UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------
                                    FORM 10-K

(Mark One)

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003.

                                       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 000-28871

                            SWITCHBOARD INCORPORATED
             (Exact Name of Registrant as Specified in Its Charter)

                   Delaware                        04-3321134
       (State or Other Jurisdiction of          (I.R.S. Employer
        Incorporation or Organization)         Identification No.)

                                120 FLANDERS ROAD
                       WESTBORO, MASSACHUSETTS            01581
              (Address of Principal Executive Offices)  (ZIP Code)

        Registrant's telephone number, including area code: 508-898-8000

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $0.01 par value per share
                                (Title of Class)

     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 [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

<PAGE>

     As of June 30, 2003, the aggregate market value of the voting common stock
held by non-affiliates of the registrant was approximately $31,353,000
(reference is made to Part II, Item 5 of this Annual Report on Form 10-K for the
statement of assumptions upon which this calculation is based). The registrant
has no shares of non-voting common stock authorized or outstanding.

     On March 5, 2004, there were 19,203,941 shares of the registrant's common
stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's Definitive Proxy Statement for its 2004 Annual
Meeting of Stockholders are incorporated by reference into Part III herein. With
the exception of the portions of that proxy statement expressly incorporated
herein by reference, such document shall not be deemed filed as part hereof.

                           FORWARD LOOKING STATEMENTS

     This Annual Report on Form 10-K includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that are subject to a number of risks and
uncertainties. All statements, other than statements of historical fact,
included in this Annual Report on Form 10-K regarding our strategy, future
operations, financial position, estimated revenues, projected costs, prospects,
plans and objectives of management are forward-looking statements. When used in
this Annual Report on Form 10-K, the words "will", "believe", "anticipate",
"intend", "estimate", "expect", "project" and similar expressions are intended
to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. We cannot guarantee future results,
levels of activity, performance or achievements and you should not place undue
reliance on our forward-looking statements. Our forward-looking statements do
not reflect the potential impact of any future successful or unsuccessful
acquisitions, mergers, dispositions, joint ventures or strategic alliances. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
described in "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Factors Affecting Operating Results, Business Prospects
and Market Price of Stock" and elsewhere in this Annual Report on Form 10-K. The
forward-looking statements provided by us in this Annual Report on Form 10-K
represent our estimates as of the date this report is filed with the SEC. We
anticipate that subsequent events and developments will cause our estimates to
change. However, while we may elect to update our forward-looking statements in
the future we specifically disclaim any obligation to do so. Our forward-looking
statements should not be relied upon as representing our estimates as of any
date subsequent to the date this report is filed with the SEC.

     This Annual Report on Form 10-K also contains estimates made by independent
parties and by us relating to market size and growth and other industry data.
These estimates involve a number of assumptions and limitations, and you are
cautioned not to give undue weight to such estimates. We have not independently
verified the accuracy of the estimates made by third parties. In addition,
projections, assumptions and estimates of our future performance and the future
performance of the industries in which we operate are necessarily subject to a
high degree of uncertainty and risk due to a variety of factors, including those
described in "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Factors Affecting Operating Results, Business Prospects
and Market Price of Stock" and elsewhere in this Annual Report on Form 10-K.
These and other factors could cause results to differ materially from those
expressed in the estimates made by the independent parties and by us.

                                 WEBSITE ADDRESS

     Our website address is www.switchboard.com. References herein to
www.switchboard.com, switchboard.com, any variations of the foregoing or any
other uniform resource locator, or URL, are inactive textual references only.


                                       2
<PAGE>

The information on our website or at any other URL is not incorporated by
reference herein and should not be considered to be a part of this document. We
make available through our website, free of charge, our Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
amendments to those reports, filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably
practicable after such reports are electronically filed with, or furnished to,
the SEC. These reports may be accessed through the website's investor
information page.

                                  SERVICE MARKS

     Switchboard, Ad Studio, MapsOnUs, My Corner, My Studio, SideClick, Think
Outside the Book and What's Nearby are registered service marks of Switchboard
Incorporated. Deals Nearby, Envenue, It's the Yellow Pages. Electrified.,
Nearbuy, Switchboard Matrix, LocalClicks and LocalCalls are service marks of
Switchboard Incorporated. Other product, company or organization names cited
herein may be service marks, trademarks or trade names of their respective
companies or organizations.


                                       3
<PAGE>

                            SWITCHBOARD INCORPORATED
                         2003 ANNUAL REPORT ON FORM 10-K
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Part I
<S>            <C>          <C>                                                                         <C>
               Item 1.       Business                                                                     5
               Item 2.       Properties                                                                  14
               Item 3        Legal Proceedings                                                           14
               Item 4.       Submission of Matters to a Vote of Security Holders                         14
               Executive Officers of the Registrant                                                      15
Part II
               Item 5.       Market for Registrant's Common Equity, Related Stockholder Matters          16
                             and Issuer Purchases of Equity Securities
               Item 6.       Selected Financial Data                                                     17
               Item 7.       Management's Discussion and Analysis of Financial                           18
                             Condition and Results of Operations
               Item 7A.      Quantitative and Qualitative Disclosures About Market Risk                  38
               Item 8.       Financial Statements and Supplementary Data                                 39
               Item 9.       Changes in and Disagreements with Accountants on Accounting and             63
                             Financial Disclosure
               Item 9A.      Controls and Procedures                                                     63
Part III
               Item 10.      Directors and Executive Officers of the Registrant.                         63
               Item 11.      Executive Compensation                                                      63
               Item 12.      Security Ownership of Certain Beneficial Owners and                         64
                             Management and Related Stockholder Matters
               Item 13.      Certain Relationships and Related Transactions                              64
               Item 14.      Principal Accountant Fees and Services                                      64
Part IV.
               Item 15.      Exhibits, Financial Statement Schedules and Reports on                      64
                             Form 8-K

               Signatures                                                                                67
</TABLE>


                                       4
<PAGE>

                                     PART I

ITEM 1.   BUSINESS

     We are a leading provider of local online advertising products, enabled by
our innovative, consumer-oriented online yellow and white pages directory
technology. We generate revenue primarily from merchant and national advertisers
that pay to advertise in the Switchboard-powered directories of our licensees
and/or in our directory. Licensees of our yellow pages directory technology
include Internet portals, traditional yellow pages publishers and newspaper
publishers.

     Through our website, and our licensee network of Switchboard-powered yellow
pages directory websites, we provide merchant and national advertisers with a
way to connect with local consumers, thus helping these businesses establish and
grow their online presence. As with the traditional paper-based yellow pages,
merchants that advertise directly with us or through one of our licensees are
able to get their message in front of consumers at the time they are looking for
that merchant's products or services on the Internet.

     We are a Delaware corporation that commenced operations in February 1996.
From our inception in February 1996 until our initial public offering in March
2000, we were a unit and later a subsidiary of ePresence, Inc. (formerly Banyan
Worldwide). We acquired MapsOnUs(TM) (www.mapsonus.com) in 1998. MapsOnUs
provides advanced mapping and driving directions throughout the United States.
We have integrated the MapsOnUs technology and mapping services as an additional
component of our suite of proprietary software products that comprise our
directory technology. Our total net revenue was $15.2 million during 2003, $11.7
million during 2002 and $9.3 million during 2001. During 2003 we recorded net
income of $2.1 million, or $0.10 per share. During 2002 we recorded a net loss
of $4.0 million, or $0.21 per share. During 2001, we recorded a net loss of
$66.8 million, or $2.83 per share. As of December 31, 2003, 2002 and 2001, our
total assets were $59.5 million, $57.8 million and $65.8 million, respectively.

     On March 26, 2004, we announced a definitive agreement to merge with a
wholly-owned subsidiary of Infospace, Inc., or "Infospace," a diversified
technology and services company that develops Internet and wireless solutions
headquartered in Bellevue, Washington. Upon consummation of the merger,
Switchboard will be a wholly-owned subsidiary of Infospace. Each share of
Switchboard common stock will be converted into a right to receive $7.75 in
cash, without interest, upon consummation of the merger. The merger is expected
to close during the second half of 2004, and is subject to customary closing
conditions, including receipt of Switchboard and ePresence, Inc. shareholder, as
well as regulatory, approvals. See "Factors Affecting Operating Results,
Business Prospects and Market Price of Stock - Risks Resulting from our
Announced Merger Agreement with Infospace" for more information concerning this
announcement.

     We intend to file a proxy statement in connection with the proposed
acquisition of Switchboard by InfoSpace. Investors and security holders are
urged to read these filings when they become available because they will contain
important information about the proposed acquisition. Investors and security
holders may obtain free copies of these documents (when they are available) and
other documents filed with the Securities and Exchange Commission at the
Securities and Exchange Commission's web site at www.sec.gov. Investors and
security holders may obtain free copies of the documents filed by Switchboard
with the Securities and Exchange Commission by contacting Switchboard Investor
Relations at 120 Flanders Road, Westborough, Massachusetts 01581, (508)
898-8200. In addition, investors and security holders may read and copy any
reports, statements and other information filed by Switchboard at the SEC public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at (800) SEC-0330 for further information on the public reference room.

     Switchboard and InfoSpace and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Switchboard and ePresence in connection with the proposed
acquisition. Certain officers and directors of Switchboard have interests in the
proposed acquisition, including their ownership of Switchboard common stock, and
their interests will be described in the proxy statement of Switchboard when it
becomes available.

     Additional information regarding the directors and executive officers of
Switchboard is included in Part III, Item 10 below. Additional information
regarding the directors and executive officers of InfoSpace is included in
InfoSpace's proxy statement for its 2003 Annual Meeting of Stockholders, which
was filed with the Securities and Exchange Commission on April 21, 2003, and the
supplement to its proxy statement, which was filed with the Securities and
Exchange Commission on May 5, 2003. These documents are available free of charge
by contacting InfoSpace Investor Relations at (866) 438-4677. All of the
documents filed by Switchboard and InfoSpace with the SEC are available free of
charge at the Securities and Exchange Commission's web site at www.sec.gov.

                                       5
<PAGE>

     We have included the web address of the SEC as an inactive textual
reference only. Except as specifically incorporated by reference into this
Report, information on that website is not part of this Report.


                             Our Market Opportunity

     For decades, yellow pages directories have been a primary source of local
merchant information for consumers. According to The Kelsey Group ("Kelsey"), an
authority on local and personalized commerce intelligence, the yellow pages
industry generates an estimated $14 billion in annual advertising sales in the
United States, and $25 billion worldwide. Kelsey reports that while most of that
market still purchases yellow pages advertising in traditional printed form, the
industry is experiencing a migration from paper to online searches. According to
Kelsey, approximately 30% of total local business searches in both print and
online directional media were interactive in 2002 compared to approximately 15%
in 2001 and 9% in 2000. Kelsey expects that this trend will continue and
projects that interactive searches will account for 45% of usage by 2006. As the
volume of directory references made online continues to grow, we believe that
merchants will continue to shift marketing expenditures away from print yellow
pages and towards online yellow pages providers. Kelsey further reports that the
online directional media market, which generated $337 million in 2002, is
forecasted to reach $2 billion by 2006.

     An online presence is important for merchants of all sizes, regardless of
whether the merchant actually sells its products and services over the Internet.
According to 2002 research conducted by Pew Internet & American Life Project, if
a merchant provides product and/or service information online, even if it does
not sell products online, nearly half of all Americans would be more likely to
go to the physical store to transact business. Online yellow pages are a
resource that merchants can use to cost-effectively establish an online presence
and provide easy access to information to consumers who are actively searching
for merchants that meet their product and service needs. According to the 2003
Yellow Pages Industry Usage Study released by the Yellow Pages Integrated Media
Association, conducted by Knowledge Networks, 66% of online yellow pages users
make or intend to make a purchase after referring to Internet yellow pages.

     Further, one of the fastest growing segments of online advertising is paid
search. Online advertising through paid search generally takes two forms: (1)
"Pay for placement," whereby advertisers pay to have their advertisements
prominently displayed within a search engine database; or (2) "Pay for
performance," whereby advertisers pay online media companies every time a user
clicks on a link to its website. A key driver of demand for paid placement and
pay for performance advertising is the improved ability for advertisers to
better manage the effectiveness of their online advertising versus other forms
of advertising. According to PricewaterhouseCoopers IAB Internet Advertising
Revenue Report, paid search accounted for 15% of the $6 billion of online
advertising spending in 2002, compared to only 4% in 2001. Many of the companies
that develop these search engines have publicly stated their emerging interest
in the local online advertising market, and the application of the "pay for
performance" model to this market.

     Market research continues to reinforce the increasing role that Internet
promotion plays in stimulating online and offline transactions for merchants. We
believe that as a leading provider of local online advertising solutions and
yellow and white pages directories, we are well positioned to capitalize on this
opportunity through our branded website and our network of current and future
licensees.

                                  Our Business

     Merchant and national advertisers pay to advertise in the
Switchboard-powered directory websites of our licensees and/or in our own
directory website. Consumers access our directory technology through one of the
Internet brands of our licensees or through our website, www.switchboard.com, to
locate business and residential information locally and nationally. The sales
forces of our licensees, our own direct sales force and third party sales
channels sell the advertising placed in Switchboard-powered directories. Our
directory technology creates powerful advertising opportunities for merchant and
national advertisers, and the merchant information creates a useful experience
for consumers that drives more user traffic to our own website, and to the
websites of our licensees. By increasing our consumer audience, we, in turn,
increase the value and reach of our advertising products.

                            Our Advertising Products

     We offer a variety of advertising products tailored to the needs of small
local businesses, large national advertisers, online retailers and other
advertisers seeking increased online exposure.

                                       6
<PAGE>

     Subscriptions for Prominent Placement - We offer merchants prominent
placement in our directory and the directories of our licensees. Prominent
placement advertisements enable merchants to have their listing data presented
ahead of non paying merchant listings included in our database, and/or enhance
their listing with additional information that may include links to their
website. It also allows advertisers to expand the geographic and category reach
of their business information. Merchants typically pay a monthly subscription
fee for prominent listings.

     Local Performance Based Advertising (LocalClicks(TM)) - We continue to
evolve the concept of a traditional print directory into an interactive and
dynamic medium interconnecting consumers with merchant and national advertisers.
In August 2003, we announced the launch of our new LocalClicks advertising
product. The LocalClicks product introduces performance-based advertising within
the Switchboard.com yellow pages. The LocalClicks product integrates paid links
into yellow pages results, connecting consumers directly from yellow pages
business listings to extended business information, business services, and
products available for online purchase. LocalClicks permits national businesses
that have a local business presence to embed links into each of their affiliated
local business listings. For example, an auto manufacturer can place links to a
newly introduced car website into the business listings of all of its
dealerships nationwide. With a single ad purchase, they create thousands of
click-able opportunities for consumers searching for dealerships locally.
Merchants typically pay a fixed fee for each time a consumer clicks on the
LocalClicks links.

     Content-Targeted Advertising - Advertisers pay for clicks to their websites
from links that are delivered in conjunction with a consumer's search query. The
consumer's search query contains terms that indicate what the consumer appears
to be searching for, including the type of product or services and location. We
call this contextual relevance. In addition to delivering the online yellow page
listings that the consumer is searching for, using our proprietary enhanced
merchant information (rich data that we have gathered about a merchant's product
and service offerings), we are able to serve contextually relevant
advertisements on yellow pages results and a variety of other pages throughout
the Switchboard.com website. Through our agreement with Google Inc. announced in
July 2003, we offer contextually relevant advertisements on our website through
the Google AdSense(TM) program. Google AdSense uses proprietary technology to
deliver dynamically generated ads targeted to the content of our online yellow
page listings. For example, when a consumer performs a yellow pages search and a
results page is displayed to the consumer, Google analyzes extensive information
about the category, the location, and the content associated with merchant
listings that satisfy the search. Google matches keywords from our local
merchant data with advertisers in their database, and returns the appropriate
advertisements for presentation alongside the yellow pages search results. Our
extensive local content enables Google's advertisers to reach a very targeted
audience through our relevant yellow pages search results. Google pays us a
share of the revenue generated whenever a user clicks on one of these ads.

     National Banner and Site Sponsorship Advertising - We sell traditional
site-wide banner and category-specific banner programs on the Switchboard.com
website, and the directories of some of our licensees, primarily in the white
pages area of our online directory. We also sell sponsorship programs on a
site-wide basis or for various categories. Sponsorships are advertisements that
do not rotate with other advertisers and are prominently displayed on our
website. Customers typically pay us based on the number of page visits we
deliver to consumers or the number of times consumers click on their
advertisements.

     As a service to some of our licensees and local merchant customers, we have
historically provided complementary services such as small business website
hosting. However, we do not emphasize such services today. In addition, we also
customize our MapsOnUs maps and driving directions content for licensing to a
number of online destinations but such licensing is not a primary product
offering and is not a material revenue source.

                        Selling Our Advertising Products

     Sales channels for our online advertising products include the sales forces
of our directory technology licensees, our own direct sales force, and third
party sales channels.

     Directory Technology Licensees - We provide a complete online yellow pages
solution, which we refer to as our directory technology, for companies
strategically focused on developing a successful online directory business under
their own brands. We license our directory technology to Internet portals,
traditional yellow pages publishers and newspaper publishers. Our suite of
advertising products are built around a proprietary merchant database and search
technology, as well as full-featured advertising and merchant management tools.
The full suite of advertising products included in our directory products enable
our licensees to offer merchants local online advertising products and yellow
and white pages services. Our directory technology is fully integrated to meet
the needs of our licensees, their merchant customers and the millions of
consumers that utilize the Switchboard-powered directory embedded in their
websites.

                                       7
<PAGE>

     Our licensees typically pay us a setup fee for the creation and
modification of a web-hosted online yellow and white pages directory. In
addition to a setup fee, our licensees typically pay us a royalty in the form of
a fixed fee-per-merchant based on the number of merchant advertisements promoted
in their platform, or a percentage of revenue generated from those merchant
advertisements. Further, our licensees can offer their advertisers placement in
our www.switchboard.com website for an incremental fee. Licensing our technology
in this way enables us to accelerate and share in the growth of local online
advertising as traditional yellow pages advertisers spend more online.

     Our largest and most significant licensee is AOL. We maintain and manage a
customized online directory in a separate and distinct web-hosted environment
for AOL. Prior to October 1, 2003, AOL paid us a percentage of revenue for
advertisements placed in their online directory and engineering service fees on
a time and materials basis for customized modifications they requested to their
directory technology. Beginning October 1, 2003, AOL pays us $4.8 million
annually in monthly installments to provide, maintain and customize their
directory platform through December 2005. In addition, AOL and Switchboard are
able to sell and share revenue on advertising products offering merchant and
national advertisers access to the combined consumer audience of both the AOL
and Switchboard yellow pages directories. AOL constituted approximately 41.2% of
our net revenue in 2003 and approximately 41.8% of our net revenue in 2002. AOL
beneficially owned approximately 7.8% of our common stock as of March 5, 2004.
We anticipate that AOL will continue to represent a significant percentage of
our revenue in 2004 and will be a material component of our overall business.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Significant Relationship" for more information.

     Direct and Third Party Sales - We also sell directory advertisements into
the Switchboard.com website through direct and third party sales forces. We have
a small, dedicated direct sales force that focuses on selling our advertising
products primarily to national and e-commerce advertisers. We currently intend
to spend an additional $2.5 million during 2004 as compared to 2003, to support
direct sales. However, our level of spending in this area may increase or
decrease depending on the success of this initiative, and as we become more
experienced in managing a significant direct sales effort. We also utilize third
party sales channels, including yellow pages publishers, telemarketing
companies, and Certified Marketing Representatives (advertising agencies that
specialize in placing yellow pages advertisements). For example, we have an
agreement with Monstermoving Inc. that provides them with the ability to sell
directory advertising services on the Switchboard.com website. Under the
agreement, each Monstermoving customer that renews its online subscription will
have an advertisement included on the Switchboard.com site, and Monstermoving
will pay us a fee for each of those customers.

                    The Audience for Our Advertising Products

     Our licensees each have their own respective online audiences, or consumer
reach, and the advertisements they sell into their Switchboard-powered
directories are made visible to those audiences.

     Furthermore, our own website, www.switchboard.com, is one of the leading
destinations on the Internet where consumers search for local merchants.
Switchboard.com has grown significantly since its inception. As a result, many
advertisers looking for effective and efficient forms of local online
advertising desire placement in the www.switchboard.com directory. According to
Nielsen//NetRatings, our websites served more than 6.1 million unique visitors
from home and work during January 2004.

     Directory advertisements sold into Switchboard.com are typically made
visible to the combined audience of the Switchboard.com directory, and the
directories of a subset of our licensees who agree to display, in their
Switchboard-powered directories, advertisements sold by Switchboard and other
sales forces. By participating in this network, these licensees can offer their
users a broader base of merchant information, which, in turn, makes their
directories more useful to their users. The combined audience of
www.switchboard.com and these licensees adds overall value for our advertisers.

                                  Our Strategy

     We believe that our business opportunity and prospects rely on the overall
growth in the market for local online advertising and yellow pages advertising,
our ability to attract increasing numbers of paying merchant and national
advertisers either directly or through our licensees, our ability to drive
quality leads to merchants, and our ability to innovate our product and service
offerings to meet consumer and merchant demands. We intend to grow our business
by focusing on the following key strategies:

     Promote the Development of Local Online Advertising Products and the Online
Yellow Pages Market - We have sought to accelerate market adoption of online
yellow pages advertising by licensing our directory technology to major media


                                       8
<PAGE>

companies, including traditional yellow pages publishers, newspaper publishers
and Internet portals. We have pursued this strategy on a private label and
co-branded basis to supplement our initiatives in promoting the Switchboard
brand. We also participate in industry trade groups to broaden adoption of the
online yellow pages advertising media. We seek to continue these efforts to grow
the overall market opportunity for the online yellow pages category and local
online advertising in general.

     Attract Increasing Numbers of Paying Merchants - We seek to increase the
number of merchant and national advertisers in our directory and the
Switchboard-powered directories of our licensees. Our sales strategy includes a
number of facets, including seeking to expand the number of licensees of our
directory technology, leveraging third party sales forces, promoting
self-service sign up for merchants and other sales strategies. We may also
embark upon broader direct selling initiatives to local merchants, including
geographically targeted telemarketing and in-person sales. If we pursue such
direct selling, we will evaluate expanding our existing sales and marketing team
and/or contracting with third party marketing firms.

     Expand the Audience for Our Advertising Products - Continuing to expand the
number of consumers using our website and the directories we power for licensees
is critical to our ability to provide value to our merchant and national
advertisers. In addition, a large and active base of merchant and national
advertisers will enable us to generate more relevant search results for
consumers. Through various initiatives, we seek to increase the number of
consumers using our directory. Such initiatives may include public relations
activities to increase consumer awareness of online yellow pages and the
Switchboard brand; online advertising campaigns to direct traffic to our
website; word-of-mouth marketing initiatives; increasing the number of licensees
using our yellow pages directory technology; distribution arrangements to
provide our local content to search portals, e-commerce hubs and topic-specific
content sites; and, affiliate programs targeted at attracting usage across
specific segments of the online consumer population.

     Innovate New Product and Service Offerings - We believe that our future
success hinges on delivering a superior consumer experience through the
functionality of our website and the directories that we power for our
licensees. By delivering a superior consumer experience, we will enhance the
value to merchants that advertise with us and with our licensees. For example,
through sophisticated searching capabilities and simple user interfaces, we can
connect consumers searching for specific products and services with the local
merchants that provide them. In addition, by continuing to provide our merchant
base with customizable products and comprehensive management tools that make it
easier for individual merchants and our licensees to manage their merchant
advertising efficiently, we seek to increase the revenue opportunity of our
services. We intend to continue to develop new technologies that improve the
functionality of our products and services for consumers, merchants and our
licensees.

                         Our Online Directory Technology

     Our directory technology is comprised of five fully-integrated components
that are utilized for our branded www.switchboard.com website, and that enable
our licensees to develop and manage their online directory business.

     Sophisticated Database and Search Engine - We provide a highly scalable,
reliable and high performance directory search engine that we have optimized for
the unique nature of local business directory searches. Through our proprietary
database technology, we are able to easily merge data from multiple sources,
allowing us to provide timely and comprehensive content to our licensees and
users. With the release of our Switchboard MatrixSM technology, we were the
first-to-market with the introduction of searchable online "copy points". Copy
points are enhanced data typically found in paper yellow pages advertising. Copy
points enable merchants to be found via a wide variety of attributes, including
product and service offerings, business hours, specialties, etc., moving beyond
the traditional category / location searching of paper-based or other online
yellow pages offerings. Recent enhancements to our database and search engine
enable users to find local businesses using common words and phrases. Our new
technology "learns", from past user behavior, the yellow pages headings most
frequently associated with these common words and phrases, and provides users
with results that are more relevant to their search.

     Customizable Advertising Product Suite - Within the yellow pages directory
we provide a complete suite of local and national advertising products that can
be fully customized to match the unique packaging and pricing requirements of
our licensees. With the introduction of our searchable "copy point" model, we
fully aligned our online advertising products with traditional yellow pages
products, offering similar enhanced data as the printed medium, improving our
ability to streamline our sales efforts.

     Comprehensive Merchant Management Tools - We have developed three different
tiers of merchant management software solutions to provide our licensees with
the level of functionality that works most efficiently in coordination with
their existing in-house systems. For licensees looking for a complete merchant
management solution, we provide a comprehensive customer relationship
management, or CRM, package that tracks merchant customer activity, performs
billing functions and manages merchant advertising. Our CRM package also can be


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<PAGE>

integrated with other applications to enable customer support representatives to
manage the fulfillment of a variety of products from within a single interface.
For licensees that already possess CRM infrastructure, we provide a secure,
web-based merchant management tool that allows licensees to easily manage
advertising campaigns and merchant collateral within the online yellow pages
technology. Lastly, for licensees that regularly set-up large volumes of
merchant advertisements into the system, we provide a bulk load interface that
allows formatted files containing merchant information and advertising
specifications to be automatically processed.

     Cobrandable User Interface - Through ongoing usability testing and close
analysis of consumer use of online yellow pages, we continue to evolve our user
interface and searching capabilities to quickly connect consumers with the most
relevant search results. Through the modular organization of functional elements
of our interface, we can customize the interface's look and feel so that it is
consistent with the look and feel of our licensees' websites and branding. These
modules separate the functional elements from the layout elements, such as site
appearance, thus facilitating rapid development. As we enhance or build new
functional elements, the underlying architecture enables us to deploy these
elements across all of the websites of our licensees without making individual
changes to specific implementation.

     MapsOnUs.com - Maps and Directions - Our MapsOnUs technology integrates
maps and driving directions into many areas of our directory technology, and is
also available through our MapsOnUs.com website. Utilizing our MapsOnUs
capabilities, we are able to provide businesses with dealer locators that can be
easily integrated into their websites to help visitors locate the closest
outlet, dealer or franchisee.

                Our Technology and Enhanced Merchant Information

     We have developed sophisticated technologies that enable rapid
dissemination of information requested by consumers using our website or the
websites of our licensees. These technologies were conceived and developed by a
staff of senior engineers experienced in designing large-scale, distributed
computer systems, a form of computer architecture that divides system
functionality over numerous computers, each known as a server, to enhance
overall system performance and reliability. We also have particular strengths in
the areas of database technologies, advertising management and content
customization.

     Directory Technology - We have been affiliated with ePresence (formerly
Banyan Worldwide), a pioneer of directory technology, since our founding in
1996. Directories played a key role in the large-scale, multiple-site
distributed systems deployed by Banyan since 1983. Our founder, Dean Polnerow,
designed and originally developed StreetTalkTM, Banyan's directory service.
Building on this experience to create our own proprietary directory technology,
we created what we believe to be the first national directory of United States
residential information available on the Internet, as well as our innovative and
proprietary yellow pages business directory.

     Data Content - We license our base residential and business listings data
content from third parties and then augment it with data that we have gathered
ourselves. There are over 108 million residential and 17 million business
listings included in our database. Currently our primary data source for base
listing information is Acxiom Corporation, and our agreement with Acxiom expires
in December 2005. We augment these base listings with detailed information we
have gathered through our own data compilation efforts, and through local
merchant sales. We have additional data content for over one million merchants
that enables consumers to search on merchant copy points or attributes. In
addition, we purchase the data used in our MapsOnUs services from TeleAtlas
North America, Inc. pursuant to an agreement which expires in February 2005.

