<Page>

                                    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: March 31, 2002

                                       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 May 8, 2002 there were 42,455,727 shares of the Registrant's common stock
outstanding.

<Page>

                               SCREAMINGMEDIA INC.

                                    FORM 10-Q

                          QUARTER ENDED MARCH 31, 2002

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                PAGE
                                                                                ----
<S>       <C>                                                                    <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Consolidated Financial Statements

          Consolidated Balance Sheets -- March 31, 2002
          (unaudited) and December 31, 2001 ...............................       3

          Consolidated Statements of Operations -- Three
          months ended March 31, 2002 (unaudited) and 2001
          (unaudited) .....................................................       4

          Consolidated Statements of Cash Flows -- Three months ended
          March 31, 2002 (unaudited) and 2001 (unaudited) .................       5

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

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations .......................................       9

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

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings ...............................................      27

Item 2.   Changes in Securities and Use of Proceeds .......................      27

Item 3.   Defaults upon Senior Securities .................................      27

Item 4.   Submission of Matters to a Vote of Security Holders .............      27

Item 5.   Other Information ...............................................      28

Item 6.   Exhibits and Reports on Form 8-K ................................      28
</Table>

                                        2
<Page>

                          PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                               SCREAMINGMEDIA INC.

                           CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
                                                                  MARCH 31,     DECEMBER 31,
                                                                    2002            2001
                                                                -------------   -------------
                                                                 (Unaudited)
                                     ASSETS
<S>                                                             <C>             <C>
CURRENT ASSETS:
Cash and cash equivalents ...................................   $  20,247,086   $  15,189,440
Marketable securities .......................................      41,157,465      48,925,499
Accounts receivable, net of allowance for doubtful
  accounts of $990,350 and $1,130,000 as of March 31,
  2002 and December 31, 2001, respectively ..................       4,348,474       5,577,430
Prepaid expenses ............................................       1,211,001       1,402,467
                                                                -------------   -------------
Total current assets ........................................      66,964,026      71,094,836

PROPERTY AND EQUIPMENT--Net of accumulated depreciation and
  amortization ..............................................      10,213,349      11,007,497
GOODWILL ....................................................      34,552,663      34,063,396
OTHER ASSETS ................................................         834,052       1,009,224
                                                                -------------   -------------
TOTAL ASSETS ................................................   $ 112,564,090   $ 117,174,953
                                                                =============   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses .......................   $   6,147,343   $   6,217,752
Accrued restructuring expenses ..............................       3,963,721       4,452,883
Deferred revenue ............................................       9,374,624      11,036,116
Current portion of capital lease obligations ................       1,773,709       2,138,723
                                                                -------------   -------------
Total current liabilities ...................................      21,259,397      23,845,474
                                                                -------------   -------------
NONCURRENT LIABILITIES:
Capital lease obligations, less current portion .............       1,592,328       1,857,707
                                                                -------------   -------------
Total liabilities ...........................................      22,851,725      25,703,181
                                                                -------------   -------------
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 100,000,000 shares
  authorized and 43,977,250 and 43,901,678 issued and
  42,425,711 and 42,350,139 outstanding at March 31,
  2002 and December 31, 2001 ................................         439,773         439,017
Additional paid-in capital ..................................     224,257,679     225,455,188
Warrants ....................................................       1,638,388       1,638,388
Deferred compensation .......................................      (1,138,897)     (1,822,393)
Treasury stock ..............................................        (968,738)       (968,738)
Accumulated deficit .........................................    (134,633,500)   (133,630,005)
Accumulated other comprehensive income ......................         117,660         360,315
                                                                -------------   -------------
Total stockholders' equity ..................................      89,712,365      91,471,772
                                                                -------------   -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................   $ 112,564,090   $ 117,174,953
                                                                =============   =============
</Table>

          See accompanying notes to consolidated financial statements.

                                        3
<Page>

                               SCREAMINGMEDIA INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<Table>
<Caption>
                                                     For the three months ended March 31,
                                                     ------------------------------------
                                                            2002         2001
                                                        ------------  ------------
<S>                                                     <C>           <C>
NET REVENUE ..........................................  $  9,410,995  $  7,601,487
                                                        ------------  ------------
OPERATING EXPENSES:
Cost of services (excluding depreciation of
    $247,423 and $162,285 for the three months ended
    March 31, 2002 and 2001, respectively,
    shown below) .....................................     2,987,860     2,218,748
Research and development (excluding stock-based
    compensation of $22,760 and $(501,599) for
    the three months ended March 31, 2002 and 2001,
    respectively, shown below) .......................     2,128,303     1,855,381
Sales and marketing (excluding stock-based
    compensation of $(734,480) and $128,764 for
    the three months ended March 31, 2002 and 2001,
    respectively, shown below) .......................     3,116,143     4,320,000
General and administrative (excluding stock-based
    compensation of $141,391 and
    $270,247 for the three months ended March 31, 2002
    and 2001, respectively, shown below) .............     2,120,091     3,741,201
Depreciation and amortization ........................     1,236,701     1,486,526
Stock-based compensation .............................      (570,329)     (102,588)
                                                        ------------  ------------
  Total operating expenses ...........................    11,018,769    13,519,268
                                                        ------------  ------------
OPERATING LOSS .......................................    (1,607,774)   (5,917,781)
                                                        ------------  ------------
OTHER INCOME (EXPENSE):
  Interest income ....................................       704,047     1,432,090
  Interest expense ...................................       (99,768)     (122,927)
                                                        ------------  ------------
Total other income, net ..............................       604,279     1,309,163
                                                        ------------  ------------
NET LOSS .............................................  $ (1,003,495) $ (4,608,618)
                                                        ============  ============
Basic net loss per common share ......................  $       (.02) $       (.12)
                                                        ============  ============
Weighted-average number of shares of common stock
  outstanding ........................................    42,376,521    37,964,145
                                                        ============  ============
</Table>

          See accompanying notes to consolidated financial statements.

