FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   (MARK ONE)

    |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2001

                                       OR

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

                   FOR THE TRANSITION PERIOD FROM ____ TO ____

                         COMMISSION FILE NUMBER: 0-30309

                               SCREAMINGMEDIA INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                     13-4042678
------------------------------             ------------------------------------
 (STATE OR OTHER JURISDICTION              (I.R.S. EMPLOYER IDENTIFICATION NO.)
              OF
INCORPORATION OR ORGANIZATION)

                      601 WEST 26TH ST., NEW YORK, NY 10001
      ---------------------------------------------------------------------
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 691-7900

  (FORMER NAME, FORMER ADDRESS, AND FORMER YEAR, IF CHANGED SINCE LAST REPORT:)
                                 NOT APPLICABLE

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 July 9, 2001 there were 38,287,510 shares of the Registrant's common stock
outstanding.


<Page>

                               SCREAMINGMEDIA INC.

                                    FORM 10-Q

                           QUARTER ENDED JUNE 30, 2001

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

PART I.   FINANCIAL INFORMATION

Item 1.   Consolidated Financial Statements

          Consolidated Balance Sheets - June 30, 2001
          (unaudited) and December 31, 2000...........................        3

          Consolidated Statements of Operations - Three and six
          months ended June 30, 2001 (unaudited) and 2000
          (unaudited).................................................        4

          Consolidated Statements of Cash Flows -- Six months ended
          June 30, 2001 (unaudited) and 2000 (unaudited)..............        5

          Notes to Consolidated Financial Statements..................        6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................        8

Item 3.   Quantitative and Qualitative Disclosures About Market
          Risk........................................................       25

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings...........................................       25

Item 2.   Changes in Securities and Use of Proceeds...................       25

Item 3.   Defaults upon Senior Securities.............................       25

Item 4.   Submission of Matters to a Vote of Security Holders.........       25

Item 5.   Other Information...........................................       26

Item 6.   Exhibits and Reports on Form 8-K............................       26


                                       2
<Page>

                          PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                               SCREAMINGMEDIA INC.

                           CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                           JUNE 30,           DECEMBER 31,
                                                                             2001                 2000
                                                                         -------------       -------------
                                                                          (Unaudited)
                                          ASSETS
<S>                                                                     <C>                 <C>
CURRENT ASSETS:
  Cash and cash equivalents ......................................      $  27,284,631       $  58,305,096
  Marketable securities ..........................................         60,888,601          39,819,978
  Accounts receivable, net of allowance for doubtful
    accounts of $1,163,000 and $1,150,000 as of June 30,
    2001 and December 31, 2000, respectively .....................          2,268,064           3,968,123
  Prepaid expenses and other current assets ......................          1,934,629           1,229,680
                                                                        -------------       -------------
    Total current assets .........................................         92,375,925         103,322,877

PROPERTY AND EQUIPMENT--Net of accumulated depreciation ..........         15,610,306          16,230,591
OTHER ASSETS .....................................................          3,225,455           2,713,059
                                                                        -------------       -------------
    TOTAL ASSETS .................................................      $ 111,211,686       $ 122,266,527
                                                                        =============       =============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses ..........................      $   3,658,720       $   4,281,053
  Deferred revenue ...............................................          2,242,469           2,684,026
  Current portion of capital lease obligations ...................          2,050,605           2,726,639
                                                                        -------------       -------------
    Total current liabilities ....................................          7,951,794           9,691,718
                                                                        -------------       -------------
NONCURRENT LIABILITIES:
  Capital lease obligations, less current portion ................          2,939,070           3,399,617
                                                                        -------------       -------------
    Total liabilities ............................................         10,890,864          13,091,335
                                                                        -------------       -------------

STOCKHOLDERS' EQUITY:
  Common stock, $0.01 par value, 100,000,000 shares
    authorized and 39,783,226 and 39,539,351 issued and 38,211,687
    and 37,937,812 outstanding at June 30,
    2001 and December 31, 2000 ...................................            397,833             395,394
  Additional paid-in capital .....................................        219,599,605         223,798,675
  Warrants .......................................................          1,008,925           1,008,925
  Deferred compensation ..........................................         (4,954,213)        (10,456,432)
  Treasury stock .................................................           (981,225)           (999,956)
  Accumulated deficit ............................................       (114,979,776)       (104,581,127)
  Accumulated other comprehensive income .........................            229,673               9,713
                                                                        -------------       -------------
    Total stockholders' equity ...................................        100,320,822         109,175,192
                                                                        -------------       -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......................      $ 111,211,686       $ 122,266,527
                                                                        =============       =============
</Table>

                 See accompanying notes to financial statements.


                                       3
<Page>

                               SCREAMINGMEDIA INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<Table>
<Caption>
                                                                     Three months ended June 30,       Six months ended June 30,
                                                                     ----------------------------    ----------------------------

                                                                         2001            2000            2001            2000
                                                                     ------------    ------------    ------------    ------------
<S>                                                                  <C>             <C>             <C>             <C>
REVENUE:
  Services .......................................................   $  5,509,651    $  4,038,050    $ 11,780,611    $  6,345,441
  License and set-up fees ........................................      1,190,995         667,029       2,521,522       1,078,724
                                                                     ------------    ------------    ------------    ------------
    Total revenue ................................................      6,700,646       4,705,079      14,302,133       7,424,165
                                                                     ------------    ------------    ------------    ------------

OPERATING EXPENSES:
  Cost of services (excluding depreciation of
    $258,662, $126,212, $420,947 and $249,212 for the three months
    ended June 30, 2001, and 2000 and the six months
    ended June 30, 2001 and 2000, respectively,
    shown below) .................................................      1,887,164       1,427,019       4,105,912       2,374,535
  Research and development (excluding stock-based
    compensation of $229,018, $657,365, $(272,581) and $1,150,036
    for the three months ended June 30, 2001 and 2000 and the
    six months ended June 30, 2001 and 2000,
    respectively, shown below) ...................................      1,955,065       1,354,225       3,810,446       2,559,921
  Sales and marketing (excluding stock-based
    compensation of $429,959, $1,374,214, $558,723,
    and $2,536,228 for the three months ended
    June 30, 2001 and 2000 and the six months ended
    June 30, 2001 and 2000,
    respectively, shown below) ...................................      3,670,449       4,527,218       7,990,449       8,722,411
  General and administrative (excluding stock-based
    compensation of $406,952, $3,217,894, $677,199 and
    $6,164,397 for the three months ended June 30, 2001
    and 2000 and the six months ended June 30, 2001 and 2000
    respectively, shown below) ...................................      3,474,028       2,176,336       7,312,584       4,554,033
  Depreciation and amortization ..................................      1,475,657         731,503       2,962,183       1,280,924
  Stock-based compensation .......................................      1,065,929       5,249,473         963,341       9,850,661
                                                                     ------------    ------------    ------------    ------------
    Total operating expenses .....................................     13,528,292      15,465,774      27,144,915      29,342,485
                                                                     ------------    ------------    ------------    ------------
OPERATING LOSS ...................................................     (6,827,646)    (10,760,695)    (12,842,782)    (21,918,320)
                                                                     ------------    ------------    ------------    ------------
OTHER INCOME (EXPENSE):
  Interest income ................................................      1,139,077         170,521       2,571,167         438,794
  Interest expense ...............................................       (107,090)        (58,403)       (230,017)        (77,023)
  Foreign currency translation ...................................          5,628              --         102,983              --
                                                                     ------------    ------------    ------------    ------------
Total other income (expense) .....................................      1,037,615         112,118       2,444,133         361,771
                                                                     ------------    ------------    ------------    ------------

NET LOSS .........................................................     (5,790,031)    (10,648,577)    (10,398,649)    (21,556,549)
Deemed preferred stock dividends .................................             --        (155,000)             --        (309,000)
                                                                     ------------    ------------    ------------    ------------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS .........................     (5,790,031)    (10,803,577)    (10,398,649)    (21,865,549)
                                                                     ============    ============    ============    ============
Basic net loss per common share ..................................   $       (.15)   $       (.85)   $       (.27)   $      (1.73)
                                                                     ============    ============    ============    ============
Weighted-average number of shares of common stock
  outstanding ....................................................     38,096,795      12,772,869      38,030,442      12,648,383
                                                                     ============    ============    ============    ============
</Table>

                 See accompanying notes to financial statements.


