**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form
      10-QSB**





**[
      X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





For
      the
      quarterly period ended September 30, 2006


or





**[  
      ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





For
      the
      transition period from ______ to ______





Commission
      File Number 000-29929





**COMMUNICATE.COM
      INC.**


(Exact
      name of small business as specified in its charter)





Nevada   88-0346310


(State
      or
      other jurisdiction of (IRS Employer


incorporation
      or organization) Identification Number)





#600
      -
      1100 Melville Street, Vancouver, B.C. V6E 4A6


(Address
      of principal executive offices)





(604)
      697-0136


(Issuer's
      telephone number)





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.


**[
      X ] Yes [   ] No**





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


**[ 
       ] Yes [ X ] No**





**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





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





Common
      Stock  17,836,339 shares
      outstanding


$.001
      Par
      Value  as
      of
      November 13, 2006


Transitional
      Small Business Disclosure Format (Check one): Yes [   ] No [X]





**Page
          - 1**


**** **COMMUNICATE.COM
      INC.**


**REPORT
      ON FORM 10-QSB**


**QUARTER
      ENDED SEPTEMBER 30, 2006**


**TABLE
      OF CONTENTS**





**PART
      I.**  **Financial
      Information**





Item
      1.  Financial
      Statements





Consolidated
      Balance sheets as of September 30, 2006 and December 31, 2005


Consolidated
      Statements of Operations for the periods ended September 30, 2006 and September
      30, 2005


Consolidated
      Statements of Cash Flows for the periods ended September 30, 2006 and September
      30, 2005


Notes
      to
      the Consolidated Financial Statements





Item
                2.
            Management's
                discussion and analysis of financial condition and results of
                operations





Item
      3.  Controls
      and Procedures.








**PART
      II.**   **Other
      Information**





Item
      1.  Legal
      Proceedings.





Item
      2.  Unregistered
      Sales of Equity Securities and Use of Proceeds.





Item
      3.  Defaults
      Upon Senior Securities.





Item
      4.  Submission
      of Matters to a Vote of Security Holders.





Item
      5.  Other
      Information.





Item
      6.  Exhibits
      and Reports on Form 8-K.





Signatures





Certifications





**Page
          - 2**


**PART
      I - FINANCIAL INFORMATION**








**Item
      1: Financial Statements.**





The
      response to Item 1 has been submitted as a separate section of this Report
      beginning on page F-1.








**Item
      2: Management’s discussion and analysis of financial condition and results of
      operations** ****





Registrant,
      through its majority-owned subsidiaries, Domain Holdings, Inc. (“DHI”, formerly
      Communicate.com Inc.) and FrequentTraveller.com Inc. (“FrequentTraveller”)
      (together the "Subsidiaries"), is involved in businesses that exploit commercial
      uses of the Internet. DHI markets and licenses a portfolio of domain names,
      a
      number of which generate high amounts of internet traffic because of, among
      other things, their generic description of a specific product or services
      category.





Registrant
      has focused since the beginning of 2001 on developing revenue streams from
      its
      domain names and improving its financial position. Registrant generates revenue
      from leasing domain names, sales commissions from the sale of third-party
      products and services utilizing the Internet, "pay-per-click" revenue and the
      trading of domain name assets. Since May 2003, Registrant has begun selling
      fragrances and beauty and sports products online directly to consumers and
      in
      October 2003 begun selling travel services through its website
      FrequentTraveller.com.





Registrant
      presently employs seventeen full-time employees and three consultants and
      occupies approximately 5,000 square feet of office space in Vancouver, British
      Columbia and Bellingham, Washington.





**(a)**  **Selected
      Financial Data**





The
      following selected financial data was derived from Registrant’s unaudited
      consolidated financial statements. The information set forth below should be
      read in conjunction with Registrant’s financial statements and related notes
      included elsewhere in this report.


**Page
          - 3**





For
                the Quarters Ended
              September
                30
            For
                the Nine Months Ended
              September
                302006
            
            
            2005
            
            
            2006
            
            
            2005Statements
                of Operations DataDomain
                Leasing and Advertising
            $
            72,432
            
            $
            256,705
            
            $
            241,403
            
            $
            844,185Domain
                Name
            
            500,000
            
            
            --
            
            
            623,800
            
            
            --eCommerce
            
            1,555,396
            
            
            760,954
            
            
            4,358,228
            
            
            2,201,855Royalty
            
            --
            
            
            --
            
            
            21,673
            
            
            --Total
                Sales
            $
            2,127,828
            
            $
            1,017,659
            
            $
            5,245,104
            
            $
            3,046,040Domain
                Names
            $
            125,112
            
            
            --
            
            $
            191,012
            
            
            --eCommerce
            
            1,238,542
            
            $
            602,648
            
            
            3,565,272
            
            $
            1,821,507Total
                Cost of Sales
            $
            1,363,654
            
            $
            602,648
            
            $
            3,756,284
            
            $
            1,821,507Gross
                Profit
            $
            764,174
            
            $
            415,011
            
            $
            1,488,820
            
            $
            1,224,533Marketing
            $
            73,965
            
            $
            43,295
            
            $
            215,373
            
            $
            119,368General
                and Administrative
            
            97,378
            
            
            80,307
            
            
            301,883
            
            
            216,031Management
                Fees and Salaries
            
            221,939
            
            
            217,750
            
            
            789,010
            
            
            614,896Professional
                Fees
            
            29,423
            
            
            221,939
            
            
            64,532
            
            
            56,092Interest
                expense
            
            1,214
            
            
            --
            
            
            3,414
            
            
            --Depreciation
            
            3,790
            
            
            3,113
            
            
            11,756
            
            
            7,711Operating
                Income
            $
            336,465
            
            $
            46,142
            
            $
            1,385,968
            
            $
            210,435Non-Recurring
                Income
            
            --
            
            
            --
            
            $
            250,000
            
            
            --Interest
                Income
            $
            11,394
            
            
            --
            
            
            35,428
            
            
            --Gain
                on Debt Settlement
            
            --
            
            $
            52,788
            
            
            --
            
            $
            69,000Non-Controlling
                Interest Share of Loss in FT.com
            
            --
            
            $
            17,679
            
            
            --
            
            $
            60
                044Net
                Income for the Period
            $
            347,859
            
            $
            116,609
            
            $
            388,280
            
            $
            339,479Basic
                Earnings per Share
            $
            0.02
            
            $
            0.01
            
            $
            0.02
            
            $
            0.02Weighted
                Average Shares Outstanding
            
            17,836,339
            
            
            15,396,065
            
            
            17,836,339
            
            
            15,396,065





Balance
                Sheet Data
            
            As
                at
              September30, 2006
            
            
            As
                at
              December
                31, 2005Current
                Assets
            $
            2,101,809
            
            $
            1,952,172Resticted
                Cash
            
            20,000
            
            
            20,000Fixed
                Assets
            
            48,553
            
            
            52,640Intangible
                Assets
            
            1,602,792
            
            
            1,539,678Total
                Assets
            $
            3,773,154
            
            $
            3,564,490Accounts
                Payable & Accrued Liabilities
            $
            643,724
            
            $
            934,734Loan
                Advance
            
            43,180
            
            
            --Common
                Stock
            
            8,846
            
            
            8,766Additional
                Paid in Capital
            
            3,611,290
            
            
            3,543,156Accumulated
                Deficit
            
            (533,886
            )
            
            (922,166
            )Total
                Stockholders’ Equity
            $
            3,086,250
            
            $
            2,629,756Total
                Liabilities and Stockholders’ Equity
            $
            3,773,154
            
            $
            3,564,490





**Page
          - 4**


**(b)**  **Results
      of Operations**





REVENUES
      AND COSTS OF REVENUES .




