<Page>
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-Q

(MARK ONE)

<Table>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</Table>

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
                                       OR

<Table>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</Table>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 0-28436

                            ------------------------

                               OPEN MARKET, INC.

             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                  DELAWARE                                      04-3214536
        (State or other jurisdiction               (I.R.S. Employer Identification No.)
      of incorporation or organization)
</Table>

                                ONE WAYSIDE ROAD
                        BURLINGTON, MASSACHUSETTS 01803
              (Address of principal executive offices) (Zip Code)

                                 (781) 359-3000
              (Registrant's telephone number, including area code)

                            ------------------------

    Indicate by check mark whether the registrant (1) 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 the past 90 days. Yes /X/  No / /

    As of August 9, 2001, there were 47,213,794 shares of the Registrant's
Common Stock outstanding.

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<Page>
                               OPEN MARKET, INC.
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                PAGE
                                                              --------
<S>                                                           <C>
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements
  Consolidated Balance Sheets as of June 30, 2001 and
    December 31, 2000 (unaudited)...........................      3
  Consolidated Statements of Operations for the three and
    six months ended June 30, 2001 and 2000 (unaudited).....      4
  Consolidated Statements of Cash Flows for the six months
    ended June 30, 2001 and 2000 (unaudited)................      5
  Notes to Consolidated Financial Statements................      6
ITEM 2. Management's Discussion and Analysis of Financial
  Condition and Results of Operations.......................     15
ITEM 3. Quantitative and Qualitative Disclosures about
  Market Risk...............................................     32

PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings...................................     33
ITEM 2. Changes in Securities and Use of Proceeds...........     33
ITEM 3. Defaults Upon Senior Securities.....................     34
ITEM 4. Submission of Matters to a Vote of Security
  Holders...................................................     34
ITEM 5. Other Information...................................     35
ITEM 6. Exhibits and Reports on Form 8-K                         35

SIGNATURES..................................................     36

EXHIBIT INDEX...............................................     37
</Table>

                                       2
<Page>
                         PART I--FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               OPEN MARKET, INC.
                          CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                              JUNE 30,    DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
<S>                                                           <C>         <C>
                           ASSETS
Current Assets:
  Cash and cash equivalents.................................  $   6,756     $  20,717
  Marketable securities.....................................      2,511         9,713
  Accounts receivable, net of allowances of $5,525 and
    $5,896 at June 30, 2001 and December 31, 2000,
    respectively............................................     11,603        22,385
  Prepaid expenses and other current assets.................      4,390         4,481
                                                              ---------     ---------
    Total current assets....................................     25,260        57,296
                                                              ---------     ---------
Property and equipment, at cost:
  Computers and office equipment............................     17,224        17,643
  Leasehold improvements....................................      5,668         5,694
  Furniture & fixtures......................................      2,265         2,372
                                                              ---------     ---------
      Total property and equipment..........................     25,157        25,709
Less--accumulated depreciation and amortization.............     17,728        16,663
                                                              ---------     ---------
      Net property and equipment............................      7,429         9,046
Intangible assets...........................................         --         2,657
Other assets................................................      1,226         1,076
                                                              ---------     ---------
Total assets................................................  $  33,915     $  70,075
                                                              =========     =========
    LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK
                  AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Line of credit............................................  $   3,086     $  17,405
  Accounts payable..........................................      4,635         5,538
  Accrued expenses..........................................     11,288        18,463
  Deferred revenues.........................................      3,704         8,012
                                                              ---------     ---------
      Total current liabilities.............................     22,713        49,418
                                                              ---------     ---------
Redeemable convertible preferred stock
  Series E 6% cumulative convertible preferred stock, $0.10
    par value--
    Authorized--5 shares, issued and outstanding 5 and no
    shares at June 30, 2001 and December 31, 2000,
    respectively............................................      3,638            --
Stockholders' Equity:
  Preferred stock, $0.10 par value--
    Authorized--1,995 shares, issued and
    outstanding--None.......................................         --            --
  Common stock, $0.001 par value--
    Authorized--300,000 shares, issued and outstanding
    46,956 and 46,708 shares at June 30, 2001 and
    December 31, 2000, respectively.........................         47            47
  Additional paid-in capital................................    225,027       223,162
  Deferred compensation.....................................       (159)         (216)
  Accumulated deficit.......................................   (217,351)     (202,336)
                                                              ---------     ---------
      Total stockholders' equity............................      7,564        20,657
                                                              ---------     ---------
Total liabilities, redeemable convertible preferred stock
  and stockholders' equity..................................  $  33,915     $  70,075
                                                              =========     =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<Page>
                               OPEN MARKET, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                  (UNAUDITED)

<Table>
<Caption>
                                                         THREE MONTHS ENDED     SIX MONTHS ENDED
                                                              JUNE 30,              JUNE 30,
                                                         -------------------   -------------------
                                                           2001       2000       2001       2000
                                                         --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
Revenues:
  Product revenues.....................................  $ 7,498    $15,719    $ 13,797   $ 31,073
  Service revenues.....................................    5,343     10,798      12,058     20,267
                                                         -------    -------    --------   --------
    Total revenues.....................................   12,841     26,517      25,855     51,340
                                                         -------    -------    --------   --------
Cost of revenues:
  Product revenues.....................................      545      2,311       1,143      4,686
  Service revenues.....................................    4,005      8,972      10,290     16,687
                                                         -------    -------    --------   --------
    Total cost of revenues.............................    4,550     11,283      11,433     21,373
                                                         -------    -------    --------   --------
    Gross profit.......................................    8,291     15,234      14,422     29,967
                                                         -------    -------    --------   --------
Operating expenses:
  Selling and marketing................................    8,636     12,632      19,380     23,109
  Research and development.............................    3,913      6,422       9,062     12,458
  General and administrative...........................    1,953      1,809       4,009      4,129
  Allowance for bad debt...............................       54      1,148         698      1,199
  Amortization of intangible assets....................       --        766         450      1,531
                                                         -------    -------    --------   --------
    Total operating expenses...........................   14,556     22,777      33,599     42,426
                                                         -------    -------    --------   --------
    Loss from operations...............................   (6,265)    (7,543)    (19,177)   (12,459)
                                                         -------    -------    --------   --------
  Gain on sale of assets...............................       --         --       4,710         --
  Gain on investment...................................      504     12,321         504     12,321
  Interest income......................................      128        373         269        726
  Interest expense.....................................      (51)       (83)       (363)      (175)
  Other expense........................................     (202)       (61)       (378)      (119)
                                                         -------    -------    --------   --------
Income (loss) before provision for income taxes........   (5,886)     5,007     (14,435)       294
Provision for income taxes.............................      152        298         267        350
                                                         -------    -------    --------   --------
Net income (loss)......................................  $(6,038)   $ 4,709    $(14,702)  $    (56)
                                                         -------    -------    --------   --------
Accretion of preferred stock discount and dividends....      285         --         314         --
                                                         -------    -------    --------   --------
Net income (loss) per share applicable to common
  shareholders.........................................  $(6,323)   $ 4,709    $(15,016)  $    (56)
                                                         =======    =======    ========   ========
Basic net income (loss) per share--applicable to common
  shareholders.........................................  $ (0.13)   $  0.10    $  (0.32)  $  (0.00)
                                                         =======    =======    ========   ========
Weighted average number of common and common equivalent
  shares outstanding--basic (Note 2(e))................   46,939     45,528      46,885     44,965
                                                         =======    =======    ========   ========
Diluted net (loss) income per share--applicable to
  common shareholders..................................  $ (0.13)   $  0.10    $  (0.32)  $  (0.00)
                                                         =======    =======    ========   ========
Weighted average number of common and common equivalent
  shares outstanding--diluted (Note 2(e))..............   46,939     48,244      46,885     44,965
                                                         =======    =======    ========   ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4
<Page>
                               OPEN MARKET, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

                                  (UNAUDITED)

<Table>
<Caption>
                                                               SIX MONTHS ENDED
                                                                   JUNE 30,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Cash Flows from Operating Activities:
  Net loss..................................................  $(14,702)  $    (56)
  Adjustments to reconcile net loss to net cash used in
    operating activities--
    Depreciation and amortization...........................     1,790      2,018
    Gain on sale of Folio technology to NextPage............    (4,460)        --
    Gain on investment......................................      (504)   (12,613)
    Amortization of intangible assets.......................       450      1,531
    Stock based compensation expense........................        57         57
    Accretion of preferred stock discount and dividends.....       314         --
  Changes in assets and liabilities--
    Accounts receivable.....................................    10,782     (3,616)
    Prepaid expenses and other current assets...............        91       (910)
    Accounts payable........................................      (903)    (1,378)
    Accrued expenses........................................    (7,175)       131
    Deferred revenues.......................................    (4,308)     2,198
                                                              --------   --------
      Net cash used in operating activities.................   (18,568)   (12,638)
                                                              --------   --------
Cash Flows from Investing Activities:
  Purchases of property and equipment.......................      (171)    (1,627)
  Maturities of marketable securities, net..................     7,704      6,376
  Increase in other assets..................................      (150)       291
                                                              --------   --------
      Net cash provided by investing activities.............     7,383      5,040
                                                              --------   --------
Cash flow from Financing Activities:
  Net payments under lines of credit........................   (14,207)    (1,010)
  Proceeds from the issuance of redeemable convertible
    preferred stock, net of issuance costs..................     4,198         --
  Proceeds from the sale of Folio Technology to NextPage....     6,667         --
  Payments on long-term obligations                                 --        (75)
  Proceeds from employee stock purchase plan................       530        567
  Proceeds from exercise of stock options...................        36      6,865
                                                              --------   --------
      Net cash (used in) provided by financing activities...    (2,776)     6,347
                                                              --------   --------
Net increase (decrease) in cash and cash equivalents........   (13,961)    (1,251)
                                                              --------   --------
Cash and cash equivalents, beginning of period..............    20,717     19,258
                                                              --------   --------
Cash and cash equivalents, end of period....................  $  6,756   $ 18,007
                                                              ========   ========
Supplemental Disclosure of Cash Flow Information:
  Interest paid during the period...........................  $    364   $    171
                                                              ========   ========
  Taxes paid during the period..............................  $    298   $     74
                                                              ========   ========
Supplemental Disclosure of Non-cash Investing and Financing
  Activities:
  Warrants issued in connection with redeemable convertible
    preferred stock.........................................  $    909   $     --
                                                              ========   ========
  Warrants issued in connection with line of credit.........  $    112   $     --
                                                              ========   ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       5
<Page>
                               OPEN MARKET, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. BASIS OF PRESENTATION

    The consolidated financial statements of Open Market, Inc. (Open Market or
the Company) presented herein have been prepared pursuant to the rules of the
Securities and Exchange Commission for quarterly reports on Form 10-Q and do not
include all of the information and note disclosures required by generally
accepted accounting principles. These statements should be read in conjunction
with the consolidated financial statements and notes thereto for the year ended
December 31, 2000, included in the Company's Annual Report on Form 10-K/A filed
with the Securities and Exchange Commission on August 2, 2001.

    The consolidated financial statements and notes herein are unaudited but, in
the opinion of management, include all adjustments (consisting of normal,
recurring adjustments) necessary to present fairly the consolidated financial
position, results of our operations and cash flows and those of our
subsidiaries.

    The results of operations for the interim periods shown herein are not
necessarily indicative of the results to be expected for any future interim
period or for the entire year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The accompanying consolidated financial statements reflect the application
of the following significant accounting policies described in this note and
elsewhere in the accompanying noted to consolidated financial statements.

    (a)  PRINCIPLES OF CONSOLIDATION

    The accompanying consolidated financial statements include the accounts of
Open Market and our wholly owned subsidiaries for all periods presented. All
material inter-company accounts and transactions have been eliminated in
consolidation.

    (b)  REVENUE RECOGNITION

    We recognize revenue in accordance with Statement of Position (SOP) 97-2,
SOFTWARE REVENUE RECOGNITION, as amended by SOP 98-9, SOFTWARE REVENUE
RECOGNITION, WITH RESPECT TO CERTAIN ARRANGEMENTS. We generate revenues from two
sources: license fees for the use of our products and service revenues for
implementation, support, consulting and training related to our products.

    We generally execute separate contracts that govern the terms and conditions
of each software license and maintenance arrangement and each professional
services arrangement. These contracts may be an element in a multiple element
arrangement. Revenues under multiple element arrangements, which may include
several different software products or services sold together, are allocated to
each element based on the residual method in accordance with SOP 98-9.

    We use the residual method when fair value does not exist for one of the
delivered elements in an arrangement. Under the residual method, the fair value
of the undelivered elements is deferred and subsequently recognized. We have
established sufficient vendor-specific objective evidence for the value of
professional services, training and maintenance and support services based on
the price charged when these elements are sold separately. Accordingly, software
license revenue is recognized under the

                                       6
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
residual method in arrangements in which software is licensed with professional
services, training and maintenance and support services.

