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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, 2001

                                      OR

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

           For the transition period from ____________ to ____________ .

                         Commission File No.: 0-30849

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

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







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

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

Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.  Yes [X]  No [   ]


On September 30, 2001, 39,329,275 shares of Registrant's Common Stock,
$0.001 par value were outstanding.




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

                                TABLE OF CONTENTS

                                                              Page No.
                                                              --------
PART I. FINANCIAL INFORMATION                                      3

Item 1.  Financial Statements                                      3

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

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

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

         Notes to Unaudited Condensed Consolidated Financial
          Statements                                               6
Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                     10

Item 3.  Quantitative and Qualitative Disclosures About
          Market Risk                                             20

PART II. OTHER INFORMATION                                        21

Item 5.  Other Information                                        21

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

Signatures                                                        22

Exhibit Index                                                     23































                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                            WEBEX COMMUNICATIONS, INC.

                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)

                                       ASSETS


                                                   September 30, December 31,
                                                        2001         2000

                                                  ------------- -------------
Current assets:
  Cash and cash equivalents                          $ 36,457     $ 28,214
  Accounts receivable, net of allowances of $5,339
   and $1,848, respectively                            18,119        9,596
  Prepaid expenses and other current assets             1,886        3,332
                                                  ------------- -------------
      Total current assets                             56,462       41,142
Property and equipment, net                            24,765       20,502

Due from related party                                  2,400        3,600
Other non-current assets                                2,337        3,299
                                                  ------------- -------------
      Total assets                                   $ 85,964     $ 68,543
                                                  ============= =============
                         LIABILITES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                   $  8,396     $ 10,052
  Accrued liabilities                                   8,474        4,095
  Deferred revenue                                      7,126        6,733
  Current portion of capital lease obligation           1,404          888
  Short-term debt                                       5,500           --
                                                  ------------- -------------
      Total current liabilities                        30,900       21,768
Capital lease obligation less current portion             631        1,269
                                                  ------------- -------------
      Total liabilities                                31,531       23,037
                                                  ------------- -------------

Stockholders' equity:
  Common stock                                             39           37
  Additional paid-in capital                          185,320      160,191
  Notes receivable from stockholder                       (45)         (45)
  Deferred equity-based compensation                   (7,312)     (17,181)
  Accumulated deficit                                (123,577)     (97,488)
  Accumulated other comprehensive income (loss)             8           (8)
                                                  ------------- -------------
      Total stockholders' equity                       54,433       45,506
                                                  ------------- -------------
      Total liabilities and stockholders' equity     $ 85,964     $ 68,543
                                                  ============= =============



























































































     See accompanying notes to unaudited condensed consolidated financial
                                    statements.


                        WEBEX COMMUNICATIONS, INC.

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

                                      Three Months Ended   Nine Months Ended
                                      ------------------  ------------------
                                      Sept 30,  Sept 30,  Sept 30,  Sept 30,
                                        2001      2000      2001      2000
                                      --------  --------  --------  --------
Net revenues                          $ 22,134  $  7,465  $ 55,325  $ 14,213
Cost of revenues                         5,693     3,213    15,654     5,640
                                      --------  --------  --------  --------
  Gross profit                          16,441     4,252    39,671     8,573
                                      --------  --------  --------  --------
Operating expenses:
 Sales and marketing                    11,710	   15,491    35,569    36,925
 Research and development                4,218     3,439    11,593     7,882
 General and administrative              2,406     1,926     7,161     4,630
  Equity-based compensation*             3,704    11,624    11,453    23,000
                                      --------  --------  --------  --------
    Total operating expenses            22,038    32,480    65,776    72,437
                                      --------  --------  --------  --------
   Operating loss                       (5,597)  (28,228)  (26,105)  (63,864)
Interest and other income (expense), net  (515)      772        16     1,309
                                      --------  --------  --------  --------
Net loss                               ($6,112) ($27,456) ($26,089) ($62,555)
                                      ========  ========  ========  ========

Net loss per share, basic and diluted $  (0.16)  $ (1.01)  $ (0.73)  $ (3.62)
                                      ========  ========  ========  ========
Shares used to compute basic and
diluted net loss per share              37,588    27,233    35,848    17,262
                                      ========  ========  ========  ========

*Equity-based compensation:
  Sales and marketing                 $  1,595   $ 3,230   $ 6,076   $ 7,269
  Research and development               1,052     2,777     2,219     5,608
  General and administrative             1,057     5,617     3,158    10,123
                                      --------  --------  --------  --------
                                      $  3,704   $11,624   $11,453   $23,000
                                      ========  ========  ========  ========



















































































































     See accompanying notes to unaudited condensed consolidated financial
                                statements.


                          WEBEX COMMUNICATIONS, INC.