     Site Design - Our directory technology was designed to provide high levels
of performance, scalability, and reliability. The directory is implemented as a
set of Windows 2000 servers that are organized into groups. Each group of
servers provides different parts of the overall site's functionality and each
type of functionality is provided by more than one group of servers. Individual
servers in a group can be added or removed without affecting the functional
capabilities of the site, and most changes required are managed automatically by
proprietary software that we have developed. This distributed architecture is
designed to be highly scalable, which means that system capacity and
functionality can be easily and inexpensively increased, typically with minimal
or no time-consuming software changes required. It is also designed to be
reliable, which means it is resistant to service interruptions and the
unavailability of one or more servers does not affect the operation of other
servers or the directory as a whole.

     We contract with a third party to host and secure the infrastructure for
our directory and the directories of our licensees. Access to the third party
facility is restricted and our infrastructure is physically segregated with
restricted access as well. In addition, we license firewall and anti-virus
security software and monitor site activity to detect unauthorized access to our
technology and information. Although we take these measures to protect access to
our technology and merchant information, we cannot totally eliminate the
possibility of unauthorized access.

                                       10
<PAGE>

     Database Search Technologies - We have developed technology designed to
quickly exchange information between the groups of servers that provide the
interface consumers use to input their requests for information with the groups
of servers that store the databases of information we use to respond to these
requests. This technology allows data from multiple databases to be accessed and
combined, regardless of its structure or content. This simplifies the
development of new user interfaces and facilitates database updates. Our
database technology helps to maximize website performance through sophisticated
in-memory data structures that are optimized for rapid searching of various
combinations of data elements, and by automatically balancing the tasks being
performed by individual servers.

     Our database technology includes sophisticated query management techniques
that enable requests for large amounts of data to be retrieved in segments while
reducing the computer processing time typically associated with these operations
using conventional design techniques. This enables ready access to a large
amount of data stored in any of the databases and results in faster responses to
the user.

     Advertising Management and Geographic Targeting - Our advertising placement
technology is used primarily to control the frequency and positioning of
advertisements displayed on our website. This technology rotates merchant
advertisement displays in and out of prime locations on our yellow pages screens
according to priorities specifically purchased by our merchant and banner
advertising customers. We use an automated chain of software programs to
securely facilitate the addition, removal and modification of both individual
ads and large, aggregated volumes of merchant advertising into our yellow pages
directory.

     We have also developed a proprietary geographically-targeted advertisement
placement methodology that provides a simple way to allow a merchant to focus
its advertising to the surrounding communities it desires to target. This
technology uses the physical location of a business and a distance measurement
selected by the merchant to automatically determine the appropriate location
targets. These advertisement management tools and processes enable our support
personnel and authorized ad resellers to remotely manage and control national,
regional and local advertising campaigns.

     Merge-Purge Data Consistency - Data integrity for business listings and
advertising products is preserved through the application of business rules to
all data change requests (data merging and purging). Data integrity rules are
applied by our merge-purge technology as each data change request attempts to
modify listing and/or advertising data. These rules include low-level data
content and constraint validation, as well as "sales channel" specific rules
that manage the business logic associated with listing and advertisement
attributes. This allows for continuous refreshing of business listing data, and
easy management of all advertising products associated with a given business,
while permitting the best and latest available data to be presented to the
consumer.

     Customer Relationship Management - Our web-based CRM tools are specially
designed to help our licensees easily manage many facets of their relationships
with their own merchant customers. The tools provide product definition and
merchant management capabilities for direct selling efforts and indirect sales
channels, including sales management, customer invoicing, credit card
transactions, self-service online advertising sales, account history and
reporting. Product definition capabilities allow each sales channel to combine
our available advertising products into packaged product offerings for their
specific merchant customer base, such as a variety of online advertisement
presentations, coupons, websites, and products fulfilled by third parties, along
with the pricing and discounting features of each advertisement product. The
tools present an access-controlled workflow process that manages and records all
merchant customer interactions, from initial sale and payment processing through
subsequent interaction logging, automatic renewal management and ongoing
reporting.



                                       11
<PAGE>

                                 Our Competition

     We compete against numerous companies primarily in three categories of
businesses for local and national advertising dollars and market share, namely:

     * Internet-based yellow and white pages directories that do not utilize our
       directory website, such as Yahoo! Yellow Pages and Verizon SuperPages;

     * Printed yellow and white pages directories that compete with online
       offerings for advertiser dollars; and

     * Internet-based pay-for-placement and pay-for-performance search engines
       and services, such as Google, LookSmart, FindWhat, Yahoo! and Citysearch,
       particularly as they begin to expand their offerings to local markets.

     We compete with these organizations primarily on the basis of directory
technology, as well as the price and consumer reach of directory advertisements.

     Our website is one of the most utilized directory platforms on the
Internet, according to Nielsen//NetRatings, claiming a top 5 spot among category
leaders. We believe that our directory technology has allowed us to secure our
key alliance with AOL as well as alliances with other important customers and,
along with the popularity of www.switchboard.com, has enabled us to capture the
attention of millions of potential consumers. However, we continue to face
competition from many sources both traditional and untraditional, including
companies which have substantially greater resources and name recognition than
we do. Beyond Yahoo! and Verizon, there are numerous national and regional
publishers of online and print yellow pages advertising who compete with us and
our licensees for merchant advertising. We may also face competition from
internal development groups within our existing and prospective customers, some
of which may decide to develop their own proprietary online directory solutions.
Additionally, the increased popularity of paid search, and the interest of the
companies that are leading the segment in expanding their offerings to more
effectively address localized searching and advertising, could begin to blur the
lines between search engines and online directories and add additional
complexities to the market.

     As directory references increase online, we believe advertising in an
online directory (versus print) will become increasingly important for
businesses both large and small. As more yellow pages print advertising dollars
are spent on online advertising, we believe that the competition in the online
directory market will intensify. We believe publishers of local online
advertising solutions will seek best-in-class technology and tools to improve
the efficiency of their online operations and to differentiate their online
offerings to merchant and national advertisers. We believe factors that will
enable online directory providers to compete effectively in this environment
include the ability to offer highly functional and scalable technology
solutions, incremental consumer page visits for their merchant and national
advertisers, and tools to ease the management and administration of online
advertising purchases. We further believe that Switchboard is well positioned to
fulfill publishers' needs in these areas.

     As online usage grows, companies offering local directories will compete to
bring greater value to online advertisers by further increasing consumer usage
of their directories in these ways:

     * speed of results;
     * relevance of search results to intent; and
     * content breadth and depth.

     We believe that structured and highly specialized user interfaces and
database designs tailored to the needs of local advertisers will be an advantage
to easily guide consumers to local service and business information. We believe
that our depth of experience and focus on these areas will play an important
role in making our offerings attractive to users and thus to the merchants that
populate our directories.

     We believe our ability to compete successfully over the long-term depends
on many factors. In addition to those discussed above, these factors include
maintaining the quality of content and functionality we provide relative to our
competitors, the cost-effectiveness and reliability of our services relative to
our competitors, and our ability to generate value for local and national
merchants. The market in which we compete is rapidly evolving. To remain
competitive, we believe it is important to continually work towards the
development of new technologies to improve the products and services we offer to
our licensees and merchant customers, as well as to improve the functionality
and utility of our web-hosted directory technology. There can be no assurance
that we will maintain our current competitive advantages or that we will compete
successfully in the market for online directory advertising services in the
future.

                                       12
<PAGE>

                            Our Intellectual Property

     Patents, copyrights, service marks, trademarks, trade dress, trade secrets,
and other intellectual property are critical to our success. We rely on a
combination of patent, trademark and copyright law, trade secret protection and
confidentiality, and license agreements with our employees, consultants,
customers, licensees, and others to protect our proprietary rights. All of our
employees have executed confidentiality and assignment of invention agreements.
Prior to disclosing confidential information to third parties, we generally
require them to sign confidentiality or other agreements restricting the use and
disclosure of our confidential information.

     As of December 31, 2003, we had seven patents issued by the U.S. Patent and
Trademark Office, three patents issued by the Canadian Intellectual Property
Office, three patent applications pending before the U.S. Patent and Trademark
Office, and two patent applications pending before the Canadian Intellectual
Property Office, all of which relate to the operation, features or performance
of our website. We pursue registration of our key service marks in the United
States and, in some cases, internationally. We currently have registered the
following service marks with the U.S. Patent and Trademark Office: Switchboard,
Envenue, Nearbuy, Think Outside The Book, What's Nearby, My Studio, My Corner,
Sideclick, Ad Studio, Maps On Us, the "Man with Building" design mark and the
"Men with Building" design mark. The following are service marks of Switchboard:
It's the Yellow Pages. Electrified.; LocalClicks; Deals Nearbuy; and,
Switchboard Matrix. Applications are pending for our registration of the
following service marks: LocalClicks and Deals Nearby. However, effective
patent, trademark, service mark, copyright and trade secret protection may not
be available or sought by us in every country in which our services are made
available online. Our patents, trademarks, or other intellectual property rights
may be successfully challenged by others or invalidated through administrative
process or litigation. Further, the validity, enforceability and scope of
protection of proprietary rights in Internet-related industries is uncertain and
still evolving.

     We license our proprietary rights, such as patents, trademarks and
copyrighted material, to third parties. Despite our efforts to protect our
proprietary rights, third parties may infringe or misappropriate our rights or
diminish the quality or reputation associated with our brand, which could have a
long-term material adverse affect on our business, results of operations, or
financial condition.

     In addition, we license software, content and other intellectual property,
including trademarks, trade secrets, patents, and copyrighted material, from
third parties. In particular, we license residential and business listing data
from Acxiom Corporation under an agreement that expires in December 2005, and
maps and driving directions data and related software from Tele Atlas North
America, Inc. under an agreement that expires in February 2005. Further, some of
the software code underlying Switchboard.com contains software code that is
licensed to us by third parties. If any of these licenses are terminated or
expire, it could have a material adverse effect on our business, results of
operations, or financial condition.

     We currently own a number of Internet domain names, including
www.switchboard.com, www.MapsOnUs.com and www.walking-fingers.com. Internet
regulatory bodies generally regulate domain names. The relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we could be unable to prevent third
parties from acquiring domain names that infringe or otherwise decrease the
value of our trademarks and other proprietary rights.

                          Our Research and Development

     We employ an engineering staff to develop, test and document the
enhancement of existing, and creation of new, products and services we offer to
our merchant network customers as well as new services and features on our
web-hosted directory platform. The market in which we compete is rapidly
evolving. To remain competitive, we believe it is critical to continually work
towards the development of new technologies to improve the products and services
we offer to our merchant network customers, as well as to improve the
functionality and utility of our web-hosted directory platform. In 2003, we
directed the efforts of our engineering staff primarily on the enhancement of
our Switchboard Matrix directory platform, the compilation and management of
merchant attribute information and the creation of new technology that offers
users more meaningful results when they search for local businesses using common
words and phrases. As of December 31, 2003, we employed a staff of 33 full-time
permanent employees dedicated to research and development activities. Our
research and development expenses have constituted, and we expect they will
continue to constitute for the foreseeable future, a material use of our cash
resources. Research and development expenses were $6.7 million, or 72.2% of net
revenue, $5.4 million, or 46.4% of net revenue and $4.3 million, or 28.1% of net
revenue, in 2001, 2002, and 2003, respectively.

                                       13
<PAGE>

                                  Our Employees

     As of March 5, 2004, we had 67 full-time employees. Of these employees, 33
are in research and development, 22 in sales and marketing, 3 in site
operations, and 9 in general and administrative. None of our employees are
represented by a labor union. We believe our relations with our employees are
good.

ITEM 2. PROPERTIES

     Our principal administrative, sales and marketing, and research and
development facilities are located in Westborough, Massachusetts and consist of
approximately 17,463 square feet under a sublease that expires on September 30,
2005. These facilities have an aggregate annual base rent of approximately
$210,000. We sublease this space from ePresence.

     In addition, we lease approximately 120 square feet of office space in
Troy, Michigan for use by a sales person. We also lease 2,782 square feet of
office space in New York City, which we have subleased to a third-party for the
remaining term of our lease with the property owner, which expires on April 28,
2005.

ITEM 3. LEGAL PROCEEDINGS

     On November 21, 2001, a putative class action lawsuit was filed in the
United States District Court for the Southern District of New York on behalf of
all persons and entities who purchased or otherwise acquired common stock of
Switchboard from March 2, 2000 through December 6, 2000. The complaint named as
defendants Switchboard, the managing underwriters of our initial public
offering, Douglas J. Greenlaw, Dean Polnerow, and John P. Jewett. Mr. Polnerow
is our President and CEO, and Mr. Greenlaw and Mr. Jewett are former officers of
Switchboard.

     An amended complaint was filed on April 20, 2002. The amended complaint
alleges violations of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, primarily based on the assertion that the
defendants made material false and misleading statements in Switchboard's
registration statement and prospectus filed with the SEC in connection with
Switchboard's initial public offering because of the failure to disclose (a) the
alleged solicitation and receipt of excessive and undisclosed commissions by the
underwriters in connection with the allocation of shares of common stock to
certain investors in Switchboard's public offering and (b) that certain of the
underwriters allegedly had entered into agreements with investors whereby
underwriters agreed to allocate the public offering shares in exchange for which
the investors agreed to make additional purchases of stock in the aftermarket at
pre-determined prices. The amended complaint alleges claims under Sections 11
and 15 of the Securities Act, and Sections 10(b) and 20(a) of the Securities
Exchange Act. The amended complaint seeks damages in an unspecified amount.

     In July 2002, Switchboard, Douglas J. Greenlaw, Dean Polnerow and John P.
Jewett joined in an omnibus motion to dismiss challenging the legal sufficiency
of plaintiffs' claims. The motion was filed on behalf of hundreds of issuer and
individual defendants named in similar lawsuits. The plaintiffs opposed the
motion, and the Court heard oral argument on the motion in November 2002. On
February 19, 2003, the court issued its decision on the defendants' motion to
dismiss, granting in part and denying in part the motion as to Switchboard. In
addition, in October 2002, Messrs. Greenlaw, Polnerow and Jewett were dismissed
from this case without prejudice.

     In June 2003, the plaintiffs, the issuer defendants and their insurers
agreed on the terms and conditions of a proposed settlement of this case. The
terms and conditions of the proposed settlement have been widely reported in the
press. Our special committee of the board of directors met twice during June
2003 to evaluate the proposed settlement. The committee was advised by outside
counsel on the merits of the proposed settlement. The committee determined that
the settlement was in the best interests of Switchboard and that we should
accept the proposed settlement. There is no guarantee that the settlement will
become final, as it is subject to a number of conditions, including court
approval. We have been informed by outside counsel that all of the non-bankrupt
issuers decided to accept the terms and conditions of the proposed settlement of
this case. We do not believe we will suffer material future losses related to
this lawsuit.

     From time to time, we are involved in various legal proceedings incidental
to the conduct of our business.


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

Not applicable.


                                       14
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

     Our executive officers and their respective ages and positions with
Switchboard as of March 5, 2004 are as follows:

<TABLE>
<CAPTION>
Name                      Age Position
------------------------- --- --------------------------------------------------
<S>                       <C> <C>
Dean Polnerow............ 47  Chief Executive Officer, President and Director
Robert P. Orlando........ 45  Vice President, Chief Financial Officer, Treasurer
                              and Secretary
James M. Canon........... 52  Vice President, Business Development
Kevin P. Lawler.......... 43  Vice President, Human Resources
James Carrington......... 51  Vice President, Sales
</TABLE>

     Dean Polnerow founded Switchboard and has served as our President since
March 1998 and as a director since September 1998. Mr. Polnerow has also served
as our Chief Executive Officer since August 21, 2003. From our inception in 1996
to March 1998, Mr. Polnerow served as our Vice President, Product and Business
Development. From 1983 to 1996, Mr. Polnerow served in various capacities,
including as Vice President, Advanced Development, at Banyan Worldwide.

     Robert P. Orlando has served as our Vice President, Chief Financial
Officer, Treasurer and Secretary since October 2001. Prior to joining
Switchboard, Mr. Orlando was the Chief Financial Officer and Treasurer of
Virtual Ink Corporation, a designer of hardware and software collaboration
tools, from 2000 to 2001. From 1991 through 2000, Mr. Orlando was the Chief
Financial Officer and Treasurer of Mathsoft, Inc., a provider of math,
engineering and scientific software solutions. Mr. Orlando also held financial
management positions with Bitstream, Inc., Unicco Service Company and Orion
Research, Inc. Previous to these positions, Mr. Orlando served as an auditor for
Arthur Andersen LLP.

     James M. Canon has served as our Vice President, Business Development since
March 1998. Prior to his appointment as our Vice President, Business
Development, from 1997 to March 1998, Mr. Canon served in various capacities at
Switchboard, most recently as Director, Product Management. From 1991 to 1997,
Mr. Canon served in various capacities, including as Information Products
Architect, at ePresence.

     Kevin P. Lawler has served as our Vice President, Human Resources since May
2000. Prior to joining Switchboard, Mr. Lawler served as Director of Human
Resources at EMC Corporation, an information storage systems provider, from 1999
to 2000. From 1998 to 1999, Mr. Lawler served as Vice President, Human Resources
for Scriptgen Pharmaceuticals Incorporated, a pharmaceuticals company. From 1990
to 1998, Mr. Lawler served as Vice President, Human Resources for Immulogic
Pharmaceutical Corporation, a pharmaceuticals company.

     James Carrington has served as our Vice President, Sales since December
2003. Prior to joining Switchboard, Mr. Carrington served in various capacities
at Monster, Inc., formerly TMP Worldwide, a yellow pages advertising agency and
directional marketing company, for 15 years, most recently as Vice President of
Sales of Monstermoving, Inc.

     Executive officers are elected annually and serve at the discretion of our
board of directors. No family relationships exist among any of our executive
officers and directors.

                                       15
<PAGE>

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
          ISSUER PURCHASES OF EQUITY SECURITIES

Market Data

     Our common stock began trading on the NASDAQ National Market under the
symbol "SWBD" on March 2, 2000. Prior to that date there was no established
public trading market for our common stock. The following table sets forth the
range of high and low closing sale prices of our common stock for the periods
indicated, as quoted on the NASDAQ National Market.

<TABLE>
<CAPTION>
PERIOD                                 HIGH          LOW
-----------------------------          -----        -----
FISCAL 2002
<S>                                    <C>          <C>
First Quarter of Fiscal 2002           $5.32        $3.02
Second Quarter of Fiscal 2002          $6.39        $3.20
Third Quarter of Fiscal 2002           $3.30        $1.08
Fourth Quarter of Fiscal 2002          $3.13        $1.48

FISCAL 2003
First Quarter of Fiscal 2003           $3.19        $2.20
Second Quarter of Fiscal 2003          $4.10        $2.55
Third Quarter of Fiscal 2003          $12.31        $3.55
Fourth Quarter of Fiscal 2003         $11.06        $6.22
</TABLE>

     As of March 5, 2004, there were 108 holders of record of our common stock.
This number does not include stockholders who hold their shares in "street name"
or through broker or nominee accounts.

     The closing per share sale price of our common stock on June 30, 2003 was
$3.60. For purposes of calculating the aggregate market value of the shares of
our common stock held by non-affiliates, as shown on the cover page of this
Annual Report on Form 10-K, we have assumed that all our outstanding shares were
held by non-affiliates, except for the outstanding shares known to us to be
beneficially held by our directors, executive officers, and each person or
entity known to us to own beneficially more than 10% of our outstanding shares
of common stock. However, this should not be deemed to be an admission that all
these persons are, in fact, affiliates of ours, or that there are not other
persons who may be deemed to be affiliates of ours.

     We have never paid cash dividends on our common stock. We intend to retain
our earnings for use in our business and, therefore, do not anticipate paying
any cash dividends on our common stock in the foreseeable future.

Use of Proceeds of Initial Public Offering

     On March 2, 2000, we made an initial public offering of up to 6,325,000
shares of common stock registered under a Registration Statement on Form S-1
(Registration No. 333-90013), which was declared effective by the Securities and
Exchange Commission on March 1, 2000.

     Our total net proceeds from the offering were approximately $86.3 million,
of which $74.8 million was received in March 2000 and $11.5 million was received
in April 2000. All payments of the offering proceeds were to persons other than
directors, officers, general partners of Switchboard or their associates,
persons owning 10% or more of any class of equity securities of Switchboard or
affiliates of Switchboard. Through December 31, 2003, we used approximately
$17.4 million of the proceeds from the offering for working capital purposes, of
which approximately $4.9 million was for the purchase of fixed assets. In
December 2000 we paid $13.0 million of the proceeds to America Online, Inc.
pursuant to the terms of our Directory and Local Advertising Platform Services
Agreement (the "Directory Agreement") entered into with America Online on that
date. In March 2002, we used $1.3 million of the proceeds for the purchase of
386,302 shares of our common stock from Viacom Inc. as treasury stock. In April
2002, we paid America Online $2.0 million upon the execution of the Second
Amendment to the Directory Agreement. In October 2002, we paid the former
stockholders of Envenue, Inc. approximately $410,000, and in June 2003 we paid
the former stockholders of Envenue an additional $1.7 million. As of December
31, 2003, we have invested the remaining net proceeds in interest-bearing, money
market funds and investment-grade securities.


                                       16
<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

     You should read the selected consolidated financial data together with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and related notes included
in this Annual Report on Form 10-K.

     We derived the selected consolidated financial data set forth below as of
December 31, 2003 and 2002 and for the years ended December 31, 2003, 2002 and
2001 from the audited consolidated financial statements of Switchboard included
herein. All other selected consolidated financial data set forth below is
derived from audited financial statements of Switchboard not included herein.
Switchboard's historical results are not necessarily indicative of future
results of operations.

                      Selected Consolidated Financial Data
                      (In thousands except per share data)

<TABLE>
<CAPTION>
                                                              For the Years Ended December 31,
                                                  ------------------------------------------------------
                                                   2003       2002      2001 (a)       2000       1999
                                                  -------    -------    --------     --------    -------
  Statement of Operations
<S>                                               <C>        <C>         <C>          <C>         <C>
    Gross revenue                                 $15,192    $13,747     $13,326      $20,310     $8,304
    Net revenue (b)                               $15,192    $11,747      $9,278      $19,898     $8,304
    Operating income (loss)                        $1,440    $(5,921)   $(69,975)    $(20,708)   $(8,656)
    Net income (loss) attributable to common
        Stockholders                               $2,074    $(3,959)   $(66,754)    $(17,288)  $ (9,744)

    Basic net income (loss) per share               $0.11     $(0.21)    $ (2.83)     $ (0.75)   $ (0.89)
    Diluted net income (loss) per share             $0.10     $(0.21)    $ (2.83)     $ (0.75)   $ (0.89)
</TABLE>

<TABLE>
<CAPTION>
                                                                   As of December 31,
                                                  ------------------------------------------------------
                                                   2003       2002         2001         2000      1999
                                                  -------    -------     --------     -------    -------
  Balance Sheet Data
<S>                                               <C>        <C>         <C>          <C>        <C>
    Total assets                                  $59,523    $57,788     $65,835      $98,557    $12,195
    Long term obligations                              $-     $1,124        $518       $2,000         $-
    Redeemable convertible preferred stock             $-         $-          $-           $-    $16,320
    Total stockholders' equity (deficit)          $56,342    $51,087     $56,667      $90,730    $(9,588)
</TABLE>

(a) Operating loss and net loss attributable to common stockholders in the
fiscal year ended December 31, 2001 includes a $22.2 million non-cash loss on
Viacom transaction and special charges of $17.3 million.

(b) Net revenue includes, as an offset to revenue, amortization of consideration
given to a customer of $2.0 million in fiscal 2002, $4.0 million in fiscal 2001
and $412,000 in fiscal 2000 in accordance with Emerging Issues Task Force Issue
01-9 "Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendor's Products)."

                                       17
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     You should read the following discussion together with the consolidated
financial statements and related notes appearing elsewhere in this Annual Report
on Form 10-K. This Item contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
and Exchange Act of 1934 that involve risks and uncertainties. Actual results
may differ materially from those included in such forward-looking statements.
Factors which could cause actual results to differ materially include those set
forth under "Factors Affecting Our Operating Results, Business Prospects and the
Market Price of Stock", as well as those otherwise discussed in this section and
elsewhere in this Annual Report on Form 10-K. See "Forward Looking Statements."

                                    Overview

     In February 1996, when we commenced operations, we derived our revenue
principally from the sale of national banner and site sponsorship advertising on
our directory website, www.switchboard.com. We now primarily derive revenue from
merchant and national advertisers that pay to advertise in the
Switchboard-powered directories of our licensees, and/or on our own website,
www.switchboard.com. We operate in a single segment, but classify our revenue
into two categories, namely net merchant network revenue and national banner and
site sponsorship revenue.

     Net merchant network revenue includes revenue from various licensing
agreements with our directory technology licensees. These agreements involve,
generally, (1) a setup fee for engineering work to develop a web-hosted platform
for our licensees which looks and feels like the licensees' own website and
includes our searching functionality, and (2) a royalty in the form of a fixed
fee per merchant based on the number of merchant advertisements promoted in
their directories, or a percentage of revenue generated from those merchant
advertisements. In addition, net merchant network revenue includes engineering
and other fees for services provided to support the directories and programs of
our licensees. Net merchant network revenue also includes revenue from running
priority placement, local performance based, and content targeted advertising in
the Switchboard.com yellow pages directory, and building and hosting websites
for local merchant advertisers. In addition, we paid a total of $15.0 million
and issued 746,260 shares of common stock to AOL in connection with entering
into our Directory Agreement with AOL in 2000. Amortization of the value
attributed to this consideration given to AOL has been included as an offset to
merchant network revenue, as the benefits of such consideration given to AOL are
not separately identifiable from the revenue obtained from AOL. During 2003, net
merchant network revenue comprised approximately 88.4% of our total net revenue
as compared to 87.9% in 2002 and 66.9% in 2001.

     We also continue to generate revenue from the sale of national banner and
site sponsorship advertising on white and yellow pages, as well as maps pages,
across both www.switchboard.com and the websites of several directory technology
licensees. Such revenue is derived from banner advertisements, sponsorships and
direct electronic mail-based promotions that are sold on either a fixed fee,
cost per thousand impressions or cost per action basis. During 2003,
approximately 11.6% of our net revenue was derived from the sale of national
banner and site sponsorship advertising, as compared to 12.1% in 2002 and 33.1%
in 2001.

     Our cost of revenue consists primarily of expenses paid to third parties
under data licensing and website creation and hosting agreements and search
engine database inclusion expense, as well as other direct expenses incurred to
maintain the operations of our website as well as the web-hosted platforms of
our licensees. These direct expenses consist of data communications expenses
related to Internet connectivity charges, salaries and benefits for operations
personnel, equipment costs and related depreciation, costs of running our data
centers, which include rent and utilities, and a pro rata share of occupancy and
information system expenses. Cost of revenue also includes an allocation of
salaries and benefits for employees, as well as expenses resulting from external
consultants, directly associated with the delivery of billable engineering and
other services. Cost of revenue as a percentage of revenue has varied in the
past, primarily because the amount of revenue recognized has varied and has been
spread over relatively fixed costs of revenue.

     Our sales and marketing expense consists primarily of employee salaries and
benefits, costs associated with channel marketing programs, collateral
production expenses, third-party commission costs, public relations, market
research, provision for bad debts and a pro rata share of occupancy and
information system expenses.

     Our research and development expense consists primarily of employee
salaries and benefits, fees for outside consultants and related costs associated
with the development of new services and features on our web-hosted directory,
the enhancement of existing products, quality assurance, testing, documentation
and a portion of occupancy and information system expenses based on employee
headcount.

                                       18
<PAGE>

     Our general and administrative expense consists primarily of employee
salaries and benefits and other personnel-related costs for executive and
financial personnel, as well as legal expenses, directors and officers insurance
and accounting costs, and a portion of occupancy and information system expense
based on employee headcount.

     Our other income and expense consists primarily of interest income earned
from our investment grade marketable securities and a note receivable from an
officer, realized gains and losses from any sales or early maturities of
marketable securities, losses on the value of a warrant issued to us by one of
our vendors that were determined to be other-than-temporary, losses on the
disposal of fixed assets, interest expense associated primarily with equipment
financing and bank fees.

     We have experienced substantial net losses. As of December 31, 2003, we had
an accumulated deficit of $106.7 million resulting from insufficient revenue to
cover the significant costs incurred in the development of our web-hosted
directory technology and the establishment of our corporate infrastructure and
organization.