    Revenues from software license agreements are recognized upon delivery of
the software if there is evidence of an agreement, the payment is fixed or
determinable and collection is probable. If an acceptance period is required or
post-delivery obligations exist, revenues are recognized upon customer
acceptance and/or completion of the obligation. We enter into reseller
arrangements for certain products that typically provide for sublicense fees
payable to us based on a percentage of our list price. Royalty and sublicense
revenues from our reseller arrangements are recognized when earned, either on a
per-unit basis as reported to us by our licensees, or with regards to guaranteed
minimums, upon shipment of the master copy of all software to which the
guaranteed minimum sublicense fees relate, if there are no significant
post-delivery obligations. Revenues for post-contract customer support are
recognized ratably over the term of the support period, which is typically one
year. Service revenues, which include education, implementation and consulting
services, are recognized in the period services are provided, if customer
acceptance is not required, there is evidence of an agreement, the revenues are
fixed or determinable and collection is probable. Although the Company generally
does not provide its customers with contractual rights of return, it has issued
credits for returns and allowances to its customers in the past, and as a
result, the Company provides for estimated returns and allowances on products
and services in accordance with Statement of Financial Accounting Standards
(SFAS) No. 48, REVENUE RECOGNITION.

    Cost of product revenues consists of costs to distribute the product,
including the cost of the media on which it is delivered and royalty payments to
third-party vendors. Cost of service revenues consists primarily of consulting
and support personnel salaries and related costs.

    Deferred revenues represent cash received from customers for products and
services in advance of revenue recognition.

    (c)  CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES

    We account for investments under SFAS No. 115, ACCOUNTING FOR CERTAIN
INVESTMENTS IN DEBT AND EQUITY SECURITIES. Under SFAS No. 115, investments for
which we have positive intent and ability to hold to maturity, consisting of
cash equivalents and marketable securities, are reported at amortized cost,
which approximates fair market value. Cash equivalents are highly liquid
investments with original maturities of less than three months. Marketable
securities are investment-grade securities with original maturities of greater
than three months. The average maturity of our marketable securities was
approximately one month and two months at June 30, 2001 and December 31, 2000,
respectively. To date, we have not recorded any realized gains or losses.

    (d)  TRANSLATION OF FOREIGN CURRENCIES

    The accounts of our foreign subsidiaries are translated in accordance with
SFAS No. 52, FOREIGN CURRENCY TRANSLATION. In translating the accounts of the
foreign subsidiaries into U.S. dollars, current assets and liabilities are
translated at the rate of exchange in effect at year-end, while non-monetary
assets and stockholders' equity are translated at historical rates. Revenue and
expense accounts are translated using the weighted-average rate in effect during
the year. Foreign currency translation and

                                       7
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
transaction gains or losses for the foreign subsidiaries are included in the
accompanying consolidated statements of operations since the functional currency
of these subsidiaries is the U.S. dollar. We had accounts receivable of
approximately $2,958 and $2,021 denominated in foreign currencies as of
June 30, 2001 and December 31, 2000, respectively. We mark these receivables to
market and record a gain or loss, which is a component of other income/expense
in the consolidated statements of operations. To date we have not incurred a
significant foreign exchange loss on our foreign accounts receivable.

    (e)  NET INCOME (LOSS) PER SHARE

    The Company applies SFAS No. 128 EARNINGS PER SHARE. SFAS No. 128
establishes standards for computing and presenting earnings per share and
applies to entities with publicly held common stock or potential common stock.
Basic net loss per share is calculated by dividing net loss by the weighted
average number of common shares outstanding. For the three months ended
June 30, 2001 and 2000, basic outstanding shares were 46,939 and 45,528,
respectively, and diluted outstanding shares were 46,939 and 48,244,
respectively. Diluted net loss per share for the three months ended June 30,
2000 includes the effect of dilutive stock options representing 2,716 shares of
Company common stock. Diluted net loss per share for the three months ended
June 30, 2001 and 2000, and for the six months ended June 30, 2000 is the same
as basic net loss per share, as the inclusion of potential common stock would be
anti-dilutive.

    (f)  COMPREHENSIVE INCOME (LOSS)

    SFAS No. 130, REPORTING COMPREHENSIVE INCOME, requires disclosure of all
components of comprehensive income (loss) on an annual and interim basis.
Comprehensive income (loss) is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. The changes in equity included in the Company's
comprehensive income (loss) comprise the reported net income (loss) for all
periods presented and unrealized gains on investments. The unrealized gain on
investment is a result of the conversion of 291,667 shares of SightPath, Inc.
preferred stock (formerly known as Clearview Technologies) to 208,259 shares of
Cisco Systems, Inc. common stock on May 16, 2000.

<Table>
<Caption>
                                                                THREE MONTHS        SIX MONTHS ENDED
                                                               ENDED JUNE 30,           JUNE 30,
                                                             -------------------   -------------------
                                                               2001       2000       2001       2000
                                                             --------   --------   --------   --------
<S>                                                          <C>        <C>        <C>        <C>
Net income (loss)..........................................  $(6,038)    $4,709    $(14,702)    $(56)
Other comprehensive income (loss):
  Unrealized gain on investments...........................       --        625          --      625
                                                             -------     ------    --------     ----
Total comprehensive income (loss)..........................  $(6,038)    $5,334    $(14,702)    $569
                                                             =======     ======    ========     ====
</Table>

    (g)  DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND SIGNIFICANT CUSTOMERS

    We apply SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND
RELATED INFORMATION which establishes standards for reporting information
regarding operating segments in annual financial statements and requires
selected information for those segments to be presented in interim financial

                                       8
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
reports issued to stockholders. SFAS No. 131 also establishes standards for
related disclosures about products and services and geographic areas. Operating
segments are identified as components of an enterprise about which separate
discrete financial information is available for evaluation by the chief
operating decision maker, or decision making group, in making decisions on how
to allocate resources and assess performance. Our chief decision maker, as
defined under SFAS No. 131, is a combination of the Chief Executive Officer and
the Chief Financial Officer.

    We report our revenues according to three operating segments: Content-driven
eBusiness solutions, Transact/ShopSite and other revenue. Our Content-driven
eBusiness revenues include license fees and service revenues from our Content
Server suite of integrated products. Our Transact/ShopSite revenues include
license fees and service revenues from our Transact and ShopSite products. On
June 29, 2001, we sold the ShopSite product line, therefore we will not receive
any future revenues related to the ShopSite product line. The other revenues
primarily relate to the royalties received from NextPage and from licensing of
patents.

<Table>
<Caption>
                                                        THREE MONTHS ENDED     SIX MONTHS ENDED
                                                             JUNE 30,              JUNE 30,
                                                        -------------------   -------------------
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
REVENUES:
Content-driven eBusiness solutions product revenues...  $ 6,148    $ 8,714    $10,727    $16,368
Transact/ShopSite product revenues....................    1,350      5,837      1,403     12,398
Other product revenues................................       --      1,168      1,667      2,307
                                                        -------    -------    -------    -------
    Total product revenues............................    7,498     15,719     13,797     31,073
                                                        -------    -------    -------    -------

Content-driven eBusiness solutions service revenues...    2,813      3,394      6,396      4,485
Transact/ShopSite service revenues....................    2,530      7,257      5,654     15,437
Other service revenues................................       --        147          8        345
                                                        -------    -------    -------    -------
    Total service revenues............................    5,343     10,798     12,058     20,267
                                                        -------    -------    -------    -------
    Total revenues....................................  $12,841    $26,517    $25,855    $51,340
                                                        =======    =======    =======    =======
</Table>

                                       9
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

<Table>
<Caption>
                                                        THREE MONTHS ENDED     SIX MONTHS ENDED
                                                             JUNE 30,              JUNE 30,
                                                        -------------------   -------------------
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
COST OF REVENUES:
Cost of Content-driven eBusiness solutions product
  revenues............................................  $   532    $   974    $   940    $ 2,006
Cost of Transact/ShopSite product revenues............       13      1,220        203      2,564
Cost of other product revenues........................       --        117         --        116
                                                        -------    -------    -------    -------
    Total cost of product revenues....................      545      2,311      1,143      4,686
                                                        -------    -------    -------    -------

Cost of Content-driven eBusiness solutions service
  revenues............................................    2,109      2,820      5,463      4,475
Cost of Transact/ShopSite service revenues............    1,896      6,030      4,820     11,932
Cost of other service revenues........................       --        122          7        280
                                                        -------    -------    -------    -------
    Total cost of service revenues....................    4,005      8,972     10,290     16,687
                                                        -------    -------    -------    -------
    Total cost of revenues............................  $ 4,550    $11,283    $11,433    $21,373
                                                        =======    =======    =======    =======
</Table>

<Table>
<Caption>
                                                        THREE MONTHS ENDED     SIX MONTHS ENDED
                                                             JUNE 30,              JUNE 30,
                                                        -------------------   -------------------
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
GROSS PROFIT:
Gross profit from Content-driven eBusiness solutions
  product revenues....................................  $ 5,616    $ 7,740    $ 9,787    $14,362
Gross profit from Transact/ShopSite product
  revenues............................................    1,337      4,617      1,200      9,834
Gross profit from other product revenues..............       --      1,051      1,667      2,191
                                                        -------    -------    -------    -------
    Total gross profit from product revenues..........    6,953     13,408     12,654     26,387
                                                        -------    -------    -------    -------

Gross profit from Content-driven eBusiness solutions
  service revenues....................................      704        574        933         10
Gross profit from Transact/ShopSite service
  revenues............................................      634      1,227        834      3,505
Gross profit from other service revenues..............       --         25          1         65
                                                        -------    -------    -------    -------
    Total gross profit from service revenues..........    1,338      1,826      1,768      3,580
                                                        -------    -------    -------    -------
    Total gross profit from revenues..................  $ 8,291    $15,234    $14,422    $29,967
                                                        =======    =======    =======    =======
</Table>

                                       10
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Revenues from geographic sources in total and as a percentage of total
revenues for the three and six months ended June 30, 2001 and 2000:

<Table>
<Caption>
                                      THREE MONTHS ENDED JUNE 30,                          SIX MONTHS ENDED JUNE 30,
                             ---------------------------------------------       ---------------------------------------------
                                    2001                      2000                      2001                      2000
                             -------------------       -------------------       -------------------       -------------------
<S>                          <C>        <C>            <C>        <C>            <C>        <C>            <C>        <C>
North America..............  $ 4,452       35%         $15,605       59%         $10,523       41%         $31,140       61%
Europe.....................    2,534       20%           2,699       10%           4,939       19%           5,432       10%
UK.........................    1,398       11%           1,947        7%           3,278       13%           4,081        8%
Italy......................    1,510       12%           1,998        8%           2,600       10%           3,121        6%
Japan......................    1,132        9%             858        3%           1,130        4%           1,556        3%
Spain......................      636        5%             282        1%           1,459        6%             920        2%
Asia.......................      553        4%           1,509        6%           1,264        5%           2,379        5%
Other......................      626        4%           1,619        6%             662        2%           2,711        5%
                             -------      ---          -------      ---          -------      ---          -------      ---
                             $12,841      100%         $26,517      100%         $25,855      100%         $51,340      100%
                             =======      ===          =======      ===          =======      ===          =======      ===
</Table>

All of our product sales for the three and six months ended June 30, 2001 and
2000 were shipped from our facilities located in the United States. As of
June 30, 2001 and December 31, 2000 all of our assets relate to the
Content-driven eBusiness solutions and Transact segments. Substantially all of
our long-lived assets are located in the United States.

    (h)  RECLASSIFICATIONS

    We have reclassified certain prior year information to conform to the
current year's presentation.

3. SPECIAL CHARGES

    In March 2001, we sold 5,000 shares of our Series E 6% cumulative
convertible preferred stock (Series E preferred stock) to an affiliate of
Palladin Group for $5.0 million, together with warrants to purchase 917,297
shares of our common stock at an exercise price of $1.91 per share, subject to
certain adjustments. The warrants were valued using the Black Scholes Model in
accordance with EITF 00-27: APPLICATION OF EITF NO. 98-5 TO CERTAIN CONVERTIBLE
INSTRUMENTS. The fair value assigned to the warrants was approximately $1,111.
The factors used to calculate this fair value are as follows: (a) fair market
value of the common stock on transaction date ($1.344 per share), (b) exercise
price of the warrants ($1.908 per share), (c) term (5 years), (d) volatility
(149%), (e) annual rate of dividends (0%), and (f) discount rate (5.80%). This
warrant value of $1,111 plus a beneficial conversion feature of $312 and
issuance costs of $251, was recorded as a discount to the Series E preferred
stock and will be accreted over a 2 year period. The warrants expire on
March 20, 2006.