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                                        Nine Months Ended
                                                      ----------------------
                                                       Sept 30,     Sept 30,
                                                         2001         2000
                                                      ----------  ----------
Cash flows from operating activities:
 Net loss                                              $(26,089)   $(62,555)
 Adjustments to reconcile net loss to net cash used
  in operating activities:
   Provisions for doubtful accounts and sales
    Allowances                                            1,984       1,033
   Depreciation and amortization                          6,409       2,102
   Impairment of investments                                750          --
   Equity-based compensation                             11,453      23,000
   Changes in operating assets and liabilities:
    Accounts receivable                                 (10,507)     (5,833)
    Prepaid expenses and other current assets             1,446      (1,663)
    Other non-current assets                               (175)        111
    Accounts payable                                     (1,656)      1,785
    Accrued liabilities                                   4,379       2,371
    Deferred revenue                                        393       1,911
    Other                                                    16          --
                                                      ----------  ----------
     Net cash used in operating activities              (11,597)    (37,738)
                                                      ----------  ----------
Cash flows from investing activities:
 Change in loan to related party                          1,200      (3,600)
 Payments of security deposits                               --        (296)
 Purchase of short-term investments                      (9,869)         --
 Sales of short-term investments                          9,869          --
 Purchases of property and equipment                     (9,702)     (9,470)
                                                      ----------  ----------
     Net cash used in investing activities               (8,502)    (13,366)
                                                      ----------  ----------
Cash flows from financing activities:
 Net proceeds from initial public offering                   --      50,740
 Net proceeds from issuances of common stock             23,602       3,883
 Repurchase of restricted stock                             (55)       (169)
 Net proceeds from issuances of preferred stock              --      27,969
 Repayment of amounts due to related party                   --        (200)
 Principal payments on capital lease obligation            (705)         --
 Borrowings under debt agreement                         11,000          --
 Repayments under debt agreement                         (5,500)         --
                                                      ----------  ----------
     Net cash provided by financing activities           28,342      82,223
                                                      ----------  ----------
Net change in cash and cash equivalents                   8,243      31,119
Cash and cash equivalents at beginning of the period     28,214      13,621
                                                      ----------  ----------
Cash and cash equivalents at end of the period        $  36,457   $  44,740
                                                      ==========  ==========
Supplemental disclosures of non-cash investing and financing activities:
 Deferred equity-based compensation                   $      --   $  50,479
                                                      ==========  ==========
 Reduction in equity-based compensation due to
  forfeitures of stock options                        $     879   $      --
                                                      ==========  ==========
 Stockholder note received for issuance of stock      $      --   $      45
                                                      ==========  ==========
 Acquisition of property and equipment under
  capital leases                                      $     583   $   2,396
                                                      ==========  ==========










































































































































     See accompanying notes to unaudited condensed consolidated financial
                                statements.




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, 2000, included in the Company's Form 10-K filed
with the Securities and Exchange Commission on April 2, 2001.

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

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


2. Revenue Recognition

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

The Company also enters into reseller agreements with distribution partners.
Revenue under these arrangements are derived from hosted services provided to
end users and are recognized over the service period, provided that, evidence
WEBEX COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share amounts)

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

For the three months and the nine months ended September 30, 2001, WebEx
recognized $230 of revenue related to equity consideration received from a
distribution partner.

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

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

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

3. Net Loss Per Share

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




WEBEX COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share amounts)

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


                                                              As of
                                                           September 30,
                                                       --------------------
                                                         2001        2000
                                                       ---------  ---------
     Shares issuable under stock options               6,961,898  4,385,458
     Shares of restricted common stock subject
      to repurchase                                    1,663,051  3,862,809
     Shares issuable pursuant to warrants                339,915    339,915



















The weighted-average exercise price of stock options outstanding as of
September 30, 2001 was $13.74 and as of September 30, 2000 was $7.27. The
weighted-average exercise price of warrants outstanding as of September 30,
2001 and 2000 was $12.50. The weighted-average repurchase price of restricted
common shares outstanding as of September 30, 2001 and September 30, 2000 was
$0.86 and $0.83, respectively.

4. Distribution Partner Agreement

In March 2000, WebEx issued fully vested and exercisable warrants to purchase
339,915 shares of Series D preferred stock at an exercise price per share of
$12.50 to a distribution partner in connection with an exclusive
distribution, advertising and promotion agreement. These warrants to purchase
preferred stock were converted into warrants to purchase common stock as a
result of the initial public offering. Under the agreement, the distribution
partner was required to include and promote WebEx services as part of its
portal services. The fair value of the warrants was determined to be $1,737
using the Black-Scholes option pricing model.  The fair value of the warrants
was recorded as deferred equity-based compensation and is being amortized
over the one year term beginning on the effective launch date of the portal
arrangement.  The unamortized value of these warrants was $0 and $1,028 at
September 30, 2001 and December 31, 2000, respectively.  The warrants have
not been exercised and expire on March 29, 2002.

