----

----

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

**Form 10-Q**

ý** QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT      OF 1934**

**For thequarterly period ended June 30, 2001**

**OR**

**o**** TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT      OF 1934**

**Commission file number 333-33194**
|                                                       |                                 |
|------------------------------------------------------------|--------------------------------------|
| **STYLECLICK, INC.******                                   |
| (Exact Name of Registrant as Specified in its  Charter)    |
|                                                       |
| **Delaware******                                           | **13-4106745******                   |
| (State or other jurisdiction of                            | (IRS Employer Identification Number) |
| incorporation or organization)                             |                                 |
|                                                       |                                 |
| **111 E. Wacker Drive, Suite 500,  Chicago, IL******       | **60601******                        |
| (Address of principal executive offices)                   | (Zip Code)                           |
|                                                       |                                 |
| **(312) 856-1081******                                     |
| (Registrant’s telephone number, including area  code) |
|                                                       |                                 |
| **5105 W. Goldleaf Circle, Los  Angeles, CA 90056******    |
| (Former Address)                                           |
|                                                            |                                      |  |

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

The number of outstanding shares of the registrant’sCommon Stock as of July 31, 2001, was:
|   | Class A  common stock | 8,980,124  | *      |
|--------|-----------------------|------------|--------|
|   | Class B  common stock | 23,039,706 |   |
|   |                  |            |   |
|   |                  | 32,019,830 |   |
|   |                  |            |   |

----

*Includes 1,000,000 shares of restricted stocksubject to vesting.

Only Class A common stock is publicly traded.

----

----

**PART I. FINANCIALINFORMATION**

Item 1. Financial Statements

Styleclick,Inc.Condensed Balance Sheets(in thousands, except share data)

|                                                                                           | June 30,                                                                                                                                 |    | December  31, |    |
|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|---------|---------------|---------|
|                                                                                           | 2001                                                                                                                                     |    | 2000          |    |
|                                                                                           |                                                                                                                                          |    |               |    |
|                                                                                           | (Unaudited)                                                                                                                              |    |          |    |
| **Assets**                                                                                     |                                                                                                                                     |    |          |    |
| Current  assets:                                                                               |                                                                                                                                     |    |          |    |
|                                                                                           | Cash  and cash equivalents                                                                                                               | $       | 1,582         |    | $ | 16,201 |   |
|                                                                                           | Accounts  receivable, net of allowance of $184 and $700, respectively                                                                    | 53      |          | 891     |   |
|                                                                                           | Inventories,  net                                                                                                                        | 1,335   |          | 7,057   |   |
|                                                                                           | Deferred  advertising and promotion                                                                                                      | 3,000   |          | 3,657   |   |
|                                                                                           | Prepaid  expenses and other current assets                                                                                               | 594     |          | 627     |   |
|                                                                                           | Due  from related parties                                                                                                                | 862     |          | -       |   |
|                                                                                           |                                                                                                                                     |         |          |         |   |
| Total  current assets                                                                          | 7,426                                                                                                                                    |    | 28,433        |    |
| Property  and equipment, net of accumulated depreciation of $12,637 and $13,238,  respectively | 7,324                                                                                                                                    |    | 13,947        |    |
| Goodwill,  net                                                                                 | -                                                                                                                                        |    | 1,000         |    |
| Deferred  advertising and promotion, non-current                                               | 7,000                                                                                                                                    |    | 8,315         |    |
| Other  assets                                                                                  | 46                                                                                                                                       |    | 75            |    |
|                                                                                           |                                                                                                                                          |    |               |    |
|                                                                                           | Total  assets                                                                                                                            | $       | 21,796        |    | $ | 51,320 |   |
|                                                                                           |                                                                                                                                     |    |          |    |
|                                                                                           |                                                                                                                                     |    |          |    |
| **Liabilities  and Stockholders’ Equity**                                                 |                                                                                                                                     |    |          |    |
| Current  liabilities:                                                                          |                                                                                                                                     |    |          |    |
|                                                                                           | Accounts  payable                                                                                                                        | $       | 1,013         |    | $ | 2,754 |   |
|                                                                                           | Accrued  liabilities                                                                                                                     | 6,623   |          | 2,291   |   |
|                                                                                           | Deferred  income                                                                                                                         | -       |          | 177     |   |
|                                                                                           | Due  to related parties                                                                                                                  | 4,800   |          | 4,171   |   |
|                                                                                           |                                                                                                                                     |         |          |         |   |
| Total  current liabilities                                                                     | 12,436                                                                                                                                   |    | 9,393         |    |
|                                                                                           |                                                                                                                                     |    |          |    |
| Stockholders’  equity:                                                                    |                                                                                                                                     |    |          |    |
|                                                                                           | Preferred  stock—$0.01 par value; 25,000,000 shares authorized, none issued and  outstanding                                        | -       |          | -       |   |
|                                                                                           | Class  A common stock—$0.01 par value, 150,000,000 shares authorized, 8,980,124 and  7,975,053 issued and outstanding, respectively | 90      |          | 80      |   |
|                                                                                           | Class  B common stock—$0.01 par value, 112,500,000 shares authorized, 23,039,706  issued and outstanding                            | 230     |          | 230     |   |
|                                                                                           | Deferred  employee compensation                                                                                                          | (1,020  | )             | -       |   |
|                                                                                           | Additional  paid-in capital                                                                                                              | 336,680 |          | 335,582 |   |
| Accumulated  deficit                                                                           | (326,620                                                                                                                                 | )       | (293,965      | )       |
|                                                                                           |                                                                                                                                          |    |               |    |
| Total  stockholders’ equity                                                               | 9,360                                                                                                                                    |    | 41,927        |    |
|                                                                                           |                                                                                                                                          |    |               |    |
| Total  liabilities and stockholders’ equity                                               | $                                                                                                                                        | 21,796  |          | $       | 51,320 |   |
|                                                                                           |                                                                                                                                          |    |               |    |