    The Series E preferred stock is convertible at the option of the holder into
shares of our common stock at an initial conversion price of $1.5262 per share,
subject to certain adjustments. The initial conversion price is subject to
adjustment on September 20, 2001, the six-month anniversary of the initial
issuance, provided that in no event shall the adjusted conversion price be less
than $0.8176 per share at the end of such six month period. In addition, the
conversion price is subject to adjustment in the event that we issue securities
at a price below the conversion price, with certain exceptions. The Company has
the right to redeem the Series E preferred stock after March 20, 2003 in cash or

                                       11
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

3. SPECIAL CHARGES (CONTINUED)
common stock of the Company. If the shares of Series E preferred stock are
redeemed for shares of common stock, the conversion price will be the lesser of
the initial conversion price, the six-month adjustment price or the then fair
market value of the common stock (determined pursuant to a formula). In no
event, however, will we be required to issue in excess of 9,369,113 shares of
common stock (subject to adjustment for stock splits, stock dividends or similar
adjustments to capitalization) upon conversion of the Series E preferred stock
and exercise of the related warrants. As a result, the Series E preferred stock
may be converted and the common stock purchase warrants may be exercised at a
price per share that may be less than the then current market price of our
common stock, which may cause substantial dilution to our existing common
stockholders.

    The shares of Series E preferred stock bear dividends at an annual rate of
6.0% of the price per share, payable semi-annually, through the issuance of
shares of our common stock or, at our option, in cash. Holders of Series E
preferred stock have the right, after March 20, 2003, to require us to redeem
the Series E preferred stock for cash or shares of our common stock, at our
option. Also, in the event of a "change in control" as defined in the terms of
the Series E preferred stock, if the Series E preferred stock is not converted
into shares of common stock by the holder, we are required to redeem the
Series E preferred stock for cash, at a redemption price equal to 115% of the
Series E preferred stock liquidation price. We are required to register, and now
have registered, the shares of common stock issuable upon conversion and upon
exercise of the warrants under the Securities Act of 1933 for public resale. On
April 26, 2001, we filed a Registration Statement of Form S-3 with the
Securities and Exchange Commission relating to the resale of these securities.
On August 3, 2001, the Securities and Exchange Commission declared the
Registration Statement effective.

4. SALE OF FOLIO TECHNOLOGY TO NEXTPAGE, INC.

    On March 23, 2001, we entered into an Asset Purchase Agreement with
NextPage, Inc., pursuant to which we sold certain technology (the Folio
technology) to NextPage for $6,667 in cash. Our Board of Directors determined
that the purchase price represented fair and reasonable consideration for these
assets. We recorded a one-time gain of $4,460 in the first quarter of 2001 in
connection with the sale, which represented the $6,667 purchase price, less
$2,207 of intangible assets which existed at the date of the sale.

5. LINE OF CREDIT

    In February 2001, we entered into a secured credit facility arrangement with
Silicon Valley Bank. This facility provided up to $12,000 in financing in the
form of a demand line of credit. Borrowings under this line are limited to
between 60% and 80% of eligible domestic accounts receivable and 90% of eligible
foreign accounts receivable, as defined in the facility, and bear interest at
the prime lending rate plus 2%. The line was collateralized by all assets, other
than intellectual property. We were required to comply with certain financial
covenants under this agreement, including a requirement that we (i) raise, on or
before March 15, 2001, additional capital of at least $10,000 through the sale
of subordinated debt, equity securities, non-core assets, certain stock
interests and/or the proceeds of lawsuit settlements and (ii) maintain a minimum
tangible net worth in an amount equal to (a) a base amount, ranging from $10,000
to $20,000 from the date of the agreement to December 31, 2001, and fixed at
$18,000 on or after December 31, 2001, plus (b) 85% of all consideration
received after the

                                       12
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

5. LINE OF CREDIT (CONTINUED)
date of the agreement from any sale of our equity securities and/or subordinated
debt, excluding amounts received in connection with the additional capital
requirement described above. Other restrictive covenants under this agreement
include restrictions on (i) our use of proceeds and (ii) our ability to sell the
company, make loans, declare dividends, increase compensation payments,
subordinate debt and encumber collateral. Effective March 30, 2001, we entered
into an amedment to the secured credit facility which, among other things,
extended the date by which we were required to raise the $10,000 of additional
capital discussed above from March 15, 2001 to March 31, 2001 and reduced the
minimum tangible net worth we are required to maintain to an amount equal to
(a) a base amount, ranging from $5,500 to $15,000 from the date of the agreement
to December 31, 2001, and fixed at $8,500 on or after December 31, 2001, plus
(b) 85% of all consideration received after the date of the original loan
agreement from any sale of our equity securities and/or subordinated debt,
excluding amounts received in connection with the additional capital requirement
described above. In addition, the amendment provided for a security interest in
our intellectual property. There were no borrowings under this line of credit at
June 30, 2001.

    At June 29, 2001, we entered into an accounts receivable purchase agreement
with Silicon Valley Bank, which provided up to $3,200 in financing in the form
of a line of credit. Borrowings under this line were limited to 80% of certain
accounts receivables, as defined, and bear interest at the rate of 1.75% per
month. Our borrowing under this facility was $3,200 at June 30, 2001.

6. RESTRUCTURING CHARGES

    (a)  Restructuring Charges

    (i) In April 2001, we implemented a restructuring plan to reduce expenses by
streamlining our workforce and realigning resources across business segments to
support the customer base of each segment. We terminated 57 employees and 40
contractors across the following functions: services (40), research and
development (14), marketing (6), general and administrative (18) and sales
(19) resulting in a restructuring severance cost of approximately $532. Of the
$532 cost, we paid approximately $396 during the second quarter of 2001 and we
expect to pay the balance of $136 by December 31, 2001.

<Table>
<Caption>
                    RESTRUCTURING COSTS                        AMOUNT
                    -------------------                       --------
<S>                                                           <C>
Employee severance, benefits and related costs..............    $532
                                                                ----
Cash paid during the second quarter of 2001.................     396
                                                                ----
Accrued restructuring at June 30, 2001......................    $136
                                                                ----
</Table>

    (ii) In the fourth quarter of 2000, we implemented a restructuring plan to
reduce expenses and align investments with new strategies designed for future
profitability and long-term revenue growth. The major component of the
restructuring charge related to the termination of approximately 92 employees
and 90 outside consultants across the following functions: services (99),
research and development (49), marketing (10), general and administrative
(13) and sales (11). Other components of the restructuring charge included the
write-off of goodwill related to the ICentral acquisition, resulting from our
decision to divest our ShopSite product line, the accrual of a software contract
commitment that resulted from a change in product strategy and accrual of office
lease impairment costs due to the reduction in workforce. The total cash impact
of the restructuring amounted to approximately $3,693.

                                       13
<Page>
                               OPEN MARKET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6. RESTRUCTURING CHARGES (CONTINUED)
We paid approximately $836 in 2000 and $1,781 in the first six months of 2001.
During the second quarter we reversed approximately $532 of charges due to an
error in the calculation of certain severance costs. The remaining liability of
approximately $544 is expected to be paid by October 31, 2001. Following are the
significant components of the restructuring charge:

<Table>
<Caption>
                    RESTRUCTURING COSTS                        AMOUNT
------------------------------------------------------------  --------
<S>                                                           <C>
Employee severance, benefits and related costs..............   $2,894
ICentral goodwill write off.................................    3,255
Office lease................................................      299
Termination costs of certain contractual arrangements.......      500
                                                               ------
Total.......................................................   $6,948
                                                               ======
</Table>

    The following is a roll forward of the restructuring accrued for in the
fourth quarter of 2000:

<Table>
<S>                                                           <C>
Accrued restructuring December 31, 2000.....................   $2,857
Cash paid during the first six months.......................    1,781
Reversal of severance costs not payable.....................      532
                                                               ------
Accrued restructuring June 30, 2001.........................   $  544
                                                               ======
</Table>

7. CONTINGENCIES

CLASS ACTION SUIT

    Six putative class action suits were filed between June 14, 2000 and
August 10, 2000, against us and certain of our officers and directors in the
United States District Court for the District of Massachusetts. These actions,
each filed on behalf of an alleged class of our shareholders who purchased their
common stock between November 8, 1999 and April 18, 2000, allege violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. In particular, they allege, among other things, that
during the putative class period, the defendants sought to mislead the investing
public by overstating Open Market's prospects and the quality of its products.
The plaintiffs are seeking monetary damages and other appropriate relief. On
January 25, 2001, the court entered an order consolidating these actions into
one action. This consolidated case is entitled IN RE OPEN MARKET SECURITIES
LITIGATION, C.A. No. 00-CV-11162. On April 13, 2001, the plaintiffs filed a
consolidated class action complaint. The Company and the other defendants
believe they have meritorious defenses against this suit and intend to
vigorously defend this suit. On May 29, 2001, they filed a motion seeking
dismissal of all counts of the consolidated complaint. On August 3, 2001, the
plaintiffs filed a motion in opposition to the defendants motion to dismiss.

                                       14
<Page>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS

    YOU SHOULD READ THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS TOGETHER WITH THE CONSOLIDATED FINANCIAL STATEMENTS AND
THE RELATED NOTES INCLUDED ELSEWHERE IN THIS REPORT. THE FOLLOWING FINANCIAL
DATA IS PRESENTED IN THOUSANDS.

OVERVIEW

    Open Market is a provider of enterprise content management and delivery
application software. Our software solutions are designed to enable businesses
and other organizations to use the Internet to optimize interactions with their
site visitors, employees, customers and distribution channels, in order to
reduce costs, accelerate business processes, gain market share, establish new
revenue streams and compete in the new online economy. We believe that quality
interactions result from the reliable and timely exchange of compelling and
accurate information and a consistent series of quality interactions is the key
to building and sustaining business relationships.

    We build our software based on two core beliefs. First, information, or
content, is a strategic asset, and world-class organizations strive to excel at
managing crucial information. For these organizations, the Internet provides new
information management challenges and opportunities. Second, web applications
managing this crucial information must be reliable, scalable, flexible and open.
This puts new requirements on how eBusiness application software needs to be
developed and delivered.

    Companies use our software to build and operate captivating web sites, rich
product catalogs, self-service applications and web services for their
distribution channels, marketplaces and customers. Our products acquire content
from people and systems, manage that information through approval and workflow
processes, and then disseminate it in personalized delivery formats to trading
partners' systems and to a variety of presentation devices, including web
browsers, wireless devices, personal digital assistants and e-mail. These
eBusiness applications, which we call "Content-driven eBusiness solutions" are
designed to enable companies to reduce costs, strengthen customer loyalty and
establish new revenue streams.

    We recognize revenue in accordance with Statement of Position (SOP) 97-2,
SOFTWARE REVENUE RECOGNITION, as amended by SOP 98-9. We generate revenue from
two sources: license fees for the use of our products, and service revenues for
implementation, support, consulting and training related to our products.

    We recognize license fee revenues upon licensing and delivery of the
software, if there is persuasive evidence of an agreement, the fee is fixed or
determinable, and collectibility is probable. If the license is subject to
customer acceptance or significant post-delivery obligations exist, we defer the
revenue recognition of the license fee until customer acceptance has occurred or
the post-delivery obligations have been met. We have established sufficient
vendor specific objective evidence for the value of professional services,
training, and maintenance and support services based on the price charged when
these elements are sold separately. Accordingly, software license revenue is
recognized under the residual method in arrangements in which software is
licensed with professional services, training, and maintenance and support
services. Under the residual method, the fair value of the undelivered elements
is deferred and subsequently recognized as earned.

    We execute separate contracts that govern the terms and conditions of each
software license and maintenance arrangement and each professional service
arrangement. These contracts may be an element in a multiple element
arrangement. Revenues under multiple element arrangements, which may include
several different software products or services sold together, are allocated to
each element based on the residual method in accordance with the Statement of
Position 98-9, SOFTWARE REVENUE RECOGNITION, WITH RESPECT TO CERTAIN
ARRANGEMENTS. Although the Company generally does not provide its customers with
contractual rights of return, it has issued credits for returns and allowances
to its

                                       15
<Page>
customers in the past, and as a result, the Company provides for estimated
returns and allowances on products and services in accordance with SFAS No. 48,
REVENUE RECOGNITION.

    We also enter into reseller arrangements for certain of our products that
typically provide for sublicense fees payable to us based on a percentage of our
list price. We recognize these sublicense revenues from resellers when earned,
either on a per-unit basis or, for guaranteed minimums, upon shipment of the
master copy of all our software to which the guaranteed sublicense fee minimums
relate, if there are no significant post-delivery obligations and if all other
criteria of SOP 97-2 and SOP 98-9 are met.

    Our service revenues are derived from a wide variety of contracted services
for technical support, consulting and training related to our products. We
charge fees for maintenance and support based on a percentage, generally 16% to
22%, of the corresponding contract price, depending on the level of support, and
recognize these fees ratably over the life of the maintenance and support
contract. Our maintenance agreements provide for unspecified product upgrades
and enhancements and technical support in the form of telephone or on-site
assistance. These agreements are renewable at the election of the customer.
Accordingly, our maintenance and technical support revenues are typically a
function of new product licenses and the annual renewal of maintenance
agreements. We also generate revenues from professional services, which include
implementation and technical consulting, and from education services, including
on-site and online training services. We recognize revenues from professional
and education services as such services are performed.

