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

                          ___________________
                              FORM 10-Q
                          ___________________
(Mark One)

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

            For the quarterly period ended June 30, 2001

                                 OR

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

   For the transition period from ____________ to ____________

                      Commission File No.: 0-30849

                       WEBEX COMMUNICATIONS, INC
       (Exact name of registrant as specified in its charter)

Delaware                                              77-0548319
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)             Identification Number)

                       307 West Tasman Drive
                     San Jose, California 95134
               (Address of principal executive offices)

                   Telephone: (408) 435-7000
         (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (l) 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 at least the past 90 days.
                          Yes [X]  No [   ]

On June 30, 2001, 39,345,189 shares of Registrant's Common Stock,  $0.001
par value were outstanding.










                      WEBEX COMMUNICATIONS, INC.
            QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED
                            JUNE 30, 2001

                         TABLE OF CONTENTS


                                                              Page
                                                               No.

PART I. FINANCIAL INFORMATION                                   3

Item 1.  Financial Statements                                   3

Unaudited Condensed Consolidated Balance Sheets at
June 30, 2001 and December 31, 2000                             3

Unaudited Condensed Consolidated Statements of Operations for
the three months and six months ended June 30, 2001 and 2000    4

Unaudited Condensed Consolidated Statements of Cash Flows for
the six months ended June 30, 2001 and 2000                     5

Notes to Unaudited Condensed Consolidated Financial Statements  6

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations                            10

Item 3.  Quantitative and Qualitative Disclosures About
Market Risk                                                    20

PART II. OTHER INFORMATION                                     21

Item 2.  Changes in Securities and Use of Proceeds             21

Item 4.  Submission of Matters to a Vote of Security Holders   21

Item 6.  Exhibits and Reports on Form 8-K                      21

Signatures                                                     22

Exhibit Index                                                  23



                     PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                       WEBEX COMMUNICATIONS, INC.

           UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                           (In thousands)

                                ASSETS



                                          June 30,   December 31,
2001 2000
                                          --------   -----------


Current assets:
  Cash and cash equivalents               $ 27,577     $ 28,214
  Short-term investments                     9,869           --
  Accounts receivable, net                  15,391        9,596
  Prepaid expenses and other
   current assets                            1,244        3,332
                                          --------   -----------
     Total current assets                   54,081       41,142

Property and equipment, net                 24,166       20,502

Due from related party                       2,400        3,600
Other non-current assets                     3,171        3,299
                                          --------   -----------
     Total assets                         $ 83,818     $ 68,543
                                          ========   ===========

             LIABILITES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                        $  7,618     $ 10,052
  Accrued liabilities                        6,013        4,095
  Deferred revenue                           6,518        6,733
  Current portion of capital
   lease obligation                          1,190          888
  Current portion of long-term debt          2,062           --
                                          --------   -----------
     Total current liabilities              23,401       21,768
Capital lease obligation less
 current portion                               793        1,269
Long-term debt less current portion          3,438           --
                                          --------   -----------
     Total liabilities                      27,632       23,037
                                          --------   -----------
Stockholders' equity:
  Common stock                                  39           37
  Additional paid-in capital               183,426      160,191
  Notes receivable from stockholder            (45)         (45)
  Deferred equity-based compensation        (9,795)     (17,181)
  Accumulated deficit                     (117,465)     (97,488)
  Accumulated other comprehensive
   income (loss)                                26           (8)
                                          --------   -----------
     Total stockholders' equity             56,186       45,506
                                          --------   -----------
     Total liabilities and
      stockholders' equity                $ 83,818     $ 68,543
                                          ========   ===========

        See accompanying notes to unaudited condensed
            consolidated financial statements.


                     WEBEX COMMUNICATIONS, INC.

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share data)


                           Three Months Ended   Six Months Ended
                           ------------------  ------------------
                           June 30,  June 30,  June 30,  June 30,
                             2001      2000      2001      2000
                           --------  --------  --------  --------
Net revenues                $18,430   $ 4,536   $33,191   $ 6,747
Cost of revenues              5,342     1,769     9,961     2,427
                           --------  --------  --------  --------
  Gross profit               13,088     2,767    23,230     4,320
                           --------  --------  --------  --------
Operating expenses:
  Sales and marketing        12,053    12,698    23,859    21,434
  Research and
   Development                3,649     2,548     7,375     4,443
  General and
   Administrative             2,669     1,790     4,755     2,703
  Equity-based
   compensation*              4,227     6,431     7,749    11,376
                           --------  --------  --------  --------
     Total operating
      Expenses               22,598    23,467    43,738    39,956
                           --------  --------  --------  --------
    Operating loss           (9,510)  (20,700)  (20,508)  (35,636)
Interest and other
 income, net                    232       357       531       537
                           --------  --------  --------  --------
Net loss                    ($9,278) ($20,343) ($19,977) ($35,099)
                           ========  ========  ========  ========

Net loss per share,
basic and diluted          $  (0.26) $  (1.60) $  (0.54) $  (2.88)
                           ========  ========  ========  ========
Shares used to compute
basic and diluted net
loss per share               35,859    12,736    34,965    12,207
                           ========  ========  ========  ========

*Equity-based
  compensation:
   Sales and marketing      $ 2,321   $ 2,435   $ 4,480   $ 4,039
   Research and development     678     1,572     1,168     2,831
   General and administrative 1,228     2,424     2,101     4,506
                           --------  --------  --------  --------
                            $ 4,227   $ 6,431   $ 7,749   $11,376

    See accompanying notes to unaudited condensed consolidated
                        financial statements.




                WEBEX COMMUNICATIONS, INC.

  UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (In thousands)


                                            Six Months Ended
                                            -----------------
                                            June 30,  June 30,
                                              2001      2000
                                            --------  --------
Cash flows from operating activities:
 Net loss                                   $(19,977) $(35,099)
 Adjustments to reconcile net loss to
  net cash used in operating activities:
   Provisions for doubtful accounts and
    sales allowances                           1,281       270
   Depreciation and amortization               4,011       975
   Equity-based compensation                   7,749    11,376
   Other                                          34        --
   Changes in operating assets and
    liabilities:
     Accounts receivable                      (7,076)   (1,822)
     Prepaid expenses and other
      current assets                           2,088    (1,534)
     Other non-current assets                   (130)      (44)
     Accounts payable                         (2,434)    6,503
     Accrued liabilities                       1,918     1,330
     Deferred revenue                           (215)    1,443
                                            --------  --------
      Net cash used in operating activities  (12,751)  (16,602)
                                            --------  --------
Cash flows from investing activities:
  Loan to related party                        1,200    (3,600)
  Purchase of short-term investments          (9,869)       --
  Purchases of property and equipment         (7,157)   (6,617)
                                            --------  --------
      Net cash used in investing activities  (15,826)  (10,217)

Cash flows from financing activities:
  Net proceeds from issuances of
   common stock                               22,897     3,837
  Repurchase of restricted stock                 (23)     (156)
  Net proceeds from issuances of
   preferred stock                                --    27,969
  Principal payments on capital lease           (434)       --
  Borrowings under debt agreement              5,500        --
                                            --------  --------
      Net cash provided by financing
       Activities                             27,940    31,650
                                            --------  --------
Net change in cash and cash equivalents         (637)    4,831
Cash and cash equivalents at beginning
 of the period                                28,214    13,621
                                            --------  --------
Cash and cash equivalents at end of
 the period                                 $ 27,577  $ 18,452
                                            ========  ========
Supplemental disclosures of non-cash investing and
financing activities:
  Deferred equity-based compensation        $     --  $ 39,583
                                            ========  ========
  Reduction in equity-based compensation
   due to forfeitures of stock options      $    543  $     --
                                            ========  ========
  Acquisition of property and equipment
   under capital leases	                    $    260  $     --
                                            ========  ========

   See accompanying notes to unaudited condensed consolidated
                      financial statements.



