<PAGE>   1
================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                       OR

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

                        COMMISSION FILE NUMBER 000-25723

                               LAUNCH MEDIA, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                        95-4463753
  (STATE OR JURISDICTION OF                               (IRS EMPLOYER
INCORPORATION OR ORGANIZATION)                        IDENTIFICATION NUMBER)

                            2700 PENNSYLVANIA AVENUE
                         SANTA MONICA, CALIFORNIA 940404
                    (Address of principal executive offices)
                            TELEPHONE: (310) 526-4300



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

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

      COMMON STOCK, PAR VALUE OF $0.001 PER SHARE, 13,509,180 SHARES OUTSTANDING
      AS OF April 30, 2000.



================================================================================


<PAGE>   2




                        LAUNCH MEDIA, INC. AND SUBSIDIARIES
                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                   PAGE NO.
                                                                                   --------
<S>         <C>                                                                    <C>
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements
            Consolidated Balance Sheets as of
                 December 31, 1999 and March 31, 2000 (unaudited)                      1
            Consolidated Statements of Operations and Comprehensive Loss for the
                 Three Months Ended March 31, 1999 and 2000 (unaudited)                2
            Consolidated Statements of Cash Flows for the
                 Three months ended March 31, 1999 and 2000 (unaudited)                3
            Notes to Consolidated Financial Statements                                 4
Item 2.     Management's Discussion and Analysis of Financial Condition
                 and Results of Operations                                             8
Item 3.     Quantitative and Qualitative Disclosures about Market Risk                24


PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings                                                         25
Item 2.     Changes in Securities                                                     25
Item 3.     Defaults Upon Senior Securities                                           25
Item 4.     Submission of Matters to a Vote of Security Holders                       25
Item 5.     Other Information                                                         25
Item 6.     Exhibits and Reports on Form 8K                                           25
            Signatures                                                                26
Exhibit 27  Financial Data Schedule                                                   27
</TABLE>






<PAGE>   3

                       LAUNCH MEDIA, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>
                                                              DECEMBER 31,     MARCH 31,
                                                                  1999            2000
                                                              ------------    ------------
                                                                       (UNAUDITED)
<S>                                                           <C>             <C>
                               ASSETS:

Current assets:
  Cash and cash equivalents.................................  $    878,000    $   3,494,000
  Short-term investments....................................    55,007,000       45,464,000
  Securities available for sale.............................     1,684,000          496,000
  Accounts receivable, net of allowances of $13,000 (1999)
    and $71,000 (2000)......................................     4,027,000        4,542,000
  Inventory.................................................       273,000          306,000
  Prepaid and other current assets..........................     2,293,000        2,388,000
                                                              ------------    -------------
          Total current assets..............................    64,162,000       56,690,000
Property and equipment, net.................................     7,404,000        8,884,000
Intangible and other assets.................................    22,652,000       28,291,000
                                                              ------------    -------------
          Total assets......................................  $ 94,218,000    $  93,865,000
                                                              ============    =============

                    LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable..........................................  $  2,767,000    $   2,946,000
  Accrued expenses..........................................     2,357,000        4,141,000
  Deferred revenue..........................................     1,197,000          314,000
  Notes payable and accrued interest........................        60,000          382,000
  Capital lease obligations, current portion................       796,000          956,000
                                                              ------------    -------------
          Total current liabilities.........................     7,177,000        8,739,000
Notes payable...............................................       160,000          966,000
Capital lease obligations, net of current portion...........       839,000        1,035,000
                                                              ------------    -------------
          Total liabilities.................................     8,176,000       10,740,000
                                                              ------------    -------------
Commitments and contingencies
Series A, B, C and D mandatory redeemable convertible
  preferred stock, $.001 par value; shares authorized
  6,580,405; none outstanding...............................            --               --
Stockholders' equity (deficiency):
  Common stock, $.001 par value, shares authorized
     75,000,000; shares issued and outstanding,
     12,849,686 (1999) and 13,498,011 (2000)................        13,000          14,000
  Additional paid-in capital................................   151,221,000     161,664,000
  Treasury stock............................................            --        (834,000)
  Other comprehensive income................................       684,000         (25,000)
  Unearned compensation.....................................      (765,000)       (689,000)
  Accumulated deficit.......................................   (65,111,000)    (77,005,000)
                                                              ------------    -------------
          Total stockholders' equity........................    86,042,000       83,125,000
                                                              ------------    -------------
          Total liabilities and stockholders' equity........  $ 94,218,000    $  93,865,000
                                                              ============    =============
</TABLE>



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


                                       1
<PAGE>   4

                       LAUNCH MEDIA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE LOSS


<TABLE>
<CAPTION>
                                                        FOR THE THREE MONTHS
                                                           ENDED MARCH 31,
                                                    ---------------------------
                                                       1999            2000
                                                    -----------    ------------
                                                            (UNAUDITED)
<S>                                                 <C>            <C>
Net revenues:
  Advertising and transaction fees................  $   711,000    $  3,705,000
  Content licensing...............................           --       2,176,000
  Subscription and other..........................      537,000         553,000
                                                    -----------    ------------
                                                      1,248,000       6,434,000
Operating expenses:
  Cost of revenues................................      651,000       1,133,000
  Sales and marketing.............................    2,830,000       7,501,000
  Content and product development.................    1,315,000       4,693,000
  General and administrative......................      600,000       2,190,000
  Depreciation and amortization...................      603,000       3,972,000
                                                    -----------    ------------
  Loss from operations............................   (4,751,000)    (13,055,000)
Interest income and other, net....................       19,000       1,167,000
                                                    -----------    ------------
  Loss before provision for income taxes..........   (4,732,000)    (11,888,000)
Provision for income taxes........................       10,000           6,000
                                                    -----------    ------------
  Net loss........................................   (4,742,000)    (11,894,000)
Accretion of mandatory redeemable convertible
  preferred stock.................................     (615,000)             --
                                                    -----------    ------------
  Net loss attributable to common stockholders....  $(5,357,000)   $(11,894,000)
                                                    ===========    ============
Basic and diluted net loss per common share.......  $     (4.32)   $      (0.89)
                                                    ===========    ============
Weighted average shares outstanding used in per
  share calculation...............................    1,241,000      13,390,000
                                                    ===========    ============
Comprehensive loss:
Net loss..........................................  $(4,742,000)   $(11,894,000)
Other comprehensive income:
  Unrealized loss on securities available for
     sale.........................................           --         (25,000)
                                                    -----------    ------------
Comprehensive loss................................  $(4,742,000)   $(11,919,000)
                                                    ===========    ============
</TABLE>



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


                                       2
<PAGE>   5

                       LAUNCH MEDIA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                                  FOR THE THREE MONTHS
                                                                     ENDED MARCH 31,
                                                               --------------------------
                                                                  1999           2000
                                                               -----------   ------------
                                                                      (UNAUDITED)
<S>                                                            <C>           <C>
Cash flows from operating activities:
  Net loss..................................................   $(4,742,000)  $(11,894,000)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization...........................       603,000      3,972,000
    Non-cash charges for issuance of equity securities......       346,000             --
    Allowance for sales returns.............................       (93,000)        58,000
    Amortization of deferred compensation...................       120,000         76,000
    Gain on sale of securities..............................            --        488,000
    Changes in operating assets and liabilities:
      Increase in accounts receivable.......................      (282,000)      (543,000)
      Increase in inventory.................................       (53,000)       (33,000)
      Increase in prepaid and other current assets..........      (714,000)       (92,000)
      Increase in accounts payable..........................       762,000        177,000
      Increase in accrued expenses..........................       288,000      1,266,000
      Increase (decrease) in deferred revenue...............       390,000       (883,000)
                                                               -----------   ------------
         Net cash used in operating activities..............    (3,375,000)    (7,408,000)
                                                               -----------   ------------
Cash flows from investing activities:
  Decrease (increase) in short-term investments.............                     (480,000)
  Purchases of property and equipment.......................      (166,000)    (1,703,000)
  Purchases of securities...................................            --    (37,924,000)
  Maturities of securities..................................     4,993,000     50,467,000
  Acquisition of business...................................      (302,000)      (984,000)
  Proceeds from sale of securities..........................            --        968,000
  Increase in other assets..................................        (6,000)      (189,000)
                                                               -----------   ------------
         Net cash provided by investing
           activities.......................................     4,519,000     10,155,000
                                                               -----------   ------------
Cash flows from financing activities:
  Payments under capital lease obligations..................       (55,000)      (189,000)
  Payments under notes payable..............................            --         (9,000)
  Proceeds from notes payable...............................     1,500,000        839,000
  Acquired treasury stock...................................            --       (834,000)
  Proceeds from exercise of stock options...................        31,000         62,000
                                                               -----------   ------------
         Net cash provided by (used in) financing activities     1,476,000       (131,000)
                                                               -----------   ------------
         Increase (decrease) in cash and cash equivalents...     2,620,000      2,616,000
    Cash and cash equivalents, beginning of year............     1,735,000        878,000
                                                               -----------   ------------
    Cash and cash equivalents, end of year..................   $ 4,355,000    $ 3,494,000
                                                               ===========   ============
Supplementary disclosure of cash flow information:
  Cash paid during the period for:
    Interest................................................   $    23,000    $    45,000
    Taxes...................................................   $    10,000    $     2,000
Supplementary disclosure of noncash transactions:
    Equipment acquired under capital leases.................   $   302,000    $   544,000
    Issuance of common stock for acquisitions...............   $ 8,931,000    $10,612,000
    Equipment acquired under note payable...................   $        --    $ 1,100,000
</TABLE>