In addition to the warrants, the agreement provided for payments to the
distribution partner for initial set-up fees, achievement of customer
milestones at defined dates, and a minimum level of advertising services.
Included in prepaid expenses is the unamortized portion of a $1,000 payment
of the set-up fees paid by WebEx for the portal arrangement. These fees are
being amortized over a one year term beginning on the effective launch date
of the portal arrangement. Unamortized set-up fees were $0 and $589 at
September 30, 2001 and December 31, 2000, respectively.

On March 22, 2001, WebEx entered into a new agreement with this distribution
partner that effectively terminated the original distribution, advertising
and promotion agreement.  Under the terms of the new agreement all previously
WEBEX COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share amounts)

existing obligations of both parties are considered fulfilled.  In addition,
WebEx agreed to pay  $1,667 in consideration for advertising and promotions
to be provided by the distribution partner through March 2002.  As of
September 30, 2001, $917 of this consideration remained outstanding, and
payments are due as follows: $250 in October 2001 and $667 in January 2002.
Concurrent with this agreement WebEx entered into a referral agreement with
this distribution partner whereby the distribution partner agreed to refer
customers to WebEx on an exclusive basis in exchange for a share of the
revenue generated from these customers.
As of the termination date of the original agreement, the Company had a
remaining obligation to pay the distribution partner $1,667 for the first
milestone payment and unpaid advertising commitments.  The distribution
partner had an obligation to provide $1,327 in additional advertising
services. The termination agreement results in all previously existing
obligations being considered fulfilled and resulted in a net gain to WebEx of
$340. This gain has been treated as a discount on future advertising services
and is being amortized as a reduction of advertising expense as advertising
is purchased under the new agreement.  Since the termination date, WebEx has
amortized $153 of this gain based on advertising services received and
recorded net advertising expense of $597.  The deferred set-up fee and the
fair value of the warrant recorded in connection with the original agreement
will continue to be amortized over their original estimated life since the
companies will continue their revenue sharing activities.

5. Loan and Security Agreement

On March 29, 2001 WebEx entered into a Loan and Security Agreement with a
bank that allows WebEx to borrow up to $7,500 or 80% of eligible accounts
receivable as defined in the agreement. Under this Agreement, WebEx could
borrow up to $2,000 on a revolving credit line that bears interest at 1.5%
above the prime rate and matures on April 30, 2002, and up to $5,500 on term
advances that bear interest at 1.75% above the prime rate and mature on
September 30, 2003. Under the terms of the agreement, the interest rates will
be reduced by 0.5% after a profitability date, defined in the agreement as
the date WebEx achieves a quarterly profit before deduction of equity-based
compensation charges. Effective on September 6, 2001, WebEx amended the
agreement with the lender and converted the entire $7,500 of borrowing
authority to the revolving credit line.  As of September 30, 2001, available
borrowings under the agreement totaled $2,000. Amounts borrowed under the
revolving credit line may be repaid and reborrowed at any time prior to the
maturity date. The Loan and Security Agreement is collateralized by all
tangible and intangible assets of WebEx and is subject to compliance with
covenants, including a minimum liquidity ratio, minimum cash balance, minimum
tangible net worth, maximum quarterly operating losses adjusted for equity-
based compensation charges, and minimum quarterly revenues.  As of September
30, 2001, the Company was in compliance with these covenants.






WEBEX COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share amounts)

6. Related Party Transactions

WebEx has contracts for engineering services with two companies in China
owned by the spouse of one of its founding officers, who is also a major
stockholder. These companies provide a significant amount of quality
assurance testing and software development activities for WebEx. Expenses
incurred for engineering services provided by these companies for the three
months ended September 30, 2001 and 2000 were $750 and $1,048 and for the
nine months ended September 30, 2001 and 2000 were $2,150 and $2,012,
respectively, and have been included in research and development expense. As
of September 30, 2001, total amounts due to the two companies in China were
$1,150.

Due from related party at September 30, 2001 and December 31, 2000 represents
a note receivable from the CEO of the Company.  The remaining principal and
interest is due on April 10, 2002.

7. Commitments

At September 30, 2001, WebEx has material purchase commitments totaling
approximately $6.0 million for equipment purchases and the construction of
leasehold improvements at new leased facilities.

WebEx leases office facilities under various operating leases that expire
through 2008. Total future minimum lease payments, under all operating
leases, amount to approximately $22.8 million.

