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MEDIA CONTACT:                                                      EXHIBIT 99.1
Tanzy Ibanez
ClarusPR
Ph:  303-296-0343, ext. 251
tibanez@claruspr.com

                    APPLIEDTHEORY REPORTS YEAR-TO-YEAR GROWTH
                     IN HIGH-VALUE MANAGED HOSTING SERVICES

     o    Revenue shift toward higher-margin services underscored by 100 percent
          year-to-year growth in managed hosting services.

     o    Company improves margins to 38 percent despite economic downturn and
          terrorist attack aftermath.

     o    Company maintains strong recurring revenue base and customer growth as
          trend toward enterprise outsourcing continues.

     o    October reduction in force to create $6.7 million annual savings in
          2002.

NEW YORK (NOV. 13, 2001) - AppliedTheory Corporation (NASDAQ:ATHY), an Internet
knowledge, development and managed hosting partner for hundreds of large
corporations, organizations and government agencies, today announced third
quarter 2001 revenue of $20.5 million dollars, an increase of 9 percent compared
to second quarter. Gross margins for the third quarter improved sequentially to
38 percent, up from 35 percent in the second quarter.

AppliedTheory continues to take assertive steps to contain costs while
maintaining a strong recurring revenue base and customer growth, and noted that
its success in sustaining operational strength is demonstrated by improved
margins despite a weakened economy. In October, the company completed a 16
percent reduction in force, which results in an annualized savings of $6.7
million that will be fully realized beginning in the first quarter of 2002. The
company also continued a strategic focus on shifting its revenue base toward
higher-margin outsourced managed hosting and related services. In third quarter,
hosting and related services accounted for $6.8 million, or 33 percent of total
revenue, representing a 100 percent increase in managed hosting services
compared to third quarter period of the previous year.

"As a company born and based in New York City, AppliedTheory has been
extraordinarily challenged by what already was a difficult economic situation
made worse by the tragic attacks on September 11," said AppliedTheory CEO Danny
E. Stroud. "The damage to the telecommunications infrastructure in New York City
commanded a significant amount of money, time and effort from AppliedTheory to
ensure we maintain our operational integrity and world-class customer service.
Our hosting operations did not have any downtime. The combination of these
events, however, underscore a defining transformation in our industry. We saw
our largest competitor file for bankruptcy while at the same time we're watching
demand for outsourced managed hosting services become the epicenter of the
Internet's future. The


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tough economic times are accelerating the trend toward outsourcing, with
enterprise customers demanding the highest levels of security, redundancy,
backup and application integration. These mission-critical requirements match
AppliedTheory's historic capabilities, knowledge base and operational depth. Our
ability to deliver these services reinforces the foundation of our strong
customer loyalty."

"We have probably not seen the end of the economic downturn," Stroud said, "but
we are confident that the steps we are taking will help us maintain our growing
leadership position as the preferred Internet and managed hosting services
company for some of the nation's largest corporations, universities and
government agencies."

Net loss attributable to common shareholders for the quarter ending September
30, 2001, was $11.2 million, or $0.40 per share, versus $14.2 million, or $0.57
per share, in the comparable 2000 period.

The EBITDA loss for the third quarter of 2001 was $2.9 million, which was a $1.4
million improvement from the $4.3 million EBITDA loss in the second quarter of
2001 before non-recurring charges. The EBITDA loss was somewhat higher than
expected due primarily to legal fees associated with the Couch litigation, and
to an increase in the company's bad debt reserve reflecting economic hardships
being experienced by some AppliedTheory customers.

Angelo Gencarelli, senior vice president and chief financial officer of
AppliedTheory, explained that the company may not reach EBITDA positive in
fourth quarter as planned, but that the company believes this to be a temporary
delay resulting specifically from the unforeseeable combination of economic
downturn, litigation costs and lengthened sales cycles that resulted following
the terrorist attacks.

"The AppliedTheory management team has effectively managed the company's path
toward profitability while turning our revenue focus toward higher value managed
hosting services despite the weakened economy," said Gencarelli. "The impact of
the September 11 attacks created two unexpected issues. One, we had to
immediately redirect our focus and resources to take care of customers affected
by the resulting structure and network damage. Secondly, prospective enterprise
customers have slowed typical sales cycles while cautiously re-evaluating their
Internet requirements in light of new concerns for security, network redundancy
and disaster recovery, in addition to the requirements they already had. Because
we are uniquely qualified to provide any level of mission-critical Internet
platform, we believe that this hesitation is temporary and that sales volume
will resume as the economic situation stabilizes."