     We are a Delaware corporation that commenced operations in February 1996.
From our inception in February 1996 until our initial public offering in March
2000, we were a unit and later a subsidiary of ePresence, Inc. On March 26,
2004, we announced a definitive agreement to merge with a wholly-owned
subsidiary of Infospace, a diversified technology and services company that
develops Internet and wireless solutions headquartered in Bellevue, Washington.
Upon consummation of the merger, Switchboard will be a wholly-owned subsidiary
of Infospace. Each share of Switchboard common stock will be converted into a
right to receive $7.75 in cash, without interest, upon consummation of the
merger. The merger is expected to close during the second half of 2004, and is
subject to customary closing conditions, including receipt of Switchboard and
ePresence, Inc. shareholder, as well as regulatory, approvals. See "Factors
Affecting Operating Results, Business Prospects and Market Price of Stock -
Risks Resulting from our Announced Merger Agreement with Infospace" for more
information concerning this announcement.


                            Significant Relationship

     Our largest and most significant directory technology licensee is AOL. In
December 2000, we entered into a Directory Agreement with AOL to develop a new
directory and local advertising platform and product set to be featured across
specified AOL properties (the "Directory Platform"). In November 2001, April
2002, August 2002, November 2002 and October 2003, certain terms of the
agreement were amended. Prior to the October 2003 amendment of the Directory
Agreement, we shared with AOL specified directory advertisement revenue. In
general, we received a majority of the first $12.0 million of such directory
advertisement revenue, less approximately $1.0 million of billable engineering
revenue earned from AOL after June 30, 2002, and received a lesser share of any
additional directory advertisement revenue over and above the initial $12.0
million. We paid AOL and recorded an asset of $13.0 million at the signing of
the original Directory Agreement. Following the incorporation of the Directory
Platform on the AOL.com, AOL Service and Digital City properties ("AOL Roll-In")
in January 2002, we recorded a second asset and a liability related to future
payments of $13.0 million. In April 2002, we established an additional asset and
liability of $1.0 million and paid $2.0 million upon the execution of the April
2002 amendment. Under the April 2002 amended agreement, we were scheduled to
make six additional quarterly payments of $2.0 million each, replacing the $13.0
million originally owed upon the AOL Roll-In. The August 2002 amendment, among
other things, eliminated the $12.0 million in remaining additional payments
established in the April 2002 amendment. The November 2002 amendment, among
other things, provided for the delivery of administrative services to AOL for
the management of merchants who signed up for advertising in the AOL yellow
pages using a self-service tool that we created for AOL. We no longer provide
these administrative services to AOL.

     AOL committed to pay us at least $2.0 million in consulting or service fees
over the term of the Directory Agreement under a payment schedule which ended in
September 2002, of which AOL paid all $2.0 million and we delivered all $2.0
million in services to AOL. Prior to the October 2003 amendment of the Directory
Agreement, we were required to provide up to 300 hours of engineering services
per month to AOL at no charge, if requested by AOL for the term of the
agreement. These 300 hours were provided to support the Directory Platform, from
which we shared in directory advertising revenue over the term of the agreement.
Any engineering services provided by us in excess of 300 hours per month were
charged to AOL on a time and materials basis. AOL typically exceeded these 300
hours each month. In 2003, 2002 and 2001, AOL consulting and service fees
totaled $2.0 million, $1.5 million and $1.9 million, respectfully.

     In October 2003, we amended and restated our agreement with AOL. The
October 2003 amendment, among other things, extended the term of the agreement
for an additional year until December 11, 2005, and provides that we will
receive $4.8 million annually from AOL, payable in monthly increments of
$400,000, in exchange for providing, maintaining and customizing the AOL yellow
pages Directory Platform and inclusion of current AOL merchants in our yellow
pages platform. In addition, the amended agreement creates the opportunity for
both parties to sell advertising products that combine the consumer audience of


                                       19
<PAGE>

both AOL's and Switchboard's yellow pages. The revenue sharing arrangement,
based on percentage of AOL merchant subscription revenue that was previously in
effect, has been eliminated.

     As part of the consideration for the $4.8 million annual fee, if requested
by AOL, we are obligated to provide AOL with up to 3,000 hours of engineering
services during each fiscal quarter in order to customize and enhance AOL's
directory technology. Accordingly, based on our customary rates we charge for
engineering services, we have bifurcated the $4.8 million annual fee between
licensing and engineering services. We attribute $2.4 million of the $4.8
million annual fee to engineering services, or $600,000 per quarter. Of the
3,000 hours, AOL may carry-over up to 1,000 unused engineering hours into the
next quarter. At no time at the end of any fiscal quarter may the unused hours
carried forward exceed 1,000 hours. Revenue attributable to any unused hours
that are carried forward into the following fiscal quarter are valued using our
standard hourly rates for engineering services and deferred until the hours
carried forward are either used or the right to use them expires. Accordingly,
revenue attributable to the 3,000 hours we are obligated to provide AOL will
range from $400,000 to $800,000 each quarter depending on how AOL decides to
utilize these minimum 3,000 hours. Regardless of how AOL decides to utilize
these 3,000 hours, AOL is obligated to pay us $400,000 each month under the
October 2003 amendment. We will bill AOL on a time and materials basis for any
hours for engineering services provided in excess of the 3,000 we are required
to provide to AOL, and recognize this revenue during the period in which the
engineering services are provided.

     As a result of the October 2003 amendment of our agreement with AOL, the
revenue generated from our agreement with AOL decreased from $1.6 million in the
third quarter of 2003 to $1.2 million for the fourth quarter of 2003. Depending
on the amount of engineering services requested by AOL, we anticipate total
revenue in future quarters from AOL to be in the range of $1.0 million to $1.4
million per quarter. We expect future cash flows from AOL under the agreement to
be approximately $1.2 million per quarter.

     In the event that the Agreement is terminated pursuant to the terms of the
Agreement, the parties may begin a "Wind-Down Period" for a period of time to be
determined by AOL, up to a maximum of three years from the date of termination.
During the Wind-Down Period, we will continue to provide AOL with directory
technology services, and AOL shall pay us a monthly fee of $250,000 (reduced
from $400,000 per month) and shall also pay us for any engineering hours in
excess of 300 hours per month. We will not be obligated to provide AOL with
3,000 hours of engineering services per quarter during the Wind-Down Period.

     In connection with entering into the Directory Agreement, in December 2000,
we issued to AOL 746,260 shares of our common stock, which were restricted from
transfer until the AOL Roll-In, which occurred on January 2, 2002. We also
agreed to issue to AOL an additional 746,260 shares of common stock if the
Directory Agreement continued after two years and a further 746,260 shares of
common stock if the Directory Agreement continued after three years. Pursuant to
the April 2002 amendment, the requirement to issue additional shares upon the
two and three-year continuations was eliminated. If we renew the Directory
Agreement with AOL for at least an additional four years after the current term,
we are required to issue to AOL a warrant to purchase up to 721,385 shares of
common stock at a per share purchase price of $4.32.

     The $13.0 million paid and the value of the stock issued to AOL upon the
signing of the Directory Agreement was amortized on a straight-line basis over
the original four-year estimated life of the agreement. As of December 31, 2001,
the remaining unamortized amounts of $11.7 million were written down to zero as
a result of an impairment analysis as of December 31, 2001. We performed an
impairment analysis of our AOL related assets because cumulative revenues earned
through December 31, 2001 were significantly below the expectations we had at
the time we entered into the agreement, and we had incurred a current period and
historical operating loss with respect to our AOL business. This analysis was
performed as part of our restatement of our financial statements for the year
ended December 31, 2001, which occurred in September 2002. However, in
performing this impairment analysis, we were unable to utilize the more
favorable financial implications of the April 2002 and August 2002 amendments as
they had occurred subsequent to the date we had filed our original Annual Report
on Form 10-K for the year ended December 31, 2001 (March 2002). The financial
implications of the April 2002 and August 2002 amendments were developments that
occurred subsequent to the March 2002 filing and, in accordance with existing
accounting standards, could not be considered. If we had been able to utilize
the more favorable financial terms resulting from the April 2002 and August 2002
amendments, our AOL assets may have been considered fully recoverable.

     Our impairment analysis, utilizing the estimated cash flow approach,
assumed revenue and expense assumptions through December 2004, the expiration
date of the Directory Agreement. We assumed annual revenue growth rates of 77%,
135% and 85% under the agreement in 2002, 2003 and 2004, respectively. We also
assumed additional contractually fixed payments to AOL of $39.0 million; a total
of $4.8 million of value associated with two additional contractual stock


                                       20
<PAGE>

issuances to AOL of 746,260 shares each, which were to have occurred in December
2002 and 2003; and our estimate of other costs and expenses we would incur to
support our relationship with AOL. We included the future issuance of stock in
our cash flow analysis because it represented an economic resource that we were
contractually required to give to AOL in order to continue to benefit from the
Directory Agreement. If we did not issue the stock to AOL, our cash flows under
the Directory Agreement would have ceased. We valued the additional required
stock issuances using the Black-Scholes option-pricing model, using an expected
volatility of 130%, a risk-free interest rate of 4.3%, dividend yield of 0% and
an expected life of one year and two years for the December 2002 and 2003
issuances, respectively. Our analysis indicated that our AOL assets were
impaired due to the fact that our projected future cash flows from AOL over the
remainder of the term of the agreement were insufficient to support the value of
our AOL related assets. We then measured our impairment by performing an
analysis of our discounted future cash flows under the Directory Agreement. We
utilized the undiscounted cash flows described above and applied a discount
factor of 20% per year. The discount factor represented our estimate of the rate
of return that an investor would expect for an investment of this type. The
magnitude of the discount rate is related to the perceived risk of the
investment. This discounted cash flow analysis indicated that our AOL related
assets were fully impaired as of December 31, 2001.

     In January 2002, we established an additional asset and related liability
of $13.0 million as a result of the AOL Roll-In. We performed an impairment
analysis on this AOL asset and determined that it was not impaired as of March
31, 2002. This analysis was performed as part of our restatement of our
financial statements for the three months ended March 31, 2002 that occurred in
September 2002. This impairment analysis included similar assumptions to those
used in the impairment analysis performed in connection with the restatement of
our December 31, 2001 financial statements. In addition, we were able to
consider the favorable financial terms of the April 2002 amendment, as this
occurred prior to the May 2002 original filing of our quarterly results on Form
10-Q for the three months ended March 31, 2002. Our analysis indicated that our
AOL asset was not impaired as of March 31, 2002.

     Throughout 2002 we remained committed to the AOL relationship. We continued
to make reduced investments in 2002, in accordance with the April 2002 and
August 2002 amendments, because we believed that continued investment at a
negotiated lower level would still yield significant revenue and corresponding
profit for Switchboard and allow us to, at a minimum, recoup our investments
under the relationship.

         In 2002, we recorded amortization based upon the remaining net book
value of our AOL assets established upon the AOL Roll-In and April 2002
amendment on a straight-line basis over the remaining term of the amended
agreement. As a result of the elimination in the August 2002 amendment of the
remaining $12.0 million owed to AOL, an adjustment to amortization of
consideration given to a customer of $482,000 was recorded in August 2002,
offsetting amortization recorded in the period, and the associated asset and
liability with respect to the $12.0 million were eliminated. Amortization of AOL
assets totaled $2.0 million in 2002. There was no amortization of AOL assets in
2003. Throughout the remaining initial term of the amended agreement, we will no
longer record amortization of consideration given to AOL as these assets are now
fully amortized and no further consideration is due to AOL. Amortization of
assets related to AOL has been reflected as a reduction of revenue in accordance
with EITF 01-9.

     The following table summarizes revenue and estimated direct expenses
associated with our AOL agreement (in thousands):

<TABLE>
<CAPTION>
                                                         Years ended December 31,
                                                -----------------------------------------
                                                2000        2001        2002        2003
                                                -----      ------      ------      ------
Revenue:
--------
<S>                                             <C>        <C>         <C>         <C>
Gross AOL revenue                               $   -      $4,074      $6,906      $6,265
Amortization of consideration provided to AOL    (412)     (4,048)     (2,000)          -
                                                -----      ------      ------      ------
Net AOL revenue                                 $(412)     $   26      $4,906      $6,265
                                                =====      ======      ======      ======
Net AOL revenue as a percentage of total
  net revenue                                    (2.0)%       0.3%       41.8%       41.2%

Costs and expenses:
-------------------
Impairment of AOL assets                           $-     $11,723        $  -         $ -
Other costs and expenses (a)                       40       1,458         582         520
                                                  ---     -------        ----        ----
Total costs and expenses                          $40     $13,181        $582        $520
                                                  ===     =======        ====        ====
</TABLE>


   (a) Included in other costs and expenses are engineering and other
       services expenses directly incurred as a result of our AOL relationship.

     Net amounts due from AOL included in accounts receivable December 31, 2002
were $549,000. There were no amounts due from AOL at December 31, 2003. We
anticipate that AOL will continue to represent a significant percentage of our
revenue in 2004 and will be a material component of our overall business. At
March 5, 2004, AOL beneficially owned 7.8% of our outstanding common stock.


                                       21
<PAGE>

                   Critical Accounting Policies and Estimates

     We have identified the policies below as critical to the understanding of
our results of operations. Note that our preparation of this Annual Report on
Form 10-K requires us to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of our financial statements and the reported amounts of
revenue and expenses during the reporting period. On an ongoing basis,
management evaluates its estimates and judgments, including those related to
revenue recognition, bad debts, investments, intangible assets, compensation
expenses, third-party commissions, restructuring costs, contingencies and
litigation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from those estimates.

     Critical accounting polices are those policies that are reflective of
significant judgments and uncertainties and potentially result in materially
different results under different assumptions and conditions. We believe our
most critical accounting policies are as follows:

Revenue Recognition

     We generate our revenue primarily from merchant advertisement placements
promoted in the Switchboard-powered directories of our licensees, as well as
those placed in our own online yellow pages directory. Generally, we recognize
revenue as services are provided, so long as no significant obligations remain
and collection of the resulting receivable is probable. We believe that we are
able to make reliable judgments regarding the creditworthiness of our customers
based upon historical and current information available to us. Our payment
experience with our customers may not be consistent with past experience. In
addition, the financial condition of these customers may decline in future
periods, the result of which could be our failure to collect invoiced amounts.
Some of these amounts could be material, resulting in an increase in our
provision for bad debts.

     We earn revenue from AOL through the provision of platform licensing
services and engineering and other services to AOL. We consider the delivery of
platform licensing services to be a separate earnings process from engineering
and other services and recognize revenue from engineering and other services in
the period during which these services are delivered. Beginning in October 2003,
we receive an annual license fee from AOL. We bifurcate this annual fee between
a platform licensing fee of $2.4 million and an engineering services fee of
$2.4 million. We recognize these platform licensing fees and engineering
services fees as revenue as they are earned. Bifurcating the annual fee between
engineering services and platform licensing required us to make judgments with
respect to the value attributable to each unit. We valued the amount
attributable to engineering services using our standard hourly rates for
providing such engineering services. We attributed the residual value of the
annual license fee to platform licensing fees. Because we bifurcated the annual
fee, we anticipate that during the term of our current agreement with AOL
revenue from platform licensing fees under the agreement will be $600,000 per
quarter and revenue from engineering services under the agreement will be
between $400,000 and $800,000 per quarter depending upon the amount of
engineering services delivered to AOL each quarter. Therefore, we expect total
quarterly revenue from the agreement will vary between $1.0 million and $1.4
million per quarter. Had we determined that we were unable to bifurcate the
annual license fee between platform licensing and engineering services, all of
the revenue we derive from the license fee would have varied in future quarters
based upon our delivery of engineering services to AOL, varying between $800,000
and $1.6 million per quarter.

Concentration of Credit Risk

     We invest our cash and cash equivalents primarily in deposits, money market
funds and investment grade securities with financial institutions. We have not
experienced any material realized losses to date on our invested cash. A
potential exposure is a concentration of credit risk in accounts receivable. We
maintain reserves for credit losses and, to date, such losses have been within
our expectations. These expectations are based on historical experience,
analysis of information currently available to us with respect to our customer's
financial position, as well as various other factors. While we believe we can
make reliable estimates of these matters, it is possible that these estimates
may change in the near future due, for example, to changes in market conditions,
other economic factors or issues specific to individual customers. A change in
estimates could negatively affect our results of operations.


                                       22
<PAGE>

Impairment of Long Lived Assets

     We evaluate the recoverability of our long-lived assets, including that
attributable to our AOL arrangement, annually, or more frequently if events or
changes in circumstances, such as a decline in sales, earnings or cash flows or
material adverse changes in the business climate, indicate the carrying value of
an asset might be impaired.

     Should an indicator of impairment exist, we perform a recoverability
assessment based on an undiscounted expected cash flow analysis utilizing
management's best estimate of the future cash flows expected to result from the
use of the asset. Our assumptions related to estimates of future cash flows are
based on historical results of cash flows adjusted for management projections
for future periods taking into account all available evidence at the date of
review. We continually apply our best judgment when applying the impairment
rules to determine the timing of the impairment test, the undiscounted cash
flows used to assess impairment, and the fair value of an impaired long-lived
asset group. We include the future issuance of stock in our cash flow analysis,
as we did in our evaluation of the asset attributable to our AOL arrangement,
because it represents an economic resource that we are contractually required to
give to enjoy the benefits of a long-lived asset. The dynamic economic
environment in which we operate and the resulting assumptions used to estimate
future cash flows impact the outcome of all impairment tests.

     If the asset being evaluated for impairment is a contractually based asset,
as is the case in the asset attributable to our AOL arrangement, we utilize the
contractual terms in existence at the time of the impairment analysis to provide
the framework for estimating the future expected cash flows. Accordingly, any
modifications made to the long-lived asset's underlying contract terms that
occur subsequent to the original filing of our financial statements are not
considered in our impairment analysis.

     If the sum of these expected future cash flows is less than the carrying
amount of the asset, the asset is considered impaired and the impairment loss is
calculated. The impairment loss is determined as the difference between the
asset's estimated fair value and its carrying value. The fair value is
determined by applying a discount rate to the expected future cash flows unless
there is an observable market for such asset. The discount rate utilized in the
analysis is commensurate with the risks involved.

     Considerable management judgment is necessary to estimate future cash flows
and appropriate assumptions; and accordingly, actual results could vary
significantly from such estimates. The use of different assumptions and
judgments could result in a determination that an asset is not impaired. In that
case, an impairment charge would not be recorded in our results of operations
during the relevant period and future results of operations would continue to be
reduced as a result of amortization of the long lived asset.

Accounting for Stock Based Compensation

     We account for stock-based compensation for employees under APB Opinion No.
25, "Accounting for Stock Issued to Employees", and elect the disclosure-only
alternative under SFAS No. 123, "Accounting for Stock-Based Compensation" and
provide the enhanced disclosures as required by SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure, an amendment of FASB
Statement No. 123". SFAS 148 provides alternative methods of transition for a
voluntary change to a fair value based method of accounting for stock-based
employee compensation. In addition, SFAS 148 amends the disclosure requirements
of SFAS 123 to require prominent disclosures in annual financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. Had we chosen to voluntarily
change to a fair value based method of accounting for stock-based employee
compensation, we would have recorded additional expense in our results of
operations of $1.3 million in 2003, $1.1 million in 2002 and $5.5 million in
2001.

     The Financial Accounting Standards Board is currently considering a
proposal that would require companies to change to a fair value based method of
accounting for stock-based employee compensation. If the FASB requires such a
change in accounting for stock-based employee compensation, we may be required
to record the expense associated with the fair value of stock-based employee
compensation in our results of operations in future periods.

     We are required in the preparation of the disclosures required under SFAS
148 to make estimates when ascribing a value to stock options granted during the
year. These estimates include, but are not limited to, an estimate of the
average time option grants will be outstanding before they are ultimately
exercised and converted into common stock and an estimate of the future
volatility in the market value of our common stock over that period in which the
option grants are outstanding. These estimates are integral to the valuing of
these option grants. Any changes in these estimates may have a material effect
on the value we ascribe to these option grants. This would in turn affect the
amortization used in the disclosures we make under SFAS 148, which could be
material. Further, the rules governing accounting for option grants continue to
evolve. Should we be required in future periods to include amortization of stock


                                       23
<PAGE>

options, such amortization would have a material adverse effect on our results
of operations.

Recently Issued Accounting Pronouncements

     In December 2003 the FASB issued Interpretation No. 46 (revised December
2003), "Consolidation of Variable Interest Entities", which addresses how a
business enterprise should evaluate whether it has a controlling financial
interest in an entity through means other than voting rights and accordingly
should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities," which was issued in January 2003.
Switchboard will be required to apply FIN 46R to variable interests in variable
interest entities created after December 31, 2003. The adoption of FIN 46R did
not have a material effect on Switchboard's financial position, results or
operations or cash flows.

                              Results of Operations

     The following table presents consolidated statement of operations
information, as well as consolidated statement of operations information stated
as a percentage of total net revenue:

<TABLE>
<CAPTION>
                                                                                                           Change
                                                                                          ---------------------------------------
                                    2001                 2002                2003             2001 to 2002          2002 to 2003
                             ------------------    ----------------    ---------------    -------------------     ----------------
                                        As a %              As a %             As a %
                                        of net              of net             of net
                              Amount    revenue    Amount   revenue    Amount  revenue      Amount       %        Amount     %
                             --------   -------    -------  -------    ------- -------    ---------   -------    -------  -------
Net revenue:
<S>                          <C>           <C>     <C>        <C>      <C>       <C>      <C>          <C>       <C>         <C>
  Merchant network.......... $  6,209      66.9%   $10,327    87.9%    $13,428   88.4%    $  4,118     66.3%     $ 3,101    30.0%
  National banner and
   site sponsorship.........    3,069      33.1%     1,420    12.1%      1,764   11.6%      (1,649)   (53.7)%        344    24.2%
                             --------    ------    -------   -----     -------  -----     --------   -------     -------   -----
  Total net revenue.........    9,278     100.0%    11,747   100.0%     15,192  100.0%       2,469     26.6%       3,445    29.3%

Cost of revenue.............    3,518      37.9%     3,744    31.9%      2,925   19.3%         226      6.4%        (819)  (21.9)%
                             --------    ------    -------   -----     -------  -----     --------   -------     -------   -----
  Gross profit..............    5,760      62.1%     8,003    68.1%     12,267   80.7%       2,243     38.9%       4,264    53.3%

Sales and marketing.........   24,606     265.2%     4,683    39.9%      3,264   21.5%     (19,923)   (81.0)%     (1,419)  (30.3)%
Research and development....    6,702      72.2%     5,446    46.4%      4,263   28.1%      (1,256)   (18.7)%     (1,183)  (21.7)%
General and administrative..    4,181      45.1%     4,057    34.5%      3,335   22.0%        (124)    (3.0)%       (722)  (17.8)%
Amortization of goodwill,
 Intangibles and other
 assets.....................      719       7.7%         -       -           -      -         (719)  (100.0)%          -       -
Loss on Viacom transaction..   22,203     239.3%         -       -           -      -      (22,203)  (100.0)%          -       -
Special charges (credits)...   17,324     186.7%      (262)   (2.2)%       (35)  (0.2)%    (17,586)  (101.5)%        227   (86.6)%
                             --------    ------    -------   -----     -------  -----     --------   -------     -------   -----
  Total operating expenses..   75,735     816.3%    13,924   118.5%     10,827   71.3%     (61,811)   (81.6)%     (3,097)  (22.2)%
                             --------    ------    -------   -----     -------  -----     --------   -------     -------   -----

  Operating (loss) income...  (69,975)   (754.2)%   (5,921)  (50.4)%     1,440    9.5%      64,054     91.5%       7,361   124.3%

  Other income, net.........    3,221      34.7%     1,962    16.7%        676    4.4%      (1,259)   (39.1)%     (1,286)  (65.5)%
                             --------    ------    -------   -----     -------  -----     --------   -------     -------   -----
  (Loss) income before
    income taxes............  (66,754)   (719.5)%   (3,959)  (33.7)%     2,116   13.9%      62,795    (94.1)%      6,075   153.4%

  Provision for income
   taxes....................        -         -          -       -          42    0.3%           -        -           42     n/a
                             --------    ------    -------   -----     -------  -----     --------   -------     -------   -----
  Net loss (income)......... $(66,754)   (719.5)%  $(3,959)  (33.7)%   $ 2,074   13.7%    $ 62,795    (94.1)%    $ 6,033   152.4%
                             ========    ======    =======   =====     =======  =====     ========   =======     =======   =====
</TABLE>

     Net revenue. The increase in net merchant network revenue in both 2003 and
2002 was due primarily to a reduction in amortization of consideration given to
AOL as a result of the elimination of such amortization in August 2002 upon the
amendment to the Directory Agreement with AOL. There was no amortization of
consideration provided to AOL in 2003. Amortization of consideration given to
AOL totaled $2.0 million and $4.0 million in 2002 and 2001, respectively. We do
not expect to incur amortization of consideration given to AOL in the future
during the remainder of the term of our current agreement. The increase in net
merchant network revenue in 2003 was also attributable to an increase in of $2.1
million in licensing revenue from new and existing directory technology
licensees exclusive of AOL. Offsetting these increases in 2003 was a decrease in
gross revenue from AOL of $641,000. The decrease in revenue from AOL was due
primarily to a decrease of $1.2 million in AOL licensing revenue which resulted
primarily from a decrease in the rate by which we shared in directory
advertisement revenue from AOL as a result of the achievement of pre-determined
cumulative revenue milestone, as well as the effects of the October 2003
amendment to the Directory Agreement. The increase in 2002 as compared to 2001
was also attributable to increases in merchant licensing and other services


                                       24
<PAGE>

revenues of $2.5 million from AOL as well as our other existing directory
technology licensees, offset in part by a decrease of $488,000 in local merchant
website hosting services.

     The increase in national banner and site sponsorship revenue in 2003
resulted primarily from the addition of new customers and an increase in revenue
from existing customers. The increase in revenue from existing customers was due
primarily to an increase in the rate charged to those existing customers and
additional advertising placements on our site, as well as an increase in traffic
to our website. We believe that our increased rates were possible in part due to
the improvement in general demand for national banner and site sponsorship
advertising during 2003. The decreases in national banner and site sponsorship
revenue in 2002 resulted from a decrease in both the number of advertisers on
the site, as well as the per impression fee charged to those customers. We
attribute the 2002 decrease to a decline in general demand for national banner
and site sponsorship on the Internet during 2002, as well as the overall state
of the U.S. economy.

     In 2003, 2002 and 2001, AOL accounted for 41.2%, 41.8% and 0.3% of net
revenue, respectively. In the year ended December 31, 2001, one customer
accounted for 11.6% of net revenue. There was no revenue in 2003 or 2002
generated from barter transactions, in which we received promotion in exchange
for promotion on our website. Revenue from barter transactions was 9.0% of net
revenue in 2001.

     Cost of revenue. The decrease in cost of revenue in 2003 was primarily
attributable to a decrease of $309,000 in the cost of third-party data, a
decrease of $278,000 in website creation and hosting fees in connection with our
merchant services programs and a decrease of $158,000 in data communications
expense. These decreases in 2003 were offset in part by an increase of $149,000
in search engine database inclusion expense.

     In 2002, we incurred an increase of $349,000 in depreciation associated
with additional equipment necessary to support our website and those of our
directory technology licensees; an increase of $177,000 in the cost of
third-party data; and an increase in revenue from lower margin merchant network
services as compared to 2001. These increases were offset in part by a decrease
of $286,000 in third-party website creation and hosting expenses associated with
our merchant programs and a decrease of $216,000 in equipment related expenses
incurred to support our directory and the directories of our licensees.

     Gross profit. The increase in gross profit dollars and percentage in 2003
was due primarily to an increase in net revenue being spread over lower costs of
revenue. In 2003, we reduced our fixed costs of revenue by lowering our data
communication expenditures and the cost of obtaining third party data. The
increase in gross profit dollars and percentage in 2002 was primarily due to an
increase in net revenue being spread over relatively fixed costs of revenue,
offset in part by an increase in lower margin merchant network services revenue.

     Sales and marketing. The decrease in sales and marketing expense in 2003
was primarily due to a decrease of $591,000 in merchant program expenses and a
$200,000 reduction of expense as a result of a payment from AOL for the final
settlement of our prior agreement with AOL, which was terminated in March 1999.
The decrease in 2003 was also due, to a lesser extent, to decreases of $163,000
in public relations expense and $156,000 in facilities expenses.