8. Significant Customer Information and Segment Reporting

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

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






WEBEX COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share amounts)

9. Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets."  SFAS No. 141 provides guidance on the accounting for a business
combination at the date a business combination is completed.  The statement
requires the use of the purchase method of accounting for all business
combinations initiated after June 30, 2001, thereby eliminating use of the
pooling-of-interests method.  SFAS No. 142 provides guidance on how to
account for goodwill and intangible assets after an acquisition is completed.
The most substantive change is that goodwill will no longer be amortized but
instead will be tested for impairment periodically.  This statement will
apply to existing goodwill and intangible assets beginning with fiscal years
starting after December 15, 2001.  WebEx will adopt this statement at the
beginning of Fiscal 2002. The impact of such adoption is not anticipated to
have a material effect on the Company's financial statements.


In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. The purpose of this statement is to
develop consistent accounting of asset retirement obligations and related
costs in the financial statements and provide more information about future
cash outflows, leverage and liquidity regarding retirement obligations and
the gross investment in long-lived assets. This statement is effective for
financial statements issued for fiscal years beginning after June 15, 2002.
WebEx will adopt SFAS No. 143 on January 1, 2003. The impact of such adoption
is not anticipated to have a material effect on the Company's financial
statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets," which is effective for fiscal years
beginning after December 15, 2001. This Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This Statement supercedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the
accounting and reporting provisions of APB Opinion No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," for the disposal of a segment of a business (as
previously defined in that Opinion). This Statement also amends Accounting
Research Board No. 51, "Consolidated Financial Statements," to eliminate the
exception to consolidation for subsidiaries for which control is likely to be
temporary. SFAS 144 retains the fundamental provisions in SFAS 121 for
recognizing and measuring impairment losses on long-lived assets held for use
and long-lived assets to be disposed of by sale, while also resolving
significant implementation issues associated with SFAS 121. SFAS 144 retains
the basic provisions of APB Opinion No. 30 on how to present discontinued
operations in the statement of operations but broadens that presentation to
include a component of an entity (rather than a segment of a business). WebEx
will adopt SFAS No. 144 on January 1, 2002. The impact of such adoption is
not anticipated to have a material effect on the Company's financial
statements.







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, our
ability to meet our capital requirements, our ability to obtain additional
financing, the ability to decrease marketing related spending, anticipated
research and development expense, our ability to maintain positive cash flow
from operations, our ability and projections to become profitable, our
ability to reduce spending levels, and the sufficiency of our cash reserves
to meet our capital requirements. Factors that could cause actual results to
differ materially from those predicted, include but are not limited to, our
ability to attract and retain customers and distribution partners for
existing and new services, our ability to expand our operations
internationally, our ability to expand our infrastructure to meet the demand
for our services, our ability to control our expenses, our ability to recruit
and retain employees particularly in the areas of sales, engineering, support
and hosting services, the ability of distribution partners to successfully
resell our services, the strength of competitive offerings and the prices
being charged by those competitors, and the impact of California's energy
problems. Additional factors, which could cause actual results to differ
materially, include those set forth in the following discussion, and, in
particular, the risks discussed below under the subheading "Factors that May
Affect Results." These forward-looking statements speak only as of the date
hereof. Unless required by law, we undertake no obligation to update publicly
any forward-looking statements.

Overview

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

We commenced operations under the name Silver Computing, Inc. in February
1995.  We changed our name to Stellar Computing Corporation in June 1997,
ActiveTouch Systems, Inc. in December 1997, ActiveTouch, Inc. in May 1998,
and WebEx, Inc. in December 1999.  In July 2000, we reincorporated in
Delaware under the name WebEx Communications, Inc.  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 currently provide the
following four services: WebEx Meeting Center, WebEx Business Exchange, WebEx
OnCall and WebEx OnStage.

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



Results of Operations

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


                              Three Months Ended   Nine Months Ended
                                 September 30,	     September 30,
                              ------------------   ------------------
                                2001      2000       2001      2000
                              --------  --------   --------  --------
Net revenues                    100%      100%       100%       100%
Cost of revenues                 26        43         28         40
     Gross profit                74        57         72         60
Operating expenses:
 Sales and marketing             53       208         64        260
 Research and development        19        46         21         55
 General and administrative      11        26         13         33
 Equity-based compensation       17       156         21        162
     Total operating expenses   100       436        119        510
     Operating loss             (26)     (378)       (47)      (449)
Interest and other income
 (expense), net                  (2)       10          0          9
Net loss                        (28)%    (368)%      (47)%     (440)%





































































Net revenues. Net revenues increased $14.6 million to $22.1 million for the
three months ended September 30, 2001 from $7.5 million for the three months
ended September 30, 2000.  Net revenues increased $41.1 million to $55.3
million for the nine months ended September 30, 2001 from $14.2 million for
the nine months ended September 30, 2000.  This increase was primarily due to
growth in our direct subscribing customer base and increased usage by
existing customers.

