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 March 31, 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 [   ]

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

On May 1, 2001, 37,171,682 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
                                  MARCH 31, 2001

                                TABLE OF CONTENTS



                                                                       Page No.
                                                                       --------

PART I. FINANCIAL INFORMATION

Item 1.  Unaudited Financial Statements

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

         Unaudited Condensed Consolidated Statements of Operations
          for the three months ended March 31, 2001 and 2000                 4

         Unaudited Condensed Consolidated Statements of Cash Flows
          for the three months ended March 31, 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                                         13

Item 3.  Quantitative and Qualitative Disclosures About Market Risk         29

PART II. OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds                          29

Item 6.  Exhibits and Reports on Form 8-K                                   30

Signatures                                                                  31

Exhibit Index                                                               32














                                       2


                          PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements

                           WEBEX COMMUNICATIONS, INC.

                  UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)

                                    ASSETS



                                                       March 31,   December 31,
                                                          2001         2000
                                                       ---------   ------------
Current assets:
  Cash and cash equivalents                            $ 23,497      $ 28,214
  Accounts receivable, net                               11,359         9,596
  Prepaid expenses and other current assets               2,236         3,332
                                                       ---------   ------------
    Total current assets                                 37,092        41,142
Property and equipment, net                              22,818        20,502

Due from related party                                    3,600         3,600
Other non-current assets                                  3,235         3,299
                                                       ---------   ------------
    Total assets                                       $ 66,745      $ 68,543
                                                       =========   ============

Current liabilities:
  Accounts payable                                     $  8,800      $ 10,052
  Accrued liabilities                                     6,104         4,095
  Deferred revenue                                        6,040         6,733
  Current portion of capital lease obligation               781           888
  Current portion of long term debt                       1,375            --
                                                       ---------   ------------
    Total current liabilities                            23,100        21,768
Capital lease obligation less current portion             1,066         1,269
Long-term debt less current portion                       4,125            --
                                                       ---------   ------------
    Total liabilities                                    28,291        23,037
Stockholders' equity:
  Common stock                                               37            37
  Additional paid-in capital                            159,439       160,191
  Notes receivable from stockholder                         (45)          (45)
  Deferred equity-based compensation                    (12,777)      (17,181)
  Accumulated deficit                                  (108,187)      (97,488)
  Accumulated other comprehensive loss                      (13)           (8)
                                                       ---------   ------------
    Total stockholders' equity                           38,454        45,506
    Total liabilities and stockholders'equity          $ 66,745      $ 68,543
                                                       =========   ============

See accompanying notes to unaudited condensed consolidated financial statements.
                                       3


                         WEBEX COMMUNICATIONS, INC.

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


                                                         Three Months Ended
                                                    ----------------------------
                                                      March 31,      March 31,
                                                        2001           2000
                                                    ------------    ------------
Net revenues                                         $   14,761      $   2,211
Cost of revenues                                          4,619            658
                                                    ------------    ------------
    Gross profit                                         10,142          1,553
                                                    ------------    ------------
Operating expenses:
  Sales and marketing                                    11,806          8,736
  Research and development                                3,726          1,895
  General and administrative                              2,087            913
  Equity-based compensation*                              3,522          4,945
                                                    ------------    ------------
      Total operating expenses                           21,141         16,489
                                                    ------------    ------------
    Operating loss                                      (10,999)       (14,936)
Interest and other income, net                              300            180
                                                    ------------    ------------
Net loss                                             $  (10,699)     $ (14,756)
                                                    ============    ============

Net loss per share, basic and diluted                $    (0.31)     $   (1.27)
                                                    ============    ============
Shares used to compute basic and diluted net
  loss per share                                         34,061         11,649
                                                    ============    ============

*Equity-based compensation:
  Sales and marketing                                $    2,159      $   1,604
  Research and development                                  490          1,259
  General and administrative                                873          2,082
                                                    ------------    ------------
                                                     $    3,522      $   4,945
                                                    ============    ============

See accompanying notes to unaudited condensed consolidated financial statements.







                                       4




                             WEBEX COMMUNICATIONS, INC.

