<PAGE>   1

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                                 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 SEPTEMBER 30, 2000

                                       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)

<TABLE>
<S>                                            <C>
                  DELAWARE                                      77-0548319
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
       INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NUMBER)
</TABLE>

                              110 ROSE ORCHARD WAY
                           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 [ ]

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

     On November 1, 2000, 36,826,162 shares of Registrant's Common Stock, $0.001
par value were outstanding.

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<PAGE>   2

                           WEBEX COMMUNICATIONS, INC.
               QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED
                               SEPTEMBER 30, 2000

                               TABLE OF CONTENTS

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

ITEM 1. Unaudited Financial Statements

       Unaudited Condensed Consolidated Balance Sheets at
        September 30, 2000 and December 31, 1999

       Unaudited Condensed Consolidated Statements of
        Operations for the three months ended September 30,
        2000 and 1999

       Unaudited Condensed Consolidated Statements of Cash
        Flows for the three months ended September 30, 2000
        and 1999

       Notes to Unaudited Condensed Consolidated Financial
        Statements

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

ITEM 3. Quantitative and Qualitative Disclosures About
  Market Risk

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

ITEM 2. Changes in Securities and Use of Proceeds

ITEM 3. Defaults Upon Senior Securities

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

ITEM 5. Other Information

ITEM 6. Exhibits and Reports on Form 8-K

SIGNATURES

EXHIBIT INDEX
</TABLE>
<PAGE>   3

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

                           WEBEX COMMUNICATIONS, INC.

                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,    DECEMBER 31,
                                                                  2000             1999
                                                              -------------    ------------
<S>                                                           <C>              <C>
Current assets:
  Cash and cash equivalents.................................    $ 44,740         $ 13,621
  Accounts receivable, net..................................       7,249            2,449
  Prepaid expenses and other current assets.................       3,031            1,368
                                                                --------         --------
          Total current assets..............................      55,020           17,438
Property and equipment, net.................................      12,317            2,167
Intangibles, net............................................       1,134            1,520
Due from related party......................................       3,600               --
Other non-current assets....................................         709              524
                                                                --------         --------
          Total assets......................................    $ 72,780         $ 21,649
                                                                ========         ========

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................    $  5,220         $  3,435
  Accrued liabilities.......................................       3,084              713
  Deferred revenue..........................................       4,413            2,502
  Due to related party......................................          --              200
  Current portion of capital lease obligation...............         930               --
                                                                --------         --------
          Total current liabilities.........................      13,647            6,850
Capital lease obligation less current portion...............       1,466               --
                                                                --------         --------
          Total liabilities.................................      15,113            6,850
                                                                --------         --------
Stockholders' equity:
  Convertible preferred stock...............................          --           29,108
  Common stock..............................................          37               11
  Additional paid-in capital................................     167,202            5,173
  Notes receivable from stockholder.........................         (45)              --
  Deferred equity-based compensation........................     (29,910)          (2,431)
  Accumulated deficit.......................................     (79,617)         (17,062)
                                                                --------         --------
          Total stockholders' equity........................      57,667           14,799
                                                                --------         --------
          Total liabilities and stockholders' equity........    $ 72,780         $ 21,649
                                                                ========         ========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

                                        1
<PAGE>   4

                           WEBEX COMMUNICATIONS, INC.

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED                NINE MONTHS ENDED
                                         ------------------------------    ------------------------------
                                         SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,
                                             2000             1999             2000             1999
                                         -------------    -------------    -------------    -------------
<S>                                      <C>              <C>              <C>              <C>
Net revenues...........................    $  7,465          $   446         $ 14,213          $ 1,465
Cost of revenues.......................       3,213              139            5,640              305
                                           --------          -------         --------          -------
     Gross profit......................       4,252              307            8,573            1,160
                                           --------          -------         --------          -------
Operating expenses:
  Sales and marketing..................      15,491            2,771           36,925            5,110
  Research and development.............       3,439              906            7,882            2,189
  General and administrative...........       1,926              490            4,630            1,037
  Equity-based compensation*...........      11,624              332           23,000              811
                                           --------          -------         --------          -------
          Total operating expenses.....      32,480            4,499           72,437            9,147
                                           --------          -------         --------          -------
     Operating loss....................     (28,228)          (4,192)         (63,864)          (7,987)
Interest and other income, net.........         772               20            1,309              106
                                           --------          -------         --------          -------
Net loss...............................    $(27,456)         $(4,172)        $(62,555)         $(7,881)
                                           ========          =======         ========          =======
Net loss per share, basic and
  diluted..............................    $  (1.01)         $ (0.39)        $  (3.62)         $ (0.74)
                                           ========          =======         ========          =======
Shares used to compute basic and
  diluted net loss per share...........      27,233           10,734           17,262           10,621
                                           ========          =======         ========          =======
*Equity-based compensation:
  Sales and marketing..................    $  3,230          $   144         $  7,269          $   328
  Research and development.............       2,777               34            5,608               70
  General and administrative...........       5,617              154           10,123              413
                                           --------          -------         --------          -------
                                           $ 11,624          $   332         $ 23,000          $   811
                                           ========          =======         ========          =======
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

                                        2
<PAGE>   5

                           WEBEX COMMUNICATIONS, INC.