Cost of Revenues. Our cost of revenues consists of costs related to user set-
up, network operations and technical support and training activities,
including Internet and telephony communication access costs, personnel,
licensed software and equipment costs and depreciation. Cost of revenues
increased $2.5 million to $5.7 million for the three months ended September
30, 2001 from $3.2 million for the three months ended September 30, 2000.
Cost of revenue increased $10.1 million to $15.7 million for the nine months
ended September 30, 2001 from $5.6 million for the nine months ended
September 30, 2000.  The increase for the three and nine months ended
September 30, 2001 was primarily due to increases in the costs for delivering
our services to more customers, additional technical staff to support our
growing installed base of customers, and expanding and improving our
worldwide network.

Sales and Marketing. Our sales and marketing expense consists of personnel
costs, including commissions, as well as costs of public relations,
advertising, marketing programs, lead generation, travel and trade shows.
Sales and marketing expense decreased $3.8 million to $11.7 million for the
three months ended September 30, 2001 from $15.5 million for the three months
ended September 30, 2000. Sales and marketing expense decreased $1.3 million
to $35.6 million for the nine months ended September 30, 2001 from $36.9
million for the nine months ended September 30, 2000. The decrease for the
three and nine months ended September 30, 2001 was the result of decreased
spending on marketing related programs offset partially by increased spending
on sales and support personnel  and commission expenses associated with our
increased sales volume.

Research and Development. Our research and development expense consists
primarily of salaries and other personnel-related expenses, depreciation of
equipment, supplies and engineering services. Research and development
expense increased $0.8 million to $4.2 million for the three months ended
September 30, 2001 from $3.4 million for the three months ended September 30,
2000. Research and development expense increased $3.7 million to $11.6
million for the nine months ended September 30, 2001 from $7.9 million for
the nine months ended September 30, 2000. The increase for the three and nine
months ended September 30, 2001 was primarily related to personnel and
equipment related expenses resulting from an increase in headcount.

General and Administrative. Our general and administrative expense consists
primarily of personnel costs for finance, human resources, legal and general
management, bad debt expense and professional services, such as legal and
accounting. General and administrative expense increased  $0.5 million to
$2.4 million for the three months ended September 30, 2001 from $1.9 million
for the three months ended September 30, 2000. General and administrative
expense increased  $2.6 million to  $7.2 million for the nine months ended
September 30, 2001 from $4.6 million for the nine months ended September 30,
2000. The increase for the three and nine months ended September 30, 2001 was
primarily due to professional fees, personnel and bad debt expenses.

Bad debt expense increased  $0.2 million to $0.7 million in the three months
ended September 30, 2001 from  $0.5 million in the three months ended
September 30, 2000. Bad debt expense increased  $1.1 million to $2.0 million
in the nine months ended September 30, 2001 from  $0.9 million in the nine
months ended September 30, 2000. The increase for the three and nine months
ended September 30, 2001 was due to the increase in accounts receivable which
was the result of our increased revenue generated by our growing installed
base of customers.

Equity-Based Compensation. Our equity-based compensation expense represents
the amortization of deferred equity-based compensation over the vesting
period of options granted to employees and expenses related to issuance of
common stock warrants and options to non-employees. Deferred equity-based
compensation represents the difference between the exercise price of the
stock options granted to employees and the deemed fair value of common stock
at the time of those grants. Equity-based compensation expense decreased $7.9
million to $3.7 million for the three months ended September 30, 2001 from
$11.6 million for the three months ended September 30, 2000. Equity-based
compensation expense decreased $11.5 million to $11.5 million for the nine
months ended September 30, 2001 from $23.0 million for the nine months ended
September 30, 2000. The decrease for the three and nine months ended
September 30, 2001 was due to lower expenses recorded on employee and non-
employee option grants due to the vesting of options granted and forfeitures
related to terminated employees. Equity-based compensation expense related to
the unvested portion of non-employee options is impacted by changes in our
stock price and will fluctuate accordingly.

Interest and Other Income (Expense), Net. Interest and other income
(expense), net is comprised of net investment income, interest income and
expense, and other expenses. Interest and other income (expense), net
decreased  $1.3 million to ($0.5) million for the three months ended
September 30, 2001 from $0.8 million for the three months ended September 30,
2000. Interest and other income (expense), net decreased  $1.3 million to
$0.0 million for the nine months ended September 30, 2001 from $1.3 million
for the nine months ended September 30, 2000. The decrease for the three and
nine months ended September 30, 2001 was primarily due to the recognition of
an impairment loss of  $750,000 on an investment in Tonbu, Inc., a privately-
held distribution partner, and less interest earned due to a lower average
cash balance. The impairment loss on the investment resulted from a
determination that an other than temporary decline in its value occurred
after the evaluation of several factors, including recent capital raising
activities undertaken by Tonbu, Inc.