*See accompanying notes to financial statements.*

Styleclick, Inc.Condensed Statements of Operations(Unaudited)

|                                                          |                                             |   |                      |    |       |    |       |   |
|---------------------------------------------------------------|--------------------------------------------------|--------|---------------------------|---------|------------|---------|------------|--------|
|                                                          | Three Months Ended June 30,                      |   | Six Months Ended June 30, |    |
|                                                          | 2001                                             |   | 2000                      |    | 2001       |    | 2000       |   |
|                                                          |                                                  |   |                           |    |            |    |            |   |
|                                                          | (in thousands, except share data)                |   |
|                                                          |                                             |   |                      |    |       |    |       |   |
| Net revenues:                                                 |                                             |   |                      |    |       |    |       |   |
|                                                          | Product  sales                                   | $      | 840                       |    | $          | 4,785   |       | $      | 4,051 |   | $ | 10,326 |   |
|                                                          | Service  revenues                                | 1,598  |                      | -       |       | 2,406   |       | -      |   |
|                                                          |                                                  |   |                           |    |            |    |            |   |
|                                                          | 2,438                                            |   | 4,785                     |    | 6,457      |    | 10,326     |   |
|                                                          |                                             |   |                      |    |       |    |       |   |
| Cost of  sales:                                               |                                             |   |                      |    |       |    |       |   |
|                                                          | Product  sales                                   | 1,009  |                      | 5,250   |       | 7,444   |       | 10,588 |   |
|                                                          | Service  revenues                                | 27     |                      | -       |       | 117     |       | -      |   |
|                                                          |                                             |        |                      |         |       |         |       |        |   |
|                                                          | 1,036                                            |   | 5,250                     |    | 7,561      |    | 10,588     |   |
|                                                          |                                             |   |                      |    |       |    |       |   |
| Gross profit  (loss)                                          | 1,402                                            |   | (465                      | )       | (1,104     | )       | (262       | )      |
|                                                          |                                             |   |                      |    |       |    |       |   |
| Operating  costs and expenses:                                |                                             |   |                      |    |       |    |       |   |
|                                                          | Selling and  marketing                           | 174    |                      | 2,107   |       | 884     |       | 3,858  |   |
|                                                          | Product  development costs                       | 2,279  |                      | 1,140   |       | 3,479   |       | 2,048  |   |
|                                                          | General and  administrative                      | 4,855  |                      | 3,999   |       | 10,875  |       | 7,910  |   |
|                                                          | Write-off of  capitalized software costs         | -      |                      | 2,260   |       | 878     |       | 2,260  |   |
|                                                          | Write-off of  deferred advertising and promotion | -      |                      | -       |       | 1,972   |       | -      |   |
|                                                          | Depreciation  and amortization                   | 1,412  |                      | 1,383   |       | 3,049   |       | 2,882  |   |
|                                                          | Amortization  of Goodwill                        | -      |                      | -       |       | 97      |       | -      |   |
|                                                          | Restructuring  expenses                          | 10,552 |                      | -       |       | 10,552  |       | -      |   |
|                                                          |                                             |        |                      |         |       |         |       |        |   |
|                                                          | Total  operating costs and expenses         | 19,272 |                      | 10,889  |       | 31,786  |       | 18,958 |   |
|                                                          |                                             |        |                      |         |       |         |       |        |   |
| Operating  loss                                               | (17,870                                          | )      | (11,354                   | )       | (32,890    | )       | (19,220    | )      |
| Other  income, net                                            | 24                                               |   | 1                         |    | 235        |    | 1          |   |
|                                                          |                                                  |   |                           |    |            |    |            |   |
| Net  loss                                                     | (17,846                                          | )      | $                         | (11,353 | )          | (32,655 | )          | $      | (19,219 | ) |
|                                                          |                                                  |   |                           |    |            |    |            |   |
|                                                          |                                             |   |                      |    |       |    |       |   |
| Basic and diluted loss per share                              | $                                                | (0.56  | )                         | $       | (0.55      | )       | $          | (1.05  | ) | $ | (0.94 | ) |
|                                                          |                                                  |   |                           |    |            |    |            |   |
|                                                          |                                             |   |                      |    |       |    |       |   |
| Basic and  diluted weighted average common shares outstanding | 32,019,830                                       |   | 20,460,110                |    | 31,024,486 |    | 20,460,110 |   |
|                                                          |                                                  |   |                           |    |            |    |            |   |
|                                                               |                                                  |        |                           |         |            |         |            |        |  |  |  |  |  |  |