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


                                       3
<PAGE>   6

                        LAUNCH MEDIA, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

        Launch Media, Inc. and subsidiaries ("the Company") was incorporated in
Delaware in February 1994 and is a digital media company focused on creating the
premier Internet destination for discovering new music. The Company operates in
one reportable industry segment. Leveraging the inherent advantages of digital
media, the Company offers a compelling music discovery experience from new and
established artists for consumers and provides a valuable marketing platform for
record labels, artists, advertisers and merchants. The music content is
delivered on the Internet at www.launch.com and on Launch on CD-ROM. Both
launch.com and Launch on CD-ROM are advertiser supported and include original
content that takes advantage of the personal computer's interactive multimedia
technology.

        On April 23, 1999 the Company effected an initial public offering
("IPO") of 3,500,000 shares of its common stock at a price of $22 per share. On
May 19, 1999, the underwriters exercised their over-allotment option to purchase
an additional 510,000 shares of common stock. The net proceeds to the Company,
after deducting underwriting discounts and commissions and offering expenses,
were approximately $80.9 million.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

        The consolidated financial statements include the accounts of Launch
Media, Inc. and its wholly owned subsidiaries. All intercompany balances and
transactions have been eliminated.

UNAUDITED INTERIM FINANCIAL INFORMATION

        The unaudited interim consolidated financial statements of the Company
for the three months ended March 31, 1999 and 2000, included herein have been
prepared in accordance with the instructions for Form 10-Q under the Securities
Exchange Act of 1934, as amended, and Article 10 of Regulation S-X under the
Securities Act of 1933, as amended. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations relating to interim financial statements.

        In the opinion of management, the accompanying unaudited interim
consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company at March 31, 2000, and the results of its operations and its cash
flows for the three months ended March 31, 1999 and 2000, respectively. The
results for the three months ended March 31, 2000 are not necessarily indicative
of the expected results for the full fiscal year or any future period.


BASIS OF PRESENTATION

        These financial statements should be read in conjunction with the
consolidated financial statements and related footnotes included in the Annual
Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC").

USE OF ESTIMATES

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


                                       4
<PAGE>   7

ongoing basis, management reviews its estimates based on currently available
information. Changes in facts and circumstances may result in revised estimates.

REVENUE RECOGNITION

        The Company's revenues have been derived primarily from the sale of
advertising and sponsorships, syndicating content to radio stations and other
Internet sites, transaction fees and annual subscriptions relating to Launch on
CD-ROM. Revenues for sponsorships across the Launch media properties are
recognized ratably over the sponsorship term which ranges from one to twelve
months. Revenues from advertisements for Launch on CD-ROM are recognized upon
the release date of the issue in which the advertisement appears. With respect
to launch.com, revenues from advertisements are recognized ratably in the period
in which the advertisement is displayed, provided that no significant Launch
obligations remain.

        Content licensing revenue includes revenue resulting from Launch
obtaining on-air radio advertising inventory in exchange for music news content.
Launch sells this inventory for cash and recognizes revenue when the radio
stations broadcast the advertisement. Revenue from syndication of Launch content
is recognized ratably over the contract term which is typically one year.

        Advance payments for Launch on CD-ROM subscriptions are deferred and
recognized over the term of the related subscription, typically 12 months.
Advance payments for sponsorships are deferred and recognized over the term of
the sponsorship.

        Advertising revenues also include barter revenues, which represent an
exchange by Launch of advertising space on Launch on CD-ROM for advertising
space on other Web sites. Revenues and expenses from barter transactions are
recorded at the lower of estimated fair value of the advertisements received or
delivered based on advertising rates currently in effect. Barter revenues are
recognized when the advertisements are run on the Launch media properties.
Barter expenses are recognized when Launch's advertisements are run on the
reciprocal Web sites or other advertising medium, which is typically in the same
period as when the advertisements are run on the Launch media properties.
Revenues and expenses recognized from barter transactions were approximately
$208,000 and $330,000 for the three months ended March 31, 1999 and 2000,
respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

        In December 1999 the SEC issued Staff Accounting Bulletin (SAB) No. 101
"Revenue Recognition in Financial Statements" which provides guidance on the
recognition, presentation and disclosure of revenue in financial statements
filed with the SEC. SAB 101 outlines the basic criteria that must be met to
recognize revenue and provides guidance for disclosures related to revenue
recognition policies. Management believes the impact of SAB 101 will not have a
material impact on the financial position or results of operations of the
Company.

        In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivatives and Hedging Activities" ("SFAS 133"), which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
(collectively referred to as derivatives) and for hedging activities. SFAS No.
133 is effective for all fiscal quarters of fiscal years beginning after June
15, 2000. The Company does not expect the adoption of this statement to have a
significant impact on the Company's financial statements.


COMPUTATION OF NET LOSS PER SHARE

        In accordance with SFAS No. 128, "Computation of Earnings Per Share",
basic earnings per share is computed using the weighted average number of shares
outstanding during the period and diluted earnings per share is computed using
the weighted average number of common and dilutive common equivalent shares
outstanding during the period. Common equivalent shares consist of the


                                       5
<PAGE>   8

incremental common shares issuable upon the conversion of the Mandatory
Redeemable Convertible Preferred Stock (using the if-converted method) and
shares issuable upon exercise of outstanding stock options and warrants, using
the treasury stock method. Common equivalent shares are excluded from the
calculation if their effect is anti-dilutive. Pursuant to SEC Staff Accounting
Bulletin No. 98, common stock and convertible preferred stock issued for nominal
consideration, prior to the anticipated effective date of an IPO, are required
to be included in the calculation of basic and diluted net loss per share as if
they were outstanding for all periods presented. To date, the Company has not
had any issuances or grants for nominal consideration.

        Diluted net loss per share for the three months ended March 31, 1999 and
2000, does not include the effect of options and warrants to purchase 1,360,972
and 2,566,422 shares of common stock, respectively and 5,918,230 shares of
Mandatory Redeemable Convertible Preferred Stock as of March 31, 1999 on an
"as-if-converted" basis as the effect of their inclusion is anti-dilutive.


3. RELATED PARTY TRANSACTIONS

        Advertising and transaction fees for the three months ended March 31,
2000 included approximately $745,000 in revenues received from a corporate
shareholder of the Company.

        In April 1999, the Company and another corporate shareholder entered
into a sponsorship and content license agreement and a music video license
agreement upon the closing of the IPO. Advertising revenues for the three months
ended March 31, 2000 were approximately $418,000. This revenue is included in
advertising and transaction fees in the consolidated statement of operations.

4. INCOME TAXES

        The Company's income tax provision consist of minimum state franchise
taxes.

5. CAPITAL LEASE LINE OF CREDIT AND FINANCING FACILITY

        The Company has a revolving capital lease line of credit for $2.0
million. At March 31, 2000, $1.8 million was outstanding under this line of
credit. This facility bears interest at the bank's prime rate (8.25% at March
31, 2000). The leased assets collateralize any borrowings under this line of
credit.

        On March 28, 2000, the Company entered into a promissory note with a
credit corporation in the amount of $1.1 million to purchase equipment. The
promissory note accrues interest at 15.4% per annum and requires monthly
interest and principal payments. Any acquired assets collateralize borrowings
under this facility.


6. BUSINESS ACQUISITIONS

Acquisition of Tourdates.com

        On January 14th, 2000, the Company acquired all of the outstanding
shares of Musicom, Inc., d.b.a. Tourdates.com. Tourdates.com is a premier online
guide to local and national concert information. The acquisition was accounted
for using the purchase method of accounting and, accordingly, the purchase price
has been allocated to the tangible and intangible assets acquired and
liabilities assumed on the basis of their respective fair values on the
acquisition date.

        The total purchase price of approximately $12 million was comprised of
626,556 shares of the Company's common stock with an estimated fair value of
approximately $10.6 million, a cash payment of approximately $1 million and
assumed liabilities and transaction costs of approximately $400,000. The excess
purchased price over net tangible assets acquired is estimated to be
approximately $12 million and is being amortized over an estimated average
useful life of approximately 3 years.