    We report our revenues according to three operating segments: Content-driven
eBusiness solutions, Transact/ShopSite and other revenue. Our Content-driven
eBusiness solutions revenues include license fees and service revenues from our
Content Server family of integrated products. Our Transact/ShopSite revenues
include license fees and service revenues from our Transact and ShopSite
products. On June 29, 2001, we sold the ShopSite product line, therefore we will
not receive any future revenues related to the ShopSite product line. The other
revenues relate primarily to the royalties received from NextPage, as well as
patent licensing revenue.

    Our cost of product revenues consists of costs to distribute our products,
including the cost of the media on which our products are delivered, and royalty
payments to third-party vendors for technology that is incorporated into our
products. Our cost of service revenues consists primarily of the salaries and
related costs of our technical personnel.

    Software development costs that qualified to be capitalized were immaterial
in all periods. Accordingly, we have charged all such expenses to research and
development in the period incurred.

    Our customer base is diversified, with no single customer representing
greater than 10% of our total revenues for periods ended June 30, 2001 and 2000.

RESULTS OF OPERATIONS

REVENUES

<Table>
<Caption>
                             THREE MONTHS ENDED                     SIX MONTHS ENDED
                                  JUNE 30,                              JUNE 30,
                             -------------------   % CHANGE FROM   -------------------   % CHANGE FROM
                               2001       2000      PRIOR YEAR       2001       2000      PRIOR YEAR
                             --------   --------   -------------   --------   --------   -------------
<S>                          <C>        <C>        <C>             <C>        <C>        <C>
Content-driven eBusiness
  solutions product
  revenue..................    8,961    $12,108          (26)%     $17,123    $20,853         (18)%
Transact/ShopSite product
  revenue..................    3,880     13,094          (70)%       7,057     27,835         (75)%
Other product revenue......       --      1,315         (100)%       1,675      2,652         (37)%
                             -------    -------         ----       -------    -------         ---
Total product revenue......  $12,841    $26,517          (52)%     $25,855    $51,340         (50)%
                             =======    =======         ====       =======    =======         ===
</Table>

                                       16
<Page>
    For the three months ended June 30, 2001, total revenues decreased by
$13,676, or 52%, with product and services revenues decreasing by $8,221 and
$5,455, respectively, from the comparable prior year period. For the six months
ended June 30, 2001, total revenues decreased by $25,485, or 50%, with product
and services revenues decreasing by $17,276 and $8,209, respectively, from the
comparable prior year period.

PRODUCT REVENUES

<Table>
<Caption>
                             THREE MONTHS ENDED                     SIX MONTHS ENDED
                                  JUNE 30,                              JUNE 30,
                             -------------------   % CHANGE FROM   -------------------   % CHANGE FROM
                               2001       2000      PRIOR YEAR       2001       2000      PRIOR YEAR
                             --------   --------   -------------   --------   --------   -------------
<S>                          <C>        <C>        <C>             <C>        <C>        <C>
Content-driven eBusiness
  solutions product
  revenue..................   $6,148    $ 8,714          (29)%     $10,727    $16,368         (34)%
Transact/ShopSite product
  revenue..................    1,350      5,837          (77)%       1,403     12,398         (89)%
Other product revenue......       --      1,168         (100)%       1,667      2,307         (28)%
                              ------    -------         ----       -------    -------         ---
Total product revenue......   $7,498    $15,719          (52)%     $13,797    $31,073         (56)%
                              ======    =======         ====       =======    =======         ===
</Table>

    For the three months ended June 30, 2001, total product revenues decreased
$8,221, or 52%, from the same period of the prior year. Content-driven eBusiness
solutions product revenues for the three months ended June 30, 2001, decreased
$2,566, or 29%, principally due to a decline in North America IT spending as a
result of economic uncertainty. For the three months ended June 30, 2001,
Transact/ShopSite product revenue declined $4,487, or 77%, from the same period
of the prior year. The decline resulted principally from reduced market demand
for our heritage commerce products. Other product revenue decline $1,168 or 100%
for the three months ended June 30, 2001, resulting from the sale of the Folio
technology to NextPage in the first quarter of 2001 thereby ending the quarterly
royalty revenue of $1,167 from the NextPage master distribution agreement for
the Folio software products.

    For the six months ended June 30, 2001, total product revenues decreased
$17,276, or 56%, from the same period of the prior year. Content-driven
eBusiness solutions product revenues for the six months ended June 30, 2001,
decreased $5,641, or 34%. Although the number of transactions remained flat year
over year, the average transaction size declined primarily due to the reduced IT
spending experienced during the period. For the six months ended June 30, 2001,
Transact/ShopSite product revenue declined $10,995, or 89%, from the same period
of the prior year. As stated above, the decline was primarily a result of
reduced market demand for our heritage commerce products. Other product revenue
declined $640 or 28% for the six months ended June 30, 2001. The decline
resulted from the sale of the Folio technology to NextPage in the first quarter
of 2001, ending the quarterly royalty revenue of $1,167 from the NextPage master
distribution agreement for the Folio software products.

    Product revenues accounted for approximately 58% and 53% of total revenues
for the three and six months ended June 30, 2001, respectively, compared to 59%
and 61% for the three and six months ended June 30, 2000, respectively. We
expect that product revenues will continue to account for the majority of total
revenues for the foreseeable future.

                                       17
<Page>
SERVICE REVENUES

<Table>
<Caption>
                             THREE MONTHS ENDED                     SIX MONTHS ENDED
                                  JUNE 30,                              JUNE 30,
                             -------------------   % CHANGE FROM   -------------------   % CHANGE FROM
                               2001       2000      PRIOR YEAR       2001       2000      PRIOR YEAR
                             --------   --------   -------------   --------   --------   -------------
<S>                          <C>        <C>        <C>             <C>        <C>        <C>
Content-driven eBusiness
  solutions service
  revenue..................   $2,813    $ 3,394          (17)%     $ 6,396    $ 4,485          43%
Transact/ShopSite service
  revenue..................    2,530      7,257          (65)%       5,654     15,437         (63)%
Other service revenue......       --        147         (100)%           8        345         (98)%
                              ------    -------         ----       -------    -------         ---
Total service revenue......   $5,343    $10,798          (51)%     $12,058    $20,267         (41)%
                              ======    =======         ====       =======    =======         ===
</Table>

    For the three and six months ended June 30, 2001, total service revenues
decreased $5,455, or 51%, and $8,209, or 41%, respectively, as compared to the
same periods of the prior year. Content-driven eBusiness solutions service
revenue decreased $581, or 17%, and increased $1,911, or 43%, for the three and
six months ended June 30, 2001, respectively, from the comparable prior year
periods. The decrease of $581 for the three months ended June 30, 2001 was due
to a shift in our professional services, which are increasingly being performed
by our partners. This was offset by an increase in maintenance and support
revenues. The increase of $1,911 for the six months ended June 30, 2001 was a
result of an increase primarily in maintenance and support revenue for our
Content-driven eBusiness solutions which offset the decrease in professional
services for the six months. Transact/ShopSite service revenues decreased
$4,727, or 65%, and $9,783, or 63%, for the three and six months ended June 30,
2001, respectively, from the comparable prior year periods. This decline was due
primarily to a shift in our model as professional services for our customers are
increasingly performed by our partners. Also, maintenance and support revenues
decreased as a result of lower product sales for our Transact products. Other
service revenues for the three and six months ended June 30, 2001, declined
$147, or 100%, and $337, or 98%, respectively from the comparable prior year
periods. The decline in other service revenue was due to the elimination of
service revenue related to the Folio publishing segment. In March 2001, we sold
the Folio product line to NextPage and therefore we do not expect to derive any
future Folio service revenues.

    Service revenues accounted for 42% and 47% of total revenues for the three
and six months ended June 30, 2001, respectively, and 41% and 39% for the three
and six months ended June 30, 2000, respectively.

COST OF PRODUCT REVENUES

<Table>
<Caption>
                                                        THREE MONTHS ENDED     SIX MONTHS ENDED
                                                             JUNE 30,              JUNE 30,
                                                        -------------------   -------------------
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
Cost of Content-driven eBusiness application product
  revenues............................................    $532      $  974     $  940     $2,006
Cost of Transact/ShopSite product revenues............      13       1,220        203      2,564
Cost of other product revenues........................      --         117         --        116
Total cost of product revenues........................    $545      $2,311     $1,143     $4,686
Percentage of total product revenues..................       7%         15%         8%        15%
Product gross margin..................................      93%         85%        92%        85%
</Table>

    For the three and six months ended June 30, 2001, total cost of product
revenues decreased $1,766 and $3,543, respectively, from the comparable prior
year periods, primarily as a result of the decrease in licensing product
revenues. In addition, during the three and six months ended June 30, 2001 we
sold fewer third party software products, which resulted in a decrease in the
cost of product revenue and an increase in product gross margin when compared to
the same periods of the prior year.

                                       18
<Page>
COST OF SERVICE REVENUES

<Table>
<Caption>
                                                        THREE MONTHS ENDED     SIX MONTHS ENDED
                                                             JUNE 30,              JUNE 30,
                                                        -------------------   -------------------
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
Cost of Content-driven eBusiness application service
  revenues............................................   $2,109     $2,820    $ 5,463    $ 4,475
Cost of Transact/ShopSite service revenues............    1,896      6,030      4,820     11,932
Cost of other service revenues........................       --        122          7        280
Total cost of service revenues........................   $4,005     $8,972    $10,290    $16,687
Percentage of total service revenues..................       75%        83%        85%        82%
Service gross margin..................................       25%        17%        15%        18%
</Table>

    For the three months ended June 30, 2001, cost of service revenues decreased
$4,967 primarily as a result of a decrease of $2,834 in outside consulting
expenses as implementation services for our customers are increasingly performed
by our partners. In addition, we realized decreases in employee related expenses
of $1,569 as a result of the restructuring of operations in October 2000 and
April 2001. The increase in service margin of approximately 8% for the three
months ended June 30, 2001, as compared with June 30, 2000 also resulted from
the lower costs associated with our professional services as these services for
our customers are increasingly performed by our partners.

    For the six months ended June 30, 2001, cost of service revenues decreased
$6,397 from the comparable prior year period, primarily as a result of a
decrease of $4,867 in outside consulting expenses as implementation services for
our customers are increasingly performed by our partners. The decrease in
service margin of approximately 3% for the six months ended June 30, 2001 as
compared with the six months ended June 30, 2000 was due primarily to a
reduction in revenues for our professional services as these services for our
customers are increasingly performed by our partners.

OPERATING EXPENSES

<Table>
<Caption>
                             THREE MONTHS ENDED                     SIX MONTHS ENDED
                                  JUNE 30,                              JUNE 30,
                             -------------------   % CHANGE FROM   -------------------   % CHANGE FROM
                               2001       2000      PRIOR YEAR       2001       2000      PRIOR YEAR
                             --------   --------   -------------   --------   --------   -------------
<S>                          <C>        <C>        <C>             <C>        <C>        <C>
Selling and marketing......  $ 8,636    $12,632          (32)%     $19,380    $23,109         (16)%
Research and development...    3,913      6,422          (39)%       9,062     12,458         (27)%
General and
  administrative...........    1,953      1,809            8%        4,009      4,129          (3)%
Bad debt expense...........       54       1148          (95)%         698      1,199         (42)%
Amortization of
  intangibles..............       --        766         (100)%         450      1,531         (71)%
                             -------    -------         ----       -------    -------         ---
Total operating expenses...  $14,556    $22,777          (36)%     $33,599    $42,426         (21)%
                             =======    =======         ====       =======    =======         ===
</Table>

SELLING AND MARKETING

    Selling and marketing expenses consist primarily of the cost of sales and
marketing personnel and outside marketing consultants, as well as the costs
associated with marketing programs, industry tradeshows, sales seminars,
advertising, and product literature.

    For the three months ended June 30, 2001, selling and marketing expenses
decreased $3,996, or 32%, from the comparable prior year period. The decrease
was primarily due to decreases in employee-related expenses, recruiting fees,
and marketing and promotional efforts. For the three months ended June 30, 2001,
we realized decreases of $1,570 in employee related expenses over the same
period last year, which included a decrease of $903 for commission expenses
related to the decrease in revenues. Also, for the three months ended June 30,
2001, recruiting fees decreased $522, marketing programs, advertising and
tradeshows decreased $1,250 and travel expenses decreased $683 from the
comparable

                                       19
<Page>
prior year period as a result of a lower demand for hiring needs and cost
conservation efforts as we realigned our expenses with our revenue.

    For the six months ended June 30, 2001, selling and marketing expenses
decreased $3,729, or 16%, from the comparable prior year period. Similarly, for
the six months ended June 30, 2001, we realized a decrease of $1,648 in employee
related expenses, which included a decrease of $1,463 for commission expenses.
We also realized similar reductions in recruiting fees of $688, in marketing
programs, advertising and tradeshows of $780 and in travel expenses of $848.