                     WEBEX COMMUNICATIONS, INC.

    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except per share data)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have
been prepared by WebEx Communications, Inc. (the "Company" or "WebEx") in
accordance with the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted in accordance
with such rules and regulations. In the opinion of management, the accompanying
unaudited financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial
position of the Company, and its results of operations and cash flows. These
financial statements should be read in conjunction with the Company's audited
consolidated financial statements and notes as of and for the year ended
December 31, 2000, included in the Company's Form 10-K filed with the
Securities and Exchange Commission on April 2, 2001.

The results of operations for the three months and six months ended June 30,
2001 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2001 or any other future period, and the Company makes
no representations related thereto.

The consolidated financial statements include the accounts of WebEx and its
wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

2. Revenue Recognition

Revenue is derived from web communication services. Web communication services
revenues are generated through a variety of contractual arrangements that
involve hosted services and revenue sharing activities. The Company sells web
communication services direct to customers through service subscriptions and
pay-per-use arrangements. Under these arrangements, customers access the
application hosted on WebEx servers via their websites or web browser.
Subscription arrangements include monthly subscriber user fees, user set-
up fees, and hosting fees in limited cases of customer-dedicated hosted
software. The subscription arrangements are considered service arrangements in
accordance with EITF Issue No. 00-3, Application of AICPA Statement of Position
97-2, Software Revenue Recognition, to Arrangements That Include the Right to
Use Software Stored on Another Entity's Hardware, and, accordingly revenue is
recognized ratably over the service period provided that evidence of an
arrangement exists, the fee is fixed or determinable and collectibility is
reasonably assured. In addition to the subscription services revenue,
WebEx derives revenue from pay-per-use services and telephony charges which are
recognized as the related services are provided. Customer support and training
are generally included in our subscription arrangements and are not sold
separately.

The Company also enters into reseller agreements with distribution partners.
Revenue under these arrangements are derived from hosted services provided to
end users and are recognized over the service period, provided that, evidence
of an arrangement exists, the fee is fixed or determinable and collectibility
is reasonably assured. Initial set up fees received in connection with these
arrangements are recognized ratably over the initial term of the contract.
Service fees are recognized as the services are provided for pay-per-use
service arrangements and ratably over the service period for services provided
on a subscription basis through the reseller. Advance payments received from
distribution partners are deferred until the related services are provided or
until otherwise earned by WebEx. In cases where WebEx contracts directly with
the end-user, revenues are recognized at the gross amount with payments made to
distribution partners recorded as a commission expense. In cases where the end-
user contracts directly with the distribution partner, revenues are recognized
at the net amount earned from the distribution partner.

WebEx has sold a limited number of perpetual software licenses for software
delivered to customers. WebEx recognizes revenue on software products delivered
to customers in accordance with the provisions of Statement of Position (SOP)
97-2, Software Revenue Recognition, as amended by SOP 98-9, Modification of SOP
97-2, Software Revenue Recognition, with Respect to Certain Transactions. No
new arrangements under the scope of SOP 97-2 occurred during the six months
ended June 30, 2001.

WebEx records an allowance for doubtful accounts to reduce accounts receivable
to amounts expected to be received from customers. Subscription arrangements
are cancelable at any time by the customer at the conclusion of the initial
term, which is generally ninety days, or any renewal term. WebEx records
estimates for sales allowances during the term of the service period.

Deferred revenue includes amounts billed to customers for which revenues have
not been recognized, which generally result from the following: (1) unearned
portion of monthly billed subscription fees; (2) deferred subscription and
distribution partner set-up fees; and (3) advances received from distribution
partners under revenue sharing arrangements.

3. Net Loss Per Share

Basic net loss per share is computed using the weighted-average number of
common shares outstanding for the period excluding restricted common shares
subject to repurchase.  Diluted net loss per share reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock. Potential common shares
are comprised of restricted common stock subject to repurchase and incremental
shares of common stock issuable upon the exercise of warrants and stock
options computed using the treasury stock method and upon the conversion of
convertible preferred stock.

The following potential common shares have been excluded from the computation
of diluted net loss per share for the six months ended June 30, 2001 and 2000
because their effect would have been antidilutive:

                                                       As of
                                                      June 30,
                                              ----------------------
                                                2001         2000
                                              ---------   ----------
Shares issuable under stock options	          5,924,935    4,023,383
Shares of restricted common stock subject
 to repurchase	                            4,087,529    3,815,038
Shares issuable pursuant to warrants            339,916      339,916
Shares of convertible preferred stock on
 an "as-if" converted basis                          --   15,917,627

The weighted-average exercise price of stock options outstanding as of June 30,
2001 was $10.72 and as of June 30, 2000 was $4.70. The weighted-average
exercise price of warrants outstanding as of June 30, 2001 and 2000 was $12.50.
The weighted-average repurchase price of restricted common shares outstanding
as of June 30, 2001 and June 30, 2000 was $0.81 and $0.85, respectively.

4. Distribution Partner Agreement

In March 2000, WebEx issued fully vested and exercisable warrants to purchase
339,915 shares of Series D preferred stock at an exercise price per share of
$12.50 to a distribution partner in connection with an exclusive distribution,
advertising and promotion agreement. These warrants to purchase preferred stock
were converted into warrants to purchase common stock as a result of the
initial public offering. Under the agreement, the distribution partner was
required to include and promote WebEx services as part of its portal services.
The fair value of the warrants was determined to be $1,737 using the Black-
Scholes option pricing model.  The fair value of the warrants was recorded as
deferred equity-based compensation and is being amortized over the one year
term beginning on the effective launch date of the portal arrangement.  The
unamortized value of these warrants was $167 and $1,028 at June 30, 2001 and
December 31, 2000, respectively.  The warrants have not been exercised and
expire on March 29, 2002.

In addition to the warrants, the agreement provided for payments to the
distribution partner for initial set-up fees, achievement of customer
milestones at defined dates, and a minimum level of advertising services.
Included in prepaid expenses is the unamortized portion of a $1,000 payment of
the set-up fees paid by WebEx for the portal arrangement. These fees are being
amortized over a one year term beginning on the effective launch date of the
portal arrangement. Unamortized set-up fees were $93 and $589 at June 30,
2001 and December 31, 2000, respectively.

On March 22, 2001, WebEx entered into a new agreement with this distribution
partner that effectively terminated the original distribution, advertising and
promotion agreement.  Under the terms of the new agreement all previously
existing obligations of both parties are considered fulfilled.  In addition,
WebEx agreed to pay  $1,667 in consideration for advertising and promotions to
be provided by the distribution partner through March 2002.  As of June 30,
2001, $1,167 of this remained outstanding, payments are due as follows; $250 in
each of July and October 2001 and $667 in January 2002.  Concurrent with this
agreement WebEx entered into a referral agreement with this distribution
partner whereby the distribution partner agreed to refer customers to WebEx
on an exclusive basis in exchange for a share of the revenue generated from
these customers.  As of the termination date of the original agreement, the
Company had a remaining obligation to pay the distribution partner $1,667 for
the first milestone payment and unpaid advertising commitments.  The
distribution partner had an obligation to provide $1,327 in additional
advertising services. The termination agreement results in all previously
existing obligations being considered fulfilled and resulted in a net gain to
WebEx of $340. This gain has been treated as a discount on future advertising
services and is being amortized as a reduction of advertising expense as
advertising is purchased under the new agreement.  Since the termination date,
WebEx has amortized $102 of this gain based on advertising services received
and recorded net advertising expense of $398.  The deferred set-up fee and the
fair value of the warrant recorded in connection with the original agreement
will continue to be amortized over their original estimated life since the
companies will continue their revenue sharing activities.