                                       6
<PAGE>   9

7.  PRO FORMA RESULTS

        Pro forma results of operations for the three months ended March 31,
1999 and 2000, assuming the completion of the Company's acquisitions of SW
Networks Inc. and Musicvideos.com as of January 1, 1999:


<TABLE>
<CAPTION>
                                                       1999           2000
                                                    -----------    -----------
<S>                                                 <C>            <C>
Net revenue.......................................  $ 2,444,000    $  6,434,000
Net loss..........................................  $(6,706,000)   $(11,894,000)
Basic and diluted loss per share..................  $      (.79)   $       (.89)
Weighted average common shares used in per share
  calculation.....................................    8,515,000     13,390,000
</TABLE>






                                       7
<PAGE>   10

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

        The Company has included in this filing certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 concerning the Company's business, operations and financial condition.
The words or phrases "can be", "expects", "may affect", "may depend",
"believes", "estimates", "projects", and similar words and phrases are intended
to identify such forward-looking statements. Such forward-looking statements are
subject to various known and unknown risks and uncertainties, and the Company
cautions you that any forward-looking information provided by or on behalf of
the Company is not a guarantee of future performance. Actual results could
differ materially from those anticipated in such forward-looking statements due
to a number of factors, some of which are beyond the Company's control, in
addition to those discussed in the Company's other public filings, press
releases and statements by the Company's management, including (i) the volatile
and competitive nature of the Internet and music industries, (ii) changes in
domestic and foreign economic and market conditions, (iii) the effect of
federal, state and foreign regulation on the Company's business, and (iv) the
effect of any future acquisitions. All such forward-looking statements are
current only as of the date on which such statements were made. The Company does
not undertake any obligation to publicly update any forward-looking statement to
reflect events or circumstances after the date on which any such statement is
made or to reflect the occurrence of unanticipated events.

The Company's fiscal year ends on December 31 of each calendar year.

RECENT EVENTS

        On January 28, 2000, Launch entered into a strategic partnership making
the Wherehouse Online Stores the exclusive e-commerce provider for pre-recorded
CDs and cassettes, videos and video games for launch.com. Similarly,
CheckOut.com announced the introduction of the Wherehouse Online Stores,
featuring dedicated stores for music, movies and related merchandise.
CheckOut.com recently received a $20 million investment from Wherehouse and will
operate the Wherehouse Online Stores under the CheckOut.com umbrella. In
addition, CheckOutMusic.com has become a partner in Launch's Online Music Group
(OMG). Launch.com has also become a content provider for CheckOutMusic.com. The
Wherehouse Online Stores have been integrated into launch.com. Launch receives a
share of revenue on all merchandise purchased on the Wherehouse Online Stores.

        On February 16, 2000, Launch announced the consumer release of the
unique streaming music service Launchcast. Prior to consumer release, Launchcast
had been available in beta preview since November and had amassed over 100,000
stations, created by launch.com members. Launch.com members have the ability to
become virtual "DJs" when they create a Launchcast station tailored to their
musical tastes. Currently, there are over 60,000 songs available in over 70
music genres, with more to be added continuously as Launchcast develops. Launch
has leveraged the technology of iBEAM Broadcasting, Microsoft and Sonic Foundry
to bring Launchcast, to consumers.

        On March 16, 2000, Launch announced the creation of Launch Japan. The
newly formed company will be based in Tokyo with Softbank Publishing owning a
50% stake, Launch owning a 30% stake and Yahoo! Japan and Tokyo Broadcasting
System (TBS) each owning a 10% stake. The format of Launch Japan will mirror
that of Launch.com, offering members personalized music information, music
videos, streaming audio, exclusive artist interviews and music-related news,
charts, tour information and exclusive editorial content. The site was launched
on April 1, 2000 at www.launch.co.jp. Launch.com will license its music content
to Launch Japan under an exclusive agreement. The deal represents Launch Media's
first international partnership. We believe that this venture will increase our
content and provide us with key exposure to the Japanese music marketplace.


                                       8
<PAGE>   11

OVERVIEW

        Launch is a digital media company focused on music. Launch leverages the
inherent advantages of digital media to offer consumers a compelling music
discovery experience while providing record labels, artists, advertisers and
merchants a valuable marketing platform. Our content is delivered on the
Internet at www.launch.com and on the monthly Launch on CD-ROM.

        Launch was incorporated in February 1994, and we published the first
issue of Launch on CD-ROM in May 1995. Through July 1998, we distributed Launch
on CD-ROM bi-monthly, and since that time, we have distributed it monthly.
Launch.com was first made available in October 1997. As of March 31, 2000,
launch.com had approximately 3.5 million registered members, and Launch on
CD-ROM had approximately 265,000 subscribers. Doubleclick, Inc. our third party
ad server, reported that in March 31, 2000 there were approximately 3.2 million
unique visitors to launch.com.

        Launch has incurred significant net losses and negative cash flows from
operations since its inception, and as of March 31, 2000, had an accumulated
deficit of approximately $77.0 million. Launch intends to continue to make
significant financial investments in marketing and promotion, content
development and technology and infrastructure development. As a result, Launch
believes that it will incur operating losses and negative cash flows from
operations for the foreseeable future, and that such losses and negative cash
flows will increase for at least the next year.

        To date, Launch's revenues have been derived primarily from the sale of
advertising, including sponsorships, and, to a lesser extent, from annual
subscriptions relating to Launch on CD-ROM. Launch derives revenue from
advertising sales against the total audience viewing content on both launch.com
and Launch on CD-ROM. Historically, Launch on CD-ROM has accounted for the
majority of Launch's audience, and, accordingly, Launch has derived the majority
of its revenues from advertising sales against the Launch on CD-ROM audience.
Launch expects that future growth, if any, in advertising revenue will largely
depend upon increasing the launch.com audience. Revenues for sponsorships across
the Launch media properties are recognized ratably over the sponsorship term,
which is typically one month. Revenues from advertisements for Launch on CD-ROM
are recognized upon the release date of the issue in which the advertisement
appears. With respect to launch.com, revenues from advertisements are recognized
ratably in the period in which the advertisement is displayed, provided that no
significant Launch obligations remain. With respect to Launch Radio Networks'
business, Launch obtains on-air radio advertising inventory in exchange for
music news content. Launch sells this inventory for cash and recognizes revenue
when the radio stations broadcast the advertisement.

        We derive subscription revenues from annual subscription fees for Launch
on CD-ROM. Advance payments for Launch on CD-ROM subscriptions are recorded as
deferred revenue and recognized as revenue ratably over the term of the
subscription.

        Advertising revenues also include barter revenues, which represent an
exchange by Launch of advertising space on Launch on CD-ROM for advertising
space on other Web sites. Revenues and expenses from barter transactions are
recorded at the lower of estimated fair value of the advertisements received or
delivered based on advertising rates currently in effect. Barter revenues are
recognized when the advertisements are run on the Launch media properties.
Barter expenses are recognized when Launch's advertisements are run on the
reciprocal Web sites or other advertising medium, which is typically in the same
period as when the advertisements are run on the Launch media properties.
Although we believe these barter transactions have been important in the
marketing of the Launch brand, we expect these transactions will decrease as a
percentage of total net revenues in the future.

        We have entered into various license arrangements, strategic alliances
and business acquisitions in order to build our audience, provide music-specific
content, generate additional online traffic, increase subscriptions and
memberships and establish additional sources of revenue. Our business
acquisitions,


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<PAGE>   12

arrangements and alliances have resulted in a variety of non-cash charges that
will affect our operating results over the next several fiscal periods.

RESULTS OF OPERATIONS

Net Revenues:

        Net revenues increased 433% from $1.2 million for the three months ended
March 31, 1999 to $6.4 million for the three months ended March 31, 2000. The
increase in net revenues was attributable primarily to an increase in
advertising and content licensing revenues.

        Advertising And Transaction Fees. Advertising and transaction fees
increased 421% from $711,000 or 57% of net revenues, for the three months ended
March 31, 1999 to $3.7 million, or 58% of net revenues, for the three months
ended March 31, 2000. Advertising revenues increased primarily as a result of an
increased number of advertisers and sponsors on Launch's media properties,
including revenue from Sony and Intel's advertising sponsorship. During 1999 and
the first three months of 2000, Launch continued to expand its advertising sales
force, in particular focusing its sales efforts on sponsorships or
advertisements that covered all of Launch's media properties. In addition, the
inventory of impressions available on our web site increased as registered and
unique users on launch.com increased. Advertising revenues have also increased
as a result of the recent rise in demand for radio advertising time. Launch
expects advertising revenue will continue to represent a significant portion of
its net revenues for the foreseeable future. Included in advertising revenues
are revenues recognized from barter transactions of $208,000, or 29.3% of
advertising revenues, for the first three months of 1999 and $330,000, or 8.9%
of advertising revenues, for the first three months of 2000.