RESEARCH AND DEVELOPMENT

    Research and development expenses consist primarily of the cost of research
and development personnel and independent contractors, certain licensed
technology and equipment and facilities costs related to such activities.

    For the three and six months ended June 30, 2001, research and development
expenses decreased $2,509, or 39%, and $3,396, or 27%, respectively, as compared
to the same periods of the prior year. For the three months ended June 30, 2001,
the decrease in headcount due to corporate restructuring in October, 2000 and
April 2001 resulted in decreases in employee related expenses of $1,342,
recruiting expense of $188 and consulting expense of $491. For the six months
ended June 30, 2001, we realized similar cost savings in employee related
expenses of $1,721, recruiting expense of $112 and consulting expense of $819.

GENERAL AND ADMINISTRATIVE

    General and administrative expenses consist primarily of the cost of
finance, management and administrative personnel and legal and other
professional fees.

    For the three and six months ended June 30, 2001, general and administrative
expenses increased $144 or 8% and decreased $120 or 3%, respectively as compared
to the same prior year periods. The increase for the three months was due mainly
to higher legal expense when compared to the three months ended June 30, 2000.

ALLOWANCE FOR BAD DEBT

    For the three and six months ended June 30, 2001, bad debt decreased $1,094
or 95% and $501 or 42% as compared to the same period of the prior year. Given
current collection experience and other factors affecting the determination of
required receivable reserves, we recorded an expense of $54 and $698 for the
three and six months ended June 30, 2001, respectively.

AMORTIZATION OF INTANGIBLES

    For the three and six months ended June 30, 2001, amortization of
intangibles decreased $766 or 100% and $1,081 or 71% as compared to the same
period of the prior year. The decrease was primarily due to fully amortized
assets of the ICentral acquisition at the end of fiscal 2000 and the write-off
of goodwill related to the Folio acquisition as result of the sale of the Folio
technology to NextPage in March 2001.

NON-OPERATING INCOME (EXPENSE)

    During the six months ended June 30, 2001, we recorded a gain on the sale of
assets of $4,710 as a net result of the sale of our Folio product line to
NextPage and the sale of a certain patent right for $250. On March 23, 2001, we
entered into an Asset Purchase Agreement with NextPage, Inc. pursuant to which
we sold certain technology, which we refer to as the Folio technology, to
NextPage for a total purchase price of $6,667 in cash. We recorded a one-time
gain of $4,460 in the first quarter of 2001 in

                                       20
<Page>
connection with the sale, which represents the $6,667 consideration, less $2,207
of intangible assets, which existed at the date of the sale.

    During the three and six months ended June 30, 2001, we recorded a gain on
investment of $504 from the sale of 23,140 shares of Cisco Systems common stock
at $21.76 on June 7, 2001. These shares were originally held in escrow upon the
conversion of shares from Sightpath to Cisco Systems. During the three and six
months ended June 30, 2000, we recorded a gain on investment of $12,321 and an
unrealized gain of $625 on the conversion of 291,667 shares of SightPath
preferred stock (formerly known as Clearview Technologies) to 208,259 shares of
Cisco Systems common stock on May 16, 2000.

    Interest income represents interest earned on cash, cash equivalents and
marketable securities. For the three and six months ended June 30, 2001,
interest income decreased $245 and $457, respectively, when compared to the
comparable prior year periods. The decrease was due to a decline in cash
equivalents and marketable securities.

    Interest expense relates to the interest charged on our lines of credit and
long-term obligations. For the three and six months ended June 30, 2001,
interest expense decreased $32 and increased $188, respectively, as compared to
the prior year periods. The decrease for the three months ended June 30, 2001
was due primarily to lower outstanding balances on the lines of credit. The
increase for the six months ended June 30, 2001 was attributed to fees of $295
related to the renewal of the lines of credit.

    Other income/expense primarily represents foreign currency translation gains
and losses.

PROVISION FOR INCOME TAXES

    We recorded a decrease in our provision for income taxes of $146 and $83 for
the three and six months ended June 30, 2001, respectively. Generally, this
provision relates to the amount of estimated taxes due in foreign jurisdictions
for our foreign operations and certain withholding taxes. We incurred losses for
U.S. tax purposes for all periods to date and, accordingly, there has been no
provision for U.S. income taxes. We believe that the provision for income taxes
will fluctuate in the future and will be dependent upon the geographical
locations of future sales and the associated withholding taxes in those
countries. The provision for income taxes will also fluctuate when we become
eligible for corporate income taxation in the United States.

LIQUIDITY AND CAPITAL RESOURCES

    Our operating activities used cash and cash equivalents of $18,568 and
$12,638 for the six months ended June 30, 2001 and 2000, respectively, to fund
our operations. For the six months ended June 30, 2001, our net loss increased
to $14,702 from $56 in the comparable prior year period. The increase in our net
loss was due primarily to the net gain of $12,071 on our investment in
SightPath, Inc. preferred stock in June 2000. Excluding this net gain from
investment, net loss for the six months ended June 30, 2000 was $12,127. The
increase in cash used in operating activities for the six months ended June 30,
2001 was due to decreases in accrued expenses of $7,175 and in deferred revenues
of $4,308 as well as the gain on the sale of Folio technology of $4,460 which
was offset by a reduction in accounts receivable of $10,782.

    Our investing activities provided cash and cash equivalents of $7,383 and
$5,040 for the six months ended June 30, 2001 and 2000, respectively. For the
six months ended June 30, 2001, the primary source of cash from investing
activities during these periods was $7,704, resulting from the sale of
marketable securities. In the comparable prior year period, the primary source
of cash from investing activities was $6,376 related to the sale of marketable
securities, which was partially offset by purchases of property and equipment of
$1,627.

    Our financing activities used cash and cash equivalents of $2,776 and
provided cash and cash equivalents of $6,347 for the six months ended June 30,
2001 and 2000, respectively. For the six months

                                       21
<Page>
ended June 30, 2001, cash and cash equivalents used in financing activities
consisted of $14,207, representing payments made under our lines of credit. This
was offset by the proceeds from the issuance of redeemable convertible preferred
stock of $4,198 and proceeds from the sale of Folio technology to NextPage of
$6,667. For the six months ended June 30, 2000, the primary source of cash from
financing activities was $7,432, resulting from the sale of common stock under
our stock option and stock purchase plans. This was partially offset by payments
made on our line of credit of $1,010.

    In February 2001, we entered into a secured credit facility arrangement with
Silicon Valley Bank. This facility provided up to $12,000 in financing in the
form of a demand line of credit. Borrowings under this line are limited to
between 60% and 80% of eligible domestic accounts receivable and 90% of eligible
foreign accounts receivable, as defined in the facility, and bear interest at
the prime lending rate plus 2%. The line was collateralized by all assets, other
than intellectual property. We were required to comply with certain financial
covenants under this agreement, including a requirement that we (i) raise, on or
before March 15, 2001, additional capital of at least $10,000 through the sale
of subordinated debt, equity securities, non-core assets, certain stock
interests and/or the proceeds of lawsuit settlements and (ii) maintain a minimum
tangible net worth in an amount equal to (a) a base amount, ranging from $10,000
to $20,000 from the date of the agreement to December 31, 2001, and fixed at
$18,000 on or after December 31, 2001, plus (b) 85% of all consideration
received after the date of the agreement from any sale of our equity securities
and/or subordinated debt, excluding amounts received in connection with the
additional capital requirement described above. Other restrictive covenants
under this agreement include restrictions on (i) our use of proceeds and
(ii) our ability to sell the company, make loans, declare dividends, increase
compensation payments, subordinate debt and encumber collateral. Effective
March 30, 2001, we entered into an amendment to the secured credit facility
which, among other things, extended the date by which we were required to raise
the $10,000 of additional capital discussed above from March 15, 2001 to
March 31, 2001 and reduced the minimum tangible net worth we are required to
maintain to an amount equal to (a) a base amount, ranging from $5,500 to $15,000
from the date of the agreement to December 31, 2001, and fixed at $8,500 on or
after December 31, 2001, plus (b) 85% of all consideration received after the
date of the original loan agreement from any sale of our equity securities
and/or subordinated debt, excluding amounts received in connection with the
additional capital requirement described above. In addition, the amendment
provided for a security interest in our intellectual property. There were no
borrowings under this line of credit at June 30, 2001.

    At June 29, 2001, we entered into an accounts receivable purchase agreement
with Silicon Valley Bank, which provided up to $3,200 in financing in the form
of a line of credit. Borrowings under this line were limited to 80% of certain
accounts receivables, as defined, and bear interest at the rate of 1.75% per
month. Our borrowing under this facility was $3,200 at June 30, 2001.

    At December 31, 2000, we had net operating loss carryforwards for income tax
purposes of approximately $169,000. These losses are available to reduce federal
and state taxable income, if any, in future years. These losses are subject to
review and possible adjustment by the Internal Revenue Service and may be
limited in the event of certain cumulative changes in ownership interests of
significant shareholders over a three-year period that are in excess of 50%.
While we believe that we have experienced a change in ownership in excess of
50%, we do not believe that this change in ownership will significantly impact
our ability to use our net operating loss carryforwards.

    In March 2001, we issued 5,000 shares of Series E preferred stock for gross
proceeds of approximately $5,000 to Halifax Fund, LP, a fund managed by the
Palladin Group, and sold our Folio technology to NextPage, Inc. for $6,667.

    In May 2001, we entered into an agreement with Theddingworth International
Limited to provide us with up to $40 million in private equity funding. Our
ability to access these funds is subject to certain conditions, including filing
a registration statement with the Securities and Exchange

                                       22
<Page>
Commission relating to the registration of the sale of these shares to
Theddingworth and having the registration statement declared effective by the
Securities and Exchange Commission, neither of which condition has been met as
of August 14, 2001. In addition, amounts available are limited by the trading
volume of our common stock and continued trading of our common stock on the
Nasdaq National Market, American Stock Exchange or the Nasdaq Small Cap Market.
In June 2001, we entered into a new accounts receivable purchase agreement with
Silicon Valley Bank and borrowed $3.2 million under that agreement. Based on our
current revised operating plan, projected revenues and expenditures, and the
belief we can generate additional cash via asset sales and debt or equity
financings (including under our agreement with Theddingworth), we believe that
sufficient capacity is or will become available to fund our operations, debt
service and capital expenditures through December 31, 2001. There can be no
assurance, however, that our actual needs for capital will not exceed available
funds or that we can timely access funds under our private equity financing
agreement with Theddingworth, or at all. Also, we are currently unable to access
funds under a pre-existing $12 million credit facility with Silicon Valley Bank
because we are currently not in compliance with certain covenants under that
facility. Further, we expect we will need to raise additional funds in order to
operate beyond December 31, 2001. We are currently exploring various
alternatives with respect to our business, including strategic business
combinations, dispositions of assets, and significant financings. There can be
no assurance that we will be successful in identifying or completing any such
transactions, or that any such transactions or financings can be completed on
favorable terms or at all. Any such financing transaction could result in
substantial dilution to our existing stockholders. If we are unable to
successfully complete a strategic business combination or are unable to obtain
significant additional funding, we will be required to significantly curtail or
modify our operations.

EURO CURRENCY

    On January 1, 1999, certain member countries of the European Union (EU)
established fixed conversion rates between their existing currencies and the
EU's common currency, the Euro. The former currencies of the participating
countries are scheduled to remain legal tender as denominations of the Euro
until January 1, 2002, when the Euro will be adopted as the sole legal currency.
We continue to assess the impact that the conversion to the Euro will have on
our European operations. We are evaluating the potential impact in several areas
of our business, including the ability of our information systems to handle
Euro-denominated transactions and the impact on exchange costs and currency
exchange rate risks. We are also evaluating the impact that cross-border price
transparencies, which may affect the ability to price products differently in
various countries, will have on our gross margin. Although we are still in the
assessment phase, the conversion to the Euro is not expected to have a material
impact on our operations or financial position.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

INTRODUCTION

    This Quarterly Report contains certain forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, the words "believes", "anticipates", "plans",
"expects", and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause our actual
results to differ materially from those indicated by forward-looking statements
made in this Quarterly Report and presented elsewhere by management from time to
time. Some of the important risks and uncertainties which may cause our
operating results to differ materially or adversely are discussed below.

                                       23
<Page>
WE HAVE A HISTORY OF SIGNIFICANT LOSSES AND THESE LOSSES MAY CONTINUE IN THE
FUTURE WHICH COULD CAUSE THE MARKET PRICE OF OUR COMMON STOCK TO DECLINE.

    We have experienced operating losses in each quarterly and annual period
since our inception and these operating losses may continue in the future. We
incurred net losses of $37.0 million for the year ended December 31, 1998,
$19.8 million for the year ended December 31, 1999, and $37.8 million for the
year ended December 31, 2000. As of June 30, 2001, our accumulated deficit was
$217.4 million. We expect to continue to make investments to broaden the range
of our product offerings. These efforts will require capital expenditures, a
substantial portion of which we will make long before any corresponding revenue
may be realized. We may never achieve profitability, and if we do achieve
profitability in any period, we may not be able to sustain or increase
profitability on a quarterly or annual basis.