Domain
      Name Leasing and Advertising . In
      the
      third quarter of 2006, Registrant generated domain name leasing and advertising
      revenue of $72,432 as compared to $256,705 in the third quarter of 2005, a
      decrease of 71.8%. During the nine months ended September 2006, domain name
      leasing and advertising revenue generated $241,403 as compared to $844,185
      in
      the previous comparable period, a decrease of 71.4%. While the transfers of
      body.com and Brazil.com to generate eCommerce sales accounted for some of the
      decrease, advertising revenue has been adversely affected by changes made by
      Internet search engines which significantly reduced the volume of Internet
      traffic directed to Registrant’s network of advertising sites. While there are
      signs which begin to show traffic improvement, Management expects this line
      of
      revenue to remain the same over the next several quarters. Management has no
      current plan to convert any additional advertising websites into retailing
      sites.





Domain
      Name Sales .
      In the
      third quarter of 2006, the Registrant sold Wrestling.com for $500,000 which
      had
      a cost of $125,112 to a third party based in Australia. During the nine months
      ended September 2006, domain names sales totaled $623,800 and had a cost of
      $191,012. Management has concluded its strategy to recapitalize the Registrant
      through the selling of non-strategic domain names. Proceeds from the prior
      sales
      of domain names were used to repay a note payable and to enhance the
      Registrant’s financial ratios and liquidity. Management has begun acquiring new
      domain names both individually and as a portfolio to replenish its asset base
      and to increase its advertising revenue. While Registrant has no immediate
      plans
      to sell any domain names in the near future, it will evaluate opportunities
      as
      they arise.





eCommerce
      Sales .
      Registrant began converting Internet traffic into customers by directly
      marketing and selling consumable goods. Registrant launched its cologne.com
      and
      perfume.com Internet retail sites in May 2003, its karate.com Internet retail
      site in 2004, and most recently soft-launched its body.com Internet retail
      site
      in March 2006. In the third quarter of 2006, the combined retail sites generated
      sales of $1,555,396 (2005 Q3 - $760,954), or approximately $16,906 per day
      (2005
      Q3 - $8,271 per day), with cost of purchases and shipping totaling $1,238,542
      (2005 Q3 - $602,648) resulting in gross profit of $316,854 and gross profit
      margin of approximately 20.4% (2005 Q3 - 20.8%). Quarterly sales comparable
      to
      previous quarter have increased by 3.3% while gross profit margin in percentage
      term has increased by 12%. Management is satisfied that the third quarter margin
      in 2006 has met its previously stated margin target of 20%.





During
      the nine months ended September 2006, total combined retail sites generated
      sales of $4,358,228 nearly doubling the sales of $2,201,855 for the comparable
      period in the previous year. With current cost of sales of $3,565,272, the
      gross
      profit margin is 18.2% as compared to 17.3% in the same period last
      year.





Management
      continues to rely on its proprietary heuristic method of vendor selection,
      based
      on analyzing a vendor’s stock selection, calculated margin, past service history
      and shipping costs to improve upon margin. Management will continue to monitor
      its overall product offerings to maintain an acceptable gross profit margin
      between 20% to 22% and to grow eCommerce sales.




**Page
          - 5**





In
      the
      third quarter of 2006, Registrant through its travel business subsidiary
      generated eCommerce service sales of $116,730 at a cost of $100,702 as compared
      to sales of $172,337 at a cost of $146,577 in the third quarter of 2005. During
      the third quarter of 2006, the subsidiary has expensed as salaries $25,149
      for
      the development of a new information management system and for improvements
      to
      its websites. During the nine months period ended September 2006, the travel
      operation incurred a net loss of $280,287 and an accumulated deficit of $614,295
      since inception in October 2002. Management continues to be disappointed by
      missing its revenue target of $150,000 per month and is planning for a
      comprehensive review of this strategy within six months.





Royalty .
      During
      the first quarter of 2006, Registrant received $21,673 in royalty revenue from
      Manhattan Assets Corp. During the second quarter of 2006, Manhattan Assets
      and
      Registrant agreed to settle all future royalty obligations in exchange for
      the
      return of call.com. A non-recurring income of $250,000 was recorded based on
      the
      estimated fair value for the domain name. No other royalty income has been
      earned during the balance of this period.





MARKETING.
      Registrant continues to advertise online by paying-for-clicks and
      search-engine-placements and affiliate marketing. In the third quarter of 2006,
      Registrant recorded marketing expenses of $73,965 or 4.8% of eCommerce sales
      as
      compared to $43,295 or 7.2% of comparable third quarter sales in 2005. During
      the nine months period ended September 2006, marketing expense totaled $215,373
      as compared to $119,368 during the comparable period in the previous year.
      Marketing expense is below targeted spending, and Management expects marketing
      expenses to increase as sales increase and has planned to spend up to 10% of
      gross product sales for marketing in the final quarter of 2006.





GENERAL
      AND ADMINISTRATIVE. Registrant’s general and administrative expenses consist of
      costs for general and corporate functions, including facility fees, travel,
      telecommunications and investor relations. In the third quarter
      of 2006, Registrant recorded general and administrative expense of $97,378
      (4.6%
      of total sales) as compared to $80,307 (7.9% of total sales) in the third quarter
      of 2005, an increase of 21.3%. During the nine months period ended September
      2006, total general and administrative expense totaled $301,883 as compared
      to
      $216,031 during the comparable period in the previous year. While much of the
      increase came from increase in credit card transaction processing fees
      reflecting the increase in comparable period sales, credit card chargeback
      costs
      also contributed to the expense increase. Credit card chargeback costs arose
      from fraudulent transactions conducted over the Registrant’s websites and
      totaled $3,621 during the third quarter
      and $18,558 during the nine months period of 2006. Management believes its
      chargeback experience ratio is below industry average and that its
      preauthorization screening process remains effective. Management expects general
      and administrative expenses to increase as total revenue increases but will
      aim
      to maintain general and administrative costs below 10% of total
      sales.