        Content Licensing. Content licensing revenues for the three months ended
March 31, 2000 were $2.2 million, or 33.8% of total net revenues. Content
licensing revenue is primarily generated from Launch Radio Networks (LRN) by
providing news and information to radio stations in exchange for advertising
radio spots. These radio spots are sold through a third-party advertising agency
and recognized as revenue when the radio station broadcasts the advertisement.
Content licensing revenues in prior years were immaterial and were captured in
subscriptions and other revenues. Content licensing revenues from LRN depend on
both the number of music and music related spots we are able to create and on
the radio market's demand for news and information. While LRN revenue comprises
the majority of our content licensing, we expect LRN revenues to decrease as a
percentage of total content licensing as we continue to expand our content
syndication.

        Subscriptions and Other Revenues. Subscriptions and other revenues
increased 3% from $537,000, or 43.0% of total net revenues for the three months
ended March 31, 1999 to $553,000, or 8.6% of total net revenues for the three
months ended March 31, 2000. Subscription revenue for the three months ended
March 31, 2000 was $414,000, or 6.4% of total net revenues.

Operating Expenses

        Cost of Revenues. Cost of revenues consists primarily of OMG expenses,
Launch on CD-ROM manufacturing and packaging costs and related subscription
distribution costs. Cost of revenues increased 74.0% from $651,000, or 52.1% of
net revenues, during the three months ended March 31, 1999 to $1.1 million, or
17.6% of net revenues, during the three months ended March 31, 2000. The
increase in cost of revenues during the three months ended March 31, 2000 was
primarily the result of the release of an additional issue of Launch on CD-ROM
and banner inventory costs relating to OMG. We expect cost of good sold as a
percentage of net revenues and in absolute dollars to decrease as Launch on
CD-ROM is phased out.

        Sales and Marketing Expenses. Sales and marketing expenses consist
primarily of advertising and marketing costs, promotional costs and the cost of
the direct marketing, commissions paid to the media representative firms, radio
affiliate sales and advertising sales force. Sales and marketing expenses
increased 165% from $2.8 million, or 226.8% of net revenues, during the three
months ended March 31, 1999 to $7.5 million, or 116.6% of net revenues, during


                                       10
<PAGE>   13

the three months ended March 31, 2000. The increase in sales and marketing
expenses occurred primarily due to the cost of acquiring new registered users on
launch.com including distribution agreements and promotions, advertising for
Launch on other websites, the hiring of additional sales and marketing
personnel, increased sponsorships of music events, and increased marketing to
promote the Launch brand. We expect sales and marketing expenses to increase
significantly in absolute dollars as we pursue an aggressive marketing campaign
and enter into additional distribution agreements to increase the audience on
launch.com, expand marketing of the Launch brand and hire additional sales and
marketing personnel.

        Content and Product Development Expenses. Content and product
development expenses consist primarily of editorial expenses, which includes
video production and editorial writers, programming costs for Launch Radio
Networks, art production, hosting and bandwidth, software licenses, and Web
development costs. Content and product development expenses increased 256.9%
from $1.3 million, or 105.4% of net revenues, during the three months ended
March 31, 1999 to $4.7 million, or 72.9% of net revenues, during the three
months ended March 31, 2000. Content and product development expenses increased
in the three months ending March 31, 2000 due to costs of further developing and
enhancing the launch.com Web site, including product development costs,
significant additions to personnel, and software license costs. We believe that
significant investments in content and product development are required to
remain competitive. Therefore, we expect that content and product development
expenses will continue to increase in absolute dollars for the foreseeable
future.

        General and Administrative Expenses. General and administrative expenses
consist primarily of salaries and related costs for general corporate functions,
including finance, legal, human resources and accounting. Also included are
facilities costs and fees for professional services. General and administrative
expenses increased 265.0% from $600,000, or 48.1% of net revenues, during the
three months ended March 31, 1999 to $2.2 million, or 34.0% of net revenues,
during the three months ended March 31, 2000. The absolute dollar increase in
general and administrative expenses in the three months ending March 31, 2000
was primarily attributable to salary and related expenses for additional
personnel and increases in facilities costs. Launch believes our infrastructure
to be primarily in place. However, we anticipate slight increases in hiring
additional personnel, expanding facilities and additional costs related to being
a public company, including costs related to investor relations programs and
professional service fees.

        Depreciation and Amortization. Depreciation and amortization was $4.0
million during the three months ended March 31, 2000 and primarily consisted of
$3,200,000 of amortization of excess purchase price over tangible net assets
acquired arising from its acquisitions and $772,000 of depreciation.

        Interest Income And Other, Net. Interest income and other, net, consists
of interest earned on cash and cash equivalents and short-term investments,
offset by interest expense on borrowings and net gains or losses from the sale
of securities held for sale. Net interest income and other was $19,000 during
the three months ended March 31, 1999 compared to net interest and other income
of $1.2 million during the three months ended March 31, 2000 and is a result of
investing net proceeds from the Company's IPO and a realized gain of $488,000 as
a result of selling certain of its securities held for sale.

LIQUIDITY AND CAPITAL RESOURCES

        Since its inception, Launch has financed its operations primarily
through a public issuance of common stock, private placements of preferred stock
and, to a lesser extent, from the revenues generated by operations. As of March
31, 2000, Launch had approximately $48.9 million in cash and cash equivalents
and short term investments.

        Net cash used in operating activities increased to $7.4 million for the
first three months of 2000 from $3.4 million for the first three months of 1999.
The increase in net cash used in operating activities is substantially
attributable to the increased net loss, excluding non-cash charges.


                                       11
<PAGE>   14

        Net cash provided by investing activities was $10.1 million for the
first three months of 2000, as compared to net cash provided by investing
activities of $4.5 million for the first three months of 1999. The increase in
net cash provided by investing activities resulted primarily from the
significant purchase of securities which took place during the first three
months of 2000 as a result of investing the cash raised in our IPO. This cash is
predominantly invested in instruments that are highly liquid, are of high
quality investment grade, and predominantly have maturities of less than one
year with the intent to make such funds readily available for operating
purposes.

        Net cash used by financing activities was $130,000 for the first three
months of 2000, compared to $1.5 million provided for the first three months of
1999.

        We have a revolving capital lease line of credit for $2.0 million. At
March 31, 2000, $1.8 million was outstanding under this line of credit. This
facility bears interest at the bank's prime rate (8.25% at March 31, 2000). The
leased assets collateralize any borrowings under this line of credit. In
addition, on March 28, 2000, we entered into a promissory note with a credit
corporation in the amount of $1.1 million. The promissory note accrues interest
at 15.4% per annum and requires monthly interest and principal payments. Any
acquired assets collateralize borrowings under this facility.

        We have experienced a substantial increase in our capital expenditures
and operating lease arrangements since inception, which is consistent with the
growth in our operations and staffing, and anticipate that this will continue
for the foreseeable future. Additionally, Launch will continue to evaluate
possible investments in businesses, products and technologies, and plans to
expand its sales and marketing programs and conduct more aggressive brand
promotions. Launch currently expects that the net proceeds from its IPO,
together with its existing capital lease line of credit and available funds,
will be sufficient to meet its anticipated needs for working capital and capital
expenditures for at least the next 12 months. There can be no assurance,
however, that the underlying assumed levels of revenues and expenses will prove
to be accurate. Launch may seek additional funding through public or private
financings or other arrangements prior to such time. Adequate funds may not be
available when needed or may not be available on terms favorable to Launch. If
additional funds are raised through the issuance of equity securities, dilution
to existing stockholders may result. If funding is insufficient at any time in
the future, Launch may be unable to develop or enhance its products or services,
take advantage of business opportunities or respond to competitive pressures,
any of which could have a material adverse effect on Launch's business,
financial condition and results of operations.

SEASONALITY OF BUSINESS AND QUARTERLY RESULTS

        The Company believes that advertising sales in traditional media are
generally lower in the first and third calendar quarters of each year than in
respective preceding quarters and that advertising expenditures fluctuate
significantly with economic cycles. Depending on the extent to which the
Internet is accepted as an advertising medium, seasonality and cyclicality in
the level of internet advertising expenditures could become more pronounced. The
forgoing factor could have a material adverse effect on the Company's business,
results of operations and financial condition.

RISKS THAT MAY AFFECT RESULTS

WE HAVE A LIMITED OPERATING HISTORY THAT MAKES AN EVALUATION OF OUR BUSINESS
DIFFICULT

        We incorporated in February 1994 and published the first issue of Launch
on CD-ROM in May 1995. We first made launch.com available over the Internet in
October 1997. Because we have a limited operating history, you must consider the
risks and difficulties frequently encountered by early-stage companies such as
Launch in new and rapidly evolving markets, including the market for advertising


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<PAGE>   15

on the Internet and other digital media. Prior to 1999, Launch on CD-ROM had
accounted for the majority of Launch's audience. Accordingly, Launch had derived
its revenues principally from advertising sales against the Launch on CD-ROM
audience and, to a lesser extent, from subscriptions for Launch on CD-ROM.
Future growth in our business will depend substantially upon our ability to
increase the size of the launch.com audience, to increase advertising sales
against that audience and to meet the challenges described in the risk factors
below.

