that a consolidated complaint will be filed
after appointment of lead plaintiff(s). All of the cases have been assigned to
one judge in the Southern District of New York. As of July 13, 2001 Autoweb and
the other defendants had not yet answered any of the complaints listed above,
and discovery had not yet commenced. Autoweb believes that it has meritorious
defenses to the complaints and intends to vigorously defend the actions. In
addition, Autoweb believes that its underwriters may have an obligation to
indemnify Autoweb against these claims under the terms of the underwriter
engagement letter for the initial public offering.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

       Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

       Not applicable.

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

No matters were submitted to a vote of the Security Holding during the Quarter
ending June 30, 2001. However, a proxy was mailed out to the shareholders
subsequent to the close of the quarter on July 20, 2001 and a stockholders
meeting is set for August 14, 2001, whereby the security holders will be asked
to vote to elect two Class II Board members, ratify the selection of
PriceWaterhouseCoopers as the company's independent accountants, and consider
and vote on the proposed merger of a wholly-owned subsidiary of Autobytel, with
and into Autoweb, as contemplated by the Acquisition Agreement between
Autobytel, Autobytel Acquisition I Corp. and Autoweb. In the merger, Autobytel
will issue 0.3553 shares of its common stock in exchange for each outstanding
share of common stock of Autoweb and Autoweb will become a wholly-owned
subsidiary of Autobytel.

ITEM 5. OTHER INFORMATION

As of June 30, 2001, our officers, directors and key employees are as follows:

<TABLE>
<CAPTION>
              NAME OF DIRECTOR                   AGE                              PRINCIPAL OCCUPATION
              ----------------                   ---                              --------------------
<S>                                              <C>    <C>
Dean A. DeBiase............................       42    Chairman of the Board
Jeffery A. Schwartz........................       35    President, Chief Executive Officer and a Director
Michael P. Schmidt.........................       38    Chief Financial Officer
Nadyne G. Edison, Ph.D. ...................       43    Chief Marketing Officer and Vice President, Customer Relationship Management
William J. Barrett.........................       44    Divisional President, Automotive Information Center (AIC)
Jerome S. Karr.............................       53    Vice President, Engineering and Chief Technology Officer
Regan Senkarik.............................       42    Vice President, Product Management
Steve Cottrell.............................       40    Vice President, Sales
Fred L. Ruffin.............................       45    Vice President, Human Resources
Meri E. Glade..............................       40    Vice President, Legal Affairs, General Counsel and Secretary
Jay C. Hoag(1).............................       43    Director
Lawrence E. Lepard(1)......................       46    Director
Mark R. Ross(1)............................       55    Director
</TABLE>


                                       23
<PAGE>   24

(1)   Member of the Audit Committee and the Compensation Committee

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following reports on Form 8-K were filed during the quarter ended June 30,
2001.

       On April 11, 2001, the company filed a Form 8-K reporting that Autobytel,
Autobytel Acquisition I Corp., a Delaware corporation and wholly-owned
subsidiary of Autobytel ("Merger Sub"), and the company entered into an
Acquisition Agreement. A copy of the Acquisition Agreement was attached as an
exhibit to the report.

       On April 12, 2001, the company filed a Form 8K/A attaching a copy of the
press release announcing the execution of the Acquisition Agreement, as it was
inadvertently omitted from the previous filing.

The following reports on Form 8-K were filed during the quarter ended June 30,
2001.



                                       24
<PAGE>   25

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: August 14, 2001                   By: /s/ JEFFREY SCHWARTZ
                                            ------------------------------------
                                                      Jeffrey Schwartz
                                             President, Chief Executive Officer

Date: August 14, 2001                   By: /s/ MICHAEL SCHMIDT
                                            ------------------------------------
                                                      Michael Schmidt
                                                  Chief Financial Officer

Date: August 14, 2001                   By: /s/ SANDRA CRAIG
                                            ------------------------------------
                                                       Sandra Craig
                                                  Vice President, Finance


                                       25