    Because we continue to incur losses, we will be required to raise additional
capital in order to fund our operations, expand our business and increase our
revenues. We cannot assure you that we will be successful in raising additional
funds on terms, which are acceptable to us or at all, or in increasing our
revenues. In the event that we are unable to obtain additional cash infusions
when required, we expect that we will have to significantly curtail certain of
our operations, sell certain of our assets or otherwise reduce the breadth of
our operations, all of which could adversely affect our business and potential
future growth and prospect.

IF OUR FINANCIAL PERFORMANCE DOES NOT IMPROVE AS A RESULT OF RECENT
RESTRUCTURINGS, WE MAY NOT REALIZE EXPECTED BENEFITS FROM OUR COST SAVINGS
MEASURES.

    In October 2000 and April 2001, we restructured our operations to reduce
expenses by streamlining our workforce and realigning resources across business
segments to appropriately support each segment's customer base. In
October 2000, we terminated 92 employees and 90 outside consultants, and in
April 2001, we terminated an additional 57 employees and 40 contractors. In
addition, we transitioned our professional services organization to focus on
higher-margin design assurance services for partners. The implementation of
these restructurings has required significant time commitments for our senior
management. We may experience a decline in product and services revenues and a
loss of customers as a result of decreasing our headcount and changing the mix
of products and services to which we devote our development and marketing
efforts without realizing any benefits. We cannot provide assurance that our
financial performance will improve as a result of these cost-saving measures.

THE SUCCESS OF OUR BUSINESS DEPENDS, IN LARGE PART, ON OUR NEW CONTENT SERVER
ENTERPRISE EDITION EBUSINESS SOLUTIONS, WHICH HAVE BEEN RECENTLY INTRODUCED AND
MAY NOT BE WIDELY ADOPTED BY OUR CUSTOMERS.

    We expect to derive substantially all of our product license revenues in the
future from our newly announced CSEE software. Our future growth and
profitability will depend upon the successful release, introduction and customer
acceptance of this new suite of products and future enhancements to these
products. Any factors adversely affecting the pricing of, demand for or market
acceptance of our suite of CSEE software products, including competition or
technological change, could cause our revenues to decline and our business and
future operating results to suffer.

IF DEMAND FOR OUR CONTENT MANAGEMENT APPLICATIONS DOES NOT CONTINUE, OUR
REVENUES MAY NOT INCREASE OR MAY DECLINE AND OUR OPERATING RESULTS WILL BE
ADVERSELY AFFECTED.

    Because we have only been primarily focused on providing content management
and delivery solutions for a short time, we have a limited operating history
pursuing this business model. The revenue growth potential of this market for
content management is still unproven. As a result, our historical financial
statements may not be an accurate indicator of our future operating results. In

                                       24
<Page>
addition, we have limited insight into trends that may emerge and affect our new
line of business, and we cannot forecast our operating expenses based on our
historical results. Our future operating results depend upon the development and
growth of the market for Internet-based packaged software applications,
including content management and delivery applications. If the Internet content
management and delivery market fails to continue to develop or develops more
slowly than expected, our business and prospects will suffer.

IF OUR SOFTWARE CEASES TO BE COMPATIBLE WITH OR WE ARE UNABLE TO LICENSE
THIRD-PARTY TECHNOLOGY OR IF DEFECTS IN THIS TECHNOLOGY EXIST, OUR PRODUCT
SHIPMENTS COULD BE DELAYED.

    Our software requires specific servers and software to be in place before it
can be installed and operated. For example, platform components include servers
running on Sun Microsystems Solaris operating environment, or Microsoft Windows
NT, databases from Oracle, Sybase or Microsoft and Java application servers from
BEA, IBM or iPlanet. The licenses from these third parties may not continue to
be available to us on commercially reasonable terms, or at all or our software
may cease to be compatible with this technology. If we were to lose any of these
technology licenses or if our software ceased to be compatible with this
technology, we would have to cease selling our products that incorporate or rely
on this technology and expend substantial amounts of resources to redesign our
products using equivalent technology, if available. If we are forced to cease
selling and to redesign our products, our business and prospects would be
adversely affected.

IF WE FAIL TO MAINTAIN AND STRENGTHEN OUR RELATIONSHIPS WITH OUR SERVICE
PARTNERS, WE MAY NOT ACHIEVE EXPECTED REVENUE GROWTH.

    We have recently expanded our indirect sales channels through an enhanced
partner program and rely on our partners' skills and networks to integrate our
products with other technologies and to implement our products at customer
sites. If a significant number of potential systems integrators adopt a
different product or technology as part of their integrated solution instead of
our products, we may not achieve expected revenue growth. In addition, if we
fail to maintain relationships with these partners or build new relationships,
our ability to expand our customer base may be harmed. We also cannot be sure
that such service partners will be able to successfully support our products
within their overall solutions, and our revenues may vary depending on their
ability to offer such support.

IF WE DO NOT COMPETE EFFECTIVELY, PARTICULARLY AGAINST ESTABLISHED PARTICIPANTS
WITH GREATER FINANCIAL AND OTHER RESOURCES THAN OURS, WE WILL LOSE MARKET SHARE.

    The market for eBusiness content management and delivery applications is
relatively new, rapidly evolving and intensely competitive. If we fail to
compete successfully with current or future competitors, we may lose market
share. Our customers' requirements and the technology available to satisfy those
requirements continually change. We expect competition in this market to persist
and increase in the future. Our primary competition includes in-house
development efforts by prospective customers and other vendors of application
software or application development platforms and tools directed at interactive
commerce and financial services, such as Art Technology Group, BroadVision,
Documentum, Interwoven and Vignette.

    In addition, larger companies with much broader product offerings, such as
BEA, IBM, Microsoft and Oracle, may bundle their products to discourage users
from purchasing our products. Companies such as IBM, BEA and iPlanet also may
add content management functionality to their application servers or introduce
their own content management software. Some of our current and potential
competitors have longer operating histories, greater name recognition, larger
installed customer bases and significantly greater financial, technical and
marketing resources than we do. As a result, these competitors may be able to
develop and expand their product offerings more quickly, adapt more swiftly to
new or emerging technology and changes in customer demands, devote greater
resources to

                                       25
<Page>
the marketing and sales of their product, pursue acquisition and other
opportunities more readily and adapt more aggressive pricing policies. In
addition, competitors have established and, in the future, may establish
cooperative relationships among themselves or with third parties to market or
enhance their products. Accordingly, it is possible that new competitors or
alliances among competitors may emerge and rapidly acquire significant market
share. Competitive pressures may make it difficult for us to acquire and retain
customers and are likely to result in price reductions, reduced gross margins
and loss of market share.

IF WE DO NOT RESPOND EFFECTIVELY AND ON A TIMELY BASIS TO RAPID TECHNOLOGICAL
CHANGES AND EVOLVING INDUSTRY STANDARDS, OUR PRODUCTS MAY BECOME OBSOLETE, AND
WE WOULD PROBABLY LOSE EXISTING CUSTOMERS AND BE UNABLE TO ATTRACT NEW ONES.

    Internet markets are characterized by rapidly changing technologies,
evolving industry standards, frequent new product and service introductions and
changing customer demands. Our new product family, Content Server Enterprise
Edition, employs the J2EE technology architecture. We cannot assure you that
this architecture will be widely adopted, that we can continue to support J2EE
standards established by Sun from time to time or that the J2EE brand will
continue to be made available to us in the future. If J2EE support decreases or
we could not continue to use Java or Java related technologies, we may have to
modify our product line to run on other platforms. If we could not implement
modifications to our products on a timely basis, our revenues could decline.

    In addition, the introduction of new products or technologies could render
our product offerings obsolete, reduce the cost of competing products or
increase the number of products similar to those that we provide or plan to
provide. Our future success will depend on our ability to adapt to rapidly
changing technologies and to enhance existing solutions and develop and
introduce a variety of new solutions and services to address our customers'
changing demands. We may be required to make significant and ongoing investments
in future periods in order to remain competitive. Further, we may experience
difficulties that could delay or prevent the successful design, development,
introduction or marketing of our solutions and services or lengthen our sales
cycles. In addition, our new solutions or enhancements must meet the
requirements of our current and prospective customers and must achieve
significant market acceptance. Any material delays in introducing new solutions
and enhancements may cause customers to forego purchases of our solutions and
purchase those of our competitors. Our failure to successfully design, develop,
test and introduce new products and/or services, or the failure of our recently
introduced products or services to achieve market acceptance, could prevent us
from maintaining existing client relationships, gaining new clients or expanding
our markets. In such a case, we would not achieve our expected revenue growth.

IF WE ARE NOT SUCCESSFUL IN ATTRACTING AND RETAINING MANAGEMENT TEAM MEMBERS AND
OTHER HIGHLY QUALIFIED INDIVIDUALS IN THE INTERNET INDUSTRY WE MAY NOT BE ABLE
TO SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY.

    Our ability to establish and maintain a position of technology leadership in
the highly competitive eBusiness software market depends in large part upon our
ability to attract and retain highly qualified managerial, sales and technical
personnel. We have recently experienced the departure of several senior
executives and may experience the departure of executives in the future due to
competition for talent from start-ups and other companies. Our future success
also depends on our continuing to attract, retain and motivate highly skilled
employees. Competition for employees in our industry is intense. We may be
unable to retain our key employees or attract, assimilate or retain other highly
qualified employees in the future. We have from time to time in the past
experienced, and we expect to continue to experience in the future, difficulty
in hiring and retaining highly skilled employees with appropriate
qualifications. If our stock price continues to decline, we may face a difficult
and significant task of motivating key personnel to stay committed to us.

                                       26
<Page>
FLUCTUATIONS IN OUR QUARTERLY REVENUE AND OPERATING RESULTS MAY RESULT IN
REDUCED PROFITABILITY AND CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE.

    We have experienced significant fluctuations in our results of operations on
a quarterly and annual basis. We expect to continue experiencing significant
fluctuations in our future quarterly and annual results of operations due to a
variety of factors, many of which are outside our control, including:

    - the introduction of new products by us and our competitors;

    - the variability and length of sales cycles associated with our product
      offerings;

    - the market acceptance of, and demand for, our products;

    - the pace of development of electronic commerce conducted on the Internet;

    - customer order deferrals in anticipation of enhancements or new products
      offered by us or our competitors;

    - non-renewal of service agreements;

    - software defects and other product quality problems;

    - the mix of products and services we sell;

    - customer retention;

    - the ability to collect payments from our customers on a timely basis;

    - any changes in our pricing policies and/or those of our competitors;

    - changes in the level of operating expenses;

    - sales productivity; and

    - general economic conditions.

    In addition, our operating expenses are largely based on anticipated revenue
trends and a significant portion of our expenses, such as leased real estate
facilities, depreciation and personnel, is fixed in the short term. Accordingly,
our results of operations are particularly sensitive to fluctuations in
revenues. If our revenues fall below our expectations, we would probably not be
able to reduce our fixed or other expenses in sufficient time to respond to the
shortfall. If our operating results fall below the expectations of securities
analysts or investors in some future quarter or quarters, the market price of
our common stock is likely to decline.

IF WE ARE UNABLE TO MEET THE OPERATIONAL, LEGAL AND FINANCIAL CHALLENGES THAT WE
WILL ENCOUNTER IN OUR INTERNATIONAL OPERATIONS, WE MAY NOT BE ABLE TO GROW OUR
BUSINESS.

    We currently derive a significant portion of our revenue from the sale of
our products outside the United States. In the quarter ended June 30, 2001, we
derived approximately 65% of our total revenues from sales outside North
America. We are increasingly subject to a number of challenges which
specifically relate to our international business activities. Our international
operations may not be successful if we are unable to meet and overcome these
challenges, which would limit the growth of our business. These challenges
include:

    - failure of local laws to provide the same degree of protection against
      infringement of our intellectual property;

    - protectionist laws and business practices that favor local competitors,
      which could slow our growth in international markets;

                                       27
<Page>
    - potentially longer sales cycles to sell products, which could slow our
      revenue growth from international sales; and

    - potentially longer accounts receivable payment cycles and difficulties in
      collecting accounts receivable.

BECAUSE WE EXCHANGE FOREIGN CURRENCY RECEIVED FROM INTERNATIONAL SALES INTO U.S.
DOLLARS AND ARE REQUIRED TO MAKE FOREIGN CURRENCY PAYMENTS, WE MAY INCUR LOSSES
DUE TO FLUCTUATIONS IN FOREIGN CURRENCY TRANSLATIONS.

    We recognize foreign currency gains and losses arising from our operations
in the period incurred. As a result, currency fluctuations between the U.S.
dollar and the currencies in which we do business will cause foreign currency
translation gains and losses, which may cause fluctuations in our future
operating results. We do not currently engage in foreign exchange hedging
transactions to manage our foreign currency exposure.