5. Loan and Security Agreement

On March 29, 2001 WebEx entered into a Loan and Security Agreement with a bank
that allows WebEx to borrow up to $7,500 or 80% of eligible accounts receivable
as defined in the agreement. As of June 30, 2001, available borrowings under
the agreement totaled $2,000. Under the terms of the agreement, WebEx may
borrow up to $2,000 on a revolving credit line that bears interest at 1.5%
above the prime rate and matures on April 30, 2002, and up to $5,500 on term
advances that bear interest at 1.75% above the prime rate and mature on
September 30, 2003. The interest rates will be reduced by 0.5% after a
profitability date, defined in the agreement as the date WebEx achieves a
quarterly profit before deduction of equity-based compensation charges. Amounts
borrowed under the revolving credit line may be repaid and reborrowed at any
time prior to the maturity date. Term advances may be drawn through June 30,
2001, and require only payments of interest through September 1, 2001, after
which all outstanding principal and interest will be payable in equal monthly
installments until the maturity date.  On March 30, 2001, WebEx borrowed $5,500
under term advances.  The Loan and Security Agreement is collateralized by all
tangible and intangible assets of WebEx and is subject to compliance with
covenants, including a minimum liquidity ratio, minimum cash balance, minimum
tangible net worth, maximum quarterly operating losses adjusted for
equity-based compensation charges, and minimum quarterly revenues.  As of June
30, 2001, the Company was in compliance with these covenants.


6. Related Party Transactions

WebEx has contracts for engineering services with two companies in China owned
by the spouse of one of our founding officers, who is also a major stockholder.
These companies provide a significant amount of quality assurance testing and
software development activities for WebEx. Expenses incurred for engineering
services provided by these companies for the three months ended June 30, 2001
and 2000 were $650 and $539 and for the six months ended June 30, 2001 and 2000
were $1,220 and $964, respectively and have been included in research and
development expense. As of June 30, 2001, total amounts due to the two
companies in China were $900.

Due from related party at June 30, 2001 and December 31, 2000 represents a note
receivable from the CEO of the Company.  The decrease of $1,200 was the result
of a principal payment made on June 28, 2001.  The remaining principal and
interest is due on April 10, 2002.

7. Commitments

At June 30, 2001, WebEx has material purchase commitments totaling
approximately $8.5 million for equipment purchases and the construction of
leasehold improvements at new leased facilities.

WebEx leases office facilities under various operating leases that expire
through 2008. Total future minimum lease payments, under all operating leases,
amount to approximately $23.9 million.

8. Significant Customer Information and Segment Reporting

SFAS No. 131, Disclosure about Segments of an Enterprise and Related
Information, establishes standards for the reporting by business enterprises of
information about operating segments, products and services, geographic areas,
and major customers. The method for determining what information to report is
based on the way that management organizes the operating segments within WebEx
for making operational decisions and assessments of financial performance.

WebEx's chief operating decision-maker is considered to be the chief executive
officer (CEO). The CEO reviews financial information presented on a
consolidated basis for purposes of making operating decisions and assessing
financial performance. The financial information reviewed by the CEO is
identical to the information presented in the accompanying condensed
consolidated statements of operations. Therefore, WebEx has determined that it
operates in a single operating segment, specifically, web communication
services. For the periods ended June 30, 2001 and 2000, all material assets
and revenues of WebEx were in the United States.

9. Private Placement

In June 2001, WebEx completed the sale of 2 million shares of unregistered
common stock to a group of private investors.  Net proceeds from the sale were
$20.5 million.

10. Recent Accounting Pronouncements

On June 29, 2001, the Financial Accounting Standards Board approved the
issuance in July 2001 of SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets."  SFAS No. 141 will
provide guidance on the accounting for a business combination at the date a
business combination is completed.  The statement requires the use of the
purchase method of accounting for all business combinations initiated after
June 30, 2001, thereby eliminating use of the pooling-of-interests method.
SFAS No. 142 will provide guidance on how to account for goodwill and
intangible assets after an acquisition is completed.  The most substantive
change is that goodwill will no longer be amortized but instead will be tested
for impairment periodically.  This statement will apply to existing goodwill
and intangible assets, beginning with fiscal years starting after December 15,
2001.  WebEx expects to adopt this statement at the beginning of Fiscal 2002.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates" and similar
expressions identify such forward-looking statements. These forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those indicated in the forward-looking
statements. These are statements that relate to future periods and include
statements as to expected net losses, expected cash flows and expenses, the
adequacy of capital resources and growth in business and operations, the
ability to decrease marketing related spending, anticipated research and
development expense, our ability to approach positive cash flow from operations
by the end of 2001, our ability and projections to become profitable, our
ability to reduce spending levels, and the sufficiency of our cash reserves to
meet our capital requirements. Factors that could cause actual results to
differ materially from those predicted, include but are not limited to, our
ability to attract and retain customers and distribution partners for existing
and new services, our ability to expand our operations internationally, our
ability to expand our infrastructure to meet the demand for our services, our
ability to control our expenses, our ability to recruit and retain employees
particularly in the areas of sales, engineering, support and hosting services,
the ability of distribution partners to successfully resell our services, the
strength of competitive offerings and the prices being charged by those
competitors, and the impact of California's energy problems. Additional
factors, which could cause actual results to differ materially, include those
set forth in the following discussion, and, in particular, the risks discussed
below under the subheading "Factors that May Affect Results." These forward-
looking statements speak only as of the date hereof. Unless required by law,
we undertake no obligation to update publicly any forward-looking statements.

Overview

We develop and market services that allow end-users to conduct meetings and
share software applications, documents, presentations and other content on the
Internet using a standard web browser. Integrated telephony and web-based audio
and video services are also available using standard devices such as
telephones, computer web-cameras and microphones.

We commenced operations in February 1995. We released an interactive
communications service built on our technology in early 1998. We began offering
WebEx Meeting Center, our first real-time, interactive multimedia
communications service, in February 1999 and began selling the service to
customers and distribution partners. We also made available a subset of our
service for free at www.webex.com. Since February 1999, our activities have
been focused on continuing to enhance and market our WebEx Interactive Platform
and our WebEx Meeting Center service, developing and deploying new services,
expanding our sales and marketing organizations and deploying our global WebEx
Interactive Network. We introduced WebEx Business Exchange in the third quarter
of 1999, WebEx OnCall service in the fourth quarter of 1999, WebEx Shopping-
Together (now WebEx OnTour) in the first quarter of 2000, WebEx OnStage in the
second quarter of 2000 and WebEx Professional Services in the third quarter of
2000. To date these new services represent an insignificant percentage of total
revenues.

We sell our services directly to our customers and indirectly through our
distribution partners. We offer our services on a monthly subscription basis to
our customers and on a revenue sharing, discounted or pay-per-use basis through
our distribution partners. Revenue from subscription services consists of
monthly user fees, which are based upon a fixed number of concurrent users, and
initial set-up fees. Typically, our contracts are for an initial term of 90
days, and then renew monthly unless terminated by either party.

Results of Operations

The following table sets forth, for the periods indicated, the statements of
operations data as a percentage of net revenues.