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED
                                                              ------------------------------
                                                              SEPTEMBER 30,    SEPTEMBER 30,
                                                                  2000             1999
                                                              -------------    -------------
<S>                                                           <C>              <C>
Cash flows from operating activities:
  Net loss..................................................    $(62,555)         $(7,881)
  Adjustments to reconcile net loss to net cash used in
     operating activities:
     Provisions for doubtful accounts and sales
      allowances............................................       1,033               97
     Depreciation and amortization..........................       2,102              135
     Equity-based compensation..............................      23,000              811
     Changes in operating assets and liabilities:
       Accounts receivables.................................      (5,833)            (973)
       Prepaid expenses and other current assets............      (1,663)            (111)
       Other non-current assets.............................         111              451
       Accounts payable.....................................       1,785              841
       Accrued liabilities..................................       2,371              (68)
       Deferred revenue.....................................       1,911              580
                                                                --------          -------
          Net cash used in operating activities.............     (37,738)          (6,118)
                                                                --------          -------
Cash flows from investing activities:
  Loan made to related party................................      (3,600)              --
  Payments of security deposits.............................        (296)            (500)
  Purchases of property and equipment.......................      (9,470)            (756)
  Purchases of intangibles..................................          --             (166)
                                                                --------          -------
          Net cash used in investing activities.............     (13,366)          (1,422)
                                                                --------          -------
Cash flows from financing activities:
  Net proceeds from initial public offering.................      50,740               --
  Net proceeds from other issuances of common stock.........       3,883               35
  Repurchase of restricted stock............................        (169)              --
  Net proceeds from issuances of preferred stock............      27,969            3,010
  Repayment of amounts due to related party.................        (200)            (400)
                                                                --------          -------
          Net cash provided by financing activities.........      82,223            2,645
                                                                --------          -------
Change in cash and cash equivalents.........................      31,119           (4,895)
Cash and cash equivalents at beginning of the period........      13,621            5,522
                                                                --------          -------
Cash and cash equivalents at end of the period..............    $ 44,740          $   627
                                                                ========          =======
Supplemental disclosures of noncash investing and financing
  activities:
  Deferred equity-based compensation........................    $ 50,479          $ 3,225
                                                                ========          =======
  Stockholder note received for issuance of stock...........    $     45          $    --
                                                                ========          =======
  Acquisition of property and equipment under capital
     leases.................................................    $  2,396          $    --
                                                                ========          =======
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.
                                        3
<PAGE>   6

                           WEBEX COMMUNICATIONS, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

 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, 1999
included in the Company's Registration statement on Form S-1 declared effective
by the Securities and Exchange Commission on July 27, 2000.

     The results of operations for the three months and nine months ended
September 30, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000 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. CASH AND CASH EQUIVALENTS

     Cash and cash equivalents consist of cash and highly liquid investments
such as money market funds with maturities of less than three months at date of
purchase.

3. RESTRICTED CASH

     Included in the other non-current assets on the condensed consolidated
balance sheets at September 30, 2000 and December 31, 1999 is $500 of restricted
cash to support a letter of credit provided as a security deposit on WebEx's
leased facility. The deposit is required for the full 5-year term of the lease,
but the amount can be reduced if WebEx meets conditions specified in the lease
agreement.

 4. COMPREHENSIVE INCOME (LOSS)

     To date, WebEx has not had any significant components of other
comprehensive income (loss).

 5. 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 to customers through service subscriptions and other
service arrangements. Under these arrangements, customers access the application
hosted on our servers via their websites. Hosted services revenues include
monthly subscriber user fees, user set-up fees, and hosting fees in limited
cases of customer-dedicated hosted software. Hosted services 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 revenues are recognized ratably over the service period. 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.

                                        4
<PAGE>   7
                           WEBEX COMMUNICATIONS, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

     The Company also enters into revenue sharing arrangements through
agreements with distribution partners. Revenues on these arrangements are
derived from hosted services provided to end users and are recognized as the
services are provided. Initial set up fees received in connection with these
arrangements are recognized ratably over the initial term of the contract.
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 gross 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.
Revenue from perpetual software license agreements is recognized upon shipment
of the software when all of the following criteria have been met: persuasive
evidence of an arrangement exists; delivery has occurred; the fee is fixed or
determinable; and collectibility is probable.