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (In thousands)

                                                         Three Months Ended
                                                    ----------------------------
                                                      March 31,      March 31,
                                                        2001           2000
                                                    ------------    ------------
Cash flows from operating activities:
 Net loss                                            $ (10,699)      $ (14,756)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
   Provisions for doubtful accounts and sales
    allowances                                             532             164
   Depreciation and amortization                         1,835             370
   Equity-based compensation                             3,522           4,945
   Other                                                    (5)             --
   Changes in operating assets and liabilities:
    Accounts receivables                                (2,295)           (225)
    Prepaid expenses and other current assets            1,096          (1,165)
    Other non-current assets                               (65)            (28)
    Accounts payable                                    (1,252)          1,898
    Accrued liabilities                                  2,009             760
    Deferred revenue                                      (693)            741
                                                    ------------    ------------
     Net cash used in operating activities              (6,015)         (7,296)
                                                    ------------    ------------
Cash flows from investing activities:
 Purchases of property and equipment                    (4,022)         (2,598)
                                                    ------------    ------------
     Net cash used in investing activities              (4,022)         (2,598)
                                                    ------------    ------------
Cash flows from financing activities:
 Net proceeds from issuances of common stock               146           3,502
 Repurchase of restricted stock                            (16)             --
 Net proceeds from issuances of preferred stock             --          28,029
 Principal payment on capital lease                       (310)             --
 Borrowings under debt agreement                         5,500              --
                                                    ------------    ------------
     Net cash provided by financing activities           5,320          31,531
                                                    ------------    ------------
Change in cash and cash equivalents                     (4,717)         21,637
Cash and cash equivalents at beginning of the period    28,214          13,621
                                                    ------------    ------------
Cash and cash equivalents at end of the period       $  23,497       $  35,258
                                                    ============    ============
Supplemental disclosures of noncash investing and financing activities:
  Deferred equity-based compensation                 $      --       $  36,181
                                                    ============    ============
  Reduction in equity-based compensation due to
   forfeitures of stock options                      $    (432)      $      --
                                                    ============    ============
See accompanying notes to unaudited condensed consolidated financial statements.
                                       5


                           WEBEX COMMUNICATIONS, INC.

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

1. Basis of Presentation

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

The results of operations for the three months ended March 31, 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.
                                       6

                           WEBEX COMMUNICATIONS, INC.

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

The Company also enters into reseller agreements with distribution
partners. Revenue under these arrangements are derived from hosted
services provided to end users and are recognized over the service
period provided that evidence of an arrangement exists, the fee is
fixed or determinable and collectibility is reasonably assured.
Initial set up fees received in connection with these arrangements
are recognized ratably over the

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

WebEx has sold a limited number of perpetual software licenses for
software delivered to customers. WebEx recognizes revenue on
software products delivered to customers in accordance with the
provisions of Statement of Position (SOP) 97-2, Software Revenue
Recognition, as amended by SOP 98-9, Modification of SOP 97-2,
Software Revenue Recognition, with Respect to Certain Transactions.
No new arrangements under the scope of SOP 97-2 occurred during the
three months ended March 31, 2001.

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

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

3. Net Loss Per Share

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

                                       7

                           WEBEX COMMUNICATIONS, INC.

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

The following potential common shares have been excluded from the
computation of diluted net loss per share for the three months ended
March 31, 2000 and 2001 because their effect would have been
antidilutive:


                                                              As of
                                                            March 31,
                                                     ----------------------
                                                        2001         2000
                                                     ---------    ---------
        Shares issuable under stock options          4,938,396    2,702,599
        Shares of restricted common stock
         subject to repurchase                       2,394,011    4,255,139
        Shares issuable pursuant to warrants           339,915      789,915
        Shares of convertible preferred stock on
         an "as-if" converted basis                        ---   15,917,627

The weighted-average exercise price of stock options outstanding as
of March 31, 2001 was $11.00 and as of March 31, 2000 was $1.56. The
weighted-average exercise price of warrants outstanding as of March
31, 2001 and 2000 was $12.50 and $5.38, respectively. The weighted-
average repurchase price of restricted common shares outstanding as
of March 31, 2001 and March 31, 2000 was $0.83 and $0.75,
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 $600 and $1,028 at March 31, 2001 and December
31, 2000, respectively.

In addition to the warrants, the agreement provides for payments to
the distribution partner for initial set-up fees, achievement of
customer milestones at defined dates, and 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 $342 and $589 at
March 31, 2001 and December 31, 2000, respectively.
                                       8



                           WEBEX COMMUNICATIONS, INC.