WE MAY NOT BE ABLE TO GENERATE ADDITIONAL REVENUE FROM OUR PLANNED INTERNATIONAL
EXPANSION TO OFFSET THE COSTS ASSOCIATED WITH ESTABLISHING AND MAINTAINING
FOREIGN OPERATIONS.

    A component of our growth strategy is to expand our presence in foreign
markets. It will be costly to establish international facilities and operations
and to promote the use of our products in international markets. Even if we are
able to successfully expand our international operations, we cannot be certain
that we will succeed in maintaining or expanding international market demand for
our products. Revenue from international activities may not offset the expense
of establishing and maintaining these foreign operations.

WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY RIGHTS ALLOWING COMPETITORS TO
ENTER OUR MARKETS AND REDUCE OUR MARKET SHARE.

    We regard our products, services and technology as proprietary. We attempt
to protect them through a combination of patents, copyrights, trademarks and
trade secret laws. We also generally enter into confidentiality agreements with
our employees, consultants and customers, and generally control access to and
distribution of our documentation and other proprietary information. These
methods may not be sufficient to protect our proprietary rights. We have no
patented technology that would preclude or inhibit competitors from entering our
market. Although we hold several U.S. patents asserting claims relating to
certain aspects or uses of electronic commerce software, we cannot be sure of
the degree of intellectual property protection those patents will provide.
Despite these precautions, it may be possible for a third party to copy or
otherwise misappropriate and use our products, services or technology without
authorization, particularly in foreign countries where the laws may not protect
our proprietary rights to the same extent as do the laws of the United States.
We also cannot assure you that third parties will not develop similar technology
independently.

WE MAY BE SUBJECT TO INFRINGEMENT CLAIMS THAT COULD SUBJECT US TO SIGNIFICANT
LIABILITY AND DIVERT THE TIME AND ATTENTION OF OUR SENIOR MANAGEMENT.

    We have resorted, and may continue to resort, to litigation in the future to
enforce our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of the proprietary rights of others. On
January 8, 2001, we filed a patent infringement lawsuit against Intershop
Communications, Inc. in the U.S. District Court for the District of Delaware. We
allege that Intershop's software products infringe upon three of our patents. We
are seeking injunctive relief and damages due to the infringement. On March 1,
2001, Intershop filed its answer denying infringement and asserting claims for a
declaratory judgement of invalidity of the patents and non-infringement. We can
provide no assurance as to the outcome of this litigation. There is a risk that
our patents can be declared invalid and unenforceable. Any conclusion of this
litigation in a manner adverse to us could

                                       28
<Page>
have a material adverse effect on our business. In addition, this litigation
could result in substantial costs and diversion of resources and could harm our
business.

    In addition to licensing technologies from third parties, we are developing
and acquiring additional proprietary intellectual property. Third parties may
try to claim our products or services infringe their intellectual property. We
expect that participants in our markets will be increasingly subject to
infringement claims. Any claim, whether meritorious or not, could be time
consuming, result in costly litigation and/or require us to enter into royalty
or licensing agreements. These royalty or licensing agreements might not be
available on terms acceptable to us or at all, in which case we would have to
cease selling, incorporating or using those products and services that
incorporate the challenged intellectual property and expend substantial amounts
of resources to redesign our products or services. If we are forced to enter
into royalty or licensing agreements or to redesign our products or services,
our business and prospects would suffer.

IF LIMITATIONS ON THE ONLINE COLLECTION OF PROFILE INFORMATION ARE IMPOSED, THE
UTILITY OF THE PERSONALIZATION FUNCTIONALITY OF OUR PRODUCTS WOULD BE LIMITED,
AND WE MAY NOT ATTRACT A SIGNIFICANT NUMBER OF NEW CUSTOMERS.

    One of the principal features of our products is the ability to develop and
maintain profiles of online users to assist business managers in personalizing
content and commercial offers to be displayed to specific online users. The
resistance of online users to providing personal data and any future laws and
regulations prohibiting use of personal data gathered online without express
consent or requiring businesses to notify their web site visitors of the
possible dissemination of their personal data could limit the utility of our
products. These types of laws or regulations could heighten privacy concerns by
requiring businesses to notify web site users that the data captured from them
online may be used by marketing entities to direct product messages to them.
While we are not aware of any laws or regulations of this type currently in
effect or in development in the United States, other countries and political
entities, including the European Union and its member states, have adopted legal
requirements imposing restrictions on the collection, use and processing of
personal data. It is possible that similar legal requirements could be adopted
in the United States. If the privacy concerns of consumers are not adequately
addressed, the effectiveness of our products could be impaired and we may not
attract new customers and the revenues they represent.

OUR PRODUCTS MAY CONTAIN DEFECTS, WHICH MAY PROVE COSTLY AND TIME CONSUMING FOR
US TO CORRECT.

    Sophisticated software products, such as those we develop and market, may
contain errors or failures that become apparent when we introduce the products
or when we provide an increased volume of services. We cannot assure you that
testing by us and our potential customers will detect all errors in our products
prior to licensing or sale. Correcting such errors may result in loss of
revenues, delay in market acceptance, diversion of development resources, damage
to our reputation or increased service and warranty costs, any of which would
adversely affect our business and our ability to market our products profitably.

EXISTING AND FUTURE EXPORT CONTROLS MAY DELAY THE INTRODUCTION OF NEW PRODUCTS
OR LIMIT OUR ABILITY TO DISTRIBUTE PRODUCTS OUTSIDE OF THE UNITED STATES.

    Due to the encryption technology contained in our products, our products are
subject to export controls within the United States. These export controls,
either in their current form or as may be subsequently enacted, may delay the
introduction of new products or limit our ability to distribute products outside
the United States. In addition, federal or state legislation or regulation may
further limit levels of encryption or authentication technology. Also, various
countries regulate the import of certain encryption technology and have adopted
laws relating to personal privacy issues that could limit our ability to
distribute products in those countries.

                                       29
<Page>
OUR BUSINESS MAY SUFFER IF THE INTERNET INFRASTRUCTURE IS UNABLE TO EFFECTIVELY
SUPPORT THE GROWTH IN DEMAND PLACED ON IT.

    Our success will depend, in large part, upon the maintenance of the Internet
infrastructure, such as reliable network backbones with the necessary speed,
data capacity and security, and the timely development of enabling products such
as high speed modems, for providing reliable Internet access and services and
improved content. We cannot assure you that the Internet infrastructure will
continue to effectively support the demands placed on it as the Internet
continues to experience increased numbers of users, frequency of use and
increased bandwidth requirements. Even if the necessary infrastructure or
technologies are developed, we may have to spend considerable amounts to adapt
our solutions accordingly. Furthermore, the Internet has experienced a variety
of outages and other delays due to damage to portions of its infrastructure.
These outages and delays could impact the Internet sites of customers using our
products and services.

THE IMPOSITION OF SALE AND OTHER TAXES ON PRODUCTS SOLD BY OUR CUSTOMERS OVER
THE INTERNET COULD HAVE A NEGATIVE EFFECT ON ONLINE COMMERCE AND, AS A RESULT,
ON DEMAND FOR OUR PRODUCT.

    The imposition of new sales or other taxes could limit the growth of
eBusiness generally and, as a result, the demand for our products. There is
recent federal legislation that limits the imposition of state and local taxes
on Internet-related sales. In 1998, the United States Congress passed the
Internet Tax Freedom Act, which places a three-year moratorium on state and
local taxes on Internet access, unless the tax was already imposed prior to
October 1, 1998, and discriminatory taxes on electronic commerce. There is a
possibility that Congress may not renew this legislation in 2001. If Congress
chooses not to renew this legislation, state and local governments would be free
to impose taxes on goods purchased over the Internet. In addition, one or more
foreign countries may seek to impose sales or other tax collection obligations
on out-of-jurisdiction companies that engage in electronic commerce. A
successful assertion by one or more foreign countries that companies engaged in
electronic business should collect sales or other taxes on sales of their
products over the Internet, even though not physically present in the foreign
country, could indirectly reduce demand for our products.

WE ARE PARTY TO SECURITIES CLASS ACTION LITIGATION WHICH MAY BE COSTLY TO DEFEND
AND THE OUTCOME OF WHICH IS UNCERTAIN AND MAY HARM OUR BUSINESS.

    We and several of our former and present officers and directors are named as
defendants in several class action complaints which have been filed on behalf of
certain of our stockholders who purchased securities between November 8, 1999
and April 18, 2000. These complaints allege violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated under
this Act. In particular, they allege, among other things, that during the
putative class period, the defendants sought to mislead the investing public by
overstating Open Market's prospects and the quality of its products. The
plaintiffs are seeking monetary damages and other appropriate relief. On
January 25, 2001, the court entered an order consolidating these actions into
one action. On April 13, 2001, the plaintiffs filed a consolidated class action
complaint. On May 29, 2001, we and the other defendants filed a motion seeking
dismissal of all counts of the consolidated complaint. On August 3, 2001, the
plaintiffs filed a motion in opposition to the defendant's motion to dismiss.

    We can provide no assurance as to the outcome of this litigation. Any
conclusion of this litigation in a manner adverse to us would have a material
adverse effect on our business, financial condition, and results of operations.
In addition, the cost to us of defending any litigation or other proceeding,
even if resolved in our favor, could be substantial. Such litigation could also
substantially divert the attention of our management and our resources in
general. Uncertainties resulting from the initiation and continuation of this
litigation or other proceedings could harm our ability to compete in the
marketplace. Because the price of our common stock has been, and may continue to
be, highly volatile,

                                       30
<Page>
we have no assurance that additional securities class action complaints will not
be filed against us in the future.

OUR STOCKHOLDERS MAY EXPERIENCE FURTHER DILUTION AND THE PRICE OF OUR COMMON
STOCK MAY DECLINE AS A RESULT OF OUR SERIES E PREFERRED STOCK FINANCING.

    In March 2001 we sold 5,000 shares of our Series E preferred stock for
$5.0 million, together with warrants to purchase 917,297 shares of our common
stock at an exercise price of $1.9078 per share, subject to certain adjustments,
to a fund managed by the Palladin Group. The warrants terminate on March 20,
2006.

    The Series E preferred stock is convertible at the option of the holder into
shares of our common stock at an initial conversion price of $1.5262 per share,
subject to adjustment,

    - on September 20, 2001, the six-month anniversary of the initial issuance,
      provided that in no event shall the adjusted conversion price be less than
      $0.8176 per share; and

    - under some circumstances in the event of redemption of the Series E
      preferred stock by Open Market on March 20, 2003.

    In no event will any such adjustment result in an increase of the conversion
price. In addition, the conversion price is subject to adjustment in the event
that we issue securities below the conversion price, with certain exceptions.

    The shares of Series E preferred stock bear dividends at an annual rate of
6.0% of the liquidation price, payable semi-annually, through the issuance of
shares of our common stock or, at our option, in cash. Holders of Series E
preferred stock have the right, after March 20, 2003, to require us to redeem
the Series E preferred stock for cash or shares of our common stock, at our
option. Also, in the event of a "change in control" as defined in the terms of
the Series E preferred stock, if the Series E preferred stock is not converted
into shares of common stock by the holder, we are required to redeem the
Series E preferred stock for cash, at a redemption equal to 115% of the
Series E preferred stock liquidation price. The Company has the right to redeem
the Series E preferred stock after March 20, 2003 in cash or common stock. If
the shares of Series E preferred stock are redeemed for shares of common stock,
the conversion price will be the lesser of the initial conversion price, the
six-month adjustment price or the then fair market value of the common stock
(determined pursuant to a formula). As a result, the Series E preferred stock
may be converted and the common stock purchase warrants may be exercised at a
price per share that may be less than the then current market price of our
common stock, which may cause substantial dilution to our existing common
stockholders. In no event, however, shall we be required to issue, upon the
conversion of the Series E preferred stock and the exercise of the warrants, in
excess of 9,369,113 shares of common stock (subject to adjustment for stock
splits, stock dividends and similar adjustments in capitalization) which
represents 19.99% of our outstanding common stock as of March 20, 2001.

    We are required to register, and now have registered, the shares of common
stock issuable upon conversion and upon exercise of the warrants under the
Securities Act of 1933 for public resale. On April 26, 2001, we filed a
Registration Statement of Form S-3 with the Securities and Exchange Commission
relating to the resale of these securities. On August 3, 2001, the Securities
and Exchange Commission declared the Registration Statement effective. Any sale
of shares of common stock upon conversion of the Series E preferred stock and
exercise of the warrants into the public market could cause a decline in the
trading price of our common stock.

                                       31
<Page>
OUR STOCKHOLDERS MAY EXPERIENCE FURTHER DILUTION AND THE PRICE OF OUR COMMON
STOCK MAY DECLINE IF WE SELL SHARES OF OUR COMMON STOCK UNDER OUR EQUITY LINE.