                                   Three Months     Six Months
                                     June 30,         June 30,
                                   --------------  --------------
                                    2001    2000    2001    2000
                                   ------  ------  ------  ------
    Net revenues                     100%    100%    100%    100%
    Cost of revenues                  29      39      30      36
                                   ------  ------  ------  ------
    Gross profit                      71      61      70      64
    Operating expenses:
    Sales and marketing               65     280      72     318
    Research and development          20      56      22      66
    General and administrative        14      39      15      40
    Equity-based compensation         23     142      23     168
                                   ------  ------  ------  ------
      Total operating expenses       123     517     132     592
                                   ------  ------  ------  ------
    Operating loss                   (51)   (456)    (62)   (528)
    Interest and other income, net     1       8       2       8
                                   ------  ------  ------  ------
    Net loss                         (50)%  (448)%   (60)%  (520)%
                                   ======  ======  ======  ======

Net revenues. Net revenues increased $13.9 million to $18.4 million for the
three months ended June 30, 2001 from $4.5 million for the three months ended
June 30, 2000.  Net revenues increased $26.4 million to $33.2 million for the
six months ended June 30, 2001 from $6.7 million for the six months ended June
30, 2000.  This increase was primarily due to growth in our direct subscribing
customer base and increased usage by existing customers.

Cost of Revenues. Our cost of revenues consists of costs related to user
set-up, network operations and technical support and training activities,
including Internet communication access costs, personnel, licensed software and
equipment costs and depreciation. Cost of revenue increased $3.6 million to
$5.3 million for the three months ended June 30, 2001 from $1.8 million for the
three months ended June 30, 2000.  Cost of revenue increased $7.6 million to
$10.0 million for the six months ended June 30, 2001 from $2.4 million for the
six months ended June 30, 2000.  The increase in dollars was primarily due to
increases in the costs for delivering our services to more customers,
additional technical staff to support our growing installed base of customers,
and expanding and improving our worldwide network.

Sales and Marketing. Our sales and marketing expense consists of personnel
costs, including commissions, as well as costs of public relations,
advertising, marketing programs, lead generation, travel and trade shows. Sales
and marketing expense decreased $0.6 million to $12.1 million for the three
months ended June 30, 2001 from $12.7 million for the three months ended June
30, 2000. Sales and marketing expense increased $2.5 million to $23.9 million
for the six months ended June 30, 2001 from $21.4 million for the six months
ended June 30, 2000. The decrease for the three months ended June 30, 2001
was the result of decreased spending on marketing related programs.  The
increase for the six months ended June 30, 2001 was primarily due to the hiring
of additional sales personnel in connection with the building of our sales
force and higher sales commissions associated with increased sales volume.
This increase was partially offset by reduced spending on marketing campaigns.

Research and Development. Our research and development expense consists
primarily of salaries and other personnel-related expenses, depreciation of
equipment, supplies and engineering services. Research and development expense
increased $1.1 million to $3.6 million for the three months ended June 30, 2001
from $2.5 million for the three months ended June 30, 2000. Research and
development expense increased $2.9 million to $7.4 million for the six months
ended June 30, 2001 from $4.4 million for the six months ended June 30, 2000.
The increase was primarily related to consulting fees and personnel related
expenses resulting from an increase in headcount.

General and Administrative. Our general and administrative expense consists
primarily of personnel costs for finance, human resources, legal and general
management, bad debt expense and professional services, such as legal and
accounting. General and administrative expense increased  $0.9 million to  $2.7
million for the three months ended June 30, 2001 from $1.8 million for the
three months ended June 30, 2000. General and administrative expense increased
$2.1 million to  $4.8 million for the six months ended June 30, 2001 from $2.7
million for the six months ended June 30, 2000. The increase was primarily due
to professional fees, personnel and bad debt expenses.

Bad debt expense increased  $0.5 million to $0.8 million in the three months
ended June 30, 2001 from  $0.3 million in the three months ended June 30, 2000.
Bad debt expense increased  $0.9 million to $1.3 million in the six months
ended June 30, 2001 from  $0.4 million in the six months ended June 30, 2000.
This increase was due to the increase in accounts receivable.

Equity-Based Compensation. Our equity-based compensation expense represents the
amortization of deferred equity-based compensation over the vesting period of
options granted to employees and expenses related to issuance of common stock
warrants and options to non-employees. Deferred equity-based compensation
represents the difference between the exercise price of the stock options
granted to employees and the deemed fair value of common stock at the time of
those grants. Equity-based compensation expense decreased $2.2 million to $4.2
million for the three months ended June 30, 2001 from $6.4 million for the
three months ended June 30, 2000. Equity-based compensation expense decreased
$3.7 million to $7.7 million for the six months ended June 30, 2001 from $11.4
million for the six months ended June 30, 2000. The decrease was due to lower
expenses recorded on employee and non-employee option grants due to the vesting
of options granted and forfeitures related to terminated employees.
Equity-based compensation expense related to the unvested portion of non-
employee options is impacted by changes in our stock price and will fluctuate
accordingly.

Interest and Other Income, Net. Interest and other income, net is comprised of
net investment income, interest income and  expense, and other expenses.
Interest and other income, net decreased  $0.2 million to $0.2 million for the
three months ended June 30, 2001 from $0.4 million for the three months ended
June 30, 2000. Interest and other income, net was unchanged at  $0.5 million
for the six months ended June 30, 2001 and June 30, 2000. The decrease for the
three months ended June 30, 2001 was related to interest expense incurred on
the Loan and Security agreement of $0.1 million and less interest earned as a
result of a lower average cash balance for three months ended June 30, 2001, as
compared to June 30, 2000.

Income Taxes. Because we incurred net operating losses in the three months
ended June 30, 2001 and 2000, we paid no federal, state and foreign income
taxes in those periods.  Nor have we recognized any tax benefits for the
related tax operating loss carryforwards. We have concluded it is more likely
than not that such benefits will not be utilized.

Net Loss. As a result of the foregoing, net loss decreased to $9.3 million in
the three months ended June 30, 2001 as compared to $20.3 million in the three
months ended June 30, 2000.  Net loss decreased to $20.0 million in the six
months ended June 30, 2001 as compared to $35.1 million in the six months ended
June 30, 2000.

Liquidity and Capital Resources

Prior to our initial public offering, we financed our operations primarily from
the private sales of preferred equity securities. Upon completion of our
initial public offering of common stock, a total of 4,025,000 shares were sold
to the public, which resulted in proceeds to the Company, after offering
expenses of $50.7 million.

As of June 30, 2001, cash and cash equivalents and short-term investments were
$37.4 million, an increase of $9.2 million compared with cash and cash
equivalents of $28.2 million as of December 31, 2000.  Cash and cash
equivalents and short-term investments include the proceeds of $20.5 million
from our private placement of 2 million shares of unregistered common stock in
May and June 2001.

Net cash used in operating activities was $12.8 million for the six months
ended June 30, 2001, as compared to  $16.6 million for the six months ended
June 30, 2000. Cash used in operating activities was primarily due to net
operating losses, increases in accounts receivable and decreases in accounts
payable. The sources of cash were primarily from decreases in prepaid expenses
and other current assets, and increases in accrued liabilities.

Net cash used in investing activities was $15.8 million for the six months
ended June 30, 2001, as compared to $10.2 million for the six months ended June
30, 2000. Net cash used by investing activities related primarily to capital
expenditures for equipment, hardware and software used in our data operations
center from which we operate our Internet communications platform, and
purchases of short-term investments.  This was offset by the partial repayment
of principal on a loan to a related party.

Net cash provided by financing activities was $27.9 million for the six months
ended June 30, 2001, as compared to $31.7 million for the six months ended June
30, 2000, and was primarily from the private placement of 2 million shares of
unregistered common stock in May and June 2001, and borrowings under a loan and
security agreement, we entered into in March 2001, that allows us to borrow up
to $7.5 million or 80% of eligible accounts receivable as defined in the
agreement. As of June 30, 2001, additional available borrowings under the
agreement totaled $2.0 million.