                                        4
<Page>

                               SCREAMINGMEDIA INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<Table>
<Caption>
                                                          For the three months ended March 31,
                                                          ------------------------------------
                                                                  2002          2001
                                                              ------------  ------------
<S>                                                           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss .................................................  $ (1,003,495) $ (4,608,618)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization ..........................     1,236,701     1,486,526
    Stock-based compensation ...............................      (570,329)     (188,838)
    Stock/warrants issued for services .....................            --        86,250
  Changes in operating assets and liabilities:
    Decrease in accounts receivable ........................     1,228,956       406,133
    Decrease (increase) in prepaid expenses and other
    assets .................................................       366,638      (486,600)
    Increase in accounts payable and accrued
    expenses ...............................................        10,450       428,527
    Decrease in deferred revenue ...........................    (2,150,759)      (56,974)
    Decrease in accrued restructuring expenses .............      (489,162)           --
                                                              ------------  ------------
      Net cash used in operating activities ................    (1,371,000)   (2,933,594)
                                                              ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment .....................      (606,641)   (1,226,448)
    Sale (purchase)of investments and marketable securities      7,756,539   (24,798,982)
    Payments of severance and other exit costs related
    to business acquired ...................................       (80,859)           --
                                                              ------------  ------------
      Net cash provided by (used in) investing
         activities ........................................     7,069,039   (26,025,430)
                                                              ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Payment of capital lease obligations ...................      (709,393)     (523,771)
    Proceeds from issuance of common stock to employees
    through employee stock purchase plan ...................        57,072            --
                                                              ------------  ------------
      Net cash used in financing activities ................      (652,321)     (523,771)
                                                              ------------  ------------
Effect of exchange rate changes on cash and cash equivalents        11,928        70,160
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .......     5,057,646   (29,412,635)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD ..............    15,189,440    58,305,096
                                                              ------------  ------------
CASH AND CASH EQUIVALENTS END OF PERIOD ....................  $ 20,247,086  $ 28,892,461
                                                              ============  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest .....................................  $     99,768  $    122,927
                                                              ============  ============
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Fixed assets acquired under capital leases..................  $     79,000  $    164,254
                                                              ============  ============
Common stock issued to board member.........................  $         --  $     86,250
                                                              ============  ============
</Table>

                See accompanying notes to consolidated financial statements.

                                        5
<Page>

                               SCREAMINGMEDIA INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2002
                                   (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,
2001.

2.    RECLASSIFICATIONS

      Certain reclassifications have been made in the March 31, 2001 financial
statements to conform to the classifications used in the March 31, 2002
financial statements.

3.    IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 2001, the FASB issued SFAS No. 141, "Business Combinations", and
SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 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. The Company has applied
the provisions of SFAS No. 141 to its acquisition of Stockpoint. SFAS No. 142 is
effective for fiscal years beginning after December 15, 2001. Under SFAS No.
142, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests. Other
intangible assets will continue to be amortized over their useful lives. Under
the transition provisions of SFAS No. 142, goodwill and long lived intangible
assets related to the Company's Stockpoint acquisition will not be periodically
amortized. The Company has adopted this standard as of the beginning of its
fiscal year 2002 (January 1, 2002). As required by this standard, management is
in the process of determining if the Company's goodwill is impaired as of
January 1, 2002. Based on the provisions in the standard, management is required
to determine the amount of such impairment, if any, by June 30, 2002. Should
management determine that goodwill is impaired, the impairment will be reflected
as a cumulative effect of a change in accounting principle.

     In July 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002, and establishes an accounting standard requiring the recording of the fair
value of liabilities associated with the retirement of long-lived assets in the
period in which they are incurred. The Company is in the process of determining
the future impact that the adoption of SFAS No. 143 may have on our earnings and
financial position.

                                        6
<Page>


In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-lived Assets." SFAS No. 144, which supercedes SFAS No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to
be Disposed Of" and the accounting and reporting provisions of APB Opinion No.
30, "Reporting Results of Operations--Reporting the Effects of Disposal of a
Segment of a Business, Extraordinary, Unusual and Infrequently occurring Events
and Transactions, and amends ARB No. 51, "Consolidated Financial Statements,"
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years, with early
adoption encouraged. The provisions of this Statement are generally to be
applied prospectively. The Company has adopted SFAS No. 144 as of January 01,
2002. The adoption of SFAS No. 144 did not have a material effect on the
financial condition or results of operations of the Company.

     In November 2001, the Financial Accounting Standards Board ("FASB")
Emerging Task Force (EITF) reached a consensus on EITF Issue 01-09, ACCOUNTING
FOR CONSIDERATION GIVEN BY A VENDOR TO A CUSTOMER OR A RESELLER OF THE VENDOR'S
PRODUCTS, which is a codification of EITF 00-14, 00-22 and 00-25. This issue
presumes that consideration from a vendor to a customer or reseller of the
vendor's products to be a reduction of the selling prices of the vendor's
products and, therefore, should be characterized as a reduction of revenue when
recognized in the vendor's income statement and could lead to negative revenue
under certain circumstances. Revenue reduction is required unless consideration
relates to a separate identifiable benefit and the benefit's fair value can be
established. This issue should be applied no later than in annual or interim
financial statements for periods beginning after December 15, 2001. The Company
has applied EITF Issue 01-09 as of January 01, 2002 and this EITF did not have a
material effect on the Company's consolidated financial statements.

4. ACQUISITION

On August 21, 2001, (the "Merger Date") ScreamingMedia Inc. (the "Company"),
acquired Stockpoint, Inc. ("Stockpoint") pursuant to a merger of our
newly-formed wholly-owned subsidiary SCRM Merger Corp. with and into Stockpoint
with Stockpoint surviving as our wholly-owned subsidiary (the "Merger"). The
Company has accounted for the combination with Stockpoint as a purchase business
combination under SFAS No. 141. Stockpoint is a provider of online financial
applications, investment analysis tools and market information. As a result of
the acquisition, the Company has significantly strengthened its offerings to the
financial services industry, a key client sector. It also expects to reduce
costs through economies of scale.

The results of Stockpoint's operations have been included in the Company's
consolidated statement of operations since the Merger Date.

The total purchase price agreed to was approximately $24.6 million and consisted
of approximately $1,056,000 cash paid, 4.1 million shares of common stock
issued, valued at approximately $9.4 million determined based on the average
closing market price of ScreamingMedia's common shares at the time of
acquisition, warrants for the purchase of 362,000 shares of common stock valued
at approximately $699,000 using the Black-Scholes Valuation Model, using an
exercise price of $6.00, expected lives of 5 years, 146% volatility, 4.5%
discount rate, and a Company stock price of $2.26, and Stockpoint debt of
approximately $6.2 million paid off at the Merger Date. As part of the
approximate $24.6 million purchase price agreed to and in addition to the
aforementioned items, the Company paid approximately $5.9 million in other
assumed debt subsequent to the Merger Date that was directly attributable to
this transaction. Pursuant to the merger agreement, the Company withheld ten
percent of the consideration agreed to be paid to Stockpoint's equity holders,
totaling approximately $1.1 million in cash, common stock and warrants for
possible future purchase price adjustments. This holdback amount has not been
placed in escrow and such withheld common shares and warrants have not been
issued. In addition, the Company incurred approximately $1.4 million in
acquisition expenses. The Company funded the acquisition through the use of its
cash and cash equivalents.

The Company is in the process of obtaining an independent valuation of the
assets and liabilities it has acquired as well as identifying the intangible
assets it has acquired in order to finalize its allocation of the purchase price
of the transaction. The Company will finalize its valuation as soon as possible
or within one year of the acquisition date. The Company's preliminary allocation
of the purchase price is subject to refinement based on the final determination
of fair value. The following table summarizes management's preliminary estimated
fair values of the assets acquired and liabilities assumed at the Merger Date.