     Accounts receivable represents all unpaid amounts billed to customers.
WebEx records an allowance for doubtful accounts to reduce accounts receivable
to amounts expected to be received from customers. WebEx records estimates for
sales allowances at the time of the sale.

     Deferred revenue includes amounts billed to customers for which revenues
have not been recognized, which generally result from the following: (1)
deferred set-up fees; (2) advances received from distribution partners under
revenue sharing arrangements; (3) deferred maintenance and support; and (4)
amounts billed in advance under customer-dedicated application hosting
arrangements.

 6. NET LOSS PER SHARE

     Basic net loss per share is computed using the weighted-average number of
common shares outstanding for the period excluding 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 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 nine months ended September
30, 1999 and 2000 because their effect would have been antidilutive:

<TABLE>
<CAPTION>
                                                                AS OF
                                                            SEPTEMBER 30,
                                                        ----------------------
                                                          2000         1999
                                                        ---------    ---------
<S>                                                     <C>          <C>
Shares issuable under stock options...................  4,385,458    3,619,417
Shares of restricted stock subject to repurchase......  3,862,809           --
Shares issuable pursuant to warrants..................    339,915      450,000
Shares of convertible preferred stock on an "as-if"
  converted basis.....................................         --    6,746,191
</TABLE>

     The weighted-average exercise price of stock options outstanding as of
September 30, 2000 was $7.27 and as of September 30, 1999 was $0.23. The
exercise price of warrants outstanding as of September 30, 2000 and

                                        5
<PAGE>   8
                           WEBEX COMMUNICATIONS, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

1999 was $12.50 and $0.01, respectively. The weighted-average repurchase price
of restricted common shares outstanding as of September 30, 2000 was $0.83.

 7. PREFERRED STOCK AND STOCKHOLDERS' EQUITY

  (a) Initial public offering

     On August 2, 2000 the Company closed its initial public offering of
3,500,000 shares of its common stock at a price of $14 per share. On August 3,
2000 the managing underwriters of the offering exercised an over-allotment
option for 525,000 shares of common stock at a price of $14 per share. Net
proceeds of the offering were approximately $50,740 after deducting underwriter
discounts, commissions and other offering expenses.

  (b) Convertible Preferred Stock

     At the time of the initial public offering there were 15,917,627 shares of
convertible preferred stock outstanding. Each share of convertible preferred
stock was converted to one share of common stock automatically upon the closing
of our initial public offering on August 2, 2000.

  (c) Stock Purchase Warrants

     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. Under the agreement, the
distribution partner will include and promote WebEx services as part of its
portal services. In addition to the warrants, the agreement provides for
payments to the distribution partner for initial set-up fees, achievement of
customer milestones at defined dates, and advertising. 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 is 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. Amortization during the current
period is $271.

     Included in the prepaid expenses as of September 30, 2000 is the
unamortized portion of a $1,000 payment of set-up fees for the portal
arrangement. These fees are being amortized over the one year term beginning on
the effective launch date of the portal arrangement. Current period amortization
and unamortized set-up fees at September 30, 2000 are $159 and $841,
respectively.

     This agreement also provides for WebEx to make up to four additional
quarterly payments of $1,000 each upon the successful completion of specified
milestones by the distribution partner and purchase a minimum level of
advertising services from the distribution partner. The milestone payments will
be expensed during the term of the agreement. The first milestone was not
reached as of September 30, 2000.

 8. RELATED PARTY TRANSACTIONS

     We have contracts for engineering services with two companies in China
owned by the wife of one of our founding executives, who is also a major
stockholder. These companies provide a significant amount of quality assurance
testing and software development activities for WebEx. Amounts paid for
engineering services to these companies for the three months ended September 30,
2000 and 1999 were $1,048 and $30 and for the nine months ended September 30,
2000 and 1999 were $2,012 and $140, respectively.

     Due to related party at December 31, 1999 represented a note payable to an
officer for unpaid compensation. The note was paid in full on July 6, 2000.

                                        6
<PAGE>   9
                           WEBEX COMMUNICATIONS, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

     In April 2000, WebEx loaned $3,600 to its Chief Executive Officer (CEO).
The loan matures in April 2002, bears interest at a rate of 6.5% per annum, and
is secured by the personal residence of the CEO and 1,000,000 shares of WebEx
stock. The loan was originally secured by 3,000,000 shares of WebEx stock. This
amount was reduced by action of the disinterested members of the Board of
Directors on October 17, 2000.