                                       4
<Page>

                               SCREAMINGMEDIA INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<Table>
<Caption>
                                                            For the six months ended June 30,
                                                            --------------------------------
                                                                 2001               2000
                                                             ------------       ------------
<S>                                                          <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ............................................      $(10,398,649)      $(21,556,549)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization .....................         2,962,183          1,280,924
    Stock-based compensation ..........................           877,091          9,850,661
    Stock/warrants issued for services ................            86,250
  Changes in operating assets and liabilities:
     Decrease (increase) in account receivable ........         1,700,059         (1,257,890)
    (Increase) in prepaid expenses and other
      assets ..........................................        (1,355,579)        (1,010,930)
    (Decrease) increase in accounts payable and accrued
      expenses ........................................          (622,333)         3,577,432
    (Decrease) increase in deferred revenue ...........          (441,557)         1,355,449
                                                             ------------       ------------
      Net cash used in operating activities ...........        (7,192,535)        (7,760,903)
                                                             ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment ..................        (1,885,046)        (3,543,228)
  Purchase of investments and marketable securities ...       (20,912,899)                --
                                                             ------------       ------------
      Net cash used in investing activities ...........       (22,797,945)        (3,543,228)
                                                             ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of capital lease obligation .................        (1,455,195)          (531,363)
Payments for the purchase of treasury stock ...........                --         (1,000,000)
Proceeds from exercise of warrants, stock options
  and stock purchases..................................           360,974            405,006
                                                             ------------       ------------
Net cash used by financing activities .................        (1,094,221)        (1,126,357)
                                                             ------------       ------------
Effect of exchange rate changes on cash
and cash equivalents ..................................            64,236                 --
NET DECREASE IN CASH AND CASH EQUIVALENTS .............       (31,020,465)       (12,430,488)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD .........        58,305,096         22,121,667
                                                             ------------       ------------
CASH AND CASH EQUIVALENTS END OF PERIOD ...............      $ 27,284,631       $  9,691,179
                                                             ============       ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for interest ..............................      $    230,017       $     77,023
                                                             ============       ============
  Cash paid for income taxes ..........................      $         --       $         --
                                                             ============       ============
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
    Fixed assets acquired under capital leases ........      $    318,614       $  4,401,866
                                                             ============       ============
    Warrant issued for common stock to sublessor in
     connection with new lease ........................      $         --       $    740,000
                                                             ============       ============
    Common stock issued to board member ...............      $     86,250       $         --
                                                             ============       ============
</Table>

                 See accompanying notes to financial statements.


                                       5
<Page>

                               SCREAMINGMEDIA INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                   (UNAUDITED)

1.    BASIS OF PRESENTATION

            The consolidated financial statements of which these notes are part
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations; however, in the opinion of our management, the Consolidated
Financial Statements include all adjustments, consisting only of normal
recurring accruals, necessary to present fairly the financial information for
such periods. These Consolidated Financial Statements should be read in
conjunction with our Consolidated Financial Statements and the notes thereto
included in our Annual Report on Form 10-K, for the year ended December 31,
2000.

2.    RECLASSIFICATIONS

      Certain reclassifications have been made in the June 30, 2000 financial
statements to conform to the classifications used in the June 30, 2001 financial
statements.

3.    IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

      In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended in June 2000 by Statement of Financial Accounting
Standards No. 138 ("SFAS 138"), "Accounting for Certain Derivative Instruments
and Certain Hedging Activities," which requires companies to recognize all
derivatives as either assets or liabilities in the balance sheet and measure
such instruments at fair value. As amended by Statement of Financial Accounting
Standards No. 137 ("SFAS 137"), "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB 133," the provisions
of SFAS 133 were adopted by the Company as of January 1, 2001. Adoption of SFAS
133, as amended by SFAS 138, did not and has not had a material effect on the
Company's financial statements.

      In June 2001, the FASB issued two new pronouncements: SFAS No. 141,
"Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS 141 prohibits the use of the pooling-of-interest method for
business combinations initiated after June 30, 2001 and also applies to all
business combinations accounted for by the purchase method that are completed
after June 30, 2001. SFAS 142 is effective for fiscal years beginning after
December 15, 2001 to all goodwill and other intangible assets recognized in an
entity's statement of financial position at that date, regardless of when those
assets were initially recognized. The Company is currently evaluating the
provisions of SFAS 141 and SFAS 142 and has not adopted such provisions in its
June 30, 2001 financial statements.

4.    CASH AND CASH EQUIVALENTS

      The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents. At June 30,
2001 and December 31, 2000 the Company had cash and cash equivalents of $27.3
million and $58.3 million, respectively.

5.    MARKETABLE SECURITIES


                                       6
<Page>

      Marketable securities consist of corporate notes and bonds with a maturity
date greater than three months when purchased. Management has classified
ScreamingMedia's marketable securities as available-for-sale securities in the
accompanying consolidated financial statements. Available-for-sale securities
are carried at fair value, with unrealized gains and losses reported as a
separate component of stockholders' equity. Realized gains and losses on
available-for-sale securities are included in other income. Gains and losses,
both realized and unrealized, are measured using the specific identification
method. Market value is determined by the most recently traded price of the
security at the balance sheet date. At June 30, 2001, the Company had marketable
securities of approximately $60.9 million.

      Marketable securities investments as of June 30, 2001 consist of the
following:

<Table>
<Caption>
                                                      UNREALIZED
                                                        HOLDING        FAIR
                                           COST          GAINS         VALUE
                                        -----------   -----------   -----------
<S>                                     <C>           <C>           <C>
Corporate Notes and Bonds.............  $60,702,693   $ 185,908     $60,888,601
                                        ===========   ===========   ===========

<Caption>
                                                                      FAIR
                                                        COST          VALUE
                                                     -----------   -----------
<S>                                                  <C>           <C>
Due within one year................................  $24,929,761   $25,105,614
Due after one year through five years..............   35,772,932    35,782,987
                                                     -----------   -----------
Total marketable securities........................  $60,702,693   $60,888,601
                                                     ===========   ===========
</Table>

      Available-for-sale securities are carried at fair value, with unrealized
gains and losses reported as a separate component of stockholders' equity as of
June 30, 2001. The Company does not hold these securities for speculative or
trading purposes. The Company did not have marketable securities as of June 30,
2000.

6.    OTHER COMPREHENSIVE INCOME (LOSS)

      The Company reports other comprehensive income (loss) in accordance with
SFAS No. 130, which requires the disclosure of comprehensive income (loss). SFAS
No. 130 requires that in addition to net income (loss), a Company should report
other comprehensive income (loss) consisting of gains and losses which bypass
the traditional income statement and are recorded directly into stockholders'
equity (deficiency) on the balance sheet. The components of other comprehensive
income for the Company consist of unrealized gains and losses relating to the
translation of foreign currency and unrealized gains and losses relating to the
Company's investments in marketable securities. Comprehensive loss was $5.6
million, $10.6 million, $10.2 million and $21.6 million for the three months
ended June 30, 2001 and 2000 and the six months ended June 30, 2001 and 2000,
respectively.


                                       7

<Page>

7.    NET LOSS PER COMMON SHARE

      Basic net loss per share was computed by dividing net loss attributable to
common stockholders by the weighted average number of common shares outstanding.
Diluted net loss per share has not been presented since the impact of options,
warrants and the conversion of preferred shares would have been antidilutive.

8.    STOCKHOLDERS' EQUITY

      TREASURY STOCK--During the first quarter of 2001, the Company issued
30,000 shares of common stock from shares held in treasury stock to a board
member and recorded compensation expense of $86,250 in connection with such
grants. Such compensation expense equaled the fair market value of the stock at
the time of issuance.

9.    STOCK BASED COMPENSATION

      In connection with the grant of stock options to employees, the Company
has recognized deferred stock based compensation expense of approximately
$1,065,929 for the three months ended June 30, 2001.

10.   SUBSEQUENT EVENT

      On July 23, 2001, the Company announced that it had signed an agreement to
acquire all of the outstanding shares of Stockpoint, Inc. for $21.6 million in
cash, stock, warrants and assumed debt. Consummation of the purchase is subject
to shareholder approval. The acquisition is expected to significantly strengthen
the Company's offerings to the financial services industry, a key client sector.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

      The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with the consolidated
financial statements and related notes contained herein and the information
contained in our Annual Report on form 10-K for the year ended December 31,
2000, as filed with the Securities and Exchange Commission on April 2, 2001.
This discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. We may identify these statements by
the use of words such as "believe", "expect", "anticipate", "intend", "plan" and
similar expressions. These forward-looking statements involve several risks and
uncertainties. Our actual results may differ materially from those set forth in
these forward-looking statements as a result of a number of factors, including
those described under the caption "Risk Factors" herein and in our Annual Report
on Form 10-K as filed with the United States Securities and Exchange Commission.
These forward-looking statements speak only as of the date of this quarterly
report, and we caution you not to rely on these statements without also
considering the risks and uncertainties associated with these statements and our
business as addressed elsewhere in this quarterly report.