<Table>
<S>                                                      <C>
Cash                                                     $     675,829
 Current assets                                              3,166,819
 Property and equipment                                      1,333,810
</Table>

                                        7
<Page>

<Table>
<S>                                                      <C>
Goodwill                                                    33,571,672
                                                         -------------
          Total assets acquired                             38,748,130
                                                         -------------
 Current liabilities                                       (14,122,343)
                                                         -------------
          Total purchase price                           $ (24,625,787)
                                                         -------------
</Table>

In connection with this acquisition, the Company has recorded preliminary exit
costs of $980,991 as of December 31, 2001 to exit certain Stockpoint activities.
Of this amount, $881,810 was paid and $99,181 remains unpaid as of March 31,
2002. Such costs primarily relate to employee terminations and lease
terminations and have been recorded as additions to goodwill.

The unaudited pro forma information below represents the consolidated results of
operations as if the merger with Stockpoint had occurred as of January 1, 2001.
The unaudited pro forma information has been included for comparative purposes
and is not indicative of the results of operations of the consolidated Company
had the merger occurred as of January 1, 2001, nor is it necessarily indicative
of future results.

<Table>
<Caption>
                       For the Three Months Ended March 31,
                     --------------------------------------
                               2001

                              (000's)
                              --------
<S>                           <C>
Net Revenue ...............   $13,178
                              =======

Net loss ..................   $(6,015)
                              =======

Proforma Basic net loss per
common share ..............   $ (0.14)
                              =======

Weighted-average number
of shares of common stock
outstanding ...............    41,689
                              =======
</Table>

5. RESTRUCTURING AND ASSET IMPAIRMENT CHARGE

During the fiscal year 2001, we recorded a $12.2 million restructuring charge.
This charge consisted of $6.0 million for the shutdown or other rationalization
of certain sales facilities, workforce reduction costs of $1.3 million and asset
impairment charges of $4.9 million. The plan was materially completed at the end
of fiscal year 2001.

Rationalization entails the consolidation, shutdown or movement of facilities to
achieve more efficient operations. Six locations, located in both the United
States and Europe, were affected by these actions. Facility shutdown charges
consisted of $4.8 million of lease cancellation payments and $1.2 million for
expense recognition related to the termination of warrants issued to lessors.

The workforce reduction charge of $1.3 million included involuntary employee
separation costs for 74 employees worldwide. The Company reduced headcount in
sales and marketing, research and development and general and administrative
areas. The affected employees received severance benefits pursuant to
established severance policies or by governmentally mandated labor
regulations. As of March 31, 2002, 73 of the planned employee eliminations
were completed. Cash severance payments of approximately $975,000 and
$223,000 were made during the year ended December 31, 2001 and the first
quarter ended March 31, 2002, respectively. At March 31, 2002 the remaining
balance of the unpaid severance was classified in the Consolidated Balance
Sheet as part of accrued restructuring expenses. The remaining balance for
employee severance related to the one position was $101,985 at March 31, 2002.
Cash payments to complete the remaining

                                        8
<Page>

accelerated integration actions will be funded from operations and are not
expected to significantly impact the Company's liquidity.

The $4.9 million asset impairment charge consists of $3.4 million for the
abandonment of software modules and related professional services incurred in
the design of our computing infrastructure and MIS systems as well as $1.5
million for the abandonment of leasehold improvements, furniture and fixtures
and computer equipment in conjunction with our facility shutdowns.

The following table summarizes the components of the restructuring charge:

<Table>
<Caption>
                                                          Balance Remaining at
                                      Cost       Utilized   March 31, 2002
                                   -----------  ----------  --------------
<S>                                <C>          <C>         <C>
 Facility shutdowns .............  $ 6,028,201  $2,166,465  $    3,861,736
 Workforce reductions ...........    1,297,019   1,195,034         101,985
 Asset impairment charges .......    4,913,982   4,913,982              --
                                   -----------  ----------  --------------
                                   $12,239,202  $8,275,481  $    3,963,721
                                   ===========  ==========  ==============
</Table>

6.  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 March 31, 2002 and
December 31, 2001, the Company had cash and cash equivalents of $20.2 million
and $15.2 million, respectively.

7.  MARKETABLE SECURITIES

     Marketable securities investments as of March 31, 2002 consist of the
following:

<Table>
<Caption>
                                                UNREALIZED
                                                  HOLDING     FAIR
                                      COST        GAINS       VALUE
                                   -----------  ----------  -----------
<S>                                <C>          <C>         <C>
Corporate Notes and Bonds........  $41,039,805  $  117,660  $41,157,465
                                   ===========  ==========  ===========
</Table>

<Table>
<Caption>
                                                                FAIR
                                                  COST          VALUE
                                                -----------  -----------
<S>                                             <C>          <C>
Due within one year..............               $22,973,204  $22,965,226
Due after one year through five
  years..........................               $18,066,601  $18,192,239
                                                -----------  -----------
Total marketable securities......               $41,039,805  $41,157,465
                                                ===========  ===========
</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 March
31, 2002 and December 31, 2001. The Company does not hold these securities for
speculative or trading purposes.

8.  STOCK BASED COMPENSATION

In connection with the grant of stock options to employees, the Company has
reversed previously recognized deferred stock based compensation expense of
approximately $(570,000) for the three months ended March 31, 2002. This
reversal relates to previously recognized but unearned stock based compensation
of forfeited, unvested stock options granted to terminated employees. In
addition, the Company reversed future amortization expense of approximately
$1.3 million within the balance sheet from deferred compensation to
additional paid in capital, reflecting the forfeiture of these options.

9.   NET LOSS PER COMMON SHARE

                                        9
<Page>

     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.

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 together with our 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, 2001, as filed
with the Securities and Exchange Commission on April 1, 2002. 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.

OVERVIEW

ScreamingMedia provides information management solutions to the enterprise. The
Company provides turnkey solutions to customers in target segments where
information is mission-critical, namely Financial Services, Corporate Websites &
Intranets and Access Providers. ScreamingMedia's solutions encompass technology
for integrating third party information and internal information into business
systems, applications to present and analyze that information, a range of
licensed information from various sources, and services to enable customization
and integration of this information into any platform including websites,
intranets, wireless solutions and interactive television services.

CRITICAL ACCOUNTING POLICIES

     The Securities and Exchange Commission ("SEC") recently issued disclosure
guidance for "critical accounting policies". The SEC defines "critical
accounting policies" as those that require application of management's most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods.

     The following listing is not intended to be a comprehensive list of all of
our accounting policies. The Company's significant accounting policies are more
fully described in Note 2 of the Notes to the Consolidated Financial Statements
included in our Annual Report on Form 10K for the year ended December 31, 2001
as filed with the SEC on April 01, 2002. In many cases, the accounting treatment
of a particular transaction is specifically dictated by generally accepted
accounting principles, with no need for management's judgment in their
application. There are also areas in which management's judgment in selecting
any available alternative would not produce a materially different result.