 9. COMMITMENTS

     WebEx leases certain equipment and occupies facilities rented under
non-cancelable operating leases expiring through 2008.

     Future minimum lease payments under the non-cancelable operating leases are
as follows:

<TABLE>
<CAPTION>
                        YEAR ENDING
                       DECEMBER 31,
                       ------------
<S>                                                          <C>
2000.......................................................  $   803
2001.......................................................    3,271
2002.......................................................    3,392
2003.......................................................    3,519
2004 and thereafter........................................   10,345
                                                             -------
Future minimum lease payments..............................  $21,330
                                                             =======
</TABLE>

     Subsequent to September 30, 2000, WebEx leased four additional facilities.
The first lease expires in 2005 and requires monthly payments of approximately
$66 commencing January 2001. The second lease expires in 2008 and requires
monthly payments of approximately $19 commencing February 2001. The remaining
two leases expire in 2002 and require monthly payments totaling $4.

     Rent expense under non-cancelable operating leases was $904 and $1,414 for
the three and nine month periods ended September 30, 2000, respectively.

     WebEx is committed to purchase an additional $2.0 million of online
advertising from a distribution partner over the initial term of an exclusive
distribution, advertising, and promotion agreement. Payments are due in three
monthly installments of $667 in October, November and December 2000.

     At September 30, 2000, WebEx has material purchase commitments totaling
approximately $5.5 million for equipment purchases and the construction of
leasehold improvements at new leased facilities.

10. 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 September 1999 and 2000, all material assets and
revenues of WebEx were in the United States.

                                        7
<PAGE>   10
                           WEBEX COMMUNICATIONS, INC.

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

11. RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. This statement as amended by SFAS No. 137
and No. 138, establishes accounting and reporting standards for derivative
instruments and requires recognition of all derivatives as assets or liabilities
in the statement of financial position and measurement of those instruments at
fair value. The statement is effective for fiscal years beginning after June 15,
2000. WebEx will adopt the standard no later than the first quarter of fiscal
year 2001 and is in the process of determining the impact that adoption will
have on its consolidated financial statements.

     In December 1999, the Securities and Exchange Commission published Staff
Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial
Statements. SAB 101 summarizes certain of the staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements and provides interpretations regarding the application of generally
accepted accounting principles to revenue recognition where there is an absence
of authoritative literature addressing a specific arrangement or a specific
industry. SAB 101 is effective for WebEx in the fourth quarter of 2000. WebEx
believes its revenue recognition practices comply with the applicable
interpretive guidance in SAB 101.

     In March 2000, the FASB issued Interpretation No. 44, Accounting for
Certain Transactions involving Stock Compensation (an interpretation of APB
guidance regarding the application of APB Opinion No. 25 to stock compensation
involving employees. This Interpretation is effective July 1, 2000 and its
adoption did not have an effect on our consolidated financial statements for
stock awards granted to date.

     In March 2000, the Emerging Issues Task Force (EITF) published its
consensus on EITF No. 00-2, Accounting for Web Site Development Costs, which was
adopted by WebEx as of July 1, 2000. EITF No. 00-2 establishes guidance for the
accounting for costs related to development and operation of websites. To date,
WebEx has not incurred significant development costs covered by EITF No. 00-2,
as all software developed internally has been offered under license to
customers. WebEx's policy of accounting for costs incurred to operate our
website and hosted services was not impacted by adoption of this pronouncement.

     In March 2000, the EITF published its consensus on EITF 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. EITF No. 00-3 states that a software element covered by SOP
97-2 is only present in a hosting arrangement if the customer has the
contractual right to take possession of the software at any time during the
hosting period without significant penalty and it is feasible for the customer
to either run the software on its own hardware or contract with another party
unrelated to the vendor to host the software. WebEx has historically treated its
hosted services as service arrangements which is in accordance with the guidance
contained in this pronouncement. WebEx's hosting arrangements generally do not
allow customers the contractual right to take possession of the software.

                                        8
<PAGE>   11

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. Factors
that could cause actual results to differ materially from those predicted,
include but are not limited to, the Company's ability to attract and retain
customers and distribution partners for existing and new services, to expand its
operations internationally, to expand its infrastructure to meet the demand for
the Company's services, the Company's ability to control its expenses, the
Company's 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 the Company's services, and the strength of
competitive offerings and the prices being charged by those competitors.
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, the Company undertakes 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.

     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 or pay-per-use basis through our
distribution partners. Revenue from subscription services consists of monthly
usage 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.

                                        9
<PAGE>   12

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the statement of
operations data as a percentage of revenue.