     The decrease in sales and marketing expense in 2002 as compared to 2001 was
primarily related to the elimination of the non-cash advertising expense related
to our former agreement with Viacom, which accounted for $9.7 million of our
sales and marketing expense during 2001. The decrease in 2002 was also
attributable to decreases of $6.1 million in other corporate marketing program
expenses, $2.0 million in employee salaries and benefits resulting primarily
from actions taken during our corporate restructuring activities in the three
months ended December 31, 2001, $913,000 in provisions for doubtful accounts and
$770,000 in merchant program expenses.

     Research and development. The decrease in research and development expense
in 2003 was due primarily to decreases of $456,000 in salaries and benefits,
$251,000 in costs associated with leased facilities as a result of more
favorable lease terms under our agreements with ePresence and $201,000 in
consulting expense. The decrease in 2002 was due primarily to decreases of
$631,000 in outside consulting, $302,000 in employee salaries and benefits,
$163,000 in costs associated with leased facilities primarily as a result of the
elimination of a leased facility in 2002 associated with our Envenue acquisition
and $74,000 in recruiting expenses. These decreases in employee salaries and
benefits in both 2003 and 2002 were primarily the result of decreases in the
number of employees performing research and development activities.

     General and administrative. The decrease in general and administrative
expense for 2003 was primarily due to the $663,000 we incurred in the 2002
period for professional services related to the amending of our Annual Report on


                                       25
<PAGE>

Form 10-K for the year ended December 31, 2001 and our Quarterly Report on Form
10-Q for the three months ended March 31, 2002 and the restatement of the
financial statements included therein. The decrease in general and
administrative expense in 2003 was also due, to a lesser extent, to a decrease
of $124,000 in insurance expense and the reduction of expense of $107,000 due to
our revised estimate of the liability required for potential damages resulting
from a class action lawsuit filed against Switchboard and certain of our current
and former officers. These decreases were offset in part by separation benefit
expenses of $174,000 resulting the resignation of our Chief Executive Officer.

     The decrease in general and administrative expense in 2002 in comparison to
2001was primarily due to a decrease of $787,000 in salaries and benefits
resulting primarily from actions taken during our corporate restructuring
activities in the three months ended December 31, 2001 and a decrease of
$261,000 in costs associated with leased facilities, offset in part by an
increase of $824,000 in expenses for professional services incurred primarily as
a result of amendments to our Annual Report on Form 10-K for the year ended
December 31, 2001 and our Quarterly Report on Form 10-Q for the three months
ended March 31, 2002 and the restatement of the financial statements included
therein.

     On October 23, 2003, we filed a Registration Statement on Form S-1 in
connection with a proposed underwritten offering of our common stock. The
offering was initiated by ePresence in order to facilitate an orderly
disposition of its Switchboard holdings in conjunction with its announced plan
of liquidation. As of December 31, 2003, we had incurred $511,000 of costs
associated with the offering. We recorded these deferred offering costs as a
long-term asset on our balance sheet as of December 31, 2003. We expect to
abandon this offering and record expense for these deferred offering costs in
full, as well as any other costs associated with this offering subsequent to
December 31, 2003, as a component of operating expenses in the three months
ended March 31, 2004.

     Amortization of goodwill, intangibles and other assets. Amortization of
goodwill, intangibles and other assets in 2001 consisted primarily of
amortization of goodwill resulting from our acquisition of Envenue, which was
written down to zero as of December 2001 as a result of an impairment analysis,
and amortization expense associated with a software license, which was fully
amortized as of December 2001.

     Loss on Viacom transaction. As a result of our October 2001 restructuring
of our relationship with Viacom, we reported a one-time, non-cash accounting
loss of $22.2 million in 2001 related to the termination of our advertising and
promotion agreement with Viacom. We agreed to terminate our right to the
placement of advertising on Viacom's CBS properties with an expected net present
value of approximately $44.5 million in exchange for, primarily, the
reconveyance by Viacom to us of approximately 7.5 million shares of our common
stock, the cancellation of warrants held by Viacom to purchase 533,469 shares of
our common stock and the reconveyance to us of the one outstanding share of our
series E special voting preferred stock. The non-cash accounting loss of $22.2
million results from the difference between the net present value of our
remaining advertising rights with Viacom, which were terminated, and the value
of the shares of our common and preferred stock that were reconveyed and the
warrants that were cancelled.

     Special (credits) charges. In 2003, we recorded the reversal of $35,000 in
excess restructuring reserves. This reversal resulted from a revision of an
estimate of termination benefits for which we had reserved as part of our 2001
special charges. It was determined in 2003 that the reserve for such benefits
was no longer required. In 2002, we recorded the reversal of $262,000 in excess
restructuring reserves as a special credit. This reversal resulted primarily
from better than expected experience in the subleasing of idle office space for
which we had reserved as part of our 2001 special charges.

     In December 2001, we recorded net pre-tax special charges of approximately
$17.3 million, comprised primarily of $15.6 million for the impairment of
certain assets, $1.0 million for costs related to facility closures and $700,000
in severance costs related to the reduction of approximately 21% of our
workforce. The restructuring resulted in 21 employee separations. These facility
closures and employee separation activities were substantially completed during
2002.

     Included in the $15.6 million charge for the impairment of certain assets
is an amount recorded for the impairment of the unamortized portion of the value
of the common stock issued and amounts prepaid to AOL. We assessed the value of
our assets related to our AOL Directory Agreement for impairment as revenues
were lower at the end of the first year of the Directory Agreement than
originally anticipated. Based upon an impairment analysis that indicated that
the carrying amount of these assets would not be fully recovered through
estimated undiscounted future operating cash flows, a charge of $11.7 million
was recorded as an additional component of special charges during 2001. This
impairment analysis was performed in September 2002 as part of our restatement
of our Annual Report on Form 10-K for the year ended December 31, 2001. The
impairment was measured as the amount by which the carrying amount of these
assets exceeded the present value of the estimated discounted future cash flows
attributable to these assets.

                                       26
<PAGE>

     In December 2001, we exercised our rights under the Envenue acquisition
agreement to substantially reduce the funding of Envenue. We evaluated the
carrying value of our goodwill in Envenue, and determined it would not be fully
recovered through estimated undiscounted future operating cash flows. As a
result during the three months ending December 31, 2001, we recorded as a
component of the $15.6 million impairment charge for certain assets an
impairment charge of $1.9 million related to the Envenue goodwill. The
impairment was measured as the amount by which the carrying amount of these
assets exceeded the present value of the estimated discounted future cash flows
attributable to these assets.

     Also included in the impairment charge for certain assets are amounts
related to prepaid advertising expenses. As a result of our change in overall
strategy from a destination site to a technology provider, we no longer
considered this prepaid advertising to be complementary to our corporate
strategy. Accordingly, we recorded $1.4 million for the impairment of these
prepaid advertising assets.

     Of the total $1.3 million facilities and severance charge, which is net of
the $35,000 and $262,000 special credits recorded in 2003 and 2002,
respectively, $1.1 million is cash-related. We have a remaining liability of
$10,000 on our balance sheet as of December 31, 2003 for the 2001 special
charges related primarily to our remaining net lease obligations for a closed
facility.

     Other income. The decrease in other income in 2003 was due primarily to a
decrease of $1.1 million in interest income earned as a result of a decline in
interest rates, as well as a decrease of $382,000 in realized gains on
investments. These decreases in 2003 were offset in part by a decrease of
$87,000 in interest expense primarily due to the repayment of all amounts due
under our equipment financing in June 2003. The decrease in 2002 was due
primarily to a decrease in interest income earned as a result of reduced funds
available for investment and a decline in interest rates, and an increase of
$95,000 in interest expense incurred primarily as a result of our financing of
equipment purchases made during 2001 and 2002, offset in part by a loss on
disposal of fixed assets in 2001.

     Income taxes. We did not have a significant tax provision in 2003.We are
subject to federal and state minimum taxes. Accordingly, we recorded income tax
expense of $42,000 in 2003. A portion of our net operating losses were created
by the excess tax benefits associated with stock options and will be realized
through increases to stockholders equity when utilized.

     We did not provide for income taxes in 2002 and 2001 due to significant
pre-tax losses. We did not record a benefit for income taxes as we believe it is
more likely than not that net operating losses and tax credits will not be fully
utilized. In assessing the realizability of deferred tax assets, we considered
whether it is more likely than not that we will not fully use some or all of the
deferred tax assets. We believe that sufficient uncertainty exists regarding the
realizability of the deferred tax assets such that a valuation of $39,929,000
and $40,346,000 for December 31, 2003 and 2002, respectively, has been
established for deferred tax assets.

     As of December 31, 2003, we had net operating loss carry-forwards for
federal and state tax purposes of approximately $87,734,000 and $87,726,000,
respectively. The federal and state net operating loss carry-forwards will begin
to expire in 2012 and 2003, respectively. Ownership changes resulting from our
issuance or sales of capital stock may limit the amount of net operating loss
carry-forwards that can be utilized by us annually to offset future taxable
income. In general, the annual usage of net operating loss carry-forwards is
limited to a company's market value on the date of the change in control,
multiplied by the federal long-term tax exempt rate. We believe that as a result
of our secondary offering, such a limitation may occur. See "Factors Affecting
Operating Results, Business Prospects and Market Price of Stock - Risks
Resulting From Our Secondary Offering - Our net operating loss carry-forwards
for federal and state tax purposes may be limited as a result of our secondary
offering, which could increase our income tax expense and reduce our net
income."

Liquidity and Capital Resources

     As of December 31, 2003, we had total cash and marketable securities of
$55.9 million, consisting of $47.3 million of cash and cash equivalents, $6.6
million of short-term marketable securities, $2.0 million of long-term
marketable securities and $36,000 of restricted cash. During 2003, cash and cash
equivalents increased by $8.9 million, primarily due to cash provided by
maturities and sales of marketable securities and restricted cash and cash
provided by operations, offset in part by net cash used for financing
activities. During 2002, cash increased by $34.2 million, primarily due to cash
provided by investing activities of $39.1 million as we moved several of our
investments to more liquid cash equivalents, offset in part by net cash used for
operating activities of $4.9 million.

     Net cash provided by operating activities in 2003 was $3.1 million,
primarily due to the following: net income of $2.1 million, non-cash income and


                                       27
<PAGE>

expenses of depreciation and amortization of $1.2 million and amortization of
unearned compensation of $146,000. The increase in cash was also due to an
increase of $432,000 in accounts payable and a decrease of $151,000 in unbilled
receivables. These increases were offset in part by an increase of $523,000 in
other current assets and an increase of $511,000 in other assets.

     Net cash used for operating activities for 2002 was $4.9 million, primarily
due to a net loss of $4.0 million, $2.0 million paid under the Directory
Agreement with AOL, a decrease in accounts payable of $1.3 million and a
decrease in accrued restructuring expense of $922,000, offset in part primarily
by depreciation and amortization of $3.6 million.

     When we entered into our relationship with AOL, we had high expectations
with respect to cash to be generated from the relationship which did not
materialize. Accordingly, we amended our agreement with AOL several times, such
that under its current terms, we are now generating positive cash flows from the
relationship and have improved other aspects of our business such that we are
now generating positive cash flows from operations overall.

     Net cash provided by investing activities in 2003 was $6.7 million,
primarily due to $5.5 million in proceeds from sales of marketable securities
and a decrease of $1.6 million in restricted cash, offset in part by purchases
of marketable securities of $285,000.

     Net cash provided by investing activities for 2002 was $39.1 million.
Investing activities for the period were primarily related to net sales of
marketable securities of $40.7 million, purchases of property and equipment of
$847,000 and an increase in restricted cash of $766,000.

     Net cash used in financing activities in 2003 was $854,000, primarily due
to payments on notes payable of $2.2 million and a payment of $1.7 million
related to the settlement of our litigation with the former stockholders of
Envenue, Inc. ("Envenue"), offset in part by proceeds of $2.3 million from the
issuance of stock and payments received from our former Chief Executive Officer
on a note receivable for the issuance of common stock of $724,000.

     Net cash provided by financing activities for 2002 was $9,000, primarily
due to the proceeds from the issuance of notes payable of $2.7 million related
to the financing of equipment purchases and proceeds of $316,000 from the
issuance of stock, offset in part by the purchase of $1.3 million in treasury
stock, and payments of capital leases and notes payable of $1.8 million. In
February 2002, Viacom Inc. exercised its warrant to purchase 533,468 shares of
our common stock pursuant to a cashless exercise provision in the warrant,
resulting in the net issuance of 386,302 shares of common stock. In March 2002,
we repurchased the 386,302 shares of our common stock from Viacom at $3.25 per
share. The repurchased shares are being held as treasury stock.

     In June 2002, we entered into a loan and security agreement (the "SVB
Financing Agreement") with Silicon Valley Bank ("SVB"), under which we had the
ability to borrow up to $4.0 million for the purchase of equipment. Amounts
borrowed under the facility accrued interest at a rate equal to prime plus
0.25%, and were to have been repaid monthly over a 30-month period. We had
utilized $2.7 million of this facility through borrowings that occurred in June
and September 2002. The SVB Financing Agreement also provided for a $1.0 million
revolving line of credit. We did not borrow any amounts under the revolving line
of credit. Our ability to borrow additional amounts under the SVB Financing
Agreement expired on May 30, 2003, after we chose not to extend the agreement.
In May 2003, we paid SVB $1.8 million in satisfaction of our outstanding
borrowings under the loan facility. We are no longer required to maintain
minimum amounts in deposit or investment accounts at SVB, as the SVB Financing
Agreement has expired and any outstanding borrowings have been repaid in full.

     In November 2000, we acquired Envenue, a wireless provider of advanced
searching technologies designed to drive leads to traditional retailers. The
total purchase price included consideration of $2.0 million in cash to be paid
on or before May 24, 2002, which we classified as a payable related to
acquisition within current liabilities. We did not pay the $2.0 million on or
before May 24, 2002, as we were involved in a contractual dispute with the
previous owners of Envenue. In June 2002, we placed $2.0 million into an escrow
account, which was to be held until the resolution of this dispute. In October
2002, we paid $410,000 out of the escrowed funds, representing the undisputed
portion of the purchase price plus interest from the original maturity date to
the former stockholders of Envenue. The remaining $1.6 million of the purchase
price was classified separately in the accompanying financial statements as of
December 31, 2002. We recorded $1.6 million as restricted cash at December 31,
2002 related to the cash held in escrow. In June 2003, we paid the former
stockholders of Envenue $1.7 million to settle all claims related to the
acquisition of Envenue. As a result, we no longer have funds in escrow related
to the matter.

     We may utilize cash resources to fund internal research and development
activities, acquisitions, or investments in businesses, technologies, products
or services that are strategic or complementary to our business. While we
believe that our amended agreement with AOL will result in lower cash flow from

                                       28
<PAGE>

AOL as compared to recent historical periods, we do not expect that the modified
revenue sharing arrangement with AOL will have a material effect on our
liquidity going forward. Based on our current level of operations, we believe
that cash generated from our operations, available cash and amounts available
will adequately meet the needs of our capital expenditures and working capital
needs for the foreseeable future.

     The following table summarizes our long-term contractual obligations as of
December 31, 2003 (in thousands):

<TABLE>
<CAPTION>
                                        Less Than 1 Year        1-3 Years       3-5 Years      5 Years         Total
                                        ----------------        ---------       ---------      -------         -----
<S>                                           <C>                 <C>               <C>            <C>         <C>
Operating lease obligations (a)               $168                $ 63              $ -            $ -         $  231
Other long-term obligations (b)                425                 364                -              -            789
                                              ----                ----              ---            ---         ------
   Total                                      $593                $427              $ -            $ -         $1,020
                                              ====                ====              ===            ===         ======
</TABLE>

(a) Excludes our operating lease for our principal administrative, sales and
marketing, and research and development facility located in Westborough,
Massachusetts, which we entered into on January 1, 2004. The lease term ends on
September 30, 2005 and has an annual base rent of $210,000.

(b) Consists of scheduled payments under various third-party data licensing
agreements.

                                       29
<PAGE>

                 Factors Affecting Operating Results, Business
                      Prospects and Market Price of Stock

     We caution you that the following important factors, among others, in the
future could cause our actual results to differ materially from those expressed
in forward-looking statements made by or on behalf of Switchboard in filings
with the Securities and Exchange Commission, press releases, communications with
investors, and oral statements. Any or all of our forward-looking statements in
this Annual Report on Form 10-K and in any other public statements we make may
turn out to be wrong. They can be affected by inaccurate assumptions we might
make or by known or unknown risks and uncertainties. Many factors mentioned in
the discussion below will be important in determining future results.
Consequently, no forward-looking statement can be guaranteed. Actual future
results may vary materially. We undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any further
disclosures we make in our reports filed with the Securities and Exchange
Commission.

                          RISKS RELATED TO OUR BUSINESS

IF THE DIRECTORY AGREEMENT WE ENTERED INTO WITH AMERICA ONLINE, INC., A
SUBSIDIARY OF TIME WARNER INC. ("AOL") (THE "DIRECTORY AGREEMENT") IS TERMINATED
PREMATURELY OR IS NOT RENEWED ON SUBSTANTIALLY SIMILAR OR FAVORABLE TERMS, IT
WOULD CAUSE A MATERIAL REDUCTION IN OUR REVENUES AND NET INCOME.

     Even though we have extended the term of the Directory Agreement, the
Directory Agreement may still be prematurely terminated due to a breach by
either party. Further, we or AOL may elect not to renew the agreement upon its
expiration. If the agreement is renewed, it may be renewed under terms that are
materially different than those in place today. The termination or expiration of
our Directory Agreement with AOL could cause us to incur losses from operations
and drain our capital resources.

     As a result of the October 2003 amendment of our agreement with AOL, the
revenue generated from our agreement with AOL decreased from $1.6 million in the
third quarter of 2003 to $1.2 million for the fourth quarter of 2003. Depending
on the amount of engineering services requested by AOL, we anticipate revenue in
future quarters from AOL to be in the range of $1.0 million to $1.4 million per
quarter. We expect future cash flows from AOL under the agreement to be
approximately $1.2 million per quarter.

IF WE RENEW OUR DIRECTORY AGREEMENT WITH AOL, WE MAY HAVE TO ISSUE WARRANTS
ALLOWING AOL TO PURCHASE SHARES OF OUR COMMON STOCK AT A PRICE BELOW THE CURRENT
MARKET PRICE, WHICH COULD REDUCE OUR REVENUES AND NET INCOME.

     If we renew the Directory Agreement with AOL for at least an additional
four years (through at least December 2009) after the initial term, we agreed to
issue to AOL a warrant to purchase up to 721,385 shares of common stock at a per
share purchase price of $4.32. The value of this potential warrant would be
amortized as an offset to revenue over the term of the renewed Directory
Agreement. Therefore, the issuance of such warrants will reduce our net income
and cause dilution of the ownership of our existing shareholders.

WE HAVE A HISTORY OF INCURRING NET LOSSES, WE MAY INCUR NET LOSSES DURING FUTURE
QUARTERS AND WE MAY NOT SUSTAIN OR IMPROVE OUR CURRENT FINANCIAL PERFORMANCE OR
ACHIEVE PROFITABILITY AGAIN, CAUSING THE VALUE OF YOUR INVESTMENT IN OUR COMMON
STOCK TO POTENTIALLY BECOME WORTHLESS.

     We have incurred significant net losses in each fiscal quarter previous to
the fiscal quarter ended March 31, 2003. From inception to December 31, 2003, we
have an accumulated deficit totaling $106.7 million. Based on recent historical
expense levels, we need to generate revenues in excess of $3.5 million each
quarter to remain profitable. Although we recorded a profit in each of the
fiscal quarters ending March 31, 2003, June 30, 2003, September 30, 2003 and
December 31, 2003, we may not maintain profitability on a quarterly or annual
basis in the future. If we do not achieve sustained profitability, we will
eventually be unable to continue our operations.

OUR QUARTERLY RESULTS OF OPERATIONS ARE LIKELY TO FLUCTUATE AND, AS A RESULT, WE
MAY FAIL TO MEET THE EXPECTATIONS OF OUR INVESTORS AND SECURITIES ANALYSTS,
WHICH MAY CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE.

     Our quarterly revenue and results of operations are volatile and are
particularly difficult to predict. Our quarterly results of operations have
fluctuated significantly in the past and are likely to fluctuate significantly


                                       30
<PAGE>

in the future. We do not believe that period-to-period comparisons of our
results of operations are meaningful and you should not rely upon these
comparisons as indicators of our future performance.

     In particular, our quarterly results of operations may fluctuate depending
upon the amount of engineering services we provide to AOL. AOL has the right to
carry forward up to 1,000 unused hours of engineering per quarter into the next
quarter. Revenue associated with any such hours of engineering services carried
forward would also be deferred until such time as the engineering services are
delivered to AOL, or AOL's right to use those hours expires. As a result, our
revenue, results of operations and cash flows from operating activities could
fluctuate on a quarterly basis. As a result of this or other factors, results in
any future quarter may be below the expectations of securities analysts or
investors. If so, the market price of our common stock may decline
significantly.

WE DEPEND ON STRATEGIC CUSTOMER AND SUPPLIER RELATIONSHIPS TO GROW OUR BUSINESS
AND OUR BUSINESS MAY NOT GROW IF THE RELATIONSHIPS UPON WHICH WE DEPEND FAIL TO
PRODUCE THE EXPECTED BENEFITS OR ARE TERMINATED.

     Our business depends upon our ability to maintain and benefit from our
existing customer relationships, particularly those with our directory
technology licensees. The success of our directory website depends in
substantial part upon our ability to access a broad base of local merchants. The
target merchant base is highly fragmented and local merchants are difficult to
contact efficiently and cost-effectively. Consequently, we depend on
relationships with licensees who license our directory technology to sell
Internet yellow pages advertising to local merchants and provide them billing
and other administrative services. The termination of any strategic relationship
with a directory technology licensee could significantly impair our ability to
attract potential local merchant customers.

     We have entered into strategic relationships with licensees of our
technology and supplier relationships with third-party information providers.
These parties may not perform their contractual obligations to us and, if they
do not, we may not be able to require them to do so. Some of our strategic
customer and supplier relationships may be terminated by either party on short
notice.

     Our strategic customer and supplier relationships are in the early stages
of development. These relationships may not provide us benefits that outweigh
the costs of the relationships. If any strategic customer or supplier demands a
greater portion of revenue or requires us to make payments for access to its
website, we may need to terminate or refuse to renew that relationship, even if
it had been previously profitable or otherwise beneficial. In addition, if we
lose a significant strategic customer or supplier, we may be unable to replace
that relationship with other strategic relationships with comparable revenue
potential, content or user demographics.

IF WE CANNOT DEMONSTRATE THE VALUE OF OUR ADVERTISING PRODUCTS TO MERCHANTS,
THOSE MERCHANT CUSTOMERS MAY STOP PURCHASING OUR ADVERTISING PRODUCTS, WHICH
COULD REDUCE OUR REVENUE AND MATERIALLY REDUCE NET INCOME.

     We may be unable to demonstrate the value of our advertising products to
merchants. Regardless of whether our merchant advertising products effectively
produce leads, merchant and national advertisers may not know the source of the
leads and may cancel their advertising. If local merchants cancel their
advertising, our revenue could decline and we may need to incur additional
expenditures to obtain new merchant and national advertisers, which would reduce
our net income.

WE MAY ATTRACT FEWER ADVERTISERS AND CONSUMERS IF WE ARE NOT ABLE TO LICENSE
ACCURATE DATABASE INFORMATION FROM THIRD-PARTY CONTENT PROVIDERS.

     We principally rely upon a single third-party source for our business and
residential listings data, and a single third-party source for our mapping data.
The loss of either of these sources or the inability of either of these sources
to collect their data could significantly and adversely affect our ability to
provide information to consumers. Although other sources of database information
exist, we may not be able to integrate data from these sources into our database
systems in a timely, cost-effective manner, or without a significant disruption
to internal engineering resources. Other sources of data may not be offered on
terms acceptable to us. Moreover, a consolidation by Internet-related businesses
could reduce the number of content providers with which we could form
relationships.

     We typically license information under arrangements that require us to pay
royalties or other fees for the use of the content. In the future, some of our
content providers may demand a greater portion of advertising revenue or
increase the fees that they charge us for their content. If we fail to enter
into and maintain satisfactory arrangements with existing or substitute content
providers, we may be unable to continue to provide our products.

     The success of our business depends on the quality of our services and that
quality is substantially dependent on the accuracy of data we license from third
parties. Any failure to maintain accurate data could impair the reputation of


                                       31
<PAGE>

our brand and our services, reduce the volume of users attracted to our website
as well as the websites of our directory technology licensees and our merchant
and national advertisers, and diminish the attractiveness of our service
offerings to those licensees, merchant and national advertisers and content
providers.

WE RELY ON A SMALL NUMBER OF COSTOMERS, THE LOSS OF WHOM MAY SUBSTANTIALLY
REDUCE OUR REVENUE.

     We derive a substantial portion of our net revenue from a small number of
customers who license our technology and sell our products. During 2003, net
revenue derived from our top ten customers accounted for approximately 68.2% of
our total net revenue. Additionally, net revenue derived from AOL alone
accounted for 41.2% of our total net revenue in 2003. Consequently, our revenue
may substantially decline if we lose any of these customers. We anticipate that
our future results of operations will continue to depend to a significant extent
upon revenue from a small number of customers. In addition, we anticipate that
the identity of those customers will change over time.

OUR PAY FOR PERFORMANCE BASED ADVERTISING IS A NEW BUSINESS OFFERING, AND WE MAY
BE UNABLE TO SUCCESSFULLY MARKET THIS SERVICE TO NEW AND EXISTING CUSTOMERS
WHICH COULD IMPAIR OUR ABILITY TO MAINTAIN AND GROW OUR BUSINESS.

     We recently introduced our LocalClicks pay for performance advertising
service. This is a new aspect of our business, and we do not have any
significant prior experience in marketing or providing this type of advertising
product. Our failure to successfully attract merchant and national advertisers
to the LocalClicks product could impair our ability to maintain and grow our
business.

WE INTEND TO EXPAND OUR DIRECT SALES INITIATIVES, WHICH IS A NEW MARKETING
CHANNEL FOR US AND WILL REQUIRE INCREMENTAL INVESTMENT WHICH COULD INCREASE OUR
COSTS AND DECREASE OUR NET REVENUE.

     Our sales strategy for LocalClicks and our other advertising products may
include broad direct sales initiatives to local and national merchants.
Historically, we have primarily relied on third parties to sell our advertising
products. Expanding our direct sales channel would be a new aspect of our
business. Increased expenses associated with direct sales could reduce our net
income. We currently intend to spend an additional $2.5 million during 2004 to
support direct sales. However, our level of spending in this area may increase
or decrease depending on the success of this initiative, and as we become more
experienced in managing a significant direct sales effort.

IF WE DO NOT INTRODUCE NEW OR ENHANCED OFFERINGS TO OUR DIRECTORY TECHNOLOGY
LICENSEES AND OUR ADVERTISERS, WE MAY BE UNABLE TO ATTRACT AND RETAIN THOSE
CUSTOMERS, WHICH WOULD SIGNIFICANTLY IMPEDE OUR ABILITY TO GENERATE REVENUE.

     We need to introduce new or enhanced products to attract and retain
directory technology licensees and advertisers, and remain competitive. Our
industry has been characterized by rapid technological change, changes in user
and customer requirements and preferences and frequent new product and service
introductions embodying new technologies. These changes could render our
technology, systems and website obsolete. If we do not periodically enhance our
existing products and services, develop new technologies that address
sophisticated and varied consumer needs, respond to technological advances and
emerging industry standards and practices on a timely and cost-effective basis
and address evolving customer preferences, our products and services may not be
attractive to directory technology licensees and our advertisers, which would
significantly impede our revenue growth. In addition, if any new product or
service introduction, such as our LocalClicks pay for performance advertising
product, is not favorably received, our reputation and our brand could be
damaged. We may also experience difficulties that could delay or prevent us from
introducing new products and services.

THE MARKETS FOR INTERNET CONTENT AND ADVERTISING ARE HIGHLY COMPETITIVE, AND OUR
FAILURE TO COMPETE SUCCESSFULLY WILL LIMIT OUR ABILITY TO INCREASE OR RETAIN OUR
MARKET SHARE.