WE HAVE A HISTORY OF LOSSES AND BECAUSE WE ANTICIPATE THAT OUR OPERATING
EXPENSES WILL GROW MORE QUICKLY THAN OUR REVENUES, AT LEAST IN THE SHORT TERM,
WE EXPECT INCREASED LOSSES

        We incurred net losses of $6.7 million in 1997, $13.4 million in 1998
and $37.5 million in 1999 and $11.9 million for the 3 months ended March 31,
2000. As of March 31, 2000, our accumulated deficit was $77.0 million. We have
not achieved profitability and expect to incur operating losses for the
foreseeable future. We expect these operating losses to increase for at least
the next year. We will need to generate significant revenues to achieve and
maintain profitability, and we cannot assure you that we will be able to do so.
Even if we do achieve profitability, we cannot assure you that we can sustain or
increase profitability on a quarterly or an annual basis in the future. If our
revenues grow more slowly than we anticipate or if our operating expenses exceed
our expectations, our financial performance will likely be adversely affected.
See "Selected Financial Data" for more detailed information regarding our
historical operating results.

OUR QUARTERLY OPERATING RESULTS ARE VOLATILE AND MAY CAUSE OUR STOCK PRICE TO
FLUCTUATE

        Our future revenues and operating results are likely to vary
significantly from quarter to quarter due to a number of factors, many of which
are outside of our control. Accordingly, you should not rely on
quarter-to-quarter comparisons of our results of operations as an indication of
future performance. It is possible that in some future periods our operating
results will be below the expectations of public market analysts and investors.
In this event, the price of our common stock will likely decline. Factors which
may cause our revenues and operating results to fluctuate include the following:

        - our ability to attract and retain advertisers;

        - our ability to increase the registered membership of launch.com and
          the new web sites, services or products introduced by us or by our
          competitors;

        - the timing and uncertainty of sales cycles;

        - mix of online advertisements sold;

        - seasonal declines in advertising sales, which typically occur in the
          first and third calendar quarters;

        - the level of Web and online services usage;

        - our ability to successfully integrate operations and technologies from
          acquisitions or other business combinations;

        - technical difficulties or system downtime affecting the Internet
          generally or the operation of launch.com; and

        - general economic conditions, as well as economic conditions specific
          to digital media and the music industry.

        To attract and retain a larger audience, we plan to significantly
increase our expenditures for sales and marketing, content development, and
technology and infrastructure development. Many of these expenditures are
planned or committed in advance in anticipation of future revenues. Because
advertising orders are typically short term and subject to cancellation without
penalty until shortly before the advertisement runs, our quarterly operating
results are


                                       13
<PAGE>   16

difficult to forecast. If our revenues in a particular quarter are lower than we
anticipate, we may be unable to reduce spending in that quarter. As a result,
any shortfall in revenues would likely adversely affect our quarterly operating
results.

BECAUSE WE DEPEND PRINCIPALLY UPON ADVERTISING REVENUES, IF WE DO NOT INCREASE
ADVERTISING SALES, OUR BUSINESS MAY NOT GROW OR SURVIVE

        Our revenues for the foreseeable future will depend substantially on
sales of advertising. In 1998 advertising sales accounted for 60.6% of our net
revenues, in 1999 they accounted for 53.9% of our net revenues, and for the
three months ended March 31, 2000 they accounted for 57.6%. If we do not
increase advertising revenues, our business may not grow or survive. Increasing
our advertising revenues depends upon many factors, including our ability to do
the following:

        - conduct successful selling and marketing efforts aimed at advertisers;

        - increase the size of the launch.com audience;

        - increase the amount of revenues per advertisement;

        - aggregate our target demographic group of 12 to 34 year old active
          music consumers, and, in particular, the Generation Y segment of this
          group;

        - increase awareness of the Launch brand among advertisers;

        - target advertisements to appropriate segments of our audience;

        - make Launch available through evolving broadband distribution
          channels; and

        - accurately measure the size and demographic characteristics of our
          audience.

        Our failure to achieve one or more of these objectives could adversely
affect our business.

        Advertising revenues are difficult to forecast, especially because the
market for advertising on digital media has emerged relatively recently. We have
historically entered into barter transactions with advertisers that we do not
believe would pay cash for such advertisements. We expect to substantially
reduce both the dollar volume and frequency of such transactions in future
periods. In each quarterly period, we derive a significant portion of our
revenues from sales of advertising to a limited number of customers.
Accordingly, the loss of a key advertising relationship or the cancellation or
deferral of even a limited number of orders could adversely affect our quarterly
performance.

IF WE FAIL TO INCREASE THE SIZE OF OUR AUDIENCE, WE MAY NOT BE ABLE TO ATTRACT
ADVERTISERS OR STRATEGIC PARTNERS

        Increasing the size of our audience is critical to selling advertising
and to increasing our revenues. If we cannot increase the size of our audience,
then we may be unable to attract new or retain existing advertisers. In
addition, we may be at a relative disadvantage to other digital media companies
with larger audiences that may be able to leverage their audiences to access
more advertisers and significant strategic alliances. To attract and retain our
audience, we must do the following:

        - continue to offer compelling music content;

        - encourage our users to become part of our community;

        - conduct effective marketing campaigns to acquire new members;

        - develop new and maintain existing distribution relationships with
          other Web sites;


                                       14
<PAGE>   17

        - update and enhance the features of launch.com;

        - increase awareness of the Launch brand;

        - make Launch available through broadband distribution channels as they
          achieve widespread consumer acceptance; and

        - offer targeted, relevant products and services.

Our failure to achieve one or more of these objectives could adversely affect
our business, and we cannot assure you that we will be successful in these
efforts.

A significant element of our strategy is to build a loyal community of
registered members on launch.com because we believe community features help
retain actively engaged users. The concept of developing such a community on the
Web is unproven, and if it is not successful, then it may be more difficult to
increase the size of our audience.

        We also depend on establishing and maintaining distribution
relationships with high-traffic Web sites to increase our audience. There is
intense competition for placements on these sites, and we may not be able to
enter into such 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 users. Therefore, launch.com
may not obtain additional users from these relationships. Moreover, we have paid
in the past, and may pay in the future, significant fees to establish these
relationships.

        We also intend to increase our financial expenditures on marketing the
Launch brand because we believe brand awareness will be critical to increasing
our audience, especially because there are few barriers to entry for Internet
businesses. If we do not increase our revenues as a result of our branding and
other marketing efforts or if we otherwise fail to promote our brand
successfully, our business could be adversely affected.

SALES CYCLES VARY FOR ADVERTISING AND MAY CAUSE OUR OPERATING RESULTS TO
FLUCTUATE

        Our dependence on advertising subjects us to additional risks because
the sales cycles for these sales vary significantly. The time between the date
of initial contact with a potential advertiser or sponsor and receipt of a
purchase order from the advertiser may range from as little as six weeks to up
to nine months. During these sales cycles, we may expend substantial funds and
management resources but not obtain advertising revenues. Therefore, if these
sales are delayed or do not otherwise occur, our operating results for a
particular period may be adversely affected.

        Advertising sales are subject to delays over which we have little or no
control, including the following:

        - advertisers' budgetary constraints;

        - internal acceptance reviews by advertisers and their agencies;

        - the timing of completion of advertisements by advertisers; and

        - the possibility of cancellation or delay of projects by advertisers or
          sponsors.

FAILURE TO CONTINUE TO DEVELOP COMPELLING CONTENT THAT ATTRACTS OUR TARGET
AUDIENCE COULD CAUSE OUR AUDIENCE SIZE TO DECREASE OR CHANGE THE DEMOGRAPHICS OF
OUR AUDIENCE

        Our future success depends on our ability to continue to develop content
that is interesting and engaging to our target audience. If our audience
determines that our content does not reflect its tastes, then our audience size


                                       15
<PAGE>   18

could decrease or the demographic characteristics of our audience could change.
Either of these results would adversely affect our ability to attract
advertisers. Our ability to develop compelling content depends on several
factors, including the following:

        - quality of our editorial staff;

        - technical expertise of our production staff;

        - access to recording artists; and

        - access to content controlled by record labels, publishers and artists.

Further, consumer tastes change, particularly those of Generation Y, and we
maybe unable to react to those changes effectively or in a timely manner.

LIMITATIONS ON THE AVAILABILITY OR INCREASES IN THE PRICE OF MUSIC CONTENT
DEVELOPED BY THIRD PARTIES COULD ADVERSELY AFFECT OUR BUSINESS

        Because much of our content, including recording artist interviews,
audio and video performances and music, are provided to us by record labels and
artists at minimal or no charge, we depend on our good relations with record
labels and artists to offer compelling content. We cannot assure you that they
will continue to make their content available to us on reasonable terms or at
all. If record labels, music publishers or artists charge significant fees for
their content or discontinue their relationships with us, then our content
offering could be adversely affected.