We also receive funds from time to time from the exercise of options or similar
rights to purchase shares of our common stock. We have no other material
external sources of liquidity.

As of June 30, 2001, our material purchase commitments, including equipment
purchases and construction of leasehold improvements at new leased facilities
totaled  $8.5 million.

We lease office facilities under various operating leases that expire through
2008. Total future minimum lease payments, under all operating leases, amount
to approximately $23.9 million.

We expect that existing cash resources will be sufficient to fund our
anticipated working capital and capital expenditure needs for at least the next
12 months. We expect our cash flow to improve and enable us to approach
positive cash flow from operations by the end of 2001, and that existing cash
reserves will therefore be sufficient to meet our capital requirements during
this period. We base our expense levels in part on our expectations of future
revenue levels. If our revenue for a particular period is lower than we expect,
we may take steps to reduce our operating expenses accordingly. If cash
generated from operations is insufficient to satisfy our liquidity
requirements, we may seek to sell additional public or private equity
securities or obtain additional debt financing. There can be no assurance that
additional financing will be available at all or, if available, will be
obtainable on terms favorable to us. If we are unable to obtain additional
financing, we may be required to reduce the scope of our planned technology and
product development and sales and marketing efforts, which could harm our
business, financial condition and operating results. Additional financing may
also be dilutive to our existing stockholders.

Factors That May Affect Results

The risks and uncertainties described below are not the only ones we face. If
an adverse outcome of any of the following risks actually occur, our business,
financial condition or results of operations could be materially and adversely
affected.

We incurred net losses in 1999, 2000 and the six months ended June 30, 2001 and
expect continuing losses at least through 2001.

As of June 30, 2001, we had an accumulated deficit of approximately $117.5
million.  We incurred net losses of approximately $20.0 million for the six
months ended June 30, 2001 and $80.4 million for the year ended December 31,
2000. Our net losses were approximately 60% of revenue for the six months ended
June 30, 2001. We expect to continue to incur net losses at least through 2001.
If we do not achieve our plans for profitability, we may not be able to
increase the number of our employees, our investment in expanding our network
services and application platform or our sales, marketing and research and
development programs in accordance with our present plans, each of which is
critical to our long-term success.

Because our quarterly results vary and are difficult to predict, we may fail to
meet quarterly financial expectations, which may cause our stock price to
decline.

We commenced operations in February 1995 and our business originally consisted
of consulting services. In early 1998, we licensed an interactive
communications product to a small number of customers. We began offering WebEx
Meeting Center in February 1999, our first real-time, interactive multimedia
communications service, and began selling this service to customers and
distribution partners. Because of our limited operating history providing
services and other factors, our quarterly revenue and operating results are
difficult to predict. In addition, because of the emerging nature of the market
for interactive communications services for websites, our quarterly revenue and
operating results may fluctuate from quarter to quarter. A number of other
factors could cause fluctuations in our operating results.

Factors outside our control include:

- our distribution partners' degree of success in distributing our services to
  end-users;
- the announcement, introduction and market acceptance of new or enhanced
  services or products by our competitors;
- changes in pricing policies of our competitors; and
- the growth rate of the market for interactive communications services for
  websites.

Factors within our control include:

- our ability to develop, enhance and maintain our network services and
  application platform in a timely manner;
- the mix of services we offer;
- our ability to attract and retain customers;
- the amount and timing of operating costs and capital expenditures relating to
  expansion of our business and network infrastructure;
- the announcement, introduction and market acceptance of new or enhanced
  services or products by us; and
- changes in our pricing policies.

If any of these factors impact our business in a particular period, our
operating results may be below market expectations, in which case the market
price of our common stock would likely decline. Also, factors such as the
growth rate of the market for our services, our ability to maintain and enhance
our network services and platform and our competitors' success could impact our
longer-term financial growth by reducing demand for our services.

We expect that our operating expenses will continue to increase and if our
revenue does not correspondingly increase, our business and operating results
will suffer.

We expect to continue to spend substantial financial and other resources on
developing and introducing new services, and expanding our sales and marketing
organization and network infrastructure. We base our expense levels in part on
our expectations of future revenue levels. If our revenue for a particular
quarter is lower than we expect, we may be unable to proportionately reduce our
operating expenses for that quarter, in which case our operating results for
that quarter would be adversely affected.

Our customers do not have long-term obligations to purchase our services;
therefore our revenue and operating results could decline if our customers do
not continue to use our services.

Our customers do not have long-term obligations to purchase services from us.
In 1999, our subscription agreements generally had an initial term of 12
months. Beginning in 2000, most of our subscription agreements had an initial
term of three months. Our contracts can be terminated at any time after their
initial term. Over 95% of our customers have agreements with initial terms of
three to 12 months. In the second quarter of 2001, over 98% of the contracts
entered into the previous quarter were renewed. Our customers may choose not to
continue to use our services, and we may not obtain a sufficient number of
additional customers to compensate for any customers we may lose. The failure
of existing customers to continue to use our services or our failure to obtain
additional customers would harm our business and operating results.

Our business and operating results may suffer if we fail to establish
distribution relationships or if our distribution partners do not successfully
market and sell our services.

To date, we have generated more than 89% of our revenue from direct sales to
customers. We have entered into distribution agreements with over 195
distribution partners. For the six months ended June 30, 2001, we have
generated less than 10% of our revenue from our distribution partners, which
revenue consisted of initial set-up fees, commitment payments, and service
fees. The payments received from our distribution partners have mostly been
recorded as deferred revenue because we defer revenue related to payments for
initial set-up fees received at the beginning of the relationship and record
revenue from subscription services over the course of the service period as the
distribution partner resells our services. We also generally do not record
commitment fees as revenue until the commitment fee is fully earned and paid.
We cannot anticipate the amount of revenue we will derive from these
relationships in the future. Our distribution agreements are typically for one-
year terms and are automatically renewed unless either party terminates the
agreement by written notice. Under these agreements, we host and maintain a co-
branded site offering the services and the distribution partner provides a link
to the co-branded site from its website. Under these agreements, when WebEx
collects from the end user customers, WebEx pays a percentage of the proceeds
generated from the distribution partner's sale of WebEx services to the
distribution partner and the remainder is retained by WebEx. When the
distribution partner purchases and resells the services, the distribution
partner receives a discount off of WebEx's standard end user prices. The
revenue sharing and discount terms of these agreements vary depending on the
individual distribution partner's business. The amount of revenue we receive
depends on the minimum amount of services they commit to resell and the volume
of business generated under the agreement. Under our standard distribution
agreement, distribution partners are required to make minimum resell
commitments based on either a minimum number of concurrent user subscriptions
per month or a minimum dollar commitment. Under these agreements, our
distribution partners are obligated to offer our services with WebEx branding
during the term of the agreement. Some of our distribution partners can add our
pay-per-use meeting services to their existing websites. The pay-per-use
service provides unlimited access to our services to be paid on a per use basis
without the need for signing a subscription agreement. The end-user generally
pays for this service through use of a credit card. The credit card information
is entered as part of the on-line registration process for using the service.
If an end-user uses our services through a distribution partner's website, we
pay the partner a percentage of the revenue collected. For pay per use
services, we usually collect fees from the end-users and pay a percentage of
the fees collected to the distribution partner. We must continue to establish
and extend these distribution partnerships. Establishing these distribution
relationships can take as long as several months or more. It typically takes
several months before our distribution arrangements generate any significant
revenue.