     Our failure to maintain and enhance our competitive position would limit
our ability to increase or maintain our market share, which would seriously harm
our business. We compete in the markets for Internet content, services and
advertising. These markets are new, rapidly evolving and highly competitive. We
expect this competition to intensify in the future. We compete, or expect to
compete, with many providers of Internet content, information services and
products, as well as with traditional media, for audience attention and
advertising and sponsorship revenue. We license much of our database content
under non-exclusive agreements with third-party providers which are in the
business of licensing their content to many businesses, including our current
and potential competitors. Many of our competitors are substantially larger than
we are and have substantially greater financial, infrastructure and personnel
resources than we have. In addition, many of our competitors have
well-established, large, and experienced sales and marketing capabilities and
greater name recognition than we have. As a result, our competitors may be in a
stronger position to respond quickly to new or emerging technologies and changes


                                       32
<PAGE>

in customer requirements. Moreover, barriers to entry are not significant, and
current and new competitors may be able to launch new websites at a relatively
low cost. We therefore expect additional competitors to enter these markets.

     Many of our current customers have established relationships with our
current and potential competitors. If our competitors develop content or
technology that is superior to ours or that achieves greater market acceptance
than ours, we may not be able to develop alternative content or technology in a
timely, cost-effective manner, or at all, and we may lose market share.

WE MAY HAVE TO RELOCATE OUR HOSTING FACILITY, AND OUR BUSINESS MAY SUFFER AS A
RESULT.

     On June 4, 2003, Cable & Wireless PLC announced that it had decided to
cease its United States operations. We currently use Cable & Wireless' Waltham,
Massachusetts facility for the hosting of our website, as well as the web-hosted
platforms we provide to our directory technology licensees. SAVVIS
Communications Corporation has entered an agreement to acquire certain assets of
Cable & Wireless's United States business, including the Waltham, Massachusetts
facility, through a bankruptcy process. As of February 17, 2004, the United
States assets of Cable & Wireless became controlled by SAVVIS. Final closing of
the sale of these assets to SAVVIS requires regulatory approval and is scheduled
to occur in March 2004. SAVVIS has indicated that they will provide continued
uninterrupted service to all of Cable & Wireless' customers. We are unable to
predict if this transaction will close. If this transaction does not close, we
are unable to predict if Cable & Wireless will be able to find another acquirer
for its United States operations. If Cable & Wireless is successful in finding
another acquirer, we would be unable to predict if that eventual acquirer would
continue to provide the same or similar services as Cable & Wireless presently
offers to us. If we are unable to reach an agreement with the eventual purchaser
or lessor of the facility, we will be required to find a new location from which
to host our website as well as the web-hosted platforms we provide to our
licensees. We may incur more expense at a new facility than we presently pay to
Cable & Wireless. Further, such a transition to a new location may result in an
interruption to our website or the web-hosted platforms of our directory
technology licensees. Such an interruption could materially and negatively
affect our ability to generate cash flows and interfere with our results of
operations.

IF WE LOSE THE SERVICES OF OUR CHIEF EXECUTIVE OFFICER AND FOUNDER, OR ARE NOT
ABLE TO ATTRACT AND RETAIN HIGHLY SKILLED MANAGERIAL AND TECHNICAL PERSONNEL
WITH INTERNET EXPERIENCE, WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS MODEL
SUCCESSFULLY, WHICH COULD HARM OUR ABILITY TO REMAIN COMPETITIVE IN THE MARKET
OF INTERNET ADVERTISING.

     Our future success depends to a significant extent on the continued service
of and effective working relationship with Dean Polnerow, our Chief Executive
Officer and founder. Our business may suffer if we lose the services of Mr.
Polnerow. Additionally, we believe that our management must be able to act
decisively to apply and adapt our business model in the rapidly changing
Internet markets in which we compete. We also rely upon our technical employees
to develop and maintain much of the technology used to provide our products and
services. Consequently, we believe that our success depends largely on our
ability to attract and retain highly skilled managerial and technical personnel.
If we are not able to hire or retain the necessary personnel to implement our
business strategy, our competitiveness in the Internet search market will
suffer.

WE MAY NOT BE ABLE TO DEDICATE THE SUBSTANTIAL RESOURCES REQUIRED TO EXPAND,
MONITOR AND MAINTAIN OUR INTERNALLY DEVELOPED SYSTEMS WITHOUT CONTRACTING WITH
AN OUTSIDE SUPPLIER AT SUBSTANTIAL EXPENSE.

     We will have to expand and upgrade our technology, transaction-processing
systems and network infrastructure if the volume of traffic on our website or
our directory technology licensees' websites increases substantially. We could
experience temporary capacity constraints that may cause unanticipated system
disruptions, slower response times and lower levels of customer service. We may
not be able to project accurately the rate or timing of increases, if any, in
the use of our services or expand and upgrade our systems and infrastructure to
accommodate these increases in a timely manner. Our inability to upgrade and
expand as required could impair the reputation of our brand and our services,
reduce the volume of users able to access our website, and diminish the
attractiveness of our service offerings to our strategic partners, advertisers
and content providers. Because we developed these systems internally, we must
either dedicate substantial internal resources to monitor, maintain and upgrade
these systems or contract with an outside supplier for these services at
substantial expense.

OUR INTERNALLY DEVELOPED SOFTWARE MAY CONTAIN UNDETECTED ERRORS, WHICH COULD
LIMIT OUR ABILITY TO PROVIDE OUR PRODUCTS AND SERVICES AND DIMINISH THE
ATTRACTIVENESS OF OUR SERVICE OFFERINGS.

     We use internally developed, custom software to provide our products and
services. Some of our software, including the software used to administer our
new pay for performance based advertising, is still being refined, and our


                                       33
<PAGE>

software may contain undetected errors, defects or bugs. Although we have not
suffered significant harm from any errors or defects to date, we may discover
significant errors or defects in the future that we may not be able to fix. Our
inability to fix any of those errors could limit our ability to provide our
services and collect payments, impair the reputation of our brand and our
services, reduce the volume of users who visit our website and diminish the
attractiveness of our service offerings to our strategic partners, advertisers
and content providers.

IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR
TECHNOLOGY AND INFORMATION MAY BE USED BY OTHERS TO COMPETE AGAINST US.

     Our success depends both on our internally developed technology and our
third party technology. We rely on a variety of trademarks, service marks and
designs to promote brand name development and recognition. We also rely on a
combination of contractual provisions, confidentiality procedures and patent,
trademark, copyright, trade secrecy, unfair competition, and other intellectual
property laws to protect the proprietary aspects of our products and services.
These legal measures afford limited protection and may not prevent our
competitors from gaining access to our intellectual property and proprietary
information. In addition, courts may not uphold our intellectual property rights
or enforce the contractual arrangements that we have entered into to protect our
proprietary technology. Any of our patents may be challenged, invalidated,
circumvented or rendered unenforceable. Furthermore, we cannot assure you that
any pending patent application held by us will result in an issued patent, or
that if patents are issued to us, such patents will provide meaningful
protection against competitors or competitive technologies.

     Litigation may be necessary to enforce our intellectual property rights, to
protect our trade secrets and to determine the validity and scope of our
proprietary rights. Any litigation could result in substantial expense, may
reduce our profits and may not adequately protect our intellectual property
rights. In addition, we may be exposed to future litigation by third parties
based on claims that our products or services infringe their intellectual
property rights. Any litigation or claim against us, whether or not successful,
could result in substantial costs and harm our reputation. In addition,
intellectual property litigation could force us to do one or more of the
following: cease selling or using any of our products that incorporate the
challenged intellectual property, which would adversely affect our revenue;
obtain a license from the holder of the intellectual property right alleged to
have been infringed, which license may not be available on reasonable terms, if
at all; and redesign or, in the case of trademark claims, rename our products to
avoid infringing the intellectual property rights of third parties, which may
not be possible and nonetheless could be costly and time-consuming.

WE HAVE LIMITED EXPERIENCE ACQUIRING COMPANIES, AND ANY ACQUISITIONS WE
UNDERTAKE COULD LIMIT OUR ABILITY TO MANAGE AND MAINTAIN OUR BUSINESS, RESULT IN
ADVERSE ACCOUNTING TREATMENT AND BE DIFFICULT TO INTEGRATE INTO OUR BUSINESS.

     Although acquisitions are not a central element of our current business
strategy, we do, from time to time, pursue acquisitions. We have limited
experience in acquiring businesses and have very limited experience in acquiring
complementary technologies. In May 1998, we acquired MapsOnUs, and in November
2000, we acquired Envenue. In the future we may undertake additional
acquisitions. As was the case with our Envenue acquisition, future acquisitions
may have negative effects on our business. The Envenue acquisition failed to
provide us with all of the financial and business-related benefits that we
anticipated and, as a result, we suffered substantial financial expense and the
diversion of our management team's time and attention. Acquisitions, in general,
involve numerous risks, including:

     * diversion of our management's attention;
     * future impairment of substantial goodwill, adversely affecting our
       reported results of operations;
     * inability to retain the management, key personnel and other employees of
       the acquired business;
     * inability to assimilate the operations, products, technologies and
       information systems of the acquired business with our business; and
     * inability to retain the acquired company's customers, affiliates, content
       providers, advertisers and key personnel.

                          RISKS RELATED TO THE INTERNET

IF THE ACCEPTANCE AND EFFECTIVENESS OF INTERNET ADVERTISING DOES NOT BECOME
FULLY ESTABLISHED, OUR ADVERTISING REVENUE WILL SUFFER.

     Our business model is heavily dependent upon increasing our sales of local
online advertising products to local merchants and national advertisers. The
Internet advertising market is new and rapidly evolving, and cannot yet be
compared with traditional advertising media to gauge its effectiveness. As a
result, demand for and market acceptance of Internet advertising is uncertain.
If Internet advertising fails to gain wide acceptance and to grow from year to
year, our overall revenue will be affected. Similarly, if use of Internet yellow


                                       34
<PAGE>

pages by consumers does not increase, Internet yellow pages advertising will not
become more attractive to local merchant and national advertisers, and our
yellow pages advertising revenue will suffer.

     Many of our directory technology licensees' current and potential local
merchant and national advertisers have little or no experience with Internet
advertising and have allocated only a limited portion of their advertising and
marketing budgets to Internet activities. The adoption of Internet advertising,
particularly by entities that have historically relied upon traditional methods
of advertising and marketing, requires the acceptance of a new way of
advertising and marketing.

     There are currently no generally accepted standards for the measurement of
the effectiveness of Internet advertising. Standard measurements may need to be
developed to support and promote Internet advertising as a significant
advertising medium. Our merchant customers may challenge or refuse to accept
either our or third-party measurements of advertisement delivery.

     These customers may find Internet advertising to be less effective for
meeting their business needs than traditional methods of advertising and
marketing. In addition, there are some software programs that limit or prevent
advertising from being delivered to a user's computer. Widespread adoption of
this software could significantly undermine the commercial viability of Internet
advertising. If the market for Internet advertising fails to develop or develops
more slowly than we expect, our ability to expand our customer base and increase
revenue will suffer.

IF WE CANNOT MAINTAIN OR GROW THE NUMBER OF CONSUMERS WHO USE OUR WEBSITE AND
THE WEBSITES OF OUR LICENSEES, OUR REVENUE WILL DECLINE.

     The number of users of our website has grown significantly over the last
two years, primarily through word of mouth referrals and through search engine
database inclusion. In the three months ended December 31, 2003, approximately
34% of our revenue was directly dependent on the number of users of our website,
including revenue from content-targeted advertising, performance based
advertising and national banner and site sponsorship advertising. If the number
of users of our website falls, our revenue will decline and could cause us to
incur losses.

     If our directory technology licensees are unable to maintain or grow the
number of consumers using their websites, it is likely that their ability to
attract merchant and national advertisers will be impaired. This could result in
us losing licensees or reducing our revenue from licensees, which would reduce
our revenue and net income.

IF WE ARE SUED FOR CONTENT DISTRIBUTED THROUGH, OR LINKED TO BY, OUR WEBSITE OR
THOSE OF OUR DIRECTORY TECHNOLOGY LICENSEES, WE MAY BE REQUIRED TO SPEND
SUBSTANTIAL RESOURCES TO DEFEND OURSELVES AND COULD BE REQUIRED TO PAY MONETARY
DAMAGES.

     We aggregate and distribute third-party data and other content over the
Internet. In addition, third-party websites are accessible through our website
or those of our directory technology licensees. As a result, we could be subject
to legal claims for defamation, negligence, intellectual property infringement
and product or service liability. Other claims may be based on errors or false
or misleading information provided on or through our website or websites of our
directory licensees. Other claims may be based on links to sexually explicit
websites and sexually explicit advertisements. We may need to expend substantial
resources to investigate and defend these claims, regardless of whether we
successfully defend against them. While we carry general business insurance, the
amount of coverage we maintain may not be adequate. In addition, implementing
measures to reduce our exposure to this liability may require us to spend
substantial resources and limit the attractiveness of our content to users.

WE MAY NEED TO EXPEND SIGNIFICANT RESOURCES TO PROTECT AGAINST ONLINE SECURITY
RISKS THAT COULD RESULT IN MISAPPROPRIATION OF OUR PROPRIETARY INFORMATION OR
CAUSE INTERRUPTION IN OUR OPERATIONS.

     Our networks may be vulnerable to unauthorized access, computer viruses and
other disruptive problems. Someone who is able to circumvent security measures
could misappropriate our proprietary information or cause interruptions in our
operations. Internet and online service providers have experienced, and may in
the future experience, interruptions in service as a result of the accidental or
intentional actions of Internet users, current and former employees or others.
We may need to expend significant resources protecting against the threat of
security breaches or alleviating problems caused by breaches. Eliminating
computer viruses and alleviating other security problems may require
interruptions, delays or cessation of service.

                                       35
<PAGE>

WE MAY BE SUED FOR DISCLOSING TO THIRD PARTIES PERSONAL IDENTIFYING INFORMATION
WITHOUT CONSENT, WHICH COULD HARM OUR RELATIONSHIP WITH BOTH OUR CUSTOMER
ADVERTISERS AND OUR WEBSITE USERS AND MAY REQUIRE US TO PAY MONETARY DAMAGES.

     Individuals whose names, addresses and telephone numbers appear in our
yellow pages and white pages directories have occasionally contacted us because
their phone numbers and addresses were unlisted with the telephone company.
While we have not received any formal legal claims from these individuals, we
may receive claims in the future for which we may be liable. In addition, if we
begin disclosing to third parties personal identifying information about our
users without consent, we may face potential liability for invasion of privacy,
which may require us to pay monetary damages. In addition to the financial harm
any liability could cause, such circumstances may negatively impact our
relationships with our customers and website users.

WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION AND LEGAL
UNCERTAINTIES, WHICH COULD FORCE US TO MODIFY OUR TECHNOLOGY OR BUSINESS
PRACTICES AND INCREASE OUR COSTS.

     There are currently relatively few laws or regulations directly applicable
to the Internet and even in areas where legislation has been enacted, laws
governing the Internet remain largely unsettled. It may take years to determine
whether and how existing laws such as those governing intellectual property,
privacy, libel and taxation apply to the Internet and Internet advertising and
directory services. In addition, the growth and development of the market for
electronic commerce may prompt calls for more stringent consumer protection
laws, both in the United States and abroad, that may impose additional burdens
on companies conducting business over the Internet.

     Laws and regulations directly applicable to Internet communications,
commerce and advertising are however, becoming more prevalent. The Digital
Millennium Copyright Act is intended, in part, to limit the liability of
eligible online service providers for listing or linking to third-party websites
that include materials that infringe copyrights or rights of others. Any failure
by us to comply with FTC requirements or other privacy-related laws and
regulations could result in proceedings by the FTC or others which could
potentially decrease our revenues and negatively impact our business.
Additionally, new laws and regulations may be adopted covering issues such as
user privacy, pricing, content, taxation and quality of products and services.
Any new legislation could hinder the growth in use of the Internet and other
online services generally and decrease the acceptance of the Internet and other
online services as media of communications, commerce and advertising. While we
are not aware of any specific efforts to do so, various U.S. and foreign
governments might attempt to regulate our transmissions or levy sales or other
taxes relating to our activities.

IF WE CANNOT PROTECT OUR DOMAIN NAMES, OUR ABILITY TO SUCCESSFULLY BRAND
SWITCHBOARD WILL BE IMPAIRED.

     We currently hold various Internet domain names, including Switchboard.com
and MapsOnUs.com. The regulation of domain names in the United States and in
foreign countries is subject to change. Governing bodies may establish
additional top-level domains, appoint additional domain name registrars or
modify the requirements for holding domain names. As a result, we may be unable
to acquire or maintain relevant domain names in all countries in which we
conduct business. This problem may be exacerbated by the length of time required
to expand into any other country and the corresponding opportunity for others to
acquire rights in relevant domain names. Furthermore, it is unclear the extent
to which laws protecting trademarks and similar proprietary rights will be
extended to protect domain names. Therefore, we may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of our trademarks and other proprietary rights,
which could impair our ability to generate revenue. We may not be able to
successfully carry out our business strategy of establishing a strong brand for
Switchboard if we cannot prevent others from using similar domain names or
trademarks.

       RISKS RESULTING FROM OUR ANNOUNCED MERGER AGREEMENT WITH INFOSPACE

IF OUR ANNOUNCED ACQUISITION BY INFOSPACE IS NOT COMPLETED, OUR BUSINESS,
REPUTATION AND STOCK PRICE MAY SUFFER

     On March 26, 2004 we announced a definitive agreement to be acquired by
InfoSpace. The agreement contains customary conditions to closing, including the
absence of material adverse changes to our business and the receipt of
Switchboard and ePresence, Inc. shareholder, as well as regulatory, approvals.
If the transaction is not consummated as a result of a failure of one of these
conditions to be met, our customers, prospective customers and investors in
general may view this failure as a poor reflection on our business or prospects.
As a result, if the transaction is not consummated as anticipated, we may
experience adverse results in our business and the market price for our common
stock may fall. We intend to file a proxy statement in connection with the
proposed acquisition of Switchboard by InfoSpace. Investors and security holders
are urged to read these filings when they become available because they will


                                       36
<PAGE>

contain important information and additional risk factors in connection with the
proposed acquisition.

                                       37
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to financial market risks, including changes in interest
rates. We typically do not attempt to reduce or eliminate our market exposures
on our investment securities because the majority of our investments are
short-term. We do not have any derivative instruments.

     The fair value of our investment portfolio or related income would not be
significantly impacted by either a 100 basis point increase or decrease in
interest rates due mainly to the short-term nature of our investment portfolio.

     All the potential changes noted above are based on sensitivity analysis
performed on our balances as of December 31, 2003.


                                       38
<PAGE>

ITEM 8.   CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   Index to Consolidated Financial Statements

<TABLE>
<S>                                                                                                      <C>
Report of Independent Auditors                                                                           40
Consolidated Balance Sheets as of December 31, 2003 and 2002                                             41
Consolidated Statements of Operations for each of the years in the three-year period                     42
    ended December 31, 2003, 2002 and 2001
Consolidated Statements of Stockholders' Equity for each of the years in the three-                      43
    year period ended December 31, 2003, 2002 and 2001
Consolidated Statements of Cash Flows for each of the years in the three-year period                     45
    ended December 31, 2003, 2002 and 2001
Notes to Consolidated Financial Statements                                                               46
</TABLE>


                                       39
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders of Switchboard Incorporated

     We have audited the accompanying consolidated balance sheets of Switchboard
Incorporated as of December 31, 2003 and 2002 and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 2003. Our audits also included the
financial statement schedule listed in the Index at Item 15. These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Switchboard
Incorporated at December 31, 2003 and 2002 and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.


/s/ Ernst & Young LLP

Boston, Massachusetts
January 27, 2004
except for Note T, as to which the date is
March 26, 2004

                                       40
<PAGE>

                            SWITCHBOARD INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)
<TABLE>
<CAPTION>
                                                                                                December 31,
                                                                                       -----------------------------
                                                                                         2003                 2002
                                                                                       ---------            --------
Assets:
-------
<S>                                                                                    <C>                   <C>
Cash and cash equivalents...........................................................   $  47,265             $38,390
Marketable securities...............................................................       6,591               3,589
Restricted cash (Note F) ...........................................................          36               1,640
Accounts receivable, net of allowance of $144 and $350, respectively................       1,503               1,558
Other current assets................................................................         863                 490
                                                                                       ---------            --------
     Total current assets...........................................................      56,258              45,667

Marketable securities...............................................................       1,960              10,244
Property and equipment, net.........................................................         794               1,877
Deferred offering costs (Note G)....................................................         511                   -
                                                                                       ---------            --------
     Total assets...................................................................   $  59,523             $57,788
                                                                                       =========            ========

Liabilities and stockholders' equity:
-------------------------------------
Accounts payable....................................................................      $1,398                $966
Accrued expenses....................................................................       1,180               1,437
Deferred revenue....................................................................         603                 475
Payable related to acquisition......................................................           -               1,600
Note payable........................................................................           -               1,099
                                                                                       ---------            --------
     Total current liabilities......................................................       3,181               5,577

Note payable........................................................................           -               1,124
                                                                                       ---------            --------
     Total liabilities..............................................................       3,181               6,701

Commitments and contingencies (Note L) .............................................

Stockholders' equity:
---------------------
Preferred Stock, $0.01 par value per share; 4,999,999 shares authorized and
     undesignated, none issued and outstanding......................................           -                   -
Series E special voting preferred stock, $0.01 par value per share; one share
     authorized and designated. No shares issued and outstanding....................           -                   -
Common stock, $0.01 par value per share; authorized 85,000,000 shares.
     Issued 19,563,303 and 19,227,230 shares, respectively .........................         196                 192
Treasury stock, 386,302 shares at cost, ............................................      (1,255)             (1,255)
Additional paid-in capital..........................................................     164,053             162,437
Note and interest receivable for issuance of restricted common stock................           -              (1,520)
Unearned compensation...............................................................         (32)               (178)
Accumulated other comprehensive income..............................................          51                 156
Accumulated deficit.................................................................    (106,671)           (108,745)
                                                                                       ---------            --------
     Total stockholders' equity.....................................................      56,342              51,087
                                                                                       ---------            --------

Total liabilities and stockholders' equity..........................................   $  59,523            $ 57,788
                                                                                       =========            ========
</TABLE>

                             See accompanying notes.


                                       41
<PAGE>

                            SWITCHBOARD INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                           Years Ended December 31,
                                                                  ------------------------------------------
                                                                   2003             2002              2001
                                                                  -------          -------          --------
<S>                                                               <C>              <C>              <C>
  Revenue......................................................   $15,192          $13,747          $ 13,326
  Consideration given to a customer............................         -           (2,000)           (4,048)
                                                                  -------          -------          --------
       Net revenue.............................................    15,192           11,747             9,278

  Cost of revenue..............................................     2,925            3,744             3,518
                                                                  -------          -------          --------

  Gross profit.................................................    12,267            8,003             5,760

   Operating expenses:
   -------------------
  Sales and marketing..........................................     3,264            4,683            24,606
  Research and development.....................................     4,263            5,446             6,702
  General and administrative...................................     3,335            4,057             4,181
  Amortization of goodwill, intangibles and other assets.......         -                -               719
  Loss on Viacom transaction...................................         -                -            22,203
  Special (credit) charges.....................................       (35)            (262)           17,324
                                                                  -------          -------          --------
       Total operating expenses................................    10,827           13,924            75,735
                                                                  -------          -------          --------

  Income (loss) from operations................................     1,440           (5,921)          (69,975)

   Other income (expense):
   -----------------------
  Interest income, net ........................................       766            1,712             3,426
  Realized (loss) gain on sales of marketable securities, net..        (1)             382                92
  Other-than-temporary unrealized loss on investment...........         -                -               (55)
  Other expense................................................       (89)            (132)             (242)
                                                                  -------          -------          --------
       Total other income......................................       676            1,962             3,221
                                                                  -------          -------          --------

  Income (loss) before income taxes............................     2,116           (3,959)          (66,754)

  Provision for income taxes...................................        42                -                 -
                                                                  -------          -------          --------

  Net income (loss)............................................   $ 2,074          $(3,959)         $(66,754)
                                                                  =======          =======          ========

  Net income (loss) per share:
    Basic                                                           $0.11           $(0.21)          $(2.83)
                                                                    =====           ======           ======
    Diluted                                                         $0.10           $(0.21)          $(2.83)
                                                                    =====           ======           ======

  Weighted average number of common shares:
    Basic                                                          18,803           18,515           23,590
    Diluted                                                        19,882           18,515           23,590
</TABLE>

                             See accompanying notes.


                                       42
<PAGE>

                            SWITCHBOARD INCORPORATED
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (in thousands, except share amounts)

<TABLE>
<CAPTION>
                                    Series E Special
                                    Voting Preferred                        Treasury Stock
                                         Stock          Common Stock            at Cost
                                    ----------------- ------------------   ----------------
                                    Number              Number             Number             Additional
                                      of                  of                 of                Paid in      Note      Contribution
                                    Shares    Value     Shares    Value    Shares  Value       Capital   Receivable    Receivable
                                    ------   -------  ----------  ------   ------ --------    ---------- ----------   ------------
<S>                                  <C>      <C>    <C>          <C>      <C>    <C>         <C>         <C>          <C>
Balance, December 31, 2000.........    1       $ -    25,633,614   $256         -  $     -     $182,342    $     -      $(54,204)
Issuance of common stock under
  stock option and stock
  purchase plans...................    -         -       120,011      1         -        -          259          -             -
Expenses resulting from issuance
  of common stock and warrants
  related to third party
  agreements.......................    -         -             -      -         -        -         (110)         -             -
Unearned compensation associated
  with grant of below market stock
  options to an employee...........    -         -             -      -         -        -          436          -             -
Amortization of unearned
  compensation.....................    -         -             -      -         -        -            -          -             -
Restructuring of Viacom Inc.
  relationship.....................   (1)        -    (7,488,560)   (74)        -        -      (22,246)         -        44,524
Non-cash advertising and promotion
  expenses.........................    -         -             -      -         -        -            -          -         9,680
Change in net unrealized gain on
  investments......................    -         -             -      -         -        -            -          -             -
Net loss...........................    -         -             -      -         -        -            -          -             -

Comprehensive loss.................    -         -             -      -         -        -            -          -             -
                                      --       ---    ----------   ----   -------  -------     --------    -------      --------
Balance, December 31, 2001             -         -    18,265,065    183         -        -      160,681          -             -
Issuance of common stock under
  stock option and stock
  purchase plans...................    -         -       125,863      -         -        -          316          -             -
Issuance of common stock to
  officer under stock incentive
  plan.............................    -         -       450,000      5         -        -        1,444     (1,449)            -
Issuance of common stock under
  warrant agreement................    -         -       386,302      4         -        -           (4)         -             -
Repurchase of shares...............    -         -             -      -   386,302   (1,255)           -          -             -
Interest due under note receivable.    -         -             -      -         -        -            -        (71)            -
Amortization of unearned
  compensation.....................    -         -             -      -         -        -            -          -             -
Change in net unrealized gain on
  investments......................    -         -             -      -         -        -            -          -             -
Net loss...........................    -         -             -      -         -        -            -          -             -

Comprehensive loss.................    -         -             -      -         -        -            -          -             -
                                      --       ---    ----------   ----   -------  -------     --------    -------      --------
Balance, December 31, 2002             -         -    19,227,230    192   386,302   (1,255)     162,437     (1,520)            -
Issuance of common stock under
  stock option and stock purchase
  plans............................    -         -       561,073      6         -        -        2,339          -             -
Repurchase and retirement of
  unvested restricted common stock.    -         -      (225,000)    (2)        -        -         (723)       725             -
Interest due under note receivable.    -         -             -      -         -        -            -        (56)            -
Repayment of note receivable for
  issuance of common stock.........    -         -             -      -         -        -            -        851             -
Amortization of unearned
  compensation.....................    -         -             -      -         -        -            -          -             -
Change in net unrealized gain on
  investments......................    -         -             -      -         -        -            -          -             -
Net income.........................    -         -             -      -         -        -            -          -             -

Comprehensive income...............    -         -             -      -         -        -            -          -             -
                                      --       ---    ----------   ----   -------  -------     --------    -------      --------
Balance, December 31, 2003.........    -       $ -    19,563,303   $196   386,302  $(1,255)    $164,053    $     -      $      -
                                      ==       ===    ==========   ====   =======  =======     ========    =======      ========
</TABLE>


                                       43
<PAGE>

                            SWITCHBOARD INCORPORATED
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (in thousands, except share amounts)
                                  (continued)

<TABLE>
<CAPTION>
                                                   Accumulated                  Total
                                                     Other                   Stockholders'
                                       Unearned   Comprehensive  Accumulated    Equity
                                     Compensation    Income        Deficit     (Deficit)
                                     ------------ -------------  ----------- -------------
<S>                                    <C>           <C>        <C>           <C>
Balance, December 31, 2000.........     $   -         $ 368      $ (38,032)    $ 90,730
Issuance of common stock under
  stock option and stock
  purchase plans...................         -             -              -          260
Expenses resulting from issuance
  of common stock and warrants
  related to third party
  agreements.......................         -             -              -         (110)
Unearned compensation associated
  with grant of below market stock
  options to an employee...........      (436)            -              -            -
Amortization of unearned
  compensation.....................       102             -              -          102
Restructuring of Viacom Inc.
  relationship.....................         -             -              -       22,204
Non-cash advertising and promotion
  expenses.........................         -             -              -        9,680
Change in net unrealized gain on
  investments......................         -           555              -          555
Net loss...........................         -             -        (66,754)     (66,754)
                                                                                -------
Comprehensive loss.................         -             -              -      (66,199)
                                        -----         -----      ---------     --------
Balance, December 31, 2001.........      (334)          923       (104,786)      56,667
Issuance of common stock under
  stock option and stock purchase
  plans............................         -             -              -          316
Issuance of common stock to
  officer under stock incentive
  plan.............................         -             -              -            -
Issuance of common stock under
  warrant agreement................         -             -              -            -
Repurchase of shares...............         -             -              -       (1,255)
Interest due under note receivable.         -             -              -          (71)
Amortization of unearned
  compensation.....................       156             -              -          156
Change in net unrealized gain on
  investments......................         -          (767)             -         (767)
Net loss...........................         -             -         (3,959)      (3,959)
                                                                                -------
Comprehensive loss.................         -             -              -       (4,726)
                                        -----         -----      ---------     --------
Balance, December 31, 2002.........      (178)          156       (108,745)      51,087
Issuance of common stock under
  stock option and stock purchase
  plans............................         -              -             -        2,345
Repurchase and retirement of
  unvested restricted common stock.         -              -             -            -
Interest due under note receivable.         -              -             -          (56)
Repayment of note receivable for
  issuance of common stock.........         -              -             -          851
Amortization of unearned
  compensation.....................       146              -             -          146
Change in net unrealized gain on
  investments......................         -          (105)             -         (105)
Net income.........................         -              -         2,074        2,074
                                                                                -------
Comprehensive income...............         -              -             -        1,969
                                        -----         -----      ---------     --------
Balance, December 31, 2003.........     $ (32)           $51     $(106,671)    $ 56,342
                                        =====            ===     =========     ========
</TABLE>

                             See accompanying notes.