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

The milestone payments are expensed as the milestones are achieved.
The first milestone date occurred during 2000 and WebEx
accrued the related payment of $1,000 as a marketing expense in
2000.

Advertising expense under the agreement is recognized as the actual
advertising services are provided.  Prepaid advertising expense for
amounts due under the advertising commitment in advance of actual
advertising services provided by the distribution partner was
$1,557 as of December 31, 2000.

On March 22, 2001, WebEx entered into a new agreement with this
distribution partner that effectively terminated the original
distribution, advertising and promotion agreement.  Under the terms
of the new agreement all previously existing obligations of both
parties are considered fulfilled.  In addition, WebEx agreed to pay
$1,667 in consideration for advertising and promotions to be
provided by the distribution partner through March 2002. The
payments are due as follows; $500 in April 2001,  $250 in each of
July and October 2001 and $667 in January 2002.  Concurrent with
this agreement WebEx entered into a referral agreement with this
distribution partner whereby the distribution partner agreed to
refer customers to WebEx on an exclusive basis in exchange for a
share of the revenue generated from these customers.

As of the termination date, 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. The difference between the
obligations as of the termination date of $340 will be treated as a discount
on future advertising services and will be amortized as a reduction
of advertising expense as advertising is purchased under the new
agreement.

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. The termination of
the  original agreement  and the execution of the referral agreement
had no effect on the statement of operations for the three months
ended March 31, 2001.





                                       9








                           WEBEX COMMUNICATIONS, INC.

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

5. Loan and Security Agreement

On March 29, 2001 WebEx entered into a Loan and Security Agreement
with a bank that allows WebEx to borrow up to $7,500 or 80% of
eligible accounts receivable as defined in the agreement. As of
March 29, 2001, available borrowings under the agreement totaled
$7,163. Under the terms of the agreement, WebEx may borrow up to
$2,000 on a revolving credit line that bears interest at 1.5% above
the prime rate and matures on April 30, 2002, and up to $5,500 on
term advances that bear interest at 1.75% above the prime rate and
mature on September 30, 2003. The interest rates will be reduced by
0.5% after a profitability date, defined in the agreement as the
date WebEx achieves a quarterly profit before deduction of equity-
based compensation charges. Amounts borrowed under the revolving
credit line may be repaid and reborrowed at any time prior to the
maturity date. Term advances may be drawn through June 30, 2001, and
require only payments of interest through September 1, 2001, after
which all outstanding principal and interest will be payable in
equal monthly installments until the maturity date. 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 March 31, 2001, the Company was in compliance with these
covenants.

On March 30, 2001, WebEx received a term advance of $5,500 under the
Loan and Security agreement discussed above.

6. Related Party Transactions

We have contracts for engineering services with two companies in
China owned by the spouse of one of our founding executives, who is
also a major stockholder. These companies provide a significant
amount of quality assurance testing and software development
activities for WebEx. Expenses incurred for engineering services
provided by these companies for the three months ended March 31,
2001 and 2000 were $570 and $425, respectively.

Due from related party at March 31, 2001 and December 31, 2000
represents a note receivable from the CEO of the Company.

7. Commitments

At March 31, 2001, WebEx has material purchase commitments totaling
approximately $6.3 million for equipment purchases and the
construction of leasehold improvements at new leased facilities.

                                       10






                           WEBEX COMMUNICATIONS, INC.

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


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.







                                       11

                           WEBEX COMMUNICATIONS, INC.

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

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 March 31, 2001 and 2000, all material assets
and revenues of WebEx were in the United States.

9. Recent Accounting Pronouncements

In June 1998, the FASB issued SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement as
amended by SFAS No. 137 and No. 138, establishes accounting and
reporting standards for derivative instruments and requires
recognition of all derivatives as assets or liabilities in the
statement of financial position and measurement of those instruments
at fair value. WebEx adopted the standard in the first quarter of
fiscal year 2001 and such adoption did not have a material effect on
the results of operations or financial position. As of March 31,
2001, the Company has not entered into any arrangements involving
derivative instruments.


