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

Net Loss. As a result of the foregoing, net loss decreased to $6.1 million in
the three months ended September 30, 2001 as compared to $27.5 million in the
three months ended September 30, 2000.  Net loss decreased to $26.1 million
in the nine months ended September 30, 2001 as compared to $62.6 million in
the nine months ended September 30, 2000.

Liquidity and Capital Resources

Prior to our initial public offering, we financed our operations primarily
from the private sales of preferred equity securities. Upon completion of our
initial public offering of common stock, a total of 4,025,000 shares were
sold to the public, which resulted in net proceeds to the Company of $50.7
million. In May and June 2001, we concluded a private placement of 2 million
shares of common stock resulting in net proceeds of $20.5 million.

As of September 30, 2001, cash and cash equivalents were $36.5 million, an
increase of $8.3 million compared with cash and cash equivalents of $28.2
million as of December 31, 2000.

Net cash used in operating activities was $11.6 million for the nine months
ended September 30, 2001, as compared to  $37.7 million for the nine months
ended September 30, 2000. Cash used in operating activities was primarily due
to net operating losses, increases in accounts receivable and decreases in
accounts payable offset by decreases in prepaid expenses and other current
assets, and increases in accrued liabilities.

Net cash used in investing activities was $8.5 million for the nine months
ended September 30, 2001, as compared to $13.4 million for the nine months
ended September 30, 2000. Net cash used by investing activities related
primarily to capital expenditures for equipment, hardware and software used
in our data operations center from which we operate our Internet
communications platform.  This was offset by the partial repayment of
principal on a loan to a related party.

Net cash provided by financing activities was $28.3 million for the nine
months ended September 30, 2001, as compared to $82.2 million for the nine
months ended September 30, 2000, and was primarily from the private placement
of 2 million shares of common stock in May and June 2001, and borrowings
under a loan and security agreement, we entered into in March 2001 and
amended in September 2001, that allows us to borrow up to $7.5 million or 80%
of eligible accounts receivable as defined in the agreement. As of September
30, 2001, additional available borrowings under the agreement totaled $2.0
million.

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

As of September 30, 2001, our material purchase commitments, including
equipment purchases and construction of leasehold improvements at new leased
facilities totaled  $6.0 million.

We lease office facilities under various operating leases that expire through
2008. Total future minimum lease payments, under all operating leases, amount
to approximately $22.8 million.

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

Factors That May Affect Results

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

We incurred net losses in 1998, 1999, 2000 and the nine months ended
September 30, 2001 and expect continuing losses at least through 2001.

As of September 30, 2001, we had an accumulated deficit of approximately
$123.6 million. We incurred net losses of approximately $26.1 million for the
nine months ended September 30, 2001 and $80.4 million for the year ended
December 31, 2000. Our net losses were approximately 47% of revenue for the
nine months ended September 30, 2001. We expect to continue to incur net
losses at least through 2001. If we do not achieve our plans for
profitability, we may not be able to increase the number of our employees,
our investment in expanding our network services and application platform or
our sales, marketing and research and development programs in accordance with
our present plans, each of which is critical to our long-term success.

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

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

Factors outside our control include:

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

Factors within our control include:

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

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

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

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

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

Our customers do not have long-term obligations to purchase services from us.
Most of our subscription agreements had an initial term of three months.
Although automatically renewed unless terminated, our contracts can be
terminated on thirty days notice at the end of the initial term or any
renewal term. Over 95% of our customers have agreements with initial terms of
three to 12 months. In the third quarter of 2001, over 90% of the contracts
entered into the previous quarter were renewed. We may terminate customers
who have failed to pay for our services.  Some customers may choose not to
continue to use our services.  We may not obtain a sufficient number of
additional customers to compensate for any customers that we may lose. The
loss of existing customers 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. We have entered into distribution agreements with over 198
distribution partners. For the nine months ended September 30, 2001, we have
generated less than 10% of our revenue from our distribution partners, which
revenue consisted of initial set-up fees, commitment payments, and service
fees. The payments received from our distribution partners have mostly been
recorded as deferred revenue because we defer revenue related to payments for
initial set-up fees received at the beginning of the relationship and record
revenue from subscription services over the course of the service period as
the distribution partner resells our services. We also do not record
commitment fees as revenue until the commitment fee is fully earned and paid.
We cannot anticipate the amount of revenue we will derive from these
relationships in the future. We must continue to establish and extend these
distribution partnerships. Establishing these distribution relationships can
take as long as several months or more. It typically takes several months
before our distribution arrangements generate any significant revenue.

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

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

Our WebEx Meeting Center service integrates data, audio and video to allow
end-users to participate in meetings online. Our WebEx Meeting Center service
accounted for more than 80% of our revenue for the nine months ended
September 30, 2001. We anticipate that revenue from our WebEx Meeting Center
service will continue to constitute the majority of our revenue for the
foreseeable future. Any decline in the demand for our WebEx Meeting Center
service, or its failure to achieve broad market acceptance, would seriously
harm our business.