     We have identified the following items as critical accounting policies
to our Company:

    REVENUE RECOGNITION: Our revenue recognition policy is significant as our
revenue is a key component of our results of operations. For the fiscal years
ended 2001 and 2000, the Company recognized revenue over the life of the
applicable contracts. During Fiscal 2002, we may sell our software and, under
certain circumstances, will recognize revenue in accordance with the provisions
of the American Institute of Certified Public Accountants' Statement of Position
97-2, "Software Revenue Recognition" (SOP 97-2). During the quarter ended March
31, 2001, we did not recognize revenue in accordance with SOP 97-2. All other
software sales will be recognized over the life of the applicable contracts in
accordance with the provisions of the American Institute

                                       10
<Page>

of Certified Public Accountants' Statement of Position 81-1, "Accounting for
Performance of Construction Type Contracts" (Sop 81-1).

     SOFTWARE CAPITALIZATION: Until 2002, we did not sell software as a
standalone product. During 2001, we made a decision to modify certain existing
internal use software and attempt to sell it as "Actrellis". At the time this
decision was made, we determined that we would need to modify our existing
software capitalization policy, such that in the future, we would now follow the
guidance of SFAS 86, "Accounting for the Costs of Computer Software to Be Sold,
Leased, or Otherwise Marketed" for software to be sold externally. The internal
use software predecessor to Actrellis was developed prior to the issuance of
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Interanal Use". SOP 98-1 requires certain costs attributable to internally
developed software to be capitalized in the application development stage. Since
the application development of Actrellis' predecessor occurred prior to the
issuance of SOP 98-1, no amounts related to Actrellis' development were
capitalized at March 31, 2002.

     Under SFAS No. 86, research and development costs are expensed as incurred.
Additionally, software development costs are subject to capitalization beginning
when a product's technological feasibility has been established and ending when
a product is available for release to customers. The Company's Actrellis
software was released soon after technological feasibility was established in
the first quarter ended March 31, 2002. As a result, capitalizable costs
subsequent to achieving technological feasibility under SFAS No. 86 have not
been incurred before the first quarter of 2002 and all software development
costs have been expensed through March 31, 2002.

     GOODWILL: The Company's intangibles consist primarily of goodwill from our
acquisition of Stockpoint accounted for under the purchase method. The Company
is in the process of obtaining an independent valuation of the assets and
liabilities it has acquired as well as identifying the intangible assets it has
acquired in order to finalize its allocation of the purchase price of the
transaction. The Company will finalize its valuation as soon as possible or
within one year of the acquisition date. The Company's preliminary allocation of
the purchase price is subject to refinement based on the final determination of
fair value. Under the transition provisions of Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets", goodwill
related to the Company's Stockpoint acquisition has not been periodically
amortized during the three months ended March 31, 2002.

     USE OF ESTIMATES: The Company's preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reported period. Actual results could differ
from these estimates.

REVENUE

We derive our revenue from the sales of licensable applications, customized
data, processing and delivery of information as well as set up and professional
services.

     HOSTED APPLICATIONS: We sell and host end user applications that enable
customers to present information. We sell individual applications such as stock
quotes or charts and bundle many of our applications into business solutions
which include the Financial Services Product Suite, the Business Information
Product Suite and the Consumer Product Suite. We recognize the revenue from
hosted applications on a subscription basis once the product has been
implemented.

     SOFTWARE: ScreamingMedia sells the Actrellis Integration Server Software,
formerly known as Siteware, which consumers install behind their firewall in
order to receive information from ScreamingMedia. The revenue from this product
is recognized ratably over the contract term. In 2002, we began selling our
Actrellis Enterprise Software Suite which customers can use to integrate and
present information without receiving any data or recurring services from
ScreamingMedia.

     This stand-alone software is sold as a perpetual or annual license fee and
the fees vary according to the version and functionality of software selected.
In accordance with the provisions of the American Institute of Certified Public
Accountants' Statement

                                       11
<Page>

of Position 97-2, "Software Revenue Recognition" (SOP 97-2), software license
revenue is generally recognized when, the contracted is executed, all delivery
obligations have been met, the fee is fixed and determinable, collectibility is
probable and vendor specific objective evidence is determinable. For some
arrangements, we may provide services that are essential to the functionality of
the software selected. For these arrangements both the license revenue and
services revenue will be recognized in accordance with the provisions of the
American Institute of Certified Public Accountants' Statement of Position 81-1,
"Accounting for Performance of Construction Type Contracts" (SOP 81-1). We will
account for these arrangements under the percentage of completion contract
method pursuant to SOP 81-1.

     Maintenance revenue for technical product support is recognized ratably
over the term of the contract.

     CUSTOMIZED DATA: We provide clients with information, which is provided as
either customized data feeds or presented in our applications. We charge clients
based on the type and volume of information, and recognize this revenue on a
subscription basis.

     PROCESSING AND DELIVERY: For Clients that have direct relationships with
information providers and for our Syndication!Connect product, we provide a
technology platform for the delivery and integration of information. We charge a
processing and delivery fee based on the amount of data delivered. This revenue
is recognized on a subscription basis.

     SET-UP FEES: Most of our products require a one-time set-up fee which
include charges for building custom filters, which enable the customer to
receive customized information, and integration kits that enable deeper
integration of our information management solutions with third party software
such as content management systems and enterprise information portals that
customers use to operate their site. Set-up revenue is recognized ratably over
the term of the contract.

     PROFESSIONAL SERVICES: We offer professional services which include
customization of products, systems integration services and other special
projects including editorial services and consulting. This revenue is generally
recognized as the service is performed.

     We record billed amounts due from clients in excess of revenue recognized
as deferred revenue on our balance sheet. Our contracts typically have lengths
of one or two years. We report our revenue net of allowances and rebates.

COST OF SERVICES

     Cost of services consists of royalties to information providers as well as
costs for bandwidth, storage of our servers in third-party network data centers
and certain costs associated with the maintenance of our infrastructure. We also
include certain payroll and related expenses pertaining to staff associated with
client implementation, developing custom applications, performing editorial and
quality assurance services and maintaining our network operations.

     We have several different arrangements with information providers. The
majority of our contracts are based on royalty fees that are calculated monthly,
based on the volume of a provider's information relayed to our customers. In
certain cases, the contractual agreement is based on fixed fees or subject to a
minimum charge. Certain of these fixed fee arrangements include additional fees
at a variable rate once our clients exceed a specified usage volume. In other
cases, we license information based on a per client basis.

                                       12
<Page>

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. These include engineers that
are developing and maintaining our software and infrastructure and our product
managers. Research and development costs are expensed as incurred until
technological feasibility is established for software to be sold. We believe
under our current software engineering processes that the establishment of
technological feasibility and general release substantially coincide. As a
result, no software development costs have been capitalized to date for software
developed for external sales. For software developed for internal use, expenses
are capitalized while in the application development stage and expensed while in
the preliminary and post implementation stages.