<TABLE>
<CAPTION>
                                                       THREE MONTHS        NINE MONTHS
                                                      SEPTEMBER 30,       SEPTEMBER 30,
                                                      --------------      --------------
                                                      2000     1999       2000     1999
                                                      -----    -----      -----    -----
<S>                                                   <C>      <C>        <C>      <C>
Revenue.............................................   100%     100%       100%     100%
Cost of revenue.....................................    43       31         40       21
                                                      ----     ----       ----     ----
Gross profit........................................    57       69         60       79
Operating expenses:
  Sales and marketing...............................   208      621        260      349
  Research and development..........................    46      203         55      149
  General and administrative........................    26      110         33       71
  Equity-based compensation.........................   156       74        162       55
                                                      ----     ----       ----     ----
          Total operating expenses..................   436     1008        510      624
                                                      ----     ----       ----     ----
Operating loss......................................  (378)    (939)      (449)    (545)
Other income, net...................................    10        4          9        7
                                                      ----     ----       ----     ----
Net loss............................................  (368)%   (935)%     (440)%   (538)%
                                                      ====     ====       ====     ====
</TABLE>

     Revenue. Revenue increased $7.0 million from $0.5 million for the three
months ended September 30, 1999 to $7.5 million for the three months ended
September 30, 2000. Revenue increased $12.7 million from $1.5 million for the
nine months ended September 30, 1999 to $14.2 million for the nine months ended
September 30, 2000. This increase was primarily due to growth in our subscribing
customer base.

     Cost of Revenue. Our cost of revenue consists of costs related to user
set-up, hosting the service and technical support and training activities,
including Internet communication access costs, personnel, licensed software and
equipment costs and depreciation. Cost of revenue increased $3.1 million from
$0.1 million for the three months ended September 30, 1999 to $3.2 million for
the three months ended September 30, 2000. Cost of revenue increased $5.3
million from $0.3 million for the nine months ended September 30, 1999 to $5.6
million for the nine months ended September 30, 2000. The cost of revenue
increase was primarily due to increases in the cost 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 increased $12.7 million from $2.8 million for the three months ended
September 30, 1999 to $15.5 million for the three months ended September 30,
2000. Sales and marketing expense increased $31.8 million from $5.1 million for
the nine months ended September 30, 1999 to $36.9 million for the nine months
ended September 30, 2000. The increases were due to the hiring of additional
sales and marketing personnel in connection with the building of our sales
force, higher sales commissions associated with increased sales volume, and an
extensive marketing campaign to generate leads and build brand awareness. We
anticipate that sales and marketing expense will continue to increase in
absolute dollars as we continue to expand our sales force and build our brand.

     Research and Development. Our research and development expense consists
primarily of salaries and other personnel-related expenses, depreciation of
computer equipment, and supplies and consulting services. Research and
development expense increased $2.5 million from $0.9 million for the three
months ended September 30, 1999 to $3.4 million for the three months ended
September 30, 2000. Research and development expense increased $5.7 million from
$2.2 million for the nine months ended September 30, 1999 to $7.9 million for
the nine months ended September 30, 2000. The increase was primarily related to
consulting fees and personnel related expenses resulting from an increase in
headcount. We anticipate that research and development costs will continue to
increase in absolute dollars as we expand our service offerings and service
functionalities.

                                       10
<PAGE>   13

     General and Administrative. Our general and administrative expense consists
primarily of personnel costs for finance, human resources, legal and general
management, as well as professional expenses, such as legal and accounting.
General and administrative expense increased $1.4 million from $0.5 million for
the three months ended September 30, 1999 to $1.9 million for the three months
ended September 30, 2000. General and administrative expense increased $3.6
million from $1.0 million for the nine months ended September 30, 1999 to $4.6
million for the nine months ended September 30, 2000. The increase was primarily
due to professional fees and personnel and payroll related expenses. We
anticipate that general and administrative expenses will continue to increase in
absolute dollars as we incur additional expenses related to the growth of our
business and our operations as a public company

     Bad debt expense increased $0.4 million from $0.1 million in the three
months ended September 30, 1999 to $0.5 million in the three months ended
September 30, 2000. For the nine months ended September 30, 1999 and 2000, bad
debt expense was $0.1 million and $0.9 million, respectively. This increase was
commensurate with the increase in revenue.