MANAGEMENT
      FEES AND SALARIES. In the third quarter
      of 2006, Registrant incurred management fees and staff salaries of $221,939,
      an
      increase of 1.9% over the third quarter
      of 2005 of $217,750. During the nine months period ended September 2006,
      management fees and salaries totaled $789,010 as compared to $614,896 during
      the
      comparable period in 2005. While the expense increased by 28.3%, as a percentage
      to total sales, the amount has decreased from 20% to 15%. Salary and wage
      increases and the strengthening of the Canadian dollar were offset by staff
      attrition. Management expects fees and staff salaries to increase in the coming
      quarters as certain key managers are scheduled for contract
      increases.




**Page
          - 6**





PROFESSIONAL
      FEES. Professional fees include legal and auditing fees. During the third
      quarter of 2006, professional fees totaled $29,423 as compared to $24,404 in
      the
      third quarter of 2005, an increase of 20.6%. During the nine months period
      ended
      September 2006, professional fees totaled $64,532 as compared to $56,092 in
      the
      comparable period in the previous year. Management attributes much of the
      increases to costs associated with regulatory compliance in the ordinary course
      of business. For the coming quarter, Management expects professional fees to
      remain roughly the same as the travel subsidiary continues its effort in filing
      its Form SB-2 to finance and develop its travel business.. Other than
      professional fees related to regulatory compliance and to the travel
      subsidiary’s Form SB-2 filing, Management is unaware of factors which are likely
      to increase professional fees in the final quarter of 2006.





**(c)**  **Liquidity
      and Capital Resources**





Registrant
      seeks to generate revenue from (i) leasing domain names to third parties to
      conduct on-line businesses; (ii) selling products and services of both company
      owned inventory and of inventory owned by third parties; (iii) fees resulting
      from Internet traffic click-throughs generated by company owned domain name
      assets; and (iv) trading of domain name assets.





At
      September 30, 2006 Registrant had current assets in excess of current
      liabilities resulting in a positive working capital of $1,414,905 as compared
      to
      a working capital of $1,017,438 at the fiscal year ending December 31, 2005.
      During the nine-months ended September 30, 2006 Registrant had a net income
      of
      $388,280 and a decrease in cash of $60,904, compared to net income of $339,479
      and an increase in cash of $424,888 for the same nine-month period of last
      year.
      Operating activities generated cash outflows of $67,719 after primarily reducing
      accounts payable. During the nine-month ended September 30, 2006, the Registrant
      purchased $160,008 in bonds held as investment and increased its short-term
      investments to $374,566, and borrowed $43,180 in short-term financing through
      its travel subsidiary. From the beginning of the fiscal year to September 30,
      2006, Registrant has reduced its accumulated deficit to $533,886 from $922,166
      and has stockholders’ equity of $3,086,250.





In
      October 2003, Registrant became a majority shareholder of FrequentTraveller,
      which has developed and is operating travel sale websites utilizing
      non-exclusive access to Registrant’s domain names Vietnam.com, Malaysia.com,
      Indonesia.com, and Brazil.com. Registrant will continue to own the
      aforementioned domain names and to develop businesses other than travel sales
      for them. FrequentTraveller has one manager and is not expected to generate
      sufficient revenue to cover expenses for at least twelve months. Any fund
      shortfall, currently requiring $15,000 per month, will be covered by Registrant
      or by sourcing outside capital. During the first nine months of 2006, FT
      borrowed $43,180 from a third party on a non-secured no interest basis. Since
      inception, FT has raised $338,926 in private placement equity, including
      $120,000 invested by the Registrant, and accumulated a deficit of $894,582
      with
      total shareholders’ deficit of $207,919. FT plans to raise additional working
      capital by way of private placement equity and to use any proceeds to expand
      its
      business and as general working capital.





The
      Registrant expects it has sufficient working capital to carry on business for
      the next twelve months. In the event of an adverse operating results or some
      other catastrophic event, Registrant may be required to seek additional capital
      from external sources. Registrant expects to raise any additional funds by
      way
      of equity and/or debt financing, and through the sale of non-strategic domain
      name assets. However, Registrant may not be able to raise the required funds
      from such financings, depending on volatile market conditions and the perception
      by investors of those companies that, like Registrant, engage in e-commerce
      and
      related businesses.





Registrant
      has no current plans to purchase any plant or significant
      equipment.




**Page
          - 7**








**(d)**
            **Recent
                Accounting Pronouncements**





In
      February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
      Financial Instruments-an amendment of FASB Statements No. 133 and 140, to
      simplify and make more consistent the accounting for certain financial
      instruments. SFAS No. 155 amends SFAS No. 133, Accounting for Derivative
      Instruments and Hedging Activities, to permit fair value remeasurement for
      any
      hybrid financial instrument with an embedded derivative that otherwise would
      require bifurcation, provided that the whole instrument is accounted for on
      a
      fair value basis. SFAS No. 155 amends SFAS No. 140, Accounting for the
      Impairment or Disposal of Long-Lived Assets, to allow a qualifying
      special-purpose entity to hold a derivative financial instrument that pertains
      to a beneficial interest other than another derivative financial instrument.
      SFAS No. 155 applies to all financial instruments acquired or issued after
      the
      beginning of an entity's first fiscal year that begins after September 15,
      2006,
      with earlier application allowed. The adoption of SFAS No. 155 on January 1,
      2006 had no impact on our financial statements.





In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 156 ("SFAS No. 156"), Accounting for Servicing of
      Financial Assets, an amendment of FASB Statement No. 140, Accounting for
      Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
      SFAS No. 156 requires all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable, and permits
      for
      subsequent measurement using either fair value measurement with changes in
      fair
      value reflected in earnings or the amortization and impairment requirements
      of
      Statement No. 140. The subsequent measurement of separately recognized servicing
      assets and servicing liabilities at fair value eliminates the necessity for
      entities that manage the risks inherent in servicing assets and servicing
      liabilities with derivatives to qualify for hedge accounting treatment and
      eliminates the characterization of declines in fair value as impairments or
      direct write-downs. SFAS 156 is effective for an entity's first fiscal year
      beginning after September 15, 2006. The adoption of SFAS No. 156 on January
      1,
      2006 had no impact on Registrant’s financial statements.





SFAS
      157





In
      September 2006, the FASB issued SFAS No. 157, *“Fair
      Value Measures”* (“SFAS No. 157”).
      This Statement defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles (GAAP), expands disclosures
      about fair value measurements, and applies under other accounting pronouncements
      that require or permit fair value measurements. SFAS No. 157 does not
      require any new fair value measurements. However, the FASB anticipates that
      for
      some entities, the application of SFAS No. 157 will change current
      practice. SFAS No. 157 is effective for financial statements issued for fiscal
      years beginning after November 15, 2007, which for the Company would be the
      fiscal year beginning January 1, 2008. The Company is currently evaluating
      the
      impact of SFAS No. 157 but does not expect that it will have a
      material impact on its financial statements.