                                       12


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

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates" and similar
expressions identify such forward-looking statements. These forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those indicated in the forward-looking
statements. These are statements that relate to future periods and include
statements as to expected net losses, expected cash flows and expenses, the
adequacy of capital resources and growth in business and operations, the
ability to decrease marketing related spending, anticipated research and
development expense, our ability to approach positive cash flow from
operations by the end of 2001, our ability and projections to become
profitable, our ability to reduce spending levels, and the sufficiency of our
cash reserves to meet our capital requirements. Factors that could cause
actual results to differ materially from those predicted, include but are not
limited to, the Company's ability to attract and retain customers and
distribution partners for existing and new services, to expand its operations
internationally, to expand its infrastructure to meet the demand for the
Company's services, the Company's ability to control its expenses, the
Company's ability to recruit and retain employees particularly in the areas
of sales, engineering, support and hosting services, the ability of
distribution partners to successfully resell the Company's services, 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, the Company undertakes no obligation to update publicly any forward-
looking statements.

Overview

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

We commenced operations in February 1995. We released an interactive
communications service built on our technology in early 1998. We began
offering WebEx Meeting Center, our first real-time, interactive multimedia
communications service, in February 1999 and began selling the service to
customers and distribution partners. We also made available a subset of our
service for free at www.webex.com. Since February 1999, our activities have
been focused on continuing to enhance and market our WebEx Interactive
Platform and our WebEx Meeting Center service, developing and deploying new
services, expanding our sales and marketing organizations and deploying our
global WebEx Interactive Network. We introduced WebEx Business Exchange in

                                       13
the third quarter of 1999, WebEx OnCall service in the fourth quarter of
1999, WebEx Shopping-Together (now WebEx OnTour) in the first quarter of
2000, WebEx OnStage in the second quarter of 2000 and WebEx Professional
Services in the third quarter of 2000. To date these new services represent
an insignificant percentage of total revenues.

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

Results of Operations

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


                                                    Three Months
                                                       March 31,
                                                  ------------------
                                                    2001       2000
                                                  --------  --------
        Net revenues                                100%       100%
        Cost of revenues                             31         30
        Gross profit                                 69         70
        Operating expenses:
         Sales and marketing                         80        395
         Research and development                    25         86
         General and administrative                  14         41
         Equity-based compensation                   24        224
             Total operating expenses               143        746
        Operating loss                              (74)      (676)
        Interest and other income, net                2          8
        Net loss                                    (72)%     (667)%

Net revenues. Net revenues increased $12.6 million to $14.8 million for the
three months ended March 31, 2001 from $2.2 million for the three months
ended March 31, 2000.  This increase was primarily due to growth in our
direct subscribing customer base and increased usage by existing customers.

Cost of Revenues. Our cost of revenues consists of costs related to user set-
up, network operations and technical support and training activities,
including Internet communication access costs, personnel, licensed software
and equipment costs and depreciation. Cost of revenue increased $3.9 million
to $4.6 million for the three months ended March 31, 2001 from $0.7 million
for the three months ended March 31, 2000. The increase in dollars and as a
percent of revenue 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.


                                       14

Sales and Marketing. Our sales and marketing expense consists of personnel
costs, including commissions, as well as costs of public relations,
advertising, marketing programs, lead generation, travel and trade shows.
Sales and marketing expense increased $3.1 million to $11.8 million for the
three months ended March 31, 2001 from $8.7 million for the three months
ended March 31, 2000. The increase was primarily due to the hiring of
additional sales personnel in connection with the building of our sales
force, higher sales commissions associated with increased sales volume.  This
increase was partially offset by reduced spending on marketing campaigns
focused on building brand awareness. We anticipate that sales and marketing
expense will not differ significantly in absolute dollars in 2001 relative to
2000.  We anticipate that increased costs associated with increases in our
sales force will be offset by decreases in marketing related spending.

Research and Development. Our research and development expense consists
primarily of salaries and other personnel-related expenses, depreciation of
equipment, supplies and consulting services. Research and development expense
increased $1.8 million to $3.7 million for the three months ended March 31,
2001 from $1.9 million for the three months ended March 31, 2000. The
increase was primarily related to consulting fees and personnel related
expenses resulting from an increase in headcount. We anticipate that research
and development expense will increase in absolute dollars in 2001 relative to
2000 as we continue to expand our service offerings and service
functionalities.