                                       8
<Page>

REVENUE

Our revenue is composed of services revenue and license and set-up fees. We
derive our services revenue primarily from hosting and distributing digital
content directly to our customers' Web sites. Our contracts typically have an
initial term of one year. We charge our customers recurring monthly content,
delivery and processing fees. In certain cases we require prepayment ranging
from one to twelve months. In addition, we charge certain of our customers an
upfront maintenance fee. We recognize revenue for the contracted services fees
ratably over the life of the contract. We record billed amounts due from clients
in excess of revenue recognized as deferred revenue. We report our revenue net
of allowances and rebates.

      License and set-up fees are charged for our proprietary Siteware software
and building custom filters enabling the customer to receive customized content.
License and set-up fees are charged upfront and vary according to the version
and functionality of SiteWare selected and the number of custom filters created.
License fees are either charged annually, or one time, while set-up fees are
charged one time only. We recognize license and set-up fees ratably over the
life of the contract. We record billed amounts due from clients in excess of
revenue recognized as deferred revenue.

      Our revenues are comprised of:

      (1)   Services revenues:

            (a)   Content revenue is derived from distributing targeted licensed
                  content directly to our customers' Web sites, intranets,
                  extranets and wireless networks.

            (b)   Content, delivery and processing fees are charged, primarily,
                  based on the amount of data delivered through our digital
                  content network.

            (c)   Hosting services are offered for both content and software
                  applications.

            (d)   We provide our customers technical product support under
                  maintenance agreements.

      (2)   License and set-up fees:

            (a)   Licensing revenue consists of fees for licenses of our
                  proprietary SiteWare software suite that allows our customers
                  to receive customized content. Licensing fees vary according
                  to the version and functionality of SiteWare selected.

            (b)   Set-up fees include charges for building custom filters which
                  enable the customer to receive customized content and
                  integration kits, which enable us to integrate Siteware into
                  third party applications of major content management and
                  personalization software vendors.

      COST OF SERVICES

      Cost of services consists of content royalty fees, certain payroll and
related expenses, fees paid to network providers for bandwidth, and monthly fees
for housing our servers in third-party network data centers. Content royalty
fees are calculated monthly, based on the volume of a provider's content used by
our customers. Under existing contracts with content providers, we generally pay
royalties on content that is used by our customers. In certain cases, the
content arrangement is based on fixed fees or subject to a minimum charge.
Payroll and related expenses pertain to the staff associated with the
customization and implementation of our SiteWare, filters and adapters, content
engineers, certain network operations and professional services staff.

      RESEARCH AND DEVELOPMENT EXPENSES

      Research and development expenses consist primarily of salaries and
related personnel costs associated with the research, design and development of
software applications and services supporting our business. To date, all
research and development costs have been expensed as incurred.


                                       9
<Page>

      SALES AND MARKETING EXPENSES

      Sales and marketing expenses consist primarily of salaries of related
personnel, sales commissions, customer support, marketing collateral,
promotional and public relations expenses.

      GENERAL AND ADMINISTRATIVE EXPENSES

      General and administrative expenses consist primarily of personnel and
related costs for general corporate functions including accounting, finance,
human resources, legal and other administrative functions, as well as provisions
for doubtful accounts and bad debt expense.

STOCK-BASED COMPENSATION

      We recorded a charge for the amortization of deferred stock-based
compensation of approximately $1.1 and $5.2 million for the three months ended
June 30, 2001 and 2000, respectively. Stock-based compensation is a result of
the issuance of stock options to employees, directors and affiliated parties
with exercise prices per share determined for financial reporting purposes to be
below the fair market value per share of our common stock at the date of the
applicable grant. This difference is recorded as a reduction of stockholders'
equity and amortized as non-cash compensation expense on an accelerated basis
over the vesting period of the related options.

SUBSEQUENT EVENT

On July 23, 2001, we announced that we signed an agreement to acquire all of the
outstanding shares of Stockpoint, Inc. for $21.6 million in cash, stock,
warrants and assumed debt. Consummation of the purchase is subject to
shareholder approval. The acquisition is expected to significantly strengthen
the Company's offerings to the financial services industry, a key client sector.

RESULTS OF OPERATIONS

      The following table sets forth our results of operations as a percentage
of revenue for the periods indicated.


                                       10
<Page>

<Table>
<Caption>
                                                                   For the Three            For the Six
                                                                    Months Ended            Months Ended
                                                                      June 30,                 June 30,
                                                                ---------------------   ----------------------
                                                                   2001        2000        2001        2000
                                                                ----------  ---------   ----------  ----------
<S>                                                                 <C>         <C>         <C>         <C>
Revenue:
  Services ..................................................        82%         86%         82%         85%
  License and set-up fees ...................................        18          14          18%         15%
                                                                   ----        ----        ----        ----

    Total revenue ...........................................       100%        100%        100%        100%
                                                                   ====        ====        ====        ====
Operating expenses:
  Cost of services (excluding depreciation of 4%, 3%, 3%
  and 3% for the three months ended June 30, 2001
   and 2000, and the six months ended June 30, 2001 and 2000         28%         30%         29%         32%
  Research and development (excluding stock-based
    compensation of 3%, 14%, (2)% and 15% for the three
    months ended June 30, 2001 and 2000 and the six months
    ended June 30, 2001 and 2000 respectively,
    shown below) ............................................        29          29          27          34
  Sales and marketing (excluding stock-based
    compensation of 6%, 29%, 4% and 34% for the three months
    ended June 30, 2001 and 2000 and the six months ended
    June 30, 2001 and 2000, respectively shown below) .......        55          96          56         117
  General and administrative (excluding stock-based
    compensation of 6%, 68%, 5% and 83% for the three months
    ended June 30, 2001 and 2000 and the six months ended
    June 30, 2001 and 2000, respectively, shown below) ......        52          46          51          61
  Depreciation and amortization .............................        22          16          21          17
  Stock-based compensation ..................................        16         112           7         133
                                                                   ----        ----        ----        ----

    Total operating expenses ................................       202         329         191         394
                                                                   ----        ----        ----        ----

Operating loss ..............................................      (102)       (229)        (91)       (294)
Other income, net ...........................................        15           2          17           5
                                                                   ----        ----        ----        ----
    Net loss ................................................       (87)%      (227)%       (74)%      (289)%
                                                                   ====        ====        ====        ====
</Table>

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

      REVENUE. Total revenue increased to $6.7 million for the three months
ended June 30, 2001, from $4.7 million for the three months ended June 30, 2000.
This growth was due to an overall increase in the value of our contracted deals.

      Services revenue totaled $5.5 million for the three months ended June 30,
2001, an increase of $1.5 million or 36% over services revenues of $4.0 million
for the three months ended June 30, 2000. This was attributable to expanded
content services offerings, an increase in the average size of content purchases
per new customer, and follow-on orders from existing customers.

      License and set-up fee revenue totaled $1.2 million for the three months


                                       11
<Page>

ended June 30, 2001, an increase of $524,000 or 79% over license and set-up fee
revenue of $667,000 for the three months ended June 30, 2000. This was due to
expanded product offerings and an increase in the average size of license and
set-up fees. In addition we have been focusing our sales force towards acquiring
enterprise level customers that typically require larger contracts than we have
sold historically.

      COST OF SERVICES. Cost of services increased to $1.9 million for the three
months ended June 30, 2001, from $1.4 million for the three months ended June
30, 2000. This increase in absolute dollars was due to an increase in services
revenue resulting in higher overall content royalties paid to providers and an
increase in the number of employees in the implementation and content
engineering, network operations, and professional services departments. As a
percentage of revenue, cost of services was approximately 28% for the three
months ended June 30, 2001 and 30% for the three months ended June, 30 2000. We
anticipate that the cost of services will continue to grow in absolute dollars
as we expand our business.

      RESEARCH AND DEVELOPMENT. Research and development expenses increased to
$2.0 million for the three months ended June 30, 2001, from $1.4 million for the
three months ended June 30, 2000. The absolute dollar increase was due to direct
personnel costs and further development of our SiteWare software suite, Content
Engine, hosting platform and other products. As a percentage of revenue,
research and development expenses remained at approximately 29% for the three
months ended June 30, 2001 and 2000. Research and development did not fluctuate
as a percentage of revenue primarily because revenue growth increased at a
comparable rate as research and development expenditures.

      SALES AND MARKETING. Sales and marketing expenses decreased to $3.7
million for the three months ended June 30, 2001, from $4.5 million for the
three months ended June 30, 2000. This decrease is attributable to a reduction
in trade shows, advertising and other marketing expenses. As a percentage of
revenue, sales and marketing expenses decreased to approximately 55% for the
three months ended June 30, 2001 from approximately 96% for the three months
ended June 30, 2000.

      GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
to $3.5 million for the three months ended June 30, 2001, from $2.2 million for
the three months ended June 30, 2000. This is primarily due to an increase in
facilities, insurance and bad debt expense. As a percentage of revenue, general
and administrative expenses increased to approximately 52% for the three months
ended June 30, 2001 from approximately 46% for the three months ended June 30,
2000. We anticipate bad debt expense will decrease as we migrate to a more
enterprise type customer base.

STOCK-BASED COMPENSATION. We recognized stock-based compensation expense of $1.1
million and $5.2 million for the three months ended June 30, 2001 and 2000,
respectively. As a percentage of revenue, stock based compensation decreased to
approximately 16% for the three months ended June 30, 2001 from approximately
112% for the three months ended June 30, 2000.

      OTHER INCOME, NET. Other income, net includes interest income from cash
and cash equivalents and marketable securities offset by interest on capital
leases. Other income, net, increased to $1.0 million for the three months ended
June 30, 2001 from $112,000 for the three months ended June 30, 2000. The
significant increase from 2000 to 2001 was due to interest income earned on
higher cash balances, cash equivalents and investments in marketable securities
resulting from a private placement in July 2000 and our initial public offering
in August 2000.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

REVENUE. Total revenue increased to $14.3 million for the six months ended June
30, 2001, from $7.4 million for the six months ended June 30, 2000. This growth
was due to an overall increase in the value of contracted deals.

Services revenue totaled $11.8 million for the six months ended June 30, 2001,
an increase of $5.5 million or 86% over license and set-up fee revenue of $6.3
million for the six months ended June 30, 2000. This was attributable to
expanded content service offerings, an increase in the average size of content
purchases per new customer and follow-on orders from existing customers.


                                       12
<Page>

License and set-up fee revenue totaled $2.5 million for the six months ended
June 30, 2001, an increase of $1.4 million or 134% over services revenues of
$1.1 million for the six months ended June 30, 2000. This increase was
attributable to expanded product offerings and an increase in the average size
of license and set-up fees.

      COST OF SERVICES. Cost of services increased to $4.1 million for the six
months ended June 30, 2001, from $2.4 million for the six months ended June 30,
2000. This increase in absolute dollars was due to an increase in services
revenue resulting in higher overall content royalties paid to providers and an
increase in the number of employees in the implementation and content
engineering, network operations, and professional services departments. As a
percentage of revenue, cost of services decreased to approximately 29% for the
six months ended June 30, 2001 from approximately 32% for the six months ended
June 30, 2000. We anticipate that the cost of services will continue to grow in
absolute dollars as we expand our business.

      RESEARCH AND DEVELOPMENT. Research and development expenses increased to
$3.8 million for the six months ended June 30, 2001, from $2.6 million for the
six months ended June 30, 2000. The absolute dollar increase was due to direct
personnel costs and further development of our SiteWare software suite, Content
Engine, hosting platform and other products. As a percentage of revenue,
research and development expenses decreased to approximately 27% for the six
months ended June 30, 2001 from approximately 34% for the six months ended June
30, 2000. As a percentage of total revenue research and development decreased
primarily because revenue growth outpaced increases in research and development
expenditures.

      SALES AND MARKETING. Sales and marketing expenses decreased to $8.0
million for the six months ended June 30, 2001, from $8.7 million for the six
months ended June 30, 2000. This decrease was attributable to a reduction in
trade shows, advertising expenses and other marketing expenses. As a percentage
of revenue, sales and marketing expenses decreased to approximately 56% for the
six months ended June 30, 2001 from approximately 117% for the six months ended
June 30, 2000.

      GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
to $7.3 million for the six months ended June 30, 2001, from $4.6 million for
the six months ended June 30, 2000. This was mainly attributable to an increase
in facilities, insurance and bad debt expenses. As a percentage of revenue,
general and administrative expenses decreased to approximately 51% for the six
months ended June 30, 2001 from approximately 61% for the six months ended June
30, 2000. As a percentage of total revenue general and administrative expenses
decreased primarily because revenue growth outpaced increases in general and
administrative expenditures.

STOCK-BASED COMPENSATION. We recognized stock-based compensation expense of
approximately $963,000 and $9.9 million for the six months ended June 30, 2001
and 2000, respectively. As a percentage of revenue, stock based compensation
decreased to approximately 7% for the six months ended June 30, 2001 from
approximately 133% for the six months ended June 30, 2000.

      OTHER INCOME, NET. Other income, net includes interest income from cash
and cash equivalents and marketable securities offset by interest on capital
leases. Other income, net, increased to $2.4 million for the six months ended
June 30, 2001 from $362,000 for the six months ended June 30, 2000. The
significant increase from 2000 to 2001 was due to interest income earned on
higher cash balances, cash equivalents and investments in marketable securities
resulting from a private placement in July 2000 and our initial public offering
in August 2000.

QUARTERLY OPERATING RESULTS

The following table sets forth our unaudited quarterly operating results for
each of our last eight quarters. This information has been derived from our
unaudited interim financial statements. In our opinion, this unaudited
information has been prepared on a basis consistent with our audited financial
statements contained in our Annual Report on Form 10-K for the fiscal year ended
2000 filed April 2, 2001 and includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the information for
the

                                       13
<Page>

quarters presented. Historical results for any quarter are not necessarily
indicative of the results to be expected for any future period.

<Table>
<Caption>
                                                                       THREE MONTHS ENDED
                            --------------------------------------------------------------------------------------------------------
                            SEPTEMBER 30,  DECEMBER 31,   MARCH 31 ,    JUNE 30,   SEPTEMBER 30,  DECEMBER 31,  MARCH 31,  JUNE, 30
                                 1999         1999          2000          2000          2000          2000        2001        2001
                                                                (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                            <C>            <C>          <C>          <C>           <C>         <C>         <C>           <C>
Revenue:
 Services ................     $  683         $1,244       $ 2,307      $ 4,038       $ 5,525     $ 6,622     $  6,271      $ 5,510
 License and set-up
   fees ..................        135            263           412          667         1,059       1,234        1,330        1,191
                               ------         ------       -------      -------       -------     -------     --------      -------
   Total revenue .........        818          1,507         2,719        4,705         6,584       7,856        7,601        6,701
Operating expenses:
 Cost of services
   (excluding
   depreciation of $31,
   $86, $126, $123, $256,
   $151, $162 and $259
   in the third quarter
   of 1999 through the
   second quarter of
   2001, respectively, as
   shown below) ..........        301            554           947        1,427         1,985       1,543        2,219        1,887
 Research and development
   (excluding stock-based
   compensation of $0,
   $64, $493, $657, $439,
   $431, $(502) and $229
   in the third quarter of
   1999 through the second
   quarter  of 2001,
   respectively, as
   shown below) ..........        244            435         1,206        1,354         1,835       1,960        1,855        1,955
 Sales and marketing
   (excludes stock-based
   compensation of $700,
   $1,110, $1,162, $1,374,
   $1,171, $812, $129 and
   $430 in the third
   quarter of 1999
   through the second
   quarter of 2001,
   respectively, as shown
   below) ................      1,483          1,986         4,195        4,528         6,156       5,884        4,320        3,670
 General and
   administrative
   (excludes stock-based
   compensation of $987,
   3,067, $2,946, $3,219,
   $2,499, $2,372, $270
   and $407 in the third
   quarter of 1999 through
   the second quarter of
   2001, respectively, as
   shown below) ..........        876          2,272         2,378        2,176         2,199       4,071        3,839        3,474
Depreciation and
 amortization ............        125            279           549          732           936       1,417        1,487        1,476
 Stock-based
   compensation ..........      1,687          4,241         4,602        5,249         4,109       3,616         (103)       1,066
                               ------         ------       -------      -------       -------     -------     --------      -------
   Total operating
     expenses ............      4,716          9,767        13,877       15,466        17,220      18,491       13,617       13,528
                               ------         ------       -------      -------       -------     -------     --------      -------
</Table>


                                       14
<Page>

<Table>
<Caption>
                                                                        THREE MONTHS ENDED
                            --------------------------------------------------------------------------------------------------------
                            SEPTEMBER 30,  DECEMBER 31,    MARCH 31      JUNE 30,  SEPTEMBER 30,  DECEMBER 31,  MARCH 31,  JUNE, 30
                                 1999          1999          2000          2000          2000         2000        2001       2001
                               --------      --------      --------      --------      --------      -------     -------    -------
                                                               (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                            <C>           <C>           <C>           <C>           <C>            <C>         <C>        <C>
Operating loss ...........       (3,898)       (8,261)      (11,158)      (10,761)      (10,636)     (10,634)     (6,016)    (6,828)
                               --------      --------      --------      --------      --------      -------     -------    -------
Other income .............           24           273           250           113         1,161        1,521       1,407      1,038
                               --------      --------      --------      --------      --------      -------     -------    -------
Net loss .................       (3,874)       (7,988)      (10,908)      (10,648)       (9,475)      (9,113)     (4,609)    (5,790)
                               --------      --------      --------      --------      --------      -------     -------    -------