Our distribution partners are not prohibited from offering and reselling the
products and services of our competitors and may choose to devote insufficient
resources to marketing and supporting our services or to devote greater
resources to marketing and supporting the products and services of other
companies. If we fail to establish new distribution relationships in a timely
manner or if our distribution partners do not successfully distribute our
services, our ability to achieve market acceptance of our interactive
communications services for websites will suffer and our business and operating
results will be harmed.

We expect to depend on sales of our WebEx Meeting Center service for
substantially all of our revenue for the foreseeable future.

Our WebEx Meeting Center service integrates data, audio and video to allow end-
users to participate in meetings online. Our WebEx Meeting Center service
accounted for more than 90% of our revenue for the six months ended June 30,
2001. We anticipate that revenue from our WebEx Meeting Center service will
continue to constitute substantially all of our revenue for the foreseeable
future. Any decline in the demand for our WebEx Meeting Center service, or its
failure to achieve broad market acceptance, would seriously harm our business.

If our services fail to function when used by large numbers of participants, we
may lose customers and our business and reputation may be harmed.

Our strategy requires that our services be able to accommodate large numbers of
meetings at any one time. Our network monitoring measures the capacity of our
services by bandwidth use, and during the first six months of 2001 our peak
usage has been running at 50% or less of our capacity. However, if we fail to
increase our capacity consistent with our growth in usage, it could impact
system performance. In addition, we may encounter performance issues when
making upgrades and modifications to our network. If our services do not
perform adequately, we may lose customers, be unable to attract new customers
and our operating results could suffer.

Our sales cycle makes it difficult to predict our quarterly operating results.

We sometimes have a long sales cycle because of the need to educate potential
customers regarding the benefits of interactive communications services for
websites. Our sales cycle varies depending on the size and type of customer
contemplating a purchase. Potential customers frequently need to obtain
approvals from multiple decision makers within their organization and may
evaluate competing products and services prior to deciding to use our services.
Our sales cycle, which can range from several weeks to several months or more,
makes it difficult to predict the quarter in which use of our services may
begin.

The existence of significant equity-based compensation will negatively impact
earnings.

As of June 30, 2001 we had approximately $9.8 million in deferred equity-based
compensation. This expense will generally be amortized over a three year period
and will result in a decrease in earnings. Cumulative amounts of deferred
equity-based compensation expensed through June 30, 2001 and through June 30,
2000 were $37.4 million and $11.4 million, respectively. We expect the amount
of equity-based compensation expense to decrease over time as a result of the
vesting of options granted prior to our initial public offering. However, the
amount of future equity-based compensation expense related to the unvested
portion of option grants to non-employees will fluctuate with the stock price
and accordingly the amount of future equity-based compensation expense is
difficult to predict. In fiscal 1999 and fiscal 2000, we granted stock options
at exercise prices significantly lower than the anticipated offering price,
which has contributed to our equity-based compensation expenses.

If our branding and marketing efforts are not successful, our business may be
harmed.

We believe that continued marketing and brand recognition efforts will be
critical to achieve widespread acceptance of our interactive communications
services. Our marketing and advertising campaigns or branding efforts may not
be successful or consumers may not find our marketing efforts compelling. If
our marketing efforts are not successful, our business and operating results
will be harmed.

We rely on related companies in China which exposes us to risks of economic
instability in China, and risks related to political tension between China and
the United States.

We currently rely on two related companies located in China, WebEx Haifei and
WebEx Hong Zhou, to conduct quality assurance testing and software development
activities. These companies are owned by the spouse of Min Zhu, one of our
executive officers. We have contracts with these companies under which they
perform development projects, assign ownership of the work performed to us, and
invoice us for services rendered based on a monthly fee per employee working on
WebEx projects. Most of the personnel who conduct these activities are contract
engineers to these third parties. Although our transactions with these
companies are approved by our disinterested directors, because these companies
are owned by the spouse of one of our executive officers, there may be a
perception that the terms of those arrangements are influenced by that
relationship. Our reliance on independent contractors located in China for
quality assurance and software development activities exposes us to a variety
of economic and political risks including but not limited to, trade
restrictions, tariffs and travel restrictions. The loss of these arrangements
may cause our costs to increase. In addition, current political and economic
tensions between the United States and China could harm our ability to conduct
operations in China, which could increase our operating costs and harm our
business and operations.

We could incur unexpected costs resulting from claims relating to use of our
services.

Many of the business interactions supported by our services are critical to our
customers' businesses. Any failure in a customer's business interaction or
other communications activity caused or allegedly caused by our services could
result in a claim for damages against us, regardless of our responsibility for
the failure, and cause us to incur unexpected costs.

Our customers and end-users may use our services to share confidential and
sensitive information and if our system security is breached, our reputation
could be harmed and we may lose customers.

Our customers and end-users may use our services to share confidential and
sensitive information, the security of which is critical to their business.
Third parties may attempt to breach our security or that of our customers. We
may be liable to our customers for any breach in security and any breach could
harm our reputation and cause us to lose customers. In addition, computers are
vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions, which could lead to interruptions, delays or loss of data. We may
be required to expend significant capital and other resources to further
protect against security breaches or to resolve problems caused by any breach.

The software underlying our services is complex and our business and reputation
could suffer if our services fail to perform properly due to undetected errors
or similar problems with our underlying software.

Complex software, such as the software underlying our services, often contains
undetected errors. We may be forced to delay commercial release of our services
until problems are corrected and, in some cases, may need to implement
enhancements to correct errors that we do not detect until after deployment of
our services. If we do detect an error in our software before we introduce new
versions of our services, we might have to limit our services for an extended
period of time while we address the problem. In addition, problems with the
software underlying our services could result in:

- damage to our reputation;
- damage to our efforts to build brand awareness;
- loss of or delay in revenue;
- delays in or loss of market acceptance of our services; and
- unexpected expenses and diversion of resources to remedy errors.

If our services do not work with the many hardware and software platforms used
by our customers and end-users, our business may be harmed.

We currently serve customers and end-users who use a wide variety of constantly
changing hardware and software applications and networking platforms. If our
services are unable to support these platforms, they may fail to gain broad
market acceptance, which would cause our operating results to suffer. Our
success depends on our ability to deliver our services to multiple platforms
and existing, or legacy, systems and to modify our services and underlying
technology as new versions of applications are introduced. In addition, the
success of our services depends on our ability to anticipate and support
new standards, especially web standards.

We license third-party technologies, and if we cannot continue to license these
or alternate technologies in a timely manner and on commercially reasonable
terms, our business could suffer.

We intend to continue to license technologies from third parties, including
applications used in our research and development activities and technology
which is integrated into our services. For example, we license real-time
database replication software, voice-over IP technology which provides
web-based voice communication capability in our services, and font rendering
technology. These third-party technologies and any that we may utilize in the
future may not continue to be available to us on commercially reasonable terms.
In addition, we may fail to successfully integrate any licensed technology into
our services. This in turn could harm our business and operating results.

Our recent growth has placed a strain on our infrastructure and resources, and
if we fail to manage our future growth to meet customer and distribution
partner requirements, our business could suffer.

We have experienced a period of rapid expansion in our personnel, facilities,
and infrastructure that has placed a significant strain on our resources. For
example, our headcount increased from 293 employees at June 30, 2000 to 461 at
June 30, 2001, and, although we may not experience in the near future a hiring
rate as high as that experienced during the last 12 months, we expect some
increase in our headcount over the next several months. Our expansion has
placed, and we expect that it will continue to place, a significant strain on
our management, operational and financial resources. Any failure by us to
effectively manage our growth could disrupt our operations or delay execution
of our business plan and could consequently harm our business.