                                       44
<PAGE>

                            SWITCHBOARD INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                    Years Ended December 31,
                                                                                -------------------------------
                                                                                 2003       2002        2001
                                                                                -------    -------     --------
Cash flows from operating activities:
<S>                                                                             <C>        <C>         <C>
Net income (loss).............................................................  $ 2,074    $(3,959)    $(66,754)
     Adjustments to reconcile net loss to net cash used in operating
activities:
       Depreciation and amortization..........................................    1,213      1,551        2,649
       Amortization of unearned compensation..................................      146        156          102
       Gain on sale of marketable securities..................................        1       (414)           -
       Loss on disposal of property and equipment.............................        2          -          176
       Amortization of AOL assets.............................................        -      2,000        4,048
       Non-cash advertising and promotion expense.............................        -          -        9,680
       Loss on Viacom Inc. transaction........................................        -          -       22,203
       Special (credit) charges, non-cash portion.............................      (35)      (262)      16,955
       Other-than-temporary unrealized loss on available for sale investments.        -          6           55
       Expenses resulting from issuance of common stock and warrants related
          to third party agreements...........................................        -          -         (110)

     Changes in operating assets and liabilities:
       Accounts receivable....................................................       55         76        3,937
       Other current assets...................................................     (372)       763       (4,654)
       Other assets...........................................................     (511)        95        1,833
       Directory services agreement...........................................        -     (2,000)           -
       Accounts payable.......................................................      432     (1,313)         991
       Accrued expenses.......................................................     (118)      (325)      (1,266)
       Accrued restructuring..................................................       (7)      (922)       1,410
       Deferred revenue.......................................................      128       (286)        (751)
       Increase in accrued interest receivable................................       71        (71)           -
                                                                                -------    -------     --------
          Net cash provided by (used in) operating activities.................    3,079     (4,905)      (9,496)

Cash flows from investing activities:
    Purchases of property and equipment.......................................     (132)      (847)      (2,942)
    Decrease (increase) in restricted cash....................................    1,604       (766)        (874)
    Proceeds from sales (purchases )of marketable securities, net.............    5,178     40,687       (2,383)
                                                                                -------    -------     --------
         Net cash provided by (used in) investing activities..................    6,650     39,074       (6,199)

Cash flows from financing activities:
     Proceeds from issuance of common stock, net..............................    2,345        316          260
     Proceeds from receipts on note receivable for issuance of common stock...      724          -            -
     Purchase of treasury stock...............................................        -     (1,255)           -
     Proceeds from issuance of note payable...................................        -      2,747            -
     Proceeds from sales-type leases..........................................        -          -        1,101
     Settlement of Envenue litigation.........................................   (1,700)         -            -
     Payments on capital leases and notes payable.............................   (2,223)    (1,799)        (226)
                                                                                -------    -------     --------
         Net cash (used in) provided by financing activities..................     (854)         9        1,135
                                                                                -------    -------     --------

Net increase (decrease) in cash and cash equivalents..........................    8,875     34,178      (14,560)

Cash and cash equivalents at beginning of year................................   38,390      4,212       18,772
                                                                                -------    -------     --------
Cash and cash equivalents at end of year......................................  $47,265    $38,390     $  4,212
                                                                                =======    =======     ========

Supplemental schedule of cash flow information:
   Interest paid..............................................................      $74       $161          $66
   Income taxes paid..........................................................      $13        $20          $ -
Supplemental statement of non-cash investing and financing activity:
   Repurchase and retirement of restricted stock and reduction of note
     receivable...............................................................     $725        $ -          $ -
   Benefit from disqualifying dispositions and employee exercises of
     non-qualified stock options..............................................      $42        $ -          $ -
   Note receivable from officer for issuance of common stock..................      $ -     $1,449          $ -
   Asset and liability related to AOL Directory Agreement.....................      $ -    $12,000          $ -
   Unrealized loss (gain) on investments......................................     $105       $767        $(555)
</TABLE>

                             See accompanying notes.

                                       45
<PAGE>

                            SWITCHBOARD INCORPORATED
                        NOTES TO THE FINANCIAL STATEMENTS
                                DECEMBER 31, 2003

A. Nature of Business

     Switchboard Incorporated, a Delaware corporation ("Switchboard"), commenced
operations in February 1996. From Switchboard's inception (February 19, 1996)
until its initial public offering on March 7, 2000, Switchboard was a unit and
later a subsidiary of ePresence Inc. ("ePresence"). As of December 31, 2003,
ePresence beneficially owned approximately 51.1% of Switchboard's common stock.
Switchboard is a provider of local online advertising products, enabled by its
consumer-oriented online yellow and white pages directory technology.

     Switchboard generates revenue primarily from merchant and national
advertisers that pay to advertise in the Switchboard-powered yellow pages
directories of its licensees, as well as in its own directory website,
www.switchboard.com. Switchboard licenses its yellow pages directory technology
to Internet portals, traditional yellow pages publishers and newspaper
publishers. Switchboard operates in one business segment as a provider of
advertising solutions through its web-hosted directory technologies and
customized yellow pages directory technology, and classifies its revenue into
two categories, namely net merchant network revenue and national banner and site
sponsorship revenue.

     Net merchant network revenue includes revenue from various licensing
agreements with Switchboard's directory technology licensees and also includes
engineering and other fees for services provided to support the directories and
programs of Switchboard's licensees. In addition, net merchant network revenue
includes revenue from running priority placement, local performance based, and
content targeted advertising in the Switchboard.com yellow pages directory, and
building and hosting websites for local merchant advertisers. During the years
ended December 31, 2003, 2002 and 2001, net merchant network revenue comprised
88.4%, 87.9% and 66.9% of our net revenue, respectively.

     Switchboard also continues to generate revenue from the sale of national
banner and site sponsorship advertising on white and yellow pages, as well as
maps pages, across both www.switchboard.com and the websites of several
directory technology licensees. During the years ended December 31, 2003, 2002
and 2001, 11.6%, 12.1% and 33.1% of Switchboard's net revenue, respectively, was
derived from the sale of national banner and site sponsorship advertising.

     Switchboard is subject to risks and uncertainties common to growing
technology-based companies, including rapid technological change, growth and
commercial acceptance of the Internet, acceptance and effectiveness of Internet
advertising, dependence on principal products and third-party technology, new
product development, new product introductions and other activities of
competitors, dependence on key personnel, security and privacy issues,
dependence on strategic customer and vendor relationships and limited operating
history.

     Switchboard has experienced substantial net losses since its inception and,
as of December 31, 2003, had an accumulated deficit of $106.7 million. Such
losses and accumulated deficit resulted from Switchboard's lack of substantial
revenue and significantly increased costs incurred in the development of
Switchboard's products and services, in the preliminary establishment of
Switchboard's infrastructure and in the development of Switchboard's brand.
Switchboard expects to continue to incur significant operating expenses in order
to execute its current business plan, particularly sales and marketing and
product development expenses. Switchboard believes that the funds currently
available would be sufficient to fund operations for the foreseeable future.

B. Summary of Significant Accounting Policies

Principles of Consolidation

     The accompanying financial statements, which are derived from both the
independent books and records of Switchboard and its subsidiaries and the
historical books and records of ePresence, include the assets, liabilities,
revenues and expenses of Switchboard at historical cost. Intercompany accounts
and transactions have been eliminated.

     These financial statements are intended to present management's estimates
of the results of operations and financial condition of Switchboard as if it had
operated as a stand-alone company since inception. Certain of the costs and
expenses are management estimates of the cost of services provided by ePresence
and its subsidiaries. As a result, the financial statements presented may not be
indicative of the results that would have been achieved had Switchboard operated
as a nonaffiliated entity.


                                       46
<PAGE>

Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosures of contingent liabilities at the period end, and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Cash Equivalents and Marketable Securities

     Switchboard considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Those instruments with
maturities as of the balance sheet date between three and twelve months are
considered to be short-term marketable securities, and investments with
maturities as of the balance sheet date of greater than one year are classified
as long-term marketable securities. Cash equivalents and marketable securities
are carried at market, and consist primarily of interest bearing deposits with
major financial institutions.

     In accordance with Statement of Financial Accounting Standards ("SFAS") No.
115 "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS
115"), Switchboard classifies all of its marketable equity securities as
available for sale securities. These securities are valued at fair value and
consist primarily of U.S government securities, corporate and municipal issues
and interest bearing deposits with major banks. Unrealized holdings gains and
losses are reported as a component of accumulated other comprehensive income, a
separate component of Stockholders' Equity. Other-than-temporary unrealized
losses are reported as a component of other income (expense) within the
Statement of Operations.

     In 2003, 2002 and 2001, purchases of marketable securities were $285,000,
$12.8 million and $81.9 million, respectively. In 2003, 2002 and 2001, proceeds
from sales and maturities of marketable securities were $5.5 million, $53.5
million and $79.5 million, respectively. In 2002, Switchboard recorded $57,000
in realized losses on marketable securities.

Property and Equipment

     Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the following estimated asset lives:

    Computers, peripherals and servers..... 3 years
    Office equipment....................... 3-5 years
    Software............................... 3 years
    Furniture and fixtures................. 5 years

     Leasehold improvements are depreciated over the asset's estimated useful
life or the remaining life of the lease, whichever is shorter. Maintenance and
repairs are charged to expense when incurred, while betterments are capitalized.
When property is retired or otherwise disposed of, the related cost and
accumulated depreciation are removed from the respective amounts and any gain or
loss is reflected in operations.

Goodwill and Intangibles

     Switchboard recorded amounts in excess of assets acquired pursuant to its
acquisition of Envenue, Inc. ("Envenue") in November 2000 as goodwill. Pursuant
to a distribution agreement Switchboard entered into with America Online, Inc.
("AOL", the "Directory Agreement"), Switchboard issued shares of its common
stock to AOL. The value of these shares of common stock had been recorded as an
intangible asset, and had been amortized on a straight-line basis over the life
of the Directory Agreement. As of December 31, 2001, Switchboard evaluated the
net realizable value of all of its assets related to AOL and Envenue as a result
of lower than anticipated revenues in accordance with Statement of Financial
Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of" ("SFAS 121") and determined that
both its assets related to AOL and Envenue had been impaired. As a result,
Switchboard recorded a loss on impairment as a component of its special charge
in 2001 (Notes E, F and Q).

Impairment of Long-Lived Assets

     In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal
of Long-Lived Assets and Long-Lived Assets" ("SFAS 144"), Switchboard
periodically evaluates its long-lived assets for potential impairment. Potential
impairment is assessed when there is evidence that events or changes in


                                       47
<PAGE>

circumstances indicate that the carrying amount of an asset may not be
recovered. Recoverability of these assets is assessed based on undiscounted
expected future cash flows from the assets, considering a number of factors
including past operating results, budgets and economic projections, market
trends and product development cycles. An impairment in the carrying value of
each asset is assessed when the undiscounted expected future cash flows derived
from the asset are less than its carrying value. Switchboard believes that there
has been no impairment of its long-lived assets as of December 31, 2003 and
2002.

Advertising Expense

     Advertising costs are expensed as incurred and totaled $34,000 and
$15,430,000 in the years ended December 31, 2002 and 2001, respectively. In
2001, the costs included $9,680,000 of non-cash advertising received from Viacom
Inc. (formerly CBS Corporation) (Note K).

Revenue Recognition

     Switchboard generates its revenue primarily from merchant advertising
placements promoted in the Switchboard-powered directories of its licensees, as
well as in its own directory website. Generally, revenue is recognized as
services are provided, so long as no significant obligations remain and
collection of the resulting receivable is probable. Switchboard believes that it
is able to make reliable judgments regarding the creditworthiness of its
customers based upon historical and current information available to
Switchboard. There can be no assurances that Switchboard's payment experience
with its customers will be consistent with past experience or that the financial
condition of these customers will not decline in future periods, the result of
which could be the failure to collect invoiced amounts. Some of these amounts
could be material, resulting in an increase in Switchboard's provision for bad
debts.

     Switchboard licenses its directory technology to its licensees. Licensees
can enter into a development and licensing arrangement with Switchboard whereby
Switchboard creates and/or modifies a private labeled web-hosted directory.
Switchboard recognizes revenue under these agreements when evidence of an
arrangement exists, the related fee is fixed or determinable, and collection of
the fee is reasonably assured, in accordance with Staff Accounting Bulletin No.
101 ("SAB") and No. 104, "Revenue Recognition in Financial Statements" ("SAB
Nos. 101 and 104"). Revenue received by Switchboard for such development and
licensing arrangements is deferred until such time as the customer accepts the
directory. Switchboard considers customer acceptance to occur at the time the
directory is made accessible to the licensee for general use. After acceptance
by the customer, revenue from such development and licensing agreements is
recognized on a straight-line basis over the remaining life of the agreement.
Once the web-hosted directory is operational, Switchboard may earn additional
fees based on the number of merchants promoted within the directory. Per
merchant license fees or additional engineering and other services fees are
recognized as earned. Per merchant fees are considered earned in the period
during which the merchant advertisement is displayed in our website and/or the
website of our licensees. Additional engineering and other services fees are
considered earned in the period during which the services were provided.

     Switchboard's most significant licensee is America Online, Inc. ("AOL").
Revenues recognized under Switchboard's agreement with AOL are recognized in
accordance with SAB Nos. 101 and 104. Prior to October 2003, Switchboard
received a share of directory advertisement revenue earned by AOL from the sales
of advertisements on the yellow pages directory it provides to AOL, less an
estimate for amounts deemed uncollectable by AOL. Switchboard recorded as
merchant licensing revenue the net amount received from AOL in accordance with
Emerging Issues Task Force ("EITF") Issue No. 99-19, "Reporting Revenue Gross as
a Principal versus Net as an Agent" ("EITF No. 99-19"), as it is earned.
Switchboard considers this merchant licensing revenue earned during the period
that AOL displays the advertisements sold to its customers in its yellow page
directory. Switchboard also earns revenue from AOL through the provision of
engineering and other services to AOL. Switchboard considers the delivery of
engineering and other services to be a separate earnings process and recognizes
revenue from engineering and other services in the period during which these
services are delivered. Subsequent to October 2003, Switchboard receives an
annual license fee. Switchboard bifurcates this amount between merchant and
platform licensing fees and engineering services fees. Switchboard recognizes
revenue from merchant and platform licensing fees as earned. Switchboard
considers revenue from merchant and platform licensing earned as it provides AOL
the yellow pages directory and displays AOL's advertisers in the Switchboard.com
yellow pages. In addition, included as an offset to revenue is consideration
given to AOL, for which the benefits of such consideration are not separately
identifiable from the revenue obtained from AOL.

     Switchboard sells national and local advertisements in Switchboard.com
through its direct sales force, as well as through third-parties. For these
advertisements, Switchboard is generally paid a monthly fee based on the number
of advertisements placed into www.switchboard.com. Switchboard recognizes this


                                       48
<PAGE>

monthly fee as revenue as it is earned. Switchboard considers this fee earned
during the period that they provide the advertising on www.switchboard.com.

     Deferred revenue is principally comprised of billings relating to
advertising agreements and licensing fees received pursuant to advertising or
services agreements in advance of revenue recognition. Unbilled receivables are
principally comprised of revenues earned and recognized in advance of invoicing
customers, resulting primarily from contractually defined billing schedules.

Cost of Revenue

     Switchboard's cost of revenue consists primarily of expenses paid to third
parties under data licensing and website creation and hosting agreements, search
engine database inclusion expenses and employee compensation expense associated
with the delivery of additional engineering, as well as other direct expenses
incurred to maintain the operations of Switchboard's website and the web-hosted
platforms of its licensees. Expenses associated with data licensing are largely
fixed in nature and are recorded as expense on a straight-line basis. Direct
expenses incurred to maintain the operations of Switchboard's website and those
of its licensees are recorded as expense as incurred. Website creation and
hosting expenses and search engine database inclusion expenses are variable
based upon the number of merchants receiving website services and the amount of
search engine database inclusion purchased. Switchboard recognizes these
expenses as the website creation and hosting expense and search engine database
inclusion expenses are incurred. Employee compensation expense associated with
the delivery of additional engineering is recorded as a cost of revenue in the
period during which the additional engineering was performed.

Risks, Concentrations and Uncertainties

     Switchboard invests its cash and cash equivalents primarily in deposits,
money market funds and investment grade securities with financial institutions.
Switchboard has not experienced any material realized losses to date on its
invested cash.

     A potential exposure to Switchboard is a concentration of credit risk in
accounts receivable. Switchboard minimizes this risk by maintaining reserves for
credit losses and, to date, such losses have been within management's
expectations. These expectations are based on historical experience, analysis of
information currently available to Switchboard with respect to its customer's
financial position, as well as various other factors. As of December 31 2002,
AOL accounted for 28.8% of accounts receivable. AOL accounted for 41.2% and
41.8% of net revenue for the years ended December 31, 2003 and 2002,
respectively. One customer accounted for 11.6% of net revenue in the year ended
December 31, 2001.

Income Taxes

     Switchboard accounts for income taxes under the liability method. Under
this method, deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted rates in effect for the year in which those temporary differences
are expected to be recovered or settled. A deferred tax asset is established for
the expected future benefit of net operating loss and tax credit carry-forwards.
A valuation reserve against net deferred tax assets is required if, based upon
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.

Fair Value of Financial Instruments

     The carrying amounts of Switchboard's financial instruments, which include
cash equivalents, marketable securities, accounts receivable, accounts payable,
accrued expenses and a note payable, approximate their fair values.

Accounting for Stock-Based Compensation

     Switchboard accounts for stock-based awards to employees using the
intrinsic value method as prescribed by Accounting Principles Board ("APB") No.
25, "Accounting for Stock Issued to Employees," ("APB 25") and related
interpretations. Accordingly, no compensation expense is recorded for options
issued to employees in fixed amounts and with fixed exercise prices at least
equal to the fair market value of Switchboard's common stock at the date of
grant. Switchboard has adopted the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation," ("SFAS 123") through disclosure only (Note N). All
stock-based awards to non-employees are accounted for at their fair value in
accordance with SFAS 123.

     At December 31, 2003, Switchboard has three stock-based employee
compensation plans as defined by SFAS 148, which are more fully described in
Note N. Switchboard accounts for those plans under the recognition and


                                       49
<PAGE>

measurement principles of APB 25 and related interpretations. The table below
illustrates the effect on the net income (loss) if Switchboard had applied the
fair value recognition provisions of SFAS 123 to stock-based employee
compensation (in thousands, except per share data). Because options vest over
several years and additional option grants are expected to be made in future
years, the below pro-forma effects are not necessarily indicative of the
pro-forma effects on future years.

<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                       ----------------------------------
                                                                        2003        2002           2001
                                                                       ------      -------       --------
<S>                                                                    <C>         <C>           <C>
Net income (loss) attributable to common stockholders as reported....  $2,074      $(3,959)      $(66,754)
Add:    Stock-based employee compensation expense included
          in reported net income (loss), net of related tax effects..     146          156            102
Add:    Adjustment for previously amortized expense associated with
          the unvested portion of options canceled in the period.....     304        2,557            892
Deduct: Total stock-based employee compensation expense
          determined under fair value based method for all
          awards, net of related tax effects.........................  (1,756)      (3,777)        (6,460)
                                                                       ------      -------       --------
Pro-forma net income (loss)..........................................  $  768      $(5,023)      $(72,220)
                                                                       ======      =======       ========

Pro forma net income (loss) per share:
   Basic.............................................................   $0.04       $(0.27)         $(3.06)
                                                                        =====       ======          ======
   Diluted...........................................................   $0.04       $(0.27)         $(3.06)
                                                                        =====       ======          ======

Weighted average number of common shares:
   Basic.............................................................  18,803       18,515         23,590
   Diluted...........................................................  19,882       18,515         23,590
</TABLE>

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants in each of the following periods:

<TABLE>
<CAPTION>
                                           Years Ended December 31,
                                     -----------------------------------
                                      2003         2002           2001
                                     -------      -------        -------
<S>                                       <C>          <C>            <C>
Dividend yield.....................       0%           0%             0%
Expected volatility................     122%         130%           130%
Average risk free interest rate....     2.9%         3.9%           4.3%
Expected lives.....................  4 years      4 years        4 years
</TABLE>

     The weighted average grant date fair values using the Black-Scholes option
pricing model were $5.19, $3.28 and $3.99 during the years ended December 31,
2003, 2002 and 2001, respectively.

Net Income (Loss) per Share

     Basic net income (loss) per share is computed using the weighted average
number of shares of common stock outstanding less any restricted shares. Diluted
income (loss) per share includes the dilutive effect of potential common shares
outstanding during the period. Potential common shares result from the assumed
exercise of outstanding stock options and warrants, the proceeds of which are
then assumed to have been used to repurchase outstanding common stock using the
treasury stock method. Potential common shares also include the unvested portion
of restricted stock, as well as the effect of unearned compensation resulting
from the unvested portion of stock options issued at an exercise price lower
than the market price on the date of issuance of the stock option.

     A reconciliation of basic and diluted weighted average shares outstanding
is as follows (in thousands):

<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                          --------------------------------------
                                                           2003            2002            2001
                                                          ------          ------          ------
<S>                                                       <C>             <C>             <C>
Basic weighted average shares outstanding...............  18,803          18,515          23,590
Effect of dilutive common stock equivalents.............   1,079               -               -
                                                          ------          ------          ------
Diluted weighted average shares outstanding.............  19,882          18,515          23,590
                                                          ======          ======          ======
</TABLE>

     During the years ended December 31, 2003, 2002 and 2001, options to
purchase 1,176,834, 3,566,603 and 4,206,080 shares of common stock,
respectively, warrants for none, 918,468 and 918,468 shares of common stock,
respectively, and restricted common stock of none, 300,000 and 746,260,
respectively, were not included in the computation of diluted net income (loss)
per share since their inclusion would be antidilutive.

                                       50
<PAGE>

Comprehensive Loss

     Switchboard adheres to SFAS No. 130, "Reporting Comprehensive Income",
which requires companies to report all changes in stockholders' equity during a
period, except those resulting from investment by owners and distribution to
owners, in comprehensive income in the period in which they are recognized.

Recent Accounting Pronouncements

     In December 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003), "Consolidation of Variable Interest Entities" (FIN 46R), which
addresses how a business enterprise should evaluate whether it has a controlling
financial interest in an entity through means other than voting rights and
accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation
No. 46, "Consolidation of Variable Interest Entities," which was issued in
January 2003. Switchboard will be required to apply FIN 46R to variable
interests in variable interest entities created after December 31, 2003. The
adoption of FIN 46R did not have a material effect on Switchboard's financial
position, results or operations or cash flows.

C. Barter Transactions

     Switchboard had no barter transactions in the years ended December 31, 2003
and 2002. Switchboard had barter transactions totaling $836,000, or 9.0% of net
revenue, for the year ended December 31, 2001 in which Switchboard received
promotion in exchange for promotion on Switchboard's website or through direct
e-mail distributions. Revenue from advertising barter has been valued based on
similar cash transactions which occurred within six months prior to the date of
the barter transaction in accordance with EITF Issue No. 99-17 "Accounting for
Advertising Barter Transactions".

D. Property and Equipment

     Property and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                   December 31,
                                              ----------------------
                                               2003           2002
                                              -------        -------
                                                  (in thousands)
<S>                                           <C>            <C>
Computers, peripherals and servers.........   $ 4,225        $ 4,250
Office equipment...........................       204            236
Software...................................       880            882
Furniture and fixtures.....................         5              5
Leasehold improvements.....................       326            326
                                              -------        -------
                                                5,640          5,699
Accumulated depreciation...................    (4,846)        (3,822)
                                              -------        -------
  Total....................................   $   794        $ 1,877
                                              =======        =======
</TABLE>

     Depreciation expense and amortization of leased assets for the years ended
December 31, 2003, 2002 and 2001 was $1,213,000, $1,521,000 and $1,235,000,
respectively.

E. AOL

     In December 2000, Switchboard entered into a Directory Agreement with AOL
to develop a new directory and local advertising platform and product set to be
featured across specified AOL properties (the "Directory Platform"). In November
2001, April 2002, August 2002, November 2002 and October 2003, certain terms of
the agreement were amended. Under the original four-year term of the amended
Directory Agreement, Switchboard was to have shared with AOL specified directory
advertisement revenue. In general, Switchboard received a majority of the first
$12.0 million of such directory advertisement revenue, less any billable
engineering revenue earned from AOL after June 30, 2002, and a lesser share of
any additional directory advertisement revenue over and above the initial $12.0
million pursuant to the August 2002 amendment. Switchboard paid AOL and recorded
an asset of $13.0 million at the signing of the original Directory Agreement.
Following the incorporation of the Directory Platform on the AOL.com, AOL
Service and Digital City properties ("AOL Roll-In") in January 2002, Switchboard
recorded a second asset and a liability related to future payments of $13.0
million. In April 2002, Switchboard established an additional asset and
liability of $1.0 million and paid $2.0 million upon the execution of the April
2002 amendment. Under the April 2002 amended agreement, Switchboard was
scheduled to make six additional quarterly payments of $2.0 million each,
replacing the $13.0 million originally owed upon the AOL Roll-In.

                                       51
<PAGE>

     The August 2002 amendment, among other things, eliminated the $12.0 million
in remaining additional payments established in the April 2002 amendment. AOL
committed to pay Switchboard at least $2.0 million in consulting or service fees
over the term of the agreement under a payment schedule which ended in September
2002, of which AOL paid all $2.0 million and Switchboard delivered all $2.0
million in services to AOL. In addition, Switchboard was required to provide up
to 300 hours of engineering services per month to AOL at no charge, if requested
by AOL for the term of the agreement. These 300 hours were provided to support
the Directory Platform, from which we shared in directory revenue over the term
of the amended agreement. Any engineering services provided by Switchboard in
excess of 300 hours per month were charged to AOL on a time and materials basis.
AOL typically exceeds these 300 hours each month. In 2003, 2002 and 2001,
consulting and service fees totaled $2.0 million, $1.5 million and $1.9 million,
respectively.