        A significant portion of the music content available on Launch is
licensed from publishers, record labels and artists. We frequently either do not
have written contracts or have short-term contracts with copyright owners, and,
accordingly, our access to copyrighted content depends upon the willingness of
such parties to continue to make their content available. Further, the parties
who license material to us may face increasing costs to develop or acquire that
material as a result of evolving laws regarding intellectual property, and these
licensors may pass any such additional costs on to us. If the fees for music
content increase substantially or if significant music content becomes
unavailable, our ability to offer music content could be materially limited. We
currently use certain content without first obtaining a license because we
believe that a license is not required under existing law. However, this area of
law remains uncertain and may not be resolved for a number of years. When this
area of law is resolved, we may be required to obtain licenses for such content.
Licenses may not be available on reasonable terms, if at all. Any limit on our
content offering could adversely affect our business.

WE NEED NEW DISTRIBUTION TECHNOLOGIES TO INCREASE ACCESSIBILITY OF OR OUR
CONTENT, AND FAILURE OF SUCH TECHNOLOGIES TO ACHIEVE CONSUMER ACCEPTANCE COULD
LIMIT OUR GROWTH

        To experience the full extent of our high-quality audio and full-motion
video content, consumers must access such content either from a CD-ROM, DVD-ROM
or over a high-bandwidth connection, such as cable or direct subscriber line
modem or satellite data broadcast. If such broadband distribution networks do
not achieve widespread consumer acceptance, we may be unable to effectively
distribute our audio and video content in its most compelling format. We cannot
assure you that broadband distribution networks will ever achieve consumer
acceptance, and if they do not, our growth may be limited.

WE DEPEND ON A LIMITED NUMBER OF ADVERTISERS, AND THE LOSS OF A NUMBER OF THESE
ADVERTISERS COULD ADVERSELY AFFECT OUR OPERATING RESULTS

        Historically, a limited number of advertisers have accounted for a
significant percentage of our revenues. We anticipate that our results of
operations in any given period will continue to depend to a significant extent
upon revenues from a small number of advertisers. In addition, particularly
because few advertisers are contractually obligated to purchase any advertising
in the future, we anticipate that the mix of advertisers in each fiscal period


                                       16
<PAGE>   19

will continue to vary. In order to increase our revenues, we will need to
attract additional significant advertisers on an ongoing basis. Our failure to
sell a sufficient number of advertisements or to engage a sufficient number of
advertisers during a particular period could adversely affect our results of
operations.

WE MUST MAINTAIN AND ESTABLISH STRATEGIC ALLIANCES TO INCREASE OUR AUDIENCE AND
ENHANCE OUR BUSINESS

        In an attempt to increase audience, build brand recognition and enhance
content, distribution and commerce opportunities, we have entered into strategic
alliances with various media and Internet-related companies such as NBC
Multimedia, Inc., America Online, Inc., Microsoft Corporation and Snap! LLC. Our
failure to maintain or renew our existing strategic alliances or to establish
and capitalize on new strategic alliances could have an adverse affect on our
business. Our future success depends to a significant extent upon the success of
such alliances. Occasionally, we enter into agreements with strategic partners
that may prohibit us from entering into similar arrangements with competitors of
our strategic partners. Such exclusivity provisions may limit our ability to
enter into favorable arrangements with complementary businesses and thereby
limit our growth. We cannot assure you that we will achieve the strategic
objectives of these alliances, that any party to a strategic alliance agreement
with Launch will perform its obligations as agreed upon or that such agreements
will be specifically enforceable by Launch. In addition, some of our strategic
alliances are short term in nature and may be terminated by either party on
short notice.

COMPETITION FROM TRADITIONAL AND ONLINE MEDIA AND OTHER COMPANIES FOCUSED ON
MUSIC COULD REDUCE OUR ADVERTISING SALES OR MARKET SHARE

        Competition among media companies seeking to attract the active music
consumer is intense. Increased competition could result in advertising price
reduction, reduced margins or loss of market share, any of which could adversely
affect our business. Traditional media companies, such as television
broadcasters, magazine publishers and radio stations, are constantly refining
their content and strategies to increase their audiences and advertising
revenues. Further, the number of Web sites competing for the attention and
spending of members, users and advertisers has increased, and we expect it to
continue to increase, particularly because there are so few barriers to entry on
the Web. We compete for members, users and advertisers with the following types
of companies:

        - publishers and distributors of traditional media, such as television,
          radio and print, including MTV, Clear Channel, CMT, Rolling Stone and
          Spin, and their Internet affiliates;

        - online services or and Web sites targeted at music consumers, such as
          mp3.com, Artistdirect, MTVi, emusic.com and musicmaker.com;

        - Web retrieval and other Web "portal" companies, such as Excite@Home,
          Inc., Infoseek Corporation, Lycos, Inc. and Yahoo, Inc.; and

        - online music retailers, such as CDNow, Inc. and Amazon.com, Inc.

        Because we compete for advertisers with traditional advertising media,
our business could be adversely affected if advertisers do not view digital
media as effective for advertising. Competition is likely to increase
significantly as new companies enter the market and current competitors expand
their services. Many of these potential competitors are likely to enjoy
substantial competitive advantages, including the following:

        - larger audiences;

        - larger technical, production and editorial staffs;

        - greater name recognition;

        - better access to content;


                                       17
<PAGE>   20

        - more established Internet presence;

        - larger advertiser bases; and

        - substantially greater financial, marketing, technical and other
          resources.

        If we do not compete effectively or if we experience any pricing
pressures, reduced margins or loss of market share resulting from increased
competition, our business could be adversely affected.

THE LOSS OF OUR CHIEF EXECUTIVE OFFICER, OUR PRESIDENT OR OTHER KEY PERSONNEL
COULD ADVERSELY AFFECT OUR BUSINESS BECAUSE THESE OFFICERS ARE IMPORTANT TO OUR
CONTINUED GROWTH

        Our future success depends to a significant extent on the continued
services of our senior management and other key personnel, and particularly
David B. Goldberg, Launch's chief executive officer, and Robert D. Roback,
Launch's president. The loss of either of these individuals or certain other key
employees would likely have an adverse effect on our business. We have an
employment agreement with only one of our executive officers, and we do not
anticipate that other executive officers or key personnel will enter into
employment agreements. We expect that we will need to hire additional personnel
in all areas during 2000. Competition for personnel throughout our industry is
intense. We may be unable to retain our current key employees or attract,
integrate or retain other highly qualified employees in the future. We have in
the past experienced, and we expect to continue to experience, difficulty in
hiring and retaining highly skilled employees with appropriate qualifications.
If we do not succeed in attracting new personnel or retaining and motivating our
current personnel, our business could be adversely affected.

GROWTH IN OUR OPERATIONS, PARTICULARLY OUR SALES, MARKETING, FINANCIAL AND
ADMINISTRATIVE ORGANIZATIONS, IS PLACING A STRAIN ON OUR RESOURCES, AND FAILURE
TO MANAGE GROWTH EFFECTIVELY COULD HARM OUR BUSINESS

        We have experienced and are currently experiencing a period of
significant growth in our operations. This growth has placed, and our
anticipated future growth in our operations will continue to place, a
significant strain on our resources. As part of this growth, we will have to
implement new operational systems and procedures and controls to expand, train
and manage our employee base and to maintain close coordination among our
technical, accounting, finance, marketing, sales and production staffs. We will
also need to continue to attract, retain and integrate personnel in all aspects
of our operations. To the extent we acquire new businesses, we will also need to
integrate new operations, technologies and personnel. Failure to manage our
growth effectively could adversely affect our business.

ACCEPTANCE AND EFFECTIVENESS OF DIGITAL MEDIA FOR ADVERTISING ARE UNPROVEN,
WHICH MAY DISCOURAGE SOME ADVERTISERS FROM ADVERTISING ON LAUNCH

        Our future is highly dependent on an increase in the use of the Internet
and other forms of digital media for advertising. If the Internet advertising
market fails to develop or develops more slowly than we expect, then our
business could be adversely affected. Moreover, the market for advertising on
other forms of digital media, such as broadband distribution, is even less
developed than Internet advertising, and if that market does not develop, then
our growth may be limited.

        The Internet advertising market is new and rapidly evolving, and we
cannot yet gauge the effectiveness of advertising on the Internet as compared to
traditional media. As a result, demand for Internet advertising is uncertain.
Many advertisers have little or no experience using the Internet for advertising
purposes. The adoption of Internet advertising, particularly by companies that
have historically relied upon traditional media for advertising, requires the
acceptance of a new way of conducting business, exchanging information and
advertising products and services. Such customers may find advertising on the


                                       18
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Internet to be undesirable or less effective for promoting their products and
services relative to traditional advertising media.

        Different pricing models are used to sell Internet advertising. It is
difficult to predict which, if any, will emerge as the industry standard. This
uncertainty makes it difficult to project our future advertising rates and
revenues. Any failure to adapt to pricing models that develop or respond to
competitive pressures could adversely affect our advertising revenues. Moreover,
"filter" software programs that limit or prevent advertising from being
delivered to an Internet user's computer are available. Widespread adoption of
this software could adversely affect the commercial viability of Internet
advertising.