     Equity-Based Compensation. Our equity-based compensation expense represents
the amortization of deferred stock-based compensation over the vesting period of
options granted and expenses related to issuance of common stock warrants.
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 and the fair value of options
granted to non-employees based on the Black-Scholes option pricing model.
Equity-based compensation expense increased $11.3 million from $0.3 million for
the three months ended September 30, 1999 to $11.6 million for the three months
ended September 30, 2000. Equity-based compensation expense increased $22.2
million from $0.8 million for the nine months ended September 30, 1999 to $23.0
million for the nine months ended September 30, 2000. Equity-based compensation
expense related to the unvested portion of non-employee options will be impacted
by future changes in our stock price and will fluctuate accordingly.

     Other Income, Net. Other income, net is comprised of net investment income
net of interest and other expenses. Other income, net increased $0.8 million
from $0.0 million for the three months ended September 30, 1999 to $0.8 million
for the three months ended September 30, 2000. Other income, net increased $1.2
million from $0.1 million for the nine months ended September 30, 1999 to $1.3
million for the nine months ended September 30, 2000. The increase was related
to higher cash balances for the three months and nine months ended September 30,
2000 as compared to September 30, 1999 due to interest income earned on cash
received from our Series C and D preferred stock issuance and our initial public
offering of common stock.

     Income Taxes. Because we incurred net operating losses in the nine months
ended September 30, 1999 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 not more likely than
not that such benefits will be utilized.

     Net Income (Loss). As a result of the foregoing, net loss in the nine
months ended September 30, 1999 was $7.9 million and increased to $62.6 million
in the nine months ended September 30, 2000. We anticipate that net losses will
continue as we invest in our business.

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. All outstanding shares of convertible preferred stock
automatically converted to common stock upon the closing of our initial public
offering.

     As of September 30, 2000, cash and cash equivalents were $44.7 million, an
increase of $31.1 million compared with cash and cash equivalents of $13.6
million as of December 31, 1999.

                                       11
<PAGE>   14

     Net cash used in operating activities was $37.7 million for the nine months
ended September 30, 2000, as compared to $6.1 million for the nine months ended
September 30, 1999. The increase was related to operating losses and increases
in prepaid expenses, other assets, and accounts receivable, partially offset by
an increase in accounts payable, accrued liabilities and deferred revenue.

     Net cash used in investing activities was $13.4 million for the nine months
ended September 30, 2000, as compared to $1.4 million for the nine months ended
September 30, 1999. 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 communication platform, and
a loan to our Chief Executive Officer.

     Net cash provided by financing activities was $82.2 million for the nine
months ended September 30, 2000, as compared to $2.6 million for the nine months
ended September 30, 1999. and was primarily due to the sale of our Series D
preferred stock and our initial public offering.

     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 September 30, 2000, our material purchase commitments, including
equipment purchases, construction of leasehold improvements at new leased
facilities, sales and marketing expenses, including advertising, totaled $7.5
million and are expected to be expended.

     We lease office facilities under various operating leases that expire
through 2008. Total future minimum lease payments, under all operating leases,
amount to approximately $27.0 million.

     We expect that existing cash resources will be sufficient to fund our
anticipated working capital and capital expenditure needs for the foreseeable
future. 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 shareholders.

FACTORS THAT MAY AFFECT RESULTS

     The risks and uncertainties described below are not the only ones we face.
If 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 and the nine months ended September 30, 2000,
  expect continuing losses and may never achieve profitability in the future.

     As of September 30, 2000, we had an accumulated deficit of approximately
$79.6 million. We incurred net losses of approximately $62.6 million for the
nine months ended September 30, 2000 and $7.9 million for the nine months ended
September 30, 1999. Our net losses were approximately 440% of revenue for the
nine months ended September 30, 2000. We expect to continue to incur net losses
for the foreseeable future. If we continue to incur net losses, 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. We have not yet determined the specific
amounts of operating expenses and capital expenditures we expect to incur. We do
not know when or if we will become profitable.

                                       12
<PAGE>   15

  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. Since we began

                                       13
<PAGE>   16

selling our services, approximately 5% of our customers have cancelled their
agreements. In the third quarter of 2000, over 95% 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. In 1999, Baan Company
N.V. accounted for approximately 16% of our revenue. Jan Baan, one of our
directors, is a founder of Baan Company. We do not expect to receive any revenue
from Baan Company in 2000. 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 90% of our revenue from direct sales
to customers to meeting-enable their websites. We have entered into distribution
agreements with over 130 distribution partners. To date, we have generated less
than 10% of our revenue from our distribution partners, which revenue consisted
of initial set-up fees and service fees. For the nine months ended September 30,
2000, these initial set-up fees and service fees each accounted for
approximately 3% of our revenue. 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 cannot
anticipate the amount of payments or 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 and range from a flat rate structure to a tiered
approach. Under a flat rate structure, the distribution partner is paid a fixed
percentage of revenue regardless of the volume sold by the distribution partner.
Under our flat rate structure, the percentage of revenue paid to a distribution
partner can typically range from 20% to 50%. Under the tiered approach, the
percentage paid or discount given to the distribution partner varies depending
on the volume of sales or the distribution partner's minimum commitment. 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
the tiered approach, the percentage of revenue paid (or discount given) to a
distribution partner can typically range from 30% to 50%. 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 through their
websites with WebEx branding during the term of the agreement. 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. We
typically retain 50% to 100% of the revenue generated from these 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