SALES AND MARKETING EXPENSES

     Sales and marketing expenses include costs of sales and marketing
personnel, as well as business development and customer support personnel,
related overhead, commissions, advertising and promotion expenses, travel and
entertainment expenses and other selling and marketing costs.

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 credit for the amortization of deferred stock-based
compensation of approximately $(570,000) and $(103,000) for the three months
ended March 31, 2002 and 2001, 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.

RESULTS OF OPERATIONS

     The results of operations for the three months ended March 31, 2001 do not
include the results of operations of Stockpoint as the Merger Date of this
acquisition was August 21, 2001.
     The following table sets forth our results of operations as a percentage of
revenue for the periods indicated.

<Table>
<Caption>
                                                        FOR THE THREE MONTHS ENDED
                                                               MARCH 31,
                                                        --------------------------
                                                           2002   2001
                                                           ----   -----
<S>                                                         <C>    <C>
Revenue ................................................    100%   100%
                                                           ====   ====
Operating expenses:

Cost of services (excluding depreciation of 3%
     and 2% for the three months ended March 31 2002
     and 2001 respectively, shown below) ...............     32     29
Research and development (excluding stock-based
     compensation of 0% and (7)% for
     the three months ended March 31, 2002 and 2001,
     respectively, shown below) ........................     23     24
</Table>

                                       13
<Page>

<Table>
<S>                                                         <C>    <C>
Sales and marketing (excluding stock-based
     compensation of (8)% and 2%
     for the three months ended March 31, 2002 and 2001,
     respectively, shown below).........................     33     57
General and administrative (excluding
     stock-based compensation of 2% and 4% for
     the three months ended March 31, 2002
     and 2001, respectively, shown below) ..............     23     49
  Depreciation and amortization ........................     13     20
  Stock-based compensation .............................     (6)    (1)
                                                           ----   ----
     Total operating expenses ..........................    118    178
                                                           ----   ----
Operating loss .........................................    (18)   (78)
Other income (expense), net ............................      6     19
                                                           ----   ----
     Net loss ..........................................    (12)%  (59)%
                                                           ====   ====
</Table>

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

     REVENUE. Total revenue increased to $9.4 million for the three months ended
March 31, 2002, an increase of $1.8 million or 24% from $7.6 million for the
three months ended March 31, 2001. This increase was primarily due to the
acquisition of Stockpoint, which accounted for $4.6 million of revenue. After
adjusting for the acquisition, our underlying revenues would

                                       14
<Page>

have decreased by 37%. This decrease adjusted for the acquisition of Stockpoint
is due to a decrease in our customer base partially offset by an increase in the
average contract value per customer. Although our total revenue has generally
increased in recent periods, we cannot be certain that total revenue will
grow in future periods or that it will grow at similar rates as in the past.

     COST OF SERVICES. Cost of services increased to $3.0 million for the three
months ended March 31, 2002, an increase of approximately $800,000 or 35% from
$2.2 million for the three months ended March 31, 2001. After adjusting for the
cost of services attributable to the acquisition of Stockpoint of approximately
$1.3 million, our underlying cost of services decreased 23%. This decrease was
due to a decrease in revenue resulting in lower data royalties paid to providers
and a decrease in the number of employees in the implementation and data
engineering, network operations and professional services departments. As a
percentage of revenue, and including Stockpoint, cost of services increased to
approximately 32% for the three months ended March 31, 2002 from 29% for the
three months ended March 31, 2001.

     RESEARCH AND DEVELOPMENT. Research and development expenses increased to
$2.1 million for the three months ended March 31, 2002, from $1.9 million for
the three months ended March 31, 2001. After adjusting for research and
development costs attributable to Stockpoint acquisition of approximately
$780,000, our underlying research and development costs decreased by
approximately $600,000. This is due to a decrease in personnel costs. As a
percentage of revenue, research and development expenses decreased slightly to
approximately 22% for the three months ended March 31, 2002 from approximately
24% for the three months ended March 31, 2001. The decrease in research and
development as a percentage of total revenue resulted primarily because revenue
growth outpaced increases in research and development expenditures.

     SALES AND MARKETING. Sales and marketing expenses decreased to $3.1 million
for the three months ended March 31, 2002, from $4.3 million for the three
months ended March 31, 2001. After adjusting for sales and marketing costs
attributable to the Stockpoint acquisition of approximately $763,000, our
underlying sales and marketing costs decreased by approximately 47%. As a
percentage of revenue, sales and marketing costs decreased to approximately 33%
for the three months ended March 31, 2002 from approximately 57% for the three
months ended March 31, 2001. This decrease in sales and marketing expense in
absolute dollars was due to a significant decrease in marketing programs, and a
decrease in compensation expense associated with the reduction of our sales
force and customer support. The decrease in sales and marketing as a percentage
of total revenue resulted primarily because revenue growth outpaced sales and
marketing expenditures.

     GENERAL AND ADMINISTRATIVE. General and administrative expenses
decreased to $2.1 million for the three months ended March 31, 2002, from
$3.7 million for the three months ended March 31, 2001. After adjusting for
general and administrative costs attributable to the Stockpoint acquisition
of approximately $530,000, our underlying general and administrative costs
decreased significantly by approximately 57%. This was due to a significant
decrease in bad debt expense, a decrease in facilities and personnel costs,
professional fees and travel expenses. As a percentage of revenue, general
and administrative expenses decreased to approximately 23% for the three
months ended March 31, 2002 from 49% for the for the three months ended March
31, 2001. General and administrative expenses decreased as a percentage of
total revenue primarily because revenue growth outpaced increases in general
and administrative expenditures.

     AMORTIZATION OF INTANGIBLES. In connection with the acquisition of
Stockpoint, we are in the process of obtaining an independent valuation of the
assets and liabilities acquired, as well as identifying the intangible assets
acquired in order to finalize the allocation of the purchase price of the
transaction. The valuation will be finalized within one year of the acquisition
date. For the year ending December 31, 2002 we will incur amortization expense
once we have identified the intangible assets related to the acquisition.

     STOCK-BASED COMPENSATION. In connection with the grant of stock options
to employees, the Company has reversed previously recognized deferred stock
based compensation expense of approximately $570,000 and $103,000 for the
three months ended March 31, 2002 and 2001, respectively. This reversal
relates to previously recognized but unearned stock based compensation of
forfeited, unvested stock options granted to terminated employees.

     OTHER INCOME, NET. Other income, net includes interest income from cash and

                                       15
<Page>

cash equivalents and marketable securities offset by interest on capital leases.
Other income, net, decreased to approximately $604,000 for the three months
ended March 31, 2002, from $1.3 million for the three months ended March 31,
2001. The significant decrease was due to a decrease in interest income earned
on declining cash balances, cash equivalents and investments in marketable
securities.