*See accompanying notes to financial statements.*

Styleclick, Inc.Condensed Statements of Cash Flows(Unaudited)

|                                                                         | Six  Months Ended June 30,                       |    |
|------------------------------------------------------------------------------|--------------------------------------------------|---------|
|                                                                         | (in thousands)                                   |    |
|                                                                         | 2001                                             |    | 2000 |   |
|                                                                         |                                                  |    |  |   |
| **Cash  flow from operating activities**                                     |                                             |    |   |   |
| Net  loss                                                                    | $                                                | (32,655 | ) | $ | (19,219 | ) |
| Adjustments  to reconcile net loss to net cash used in operating activities: |                                             |    |   |   |
|                                                                         | Depreciation  and amortization                   | 3,049   |   | 2,882 |   |
|                                                                         | Amortization  of goodwill                        | 97      |   | - |   |
|                                                                         | Write-off  of capitalized software costs         | 4,269   |   | 2,260 |   |
|                                                                         | Write-off of goodwill                            | 903     |   | - |   |
|                                                                         | Write-off  of deferred advertising and promotion | 1,972   |   | - |   |
|                                                                         | Loss  on disposition of fixed assets             | 1,562   |   | - |   |
|                                                                         | Amortization  of deferred compensation           | 65      |   | - |   |
|                                                                         | Changes  in operating assets and liabilities:    |    |   |   |   |
|                                                                         | Accounts  receivable                             | 838     |   | 503 |   |
|                                                                         | Inventories                                      | 5,722   |   | 1,536 |   |
|                                                                         | Prepaid  expenses and other current assets       | (1,272  | ) | - |   |
|                                                                         | Accounts  payable                                | (1,741  | ) | (1,128 | ) |
|                                                                         | Deferred  income                                 | (177    | ) | - |   |
|                                                                         | Due  to related parties                          | (233    | ) | - |   |
|                                                                         | Accrued  liabilities                             | 4,332   |   | (2,648 | ) |
|                                                                         | Other,  net                                      | 1,344   |   | 413 |   |
|                                                                         |                                                  |    |  |   |
| Net  cash used in operating activities                                       | (11,925                                          | )       | (15,401 | ) |
|                                                                         |                                             |    |   |   |
| **Cash  flow from investing activities**                                     |                                             |    |   |   |
| Capital  expenditures                                                        | (2,707                                           | )       | (350 | ) |
|                                                                         |                                                  |    |  |   |
| Net  cash used in investing activities                                       | (2,707                                           | )       | (350 | ) |
|                                                                         |                                             |    |   |   |
| **Cash  flow from financing activities**                                     |                                             |    |   |   |
| Proceeds  from issuance of common stock                                      | 13                                               |    | - |   |
| Capital  contributed by USANi  LLC                                      | -                                                |    | 15,750 |   |
|                                                                         |                                                  |    |  |   |
| Net  cash provided by financing activities                                   | 13                                               |    | 15,750 |   |
|                                                                         |                                             |    |   |   |
| Net  decrease in cash and cash equivalents                                   | (14,619                                          | )       | (1 | ) |
|                                                                         |                                                  |    |  |   |
| Cash  and cash equivalents at beginning of period                            | 16,201                                           |    | 9 |   |
|                                                                         |                                                  |    |  |   |
| Cash  and cash equivalents at end of period                                  | $                                                | 1,582   |   | $ | 8 |   |
|                                                                         |                                                  |    |  |   |
|                                                                              |                                                  |         |  |  |  |  |  |  |  |

*See accompanying notes to financial statements.*

Styleclick, Inc.Notes to Condensed Financial Statements

**1. Basis of Presentation**

             The accompanying unauditedcondensed financial statements of Styleclick, Inc. ("Styleclick")have been prepared in accordance with generally accepted accounting principlesfor interim financial information and with the instructions to Form 10-Q andArticle 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotesrequired by generally accepted accounting principles for complete financialstatements.  In the opinion ofmanagement, all adjustments considered necessary for a fair presentation have beenincluded.  These adjustments consistedof normal recurring accruals with the exception of a $10.6 millionrestructuring expenses recorded based on Styleclick’s restructuring plan, a$2.0 million inventory expense recorded based on Styleclick’s inventorydisposition plan, a $0.9 million write-off of capitalized software developmentcosts associated with Styleclick’s FirstJewelry.com Internet shopping websitewhich was closed down in March 2001 and a $2.0 million write-off of deferredadvertising and promotion after the evaluation of recoverability of suchasset.  Operating results for the firstsix months of 2001 are not necessarily indicative of the results that may beexpected for the year ended December 31, 2001.