Deemed preferred stock
  dividends ..............           --          (102)         (154)         (155)      (50,215)          --          --         --
                               --------      --------      --------      --------      --------      -------     -------    -------
Loss attributable to
  common stockholders ....     $ (3,874)     $ (8,090)     $(11,062)     $(10,803)     $(59,690)     $(9,113)    $(4,609)   $(5,790)
                               ========      ========      ========      ========      ========      =======     =======    =======
Basic net loss per common
  share ..................     $  (0.31)     $  (0.65)     $  (0.88)     $  (0.85)     $  (2.16)     $  (.24)    $  (.12)   $  (.15)
                               ========      ========      ========      ========      ========      =======     =======    =======
Weighted-average number of
  shares used in
  computation of basic and
  diluted net loss per
  share ..................       12,474        12,476        12,526        12,773        27,594       37,932      37,964     38,097
                               ========      ========      ========      ========      ========      =======     =======    =======
PRO FORMA BASIC NET LOSS
  PER COMMON SHARE
Loss attributable to
  common stockholders ....     $ (3,874)     $ (8,090)     $(11,062)     $(10,803)     $(59,690)     $(9,112)    $(4,609)   $(5,790)

Add amortization of
  deferred stock
  compensation ...........        1,687         4,241         4,601         5,249         4,109        3,616        (103)     1,066
Add deemed preferred stock
  dividends ..............           --           102           154           155        50,215           --          --         --
                               --------      --------      --------      --------      --------      -------     -------    -------
Net loss in computing pro
  forma basic net loss per
  common share ...........     $ (2,187)     $ (3,747)     $ (6,307)     $ (5,399)     $ (5,366)     $(5,496)    $(4,712)   $(4,724)
                               ========      ========      ========      ========      ========      =======     =======    =======
Shares used in computation
  of basic net loss per
  common share ...........       12,474        12,476        12,526        12,773        27,594       37,932      37,964     38,097
Add pro forma adjustment
  to reflect weighted
  average effect of the
  assumed conversion of
  convertible preferred
  stock ..................        4,121        10,877        11,349        11,349         6,958           --          --         --
                               ========      ========      ========      ========      ========      =======     =======    =======
Shares used in computing
  pro forma basic net loss
  per common share .......       16,595        23,353        23,875        24,122        34,552       37,932      37,964     38,097
                               ========      ========      ========      ========      ========      =======     =======    =======
Pro forma basic net loss
  per common share .......     $  (0.13)     $  (0.16)     $  (0.26)     $  (0.22)     $  (0.16)     $ (0.14)    $ (0.12)   $ (0.12)
                               ========      ========      ========      ========      ========      =======     =======    =======
</Table>

      *Certain reclassifications have been made to the 1999 and 2000 financial
statements to conform with the 2001 presentation

NET LOSS PER SHARE

      Basic net loss per share was computed by dividing net loss attributable to
common stockholders by the weighted average number of common shares outstanding.
Diluted net loss per share has not been presented since the impact of options,
warrants and the conversion of preferred shares would have been antidilutive.

Pro forma basic net loss excludes the amortization of deferred stock
compensation and deemed preferred stock dividends of $1,687, $4,343, $4,756,
$5,404, $54,324, $3,616, $(103) and $1,066 for the three months ending September
30, 1999 through June 30, 2001 (in thousands), respectively.


                                       15
<Page>

      Pro forma basic net loss per common share has been computed as described
above and also gives effect, even if anti-dilutive, to common equivalent shares
from preferred stock as if such conversion had occurred at the beginning of the
period or at the date of original issuance, if later.

LIQUIDITY AND CAPITAL RESOURCES

      We have financed our operations through private sales of equity and debt
securities and through our initial public offering. Sales of equity securities
include $57.9 million of net proceeds from our August 2000 initial public
offering of common stock and $46.2 million of net proceeds received from the
July 2000 private placement of convertible preferred stock, which converted into
common stock upon the completion of our initial public offering. As of June 30,
2001 we had cash and cash equivalents and marketable securities of approximately
$88 million.

      As of June 30, 2001, our principal commitments consisted of obligations
outstanding under a series of capital leases of computer and networking
equipment and our facilities leases. We entered into capital lease arrangements
for computer, network and telephony equipment. Additionally, we entered into
other capital leases for the design and implementation of our new financial
systems. A leasing company is the beneficiary of a $3.6 million standby letter
of credit with a bank securing our lease arrangement with them. At the end of
each lease term, we have the option to purchase the equipment, typically at the
lesser of fair market value or 10% of gross asset value. We presently intend to
exercise the purchase option for the majority of the leases.

      We operate from leased premises in New York, San Francisco, Miami and
London. Our current aggregate annual rental obligations under these leases are
approximately $1.6 million for the year ended December 31, 2001. Our capital
expenditures were $2.2 million and $3.5 million, for the six months ended June
30, 2001 and 2000, respectively, consisting principally of computers, hardware,
software and professional services to design our new financial systems,
networking equipment and the build-out of our headquarters.

On July 23, 2001, we announced the signing of an agreement to acquire all of the
outstanding shares of Stockpoint, Inc. for $21.6 million in cash, stock,
warrants and assumed debt. Consummation of the purchase is subject to
shareholder approval. The acquisition is expected to significantly strengthen
the Company's offerings to the financial services industry, a key client sector.

For the six months ended June 30, 2001 and 2000, respectively, net cash used in
operating activities was approximately $7.2 million and $7.8 million,
respectively. The net cash used in operating activities for the six months ended
June 30, 2001 resulted primarily from net losses of $10.4 million offset by $3.9
million in non-cash charges, a $1.7 million decrease in accounts receivable, a
$1.4 million increase in prepaid expenses and other assets and decreases in
accounts payables and accrued expenses and deferred revenues of $622,000 and
$442,000, respectively. The net cash used in operating activities for the six
months ended June 30, 2000 resulted primarily from net losses of $21.6 million,
and an increase in trade accounts receivable of $1.3 million, offset by non-cash
charges of $11.1 million, of which stock based compensation accounted for $9.9
million, an increase of $3.6 million in accounts payable and accrued expenses, a
$1.4 million increase in deferred revenue and an increase in prepaid expenses
and other current assets of $1.0 million.

      For the six months ended June 30, 2001 and 2000, net cash used in
investing activities was $22.8 million and $3.5 million, respectively. The net
cash used in investing activities for the six months ended June 30, 2001 was for
the purchase of marketable securities and equipment, $20.9 million and $1.9
million, respectively. The net cash used in investing activities for the six
months ended June 30, 2000 was for the purchase of equipment.

      For the six months ended June 30, 2001 and 2000 net cash used in financing
activities for each period was $1.1 million, respectively. Net cash used by
financing activities for the six months ended June 30, 2001, was for repayments
of our capital lease obligations of $1.5 million offset by proceeds from
warrants, stock options and stock purchases of approximately $361,000. Net cash
used in financing activities for the six months ended June 30, 2000 were for
capital lease repayments of $531,000 and payment for the purchase of treasury
stock of $1.0 million offset by proceeds from the exercise of a warrants and
stock options of $405,000.


                                       16
<Page>

      We believe that our current cash and cash equivalents, and marketable
securities will be sufficient to meet our operating expenses, for at least the
next eighteen months. We believe that changes in the market environment over the
past year have increased the value of corporate cash reserves as well as the
relative importance of bringing expenses more in line with revenues over time
and reducing our reliance on external sources of capital. Management is
extremely focused on monitoring costs. In addition, if we undertake significant
acquisitions or make significant strategic investments, we may need to raise
additional funds within that time. We may also need to raise additional funds if
competitive pressures force us to make unforeseen expenditures, such as to
acquire or develop new technology. If we need to raise additional funds, we will
likely do so through the issuance and sale of equity securities. If this were to
occur, the percentage ownership of our stockholders could be reduced, our
stockholders may experience additional dilution and these securities may have
rights, preferences or privileges senior to those of our stockholders. We cannot
assure you that additional financing will be available on terms favorable to us,
or at all. If adequate funds are not available or are not available on
acceptable terms, our ability to fund our expansion, take advantage of
unanticipated opportunities, develop or enhance services or products or
otherwise respond to competitive pressures would be significantly limited. Our
business, results of operations and financial condition could be materially
adversely affected by these limitations.