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 elsewhere contained herein and includes all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
information for the quarters presented. Historical results for any quarter are
not necessarily indicative of the results to be expected for any future period.

                                       16
<Page>

<Table>
<Caption>
                                                                              THREE MONTHS ENDED
                                              --------------------------------------------------------------------------------------
                                              JUNE 30,SEPTEMBER 30, DECEMBER 31,MARCH 31, JUNE 30,SEPTEMBER 30, DECEMBER 31,MARCH31,
                                                2000       2000       2000       2001       2001       2001       2001       2002
                                              --------   --------   --------   --------   --------   --------   --------   ---------
                                                                      (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                                           <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
    Total revenue ........................... $  4,705   $  6,584   $  7,856   $  7,601   $  6,701   $  7,244   $  9,405   $  9,411
                                              --------   --------   --------   --------   --------   --------   --------   --------

  Operating expenses:
Cost of services
(excluding depreciation of $123, $256, $151,
    $162, $259, $156, $227 and $247 in the
    second quarter of 2000 through the first
    quarter of 2002, respectively, as shown
    below) ..................................    1,427      1,985      1,543      2,219      1,887      2,239      2,866      2,988
Research and development(excluding
    stock-based compensation of $657, $439,
    $431, $(502), $229, $161, $(236) and $23
    in the second quarter of 2000 through the
    first quarter of 2002, respectively, as
    shown below) .............................   1,354      1,835      1,960      1,855      1,955      2,150      1,893      2,128
Sales and marketing (excludes stock-based
    compensation of $1,374, $1,171, $812, $129,
    $430,$(473), $(196) and $(735) in the
    second quarter of 2000 through the first
    quarter of 2002, respectively, as shown
    below) ....................................  4,528      6,156      5,884      4,320      3,670      3,145      3,377      3,116
General and administrative (excludes
    stock-based compensation of $3,218, $2,499,
    $2,373, $270, $407, $485, $(296) and $141
    in the second quarter of 2000 through the
    first quarter of 2002, respectively, as
    shown below) ..............................  2,176      2,199      4,071      3,839      3,474      3,128      2,671      2,120

Depreciation and amortization
  Stock-based                                      732        936      1,417      1,487      1,476      1,141      1,353      1,236
    compensation ............................    5,249      4,109      3,616       (103)     1,066        173       (256)      (570)
Restructuring charge ........................       --         --         --         --         --     12,239         --         --
                                              --------   --------   --------   --------   --------   --------   --------   --------
    Total operating expenses ................   15,466     17,220     18,491     13,617     13,528     24,215     11,904     11,018
                                              --------   --------   --------   --------   --------   --------   --------   --------

Operating loss ..............................  (10,761)   (10,636)   (10,635)    (6,016)    (6,827)   (16,971)    (2,499)    (1,607)
                                              --------   --------   --------   --------   --------   --------   --------   --------
Other income ................................      113      1,161      1,521      1,407      1,038        213        607        604
                                              --------   --------   --------   --------   --------   --------   --------   --------
Net loss ....................................  (10,648)    (9,475)    (9,114)    (4,609)    (5,789)   (16,758)    (1,892)    (1,003)
                                              ========   ========   ========   ========   ========   ========   ========   ========

Deemed preferred stock dividends ............     (155)   (50,215)        --         --         --         --         --         --
                                              --------   --------   --------   --------   --------   --------   --------   --------
Loss attributable to common stockholders .... $(10,803)  $(59,690)  $ (9,114)  $ (4,609)  $ (5,789)  $(16,758)  $ (1,892)  $ (1,003)
                                              ========   ========   ========   ========   ========   ========   ========   ========
Basic net loss per common share ............. $   (.85)  $  (2.16)  $   (.24)  $   (.12)  $   (.15)  $   (.42)  $   (.04)  $   (.02)
                                              ========   ========   ========   ========   ========   ========   ========   ========
Weighted-average number of shares used in
  computation of basic net loss per share ...   12,773     27,594     37,932     37,964     38,097     40,087     42,256     42,377
                                              ========   ========   ========   ========   ========   ========   ========   ========

PRO-FORMA BASIC NET LOSS
  PER COMMON SHARE
Loss attributable to common stockholders .... $(10,803)  $(59,690)  $ (9,114)  $ (4,609)  $ (5,789)  $(16,758)  $ (1,892)  $ (1,003)

Add amortization of deferred stock
  compensation ..............................    5,249      4,109      3,616       (103)     1,066        173       (256)      (570)
Add deemed preferred stock dividends ........      155     50,215         --         --         --         --         --         --
</Table>

                                       17
<Page>

<Table>
<S>                                           <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Add restrucuring and asset impairment charge        --         --         --         --         --     12,239         --         --

Add provision for impairment of investments         --         --         --         --         --        400         --         --

Net loss in computing proforma basic net loss --------   --------   --------   --------   --------   --------   --------   ---------
  per common share .......................... $ (5,399)  $ (5,366)  $ (5,498)  $ (4,712)  $ (4,723)  $ (3,946)  $ (2,148)  $ (1,573)
                                              ========   ========   ========   ========   ========   ========   ========   ========

Shares used in computation of basic net loss
  per common share ..........................   12,773     27,594     37,932     37,964     38,097     40,087     42,256     42,377

Add pro forma adjustment to reflect weighted
  average effect of the assumed conversion of
  convertible preferred stock ...............   11,349      6,958         --         --         --         --         --         --

Shares used in computing pro forma basic net
  loss per common share .....................   24,122     34,552     37,932     37,964     38,097     40,087     42,256     42,377

Pro forma basic net loss per common share ... $  (0.22)  $  (0.16)  $  (0.14)  $  (0.12)  $  (0.12)  $  (0.10)  $  (0.05)  $  (0.04)
                                              ========   ========   ========   ========   ========   ========   ========   =========
</Table>

     *Certain reclassifications have been made to the 1999, 2000 and 2001
financial statements to conform with the 2002 presentation- See footnotes to the
financial statements included elsewhere herein.

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.

Pro forma basic net loss excludes the amortization of deferred stock
compensation and deemed preferred stock dividends, restructuring charge, and the
provision for impairment of investments of $5,404, $54,324, $3,616, $(103),
$1,066, $12,812, $(256)and $(570) for the three months ending June 30, 2000
through the three months ended March 31, 2002 (in thousands), respectively.

     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 March 31,
2002 we had cash and cash equivalents and marketable securities of approximately
$61.4 million.

                                       18
<Page>

     We operate from leased premises in New York, satellite offices in San
Francisco, London and Iowa. Our current aggregate annual rental obligations
under these leases are approximately $2.1 million for the year ended December
31, 2002. Our capital expenditures were approximately $606,000 and $1.2 million,
for the three months ended March 31, 2002 and 2001, 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.