             The balance sheet at December 31,2000 was derived from the audited financial statements at that date but doesnot include all of the information and footnotes required by generally acceptedaccounting principles for complete financial statements.

             For further information, refer tothe financial statements and footnotes thereto included in Styleclick's annualreport on Form 10-K for the year ended December 31, 2000.

**2. New Organization**

             In March 2001, Styleclick announcedcertain changes including a new companyorganization designed to advance its offering of scalable commerce services.  The announcement included disclosure ofStyleclick's purchase of certain assets formerly held by MVP.com, Inc.(“MVP.com”), a former provider of e-commerce services located in Chicago,Illinois, including the hardware and proprietary software comprising itstechnology platform, as part of a liquidation of MVP.com’s assets.  Additionally,Styleclick hired Ian Drury, former Chief Technology Officer of MVP.com andBrent Hill, former Vice President, Business Development, of MVP.com, thetechnologists responsible for creating the proprietary software purchased byStyleclick, as well as certain other former employees of MVP.com.  Messrs. Drury and Hill have joinedStyleclick’s senior staff as Executive Vice Presidents.  In connection with such hirings Styleclickissued to Messrs. Drury and Hill and certain other former employees of MVP.coman aggregate of 1,000,000 shares of Class A common stock subject to certainrestrictions including a vesting schedule, and options to purchase an aggregateof 1,430,500 shares of Class A common stock. The issuance of the 1,000,000 shares of Class A common stock was valuedas $1.1 million and is being recorded as deferred employee compensation againstStyleclick’s equity.  The $1.1 millionis recognized as employee compensation expense on a straight-line basis overthe vesting period of 48 months.             Also in March 2001,Styleclick announced that its Board of Directors had elected Lisa Brown to theoffice of Chief Executive Officer of Styleclick and Robert Halper to the officeof President and Chief Operating Officer of Styleclick.  Ms. Brown also serves as Chief ExecutiveOfficer and President of USA Electronic Commerce Solutions LLC (“ECS”), awholly-owned subsidiary of Styleclick’s majority shareholder, USA Networks,Inc., and Mr. Halper serves as Executive Vice President, Operations andFinance, of ECS.
             Finally, in conjunction with thenew company organization, Styleclickreceived a revolving line of credit for $15 million from USAi.  The term of the credit line is 18 months andcarries an interest rate of USAi’s average blended cost of borrowing.  The credit line can be drawn against onlywith the approval of Styleclick’s Board of Directors.  As of June 30, 2001, no borrowing against this line of credit hadbeen made.

**3. Restructuring**

             On May 14, 2001, Styleclick announced several changes toits operations including the consolidation of its operations at its Chicagosite, the closing of the FirstAuction.com website, and the signing of aservices agreement with ECS.

             In March 2001, Styleclick acquiredthe technology platform formerly owned by MVP.com, and has since been operatingin Los Angeles and Chicago, with distinct technology platforms in eachlocation. The consolidation of all operations at Styleclick Chicago issubstantially complete and expected to be completed no later than mid-August2001.

             FristAuction.com ceased operationsin May 2001.  Closing FirstAuction.comwas in line with Styleclick’s stated plan to gradually phase-out itsbusiness-to-consumer business model in order to focus resources on Styleclick'score business model: enabling e-commerce for third parties.

             On May 14, 2001, Styleclick hasentered into a services agreement with ECS. Pursuant to the services agreement, ECS will provide certainmerchandising, business operations and financial services to Styleclick atcost.  As of June 30, 2001, Styleclickhas transitioned most of these functions to ECS and anticipates that nearly allcovered functions will be performed by ECS after July 31, 2001. Also pursuant tothe services agreement, ECS has agreed to use its reasonable efforts, asdetermined by ECS, to engage Styleclick to provide ECS’s non-affiliatedcustomers with technological services of the type provided by Styleclick tothird parties to the extent that Styleclick has the capacity to provide suchservices itself in a timely manner. Compensation to be paid to Styleclick in respect of such services shallbe negotiated by the parties in good faith prior to Styleclick'sengagement.  However, Styleclick cannotbe certain that ECS will use Styleclick’s services in any particular instanceor at all.