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

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

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

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

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

As of September 30, 2001 we had approximately $7.3 million in deferred
equity-based compensation. This expense will generally be amortized over a
three year period and will result in a decrease in earnings. Cumulative
amounts of deferred equity-based compensation expensed through September 30,
2001 and through September 30, 2000 were $41.1million 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 prior to our
initial public offering. However, the amount of future equity-based
compensation expense related to the unvested portion of option grants to non-
employees will fluctuate with the stock price and accordingly the amount of
future equity-based compensation expense is difficult to predict. In 1999 and
2000, we granted stock options at exercise prices significantly lower than
the anticipated offering price, which has contributed to our equity-based
compensation expenses.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We have experienced a period of rapid expansion in our personnel, facilities,
and infrastructure that has placed a significant strain on our resources. For
example, our headcount increased from 362 employees at September 30, 2000 to
471 at September 30, 2001, and, although we may not experience in the near
future a hiring rate as high as that experienced during the last 12 months,
we expect some increase in our headcount over the next several months. Our
expansion has placed, and we expect that it will continue to place, a
significant strain on our management, operational and financial resources.
Any failure by us to effectively manage our growth could disrupt our
operations or delay execution of our business plan and could consequently
harm our business.

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

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

If we are unable to attract, integrate and retain qualified personnel, our
business could suffer.

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. We hired over 200 people in the 12
months ending September 30, 2001, and, although we may not experience in the
near future a hiring rate as high as that experienced during that time
period, we expect to increase our headcount over the next several months. In
the past, 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. Although
the current economic conditions have made hiring of personnel easier, we do
not know how long the current labor market conditions will last.  If we
encounter difficulty hiring, integrating and retaining a sufficient number of
qualified personnel in the future, the quality of our services may be
adversely affected. 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. In addition,
third party co-location facilities may discontinue their operations due to
poor business performance. Because a substantial part of 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. In the event of damage to or interruption
of our internal or outsourced systems, if we are unable to implement our
disaster recovery plans or our efforts to restore our services to normal
levels are not successful, our business would be adversely affected.  In
addition, business interruption insurance may not adequately compensate us
for losses that may occur.

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

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

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

Our success and ability to compete depend to a significant degree upon the
protection of our underlying software and our proprietary technology through
patents. We regard the protection of patentable inventions as important to
our future opportunities. We currently have three issued patents in the areas
of peer-to-peer connections to facilitate conferencing, document annotation
and optimizing data transfer and 20 patent applications pending in the United
States and we may seek additional patents in the future. These patent
applications cover different aspects of the technology used to deliver our
services and are important to our ability to compete. However, it is possible
that:

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

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

We also rely on a combination of laws, such as copyright, trademark and trade
secret laws, and contractual restrictions, such as confidentiality agreements
and licenses, to establish and protect our technology. Our trademarks
include: ActiveTouch, WebEx (word and design), WebEx bifurcated ball design,
Meeting Center, WebEx Meeting Center, WebEx.com, Meeting-Enable Your Web
Site,  We've Got To Start Meeting Like This and Powering Real Time Business
Meetings. Also, our software is automatically protected by copyright law.
These forms of intellectual property protection are critically important to
our ability to establish and maintain our competitive position. However,

- third parties may infringe or misappropriate our copyrights, trademarks and
  similar proprietary rights;
- laws and contractual restrictions may not be sufficient to prevent
  misappropriation of our technology or to deter others from developing
  similar technologies;
- effective trademark, copyright and trade secret protection may be
  unavailable or limited in foreign countries;
- other companies may claim common law trademark rights based upon state or
  foreign laws that precede the federal registration of our marks; and
- policing unauthorized use of our services and trademarks is difficult,
  expensive and time-consuming, and we may be unable to determine the extent
  of any unauthorized use.

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

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

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

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

We may acquire or invest in complementary businesses, technologies or
services.  We invested $1 million in Tonbu, Inc., a privately-held
distribution partner, in January 2001. We wrote-off $750,000 of this
investment in the three months ending September 30, 2001.  The future value
of this investment is uncertain and could result in further write-offs of all
or part of the investment.  As of September 30, 2001, we had no other
specific agreements or commitments with respect to any acquisitions or
investments.  Integrating any newly acquired businesses, technologies or
services may be expensive and time-consuming. To finance any acquisitions, it
may be necessary for us to raise additional funds through public or private
financings. Additional funds may not be available on terms that are favorable
to us and, in the case of equity financings, may result in dilution to our
stockholders. We may be unable to complete any acquisitions or investments on
commercially reasonable terms, if at all. Even if completed, we may be unable
to operate any acquired businesses profitably or otherwise implement our
growth strategy successfully. If we are unable to integrate any newly
acquired entities or technologies effectively, our operating results could
suffer. Future acquisitions by us could also result in large and immediate
write-offs, or incurrence of debt and contingent liabilities, any of which
could harm our operating results.