General and Administrative. Our general and administrative expense consists
primarily of personnel costs for finance, human resources, legal and general
management, bad debt and professional expenses, such as legal and accounting.
General and administrative expense increased  $1.2 million to  $2.1 million
for the three months ended March 31, 2001 from $0.9 million for the three
months ended March 31, 2000. The increase was primarily due to professional
fees, personnel and payroll related expenses. We anticipate that general and
administrative expense will increase in absolute dollars in 2001 relative to
2000.

Bad debt expense increased  $0.3 million to $0.5 million in the three months
ended March 31, 2001 from  $0.2 million in the three months ended March 31,
2000. This increase was due to the increase in accounts receivable.

Equity-Based Compensation. Our equity-based compensation expense represents
the amortization of deferred equity-based compensation over the vesting
period of options granted to employees and expenses related to issuance of
common stock warrants and options to non-employees. Deferred equity-based
compensation represents the difference between the exercise price of the
stock options granted to employees and the deemed fair value of common stock
at the time of those grants . Equity-based compensation expense decreased
$1.4 million to $3.5 million for the three months ended March 31, 2001 from
$4.9 million for the three months ended March 31, 2000. The decrease was due
to lower expenses recorded on non-employee option grants. 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.


                                       15

Interest and Other Income, Net. Interest and other income, net is comprised
of net investment income net of interest and other expenses. Other income,
net increased  $0.1 million to $0.3 million for the three months ended March
31, 2001 from  $0.2 million for the three months ended March 31, 2000. The
increase was related to interest earned on a higher average cash balance for
three months ended March 31, 2001 as compared to March 31, 2000.

Income Taxes. Because we incurred net operating losses in the three months
ended March 31, 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 $10.7 million
in the three months ended March 31, 2001 as compared to $14.8 million in the
three months ended March 31, 2000.  We anticipate that net losses will
continue at least in 2001.

Liquidity and Capital Resources

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

As of March 31, 2001, cash and cash equivalents were $23.5 million, a
decrease of $4.7 million compared with cash and cash equivalents of $28.2
million as of December 31, 2000.

Net cash used in operating activities was $6.0 million for the three months
ended March 31, 2001, as compared to  $7.3 million for the three months ended
March 31, 2000. Cash used in operating activities were primarily due to net
operating losses, increases in accounts receivable and decreases in accounts
payable and deferred revenue. The sources of cash were primarily decreases in
prepaid expenses and other current assets and increases in accrued
liabilities.

Net cash used in investing activities was $4.0 million for the three months
ended March 31, 2001, as compared to $2.6 million for the three months ended
March 31, 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.

Net cash provided by financing activities was $5.3 million for the three
months ended March 31, 2001, as compared to $31.5 million for the three
months ended March 31, 2000, and was primarily from a loan and security
agreement, we entered into in March 2001, that allows us to borrow up to $7.5
million or 80% of eligible accounts receivable as defined in the agreement.
As of March 31, 2001, available borrowings under the agreement totaled $1.6
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.
                                       16
As of March 31, 2001, our material purchase commitments, including equipment
purchases, construction of leasehold improvements at new leased facilities,
sales and marketing expenses, including advertising, totaled  $7.4 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 $25.0 million.

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

Factors That May Affect Results

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

We incurred net losses in 1999, 2000 and the three months ended March 31,
2001 and expect continuing losses at least through 2001.

As of March 31, 2001, we had an accumulated deficit of approximately $108.2
million. We incurred net losses of approximately $10.7 million for the three
months ended March 31, 2001 and $80.4 million for the year ended December 31,
2000. Our net losses were approximately 72% of revenue for the three months
ended March 31, 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.






                                       17

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.


                                       18

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

Our customers do not have long-term obligations to purchase services from us.
In 1999, our subscription agreements generally had an initial term of 12
months. Beginning in 2000, most of our subscription agreements had an initial
term of three months. Our contracts can be terminated at any time after their
initial term. Over 95% of our customers have agreements with initial terms of
three to 12 months. Since we began selling our services, approximately 6% of
our customers have cancelled their agreements. In the first quarter of 2001,
over 98% of the contracts entered into the previous quarter were renewed. Our
customers may choose not to continue to use our services, and we may not
obtain a sufficient number of additional customers to compensate for any
customers we may lose. The failure of existing customers to continue to use
our services or our failure to obtain additional customers would harm our
business and operating results.