             In conjunction with the May 2001announcement, Styleclick incurred $10.6 million of restructuring expenses inthe second quarter of 2001.  Therestructuring expenses included a $3.4 million write-off of capitalizedsoftware development costs, a $1.5 million loss on disposition of fixed assets(primarily leasehold improvements), a $1.6 million accrued office lease expenserelated to the future termination of office lease agreements, a $2.8 millionemployee termination expenses, a $0.9 million write-off of goodwill and a totalof $0.4 million expense primarily related to the termination of severalexisting business contracts.

Item 2.  Management’s Discussion and Analysis ofFinancial Condition and Results of Operations

             The following discussion should beread in conjunction with the financial statements and the notes theretoappearing elsewhere in this Form 10-Q. This discussion contains forward-looking statements that involve risksand uncertainties.  Our actual resultsmay differ materially from those anticipated in these forward-lookingstatements as a result of certain factors, including, but not limited to, thoseset forth below and elsewhere in this Form 10-Q.

**General**

             Styleclick, Inc. is a provider ofelectronic commerce (e-commerce) technologies and services enabling itscustomers to sell their products online. Styleclick's offerings includewebsite design, development and hosting, product imaging, online sales andmerchandising technologies.

             Recent changes in Styleclick’sbusiness model make the prediction of future operating results difficult,although Styleclick expects to incur net losses for the foreseeablefuture.  As part of its evolvingstrategy, Styleclick may decide to reduce development and marketing costsassociated with, shift the focus of, or substantially reduce its interest in,some or all of its operations, which may cause a decrease in Styleclick’santicipated revenue or net income. Styleclick intends to continue to explore ways to reduce expenses andincrease efficiencies.

             Inconnection with its increased focus on its e-commerce service providerbusiness, Styleclick has closed down its only two retail websites,FirstJewelry.com (in March 2001) and FirstAuction.com (in May 2001) and is inthe process of selling its inventory on hand through the liquidation channels.

**Results of Operations**

***Comparison of Three Months Ended June 30, 2001 and 2000***

*Revenue and Gross Profit(Loss)*

             For the three months ended June 30,2001, net revenues decreased by $2.3 million, or 49%, compared to the threemonths ended June 30, 2000. Merchandise sales decreased $3.9 million primarilydue to Styleclick’s transitioning out of the business-to-consumer market in the2001 period. The decrease was partially offset by a $1.6 million increase inservice revenues generated from Styleclick’s e-commerce related services. Grossmargin increased by $1.9 million, from a $0.5 million loss in the 2000 periodto a $1.4 million profit in the 2001 period, primarily due to a $1.6 millionprofit generated from Styleclick’s service revenues since cost of salesassociated with service revenues is relatively insignificant.

Operating Costsand Expenses

             For the three months ended June 30,2001, total operating costs and expenses of $19.3 million increased by $8.4million or 77% compared to the corresponding period in 2000.  General and administrative expenses were$0.9 million and product development costs were $1.1 million above those forthe 2000 period due to an increased headcount in the 2001 period as compared tothe 2000 period.  The increase alsoresulted from a $10.6 million of restructuring expenses associated withStyleclick’s announced restructuring plan in the 2001 period whereas no suchexpenses in the 2000 period.  The $10.6million restructuring expenses included a $3.4 million write-off of capitalizedsoftware development costs, a $1.5 million loss on disposition of fixed assets(primarily leasehold improvements), a $1.6 million accrued office lease expenserelated to the future termination of office lease agreements, a $2.8 millionemployee termination expenses, a $0.9 million write-off of goodwill and a totalof $0.4 million expense primarily related to the termination of severalexisting business contracts. As a result of Styleclick’s restructuring,Styleclick anticipates that there will be a significant reduction in operatingcosts and expenses during the third and fourth quarters of 2001when compared tothe second quarters of 2001.  Theincreases were offset by a $1.9 million decrease in selling and marketingexpense and a $2.3 million decrease in write-off of capitalized softwaredevelopment costs in the 2001 period as compared to the 2000 period.  The decrease in selling and marketingexpense reflected Styleclick’s reduced spending on advertising spending onStyleclick’s Internet shopping websites. The decrease in the write-off of capitalized software development costswas due to a $2.3 million write-off of capitalized software costs related to anaccounting software package and electronic data interchange software in the2000 period and no such write-off in the 2001 period.             OnMay 14, 2001, Styleclick entered into a services agreement with USAElectronic Commerce Solutions LLC (“ECS”), a wholly-owned subsidiary ofStyleclick’s majority shareholder, USA Networks, Inc.  Pursuant to the services agreement, ECS will provide certainmerchandising, business operations and financial services to Styleclick atcost. As of June 30, 2001, Styleclick has transitioned most of these functionsto ECS and anticipates that nearly all covered functions will be performed byECS after July 31, 2001.  Once thetransitions are completed, Styleclick anticipates that the services agreementwill significantly reduce Styleclick’s operating expenses.
             For the three months ended June,2001, net loss increased by $6.5 million compared to the three months endedJune 30, 2000 due to increased operating expenses which were partially offsetby higher gross profit.