**Page
          - 8**





SFAS
      158





In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans.” This Statement requires an
      employer to recognize the over funded or under funded status of a defined
      benefit post retirement plan (other than a multiemployer plan) as an asset
      or
      liability in its statement of financial position, and to recognize changes
      in
      that funded status in the year in which the changes occur through comprehensive
      income.  SFAS No. 158 is effective for fiscal years ending after December
      15, 2006. The Company does not expect that the implementation of SFAS No. 158
      will have any material impact on its financial position and results of
      operations.








SAB
      108





In
      September 2006, the SEC issued Staff Accounting Bulletin
      (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements
      when Quantifying Misstatements in Current Year Financial Statements.” SAB
      No. 108 addresses how the effects of prior year uncorrected misstatements
      should be considered when quantifying misstatements in current year financial
      statements. SAB No. 108 requires companies to quantify misstatements using
      a balance sheet and income statement approach and to evaluate whether either
      approach results in quantifying an error that is material in light of relevant
      quantitative and qualitative factors. SAB
      No.
      108 is effective for periods ending after November 15, 2006. The
      Company is currently evaluating the impact of adopting SAB No. 108 but does
      not expect that it will have a material effect on its
      financial statements.





**(e)**  **Uncertainties
      Relating to Forward-Looking Statements**





Management’s
      discussion and analysis of Registrant’s financial condition and the results of
      its operations and other sections of this report, contain forward looking
      statements that are based upon the current beliefs and expectations of
      Registrant’s management, as well as assumptions made by, and information
      currently available to, Registrant’s management. Because these statements
      involve risks and uncertainties, actual actions and strategies and the timing
      and expected results may differ materially from those expressed or implied
      by
      the forward-looking statements. As well, Registrant’s future results,
      performance or achievements could differ materially from those expressed in,
      or
      implied by, any forward-looking statements. Future events and actual results
      could differ materially from those set forth in or underlying the
      forward-looking statements.





**Item
      3: Controls and Procedures.**





**Disclosure
      Controls and Procedures**





David
      M.
      Jeffs, Registrant’s Chief Executive Officer, and J. Cameron Pan, Registrant’s
      Chief Financial Officer have evaluated the effectiveness of Registrant’s
      disclosure controls and procedures (as such term is defined in Rules 13a-15
      and
      15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act” )) as of
      the end of the period covered by this quarterly report (the “Evaluation Date”).
      Based on such evaluation, they have concluded that, as of the Evaluation Date,
      Registrant’s disclosure controls and procedures are effective in alerting
      Registrant on a timely basis to material information required to be included
      in
      its reports filed or submitted under the Exchange Act.




**Page
          - 9**





**Changes
      in Internal Controls**





During
      the quarter of the fiscal year covered by this report, there were no changes
      in
      Registrant’s internal controls or, to the Registrant’s knowledge, in other
      factors that have materially affected, or are reasonably likely to materially
      affect, these controls and procedures subsequent to the date Registrant carried
      out this evaluation.





**PART
      II - OTHER INFORMATION**








**Item
      1. Legal Proceedings.**





In
      December 1999, DHI commenced a lawsuit in the Supreme Court of British Columbia
      (No. C996417) against Paul Green, the former chief executive officer of DHI,
      for
      breach of fiduciary duty for wrongfully attempting to appropriate the
      Subsidiary’s business opportunities. DHI is seeking an undetermined amount of
      damages and a declaration that it had just cause to terminate Paul Green as
      the
      CEO in or about June 1999. No decision has been rendered in this case and
      Registrant cannot predict whether DHI will prevail, and if it does, what the
      terms of any judgment may be.





The
      former Chief Executive Officer of DHI, Paul Green, commenced a legal action
      against DHI on March 9, 2000 in the Supreme Court of British Columbia (No.
      S001317) for wrongful dismissal and breach of contract. He is seeking, at a
      minimum, 18.39% of the outstanding shares of DHI, specific performance of his
      contract, special damages in an approximate amount of $30,000, aggravated and
      punitive damages, interest and costs. On June 1, 2000, DHI filed a Defence
      and
      Counterclaim against this individual claiming damages and special damages for
      breach of fiduciary duty and breach of his employment contract. The outcome
      of
      these legal actions is currently not determinable and as such the amount of
      loss, if any, resulting from this litigation is presently not
      determinable.





Registrant
      is not aware of any other pending or threatened material legal
      proceedings.





**Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds.**





During
      the quarter of the fiscal year covered by this report, (i) Registrant did not
      modify the instruments defining the rights of its shareholders, (ii) no rights
      of any shareholders were limited or qualified by any other class of securities,
      and (iii) Registrant did not sell any unregistered equity securities, except
      for
      the following:





**Share
      Bonus - $0.69 per share**





On
      October 3, 2006, the Registrant’s Chief Executive Office and the Chief Financial
      Officer each received 40,000 restricted shares of common stock in lieu of a
      cash
      bonus. The price of the shares was set at $0.69 per share. The Registrant relied
      upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation
      S.
      Management is satisfied that the requirements of the exemption from the
      registration and prospectus delivery requirements of the Securities Act of
      1933
      have been fully complied with, which exemption is specified by the provisions
      of
      Section 4(2) of that Act and Regulation S promulgated pursuant to that Act
      by
      the Securities and Exchange Commission.




**Page
          - 10**





**Item
      3. Defaults Upon Senior Securities.**





During
      the quarter of the fiscal year covered by this report, no material default
      has
      occurred with respect to any indebtedness of Registrant. Also, during this
      quarter, no material arrearage in the payment of dividends has
      occurred.





**Item
      4. Submission of Matters to a Vote of Security Holders.**





No
      matter
      was submitted to a vote of security holders, through the solicitation of proxies
      or otherwise, during the three months of the fiscal year covered by this
      report.





**Item
      5. Other Information.**





During
      the quarter of the fiscal year covered by this report, Registrant reported
      all
      information that was required to be disclosed in a report on Form 8-K.





**Item
      6. Exhibits.**





(A)  Index
      to and Description of Exhibits.





EXHIBIT
            DESCRIPTIONF-1
            Financial
                Statements.31
            Section
                302 Certification of Chief Executive Officer and Chief Financial
                Officer32
            Section
                906 Certificate of Chief Executive Office and Chief Financial
                Officer








**Page
          - 11**


**SIGNATURES**





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





**COMMUNICATE.COM
      INC.**











By:*/s/
      David M. Jeffs*      ******


Name:  **David
      M. Jeffs**


Title **:**  **Director
      and CEO**


Dated:  **November
      14, 2006**








By:*/s/
      J. Cameron Pan*      ******


Name:  **J.
      Cameron Pan**


Title **:**  **CFO**


Dated:  **November
      14, 2006**








**Page
          - 12**







**Exhibit
      31**










**Page
          - 13**


**CERTIFICATIONS**




I,
      David
      M Jeffs, certify that:






1.
      I have
      reviewed this quarterly report on Form 10-QSB of Communicate.com Inc.;




2.
      Based
      on my knowledge, this quarterly report does not contain any untrue statement
      of
      a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were
      made, not misleading with respect to the period covered by this report;