      RECENT ACCOUNTING PRONOUNCEMENTS-- In June 1998, the Financial Accounting
Standards Board ("FASB") issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended in June 2000 by Statement of
Financial Accounting Standards No. 138 ("SFAS 138"), "Accounting for Certain
Derivative Instruments and Certain Hedging Activities," which requires companies
to recognize all derivatives as either assets or liabilities in the balance
sheet and measure such instruments at fair value. As amended by Statement of
Financial Accounting Standards No. 137 ("SFAS 137"), "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
133," the provisions of SFAS 133 were adopted by the Company as of January 1,
2001. Adoption of SFAS 133, as amended by SFAS 138, did not and has not had a
material impact on the Company's results of operations or financial position
during the second quarter of 2001.

In June 2001, the FASB issued two new pronouncements: SFAS No. 141, "Business
Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS
141 prohibits the use of the pooling-of-interest method for business
combinations initiated after June 30, 2001 and also applies to all business
combinations accounted for by the purchase method that are completed after June
30, 2001. SFAS 142 is effective for fiscal years beginning after December 15,
2001 to all goodwill and other intangible assets recognized in an entity's
statement of financial position at that date, regardless of when those assets
were initially recognized. The Company is currently evaluating the provisions of
SFAS 141 and SFAS 142 and has not adopted such provisions in its June 30, 2001
financial statements.

                                  RISK FACTORS

An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below before deciding to invest in shares
of our common stock. The trading price of our common stock could decline due to
any of these risks, in which case you could lose all or part of your investment.
In assessing these risks, you should also refer to the other information in this
and our other public filings, including our financial statements and the related
notes.

                          RISKS RELATED TO OUR BUSINESS

BECAUSE WE HAVE A LIMITED OPERATING HISTORY, IT WILL BE DIFFICULT FOR YOU TO
EVALUATE OUR BUSINESS.

      It is difficult to value our business and evaluate our prospects because
of our limited operating history. We began our current line of business at the
end


                                       17
<Page>

of 1997 and began focusing exclusively on this business in the latter part of
1998. Accordingly, we have limited financial and operating data that is relevant
to our current business. Our business model is unproven, which creates a risk
that our performance will not meet the expectations of investors and that the
value of our common stock will decline.

WE HAVE A HISTORY OF SIGNIFICANT OPERATING LOSSES AND EXPECT TO INCUR
SIGNIFICANT LOSSES FOR THE FORESEEABLE FUTURE.

      We expect to incur operating losses and experience negative cash flow for
the foreseeable future. We have incurred significant losses since we began our
current line of business in 1997. As of June 30, 2001, we had an accumulated
deficit of $64.4 million, excluding deemed preferred stock dividends. We
incurred net losses of $5.8 million and $10.6 million for the three months ended
June 30, 2001 and 2000 respectively, not including deemed preferred stock
dividends relating to the sale and conversion of preferred stock. We expect to
incur additional losses as we incur additional costs and expenses related to:

      -     sales and marketing activities;

      -     employing additional personnel;

      -     funding our international operations;

      -     software and product development;

      -     establishing strategic relationships; and

      -     increasing the number of content providers.

      We cannot predict when we will operate profitably, if ever. Our ability to
achieve profitability will depend on our ability to generate and sustain
substantially higher net sales while maintaining reasonable expense levels. We
cannot be certain that if we were to achieve profitability, we would be able to
sustain or increase profitability.

OUR QUARTERLY FINANCIAL RESULTS MAY BE VOLATILE AND COULD CAUSE OUR STOCK PRICE
TO FLUCTUATE.

      Our revenues and operating results may vary significantly from quarter to
quarter. Because of these fluctuations, our results in any quarter may not be
indicative of future performance and it may be difficult for investors to
properly evaluate our results. It is possible that in some future periods our
revenues or earnings may fall below the expectations of investors and result in
the market price of our common stock declining. The factors that may cause our
financial results to vary from quarter to quarter include:

      -     the demand for our services;

      -     the value, timing and renewal of contracts with customers and
            content providers;

      -     the amount and timing of operating costs and capital expenditures;
            and

      -     the performance of our technology.

      These factors, which are largely beyond our control, together with our
limited operating history and unproven business model, make it difficult to
forecast our future revenues or results of operations accurately. We also have
limited meaningful historical financial data upon which to base planned
operating


                                       18
<Page>

expenses. A substantial portion of our operating expenses is related to
personnel costs, and overhead, which cannot be adjusted quickly. Our operating
expense levels reflect, in part, our expectations of future revenues. If actual
revenues on a quarterly basis are below management's expectations, or if our
expenses precede increased revenues, both gross margins and results of
operations would be materially adversely affected.

LOSING MAJOR CONTENT PROVIDERS MAY LEAVE US WITH INSUFFICIENT BREADTH OF CONTENT
TO RETAIN AND ATTRACT CUSTOMERS.

      We do not generate original content and are therefore highly dependent
upon third-party content providers. If we were to lose several of our major
content providers and were not able to obtain similar content from other sources
our services would be less attractive to customers. In addition, we cannot be
certain that we will be able to license content from our current or new
providers on favorable terms in the future, if at all.

IF WE ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL PROFESSIONAL STAFF, OUR GROWTH
WILL BE LIMITED.

      Our ability to grow, increase our market share and develop our products
depends in large part on our ability to hire, retain and manage highly skilled
employees, including technical, sales, marketing and business development
personnel. Companies in our industry and similar industries compete intensely to
hire and retain qualified personnel, and we cannot assure you that we will be
able to attract the employees we need, or that we will be able to retain the
services of those we have hired. We cannot assure you that we will be able to
prevent the unauthorized use or disclosure of our proprietary knowledge,
practices and procedures if our employees leave us.

IF WE DO NOT CONTINUE TO DEVELOP OUR TECHNOLOGY, OUR SERVICES MAY QUICKLY BECOME
OBSOLETE.

      The market for Internet technology products and services is characterized
by rapidly changing technology, evolving industry standards and customer demands
and frequent new product introductions and enhancements. To be successful, we
will have to continually improve the performance, features and reliability of
our products and services. We cannot assure you that our technological
development will advance at the pace necessary to sustain our growth.
Additionally, new Internet or telecommunications technologies may require us to
alter our technology and products to avoid them becoming obsolete. Improving our
current products and developing and introducing new products will require
significant research and development.

OUR LIMITED EXPERIENCE SELLING AND MARKETING OUR SERVICES MAY IMPEDE EXPANSION
OF OUR BUSINESS.

      We have had relatively little experience marketing our services and may
not be able to successfully implement our sales and marketing initiatives.
Marketing our services in order to expand our customer base is crucial to the
success of our business. The majority of our sales people were hired over the
past twelve months. We may be unable to hire, retain, integrate and motivate
sales and marketing personnel. New sales and marketing personnel may also
require a substantial period of time to become effective. Unsuccessful sales or
marketing efforts or a material lengthening of our sales cycle could have
material adverse effects on our revenues.

IF EQUIPMENT FAILURES INTERRUPT THE DISTRIBUTION OF CONTENT TO OUR CUSTOMERS, WE


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MAY LOSE CUSTOMERS AND OUR REPUTATION MAY BE ADVERSELY AFFECTED.

      Our services will only be attractive to current and prospective customers
if we are able to process and distribute content quickly and reliably. Any
failure of the computer equipment we use or the third-party telecommunications
networks on which we rely for distribution could interrupt or delay our service.
This could lead to customers canceling contracts and could damage our
reputation, which could limit our ability to attract additional customers and
lead to a drop in the value of our common stock.

      Substantially all of our own computer and communications hardware is
located in our headquarters and on the premises of our server hosting providers
located in New York City. We also depend on the Internet to distribute our
content. All of these systems are vulnerable to damage or interruption from
fire, flood, power loss, earthquake, malicious damage, including hacking and
computer viruses, telecommunications failure and similar events.

WE MAY BE UNABLE TO EXPAND OUR COMPUTER SYSTEMS QUICKLY ENOUGH TO SUPPORT DEMAND
FOR OUR SERVICES.

      Our future success will depend in part on our ability to expand our
computer systems rapidly in order to accommodate significant increases in
content processing volume. We may be unable to expand the capacity of our
existing systems or develop new systems to enable us to process a larger amount
of content, or to provide our services to a larger number of customers. If we
are unable to expand our systems, we may suffer service interruptions that could
make our services less attractive to customers.

      Most of our software systems are internally developed, and we rely on our
employees and third-party contractors to develop and maintain these systems. If
any of our software developers or these contractors become unavailable to us, we
may experience difficulty in improving and maintaining our systems. Although we
are continually enhancing and expanding our infrastructure, we have experienced
periodic systems interruptions, which we believe may continue to occur. Failure
to maintain high-capacity data transmission would adversely affect our
reputation and business.

WE FACE INTENSE COMPETITION THAT COULD IMPAIR OUR ABILITY TO GROW AND ACHIEVE
PROFITABILITY.