     The October 2003 amendment, among other things, extended the term of the
agreement for an additional year until December 11, 2005, and provides that
Switchboard will receive $4.8 million annually from AOL, payable in monthly
increments of $400,000, in exchange for providing, maintaining and customizing
the AOL yellow pages directory technology and inclusion of current AOL merchants
in Switchboard's yellow pages directory. In addition, the amended agreement
creates the opportunity for both parties to share in revenue generated from
advertising products that combine both AOL's and Switchboard's consumer
audience. The revenue sharing arrangement, based on a percentage of AOL merchant
subscription revenue, that was previously in effect has been eliminated. AOL and
Switchboard are now able to sell advertising products offering both local
merchant and national advertisers access to the combined consumer audience of
both AOL and Switchboard yellow pages. As part of the consideration for the $4.8
million annual fee, if requested by AOL, Switchboard is obligated to provide AOL
with up to 3,000 hours of engineering services per fiscal quarter in order to
customize and further AOL's directory platform. In addition, AOL may carry-over
up to 1,000 of its unused engineering hours into the next quarter. At no time at
the end of any fiscal quarter may the unused hours carried forward exceed 1,000
hours. Revenue attributable to any unused hours that are carried forward into
the following fiscal quarter are valued using Switchboard's standard hourly
rates for engineering services and deferred until the hours carried forward are
either used or the right to use them expires. Switchboard bills AOL on a time
and materials basis for any hours of engineering services in excess of the 3,000
hours per quarter and recognizes this revenue during the period in which the
engineering services are delivered. The October 2003 amended agreement is
subject to earlier termination upon the occurrence of specified events,
including, without limitation (1) Switchboard being acquired by one of certain
third parties, or (2) AOL acquiring one of certain third parties and AOL paying
Switchboard a termination fee of $25.0 million.

     Subsequent to the October 2003 amendment to the AOL agreement, Switchboard
has bifurcated the monthly fee received from AOL into a directory license fee
and an engineering service fee in accordance with EITF No. 00-21, "Revenue
Arrangement with Multiple Deliverables" ("EITF No. 00-21") and SAB 104. EITF
00-21 and SAB 104 allow for accounting for separate elements of contract if the
elements qualify as separate accounting units, and if vendor specific evidence
of fair value can be established for each element under the arrangement. If
vendor specific evidence of fair value cannot be established for all elements
under the arrangement, but can be established for the undelivered elements,
value may be allocated to the delivered elements based on the residual method.
Switchboard has established vendor specific evidence of fair value for the
engineering services and has allocated remaining value to the license fees.
Switchboard recognizes revenue for each element in accordance with SAB 101 and
104, when evidence of an arrangement exists, fees are fixed and determinable,
services have been delivered and collectibility is assured.

     In connection with entering into the Directory Agreement, in December 2000,
Switchboard issued to AOL 746,260 shares of its common stock, which were
restricted from transfer until the AOL Roll-In, which occurred on January 2,
2002. Switchboard valued these shares using the fair market value for its common
stock at the time of issuance, recording an asset of $3.1 million in December
2000. Switchboard also agreed to issue to AOL an additional 746,260 shares of
common stock if the Directory Agreement continued after two years and a further
746,260 shares of common stock if the Directory Agreement continued after three
years. Under the amended agreement, the requirement to issue additional shares
upon the two and three-year continuations has been eliminated. If Switchboard
renews the Directory Agreement with AOL for at least an additional four years
after the initial amended five-year term, it is required to issue to AOL a
warrant to purchase up to 721,385 shares of common stock at a per share purchase
price of $4.32. Switchboard will record the value of this potential warrant when
it is issuable.

     The $13.0 million paid and the value of the stock issued upon the signing
of the Directory Agreement was amortized on a straight-line basis over the
original four-year estimated life of the agreement. In accordance with EITF
Issue 01-9 "Accounting for Consideration Given by a Vendor to a Customer
(Including a Reseller of the Vendor's Products)", Switchboard recorded the
amortization of its AOL asset as an offset to merchant network revenue of $2.0
million and $4.0 million in 2002 and 2001, respectively. As of December 2001 and
as part of the September 2002 restatement of Switchboard's Annual Report on Form
10-K for the year ended December 31, 2001, the remaining unamortized amounts
were written down to zero as a result of an impairment analysis as of December
31, 2001 (Note Q). In 2002, Switchboard recorded amortization based upon the
remaining net book value of its AOL assets established upon the AOL Roll-In and


                                       52
<PAGE>

April 2002 amendment on a straight-line basis over the remaining term of the
amended agreement.

     As a result of the elimination in the August 2002 amendment of the
remaining $12.0 million owed to AOL, an adjustment to amortization of
consideration given to a customer of $482,000 was recorded in 2002, offsetting
amortization recorded in the period. Throughout the remaining initial term of
the amended agreement, Switchboard will no longer record amortization of
consideration given to AOL as these assets are now fully amortized and no
further consideration is due AOL. The following table illustrates the amounts
provided to AOL and the associated amortization expense and impairment charge in
each of the years ended December 31, 2000, 2001 and 2002 (in thousands).

<TABLE>
<CAPTION>
                                                                Years ended December 31,
                                                          ----------------------------------
                                                           2000         2001          2002
                                                          -------      -------       -------
<S>                                                       <C>          <C>           <C>
Net value of AOL related assets at beginning of period..  $     -      $15,771       $     -
Value of stock issued to AOL(a).........................    3,183            -             -
Cash paid to AOL(b).....................................   13,000            -         2,000
Amortization of AOL assets(c)...........................     (412)      (4,048)       (2,000)
Impairment of AOL assets(d).............................        -      (11,723)            -
                                                          -------      -------       -------
Net value of AOL related assets at end of period........  $15,771      $     -       $     -
                                                          =======      =======       =======
</TABLE>

(a) Recorded as a component of other assets.
(b) Recorded as prepaid Directory Agreement.
(c) Recorded as consideration given to a customer.
(d) Recorded as a component of special charges.

     Revenue recognized from AOL, net of amortization of consideration given to
AOL, was $6,265,000, or 41.2% of net revenue, $4,906,000, or 41.8% of net
revenue, and $26,000 in 2003, 2002 and 2001, respectively. Net amounts due from
AOL included in accounts receivable at December 31, 2002 were $549,000. There
were no amounts due from AOL at December 31, 2003. As of December 31, 2003, AOL
beneficially owned 7.8% of Switchboard's outstanding common stock.

F. Envenue Acquisition

     On November 24, 2000, Switchboard acquired Envenue, a wireless provider of
advanced product searching technologies designed to drive leads to traditional
retailers. The transaction was accounted for as a purchase. The total purchase
price included consideration of $2.0 million in cash, which was to be paid on or
before May 24, 2002, and $38,000 in recorded value of stock options to purchase
10,200 shares of Switchboard's common stock issued to non-employees. Switchboard
used the Black-Scholes option pricing model to determine the fair value of the
options granted. Switchboard did not pay the $2.0 million on or before May 24,
2002, as it was involved in a contractual dispute with the previous owners of
Envenue. In June 2002, Switchboard placed $2.0 million into an escrow account,
which was to be held until the resolution of this dispute. In October 2002,
Switchboard paid $410,000 out of the escrowed funds, representing the undisputed
portion of the purchase price plus interest from the original maturity date to
the former stockholders of Envenue. The remaining $1.6 million of the purchase
price, which was non-interest bearing, was classified separately in the
accompanying financial statements as of December 31, 2002. Switchboard recorded
$1.6 million as restricted cash at December 31, 2002 related to the cash held in
escrow. In June 2003, Switchboard paid the former owners of Envenue $1.7 million
to settle all claims related to the acquisition of Envenue. As a result,
Switchboard no longer has funds in escrow related to the matter.

     Switchboard recorded $2,285,000 of goodwill from the acquisition in 2000
and was amortizing this goodwill on a straight-line basis using an estimated
useful life of 5 years. In December 2001, Switchboard exercised its rights under
the acquisition agreement to substantially reduce the funding of its Envenue
acquisition. Additionally, Switchboard evaluated the carrying value of its
goodwill in Envenue, and determined it would not be fully recovered through
estimated undiscounted future operating cash flows. As a result during the three
months ending December 31, 2001, Switchboard recorded an impairment charge of
$1,859,000 related to the Envenue goodwill. This impairment charge was recorded
as a component of special charges within the Switchboard's statement of
operations (Note Q).

G. Deferred Offering Costs

     On October 23, 2003, Switchboard filed a Registration Statement on Form S-1
in connection with a proposed underwritten offering of 8,815,171 shares of its
common stock, plus an over-allotment option of 1,322,250 shares. Of the shares
proposed to be sold, including the over-allotment option, 10,037,421 shares are


                                       53
<PAGE>

proposed to be sold by ePresence, Inc. and certain other selling shareholders,
and 100,000 are proposed to be sold by Switchboard. The offering is being
initiated by ePresence in order to facilitate an orderly disposition of its
Switchboard holdings in conjunction with its announced plan of liquidation. At
the completion of the offering, Switchboard anticipates that ePresence will
continue to own 5.6% of Switchboard's shares. If the over-allotment option is
exercised and the additional 1,322,250 shares are sold, ePresence will no longer
own any shares of Switchboard. The sale of ePresence's entire holdings of
Switchboard stock is subject to the approval of ePresence's shareholders.
However, ePresence may sell up to approximately 5.4 million of its shares of
Switchboard stock without shareholder approval.

     As of December 31, 2003, Switchboard had incurred $511,000 of costs
associated with the offering, of which $15,000 was paid in 2003. Switchboard has
classified these deferred offering costs as a long-term asset on its balance
sheet as of December 31, 2003. Switchboard anticipates offsetting these costs
with proceeds received from the offering.

H. Marketable Securities

     The following is a summary of investments at December 31, 2003 and 2002 (in
thousands):

<TABLE>
<CAPTION>
2003                                                                   Unrealized
----                                                              --------------------
                                          Amortized Cost          Gains          Losses         Estimated Fair Value
                                          --------------          -----          ------         --------------------
Short Term
----------
<S>                                           <C>                  <C>            <C>                  <C>
U.S. corporate debt securities...........     $  506               $ 7            $ -                  $  513
U.S. Government obligations..............      6,039                39              -                   6,078
                                              ------               ---            ---                  ------
  Total short term investments...........      6,545                46              -                   6,591

Long Term
---------
U.S. corporate debt securities..........         555                 5              -                     560
Municipal obligations...................       1,400                 -              -                   1,400
                                              ------               ---            ---                  ------
  Total long term investments...........       1,955                 5              -                   1,960
                                              ------               ---            ---                  ------
  Total investments.....................      $8,500               $51            $ -                  $8,551
                                              ======               ===            ===                  ======
</TABLE>

<TABLE>
<CAPTION>
2002                                                                   Unrealized
----                                                              ---------------------
                                          Amortized Cost          Gains          Losses         Estimated Fair Value
                                          --------------          -----          ------         --------------------
Short Term
----------
<S>                                          <C>                  <C>             <C>                 <C>
U.S. corporate debt securities..........     $ 1,540              $  7            $ -                 $ 1,547
U.S. Government obligations.............       2,032                10              -                   2,042
                                              ------              ----            ---                 -------
  Total short term investments..........       3,572                17              -                   3,589

Long Term
---------
U.S. corporate debt securities..........       2,548                42              -                   2,590
U.S. Government obligations.............       6,057                97              -                   6,154
Municipal obligations...................       1,500                 -              -                   1,500
                                              ------              ----            ---                 -------
  Total long term investments...........      10,105               139              -                  10,244
                                              ------              ----            ---                 -------
  Total investments.....................     $13,677              $156            $ -                 $13,833
                                             =======              ====            ===                 =======
</TABLE>

     In August 1999, in connection with a Development, Access and License
agreement with a third party, Switchboard was issued a warrant for 150,000
shares of common stock, with an exercise price of $9.19 per share. In September
2001 and March 2002, Switchboard assessed a decline in market value of the third
party's publicly traded common stock and determined that the decline in value
was other-than-temporary. As a result, Switchboard recorded as a component of
other income and expense unrealized losses on investments of $6,000 and $55,000
in the years ended December 31, 2002 and 2001, respectively. In June 2002, the
warrant expired.

     In June 2002, Switchboard entered into a loan and security agreement (the
"SVB Financing Agreement") with Silicon Valley Bank ("SVB") (Note P). As a
result of the conditions contained within the SVB Financing Agreement,
Switchboard liquidated $35.7 million in marketable securities previously held at
Fleet for transfer to SVB. This liquidation resulted in $402,000 in realized
gains during 2002.

                                       54
<PAGE>

I. Accrued Expenses

     Accrued expenses consist of the following at:

<TABLE>
<CAPTION>
                                  December 31,
                             ----------------------
                              2003            2002
                             ------          ------
                                 (in thousands)
<S>                          <C>             <C>
Compensation..............   $  787          $  776
Professional services.....      196             260
Other.....................      197             401
                             ------          ------
Total.....................   $1,180          $1,437
                             ======          ======
</TABLE>

J. Related Parties

     Under an agreement dated March 7, 2000, ePresence provided certain
administrative, technical support and equipment maintenance services for
Switchboard. Following the expiration of the March 2000 agreement, Switchboard
and ePresence entered into a corporate services agreement dated March 7, 2002,
under which ePresence provided Switchboard with telephone service and support
only, for an amount of $75,000 per year. The March 2002 agreement included past
services incurred since the March 7, 2001 expiration of the previous agreement,
as well as telephone services through February 28, 2003. The March 2002
agreement expired in February 2003. Switchboard entered into a new agreement
with ePresence dated March 1, 2003 to provide telephone service and support only
from March 2003 through December 2003 for $62,500. As of both December 31, 2003
and 2002, Switchboard had accrued expenses of $6,000 related to these services.
For these services Switchboard paid ePresence $75,000, $131,000 and $29,000 in
2003, 2002 and 2001, respectively.

     Switchboard leased the space it occupied in 2003 under a sublease it
entered into in January 2003, which expired on December 31, 2003. Switchboard
leased the space it occupied in 2002 and 2001 under a sublease entered into in
January 2001, which expired on December 31, 2002. Under these subleases,
Switchboard paid approximately $251,000, $475,000 and $488,000 to ePresence
during 2003, 2002 and 2001, respectively, and had $19,000 and $43,000 accrued
related to the lease as of December 31, 2003 and 2002, respectively. Previous to
the January 2001 sublease agreement, Switchboard paid ePresence rent in an
amount that was approximately equal to its pro rata share of ePresence's rent
and occupancy costs. Switchboard's share of ePresence's rent and occupancy costs
was $51,000 in 2001. In January 2004, Switchboard entered into a new lease
agreement with ePresence to lease the space it occupies for a gross annual base
rent of $210,000 per year, which expires on September 30, 2005. Minimum lease
payments to ePresence are $210,000 and $157,000 in 2004 and 2005, respectively.
Switchboard believes that the amounts paid to ePresence under its services
agreements and subleases with ePresence are competitive with amounts Switchboard
would have paid to outside third parties for the same or similar services and
leased space.

     Certain directors of Switchboard hold positions as officers or directors of
ePresence. The Chairman of the Board of Directors of Switchboard is also
Chairman of the Board of Directors, President and Chief Executive Officer of
ePresence. One director of Switchboard is Senior Vice President and Chief
Financial Officer of ePresence. Another director of Switchboard is also a
director of ePresence. In 2003, a total of $23,000 was paid in cash and options
to purchase a total of 90,000 shares of Switchboard's common stock were granted
to these directors for their services. In 2002 and 2001, no compensation was
paid to these directors by Switchboard for their services other than option
grants under Switchboard's equity incentive plans.

K. Restructuring of Viacom Relationship

     In 1999, Switchboard and Viacom Inc. ("Viacom", formerly CBS Corporation)
consummated a number of agreements under which Viacom acquired a 35% equity
stake in Switchboard, through the issuance of 7,468,560 shares of Switchboard's
common stock and one share of Series E Special Voting Preferred Stock. In
exchange, Switchboard received $5,000,000 in cash and the right to receive
advertising and promotional value over a term of seven years, across the full
range of CBS media properties, as well as those of its radio and outdoor
subsidiary, Infinity Broadcasting Corporation. As part of the transactions,
Viacom was also issued warrants to purchase up to an additional 1,066,937 shares
of Switchboard's common stock at a per share exercise price of $1.00, which
would have increased its ownership position in Switchboard to 40% at the time of
the transaction. The number of shares of common stock and warrants issued to
Viacom were subject to adjustment in the event of certain future issuances of
securities by Switchboard.

     The Advertising and Promotion Agreement dated as of June 30, 1999 among
Switchboard, ePresence and Viacom provided advertising with a future value of
$95 million to Switchboard over a seven-year period, subject to one year
renewals upon the mutual written agreement of Switchboard, ePresence and Viacom.
The net present value of the advertising was recorded as a contribution
receivable for the common stock issued. The contribution receivable was reduced


                                       55
<PAGE>

as Switchboard utilized advertising based on the proportion of advertising
provided to the total amount to be provided over the seven-year term.

     In August 2001, Switchboard entered into a restructuring agreement with
Viacom and ePresence, under which, among other things, Switchboard agreed to
terminate its right to the placement of advertising on Viacom's CBS properties
with an expected net present value of approximately $44,524,000 in exchange for,
primarily, the reconveyance by Viacom to Switchboard of 7,488,560 shares of
Switchboard's common stock, the cancellation of warrants held by Viacom to
purchase 533,469 shares of Switchboard's common stock and the reconveyance to
Switchboard of the one outstanding share of Switchboard's series E special
voting preferred stock. In addition, as part of the restructuring of
Switchboard's relationship with Viacom, Switchboard's license to use specified
CBS trademarks terminated on January 26, 2002.

     On October 26, 2001, Switchboard obtained approval for the restructuring
agreement by its stockholders and closed the transactions contemplated by the
restructuring agreement. At the closing, the two individuals who had been
elected directors by Viacom pursuant to Viacom's rights as the holder of
Switchboard's special voting preferred stock resigned as directors of
Switchboard. Due to the reduction in the number of outstanding shares of
Switchboard's stock associated with the closing, ePresence became Switchboard's
majority stockholder, beneficially owning approximately 54% of Switchboard's
outstanding stock on October 26, 2001.

     In connection with the termination of its advertising and promotion
agreement with Viacom, Switchboard recorded a one-time, non-cash accounting loss
of $22,203,000 in Switchboard's 2001 statement of operations. The non-cash
accounting loss resulted from the difference between the net present value of
Switchboard's remaining advertising rights with Viacom, which were terminated,
and the value of the shares of Switchboard's common and preferred stock that
were reconveyed and the warrants that were cancelled. Switchboard determined the
value of the 7,488,560 shares of common stock reconveyed and one share of
preferred stock cancelled to be $20,968,000 using the closing market price of
Switchboard's common stock of $2.80 per share on October 26, 2001. Switchboard
used the Black-Scholes warrant pricing model to determine a value of $1,352,544
attributable to the canceled warrants.

     Subsequently, on February 27, 2002, Viacom exercised its warrant pursuant
to a cashless exercise provision in the warrant, resulting in the net issuance
of 386,302 shares of common stock. On March 12, 2002, Switchboard repurchased
these 386,302 shares of common stock from Viacom at a price of $3.25 per share,
for a total cost of $1.3 million. Switchboard recorded the value of these shares
as treasury stock at cost.

L. Commitments and Contingencies

     Switchboard leases facilities and certain equipment under non-cancelable
lease agreements which expire at various dates through March of 2005. Under
these agreements, Switchboard is obligated to pay for utilities, taxes,
insurance and maintenance. Excluding rent paid to ePresence (Note J),
Switchboard recorded rent expense of $16,000, $17,000 and $357,000 in the years
ended December 31, 2003, 2002 and 2001, respectively. Under various agreements,
Switchboard paid rent of approximately $251,000, $475,000 and $539,000 in 2003,
2002 and 2001 to ePresence, respectively. In addition, Switchboard has entered
into certain license agreements, under which Switchboard is required to pay
minimum royalty payments through October 2005 based upon Switchboard's revenue.

     At December 31, 2003, future minimum lease payments under operating leases,
excluding Switchboard's operating lease with ePresence, and license agreements
with minimum terms exceeding one year are as follows (in thousands):

<TABLE>
<S>                                <C>
   2004.........................   $  593
   2005.........................      415
   2006.........................       12
   -----------------------------   ------
   Total future minimum payments   $1,020
                                   ======
</TABLE>

     On November 21, 2001, a putative class action lawsuit was filed in the
United States District Court for the Southern District of New York on behalf of
all persons and entities who purchased or otherwise acquired common stock of
Switchboard from March 2, 2000 through December 6, 2000. The complaint named as
defendants Switchboard, the managing underwriters of our initial public
offering, Douglas J. Greenlaw, Dean Polnerow, and John P. Jewett. Mr. Polnerow
is our President and CEO, and Mr. Greenlaw and Mr. Jewett are former officers of
Switchboard.

     An amended complaint was filed on April 20, 2002. The amended complaint
alleges violations of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, primarily based on the assertion that the
defendants made material false and misleading statements in Switchboard's


                                       56
<PAGE>

registration statement and prospectus filed with the SEC in connection with
Switchboard's initial public offering because of the failure to disclose (a) the
alleged solicitation and receipt of excessive and undisclosed commissions by the
underwriters in connection with the allocation of shares of common stock to
certain investors in Switchboard's public offering and (b) that certain of the
underwriters allegedly had entered into agreements with investors whereby
underwriters agreed to allocate the public offering shares in exchange for which
the investors agreed to make additional purchases of stock in the aftermarket at
pre-determined prices. The amended complaint alleges claims under Sections 11
and 15 of the Securities Act, and Sections 10(b) and 20(a) of the Securities
Exchange Act. The amended complaint seeks damages in an unspecified amount.

     In July 2002, Switchboard, Douglas J. Greenlaw, Dean Polnerow and John P.
Jewett joined in an omnibus motion to dismiss challenging the legal sufficiency
of plaintiffs' claims. The motion was filed on behalf of hundreds of issuer and
individual defendants named in similar lawsuits. The plaintiffs opposed the
motion, and the Court heard oral argument on the motion in November 2002. On
February 19, 2003, the court issued its decision on the defendants' motion to
dismiss, granting in part and denying in part the motion as to Switchboard. In
addition, in October 2002, Messrs. Greenlaw, Polnerow and Jewett were dismissed
from this case without prejudice.

     In June 2003, the plaintiffs, the issuer defendants and their insurers
agreed on the terms and conditions of a proposed settlement of this case. The
terms and conditions of the proposed settlement have been widely reported in the
press. Our special committee of the board of directors met twice during June
2003 to evaluate the proposed settlement. The committee was advised by outside
counsel on the merits of the proposed settlement. The committee determined that
the settlement was in the best interests of Switchboard and that we should
accept the proposed settlement. There is no guarantee that the settlement will
become final, as it is subject to a number of conditions, including court
approval; however, based on this proposed settlement. In the third quarter of
2003, Switchboard was informed by outside counsel that all but two of the
non-bankrupt issuers decided to accept the terms and conditions of the proposed
settlement of this case. The two issuers who did not accept the proposal were in
unique circumstances that do not apply to other issuers. We do not believe we
will suffer material future losses related to this lawsuit.

     Switchboard is currently involved in other legal proceedings that are
incidental to the conduct of its business, none of which it believes could
reasonably be expected to have a materially adverse effect on Switchboard's
financial condition.

M. Income Taxes

     In 2003, Switchboard did not have a significant tax provision. Switchboard
is subject to certain state and federal minimum taxes. Switchboard has not
provided for income taxes in each of the years ended December 31, 2002 and 2001
due to its significant pre-tax losses. Switchboard has not recorded a benefit
for income taxes as Switchboard believes it is more likely than not that net
operating losses and tax credits will not be fully utilized.

     A reconciliation of the federal statutory rate to the Company's effective
tax rate in 2003 is as follows:

<TABLE>
<CAPTION>
                                                                           Year ended       Year ended
                                                                          December 31,     December 31,
                                                                              2003            2002
                                                                          ------------     ------------
<S>                                                                            <C>             <C>
Income tax provision (benefit) at federal statutory rate...................    35.0 %          35.0 %
Minimum federal and state taxes............................................     2.0 %           5.5 %
Permanent items............................................................     0.3 %           0.1 %
Valuation allowance/other..................................................   (35.3)%         (40.6)%
                                                                              -----           -----
Provision for income taxes.................................................     2.0 %             - %
                                                                              =====           =====
</TABLE>

                                       57
<PAGE>

     In assessing the realizability of deferred tax assets, Switchboard
considers whether it is more likely than not that some or all of the deferred
tax assets will not be realized. Switchboard believes that sufficient
uncertainty exists regarding the realizability of the deferred tax assets such
that a valuation of $39,940,000 and $40,346,000 for December 31, 2003 and 2002,
respectively, has been established for deferred tax assets. The components of
the net deferred tax assets (liabilities) and the related valuation allowance
are as follows:

<TABLE>
<CAPTION>
                                                    December 31,
                                          ------------------------------
                                              2003              2002
                                          ------------      ------------
     Deferred tax assets:
<S>                                       <C>                <C>
     Net operating loss carryforwards...  $ 36,503,000       $35,769,000
     AOL impairment and intangibles.....     1,040,000         1,187,000
     Other deferred tax assets..........     2,386,000         3,390,000
                                          ------------      ------------
                                            39,929,000        40,346,000
     Less valuation allowance...........   (39,929,000)      (40,346,000)
                                          ------------      ------------
     Net deferred tax assets............  $          -      $          -
                                          ============      ============
</TABLE>

     As of December 31, 2003, Switchboard has net operating loss carryforwards
for federal and state tax purposes of approximately $87,734,000 and $87,726,000,
respectively. The federal and state net operating loss carryforwards will begin
to expire in 2012 and 2003, respectively. A portion of the Company's net
operating losses were created by the excess tax benefits associated with stock
options and will be realized through increases to stockholders equity when
utilized. Ownership changes resulting from Switchboard's issuance of capital
stock may limit the amount of net operating loss carryforwards that can be
utilized annually to offset future taxable income.

N. Stock Option Plans

     In November 2000, with its acquisition of Envenue, Switchboard adopted the
2000 Non-Statutory Stock Option Plan ("2000 Non-Statutory Plan"). A total of
446,000 shares of common stock have been reserved for issuance under the 2000
Non-Statutory Plan. As of December 31, 2003, options to purchase 201,908 shares
were issued and outstanding under the 2000 Non-Statutory Plan.

     In October 1999, Switchboard adopted the 1999 Stock Incentive Plan (the
"1999 Option Plan"). A total of 3,520,916 shares of common stock have been
reserved for issuance under the 1999 Option Plan. As of December 31, 2003,
options to purchase 1,804,328 shares were issued and outstanding under the 1999
Option Plan. The 1999 Option Plan also permits awards of restricted stock at a
price determined by the Compensation Committee or the Board of Directors subject
to Switchboard's right to repurchase such stock in specified circumstances prior
to the expiration of a restricted period. In January 2002, Switchboard issued
450,000 shares of restricted common stock to Mr. Greenlaw, its former Chief
Executive Officer, who was also a director of Switchboard, at fair market value
(Note R). In September 2003, Mr. Greenlaw ceased to be an employee and resigned
as a director. In connection with the separation of employment, Switchboard
exercised its right to repurchase 225,000 unvested restricted shares from Mr.
Greenlaw. These 225,000 repurchased shares were returned to the 1999 Option
Plan.

     Switchboard also has the 1996 Stock Incentive Plan (the "1996 Option
Plan"), which provides for the issuance of options to purchase 1,216,800 shares
of Switchboard's common stock. As of December 31, 2003, options to purchase
1,216,800 shares were issued and outstanding under the 1996 Option Plan.

                                       58
<PAGE>

     Generally, options under the 1996, 1999 and 2000 Option Plans vest over
four years and have a maximum term of ten years. All options are fully
exercisable upon the date of grant into shares of restricted stock, for which
the restrictions laps over in accordance with the vesting under the original
stock option grant. A summary of the status of Switchboard's stock plans as of
December 31, 2003, 2002 and 2001 and the changes during the years ending on
those dates is presented below.