3.
      Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the financial
      condition, results of operations and cash flows of the small business issuer
as
      of, and for, the periods presented in this report;




4.
      The
      small business issuer’s other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as defined
      in
      Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
      reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
      small business issuer and have:




(a)
      Designed such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure that
      material information relating to the small business issuer, including its
      consolidated subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this report is being prepared;




(b)
      Designed such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles;




(c)
      Evaluated the effectiveness of the small business issuer’s disclosure controls
      and procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of the
      period covered by this report based on such evaluation; and




(d)
      Disclosed in this report any change in the small business issuer’s internal
      control over financial reporting that occurred during the small business
      issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal
      quarter in the case of an annual report) that has materially affected, or is
      reasonably likely to materially affect, the small business issuer’s internal
      control over financial reporting; and




5.
      The
      small business issuer’s other certifying officer(s) and I have disclosed, based
      on our most recent evaluation of internal control over financial reporting,
      to
      the small business issuer’s auditors and the audit committee of the small
      business issuer’s board of directors (or persons performing the equivalent
      functions):




(a)
      All
      significant deficiencies and material weaknesses in the design or operation
      of
      internal control over financial reporting which are reasonably likely to
      adversely affect the small business issuer’s ability to record, process,
      summarize and report financial information; and




(b)
      Any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the small business issuer’s internal control over
      financial reporting.







Date:
      November 14, 2006





***/s/
      David M Jeffs***


David
      M
      Jeffs, Director and CEO


**Page
          - 14**


**CERTIFICATIONS**




I,
      J
      Cameron Pan, certify that:




1.
      I have
      reviewed this quarterly report on Form 10-QSB of Communicate.com Inc.;




2.
      Based
      on my knowledge, this quarterly report does not contain any untrue statement
      of
      a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were
      made, not misleading with respect to the period covered by this report;




3.
      Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the financial
      condition, results of operations and cash flows of the small business issuer
      as
      of, and for, the periods presented in this report;




4.
      The
      small business issuer’s other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as defined
      in
      Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
      reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
      small business issuer and have:




(a)
      Designed such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure that
      material information relating to the small business issuer, including its
      consolidated subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this report is being prepared;




(b)
      Designed such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles;




(c)
      Evaluated the effectiveness of the small business issuer’s disclosure controls
      and procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of the
      period covered by this report based on such evaluation; and




(d)
      Disclosed in this report any change in the small business issuer’s internal
      control over financial reporting that occurred during the small business
      issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal
      quarter in the case of an annual report) that has materially affected, or is
      reasonably likely to materially affect, the small business issuer’s internal
      control over financial reporting; and




5.
      The
      small business issuer’s other certifying officer(s) and I have disclosed, based
      on our most recent evaluation of internal control over financial reporting,
      to
      the small business issuer’s auditors and the audit committee of the small
      business issuer’s board of directors (or persons performing the equivalent
      functions):




(a)
      All
      significant deficiencies and material weaknesses in the design or operation
      of
      internal control over financial reporting which are reasonably likely to
      adversely affect the small business issuer’s ability to record, process,
      summarize and report financial information; and




(b)
      Any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the small business issuer’s internal control over
      financial reporting.







Date:
      November 14, 2006





***/s/
      J Cameron Pan***


J
      Cameron
      Pan - CFO


**Page
          - 15**









**Exhibit
      32**














**Page
          - 16**




**CERTIFICATION
      PURSUANT TO**


**18
      U.S.C. SECTION 1350,**


**AS
      ADOPTED PURSUANT TO**


**SECTION
      906 OF THE SARBANES-OXLEY ACT OF 2002**






In
      connection with the Quarterly Report of Communicate.com Inc. (“Communicate”) on
      Form 10-QSB for the period ending September 30, 2006 as filed with the
      Securities and Exchange Commission on the date hereof (the “Report”), I, David
      M. Jeffs, President, Chief Executive Officer of Communicate and the sole member
      of the Board of Directors, certify, pursuant to s.906 of the Sarbanes-Oxley
      Act
      of 2002, that:




(1)
      The
      Report fully complies with the requirements of section 13(a) or 15(d) of the
      Securities Exchange Act of 1934; and




(2)
      The
      information contained in the Report fairly represents, the financial condition
      and result of operations of Communicate.








*/s/
      David M. Jeffs*


David
      M.
      Jeffs


Chief
      Executive Officer






November
      14, 2006






**Page
          - 17**









**CERTIFICATION
      PURSUANT TO**


**18
      U.S.C. SECTION 1350,**


**AS
      ADOPTED PURSUANT TO**


**SECTION
      906 OF THE SARBANES-OXLEY ACT OF 2002**








In
      connection with the Quarterly Report of Communicate.com Inc. (“Communicate”) on
      Form 10-QSB for the period ending September 30s, 2006 as filed with the
      Securities and Exchange Commission on the date hereof (the “Report”), I, J.
      Cameron Pan, Secretary, Treasurer, and Chief Financial Officer of Communicate,
      certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:




(1)
      The
      Report fully complies with the requirements of section 13(a) or 15(d) of the
      Securities Exchange Act of 1934; and




(2)
      The
      information contained in the Report fairly represents, the financial condition
      and result of operations of Communicate.






*/s/
      J. Cameron Pan*


J.
      Cameron Pan


Chief
      Financial Officer






November
      14, 2006







**Page
          - 18**







**COMMUNICATE.COM
        INC.**
 
 **INTERIM
        CONSOLIDATED FINANCIAL STATEMENTS**
 
 **SEPTEMBER
        30, 2006**
 
 
 
 (UNAUDITED)
 
 
  
 
 
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **INTERIM
        CONSOLIDATED STATEMENTS OF
        OPERATIONS**
 
 **INTERIM
        CONSOLIDATED STATEMENTS OF CASH
        FLOWS**
 
 **NOTES
        TO INTERIM CONSOLIDATED FINANCIAL
        STATEMENTS**
 
  **Page
            - 19**
  **COMMUNICATE.COM
        INC.**
 
 **CONSOLIDATED
        BALANCE SHEETS**
 
 September
                  30,
                2006
              
              
              December
                  31,
                2005(Unaudited)
              
              
              (Restated-Note
                  11)**ASSETS****CURRENT
                  ASSETS**Cash
                  and cash equivalents
              $
              1,674,983
              
              $
              1,735,887Short-term
                  investments
              
              374,566
              
              
              214,558Accounts
                  receivable
              
              10,652
              
              
              1,727Prepaids
              
              41,608
              
              
              -2,101,809
              
              
              1,952,172**RESTRICTED
                  CASH**
              
              20,000
              
              
              20,000**PROPERTY
                  AND EQUIPMENT**,
                  net of accumulated depreciation
              
              48,553
              
              
              52,640**INTANGIBLE
                  ASSETS**
              
              1,602,792
              
              
              1,539,678$
              3,773,154
              
              $
              3,564,490**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****CURRENT
                  LIABILITIES**Accounts
                  payable and accrued liabilities
              $
              643,724
              
              $
              934,734Loan
                  payable
              
              43,180
              
              
              -686,904
              
              
              934,734**STOCKHOLDERS’
                  EQUITY**Capital
                  stockAuthorized:50,000,000
                  common shares, $0.001 par valueIssued
                  and outstanding:17,836,339
                  common shares (December 31, 2005 - 17,756,339)
              
              8,846
              
              
              8,766Additional
                  paid-in capital
              
              3,611,290
              
              
              3,543,156Accumulated
                  deficit
              
              (533,886
              )
              
              (922,166
              )3,086,250
              
              
              2,629,756$
              3,773,154
              
              $
              3,564,490
 
 
 The
        accompanying notes are an integral part of these interim consolidated financial
        statements.
 