If we lose the services of Subrah S. Iyar, our Chief Executive Officer, or Min
Zhu, our President and Chief Technical Officer, our business may be harmed.

Our success will depend on our senior executives. In particular, the loss of
the services of our Chief Executive Officer and co-founder, Subrah S. Iyar, or
our President, Chief Technical Officer and co-founder, Min Zhu, would harm our
business. We do not have long-term employment agreements with or life insurance
policies on any of our senior management.

We must attract, integrate and retain qualified personnel, which is
particularly difficult for us because we are headquartered in the San Francisco
Bay Area where competition for personnel is intense.

Our future success will depend on our ability to attract, train, retain and
motivate highly skilled engineering, technical, managerial, sales and marketing
and customer support personnel. Competition for these personnel is intense,
especially in the San Francisco Bay Area. We hired over 240 people during the
last 12 months and, although we may not experience in the near future a hiring
rate as high as that experienced during the last 12 months, we expect to
increase our headcount over the next several months. We have had difficulty
hiring qualified personnel as quickly as we have desired. In particular, we
have had difficulty hiring a sufficient number of qualified technical,
development and support personnel. Our inability to hire, integrate and retain
qualified personnel in sufficient numbers could reduce the quality of our
services. If we fail to retain and recruit necessary sales, marketing or other
personnel, our ability to develop new services and to provide a high level of
customer service, and consequently our business, could suffer. In addition, if
we hire employees from our competitors, these competitors may claim that we
have engaged in unfair hiring practices. We could incur substantial costs in
defending ourselves against any of these claims, regardless of their merits.

Interruptions in either our internal or outsourced computer and communications
systems could reduce our ability to provide our services and could harm our
business and reputation.

The success of our interactive communications services for websites depends on
the efficient and uninterrupted operation of our internal and outsourced
computer and communications hardware and software systems. Any system failure
that causes an interruption in our interactive communications services for
websites or a decrease in their performance could harm our relationships with
our customers and distribution partners. In this regard, some of our
communications hardware and software are hosted at third-party co-location
facilities. These systems and operations are vulnerable to damage or
interruption from human error, telecommunications failures, break-ins,
sabotage, computer viruses and intentional acts of vandalism. Because our
central computer and communications hardware and network operations are located
in the San Francisco Bay Area, an earthquake or other natural disaster could
impair the performance of our entire network. We have no formal disaster
recovery plan in the event of damage to or interruption of our internal or
outsourced systems, and business interruption insurance may not adequately
compensate us for losses that may occur.

We might have liability for content or information transmitted through our
communications services.

We face potential liability for defamation, negligence, copyright, patent or
trademark infringement and other claims based on the nature and content of the
materials transmitted through our web-based communications services. Any
imposition of liability could harm our reputation and our business and
operating results, or could result in the imposition of criminal penalties.

Our success depends upon the patent protection of our software and technology.

Our success and ability to compete depend to a significant degree upon the
protection of our underlying software and our proprietary technology through
patents. We regard the protection of patentable inventions as important to our
future opportunities. We currently have three issued patents in the areas of
peer-to-peer connections to facilitate conferencing, document annotation and
optimizing data transfer and 19 patent applications pending in the United
States and we may seek additional patents in the future. These patent
applications cover different aspects of the technology used to deliver our
services and are important to our ability to compete. However, it is possible
that:

- any patents acquired by or issued to us may not be broad enough to
  protect us;
- any issued patent could be successfully challenged by one or more third
  parties, which could result in our loss of the right to prevent others from
  exploiting the inventions claimed in those patents;
- current and future competitors may independently develop similar technology,
  duplicate our services or design around any of our patents;
- our pending patent applications may not result in the issuance of patents;
  and
- effective patent protection may not be available in every country in which we
  do business.

We also rely upon trademarks, copyrights and trade secrets to protect our
technology, which may not be sufficient to protect our intellectual property.

We also rely on a combination of laws, such as copyright, trademark and trade
secret laws, and contractual restrictions, such as confidentiality agreements
and licenses, to establish and protect our technology. Our trademarks include:
ActiveTouch, WebEx (word and design), WebEx bifurcated ball design, Meeting
Center, WebEx Meeting Center, WebEx.com, Meeting-Enable Your Web Site,  We've
Got To Start Meeting Like This and Powering Real Time Business Meetings. Also,
our software is automatically protected by copyright law. These forms of
intellectual property protection are critically important to our ability to
establish and maintain our competitive position. However,
- third parties may infringe or misappropriate our copyrights, trademarks and
  similar proprietary rights;
- laws and contractual restrictions may not be sufficient to prevent
  misappropriation of our technology or to deter others from developing similar
  technologies;
- effective trademark, copyright and trade secret protection may be unavailable
  or limited in foreign countries;
- other companies may claim common law trademark rights based upon state or
  foreign laws that precede the federal registration of our marks; and
- policing unauthorized use of our services and trademarks is difficult,
  expensive and time-consuming, and we may be unable to determine the extent of
  any unauthorized use.

Reverse engineering, unauthorized copying or other misappropriation of our
proprietary technology could enable third parties to benefit from our
technology without paying us for it, which would significantly harm our
business.

We may face intellectual property infringement claims that could be costly to
defend and result in our loss of significant rights.

We may be subject to legal proceedings and claims, including claims of alleged
infringement of the copyrights, trademarks and patents of third parties.
Although we have not received notice of any alleged patent infringement, our
services may infringe issued patents that may relate to our services. In
addition, because the contents of patent applications in the United States are
not publicly disclosed until the patent is issued, we may be unaware of filed
patent applications relating to our services. We have received notices alleging
that we have infringed trademarks or related rights of third parties.
Intellectual property litigation is expensive and time-consuming and could
divert management's attention away from running our business. This litigation
could also require us to develop non-infringing technology or enter into
royalty or license agreements. These royalty or license agreements, if
required, may not be available on acceptable terms, if at all, in the event of
a successful claim of infringement. Our failure or inability to develop non-
infringing technology or license proprietary rights on a timely basis would
harm our business.

We may engage in future acquisitions or investments that could dilute the
ownership of our existing stockholders, cause us to incur significant expenses
or harm our operating results.

We may acquire or invest in complementary businesses, technologies or
services.  We invested one million dollars in Tonbu, Inc., a distribution
partner, in January 2001. The future value of this investment is uncertain and
could result in a write-off of all or part of the investment.  As of June 30,
2001 we had no other specific agreements or commitments with respect to any
acquisitions or investments.  Integrating any newly acquired businesses,
technologies or services may be expensive and time-consuming. To finance any
acquisitions, it may be necessary for us to raise additional funds through
public or private financings. Additional funds may not be available on terms
that are favorable to us and, in the case of equity financings, may result in
dilution to our stockholders. We may be unable to complete any acquisitions or
investments on commercially reasonable terms, if at all. Even if completed, we
may be unable to operate any acquired businesses profitably or otherwise
implement our growth strategy successfully. If we are unable to integrate any
newly acquired entities or technologies effectively, our operating results
could suffer. Future acquisitions by us could also result in large and
immediate write-offs, incurrence of debt and contingent liabilities, or
amortization of expenses related to goodwill and other intangibles, any of
which could harm our operating results.

We must compete successfully in the interactive communications services market.

The market for interactive communications services is intensely competitive,
subject to rapid change and is significantly affected by new product and
service introductions and other market activities of industry participants.
Although we do not currently compete against any one entity with respect to all
aspects of our services, we do compete with various companies in regards to
specific elements of our interactive communications services. For example, we
compete with providers of traditional communications technologies such as
teleconferencing and videoconferencing as well as applications software and
tools companies, such as Centra Software, Raindance , Lotus (SameTime),
Microsoft (NetMeeting) and Placeware. We also face potential competition from a
variety of enterprise software vendors, such as Microsoft, and from a variety
of providers of infrastructure services for websites, such as Akamai, Inktomi,
Infospace and Critical Path, any of which could choose to extend their products
and services to include interactive communications.