          As of March 31, 2002, our principal commitments consisted of
obligations outstanding under a series of capital leases of computer and
networking equipment and our facilities leases. Additionally, we entered into
other capital leases for the design and implementation of our 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. In connection with the acquisition of Stockpoint Inc., a financial
institution acting as a trustee for debenture holders is the beneficiary of
an irrevocable standby letter of credit for $6.3 million. Our obligation
regarding the $6.3 million letter of credit has been 99% satisfied as of
March 31, 2002. Our landlord is the beneficiary of a $175,000 irrevocable
standby letter of credit with a financial institution securing our New York
office lease arrangement with them.

     For the three months ended March 31, 2002 and 2001 the net cash used in
operating activities was approximately $1.4 million and $2.9 million. The net
cash used in operating activities for the three months ended March 31, 2002
resulted primarily from net losses of $1.0 million, a decrease in deferred
revenue of $2.2 million and a decrease in accrued restructuring expenses of
$489,000. This was offset by a decrease in trade accounts receivable of $1.2
million, and a decrease in prepaid expenses and other assets of $366,000.
Depreciation expense accounted for $1.2 million offset by a reversal of stock
based compensation of $570,000. The net cash used in operating activities for
the three months ended March 31, 2001 resulted primarily from net losses of $4.6
million offset by $1.4 million in non-cash charges. An increase in accounts
payable and accrued expenses and prepaid expenses and other assets of $429,000
and $487,000, respectively. This is offset by a decrease in accounts receivable
and deferred revenue of $406,000 and $57,00, respectively.

     For the three months ended March 31, 2002 and 2001, net cash provided by
(used) in investing activities was $7.1 million and $(26.0) million,
respectively. The net cash provided by investing activities for the three months
ended March 31, 2002 was principally for the sale of marketable securities
reclassified into cash and cash equivalents of $7.8 million, offset by
approximately $606,000 for the purchase of property and equipment. The net cash
used in investing activities for the three months ended March 31, 2001 was for
the purchase of marketable securities and equipment, $24.8 million and $1.2,
respectively.

     For the three months ended March 31, 2002 and 2001 net cash used in
financing activities was $652,000 and $524,000. Net cash used in financing
activities for the three months ended March 31, 2002 and 2001 was primarily from
repayments of our capital lease obligations.

     We believe that the net proceeds from our initial public offering, together
with the net proceeds from the Series C preferred stock offering and our current
cash and cash equivalents, and marketable securities will be sufficient to meet
our operating expenses, for at least the next twelve months. 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

                                       19
<Page>

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.

        RISK FACTORS

        An investment in our common stock involves a high degree of risk. The
risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties not presently known to us may also impair our
operations and business. If we do not successfully address any of the risks
described below, there could be a material adverse effect on our financial
condition, operating results and business. We cannot assure you that we will
successfully address these risks.

        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 of 1998 and expanded our line of business with the acquisition of
Stockpoint, Inc. in August of 2001. Accordingly, we have limited financial and
operating data for evaluating our business.

OUR MANAGEMENT TEAM HAS LIMITED EXPERIENCE IN WORKING TOGETHER AND IF THEY FAIL
TO FUNCTION EFFECTIVELY AS A UNIT, OUR OPERATING PERFORMANCE MAY BE ADVERSELY
AFFECTED.

        Our Chief Executive Officer has only been employed by us since January,
2002. Moreover, with the acquisition of Stockpoint, Inc., the management team
from both companies has been recently integrated and has only been working
together as one unit since August, 2001. Therefore, there has been little
opportunity to evaluate the effectiveness of our senior management team as a
unit. The failure of our senior management to function effectively as a team may
have an adverse effect on our ability to maintain a cohesive culture and compete
effectively.

WE HAVE A HISTORY OF SIGNIFICANT OPERATING LOSSES.

        We have incurred operating losses in every quarter since we began our
current line of business in 1998. We expect to incur additional losses in 2002.
Our ability to achieve profitability will depend on our ability to generate and
sustain 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 that 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;

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

- the performance of our technology;

- actions taken by our competitors, including new product introductions and
  enhancements; and

- adverse changes in the financial markets.

        These factors, some of which are beyond our control, make it difficult
to forecast our future revenues or results of operations accurately. A portion
of our operating expenses are related to costs 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 exceed increased revenues, results of
operations would be materially adversely affected.

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

        The market we compete in 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 technologies may require us to alter our technology
and products to avoid becoming obsolete. Improving our current products and
developing and introducing new products will require significant research and
development.

WE DO NOT HAVE A PROVEN TRACK RECORD OF SELLING OUR NEW TECHNOLOGY OFFERINGS.

        We have developed and introduced new products and services that have a
very limited track record. We cannot assure you whether there will be a
significant demand for our new products and services by either our current
clients or prospective clients. If the investment we have made in producing and
selling these new products and services does not result in significant sales,
our business may be materially adversely affected.

INTERNAL OR THIRD-PARTY SYSTEM OR EQUIPMENT FAILURES COULD ADVERSELY AFFECT OUR
BUSINESS.

        Our systems and operations are vulnerable to damage or interruption from
a variety of factors, including human error, natural disasters, power loss,
telecommunication failures, break-ins, sabotage (physical or electronic),
computer viruses, vandalism and similar unexpected adverse events. Moreover,
while we presently have multiple data centers and have implemented internal
redundancy measures, we presently do not have all functionality of all data
centers available in multiple sites. We presently have a computer center at our
Iowa facilities, and in addition, some of our computer operations are located in
facilities owned by third parties (known as "co-location facilities"). Any
failure of the computer equipment we use or the third-party telecommunications
networks and data centers 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, decrease our revenue and lead to a drop in the value of our common
stock.

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

        We face significant competition in our markets. 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:

        - Financial Information Providers and Media Companies, who often sell
their own information directly to customers;

        - Application Service Providers and Information Aggregators, who
aggregate information and either host private-label applications that use that
data or deliver that data in the form of feeds to customers;

                                       21
<Page>

         - Financial and other Enterprise Software Vendors, who have already or
may in the future develop extensions to their software capabilities to be able
to manage external information as efficiently as internal information;

        - The in-house development staffs of many of our clients, who develop
technology solutions often in conjunction with consulting and systems
integration firms.

        We expect all of these forms of competition to continue to intensify.
Some of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
client bases and significantly greater financial, technical and marketing
resources than we do. These factors may provide them with significant advantages
over us. In addition, larger, well-established and well-financed entities may
acquire, invest in or form joint ventures with our competitors. Increased
competition from these or other competitors could adversely affect our business.

SOME OF OUR CUSTOMERS ARE 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 enterprise
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 March 31,
2002 was approximately $1.0 million. We may continue to encounter these
difficulties in the future. If any significant part of our customer base 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.

        Many of the customers we lost 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 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.