      We face significant competition in the market for digital content. We may
experience greater competition in the future as we address a wider range of
market segments, additional entrants join the market and existing competitors
offer new or upgraded products. Barriers to new entrants are relatively low. If
we fail to compete successfully, we could lose market share, or be forced to
lower our prices or spend more on marketing, which would reduce our margins.

      We compete with companies that are focused on aggregating third-party
content and distributing it to online customers. We also compete with
traditional wire services that have adapted their own content for use by Web
sites. We also compete with a wide range of providers of different types of
content that can be used on Web sites, such as directories, maps, photographs,
stock tickers and video clips. Finally, we compete with companies that create
and sell software that enables their customers to aggregate and distribute
digital content and/or to integrate digital content from external sources into
their web platforms. We do not believe that any of these competitors is
currently dominant.

      Some of our competitors offer products with different pricing models,
delivery systems and types of content, and these differences could prove
attractive to potential customers. In the future, these competitors or others
might offer products with the features we currently provide, or other features
desired by potential customers.

      Many of our current and potential competitors have longer operating
histories, larger customer or user bases, and significantly greater financial,
marketing and other resources than we do. These competitors can devote
substantially more resources than we can to business development and may adopt
aggressive pricing policies. In addition, larger, well-established and


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well-financed entities may acquire, invest in or form joint ventures with our
competitors as the use of the Internet and other online services increases.
Increased competition from these or other competitors could adversely affect our
business.

SOME OF OUR CUSTOMERS ARE RECENTLY ESTABLISHED INTERNET COMPANIES WHO POSE
CREDIT RISKS. THE FAILURE OF THESE CUSTOMERS TO PAY THEIR BILLS HAS LED TO A
LOSS OF REVENUE, A TREND WHICH MAY CONTINUE.

      While our strategy is to attract large and mid-sized customers, a number
of our customers are smaller Internet companies. Many of these companies have
limited operating histories, operate at a loss and have limited cash reserves
and limited access to additional capital. With some of these customers, we have
experienced difficulties collecting accounts receivable. As a result, our
allowance for doubtful accounts as of June 30, 2001 was approximately $1.2
million. We may continue to encounter these difficulties in the future. If any
significant part of our customer base continues to experience commercial
difficulties or is unable or unwilling to pay our fees for any reason, our
business will suffer.

FAILURE TO RETAIN EXISTING CUSTOMERS AND ATTRACT NEW CUSTOMERS COULD ADVERSELY
AFFECT OUR BUSINESS AND OPERATING RESULTS.

      During the second quarter of 2001 we added 77 new customers and provided
additional services to 35 of our existing customers. In addition we have
experienced 141 customer renewals. However, we also lost 320 customers during
this same period. Many of the customers we lost during this period were emerging
Internet companies with limited operating histories, limited cash reserves and
operating at a loss. While our strategy is to continue to target large and
mid-sized enterprise customers, a significant number of our customers continue
to comprise smaller Internet companies similar to those that we lost in the
first and second quarters of 2001. We cannot assure you that we will be able to
continue to attract new customers at the same rate as we have done in the past,
or that we will be able to retain existing customers.

IF THE CONTENT WE DISTRIBUTE IS UNLAWFUL OR CAUSES INJURY, WE MAY HAVE TO PAY
FINES OR DAMAGES.

      The publication or dissemination of content that we have distributed may
give rise to liability for defamation, negligence, breach of copyright, patent,
trade secret or trademark infringement or other claims or charges based on the
nature of the content. As a distributor of this content, we may be directly or
indirectly liable to claims or charges of this nature.

      In addition, we could be exposed to liability arising from the activities
of our customers or their users with respect to the unauthorized duplication of,
or insertion of inappropriate material into, the content we supply. Although we
carry general liability insurance, our insurance may not cover claims of these
types or may be inadequate to indemnify us for all liability that may be imposed
on us.

IF WE DISTRIBUTE CONTENT TO UNAUTHORIZED RECIPIENTS, WE MAY HAVE TO PAY DAMAGES
TO OUR CONTENT PROVIDERS.

      Our proprietary software technologies enable us to deliver content we
receive from participating content providers only to customers who have been
authorized to access that content. We might inadvertently distribute content to
a customer who is not authorized to receive it, which could subject us to a
claim for damages from the information provider or harm our reputation in the
marketplace.

IF WE ARE UNABLE TO MAINTAIN OUR REPUTATION AND EXPAND OUR NAME RECOGNITION, WE
MAY HAVE DIFFICULTY ATTRACTING NEW BUSINESS AND RETAINING CURRENT CUSTOMERS AND
EMPLOYEES, AND OUR BUSINESS MAY SUFFER.

      We believe that establishing and maintaining a good reputation and name
recognition is critical for attracting and retaining customers and employees. We
also believe that the importance of reputation and name recognition is
increasing, and will continue to increase, due to the growing number of
providers of Internet services. If our reputation is damaged or if potential
customers are not familiar with us or the services we provide, we may be unable


                                       21
<Page>

to attract new, or retain existing, customers and employees. Promotion and
enhancement of our name will depend largely on our success in continuing to
provide effective services. If customers do not perceive our services to be
effective or of high quality, our brand name and reputation will suffer.

PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED AND EFFORTS TO PROTECT OUR
INTELLECTUAL PROPERTY MAY BE INADEQUATE, TIME-CONSUMING AND EXPENSIVE.

      We regard our trademarks, service marks, copyrights, trade secrets and
similar intellectual property as critical to our success. The unauthorized
reproduction or other misappropriation of our trademarks or other intellectual
property could diminish the value of our proprietary rights or reputation. If
this were to occur, our business could be materially and adversely affected.

      We rely upon a combination of trademark and copyright law, patent law,
trade secret protection and confidentiality and license agreements with our
employees, customers and others to protect our proprietary rights. We have
received and have filed a number of trademarks and service marks, and have filed
several patent applications with the United States Patent and Trademark Office.
However, registrations and patents may only be granted in selected cases, and
there can be no assurance that we will be able to secure these or additional
registrations or patents. Furthermore, policing and enforcement against the
unauthorized use of our intellectual property rights could entail significant
expenses and could prove difficult or impossible.

THIRD PARTIES MAY CLAIM THAT WE HAVE BREACHED THEIR INTELLECTUAL PROPERTY
RIGHTS, WHICH COULD DIVERT MANAGEMENT'S ATTENTION AND RESULT IN EXPENSE TO
DEFEND OR SETTLE CLAIMS.

      Third parties may bring claims of copyright or trademark infringement,
patent violation or misappropriation of creative ideas or formats against us
with respect to content that we distribute or our technology or marketing
techniques and terminology. These claims, with or without merit, could be time
consuming to defend, result in costly litigation, divert management attention,
require us to enter into costly royalty or licensing arrangements or limit our
ability to distribute content or prevent us from utilizing important
technologies, ideas or formats.

WE COULD FACE ADDITIONAL RISKS AND CHALLENGES AS WE OPERATE INTERNATIONALLY AND
MAY FACE UNEXPECTED COSTS IN DEVELOPING INTERNATIONAL REVENUES.

      We have invested financial and managerial resources in our operations in
international markets. We maintain offices in London, Paris, Munich and in Miami
in order to service the European and Latin American markets, respectively. If
our revenues from international operations, and particularly from our operations
in Europe and Latin America, do not exceed the expense of establishing and
maintaining these operations, our business, financial condition and operating
results will suffer. We have only limited experience in international
operations, and we may not be able to capitalize on our investment in these
markets.

POTENTIAL ACQUISITIONS AND STRATEGIC INVESTMENTS MAY RESULT IN INCREASED
EXPENSES, DIFFICULTIES IN INTEGRATING TARGET COMPANIES AND DIVERSION OF
MANAGEMENT'S ATTENTION.

      We anticipate that from time to time we may be reviewing one or more
acquisitions or strategic investments or other opportunities to expand our range
of technology and products and to gain access to new markets. Growth through
acquisitions or strategic investments entails many risks, including the
following:

      -     our management's attention may be diverted during the acquisition
            and integration process;

      -     we may face costs, delays and difficulties of integrating the
            acquired company's operations, technologies and personnel into our
            existing operations, organization and culture;


                                       22
<Page>

      -     we may issue new equity securities to pay for acquisitions, which
            would dilute the holdings of existing stockholders;

      -     the timing of an acquisition or our failure to meet operating
            expectations for acquired businesses may impact adversely on our
            financial condition; and

      -     we may be adversely affected by expenses of any undisclosed or
            potential legal liabilities of the acquired company, including
            intellectual property, employment and warranty and product
            liability-related problems.

If realized, any of these risks could have a material adverse effect on our
business, financial condition and operating results.