  **Page
            - 20**
  **COMMUNICATE.COM
        INC.**
 **INTERIM
        CONSOLIDATED STATEMENTS OF
        OPERATIONS**
 (Unaudited)
 
 Three
                  months ended
                September
                  30
              
              
              
              
              
              Nine
                  months ended
                September
                  302006
              
              
              2005
              
              
              2006
              
              
              2005**SALES**Domain
                  name leasing and advertising
              $
              72,432
              
              $
              256,705
              
              $
              241,403
              
              $
              844,185Domain
                  names
              
              500,000
              
              
              -
              
              
              623,800
              
              
              -eCommerce
              
              1,555,396
              
              
              760,954
              
              
              4,358,228
              
              
              2,201,855Royalties
              
              -
              
              
              -
              
              
              21,673
              
              
              -Total
                  sales
              
              2,127,828
              
              
              1,017,659
              
              
              5,245,104
              
              
              3,046,040**COST
                  OF SALES**Domain
                  names
              
              125,112
              
              
              -
              
              
              191,012
              
              
              -eCommerce
              
              1,238,542
              
              
              602,648
              
              
              3,565,272
              
              
              1,821,507Total
                  cost of sales
              
              1,363,654
              
              
              602,648
              
              
              3,756,284
              
              
              1,821,507**GROSS
                  PROFIT**
              
              764,174
              
              
              415,011
              
              
              1,488,820
              
              
              1,224,533**EXPENSES**Marketing
              
              73,965
              
              
              43,295
              
              
              215,373
              
              
              119,368General
                  and administrative
              
              97,378
              
              
              80,307
              
              
              301,883
              
              
              216,031Management
                  fees and salaries
              
              221,939
              
              
              217,750
              
              
              789,010
              
              
              614,896Professional
                  fees
              
              29,423
              
              
              24,404
              
              
              64,532
              
              
              56,092Interest
                  expense
              
              1,214
              
              
              -
              
              
              3,414
              
              
              -Depreciation
              
              3,790
              
              
              3,113
              
              
              11,756
              
              
              7,711427,709
              
              
              368,869
              
              
              1,385,968
              
              
              1,014,098**INCOME
                  BEFORE OTHER ITEMS**
              
              336,465
              
              
              46,142
              
              
              102,852
              
              
              210,435**NON-RECURRING
                  INCOME (NOTE 9)**
              
              -
              
              
              -
              
              
              250,000
              
              
              -**INTEREST
                  INCOME**
              
              11,394
              
              
              -
              
              
              35,428
              
              
              -**GAIN
                  ON DEBT SETTLEMENT**
              
              -
              
              
              52,788
              
              
              -
              
              
              69,000**NON-CONTROLLING
                  INTEREST SHARE OF LOSS IN FT.COM**
              
              -
              
              
              17,679
              
              
              -
              
              
              60,044**NET
                  INCOME**
              $
              347,859
              
              $
              116,609
              
              $
              388,280
              
              $
              339,479**BASIC
                  AND DILUTED EARNINGS PER SHARE:**
              $
              0.02
              
              $
              0.01
              
              $
              0.02
              
              $
              0.02**WEIGHTED
                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND****DILUTED:**
              
              17,836,339
              
              
              15,396,065
              
              
              17,836,339
              
              
              15,396,065
 
 
 The
        accompanying notes are an integral part of these interim consolidated financial
        statements.
 
  **Page
            - 21**
   **COMMUNICATE.COM
        INC.**
 
 **INTERIM
        CONSOLIDATED STATEMENTS OF CASH
        FLOWS**
 (Unaudited)
 Nine
                  months
                ended
                  September 30, 2006
              
              Nine
                  months
                ended
                  September 30, 2005**CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  income
              
              $
              388,280
              
              $
              339,479Adjustments
                  to reconcile net income to net cash provided by operating
                  activitiesNon-controlling
                  interest share of losses
              
              
              -
              
              
              (60,044
              )Cost
                  of domain name sales (Note 10)
              
              
              191,012
              
              
              -Termination
                  of royalty agreements (Note 9)
              
              
              (250,000
              )
              
              -Interest
                  charged to additional paid-in capital
              
              
              3,414
              
              
              -Share
                  issuance costs
              
              
              64,800
              
              
              -Depreciation
              
              
              11,756
              
              
              7,711Changes
                  in operating assets and liabilitiesAccounts
                  receivable
              
              
              (258,925
              )
              
              9,011Prepaids
              
              
              (41,608
              )
              
              -Accounts
                  payable and accrued liabilities
              
              
              (291,010
              )
              
              (138,389
              )**CASH
                  PROVIDED BY********OPERATING
                  ACTIVITIES**
              
              
              67,719
              
              
              157,768**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Purchase
                  of available-for-sale securities
              
              
              (160,008
              )
              
              -Purchase
                  of domain name
              
              
              (4,126
              )
              
              -Purchase
                  of property and equipment
              
              
              (7,669
              )
              
              (29,980
              )**CASH
                  USED IN INVESTING ACTIVITIES**
              
              
              (171,803
              )
              
              (29,980
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Proceeds
                  from issuance of common stock
              
              
              -
              
              
              297,100Loan
                  proceeds
              
              
              43,180
              
              
              -**CASH
                  FLOWS PROVIDED BY FINANCING ACTIVITIES**
              
              
              43,180
              
              
              297,100**NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              (60,904
              )
              
              424,888**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              1,735,887
              
              
              1,064,928**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              1,674,983
              
              $
              1,489,816**SUPPLEMENTAL
                  CASH FLOW INFORMATION**(Refer
                  to Note 6)
 
  The
        accompanying notes are an integral part of these interim consolidated financial
        statements.
 