                                       14
<PAGE>   17

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 in the nine months ended September
30, 2000. 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 April 2000, our network
operated on average at less than 25% of our capacity. We have tested the system
for 1,000 concurrent users per server in clusters of 20 servers. However, we
have limited experience in conducting large numbers of concurrent meetings and a
large number of concurrent meetings could impact system performance. If our
services do not perform adequately when used by large numbers of participants,
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 have a long sales cycle because we generally 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 September 30, 2000 we had approximately $29.9 million in deferred
equity-based compensation. This expense will generally be amortized over a four
year period and will result in a decrease in earnings. Cumulative amounts of
deferred equity-based compensation expensed through December 31, 1999 and
through September 30, 2000 were $2.1 million and $23.0 million, respectively. We
expect the amount of equity-based compensation expense to decrease over time as
a result of the vesting of options granted and warrants issued prior to our
initial public offering. However, the amount of deferred equity-based
compensation expense related to the unvested portion of option grants to
non-employees fluctuates with the stock price and accordingly the amount of
future equity-based compensation expense is difficult to predict. In fiscal 1999
and the first part of 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 expansion of our marketing and brand recognition
efforts will be critical to achieve widespread acceptance of our interactive
communications services for websites. Although we have not yet determined the
specific amounts we plan to spend on marketing activities, we believe that sales
and marketing expense will increase in absolute dollars as we continue to expand
our sales force and build our brand. We intend to generally fund these expenses
from our existing cash balances, cash from operations and proceeds from our
initial public offering. Our marketing and advertising campaigns or branding
efforts may not be successful or consumers may not find our marketing efforts
compelling. In addition, our sales and

                                       15
<PAGE>   18

marketing expenses may not be offset by the expenses we incur in building our
brand. 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.

                                       16
<PAGE>   19

  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 are currently experiencing a period of rapid expansion in our personnel,
facilities, and infrastructure that has been placing a significant strain on our
resources. For example, our headcount increased from 105 employees at December
31, 1999 to 362 at September 30, 2000, and, although we may not experience in
the near future a hiring rate as high as that experienced during the first nine
months of 2000, we expect to increase our headcount over the next several
months. We will likely need to lease additional office space in the Silicon
Valley within the next 12 months as we hire additional personnel. For example,
we recently leased an additional 86,000 square feet of office space. If we fail
to obtain sufficient space when needed, our business could suffer. 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 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 have hired over 260 people during
the first nine months of 2000 and, although we may not experience in the near
future a hiring rate as high as that experienced during the first nine months of
2000, 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

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<PAGE>   20

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 two issued patents in the areas of
document annotation and optimizing data transfer and eight 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. ActiveTouch,
WebEx, WebEx.com and Meeting-Enable Your Web Site are our trademarks. 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,

                                       18
<PAGE>   21

     - 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 in the general areas of
distributed networks, Internet-based communication and real-time collaboration,
including claims of alleged infringement of the copyrights, trademarks and
patents of third parties. Although we have not received notice of any alleged
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. 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, although as of September 30, 2000, we had no specific agreements or
commitments with respect to any of these transactions. 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.

INDUSTRY RISKS

  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

                                       19
<PAGE>   22

teleconferencing and videoconferencing as well as applications software and
tools companies, such as Centra Software, Evoke, 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.

  The Year 2000 problem could harm our operations.

     Before January 1, 2000, there was a great deal of concern regarding the
ability of computers to adequately recognize 21st century dates from 20th
century dates due to the two-digit date fields used by many systems. To date,
our computer systems are functioning normally and our compliance and remediation
efforts leading up to 2000 have been effective to prevent any problems. However,
computer experts have warned that there may still be residual consequences of
the change in centuries and any such difficulties could disrupt our ability to
deliver our services.

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.

                                       20
<PAGE>   23

     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. Accordingly, we do not expect any material loss from these
investments and believe that our potential interest rate exposure is not
material.

                                       21
<PAGE>   24

                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Not applicable.

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS

     (a) Upon the closing of our initial public offering on August 2, 2000, all
of the then outstanding shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, and Series D Preferred Stock were automatically
converted on a share-for-share basis into shares of our Common Stock. Following
that conversion, we filed an Amended and Restated Certificate of Incorporation
that reflects the deletion of provisions relating to those series of preferred
stock.