We must compete successfully in the interactive communications services
market.

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

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

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

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

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

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

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

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

Economic growth has slowed significantly, and some analysts believe the
United States economy will experience a recession.  In addition, the recent
terrorists attacks in the United States may further add to the decline in the
United States economy.  In particular, some of the companies that buy or
resell or that are likely to buy or resell our services are high technology
companies or are in the Internet industry which may face financial problems
in a slowing or down economy. If the economy continues to decline as a result
of the recent economic, political and social turmoil, or if there are further
terrorist attacks in the United States or elsewhere, our customers may not be
able to pay for our services and our distribution partners may cease
operations, which may harm our operating results.

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

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

Our stock price has been and will likely continue to be volatile, and you may
be unable to resell your shares at or above the price you paid.

Our stock price has been and is likely to continue to be highly volatile.
For example, between January 1, 2001 and September 30, 2001, our stock price
has traded as high as $27.45 on June 27, 2001 and as low as $5.875 on March
23, 2001.  Our stock price could fluctuate significantly due to a number of
factors, including:
- variations in our actual or anticipated operating results;
- sales of substantial amounts of our stock;
- announcements about us or about our competitors, including technological
  innovation or new products or services;
- litigation and other developments relating to our patents or other
  proprietary rights or those of our competitors;
- conditions in the Internet industry;
- governmental regulation and legislation; and
- changes in securities analysts' estimates of our performance, or our
  failure to meet analysts' expectations.

Many of these factors are beyond our control.
In addition, the stock markets in general, and the Nasdaq National Market and
the market for Internet technology companies in particular, have experienced
extreme price and volume fluctuations recently.  These fluctuations often
have been unrelated or disproportionate to the operating performance of these
companies.  These broad market and industry factors may decrease the market
price of our common stock, regardless of our actual operating performance.
In the past, companies that have experienced volatility in the market prices
of their stock have been the object of securities class action litigation.
If we were the object of securities class action litigation, it could result
in substantial costs and a diversion of management's attention and resources,
which could affect our profitability.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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



PART II - OTHER INFORMATION


Item 5.  Other Information

To be considered for inclusion in the Company's proxy statement and form of
proxy for its 2002 Annual Meeting of Stockholders, a stockholder proposal
must be received at the principal executive offices of the Company not later
than December 17, 2001.

A stockholder proposal not included in the Company's proxy statement for the
2002 Annual Meeting will be ineligible for presentation at the meeting unless
the stockholder gives timely notice of the proposal in writing to the
Secretary of the Company at the principal executive offices of the Company
and otherwise complies with the provisions of the Company's Bylaws.  To be
timely, the Company's Bylaws provide that the Company must have received the
stockholder's notice not less than 50 days nor more than 75 days prior to the
scheduled date of such meeting.  However, if notice or prior public
disclosure of the date of the annual meeting is given or made to stockholders
less than 65 days prior to the meeting date, the Company must receive the
stockholder's notice by the earlier of (i) the close of business on the 15th
day after the earlier of the day the Company mailed notice of the annual
meeting date or provided such public disclosure of the meeting date and (ii)
two days prior to the scheduled date of the annual meeting.  For the
Company's 2002 Annual Meeting of Stockholders, which is scheduled to be held
on May 15, 2002, stockholders must submit written notice to the Secretary in
accordance with the foregoing Bylaw provisions no later than March 25, 2002
but not prior to March 1, 2002.

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

(a)  Exhibits:

Exhibit
Number    Description
-------  -------------------------------------------------------
3.1*     Amended and Restated Certificate of Incorporation
3.2**    Amended and Restated Bylaws
4.1*     Form of Common Stock Certificate








--------------------
 *  Incorporated by reference from Exhibits 3.3 and 4.1 of Amendment No. 1 to
    the Registrant's Registration Statement on Form S-1 (File No. 333-33716)
    filed with the Securities and Exchange Commission on June 21, 2000.

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

(b)  Reports on Form 8-K:

No reports on Form 8-K were filed during the quarter ended September 30,
2001.




                             SIGNATURES

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

                                             WEBEX COMMUNICATIONS, INC.

Date:  November 14, 2001                     By:/s/ Craig Klosterman
                                             --------------------------
                                              Craig Klosterman
                                              Chief Financial Officer
                                              (Duly Authorized Officer,
                                              Principal Financial	and
                                              Principal Accounting Officer)


                                EXHIBIT INDEX

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

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
















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		9.30.01 10Q 111301