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REVENUE FOR THE QUARTER

For the third quarter of 2001, revenue from web hosting and related services
grew 100 percent, with Internet Solutions revenue decreasing 31 percent and
Internet connectivity revenue decreasing 12 percent from the third quarter 2000.
Prior year and consecutive quarter comparables (in millions) were as follows:

<TABLE>
<CAPTION>
                                             QUARTER-OVER-QUARTER                   YEAR-OVER-YEAR
                                     ------------------------------       -----------------------------
                             3Q01    2Q01     CHANGE       % CHANGE       3Q00     CHANGE      % CHANGE
                             ----    ----     ------       --------       ----     ------      --------
<S>                          <C>     <C>        <C>          <C>          <C>       <C>           <C>
Web Hosting                  $6.8    $6.8       0             0%          $3.4      $3.4          100%
Internet Solutions           $6.6    $4.7      $1.9          40%          $9.5     $(2.9)         (31)%
Internet Connectivity        $7.1    $7.4      (0.3)         (4)%         $8.1     $(1.0)         (12)%
</TABLE>



ABOUT APPLIEDTHEORY CORPORATION

Industry pioneer AppliedTheory combines its unparalleled knowledge base with the
ability to build, integrate and manage Internet business solutions in an
increasingly complex online economy. AppliedTheory's proactive responsiveness to
changing business requirements has earned the company a 95 percent retention
rate from customers that include AOL, America's Job Bank and Ingersoll-Rand. The
company offers a comprehensive and fully integrated suite of managed hosting,
connectivity and security services, providing one of the industry's most
reliable single sources for large enterprise Internet needs. For additional
information about the company, visit www.appliedtheory.com.

Statements contained in this announcement that are not historical facts may be
deemed to be forward-looking statements, which are subject to risks and
uncertainties, including those discussed in AppliedTheory's filings with the
Securities and Exchange Commission.

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                   APPLIEDTHEORY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED                   NINE MONTHS ENDED
                                            SEPTEMBER 30,                       SEPTEMBER 30,
                                    --------------------------          --------------------------
                                       2000             2001              2000             2001
                                    ----------      ----------          ---------       ----------

<S>                                 <C>             <C>                 <C>             <C>
Net revenues
  Web hosting                       $    3,417      $    6,772          $   7,192       $   20,986
  Internet solutions                     9,474           6,578             24,180           16,543
  Internet connectivity                  8,075           7,157             23,405           22,092
                                    ----------      ----------          ---------       ----------

  Total net revenues                    20,966          20,507             54,777           59,621
                                    ----------      ----------          ---------       ----------

Costs and expenses
  Cost of revenues                      14,561          12,761             38,350           38,771
  Sales and marketing                    7,198           4,474             21,368           16,234
  General and administrative             5,709           5,835             15,481           15,889
  Research and development                 915             498              1,263            1,750
  Depreciation                           2,868           3,357              7,333            9,547
  Amortization                           3,416           3,708              8,212           11,087
  Other expenses (income)                   20             (67)              (186)             (89)
  Non-recurring charges                                                                      6,202
                                    ----------      ----------          ---------       ----------

  Total costs and expenses              34,687          30,566             91,821           99,391
                                    ----------      ----------          ---------       ----------

  Loss from operations                 (13,721)        (10,059)           (37,044)         (39,770)

Interest income                           (436)            (21)            (1,113)            (160)
Interest expense                           940           1,183              2,190            3,642
                                    ----------      ----------          ---------       ----------

  Net loss attributable to
    common stockholders             $  (14,225)     $  (11,221)         $ (38,121)      $  (43,252)
                                    ==========      ===========         =========       ===========

Basic and diluted loss per
  common share                      $   ( 0.57)     $    (0.40)         $  ( 1.59)      $    (1.59)
                                    ==========      ==========         =========        ==========

Shares used in computing basic
  and diluted loss per share        24,822,053      28,327,183         23,924,826       27,193,967
                                    ==========      ==========         ==========       ==========

Other data:
 EBITDA (1)                             (7,436)         (2,994)           (21,499)         (19,136)
 Capital Expenditures (2)                1,722             571             14,946            2,016
</TABLE>


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(1) EBITDA is earnings (loss) from operations before interest, taxes,
depreciation, and amortization. EBITDA is presented because management believes
that investors may find it to be a useful tool for measuring a company's ability
to service debt. However, EBITDA does not represent cash flow from operations,
as defined by generally accepted accounting principles. EBITDA should not be
considered as a substitute for net loss or as an indicator of our operating
performance, cash flow or liquidity.

(2) Capital expenditures include assets acquired with debt and exclude assets
acquired through capital lease financing.


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