             Styleclick recorded no provisionfor income taxes during the three months ended June 30, 2001 and 2000 due tonet operating losses in both periods.

***Comparison of Six Months Ended June 30, 2001 and 2000***

*Revenue and Gross Loss*

             For the six months ended June 30,2001, net revenues decreased by $3.9 million, or 37%, compared to the sixmonths ended June 30, 2000. Merchandise sales decreased $6.3 million primarilydue to Styleclick’s transitioning out of the business-to-consumer market in the2001 period. The decrease was offset by a $2.4 million increase in servicerevenues generated from Styleclick’s e-commerce related services. Gross lossincreased by $0.8 million, from a $0.3 million loss in the 2000 period to a$1.1 million loss in the 2001 period, primarily due to a $3.1 million lossincrease from merchandise sales.  Ofthis $3.1 million increase, a $2.0 million inventory expense was recorded inthe 2001 period based on Styleclick’s inventory disposition plan and no suchexpense was recorded in the 2000 period. The $3.1 million increase in gross loss was offset by a $2.3 milliongross profit generated from Styleclick’s service revenues since cost of salesassociated with service revenues is relatively insignificant.

*Operating Costs and Expenses*

             For the six months ended June 30,2001, total operating costs and expenses of $31.8 million increased by $12.8million or 68% compared to the corresponding period in 2000.  General and administrative expenses were $3million and product development costs were $1.4 million above those for the2000 period due to an increased headcount in the 2001 period as compared to the2000 period.  The increase also resultedfrom a $10.6 million of restructuring expenses associated with Styleclick’sannounced restructuring plan in the 2001 period whereas no such expenses in the2000 period. The $10.6 million restructuring expenses included a $3.4 millionwrite-off of capitalized software development costs, a $1.5 million loss ondisposition of fixed assets (primarily leasehold improvements), a $1.6 millionaccrued office lease expense related to the future termination of office leaseagreements, a $2.8 million employee termination expenses, a $0.9 millionwrite-off of goodwill and a total of $0.4 million expense primarily related tothe termination of several existing business contracts. As a result ofStyleclick’s restructuring, Styleclick anticipates that there will be asignificant reduction in operating costs and expenses during the third andfourth quarters of 2001when compared to the first six months of 2001.  The increases were offset by a $1 milliondecrease in selling and marketing expense and a $1.4 million decrease inwrite-off of capitalized software development costs in the 2001 period ascompared to the 2000 period.  Thedecrease in selling and marketing expense reflected Styleclick’s reducedspending on advertising spending on Styleclick’s Internet shoppingwebsites.  The decrease in the write-offof capitalized software development costs resulted from the excess of the $2.3million write-off of capitalized software costs related to an accountingsoftware package and electronic data interchange software in the 2000 periodover the $0.9 million write-off of capitalized software development costsassociated with Styleclick’s FirstJewelry.com Internet shopping website in the2001 period.             OnMay 14, 2001, Styleclick entered into a services agreement with USAElectronic Commerce Solutions LLC (“ECS”), a wholly-owned subsidiary ofStyleclick’s majority shareholder, USA Networks, Inc.  Pursuant to the services agreement, ECS will provide certainmerchandising, business operations and financial services to Styleclick atcost. As of June 30, 2001, Styleclick has transitioned most of these functionsto ECS and anticipates that nearly all covered functions will be transitionedto ECS by July 31, 2001.  Once thetransitions are completed, Styleclick anticipates that the services agreementwill significantly reduce Styleclick’s operating expenses.
             For the six months ended June 30,2001, net loss increased by $13.4 million compared to the six months ended June30, 2000 due to increased gross loss and operating expenses.

             Styleclick recorded no provisionfor income taxes during the six months ended June 30, 2001 and 2000 due to netoperating losses in both periods.

**Liquidity and Capital Resources**

             Net cash used in operatingactivities was $11.9 million, which resulted primarily from the $32.7 millionoperating loss and the $3.0 million payments made by Styleclick on its prepaidexpense accounts and accounts payable. Such operating loss and cash payments were offset by a decrease inaccounts receivable ($0.8 million), a decrease in inventories ($5.7 million), adecrease in other asset accounts ($1.3million), an increase in accrued liabilities($4.3 million) and five non-cash expense items: depreciation and amortization($3.0 million), the write-off of capitalized software costs ($4.3 million), thewrite-off of goodwill ($0.9 million), the write-off of deferred advertising andpromotion ($2.0 million) and the loss of disposition of fixed assets ($1.6million).  Additionally, cash used inconnection with investing activities for capital expenditures was $2.7 millionin the first six months of 2001.