 
  **Page
            - 22**
   **COMMUNICATE.COM
        INC.**
 **NOTES
        TO INTERIM CONSOLIDATED FINANCIAL
        STATEMENTS**
 **SEPTEMBER
        30, 2006**
 **(Unaudited)**
 
 
 **NOTE
        1 - NATURE OF OPERATIONS**
 
 The
        Company’s subsidiary Domain Holdings Inc. (“DHI”) owns a portfolio of generic
        domain names. DHI’s current business strategy is to develop or to seek partners
        to develop its domain names to include content, commerce and community
        applications. DHI has developed two websites that sell fragrance, beauty
        care
        and sporting goods products to North American consumers. DHI sells advertising
        services on its domains held for development and seeks to acquire other domains
        to complement its retail and advertising strategy. DHI has an in-house
        development team that develops its corporate and retailing
        websites.
 
 Effective
        December 31, 2005, DHI reorganized by transferring certain domain name assets
        into its 100% owned subsidiary Acadia Management Corp. (“Acadia”), a British
        Columbia, Canada, company incorporated on December 1, 2005.
 
 On
        October 1, 2003 the Company acquired a 71% controlling interest in
        FrequentTraveller.com Inc. (“FT”), a Nevada private company incorporated on
        October 29, 2002. FT is a full service travel agency that caters to
        Internet-based customers seeking tours and other travel services. As at December
        31, 2005, the Company owns 50.4% of the outstanding shares of FT. (Refer
        to Note
        3.)
 
 **Comparative
        figures**
 Certain
        comparative figures have been reclassified in order to conform to the current
        period’s financial statement presentation.
  **NOTE
        2 - BASIS OF PRESENTATION**
  The
        foregoing unaudited interim financial statements have been prepared in
        accordance with generally accepted accounting principles for interim
        consolidated financial information and with the instructions to Form 10-QSB
        and
        Regulation S-B as promulgated by the Securities and Exchange Commission ("SEC").
        Accordingly, these consolidated financial statements do not include all of
        the
        disclosures required by generally accepted accounting principles for complete
        financial statements. These unaudited interim consolidated financial statements
        should be read in conjunction with the audited consolidated financial statements
        for the period ended December 31, 2005. In the opinion of management, the
        unaudited interim consolidated financial statements furnished herein include
        all
        adjustments, all of which are of a normal recurring nature, necessary for
        a fair
        statement of the results for the interim period presented.
  The
        preparation of financial statements in accordance with generally accepted
        accounting principles requires the use of estimates and assumptions that
        affect
        the reported amounts of assets and liabilities, disclosure of contingent
        assets
        and liabilities known to exist as of the date the financial statements are
        published, and the reported amounts of revenues and expenses during the
        reporting period. Uncertainties with respect to such estimates and assumptions
        are inherent in the preparation of the Company's financial statements;
        accordingly, it is possible that the actual results could differ from these
        estimates and assumptions that could have a material effect on the reported
        amounts of the Company's financial position and results of
        operations.
  Operating
        results for the nine month period ended September 30, 2006 are not necessarily
        indicative of the results that may be expected for the year ending December
        31,
        2006.
 
 **NOTE
        3 - NON-CONTROLLING INTEREST**
 
 By
        agreement dated October 1, 2003, the Company acquired 350,000 common shares
        of
        FT, representing 71% of the outstanding shares of FT, in consideration for
        settlement of a $35,000 debt owing to the Company by FT for previous consulting
        work provided. Subsequent to October 1, 2003, FT issued 113,637 shares of
        its
        common stock to non-controlling interests for total proceeds of $50,000.
        In
        2004, FT issued 350,000 shares to the Company in settlement of advances of
        $35,000 and issued 334,578 shares to non-controlling interests for total
        proceeds of $51,726. On November 16, 2004, FT declared a nine share for every
        one share stock dividend. Amounts realized with respect to gains on dilution
        have been restated and allocated to additional paid in capital (see Note
        11).
  **Page
            - 23**
 
 
 **COMMUNICATE.COM
        INC.**
 **NOTES
        TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
        30, 2006**
 **(Unaudited)**
 
 
 **NOTE
        3 - NON-CONTROLLING INTEREST** (continued)
 
 On
        May 1,
        2005, FT completed a private placement of common shares at $0.05 per common
        share and raised $147,100 of which $50,000 was invested by the Company. FT
        issued 1,000,000 common shares to the Company and 1,942,000 to non-controlling
        interests. The monies were used to recapitalize FT and for working capital
        purposes. The Company recorded a non-controlling interest share of loss in
        FT of
        $68,588 in 2005. As of September 30, 2006, FT has 15,878,690 common shares
        issued and outstanding of which the Company owns 8,000,000 common shares
        representing 50.4% of FT’s issued and outstanding common shares.
 
 On
        May 5,
        2005, DHI entered into an agreement with FT whereby FT would have the right
        to
        sell travel products on Brazil.com, Indonesia.com, Malaysia.com, Canadian.com
        and GreatBritain.com by agreeing to pay at least a minimum royalty commencing
        2006 of $150,000 per annum. The royalty, which is 5% on the first $20 million
        in
        revenue and decreases by 1% on every subsequent $20 million to a minimum
        of 1%
        on annual sales greater than $80 million, is based on sales of travel products
        by FT. DHI retains the rights to sell other services, including advertising,
        on
        the websites. Beginning in 2007, DHI will earn a minimum annual royalty of
        $150,000 from FT. The agreement expires on December 31, 2010 and may be
        extended by
        FT  in
        increments of 5 years thereafter with the minimum annual royalty recalculated
        based on the average from the previous 5-year period.
 
 On
        July
        19, 2005, FT filed a Form SB-2 registration statement with the U.S, Securities
        and Exchange Commission offering up to 4,000,000 common shares at a price
        of
        $0.50 per common share. The monies to be raised are intended for development
        of
        FT’s business, including call center operations, technology investment and
        working capital. The Company is not obligated to undertake any portion of
        the
        offering, and if the maximum offering is sold by FT the Company’s interest in FT
        will decrease from 50.4% to 40%. While the registration process is continuing,
        the Company cannot estimate when, or if, the Form SB-2 filed by FT will become
        effective and whether the offering will be sold by FT.
 
 **NOTE
        4 - RELATED PARTY TRANSACTIONS**
 
 During
        the quarter ended March 31 2006, consulting fees totalling $54,188 (2005
        -
        $51,000) were incurred and paid to the two officers of the Company.
 
 During
        the quarter ended June 30, 2006, consulting fees totalling $55,188 (2005
        -
        $51,000) were incurred and paid to the two officers of the Company. Also,
        performance bonuses totalling $100,000 were accrued.
 
 During
        the quarter ended September 30, 2006, consulting fees totalling $57,188 (2005
        -
        $51,000) were incurred and paid to the two officers of the Company. Of the
        $50,000 performance bonuses accrued to each of the officers at June 30, 2006,
        the Company paid to each of the officers cash of $22,400 and 40,000 restricted
        common shares with a deemed value of $0.69 per common share which at the
        time of
        issuance had a fair value of $0.81 per common share. Accordingly, a fair
        value
        increment adjustment of $9,600 was recorded as additional consulting
        fees.
 
 **NOTE
        5 - INCOME TAXES**
 
 The
        Company’s subsidiaries, DHI and Acadia are subject to federal and provincial
        taxes in Canada and the Company and its subsidiary FT are subject to United
        States federal and state taxes.
 