Many of our current and potential competitors have longer operating histories,
significantly greater financial, technical and other resources and greater name
recognition than we do. Our current and future competitors may be able to
respond more quickly to new or emerging technologies and changes in customer
requirements. In addition, current and potential competitors have established,
and may in the future establish, cooperative relationships with third parties
and with each other to increase the availability of their products and services
to the marketplace. Competitive pressures could reduce our market share or
require us to reduce the price of our services, either of which could harm our
business and operating results.

Our future success depends on the broad market adoption and acceptance of
interactive communications services for Websites.

The market for interactive communications services for websites is relatively
new and rapidly evolving. Market demand for communications services over the
Web is uncertain. If the market for interactive communications services does
not grow, our business and operating results will be harmed. Factors that might
influence market acceptance of our services include the following, all of which
are beyond our control:

- willingness of businesses and end-users to use interactive communications
  services for websites;
- the growth of the Web and commercial on-line services;
- the willingness of our distribution partners to integrate interactive
  communications services for websites in their service offerings; and
- the ongoing level of security and reliability for conducting business over
  the Web.

Our success depends on the continued growth of Web usage and the continued
reliability of the Internet.

Because our services are designed to work over the Web, our revenue growth
depends on the continued development and maintenance of the Internet
infrastructure. This continued development of the Web would include maintenance
of a reliable network with the necessary speed, data capacity and security, as
well as timely development of complementary products and services, including
high-speed modems, for providing reliable Internet access and services. Because
global commerce on the Web and the on-line exchange of information is new and
evolving, we cannot predict whether the Web will continue to be a viable
commercial marketplace over the long term. The success of our business will
rely on the continued improvement of the Web as a convenient means of customer
interaction and commerce, as well as an efficient medium for the delivery and
distribution of information by businesses to their employees.

Many of our customers are high technology companies or in the Internet industry
which may face financial problems in a slowing or down economy.

Some of the companies that buy or that are likely to buy our products and
services are high technology companies or are in the Internet industry which
may face financial problems in a slowing or down economy. If they face
financial difficulties or are not successful, these companies may not be able
to pay for products or services that we have provided to them, and they may not
be able to buy further products and services from us.

We may experience power blackouts and higher electricity prices as a result of
California's current energy crisis, which could disrupt our operations and
increase our expenses.

California is in the midst of an energy crisis that could disrupt our
operations and increase our expenses.  We rely on the major Northern California
public utility, Pacific Gas & Electric Company, or PG&E, to supply electric
power to our headquarters in Northern California.  PG&E has recently filed for
protection under Cahpter 11 of the Bankruptcy Act.  Due to problems associated
with the de-regulation of the power industry in California and shortages in
wholesale electricity supplies, customers of PG&E have been faced with
increased electricity prices, power shortages and, in some cases, rolling
blackouts. If blackouts interrupt our power supply, we may be temporarily
unable to continue to operate our central computer and communications hardware
and network systems. Any such interruption in our ability to continue our
operations could delay our ability to develop or provide our network and
services, which could damage our reputation and result in lost revenue, either
of which could substantially harm our business and results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk. We have recently begun selling our services outside the
United States. These services are generally priced in the local currency. As a
result, our financial results could be affected by factors such as changes in
foreign currency exchange rates or weak economic conditions in foreign markets.
When the amount of revenue obtained from sources outside the United States
becomes significant, we may engage in hedging activities or other actions to
decrease fluctuations in operating results due to changes in foreign currency
exchange rates.  To date, we have not used derivative instruments to manage
foreign currency risks.

Interest Rate Risk. We do not use derivative financial instruments or market
risk sensitive instruments.  Instead, we invest in highly liquid investments
such as money market funds with maturities of less than three months at date of
purchase, available for sale commercial paper and government agency securities
with maturities of six months or less at date of purchase.  Accordingly, we do
not expect any material loss from these investments and believe that our
potential interest rate exposure is not material.

PART II - OTHER INFORMATION

Item 2. Change in Securities and Use of Proceeds

(c) On May 24, 2001, WebEx entered into stock purchase agreements with several
investors pursuant to which we issued and sold an aggregate of 2,000,000 shares
of unregistered Common Stock for an aggregate purchase of $21,500,000.  The net
proceeds of the private placement, after expenses, were $20,509,894.  We relied
on the exemption provided by Section 4(2) of the Securities Act of 1933, as
amended (the "Act") and Regulation D under the Act, because the transaction did
not involve a public offering and each of the investors represented that it was
an "accredited investor" as such term is defined by the Securities Exchange
Commission promulgated under the Act.


Item 4. Submission of matters to a vote of security holders

On May 15, 2001, we held our annual stockholders' meeting at our headquarters,
307 West Tasman Drive, San Jose, CA 95134.  At such meeting, the following
actions were voted upon:

(a) The following individuals were elected to the board of directors to serve a
three year term expiring at WebEx's 2004 annual meeting of stockholders or
until their respective successors have been elected and qualified:

                                The Votes for each     The Votes Withheld
Director                             Director          from each Director
-------------------------------------------------------------------------
Somshankar Das                      27,082,278              189,202
David Ure                           27,081,887              189,593

(b) To ratify the appointment of KPMG LLP as WebEx's independent public
accountants for the period ending December 31, 2001:

Votes For                 Votes Against                   Abstain
-------------------------------------------------------------------------
27,017,762                   55,887                       197,831


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

(a)  Exhibits:

Exhibit
Number      Description
-------   -------------------------------------------------------------
3.1*      Amended and Restated Certificate of Incorporation
3.2**     Amended and Restated Bylaws
4.1*      Form of Common Stock Certificate
------------
*    Incorporated by reference from Exhibits 3.3 and 4.1 of Amendment No. 1 to
     the Registrant's Registration Statement on Form S-1 (File No. 333-33716)
     filed with the Securities and Exchange Commission on June 21, 2000.

**  Incorporated by reference from Exhibit 3.2 of Registrant's Annual Report on
    Form 10-K (File No. 0-30849), for the fiscal year ended December 31, 2000
    filed with the Securities and Exchange Commission on April 2, 2001.



(b)  Reports on Form 8-K:

On May 23, 2001, we filed a Form 8-K reporting, under item 5, the Company's
announcement of the Company's issuance and sale of 2,000,000 shares of its
Common Stock.


                             SIGNATURES

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

                                         WEBEX COMMUNICATIONS, INC.

Date:  July 30, 2001                     By:  /s/ Craig Klosterman
                                              ---------------------
                                              Craig Klosterman
                                              Chief Financial Officer
                                              (Duly Authorized Officer,
                                               Principal Financial and
                                               Principal Accounting Officer)


                         EXHIBIT INDEX

Exhibit
Number      Description
-------   -------------------------------------------------------------
3.1*      Amended and Restated Certificate of Incorporation
3.2**     Amended and Restated Bylaws
4.1*      Form of Common Stock Certificate
------------
*    Incorporated by reference from Exhibits 3.3 and 4.1 of Amendment No. 1 to
     the Registrant's Registration Statement on Form S-1 (File No. 333-33716)
     filed with the Securities and Exchange Commission on June 21, 2000.

**  Incorporated by reference from Exhibit 3.2 of Registrant's Annual Report on
    Form 10-K (File No. 0-30849), for the fiscal year ended December 31, 2000
    filed with the Securities and Exchange Commission on April 2, 2001.