                    RISKS OF DOING BUSINESS OVER THE INTERNET

IF THE INTERNET DOES NOT CONTINUE TO GROW AS A MEDIUM FOR COMMERCE, WE WILL NOT
SUCCEED.

      Because most of our present and anticipated customers are operators of
commercial Web sites, demand for our services will depend in large part on
continued growth in use of the Internet. There are critical issues concerning
the commercial use of the Internet that remain unresolved. If the Internet
develops more slowly than we expect as a commercial or business medium, demand
for our services will be lower than we expect.

LEGAL UNCERTAINTIES AND GOVERNMENT REGULATION OF THE INTERNET COULD INHIBIT
GROWTH OF THE INTERNET AND E-COMMERCE.

      Many legal questions relating to the Internet remain unclear and these
areas of uncertainty may be resolved in ways that damage our business. It may
take years to determine whether and how existing laws governing matters such as
intellectual property, privacy, libel and taxation apply to the Internet. In
addition, new laws and regulations that apply directly to Internet
communications, commerce and advertising are becoming more prevalent. For
example, the U.S. Congress has recently passed Internet-related legislation
concerning copyrights, taxation, and the online privacy of children. As the use
of the Internet and the prevalence of e-commerce grow, there may be calls for
further regulation, such as more stringent consumer protection laws. Finally,
our distribution arrangements and customer contracts could subject us to the
laws of foreign jurisdictions in unpredictable ways.

      These possibilities could affect us adversely in a number of ways. New
regulation could make the Internet less attractive to users, resulting in slower
growth in its use and acceptance than we expect. Complying with new regulations
could result in additional cost to us, which could reduce our margins, or it
could leave us at risk of potentially costly legal action. We may be affected
indirectly by legislation that fundamentally alters the practicality or
cost-effectiveness of utilizing the Internet, including the cost of transmitting
over various forms of network architecture, such as telephone networks or cable
systems, or the imposition of various forms of taxation on Internet-related
activities. Regulators continue to evaluate the best telecommunications policy
regarding the transmission of Internet traffic.

                         RISKS RELATED TO OUR SECURITIES

VOLATILITY OF OUR STOCK PRICE COULD ADVERSELY AFFECT STOCKHOLDERS.

      The stock market in general, and in particular the market for
Internet-related stocks, has recently experienced extreme price fluctuations. At
times, Internet-related stocks have traded at prices and multiples that are
substantially above the historical levels of the stock market in general. Since
estimates of the value of Internet-related companies have little historical
basis and often vary widely, fluctuations in our stock price may not be
correlated in a predictable way to our performance or operating results. Our
stock price may also fluctuate as a result of factors that are beyond our
control or unrelated to our operating results. We expect our stock price to


                                       23
<Page>

fluctuate as a result of factors such as:

      -     variations in our actual or anticipated quarterly operating results
            or those of our competitors;

      -     announcements by us or our competitors of technological innovations;

      -     introduction of new products or services by us or our competitors;

      -     conditions or trends in the Internet industry;

      -     changes in the market valuations of other Internet companies;

      -     announcements by us or our competitors of significant acquisitions;
            and

      -     our entry into strategic partnerships or joint ventures.

WE DO NOT INTEND TO PAY DIVIDENDS.

      We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain any future earnings for funding growth and,
therefore, do not expect to pay any cash dividends in the foreseeable future.

WE ARE EFFECTIVELY CONTROLLED BY OUR EXECUTIVE OFFICERS AND DIRECTORS AND THE
INTERESTS OF THESE STOCKHOLDERS COULD CONFLICT WITH YOUR INTERESTS.

      Our executive officers and directors, in the aggregate, beneficially own
approximately 46.0% of our outstanding common stock on a fully diluted basis. As
a result, these stockholders, if acting together, would be able to exert
considerable influence on any matters requiring approval by our stockholders,
including the election of directors, amendments to our charter and by-laws and
the approval of mergers or other business combination transactions. The
ownership position of these stockholders could delay, deter or prevent a change
in control of ScreamingMedia and could adversely affect the price that investors
might be willing to pay in the future for shares of our common stock.

IT MAY BE DIFFICULT FOR A THIRD PARTY TO ACQUIRE OUR COMPANY, WHICH COULD
DEPRESS OUR STOCK PRICE.

      Delaware corporate law and our certificate of incorporation and bylaws
contain provisions that could have the effect of delaying, deferring, or
preventing a change in control of ScreamingMedia that stockholders may consider
favorable or beneficial. These provisions could discourage proxy contests and
make it more difficult for you and other stockholders to elect directors and
take other corporate actions. These provisions could also limit the price that
investors might be willing to pay in the future for shares of our common stock.
These provisions include:

      -     a staggered board of directors, so that it would take three
            successive annual meetings to replace all directors;

      -     prohibition of stockholder action by written consent; and

      -     advance notice requirements for the submission by stockholders of
            nominations for election to the board of directors and for proposing
            matters that can be acted upon by stockholders at a meeting.

In addition, we have entered into a stockholder rights agreement that makes it
more difficult for a third party to acquire us without the support of our board
of directors and principal stockholders.


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<Page>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Interest Rate Sensitivity. We do not enter into financial instrument
transactions for trading purposes. Some of our investments may be subject to
market risk which means that a change in prevailing interest rates may cause the
principal amount of the investment to fluctuate.

      Exchange Rate Sensitivity. We consider our exposure to foreign currency
exchange rate fluctuations to be minimal as we currently do not have significant
amount of revenue and assets denominated in a foreign currency and have minimal
expenses paid in a foreign currency. Currently, the exposure is primarily
related to revenue and operating expenses in the U.K. We anticipate that in the
future, the proportion of our operating expenses paid in foreign currencies will
increase and that the number of foreign currencies in which we earn our revenue
will also increase. Accordingly, we may be subject to exposure from adverse
movements in foreign currency exchange rates in relation to these revenues and
expenses. We do not currently use derivative financial instruments. As of June
30, 2001 the effect of foreign exchange rate fluctuations was not material.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      There are no pending legal proceedings to which we are a party.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      From the date of receipt of funds from our initial public offering through
June 30, 2001, the net proceeds of the offering have been used to support our
domestic sales and marketing activities, the expansion of our international
operations, product development and for general corporate purposes. We also may
use a portion of the net proceeds to invest in complementary businesses or
technologies. On July 23, 2001, we announced that it we signed an agreement to
acquire all of the outstanding shares of Stockpoint, Inc. for $21.6 million in
cash, stock and retained debt. Consummation of the purchase is subject to
shareholder approval. None of the net proceeds from the offering was paid
directly or indirectly to any director, officer, general partner or their
associates, or to any persons owning 10% or more of any class of equity
securities. Pending application of the net proceeds towards one of the above
uses, the net proceeds have been invested in interest-bearing, investment-grade
securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None.

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

      On June 12, 2001 the Company held its annual meeting of stockholders. The
matters on which the stockholders voted, in person or by proxy, were (1) the
election of two nominees as class I directors to serve until the 2004 annual
meeting of stockholders and until their respective successors are duly elected
and qualified and (2) to ratify the selection of Deloitte & Touche LLP as the
independent auditors of the Company for the fiscal year ending December 31,
2001. The two nominees were elected and the auditors were ratified. The results
of the voting are set forth below:

<Table>
<Caption>
                                      Votes            Votes            Votes
Election of Directors                  for             Against        Abstained
---------------------                ----------        -------        ---------
<S>                                  <C>               <C>              <C>
James D. Robinson III                29,680,633        0                10,420
Michael H. Jordan                    29,680,633        0                10,420

Ratification of auditors             29,678,771        9,237            3,045
</Table>


                                       25
<Page>

ITEM 5. OTHER INFORMATION

William P. Kelly, Esq. resigned as a director on April 3, 2001 and no one has
been elected to fill his vacancy.


                                       26
<Page>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a) Exhibits

      (b) Reports on form 8-K.

            During the three months ended June 30, 2001, the registrant filed
the following reports on form 8-K:

On July 24, 2001 the registrant submitted a report on Form 8-K under item 5
thereof to file the press release, merger agreement and voting agreement in
connection with our execution of a merger agreement among the registrant SCRM
Merger Corp., a wholly-owned subsidiary of the registrant and Stockpoint, Inc.
on July 23, 2001.


                                       26
<Page>

                                   SIGNATURES

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


                                              SCREAMINGMEDIA INC.
                                                 (Registrant)

     SIGNATURE                         TITLE                     DATE
     ---------                         -----                     ----

/s/ KEVIN C. CLARK       Chairman of the Board of Directors      August 14, 2001
----------------------   Chief Executive Officer and Director
  Kevin C. Clark

/s/ DAVID M. OBSTLER     Chief Financial Officer and Treasurer   August 14, 2001
----------------------
    David M. Obstler


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