TRACKING AND MEASUREMENT STANDARDS FOR ADVERTISING ARE EVOLVING AND CREATE
UNCERTAINTY ABOUT THE VIABILITY OF OUR BUSINESS MODEL

        There are currently no standards for the measurement of the
effectiveness of advertising on the Internet and other digital media, and the
industry may need to develop standard measurements. The absence or insufficiency
of these standards could adversely impact our ability to attract and retain
advertisers. We cannot assure you that such standard measurements will develop.
In addition, currently available software programs that track Internet usage and
other tracking methodologies are rapidly evolving. We cannot assure you that the
development of such software or other methodologies will keep pace with our
information needs, particularly to support the growing needs of our internal
business requirements and advertising clients. For instance, DoubleClick, Inc.,
our third party ad server, reported that there were 6.6 million unique visitors
in March 2000. Our advertisers may rely on this data or other similar data to
determine whether to advertise on Launch, and adverse data from this or other
sources in any particular period may cause advertisers not to advertise on
Launch.

        It is important to our advertisers that we accurately measure the
demographics of our user base and the delivery of advertisements on our Web
site. We depend on third parties to provide certain of these measurement
services. If they are unable to provide these services in the future, we would
need to perform them ourselves or obtain them from another provider, if
available. This could cause us to incur additional costs or cause interruptions
in our business during the time we are replacing these services. Companies may
choose to not advertise on Launch or may pay less for advertising if they do not
perceive our measurements or measurements made by third parties to be reliable.

WE MAY HAVE LIABILITY FOR NEGLIGENCE, DEFAMATION OR OTHER MATTERS FOR CONTENT
POSTED ON LAUNCH.COM OR TO CONSUMERS FOR PRODUCTS SOLD THROUGH LAUNCH.COM

        Because users of our Web site may distribute our content to others,
third parties might sue us for defamation, negligence, copyright or trademark
infringement or other matters. These types of claims have been brought,
sometimes successfully, against online services in the past. Others could also
sue us for the content that is accessible from our Web sites through links to
other Web sites or through content and materials that may be posted by
launch.com members. Such claims might include, among others, that by directly or
indirectly hosting the personal Web sites of third parties, we are 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 launch.com contains errors, third parties could
make claims against us for losses incurred in reliance on such information.

        We may also enter into agreements that entitle us to receive a share of
revenue from the purchase of goods and services through direct links from our
Web sites to their Web sites. Such arrangements may subject us to additional
claims, including potential liabilities to consumers of such products and
services, based on the access we provide to such products or services, even if
we do not provide such products or services ourselves. While our agreements with
these parties may provide that we will be indemnified against such liabilities,
such indemnification, if available, may not be adequate. Our insurance may not
adequately protect us against these types of claims and, even if such claims do
not result in liability, we could incur significant costs in investigating and


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defending against such claims.

WE EXPECT TO MAKE ACQUISITIONS THAT MAY DILUTE OUR STOCKHOLDERS' INTERESTS IN
LAUNCH OR RESULT IN AMORTIZATION OF SIGNIFICANT AMOUNTS OF INTANGIBLE ASSETS

        As part of our business strategy, we expect to review acquisition
prospects that would complement our current content offerings, increase our
market share or otherwise offer growth opportunities. Such acquisitions could
cause our operating results or the price of our common stock to decline. To
date, we have had limited experience in these types of transactions. We may
acquire businesses, products or technologies in the future. Because business
acquisitions typically involve significant amounts of intangible assets, future
operating results may be adversely affected by amortization of intangible assets
acquired. In the event of such future acquisitions or business combinations, we
could do the following:

        - issue equity securities that would dilute current stockholders'
          percentage ownership in us;

        - incur substantial debt; or

        - assume contingent liabilities.

WE MAY BE UNABLE TO EFFECTIVELY INTEGRATE BUSINESSES WE ACQUIRE IN THE FUTURE,
AND ANY SUCH FAILURE COULD DIMINISH THE VALUE OF AN ACQUIRED BUSINESS OR CAUSE
DISRUPTIONS IN OUR ONGOING OPERATIONS

        Acquisitions and business combinations entail numerous operational
risks, including the following:

        - difficulties in the assimilation of acquired operations, technologies
          or products;

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

        - risks of entering markets in which we have no or limited experience;
          and

        - potential loss of key employees of acquired organizations.

        We cannot assure you that we will be able to successfully integrate any
businesses, products, technologies or personnel that we might acquire in the
future, and our failure to do so could damage our business.

        We may not be able to effectively integrate the operations of acquired
businesses with our ongoing operations. Such failure could harm our business by
diverting management and other resources. Further, the personnel of acquired
businesses may elect not to continue with Launch after completion of any
acquisition, which could diminish the value of any acquisition. In that regard,
we cannot assure you that the personnel of acquired businesses will continue as
employees of Launch.

WE MAY NEED ADDITIONAL FINANCING TO ACHIEVE OUR BUSINESS OBJECTIVES, AND SUCH
FINANCING MAY NOT BE AVAILABLE BECAUSE OF THE CONDITION OF OUR BUSINESS OR THE
UNCERTAIN NATURE OF THE FINANCIAL MARKETS

        We currently anticipate that our available cash resources, combined with
the net proceeds from our IPO, will be sufficient to meet our anticipated
working capital and capital expenditure requirements for at least the 12 months
following the date of this Report on Form 10-Q.

        If we raise additional funds by issuing equity or convertible debt
securities, the percentage ownership of our then-current stockholders will be
reduced, and such securities may have rights, preferences or privileges senior
to those of such stockholders. We cannot assure you that additional financing
will be available on terms favorable to us, or at all. If adequate funds are not
available or are not available on acceptable terms, our ability to fund our
expansion, take advantage of unanticipated opportunities, develop or enhance


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<PAGE>   23

services or products or otherwise respond to competitive pressures would be
significantly limited. This limitation could adversely affect our business.

        We may need to raise additional funds in order to do the following:

        - fund more rapid expansion;

        - develop new or enhance existing services or products;

        - fund distribution relationships;

        - respond to competitive pressures; or

        - acquire complementary products, businesses or technologies.

        See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" for a discussion of
our working capital and capital expenditures.

IF THE USE OF DIGITAL MEDIA, INCLUDING THE INTERNET, DOES NOT CONTINUE TO GROW,
OUR MARKET MAY NOT DEVELOP ADEQUATELY

        Our market is new and rapidly evolving. If usage of digital media, and
in particular the Internet, does not continue to grow, our business will be
adversely affected. A number of factors may inhibit such usage, including, but
not limited to the following:

        - inadequate network infrastructure;

        - security concerns;

        - inconsistent quality of service; and

        - limited availability of cost-effective, high-speed access.

        Even if digital media usage grows, the infrastructure necessary for such
growth may not be able to support the demands placed on it by this growth, and
its performance and reliability may decline. In addition, Web sites have
experienced interruptions in their service as a result of outages and other
delays occurring throughout the Internet network infrastructure. If these
outages or delays frequently occur in the future, digital media and, in
particular, Internet usage, as well as the usage of launch.com, could grow more
slowly than we expect or even decline.

WE NEED TO ADAPT TO RAPID TECHNOLOGICAL CHANGE IN SOFTWARE AND DISTRIBUTION
SYSTEMS TO REMAIN COMPETITIVE

        Our market is characterized by rapidly changing technologies, frequent
new product and service introductions and evolving industry standards. The
recent growth of digital media, and in particular, the Internet, and intense
competition in our industry exacerbate these market characteristics. To achieve
our goals, we need to effectively integrate the various software programs and
tools required to enhance and improve our product offerings and manage our
business. Our future success will depend on our ability to adapt to rapidly
changing technologies by continually improving the performance features and
reliability of our products and services. We may experience difficulties that
could delay or prevent the successful development, introduction or marketing of
new products and services. In addition, new enhancements must meet the
requirements of our current and prospective users and must achieve significant
market acceptance. We could also incur substantial costs if we need to modify
our service or infrastructures or adapt our technology to respond to these
changes.

GOVERNMENTAL REGULATION OF THE WEB RELATED TO COMMUNICATION, COMMERCE, SALES TAX
AND OTHER ISSUES MAY LIMIT THE GROWTH OF OUR BUSINESS AND DECREASE OUR MARKET
OPPORTUNITY


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<PAGE>   24

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

        Launch generally does not collect sales or other taxes in respect of
goods sold to users on launch.com. However, one or more states may seek to
impose sales tax collection obligations on out-of-state companies, such as
Launch, which engage in or facilitate online commerce. A number of proposals
have been made at the state and local level that would impose additional taxes
on the sale of goods and services through the Internet. Such proposals, if
adopted, could substantially impair the growth of electronic commerce and could
adversely affect our opportunity to derive financial benefit from electronic
commerce. Moreover, if any state or foreign country were to successfully assert
that Launch should collect sales or other taxes on the exchange of merchandise
on its system, our results of operations could be adversely affected.
Legislation limiting the ability of states to impose taxes on Internet-based
transactions has been proposed in the U.S. Congress. We cannot assure you that
this legislation will ultimately become law or that the tax moratorium in the
final version of this legislation will be ongoing. Failure to enact or renew
this legislation, once enacted, could allow various states to impose taxes on
Internet-based commerce, which could adversely affect our business.