             InMarch 2001, Styleclick received a revolving line of credit for $15 million fromUSAi.  The term of the credit line is 18months and carries an interest rate of USAi’s average blended cost ofborrowing.  The credit line can be drawnagainst only with the approval of Styleclick’s Board of Directors. As of June30, 2001, no borrowing against this line of credit had been made.

             In May 2001, Styleclick entered into a servicesagreement with ECS.  Pursuant to theservices agreement, ECS will provide certain merchandising, business operationsand financial services to Styleclick at cost. Styleclick anticipates that allcovered functions will be transitioned to ECS by July 31, 2001.  Styleclick expects that the agreement willreduce its operating expenses on a going-forward basis.             During the second quarter of2001, Styleclick incurred a $10.6 million of restructuring expenses.  These expenses are expected to benon-recurring.  As such, it isanticipated that Styleclick’s operating expenses will be significantly lower inthe foreseeable future.
             Styleclick hasexperienced significant operating losses and used significant cash inoperations in the past two years.  Inaddition, as part of Styleclick’s purchase of the technology platform ofMVP.com and the hiring of certain former employees of MVP.com, Styleclick iscommitted to expending certain resources. These include, but are not limited to, salaries, operating expenses,technology development costs and capital expenditures.  While the specific amount of this commitmentis not fully known at this time, the Company believes that cash on hand plusthe credit line should be sufficient to fund its operating activities throughat least the first quarter of 2002. Styleclick does not currently anticipate that it will be profitable orgenerate positive cash flow during 2001. Consequently, Styleclick intends to focus on generating revenues withoutthe necessity of reducing expenses and other actions to achieve a positive cashflow as quickly as possible.  However,if Styleclick’s does not achieve these goals it may require additional capitalat an earlier date.  USAi is under noobligation to provide additional capital, and Styleclick cannot ensure that itwill be able to obtain additional capital on favorable terms or at all.

**Forward-Looking Information**

             Certain statements in this Sectionand elsewhere in this report are forward-looking in nature and relate to trendsand events that may affect Styleclick's future financial position and operatingresults.  Such statements are madepursuant to the safe harbor provisions of the Private Securities LitigationReform Act of 1995.  The terms"believe," "expect," "anticipate,""intend," and "project" and similar words or expressions areintended to identify forward-looking statements.  These statements speak only as of the date of this report.  The statements are based on currentexpectations, are inherently uncertain, are subject to risks, and should bereviewed with caution.  Actual resultsand experience may differ materially from the forward-looking statements as aresult of many factors, including: Styleclick's lack of profitability and anticipation of continued losses;Styleclick's evolving business model, which makes the prediction of futureoperating results difficult; Styleclick's reliance on ECS; performance problemswith Styleclick's Los Angeles technology platform; uncertainty surrounding theperformance of the Chicago technology platform, due to its recent acquisitionby Styleclick; control of Styleclick by USA Networks, Inc.; the potential forconflicts of interest between the Styleclick and USA Networks, Inc. and itsaffiliates, including USA Electronic Commerce Solutions, LLC; possible futuresales of Styleclick's securities by USA Networks, Inc.; risks associated withthe shutdown of the Los Angeles facility; Styleclick's future capital needs andthe uncertainty of additional financing; the unpredictability and potentialfluctuations in future revenues and operating results; the fact that Styleclickcompetes in new and emerging markets; and Styleclick's dependence on thecontinued growth of online commerce.  Itis not possible to foresee or identify all such factors.  Styleclick makes no commitment to update anyforward-looking statement or to disclose any facts, events, or circumstancesafter the date hereof that may affect the accuracy of any forward-lookingstatement.

Item 3.  Quantitative and Qualitative Disclosure ofMarket Risk

None.

**PARTII. OTHER INFORMATION**

Item 1.  Legal Proceedings

             From time totime Styleclick may be subject to legal proceedings and claims in the ordinarycourse of its business, including claims of alleged infringement of thetrademarks and other intellectual property rights of third parties byStyleclick.  In addition, litigation maybe necessary in the future to enforce Styleclick’s intellectual propertyrights, to protect its trade secrets or to determine the validity and scope ofthe proprietary rights of others.  Thislitigation, regardless of outcome or merit, could result in substantial costsand diversion of management and technical resources, any of which couldmaterially harm Styleclick’s business.

*             Loevner*

             On February 8, 1999,Internet Shopping Network, LLC (“ISN”) filed a Demand for Arbitration with theoffice of the American Arbitration Association in Orlando, Florida.  ISN commenced this arbitration to settledisputes arising out of claims by ISN’s former CEO and president, Kirk Loevner,following the termination of his employment on or about August 10, 1998.  Mr. Loevner claims entitlement to options on250,000 shares of stock of Internet Shopping Network, Inc.