LOSING MAJOR INFORMATION PROVIDERS MAY LEAVE US WITH INSUFFICIENT INFORMATION TO
RETAIN AND ATTRACT CUSTOMERS.

        We do not generate original content or data and are therefore highly
dependent upon third-party information providers. If we were to lose several of
our major information providers and were not able to obtain similar content or
data 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 or data
from our current or new providers on favorable terms in the future, if at all.

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. In
addition, the laws of some foreign countries do not protect proprietary rights
to the same extent as do U.S. laws. Moreover, potential competitors might be
able to develop technologies or services similar to ours without infringing our
patents. In addition, if our agreements with employees, consultants and others
who participate in product and service development activities are breached, we
may not have adequate remedies, and our trade secrets may become known or
independently developed by competitors. 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.

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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 information 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 information or prevent us from utilizing important
technologies, ideas or formats.

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

The publication or dissemination of information 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 information. As a distributor of this information, 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 information 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 INFORMATION TO UNAUTHORIZED RECIPIENTS, WE MAY HAVE TO PAY
DAMAGES TO OUR INFORMATION PROVIDERS.

        Our proprietary software technologies enable us to deliver information
we receive from participating information providers only to customers who have
been authorized to access that information. We might inadvertently distribute
information 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.

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;

        - 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. Any of these risks and
our limited experience in integrating acquisitions could affect our recent
acquisition and integration of Stockpoint and any possible future acquisitions.

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

        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.

                                       23
<Page>

Congress has passed Internet-related legislation concerning copyrights,
taxation, and the online privacy of children. As the use of the Internet grows,
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
regulations 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, the market for technology or
Internet-related stocks in particular, has experienced extreme price
fluctuations. At times, technology or 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 technology or
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 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 technology or Internet industry;

        - changes in the market valuations of other technology or 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 36.3% 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 by-laws
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

                                       24
<Page>

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.

          RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001, the FASB issued SFAS No. 141, "Business Combinations", and
SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 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. The Company has applied
the provisions of SFAS No. 141 to its acquisition of Stockpoint. SFAS No. 142 is
effective for fiscal years beginning after December 15, 2001. Under SFAS No.
142, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests. Other
intangible assets will continue to be amortized over their useful lives. Under
the transition provisions of SFAS No. 142, goodwill and long lived intangible
assets related to the Company's Stockpoint acquisition will not be periodically
amortized. The Company has adopted this standard as of the beginning of its
fiscal year 2002 (January 1, 2002). As required by this standard, management is
in the process of determining if the Company's goodwill is impaired as of
January 1, 2002. Based on the provisions in the standard, management is required
to determine the amount of such impairment, if any, by June 30, 2002. Should
management determine that goodwill is impaired, the impairment will be reflected
as a cumulative effect of a change in accounting principle.

     In July 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002, and establishes an accounting standard requiring the recording of the fair
value of liabilities associated with the retirement of long-lived assets in the
period in which they are incurred. The Company is in the process of determining
the future impact that the adoption of SFAS No. 143 may have on our earnings and
financial position.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-lived Assets." SFAS No. 144, which supercedes
SFAS No. 121, "Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed Of" and the accounting and reporting provisions
of APB Opinion No. 30, "Reporting Results of Operations--Reporting the Effects
of Disposal of a Segment of a Business, Extraordinary, Unusual and Infrequently
occurring Events and Transactions, and amends ARB No. 51, "Consolidated
Financial Statements," addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. SFAS No. 144 is effective for
fiscal years beginning after December 15, 2001, and interim periods within those
fiscal years, with early adoption encouraged. The provisions of this Statement
are generally to be applied prospectively. The Company has adopted SFAS No. 144
as of January 01, 2002. The adoption of SFAS No. 144 did not have a material
effect on the financial condition or results of operations of the Company.

     In November 2001, the Financial Accounting Standards Board ("FASB")
Emerging Task Force (EITF) reached a consensus on EITF Issue 01-09, ACCOUNTING
FOR CONSIDERATION GIVEN BY A VENDOR TO A CUSTOMER OR A RESELLER OF THE VENDOR'S
PRODUCTS, which is a codification of EITF 00-14, 00-22

                                       25
<Page>

and 00-25. This issue presumes that consideration from a vendor to a customer or
reseller of the vendor's products to be a reduction of the selling prices of the
vendor's products and, therefore, should be characterized as a reduction of
revenue when recognized in the vendor's income statement and could lead to
negative revenue under certain circumstances. Revenue reduction is required
unless consideration relates to a separate identifiable benefit and the
benefit's fair value can be established. This issue should be applied no later
than in annual or interim financial statements for periods beginning after
December 15, 2001. The Company has applied EITF Issue 01-09 as of January 01,
2002 and this EITF did not have a material effect on the Company's financial
statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Interest Rate Sensitivity. The primary objective of our investment 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 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 March
31, 2002 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

                                       26
<Page>

     From the date of receipt of funds from our initial public offering through
December 31, 2000, 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, although we have no present commitments or agreements with respect
to any material acquisition or investment. 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.

     We have never declared or paid any cash dividends on our common or
preferred stock. We do not anticipate paying any cash dividends in the
foreseeable future. We currently intend to retain future earnings, if any, to
finance operations and the expansion of our business. Any future determination
to pay cash dividends will be at the discretion of the board of directors and
will be dependent upon our financial condition, operating results, capital
requirements, general business conditions, restrictions imposed by financing
arrangements, if any, legal and regulatory restrictions on the payment of
dividends and other factors that our board of directors deems relevant.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         None.

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

          We did not submit any matters to a vote of security holders during the
First quarter of fiscal year ended December 31, 2002.

ITEM 5. OTHER INFORMATION

     John Sculley was appointed as a director of the registrant on
February 4, 2002 to replace Patrick McNeela who resigned as a director of the
registrant on February 4, 2002. Also, Jay Chiat served as Chairman Emeritus
and a director of the registrant until he passed away on April 23, 2002. It
is currently anticipated that the Board of Directors will elect a director to
fill such vacancy upon the location of a suitable candidate.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits - None

     (b)  Reports on Form 8-K

     On January 10, 2002, the registrant submitted a report on Form 8-K under
Item 9 announcing that Kirk Loevner was named President and Chief Executive
Officer of the registrant effective January 10, 2002. Mr. Loevner was also
elected to the Board of Directors. It was also announced that Kevin Clark,
former Chief Executive Officer, would remain Chairman of the Board of
Directors.


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<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)

<Table>
<Caption>
                     SIGNATURE                                 TITLE                   DATE
                     ---------                                 -----                   ----
                <S>                                   <C>                          <C>


                /s/ KIRK LOEVNER                     President, Chief Executive    May 14, 2002
---------------------------------------------------   Officer and Director
                  Kirk Loevner

               /s/ DAVID M. OBSTLER                  Chief Financial Officer       May 14, 2002
---------------------------------------------------   and Treasurer
                 David M. Obstler
</Table>

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