    On May 25, 2001, we entered into an agreement with Theddingworth
International Limited to provide Open Market with up to $40 million in private
equity funding. Pursuant to this agreement, we have the right, but not the
obligation, to raise up to $40 million through the issuance and sale of our
common stock to the investor pursuant to a series of draw downs over a period of
24 months. The draw downs are subject to the satisfaction of a number of
conditions, including the filing and effectiveness of a registration statement
with the Securities and Exchange Commission covering the resale of the shares
purchased under the agreement. Pricing for the shares issuable under the
agreement is based on the weighted average price of our common stock over a
period of time prescribed in the agreement. We will use the funds received from
sales of the common stock under the agreement for working capital and other
general corporate purposes. We cannot request a draw down which would result in
the issuance of an aggregate number of shares of common stock pursuant to the
agreement which exceeds 19.9% of the total number of shares of our common stock
outstanding on May 25, 2001 without obtaining stockholder approval of such
excess issuance.

    In connection with the agreement, we issued to Theddingworth a warrant to
purchase up to 350,000 shares of our common stock at an exercise price of $1.91
per share, subject to certain adjustments in the case of a stock split, stock
dividend or other similar transaction. The warrant terminates on May 25, 2006.

    The resale by Theddingworth of the common stock that it purchases from us
will increase the number of publicly traded shares, which could depress the
market price of our common stock. Moreover, as all the shares we sell to
Theddingworth will be available for immediate resale, the mere prospect of our
sales to it could depress the market price for our common stock. The shares of
our common stock issuable to Theddingworth under the equity line facility will
be sold at a 10% discount to the volume-weighted average daily price of our
common stock during the applicable drawdown period and the proceeds paid to us
upon each drawdown will be net of an escrow agent fee of $1,000. If we were to
require Theddingworth to purchase our common stock at a time when our stock
price is low, our existing common stockholders will experience substantial
dilution. The issuance of shares to Theddingworth will therefore dilute the
equity interest of existing stockholders and could have an adverse effect on the
market price of our common stock.

    The perceived risk of dilution may cause our stockholders to sell their
shares, which would contribute to a downward movement in the stock price of our
common stock. Moreover, the perceived risk of dilution and the resulting
downward pressure on our stock price could encourage Theddingworth to engage in
short sales of our common stock. By increasing the number of shares offered for
sale, material amounts of short selling could further contribute to progressive
price declines in our common stock.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    FOREIGN EXCHANGE HEDGING.  The accounts of our foreign subsidiaries are
translated in accordance with SFAS No. 52, FOREIGN CURRENCY TRANSLATION. In
translating the accounts of the foreign subsidiaries into U.S. dollars, assets
and liabilities are translated at the rate of exchange in effect at year-end,
while stockholders' equity is translated at historical rates. Revenue and
expense accounts are translated using the weighted-average exchange rate in
effect during the year. Foreign currency translation and transaction gains or
losses for our subsidiaries are included in the accompanying consolidated
statements of operations since the functional currency for our subsidiaries is
the U.S. dollar. We have not entered into hedges of our foreign currency
exposures.

    INVESTMENT PORTFOLIO.  We do not invest in derivative financial instruments.
Our investment policy permits only high credit quality investment vehicles, and
this policy also limits the amount of credit exposure of any one issue, issuer,
and type of investment. See "Note 2--Summary of Significant Accounting Policies"
in the accompanying Notes to Consolidated Financial Statements.

                                       32
<Page>
                           PART II--OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

    Six putative class action suits were filed between June 14, 2000 and
August 10, 2000, against us and certain of our officers and directors in the
United States District Court for the District of Massachusetts. These actions,
each filed on behalf of an alleged class of our shareholders who purchased our
common stock between November 18, 1999 and April 18, 2000, allege violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated under the Securities Exchange Act. In particular, they allege, among
other things, that during the putative class period, the defendants sought to
mislead the investing public by overstating Open Market's prospects and the
quality of its products. The plaintiffs are seeking monetary damages and other
appropriate relief. On January 25, 2001, the court entered an order
consolidating these actions into one action. This consolidated case is entitled
IN RE OPEN MARKET SECURITIES LITIGATION, C.A. No. 00-CV-11162. On April 13,
2001, the plaintiffs filed a consolidated class action complaint. The Company
and the other defendants believe they have meritorious defenses against this
suit and intend to vigorously defend this suit. On May 29, 2001, they filed a
motion seeking dismissal of all counts of the consolidated complaint. On
August 3, 2001, the plaintiffs filed a motion in opposition to the defendants
motion to dismiss.

    On January 8, 2001, we filed a patent infringement lawsuit against Intershop
Communications, Inc. in the U.S. District Court for the District of Delaware.
Our complaint alleges that Intershop's software products infringe upon three of
our patents. We are seeking injunctive relief and damages due to Intershop's
infringement. On March 1, 2001, Intershop filed its answer denying infringement
and asserting claims for a declaratory judgement of invalidity of the patents
and non-infringement.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

    In March 2001, we sold 5,000 shares of our Series E 6% cumulative
convertible preferred stock and warrants to purchase 917,297 shares of our
common stock at an exercise price of $1.9078 per share, subject to certain
adjustments, for aggregate cash consideration of $5.0 million, to Halifax Fund,
LP, a fund managed by the Palladin Group. The warrants are exercisable for a
period of five years. The Company's total expenses in connection with the
offering were $300, $200 of which was for brokers' commissions and $100 of which
was for other expenses paid to persons other than directors or officers of the
Company, persons owning more than 10 percent of any class of equity securities
of the Company, or affiliates of the Company. The Company's net proceeds from
the offering were $4,700. The Company intended to use these proceeds for working
capital. The Company invested, from time to time, the balance of such net
proceeds primarily in investment grade interest bearing instruments. As of
June 30, 2001, the Company had $9,267 of cash, cash equivalents, and
available-for-sale investments and had used the proceeds of $4,700 during the
second quarter of 2001 for working capital. The sale of these shares and
warrants were exempt from registration under the Securities Act of 1933 pursuant
to Rule 506 of Regulation D, promulgated thereunder, as there were less than 35
purchasers of these securities and the purchaser was an accredited investor as
defined in Rule 501 of Regulation D.

    The Series E preferred stock is convertible at the option of the holder into
shares of our common stock at an initial conversion price of $1.5262 per share,
subject to adjustment,

    - on the six-month anniversary of the initial issuance, provided that in no
      event shall the adjusted conversion price be less than $0.8176; and

    - under some circumstances in the event of redemption of the Series E
      preferred stock by Open Market on the two-year anniversary of the original
      issuance, as determined above.

                                       33
<Page>
    In no event will any such adjustment result in an increase of the conversion
price. In addition, the conversion price is subject to adjustment in the event
that we issue securities below the conversion price, with certain exceptions.

    The shares of Series E preferred stock bear dividends at an annual rate of
6.0% of the liquidation preference of these shares, payable semi-annually,
through the issuance of shares of our common stock or, at our option, in cash.
Holders of Series E preferred stock have the right, after two years, to require
us to redeem the Series E preferred stock for cash or convert such shares into
our common stock, at our option. Also, in the event of a "change in control" as
defined in the terms of the Series E preferred stock, if the Series E preferred
stock is not converted into shares of common stock by the holder, we are
required to redeem the Series E preferred stock for cash, with such cash
redemption equal to 115% of the Series E preferred stock liquidation preference.
The shares of Series E preferred stock are redeemable by Open Market after two
years in cash or common stock at the Company's option. If the shares of
Series E preferred stock are redeemed for shares of common stock, the conversion
price will be the lesser of the initial conversion price, the six-month
adjustment price or the then fair market value of the common stock (determined
pursuant to a formula). In no event, however, will we be required to issue in
excess of 9,369,113 shares of common stock (subject to adjustment for stock
splits, stock dividends or similar adjustments to capitalization) upon
conversion of the Series E preferred stock and exercise of the related warrants.
As a result, the Series E preferred stock may be converted and the common stock
purchase warrants may be exercised at a price per share that may be less than
the then current market price of our common stock, which may cause substantial
dilution to our existing common stockholders. In no event, however, shall we be
required to issue, upon the conversion of the Series E preferred stock and the
exercise of the warrants, in excess of 9,369,113 shares of common stock (subject
to adjustment for stock splits, stock dividends and similar adjustments in
capitalization) which represents 19.99% of our outstanding common stock as of
March 20, 2001.

    We are required to register the shares of common stock issuable upon
conversion and upon exercise of the warrants under the Securities Act of 1933
for public resale. Any sale of shares of common stock upon conversion of the
Series E preferred stock and exercise of the warrants into the public market
could cause a decline in the trading price of our common stock.

    On May 25, 2001, we entered into an agreement with Theddingworth
International Limited to provide Open Market with up to $40 million in private
equity funding. Pursuant to this agreement, we have the right, but not the
obligation, to raise up to $40 million through the issuance and sale of our
common stock to the investor pursuant to a series of draw downs over a period of
24 months. The draw downs are subject to the satisfaction of a number of
conditions, including the filing and effectiveness of a registration statement
with the Securities and Exchange Commission covering the resale of the shares
purchased under the agreement. Pricing for the shares issuable under the
agreement is based on the weighted average price of our common stock over a
period of time prescribed in the agreement. We will use the funds received from
sales of the common stock under the agreement for working capital and other
general corporate purposes. We cannot request a draw down which would result in
the issuance of an aggregate number of shares of common stock pursuant to the
agreement which exceeds 19.9% of the total number of shares of our common stock
outstanding on May 25, 2001 without obtaining stockholder approval of such
excess issuance.

    In connection with the agreement, we issued to Theddingworth a warrant to
purchase up to 350,000 shares of our common stock at an exercise price of
$1.91 per share, subject to certain adjustments in the case of a stock split,
stock dividend or other similar transaction. The warrant terminates on May 25,
2006. The issuance of this warrant and the shares of common stock issuable upon
exercise thereof is exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended.

                                       34
<Page>
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

    None

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

    At the Company's Annual Meeting of Stockholders held on June 20, 2001, the
following proposals were adopted by the vote specified below:

<Table>
<Caption>
                   PROPOSAL                        FOR       AGAINST     ABSTAIN    BROKER NON-VOTES
----------------------------------------------  ----------   --------   ---------   ----------------
<S>                                             <C>          <C>        <C>         <C>
(1)  To elect three Class II Directors:
    Shikhar Ghosh.............................  34,175,088                986,008
    BC Krishna................................  34,404,306                756,790
    Patrick Scannell..........................  34,152,784              1,008,312
(2)  To approve the 2001 Employee Stock
     Purchase Plan............................  34,399,207   583,989      177,900
(3)  To ratify the selection by the Board of
     Directors of Arthur Andersen LLP as the
     Company's independent public accountants
     for the fiscal year ending December 31,
     2001.....................................  34,688,070   402,923       70,103
</Table>

ITEM 5.  OTHER INFORMATION

    None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  EXHIBITS

    See Exhibit Index attached hereto.

    (b)  REPORTS ON FORM 8-K

    (1) On March 23, 2001, Open Market and its wholly owned subsidiary, Folio
    Corporation, entered into an Asset Purchase Agreement with NextPage, Inc.,
    pursuant to which we sold certain technology and related assets to NextPage
    for a total purchase price of $6.6 million in cash (which included a
    $1.1 million license fee payment from NextPage to us for the first quarter
    of 2001). The Current Report on Form 8-K reporting this event under Items 2
    and 7 was filed with the Securities and Exchange Commission on April 9,
    2001.

    (2) On May 25, 2001, Open Market, Inc. entered into an agreement with an
    institutional investor to provide the Company with up to $40,000,000 in
    private equity funding. In connection with the Equity Line, the Company
    issued to the institutional investor a warrant to purchase up to 350,000
    shares of its common stock at an exercise price of $1.91 per share, subject
    to certain adjustments. The Current Report on Form 8-K reporting this event
    under Items 5 and 7 was filed with the Securities and Exchange Commission on
    June 4, 2001.

                                       35
<Page>
                                   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 hereunto duly authorized.

<Table>
<S>                                                    <C>  <C>
                                                       OPEN MARKET, INC.

Date: August 14, 2001                                  By:            /s/ HARLAND K. LAVIGNE
                                                            -----------------------------------------
                                                                        Harland K. LaVigne
                                                             CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE
                                                                             OFFICER
                                                                  (PRINCIPAL EXECUTIVE OFFICER)

Date: August 14, 2001                                  By:              /s/ EDWARD DURKIN
                                                            -----------------------------------------
                                                                          Edward Durkin
                                                            VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
                                                                  (PRINCIPAL FINANCIAL OFFICER)

Date: August 14, 2001                                  By:             /s/ ANNMARIE RUSSELL
                                                            -----------------------------------------
                                                                         Annmarie Russell
                                                                    VICE PRESIDENT OF FINANCE
                                                                  (PRINCIPAL ACCOUNTING OFFICER)
</Table>

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EXHIBITS

10.1 Accounts Receivable Purchase Agreement, dated as of June 29, 2001, by and
    between the Registrant and Silicon Valley Bank.

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