             Mr. Loevner respondedby initiating an action against the Company in Santa Clara County SuperiorCourt on March 5, 1999, titled *Loevner v.Internet Shopping Network LLC*, Case No. CV 780394.  Mr. Loevner's complaint sought anunspecified amount of compensatory damages, penalties under the Labor Code,punitive damages, and attorney's fees and costs.  On April 5, 1999, ISN petitioned the Court to compel arbitrationand stay the litigation pursuant to Mr. Loevner's employment agreement.  The Santa Clara Superior Court denied ISN’spetition on September 14, 1999.  ISNappealed, and on November 9, 2000, the California Court of Appeal overruled theSuperior Court's denial of ISN’s petition to compel arbitration.

             On December 19, 2000,Mr. Loevner filed a petition for review in the California Supreme Court.  The California Supreme Court granted review,but deferred further action pending the United States Supreme Court's decisionon a related issue involving the Federal Arbitration Act.  On March 21, 2001, the United States SupremeCourt announced its decision applying the Federal Arbitration Act to contractsof employment.  On June 29, 2001, theSanta Clara Superior Court granted ISN’s petition to compel arbitration.  Although it is impossible to opine as to theultimate outcome of this matter, Styleclick believes that Mr. Loevner's claimsare without merit, and it intends vigorously to defend against Mr. Loevner'sallegations in this matter.

*             Freedman*

             On May 4, 2001, each of LeeFreedman and Joyce Freedman filed a claim with the State Labor Commissioner ofthe State of California, asking for 36 weeks paid vacation and 2 weeksseverance each, in an aggregate dollar amount of $185,769.36 for Joyce Freedmanand $100,961.70 for Lee Freedman.  JoyceFreedman was the Chief Executive Officer of Styleclick.com and Lee Freedman wasthe Chief Financial Officer of Styleclick.com. Each of the Freedmans is claiming three weeks vacation pay for each ofthe thirteen years he or she was employed by Styleclick.com or itspredecessors.  Although it is impossible to opine as to the ultimate outcome of thismatter, Styleclick believes that the Freedmans’ claims are without merit, andit intends vigorously to defend against the Freedmans’ allegations in thismatter.Item 2.  Changes in Securities and Useof Proceeds
None.

Item 3.  Defaults Upon Senior Securities

             None.

Item 4.  Submission of Matters to a Vote of SecurityHolders

             The Company’s 2001 Annual Meetingof Stockholders was held on June 13, 2001.

             At that meeting, the Company’sstockholders elected each of the following persons to serve as a director ofthe Company until the next Annual Meeting of Stockholders and thereafter untilhis or her successor is elected and qualified with the following votes for,withheld, abstained and broker non-votes:
Director Yes Votes Withhold Authority  Lisa  Brown 235,576,221 80,369Robert  Halper 235,576,221 80,369Julius  Genachowski 235,576,221 80,369Jonathan  Miller 235,576,221 80,369Leslie  Saleson 235,576,221 80,369Michael  Sileck 235,576,221 80,369Hamilton  South 235,576,221 80,369Deirdre  Stanley 235,576,221 80,369John  Tinker 235,576,221 80,369
             In addition to the election ofdirectors, the Company’s stockholders ratified the Company’s 2000 Stock Plan,the Company’s 2000 Directors’ Stock Option Plan, and the appointment by theBoard of Directors of Ernst & Young LLP as independent auditors for theCompany and its subsidiaries for the year ending December 31, 2001.  The stockholders ratified the 2000 StockPlan with 231,283,019 votes in favor, 197,353 votes against, 20,105 votesabstaining and 4,146,113 broker non-votes. The stockholders ratified the 2000 Directors’ Stock Option Plan with231,275,727 votes in favor, 198,545 votes against, 26,205 votes abstaining and4,146,113 broker non-votes.  Thestockholders ratified the appointment of Ernst & Young LLP with 235,616,813votes in favor, 10,552 votes against, 19,225 votes abstaining and 0 brokernon-votes.Item 6.               Exhibits andReports on Form 8-K (a)Exhibits  None (b)Reports on Form 8-K  On April 23, 2001, Styleclick filed a report  on Form 8-K. The items reported were Item   5– "Other Events" and Item 7(c) -  "Exhibits."
             * Filed herewith

SIGNATURE

In accordancewith the requirements of the Exchange Act, the registrant caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.
      Styleclick, Inc.    Date: August 14, 2001 By: /s/  LISA BROWN   Lisa Brown   Chairman of the Board and   Chief Executive Officer        /s/  ROBERT HALPER   Robert Halper   President (Principal Financial Officer)
 

**EXHIBITINDEX**

**Exhibit Number                         Description**

None

             * Filed herewith