 As
        at
        December 31, 2005, the Company and its subsidiaries have  net
        operating loss carryforwards of approximately $2,430,000 that
        result in deferred tax assets. These loss carryforwards will expire, if not
        utilized, through 2025 with the majority expiring by 2006. The Company’s
        subsidiary DHI also has approximately $1,610,000 in undepreciated capital
        costs
        relating to property and equipment that have not been amortized for tax
        purposes. The Company’s subsidiary Acadia also has approximately $1,800,000 in
        undepreciated capital costs relating to intangible assets that have not been
        amortized for tax purposes. These costs may be amortized in future years
        as
        necessary to reduce taxable income. M anagement
        believes that t he
        realization of the benefits from these deferred tax assets is uncertain and.
        accordingly, a full deferred tax asset valuation allowance has been provided
        and
        no deferred tax asset benefit has been recorded.
 
 **Page
            - 24**
 
 
 **COMMUNICATE.COM
        INC.**
 **NOTES
        TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
        30, 2006**
 **(Unaudited)**
 
 
 **NOTE
        6 - SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS**
 
 Nine
                  months ended
                September
                  30, 2006
                (Unaudited)
              
              
              Nine
                  months ended
                September
                  30, 2005
                (Unaudited)Cash
                  paid during the period for:Interest
              
              $
              -
              
              $
              -Income
                  taxes
              
              $
              -
              
              $
              -
 
 
 **NOTE
        7 - SEGMENTED INFORMATION**
 
 The
        Company’s eCommerce operations are conducted in three business segments, Domain
        Sales, Leasing and Advertising, eCommerce Products and eCommerce Services.
        Revenues, operating profits and net identifiable assets by business segments
        are
        as follows:
 
 For
                  the nine months ended September 30, 2006Domain
                  Sales, Advertising and
                Royalty
              
              
              eCommerce
                Products
              
              
              eCommerce
                Services
              
              
              Total$
              
              
              $
              
              
              $
              
              
              $Revenue
              
              886,876
              
              
              3,960,228
              
              
              398,000
              
              
              5,245,104Segment
                  Profit (Loss)
              
              385,865
              
              
              (125,384
              )
              
              (157,629
              )
              
              102,852As
                  atSeptember
                  30, 2006
              
              
              
              $
              $
              
              
              
              
              $
              $Total
                  Assets
              
              1,347,126
              
              
              2,357,606
              
              
              68,422
              
              
              3,773,154Intangible
                  Assets
              
              1,347,126
              
              
              252,366
              
              
              3,300
              
              
              1,602,792
 
 The
        reconciliation of the segment profit to net income as reported in the financial
        statements is as follows:
 
 Nine
                  months ended
                September
                  30, 2006Segment
                  Profit
              $
              102,852Non-RecurringIncome
              
              250,000Interest
                  Income
              
              35,428Non-Controlling
                  Interest
              
              -Net
                  Income
              $
              388,280
 
 **NOTE
        8 - CONTINGENCIES**
 
 The
        former Chief Executive Officer of DHI commenced a legal action against DHI
        on
        March 9, 2000 for wrongful dismissal and breach of contract. He is seeking,
        at a
        minimum, 18.39% of the outstanding shares of DHI, specific performance of
        his
        contract, special damages in an approximate amount of $30,000, aggravated
        and
        punitive damages, interest and costs. On June 1, 2000, Communicate.com filed
        a
        Defence and Counterclaim against this individual claiming damages and special
        damages for breach of fiduciary duty and breach of his employment contract.
        The
        outcome of these legal actions is currently not determinable and as such
        the
        amount of loss, if any, resulting from this litigation is presently not
        determinable.
 
 **NOTE
        9 - ROYALTY SETTLEMENT**
  Pursuant
        to agreements entered into on July 3, 2003 with Manhattan Assets Corp., DHI
        sold
        automobile.com, call.com, exercise.com and makeup.com for $1 million and
        retained a perpetual royalty right to the domain names. The royalty is
        calculated and payable monthly as the greater of 5% of net revenues arising
        from
        the sale of products and services marketed on webpages.
  **Page
            - 25**
  **COMMUNICATE.COM
        INC.**
 **NOTES
        TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
        30, 2006**
 **(Unaudited)**
 
 **NOTE
        9 - ROYALTY SETTLEMENT** (continued) ****
 
 hosted
        on
        the domain names, or $2,500, commencing 2006. During the first quarter of
        2006,
        DHI received royalty payments of $21,673 in aggregate. During the second
        quarter
        in 2006, Manhattan Assets and DHI agreed to settle all future royalty
        obligations in exchange for the return of call.com which has been recorded
        at
        its estimated fair value of $250,000 resulting in non-recurring income of
        $250,000.
 
 **NOTE
        10 - DOMAIN NAME SALE**
  On
        August
        11, 2006, DHI completed the sale and transfer of a sports domain name with
        a
        cost of $125,112 to an arms-length party for cash proceeds of
        $500,000.
 
 **NOTE
        11 - RESTATEMENTS**
  The
        Company has restated its consolidated financial statements for the year ended December
        31, 2005 and 2004. The Company is restating the financial statements to reverse
        the dilution gains in FT booked in 2004 and 2005 totalling $40,836 and to
        record
        these as additional paid in capital. The Company has also revised the fair
        value
        of stock issued by FT in 2004 for management fees resulting in an increase
        in
        management fees of $40,000.
 
 December
                  31, 2005
                As
                  Reported
                $
              
              
              Adjustment
                $
              
              
              December
                  31, 2005
                As
                  Restated
                $Balance
                  SheetAdditional
                  paid-in capital
              
              
              3,445,751
              
              
              97,405
              
              
              3,543,156Accumulated
                  deficit
              
              
              (824,761
              )
              
              (97,405
              )
              
              (922,166
              )
 
 Year
                  Ended
                December
                  31, 2005
                As
                  Reported
                $
              
              
              Adjustment
                $
              
              
              Year
                  Ended
                December
                  31, 2005
                As
                  Restated
                $Statement
                  of OperationsGeneral
                  and administrative
              
              
              (332,350
              )
              
              1,547
              
              
              (330,803
              )Non-controlling
                  interest share of loss in FT.com
              
              
              68,617
              
              
              (29
              )
              
              68,588Dilution
                  gain in FT.com
              
              
              28,483
              
              
              (28,483
              )
              
              --Net
                  income for the year
              
              
              373,940
              
              
              (26,965
              )
              
              346,975Accumulated
                  deficit - beginning
              
              
              (1,198,701
              )
              
              (70,440
              )
              
              (1,269,141
              )Accumulated
                  deficit - ending
              
              
              (824,761
              )
              
              (97,405
              )
              
              (922,166
              )
 
 There
        was
        no change to the basic and diluted net earnings per share resulting from
        the
        restatement.
 
 
 **Page
            - 26**