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

To date, we have generated more than 90% of our revenue from direct sales to
customers to meeting-enable their websites. We have entered into distribution
agreements with over 190 distribution partners. For the three months ended
March 31, 2001, we have generated less than 10% of our revenue from our
distribution partners, which revenue consisted of initial set-up fees,
commitment payments, and service fees. The payments received from our
distribution partners have mostly been recorded as deferred revenue because
we defer revenue related to payments for initial set-up fees received at the
beginning of the relationship and record revenue from subscription services
over the course of the service period as the distribution partner resells our
services. We also generally do not record commitment fees as revenue until
the commitment fee is fully earned and paid. We cannot anticipate the amount
of revenue we will derive from these relationships in the future. Our
distribution agreements are typically for one-year terms and are
automatically renewed unless either party terminates the agreement by written
notice. Under these agreements, we host and maintain a co-branded site
offering the services and the distribution partner provides a link to the co-
branded site from its website. Under these agreements, when WebEx collects
from the end user customers, WebEx pays a percentage of the proceeds
generated from the distribution partner's sale of WebEx services to the
distribution partner and the remainder is retained by WebEx. When the
distribution partner purchases and resells the services, the distribution
partner receives a discount off of WebEx's standard end user prices. The
revenue sharing and discount terms of these agreements vary depending on the
individual distribution partner's business. The amount of revenue we receive
depends on the minimum amount of services they commit to resell and the
volume of business generated under the agreement. Under our standard
distribution agreement, distribution partners are required to make minimum
resell commitments based on either a minimum number of concurrent user
subscriptions per month or a minimum dollar commitment. Under these
agreements, our distribution partners are obligated to offer our services

                                       19

with WebEx branding during the term of the agreement. Some of our
distribution partners can add our pay-per-use meeting services to their
existing websites. The pay-per-use service provides unlimited access to our
services to be paid on a per use basis without the need for signing a
subscription agreement. The end-user generally pays for this service through
use of a credit card. The credit card information is entered as part of the
on-line registration process for using the service. If an end-user uses our
services through a distribution partner's website, we pay the partner a
percentage of the revenue collected. For pay per use services, we usually
collect fees from the end-users and pay a percentage of the fees collected to
the distribution partner. We must continue to establish and extend these
distribution partnerships. Establishing these distribution relationships can
take as long as several months or more. It typically takes several months
before our distribution arrangements generate any significant revenue.

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

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

Our WebEx Meeting Center service integrates data, audio and video to allow
end-users to participate in meetings online. Our WebEx Meeting Center service
accounted for more than 90% of our revenue for the three months ended March
31, 2001. We anticipate that revenue from our WebEx Meeting Center service
will continue to constitute substantially all of our revenue for the
foreseeable future. Any decline in the demand for our WebEx Meeting Center
service, or its failure to achieve broad market acceptance, would seriously
harm our business.

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

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

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



                                       20

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

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

As of March 31, 2001 we had approximately $12.8 million in deferred equity-
based compensation. This expense will generally be amortized over a three
year period and will result in a decrease in earnings. Cumulative amounts of
deferred equity-based compensation expensed through March 31, 2000 and
through March 31, 2001 were $7.0 million and $33.2 million, respectively. We
expect the amount of equity-based compensation expense to decrease over time
as a result of the vesting of options granted prior to our initial public
offering. However, the amount of future equity-based compensation expense
related to the unvested portion of option grants to non-employees will
fluctuate with the stock price and accordingly the amount of future equity-
based compensation expense is difficult to predict. In fiscal 1999 and fiscal
2000, we granted stock options at exercise prices significantly lower than
the anticipated offering price, which has contributed to our equity-based
compensation expenses.

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

We believe that continued expansion of our marketing and brand recognition
efforts will be critical to achieve widespread acceptance of our interactive
communications services for websites. Although we have not yet determined the
specific amounts we plan to spend on marketing activities, we believe that
sales and marketing expense will increase in absolute dollars as we continue
to expand our sales force and build our brand. We intend to generally fund
these expenses from our existing cash balances, cash from operations and
proceeds from our initial public offering. Our marketing and advertising
campaigns or branding efforts may not be successful or consumers may not find
our marketing efforts compelling. In addition, our sales and marketing
expenses may not be offset by the expenses we incur in building our brand. If
our marketing efforts are not successful, our business and operating results
will be harmed.