WE RELY ON THIRD PARTIES FOR OUR WEB SITE HOSTING FACILITIES AND INTERNET
CONNECTIVITY. IF THESE SYSTEMS FAIL, THEY COULD DISRUPT OR DELAY USER TRAFFIC,
WHICH COULD IMPAIR OUR BUSINESS

        Substantially all of our launch.com communications and computer hardware
was located at Exodus Communications, Inc.'s facilities in Irvine, California
through the end of January 2000. Effective February 2000, the Company moved
substantially all of our launch.com communications and computer hardware to
PSINet's facilities in Marina del Rey, California. PSINet provides Web site
hosting services. In addition, we utilize the audio and video streaming services
of iBEAM Broadcasting. iBEAM Broadcasting has a proprietary network which
delivers streaming audio and video over the Internet. Fire, floods, earthquakes,
power loss, telecommunications failures, break-ins and similar events could
damage these systems and cause interruptions in our services. Computer viruses,
electronic break-ins or other similar disruptive problems could result in
reductions or termination of our services by our customers or otherwise
adversely affect our Web site. Our business could be adversely affected if our
systems were affected by any of these occurrences. Our insurance policies may
not adequately compensate us for any losses that may occur due to any failures
or interruptions in our systems. We do not presently have any backup systems or
a formal disaster recovery plan.

        Our Web site must be able to accommodate a high volume of traffic and
deliver frequently updated information. Our Web site has experienced in the past
and may in the future experience slower response times or decreased traffic for
a variety of reasons. In addition, our users depend on Internet service
providers, online service providers and other Web site operators for access to
our Web site. Many of them have experienced significant outages in the past, and
could experience outages, delays and other difficulties due to system failures
unrelated to our systems. Moreover, the Internet network infrastructure may not
be able to support continued growth. Any of these problems could adversely
affect our business.

BECAUSE OUR USERS PROVIDE US WITH PRIVATE INFORMATION, WE MAY BE SUBJECT TO
LIABILITY IF THIS INFORMATION WERE MISUSED


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<PAGE>   25

        Our privacy policy provides that we will not willfully disclose any
individually identifiable information about any user to a third party without
the user's consent unless required by law. This policy is displayed to users of
our personalized services when they initially register and is easily accessible
on launch.com. Despite this policy, however, if third persons were able to
penetrate our network security or otherwise misappropriate our users' personal
information or credit card information, we could be subject to liability. We
also rely on a third-party provider for our e-commerce services. If we
experience service problems with our e-commerce transactions, we could also be
subject to liability. This liability could include claims for unauthorized
purchases with credit card information, impersonation or other similar fraud
claims. It could also include claims for other misuses of personal information,
such as for unauthorized marketing purposes. These claims could result in
litigation. In addition, the Federal Trade Commission, the European Union and
certain state and local authorities have been investigating certain Internet
companies regarding their use of personal information. We could incur additional
expenses if new regulations regarding the use of personal information are
introduced or if these authorities choose to investigate our privacy practices.

        Like most Web sites, we typically place certain information commonly
referred to as cookies on a user's hard drive without the user's knowledge or
consent. We use cookies for a variety of reasons, including enabling us to limit
the frequency with which a user is shown a particular advertisement. Certain
currently available Internet browsers allow users to modify their browser
settings to remove cookies at anytime or to prevent cookies from being stored on
their hard drives. In addition, some Internet commentators, privacy advocates
and governmental bodies have suggested limiting or eliminating the use of
cookies. Any reduction or limitation in the use of cookies could limit the
effectiveness of this technology.

SECURITY CONCERNS REGARDING CREDIT CARD OR OTHER CONFIDENTIAL INFORMATION
TRANSMITTED OVER THE WEB COULD LIMIT OUR GROWTH

        A significant barrier to e-commerce and communications over the Internet
has been the need for secure transmission of confidential information. Internet
usage may not increase at the rate we expect unless some of these concerns are
adequately addressed and found acceptable by the market. Internet usage could
also decline if any well-publicized compromise of security occurred. We may
incur significant costs to protect against the threat of security breaches or to
alleviate problems caused by such breaches. Any such protections may not be
available at a reasonable price or at all. If a third party were able to
misappropriate our users' personal information, users could sue us or bring
claims against us.

WE MAY EXPEND SIGNIFICANT RESOURCES TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS
OR TO DEFEND CLAIMS OF INFRINGEMENT BY THIRD PARTIES, AND IF WE ARE NOT
SUCCESSFUL WE MAY LOSE RIGHTS TO USE SIGNIFICANT MATERIAL OR BE REQUIRED TO PAY
SIGNIFICANT FEES

        Copyrighted material that Launch develops internally, as well as
trademarks relating to the Launch brand and other proprietary rights, are
important to our success and our competitive position. We seek to protect our
copyrights, trademarks and other proprietary rights, but these actions may be
inadequate. Launch has trademark applications pending in several jurisdictions,
but we cannot guarantee that we will be able to register our trademarks in all
jurisdictions in which we intend to do business. We generally enter into
confidentiality or license agreements with our employees, consultants and
corporate partners, and generally control access to and distribution of our
proprietary information. We cannot assure you that the steps we have taken will
prevent misappropriation of our proprietary rights, particularly in foreign
countries where laws or law enforcement practices may not protect our
proprietary rights as fully as in the United States. If third parties were to
use or otherwise misappropriate our copyrighted materials, trademarks or other
proprietary rights without our consent or approval, our competitive position
could be harmed, or we could become involved in litigation to enforce our
rights.

        In addition, we rely on a third party to provide services enabling our


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e-commerce transactions. We could become subject to infringement actions by
third parties based upon our use of intellectual property provided by our
third-party provider. There is no provision for indemnification of Launch by the
third-party provider. It is also possible that we could become subject to
infringement actions based upon the content licensed from third parties. Any
such claims or disputes could subject us to costly litigation and the diversion
of our financial resources and technical and management personnel. Further, if
our efforts to enforce our intellectual property rights are unsuccessful or if
claims by third parties against Launch are successful, we may be required to
change our trademarks, alter the content and pay financial damages. We cannot
assure you that such changes of trademarks, alteration of content or payment of
financial damages will not adversely affect our business.

ITEM 3. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We maintain investment portfolio holdings of various issuers, types and
maturities whose values are dependent upon short-term interest rates. We
generally classify these securities as available for sale, and consequently
record them on the balance sheet at fair value with unrealized gains and losses
being recorded as a separate part of stockholders' equity. We do not currently
hedge these interest rate exposures.

        Given Launch's current profile of interest rate exposures and the
maturities of its investment holdings, we believe that an unfavorable change in
interest rates would not have a significant negative impact on our investment
portfolio or statement of operations through December 31, 2000.





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<PAGE>   27

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

"Not applicable."


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        The net proceeds to the Company from the sale of the 4,010,000 shares of
Common Stock in the Company's initial public offering (Registration Statement
No. 333-72433 and No. 333-76871), effective April 22, 1999, including the
underwriter's exercise of their over-allotment option on May 18, 1999, were
approximately $81,000,000 after deducting underwriting discounts and commissions
and other offering expenses. Our use of proceeds through March 31, 2000
conformed to the intended use of proceeds described in our prospectus relating
to the IPO. From the date of the IPO through March 31, 2000, Launch has spent
$25.6 million of the net proceeds on sales and marketing, $13.5 million of the
net proceeds on content and product development expenses, $5.7 million on
general and administrative expenses, $4.9 million on capital expenditures and
$1.5 million on acquisitions. The balance of the net proceeds of the IPO have
been invested in investment grade, interest bearing securities.

        On January 14, 2000, Launch issued 626,556 shares of common stock in
connection with its acquisition of Tourdates.com pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

"Not applicable."

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

"Not applicable."

ITEM 5. OTHER INFORMATION

"Not applicable."

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(a)     EXHIBITS:

        (27) Financial Data Schedule

(b)     Reports on Form 8-K

        No reports were filed on form 8-K during the quarter for which this
        report is filed.




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                                   SIGNATURES

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


                                   Dated  May 15, 2000
                                         -------------------

                                   LAUNCH MEDIA, INC.
                                  (Registrant)

                                   /s/ JEFFREY M. MICKEAL
                                   --------------------------------------------
                                   Jeffrey M. Mickeal
                                   Chief Financial Officer and Secretary
                                   (Principal Financial and Accounting Officer)






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