     (c) In the three months ended September 30, 2000, we granted options to
purchase 547,450 shares of our common stock, at exercise prices ranging from
$10.80 to $55.375. Our issuance of common stock upon the exercise of employee
stock options was 127,062, at exercise prices ranging from $0.005 and $1.50
shares and we repurchased 30,000 shares, with exercise prices ranging from $0.35
to $0.50.

     The sales of the above securities were considered to be exempt from
registration under the Securities Act of 1933, as amended, in reliance on
Section 4(2) of the Securities Act, or Regulation D promulgated thereunder, or
Rule 701 promulgated under Section 3(b) of the Securities Act, as transactions
by an issuer not involving a public offering or transactions under compensatory
benefit plans and contracts relating to compensation provided under Rule 701.
The recipients of securities in each of these transactions represented their
intention to acquire securities for investment only and not with a view to or
for sale with any distribution thereof, and appropriate legends were affixed to
the share certificates and instruments issued in these transactions. All
recipients had adequate access, through their relationship with the Registrant,
to information about the Registrant.

     (d) Use of Proceeds from Sales of Registered Securities

     On August 2, 2000 we closed the initial public offering of our common
stock. The shares of common stock sold in the offering were registered under the
Securities Act of 1933, as amended, on a Registration Statement on Form S-1 (the
"Registration Statement") (Registration No. 333-33716) that was declared
effective by the Securities and Exchange Commission on July 27, 2000. The
3,500,000 shares offered under our Registration Statement were sold at a price
of $14.00 per share. Goldman, Sachs & Co, Deutsche Banc Alex. Brown, Wit
Soundview and CIBC World Markets, the managing underwriters of the offering,
also exercised an over-allotment option on August 3, 2000 for 525,000 shares.
The over-allotment shares were sold at a price of $14.00 per share.

     Of the $56.4 million in aggregate gross proceeds raised by us in the
offering, as of September 30, 2000:

     - approximately $3.9 million was paid to the underwriters in connection
       with the underwriting discount;

     - approximately $0.2 million was paid by us in connection with offering
       expenses, printing fees, listing fees, filing fees, accounting fees and
       legal fees;

     - approximately $1.1 million was used for capital expenditures; and

     - approximately $6.5 million was used to fund operations.

     The remainder of the net proceeds from the offering has been invested in
short-term, interest bearing, investment grade securities. We do not have
specific plans for the remaining net proceeds from the offering. The amounts and
timing of any expenditures will vary depending on the amount of cash generated
by our operations, competitive and technological developments and the rate of
growth, if any, of our business. We will retain broad discretion in the
allocation of the remaining net proceeds from this offering.

                                       22
<PAGE>   25

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     Not applicable.

ITEM 5. OTHER INFORMATION

     Phillip White resigned from our board of directors effective October 17,
2000. We are currently in the process of searching for one or more additional
board members.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a) EXHIBITS:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
-------                            -----------
<S>        <C>
 3.1*      Amended and Restated Certificate of Incorporation
 3.2**     Amended and Restated Bylaws
 4.1*      Common Stock Certificate
10.1       Lease dated 10/25/00 between Registrant and North Valley
           Tech LLC
10.2       Lease dated 10/17/00 between Registrant and WDCI, Inc.
27.1       Financial Data Schedule
</TABLE>

---------------
 * 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 3.4 of Registrant's Registration
   Statement on Form S-1 (File No. 333-33716) filed with the Securities and
   Exchange Commission on March 31, 2000.

     (b) REPORTS ON FORM 8-K:

     No reports on Form 8-K were filed during the quarter ended September 30,
2000

                                       23
<PAGE>   26

                                   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.

                                          By:     /s/ CRAIG KLOSTERMAN
                                                      Craig Klosterman
                                                  Chief Financial Officer
                                            (Duly Authorized Officer, Principal
                                                          Financial
                                             and Principal Accounting Officer)

                                       24
<PAGE>   27

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
-------                            -----------
<C>        <S>
  3.1*     Amended and Restated Certificate of Incorporation
  3.2**    Amended and Restated Bylaws
  4.1*     Common Stock Certificate
 10.1      Lease dated 10/25/00 between Registrant and North Valley
           Tech LLC
 10.2      Lease dated 10/17/00 between Registrant and WDCI, Inc.
 27.1      Financial Data Schedule
</TABLE>

---------------
*  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 3.4 of Registrant's Registration
   Statement on Form S-1 (File No. 333-33716) filed with the Securities and
   Exchange Commission on March 31, 2000.

                                       25