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

We currently rely on two related companies located in China, WebEx Haifei and
WebEx Hong Zhou, to conduct quality assurance testing and software
development activities. These companies are owned by the spouse of Min Zhu,
one of our executive officers. We have contracts with these companies under

                                       21

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:




                                       22

- 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 are currently experiencing a period of rapid expansion in our personnel,
facilities, and infrastructure that has been placing a significant strain on
our resources. For example, our headcount increased from 208 employees at
March 31, 2000 to 451 at March 31, 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.

                                       23


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

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

Our future success will depend on our ability to attract, train, retain and
motivate highly skilled engineering, technical, managerial, sales and
marketing and customer support personnel. Competition for these personnel is
intense, especially in the San Francisco Bay Area. We hired over 325 people
during the last 12 months and, although we may not experience in the near
future a hiring rate as high as that experienced during the last 12 months,
we expect to increase our headcount over the next several months. We have had
difficulty hiring qualified personnel as quickly as we have desired. In
particular, we have had difficulty hiring a sufficient number of qualified
technical, development and support personnel. Our inability to hire,
integrate and retain qualified personnel in sufficient numbers could reduce
the quality of our services. If we fail to retain and recruit necessary
sales, marketing or other personnel, our ability to develop new services and
to provide a high level of customer service, and consequently our business,
could suffer. In addition, if we hire employees from our competitors, these
competitors may claim that we have engaged in unfair hiring practices. We
could incur substantial costs in defending ourselves against any of these
claims, regardless of their merits.

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

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

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


                                       24
We face potential liability for defamation, negligence, copyright, patent or
trademark infringement and other claims based on the nature and content of
the materials transmitted through our web-based communications services. Any
imposition of liability could harm our reputation and our business and
operating results, or could result in the imposition of criminal penalties.

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

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

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

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

We also rely on a combination of laws, such as copyright, trademark and trade
secret laws, and contractual restrictions, such as confidentiality agreements
and licenses, to establish and protect our technology. Our trademarks
include: ActiveTouch, WebEx (word and design), WebEx bifurcated ball design,
Meeting Center, WebEx Meeting Center, WebEx.com, Meeting-Enable Your Web Site
and We've Got To Start Meeting Like This. 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,




                                       25








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

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

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

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

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

We may acquire or invest in complementary businesses, technologies or
services.  We invested one million dollars in Tonbu, Inc., a distribution
partner, in January 2001. The future value of this investment is uncertain
and could result in a write-off of all or part of the investment.  As of
March 31, 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

                                       26


financings, may result in dilution to our stockholders. We may be unable to
complete any acquisitions or investments on commercially reasonable terms, if
at all. Even if completed, we may be unable to operate any acquired
businesses profitably or otherwise implement our growth strategy
successfully. If we are unable to integrate any newly acquired entities or
technologies effectively, our operating results could suffer. Future
acquisitions by us could also result in large and immediate write-offs,
incurrence of debt and contingent liabilities, or amortization of expenses
related to goodwill and other intangibles, any of which could harm our
operating results.

We must compete successfully in the interactive communications services
market.

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

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

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

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




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

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

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

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

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

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

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


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

PART II - OTHER INFORMATION

Item 2. Change in Securities and Use of Proceeds

(d)	Use of Proceeds from Sales of Registered Securities

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

Of the $56.4 million in aggregate gross proceeds raised by us in the ffering,
as of March 31, 2001:

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

-  approximately $1.7 million was paid by us in connection with offering
   expenses, printing fees, listing fees, filing fees, accounting fees and
   legal fees;

-  approximately $8 million was used for capital expenditures; and

-  the remainder of the funds were used to fund operations.




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

(a)  Exhibits:

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

*  Incorporated by reference from Exhibits 3.3 and 4.1 of Amendment No. 1 to
   the Registrant's Registration Statement on Form S-1 (File No. 333-33716)
   filed with the Securities and Exchange Commission on June 21, 2000.
** Incorporated by reference from Exhibit 3.2 of Registrant's Annual Report
   on Form 10-K (File No. 0-30849), for the fiscal year ended December 31,
   2000 filed with the Securities and Exchange Commission on April 2, 2001.

(b)  Reports on Form 8-K:

On March 12, 2001, WebEx filed a Form 8-K disclosing under Item 5 that
Registrant's 2001 Annual Meeting will be held on May 15, 2001 and specifying
the deadlines for filing proposals for such meeting.





























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







































                                       31


                                 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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