<TABLE>
<CAPTION>
                                                                       Weighted Average
                                                           Shares       Exercise Price
                                                         ----------    ----------------
<S>                                                       <C>               <C>
Outstanding and exercisable at December 31, 2000.......   3,526,080         $6.50
Granted................................................   1,359,000          4.16
Exercised..............................................     (73,700)         1.00
Canceled...............................................    (605,300)         5.76
                                                         ----------          ----
Outstanding and exercisable at December 31, 2001.......   4,206,080          5.95
Granted................................................   1,193,365          3.51
Exercised..............................................    (538,056)         3.15
Canceled...............................................  (1,294,786)         8.15
                                                         ----------          ----
Outstanding and exercisable at December 31, 2002.......   3,566,603          4.74
Granted................................................     281,000          6.09
Exercised..............................................    (505,354)         4.39
Canceled...............................................    (119,213)         5.63
                                                         ----------          ----
Outstanding and exercisable at December 31, 2003.......   3,223,036         $4.88
                                                         ==========         =====
</TABLE>

     As of December 31, 2003, 1,716,588 shares and 186,856 shares were available
for grant under the 1999 Option Plan and the 2000 Non-Statutory Plan,
respectively. There were no shares available for grant under the 1996 Option
Plan.

     The following table summarizes information about the stock options at
December 31, 2003:

<TABLE>
<CAPTION>
                                             Options Outstanding               Options Vested and Exercisable
                                    ------------------------------------    -----------------------------------
                                    Weighted Average
      Range of           Number        Remaining        Weighted Average     Number Vested     Weighted Average
  Exercise Prices    Outstanding    Contractual Life     Exercise Price     and Exercisable     Exercise Price
  ---------------    -----------    ----------------    ----------------    ---------------    ----------------
<S>                    <C>                <C>                <C>                <C>                 <C>
  $1.00 - $2.53        913,500            4.94               $1.51              768,500             $1.42
  $2.63 - $5.00        734,502            7.98               $3.54              301,598             $3.48
  $5.07 - $7.00        765,856            7.98               $5.91              472,540             $5.53
  $7.50 - $11.00       809,178            5.76               $8.93              793,138             $8.90
</TABLE>

     In June 2001, Switchboard issued to a director and officer of Switchboard
options to purchase 150,000 shares of its common stock under the 1999 Option
Plan at a price below market value. Switchboard recorded $437,000 in value
resulting from the difference between the market value on the date of grant of
$3.91 per share and the $1.00 per share exercise price as unearned compensation
as a component of Stockholders' Equity. Switchboard is amortizing this amount
over the two-year and nine-month vesting period. In 2003, 2002 and 2001,
Switchboard recognized $146,000, $156,000 and $102,000 of amortization expense,
respectively.

     In 1999, the Board of Directors adopted the 1999 Employee Stock Purchase
Plan (the "Purchase Plan"). A total of 300,000 shares of Switchboard's common
stock have been reserved for issuance to eligible employees under the Purchase
Plan. Under the Purchase Plan, Switchboard is authorized to make a series of
offerings during which employees may purchase shares of common stock through
payroll deductions made over the term of the offering. The per-share purchase
price at the end of each offering is equal to 85% of the fair market value of
the common stock at the beginning or end of the offering period (as defined by
the Purchase Plan), whichever is lower. As of December 31, 2003, 150,428 shares
of common stock were issued under the Purchase Plan.

O. Capital Lease

     In March 2001, Switchboard entered into a computer equipment sale-leaseback
agreement with Fleet Capital Corporation ("FCC") under which Switchboard was
able to lease up to $3.0 million of equipment. Under the agreement, Switchboard
was to have leased computer equipment over a three-year period ending on June


                                       59
<PAGE>

28, 2004. At December 31, 2001, Switchboard had utilized approximately $1.1
million of this lease facility. The agreement had an estimated effective annual
percentage rate of approximately 7.90%. Under the terms of the agreement,
Switchboard was required to maintain on deposit with Fleet a compensating
balance, restricted as to use, in an amount equal to the principal outstanding
under the lease. Switchboard had accounted for the transaction as a capital
lease.

     In May 2002, Switchboard paid $794,000 to FCC to terminate its lease
obligations with FCC through an early buy-out. The $794,000 was comprised of
$764,000 in outstanding principal under the lease and $30,000 in expenses
associated with the early termination. In exchange for the amount paid,
Switchboard assumed all right and title to the assets leased under the facility.
Additionally, Switchboard's requirement to maintain a compensating balance with
Fleet was eliminated.

P. Notes Payable and Line of Credit

     In June 2002, Switchboard entered into a loan and security agreement (the
"SVB Financing Agreement") with Silicon Valley Bank ("SVB"), under which
Switchboard was able to borrow up to $4.0 million for the purchase of equipment.
Amounts borrowed under the facility accrued interest at a rate equal to prime
plus 0.25%, and were to have been repaid monthly over a 30-month period.
Switchboard had utilized $2.7 million of this facility through borrowings that
occurred in June 2002 and September 2002. Switchboard recorded a note payable to
SVB on its balance sheet totaling $2.2 million for the equipment financed as of
December 31, 2002, of which $1.1 million was classified as a current liability.
The SVB Financing Agreement also provided for a $1.0 million revolving line of
credit at an interest rate equal to prime. Switchboard did not borrow any
amounts under the revolving line of credit. Switchboard's ability to borrow
additional amounts under the SVB Financing Agreement expired on May 30, 2003
after Switchboard chose not to renew the agreement. In May 2003, Switchboard
paid SVB $1.8 million in satisfaction of its outstanding borrowings under the
loan facility.

Q. Special Credits and Charges

     In 2003, Switchboard recorded the reversal of $35,000 of excess
restructuring reserves as a special credit. The 2003 reversal resulted primarily
from a change in estimate with respect to a compensation amount for a terminated
employee that had been provided for as part of the Company's 2001 special
charges. In 2002, Switchboard recorded the reversal of $262,000 in excess
restructuring reserves as a special credit. The 2002 reversal resulted primarily
from better than expected results in the subleasing of idle office space which
Switchboard had reserved for as part of its 2002 special charges. Under a
non-cancelable sublease, Switchboard received $156,000 and $72,000 in 2003 and
2002, and anticipates receiving $132,000 and $60,000 in 2004 and 2005,
respectively.

     In December 2001, Switchboard recorded net pre-tax special charges of
approximately $17.3 million, comprised primarily of $15.6 million for the
impairment of certain assets, $1.0 million for costs related to facility
closures and $700,000 in severance costs related to the reduction of
approximately 21% of Switchboard's workforce. The restructuring resulted in 21
employee separations.

     Included in the $15.6 million impairment charge for certain assets is $11.7
million recorded for the impairment of the unamortized portion of the value of
the common stock issued and amounts prepaid to AOL. Switchboard assessed the
value of its assets related to its AOL Directory Agreement for impairment as it
had a current period operating loss combined with a history of operating losses
with respect to its AOL relationship and revenues were lower at the end of the
first year of the Directory Agreement than originally anticipated and
Switchboard had incurred a current period and historical operating loss with
respect to its AOL business. This analysis was performed as part of
Switchboard's restatement of its financial statements for the year ended
December 31, 2001, which occurred in September 2002. However, in performing this
impairment analysis, Switchboard was unable to utilize the more favorable
financial terms of the April 2002 and August 2002 amendments as they had
occurred subsequent to the date Switchboard had filed its original Annual Report
on Form 10-K for the year ended December 31, 2001 (March 2002). The financial
terms of the April 2002 and August 2002 amendments were developments that
occurred subsequent to the March 2002 filing and, in accordance with existing
accounting standards, could not be considered. If Switchboard had been able to
utilize the more favorable financial terms resulting from the April 2002 and
August 2002 amendments, its AOL assets may have been considered to be fully
recoverable.

     Switchboard's impairment analysis, utilizing the estimated cash flow
approach, included certain revenue and expense assumptions through December
2004, the expiration date of the Directory Agreement. Switchboard assumed annual
revenue growth rates of 77%, 135% and 85% under the agreement in 2002, 2003 and
2004, respectively. Switchboard's expense assumptions included contractually
fixed payments of $39.0 million; a total of $4.8 million of value associated
with two additional contractual stock issuances to AOL of 746,260 shares each,
which were to have occurred in December 2002 and 2003; and an estimate of other
costs and expenses Switchboard would incur to support the relationship with AOL.
Switchboard's analysis indicated that the AOL assets were impaired due to the
fact that the projected future cash flows from AOL over the remainder of the
term of the agreement were insufficient to support the value of the AOL related
assets. Switchboard then measured impairment by performing an analysis of the


                                       60
<PAGE>

discounted future cash flows under the Directory Agreement using a discount
factor of 20% per year. This discounted cash flow analysis indicated that the
AOL related assets were fully impaired as of December 31, 2001. Accordingly, a
charge of $11.7 million was recorded as an additional component of special
charges during 2001.

     In December 2001, Switchboard exercised its rights under the Envenue
acquisition agreement to substantially reduce the funding of Envenue.
Switchboard evaluated the carrying value of its goodwill in Envenue, and
determined it would not be fully recovered through estimated undiscounted future
operating cash flows. As a result, in 2001 Switchboard recorded as a component
of the $15.6 million impairment charge, $1.9 million related to the Envenue
goodwill. The impairment was measured as the amount by which the carrying amount
of these assets exceeded the present value of the estimated discounted future
cash flows attributable to these assets.

     Also included in the impairment charge for certain assets are amounts
related to prepaid advertising expenses. As a result of Switchboard's change in
overall strategy from a destination site to a technology provider, Switchboard
no longer considered this prepaid advertising to be complementary to its
corporate strategy. Accordingly, Switchboard recorded $1.4 million for the
impairment of these prepaid advertising assets.

     Of the total $1.3 million facilities and severance charge, which is net of
the $35,000 and $262,000 special credits recorded in 2003 and 2002,
approximately $1.1 million was cash related. Switchboard has a remaining
liability of $10,000 on its balance sheet as of December 31, 2003 relating to
the special charges.

R. Note Receivable for the Issuance of Restricted Common Stock

     In January 2002, Switchboard recorded a note receivable from Mr. Greenlaw,
its Chief Executive Officer, who was also a member of its Board of Directors,
for approximately $1.4 million arising from the financing of a purchase of
450,000 shares of its common stock as restricted stock by Mr. Greenlaw. As of
December 31, 2002, 300,000 of such shares were unvested and restricted from
transfer. On each of January 4, 2003, 2004, 2005 and 2006, 75,000 of these
restricted shares were to have vested, respectively. The note bore interest at a
rate of 4.875%, which was deemed to be fair market value, compounding annually
and was 100% recourse as to principal and interest. The note was payable upon
the earlier of the occurrence of the sale of all or part of the shares by the
issuer of the note, or January 4, 2008. During 2003 and 2002, Switchboard
recorded $56,000 and $71,000 in interest income resulting from this note
receivable. At December 31, 2002, Switchboard had recorded $1.5 million in
principal and interest as a note receivable classified within stockholders'
equity.

     Mr. Greenlaw ceased to be an employee and resigned as a director effective
September 2, 2003. In connection with Mr. Greenlaw's separation of employment,
Switchboard recorded, as a component of general and administrative expense,
certain separation expenses of $174,000 in 2003 in accordance with Mr.
Greenlaw's employment agreement. At the time Mr. Greenlaw ceased to be
affiliated with Switchboard, 225,000 of the original 450,000 shares granted were
vested. In September 2003, Switchboard exercised its right to repurchase the
remaining 225,000 unvested shares for $725,000, resulting in a corresponding
reduction in the outstanding note of $725,000. In accordance with the terms of
the note, Mr. Greenlaw repaid the note payable and all accrued interest
outstanding to Switchboard in full through payments totaling $851,000. The final
payment was received in November 2003.

                                       61
<PAGE>

S. Condensed Quarterly Results of Operations (unaudited)

     In thousands except per share data:

<TABLE>
<CAPTION>
2003 Quarters Ended                                     Mar 31,   Jun 30,    Sep 30,    Dec 31,
--------------------                                    -------   -------    -------    -------
<S>                                                      <C>       <C>        <C>         <C>
    Revenue...........................................   $3,341    $3,974     $4,108      $3,769
    Net revenue.......................................   $3,341    $3,974     $4,108      $3,769
    Gross profit......................................   $2,634    $3,160     $3,446      $3,027
    Operating (loss) profit...........................    $(126)     $367       $609        $590
    Net income........................................      $56      $527       $762        $729
    Basic net income per share........................       $-     $0.03      $0.04       $0.04
    Diluted net income per share......................       $-     $0.03      $0.04       $0.04

2002 Quarters Ended                                     Mar 31,   Jun 30,    Sep 30,    Dec 31,
--------------------                                    -------   -------    -------    -------
    Revenue...........................................   $4,023    $3,014     $3,325      $3,385
    Net revenue.......................................   $2,920    $2,068     $3,374      $3,385
    Gross profit......................................   $2,002      $956     $2,423      $2,622
    Operating loss....................................  $(1,637)  $(2,229)   $(1,688)      $(367)
    Net loss attributable to common stockholders......  $(1,042)  $(1,355)   $(1,382)      $(180)
    Basic and diluted net loss per share..............   $(0.06)   $(0.07)    $(0.07)     $(0.01)
</TABLE>

T. Subsequent Event

     On March 26, 2004, Switchboard announced a definitive agreement to be
acquired by InfoSpace, Inc. ("InfoSpace"). In connection with the transaction,
all of the outstanding shares of Switchboard will be converted into a right to
receive $7.75 per share in cash, without interest, and Switchboard will become a
wholly-owned subsidiary of InfoSpace. The completion of the transaction is
subject to several conditions, including shareholder and regulatory approval.

                                       62
<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.   CONTROLS AND PROCEDURES

     Our management, with the participation of our chief executive officer and
chief financial officer, evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) as of December 31, 2003. Based on this evaluation, our chief executive
officer and chief financial officer concluded that, as of December 31, 2003, our
disclosure controls and procedures were (1) designed to ensure that material
information relating to Switchboard, including our consolidated subsidiaries, is
made known to our chief executive officer and chief financial officer by others
within those entities, particularly during the period in which this report was
being prepared and (2) effective, in that they provide reasonable assurance that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms.

     No change in our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal
quarter ended December 31, 2003 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required to be disclosed by this Item pursuant to Item 401
of Regulation S-K with respect to our executive officers is contained in Part I
of this Annual Report on Form 10-K under the caption, "Executive Officers of the
Registrant." The remaining information required to be disclosed by this Item
pursuant to Item 401 of Regulation S-K is contained in our proxy statement for
our 2004 Annual Meeting of Stockholders under the caption, "Proposal 1 Election
of Directors," and is incorporated in this Annual Report on Form 10-K by
reference.

     The information required to be disclosed by this Item pursuant to Item 405
of Regulation S-K is contained in our proxy statement for our 2004 Annual
Meeting of Stockholders under the caption, "Section 16(a) Beneficial Ownership
Reporting Compliance," and is incorporated in this Annual Report on Form 10-K by
reference.

     By the date of our 2004 Annual Meeting of Stockholders, we will adopt a
Code of Business Conduct and Ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. We expect to post the text
of our Code of Business Conduct and Ethics in the "About Switchboard-Investor"
section of our website, www.switchboard.com. We intend to disclose on our
website any amendments to, or waivers from, our Code of Business Conduct and
Ethics that are required to be disclosed pursuant to the disclosure requirements
of Item 10 of Form 8-K.

ITEM 11.   EXECUTIVE COMPENSATION

     The information required to be disclosed by this Item pursuant to Item 402
of Regulation S-K is contained in our proxy statement for our 2004 Annual
Meeting of Stockholders under the captions, "Executive Compensation" and
"Director Compensation," and is incorporated in this Annual Report on Form 10-K
by reference.



                                       63
<PAGE>

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  AND
           RELATED STOCKHOLDER MATTERS

     The information required to be disclosed by this Item pursuant to Item 403
of Regulation S-K is contained in our proxy statement for our 2004 Annual
Meeting of Stockholders under the captions, "Security Ownership of Certain
Beneficial Owners and Management," and is incorporated in this Annual Report on
Form 10-K by reference.

     The information required to be disclosed by this Item pursuant to Items
201(d) of Regulation S-K is contained in our proxy statement for our 2004 Annual
Meeting of Stockholders under the caption, "Executive Compensation--Equity
Compensation Plan Information," and is incorporated in this Annual Report on
Form 10-K by reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required to be disclosed by this Item pursuant to Item 404
of Regulation S-K is contained in our proxy statement for our 2004 Annual
Meeting of Stockholders under the caption, "Executive Compensation--Employment,
Change of Control and Severance Arrangements" and "Certain Relationships and
Related Transactions," and is incorporated in this Annual Report on Form 10-K by
reference.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information required to be disclosed by this Item pursuant to Item 9(e)
of Schedule 14A is contained in our proxy statement for our 2004 Annual Meeting
of Stockholders under the caption, "Proposal 2 Ratification of the Appointment
of Independent Auditors--Independent Auditors' Fees and Other Matters," and is
incorporated in this Annual Report on Form 10-K by reference.

                                     PART IV

ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of or are included in this Annual
Report on Form 10-K:

1. Financial Statements:

     * Consolidated Balance Sheets as of December 31, 2003 and 2002.
     * Consolidated Statements of Operations for the years ended December 31,
       2003, 2002 and 2001.
     * Consolidated Statements of Stockholders' Equity for the years ended
       December 31, 2003, 2002 and 2001.
     * Consolidated Statements of Cash Flows for the years ended December 31,
       2003, 2002 and 2001.
     * Notes to Consolidated Financial Statements.
     * Report of Independent Auditors for the years ended December 31, 2003,
       2002 and 2001.
     * Selected Financial Data for the years ended, and at, December 31, 2003,
       2002, 2001, 2000 and 1999.

                                       64
<PAGE>

2. Financial Statement Schedules:

     * Schedule II--Valuation and Qualifying Accounts.

     We have omitted schedules other than the one listed above since they are
either not required, not applicable or the information is otherwise included.

3. Listing of Exhibits:

     The Exhibits filed as part of this Annual Report on Form 10-K are listed on
the Exhibit Index immediately preceding such Exhibits, which Exhibit Index is
incorporated herein by reference. Documents listed on such Exhibit Index, except
for documents identified by footnotes, are being filed as exhibits herewith.
Documents identified by footnotes are not being filed herewith and, pursuant to
Rule 12b-32 under the Securities Exchange Act of 1934, reference is made to such
documents as previously filed as exhibits with the Securities and Exchange
Commission. Switchboard's file number under the Securities Exchange Act of 1934
is 000-28871.

(b) Reports on Form 8-K.

     On October 16, 2003, Switchboard filed a Current Report on Form 8-K dated
October 15, 2003, reporting under Item 5 (Other Events and Regulation FD
Disclosure) that it had amended and restated its Directory and Local Advertising
Platform Services Agreement dated December 11, 2000, as amended, with America
Online, Inc.

     On October 16, 2003, Switchboard furnished a Current Report on Form 8-K
dated October 16, 2003, reporting under Item 12 (Results of Operations and
Financial Condition) that it had issued a press release announcing that it had
amended and restated its Directory and Local Advertising Platform Services
Agreement dated December 11, 2000, as amended, with America Online, Inc.

     On October 23, 2003, Switchboard furnished a Current Report on Form 8-K
dated October 23, 2003, reporting under Item 12 (Results of Operations and
Financial Condition) containing a copy of Switchboard's earnings release for the
quarter ended September 30, 2003

     On October 23, 2003, Switchboard filed a Current Report on Form 8-K dated
October 23, 2003, reporting under Item 5 (Other Events and Regulation FD
Disclosure) that it had issued a press release announcing its intention to file
with the Securities and Exchange Commission a registration statement on Form S-1
covering the offering of shares of its common stock.

     On December 11, 2003, Switchboard filed a Current Report on Form 8-K dated
December 10, 2003, reporting under Item 5 (Other Events and Regulation FD
Disclosure) that it had issued a press release announcing that Michael A.
Ruffolo had joined Switchboard's board of directors.


                                       65
<PAGE>

                                   SCHEDULE II

                            SWITCHBOARD INCORPORATED
                        VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                                 (in thousands)


<TABLE>
<CAPTION>
                                           Balance at     Additions Charged
                                           Beginning         to Costs and                       Balance at End
Description                                of Period           Expenses         Deductions        of Period
-----------                                ----------     -----------------     ----------      --------------
Year Ended December 31, 2003

  Reserve for doubtful accounts
<S>                                           <C>                 <C>               <C>              <C>
     and sales allowances...............      $350                $138              $344             $144

Year Ended December 31, 2002:

  Reserve for doubtful accounts
     and sales allowances...............      $500                $216              $366             $350

Year Ended December 31, 2001:

  Reserve for doubtful accounts.........      $402                $923              $825             $500
</TABLE>


                                       66
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated: March 29, 2004                      SWITCHBOARD INCORPORATED

                                           By:/s/Robert P. Orlando
                                              --------------------
                                              Robert P. Orlando
                                              Vice President and Chief Financial
                                              Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
      Name                                         Title                                   Date
      ----                                         -----                                   ----

<S>                              <C>                                                             <C>
/s/Dean Polnerow                 Chief Executive Officer, President and Director       March 29, 2004
----------------                 (Principal Executive Officer)
Dean Polnerow


/s/Robert P. Orlando             Vice President and Chief Financial Officer            March 29, 2004
--------------------             (Principal Financial Officer and Principal
Robert P. Orlando                Accounting Officer)


/s/William P. Ferry              Chairman of the Board of Directors                    March 29, 2004
-------------------
William P. Ferry


/s/Stephen J. Killeen            Director                                              March 29, 2004
---------------------
Stephen J. Killeen


/s/Michael A. Ruffolo            Director                                              March 29, 2004
---------------------
Michael A. Ruffolo


/s/Richard M. Spaulding          Director                                              March 29, 2004
-----------------------
Richard M. Spaulding


/s/David N. Strohm               Director                                              March 29, 2004
------------------
David N. Strohm

/s/Robert M. Wadsworth           Director                                              March 29, 2004
----------------------
Robert M. Wadsworth
</TABLE>


                                       67
<PAGE>


                                  EXHIBIT INDEX


Exhibit No.        Description
-----------        -----------

3.1(1)      Restated Certificate of Incorporation
3.2(2)      Amended and Restated By-Laws
4.1(2)      Specimen Stock Certificate for shares of Common Stock, par value
            $.01 per share(1)
10.1(3)     Registration Rights Agreement, by and between Switchboard and
            America Online, dated as of December 11, 2000
10.2(4)     Registration Rights Agreement, by and between Switchboard and Banyan
            Worldwide, dated as of March 7, 2000
10.3(2)*    1996 Stock Incentive Plan, as amended, including forms of stock
            option agreement for incentive and nonstatutory stock options.
10.4(1)*    1999 Stock Incentive Plan, as amended, including forms of stock
            option agreement for incentive and nonstatutory stock options
10.5(2)*    1999 Employee Stock Purchase Plan
10.6(5)*    2000 Nonstatutory Stock Option Plan
10.7(2)     Amended and Restated Registration Rights Agreement by and between
            Switchboard Incorporated and Banyan Worldwide, dated May 3, 1999.
10.8(2)     Amended and Restated Registration Rights Agreement, as amended, by
            and among Switchboard Incorporated, America Online, Inc., Digital
            City Inc. and Banyan Worldwide, dated February 20, 1998.
10.9(2)*    Employment Agreement between Switchboard Incorporated and Douglas J.
            Greenlaw, dated October 8, 1999.
10.10(2)*   Employment Agreement between Switchboard Incorporated and Dean
            Polnerow, dated December 1, 1999.
10.11(2)*   Employment Agreement between Switchboard Incorporated and James M.
            Canon, dated December 31, 1999.
10.12(2)*   Non-Statutory Stock Option Agreement Granted Under 1999 Stock
            Incentive Plan between Switchboard Incorporated and Douglas J.
            Greenlaw, dated October 13, 1999.
10.13(2)*   Non-statutory Stock Option Agreement between Switchboard
            Incorporated and Douglas J. Greenlaw, dated October 13, 1999.
10.14(2)*   Incentive Stock Option Agreement between Switchboard Incorporated
            and Dean Polnerow, dated October 13, 1999.
10.15(2)*   Incentive Stock Option Agreement between Switchboard Incorporated
            and James M. Canon, dated October 13, 1999.
10.16(2)*   Non-Statutory Stock Option Agreement between Switchboard
            Incorporated and William P. Ferry, dated September 14, 1999.
10.17(2)*   Non-Statutory Stock Option Agreement between Switchboard
            Incorporated and William P. Ferry, dated October 18, 1999.
10.18(2)*   Non-Statutory Stock Option Agreement between Switchboard
            Incorporated and Richard M. Spaulding, dated September 14, 1999.
10.19(2)*   Non-Statutory Stock Option Agreement between Switchboard
            Incorporated and David N. Strohm, dated September 14, 1999.
10.20(2)*   Non-Statutory Stock Option Agreement between Switchboard
            Incorporated and Robert M. Wadsworth, dated September 14, 1999.
10.21(3)*   Incentive Stock Option Agreement between Switchboard Incorporated
            and Kevin Lawler, dated May 24, 2000.
10.22(6)    Stock Purchase Agreement dated as of November 24, 2000, among
            Switchboard Incorporated, Envenue, Inc. and the Stockholders of
            Envenue, Inc.
10.22(3)*   Employment Agreement between Switchboard Incorporated and Kevin P.
            Lawler, dated May 9, 2000.
10.23(7)*   Employment Agreement between Robert Orlando and Switchboard
            Incorporated, dated September 20, 2001.
10.24(8)*   Restricted Stock Agreement Granted Under 1999 Stock Incentive Plan
            between Douglas J. Greenlaw and Switchboard Incorporated dated
            January 4, 2002.
10.25(8)*   Secured promissory note between Douglas J. Greenlaw and Switchboard
            Incorporated dated January 4, 2002.
10.26(8)*   Collateral Assignment and Pledge Agreement between Douglas J.
            Greenlaw and Switchboard Incorporated dated January 4, 2002.


                                       68
<PAGE>

10.27(8)*   Consent to the cancellation of options granted on October 13, 1999
            by Douglas J. Greenlaw on January 4, 2002.
10.28(8)*   Agreement of Amendment, Severance, and Mutual Release between John
            Jewett and Switchboard Incorporated dated February 26, 2002.
10.29(3)+   Directory and Local Advertising Platform Services Agreement dated as
            of December 11, 2000 between Switchboard Incorporated and America
            Online, Inc.
10.30(3)    Common Stock and Warrant Purchase Agreement dated as of December 11,
            2000 between Switchboard Incorporated and America Online, Inc.
10.31(3)    Form of Common Stock Purchase Warrant which may be issued to America
            Online, Inc. pursuant to the Common Stock and Warrant Agreement
            dated as of December 11, 2000 between Switchboard Incorporated and
            America Online, Inc.
10.32(8)    First Amendment dated November 16, 2001 to the Directory and Local
            Advertising Platform Services Agreement between Switchboard
            Incorporated and America Online, Inc. dated December 11, 2000.
10.33(8)+   Second Amendment dated April 25, 2002 to the Directory and Local
            Advertising Platform Services Agreement between Switchboard
            Incorporated and America Online, Inc. dated December 11, 2000.
10.34(9)+   Third Amendment dated August 21, 2002 to Directory and Local
            Advertising Platform Services Agreement between America Online, Inc.
            and Switchboard Incorporated dated December 11, 2000.
10.35(2)    Financial Reporting Agreement among Switchboard Incorporated, Banyan
            Worldwide and CBS Corporation, dated as of January 28, 2000.
10.36(8)    Termination Agreement between MediaMap, Inc. and Switchboard
            Incorporated dated January 30, 2002.
10.37(8)    Services Agreement dated March 7, 2002 between Switchboard
            Incorporated and ePresence Inc.
10.38(5)    Sublease between ePresence, Inc. and Switchboard Incorporated, dated
            as of January 1, 2003.
10.39(5)    Services Agreement dated March 1, 2003 between Switchboard
            Incorporated and ePresence, Inc.
10.40(5)    Master Services Agreement between Cable & Wireless Internet Services
            Inc. and Switchboard Incorporated dated May 13, 2002.
10.41(5)+   Order Form between Cable & Wireless Internet Services Inc. and
            Switchboard Incorporated dated May 22, 2002.
10.42(9)    Loan and Security Agreement between Silicon Valley Bank and
            Switchboard Incorporated dated May 31, 2002.
10.43(5)+   Data Products License Agreement by and between Switchboard
            Incorporated and Acxiom Corporation, dated December 15, 2002.
10.44(5)+   General Provisions Agreement by and between Switchboard Incorporated
            and TeleAtlas North America, Inc., dated February 19, 2003.
10.45(5)+   Internet Provider License by and between Switchboard Incorporated
            and TeleAtlas North America, Inc., dated February 21, 2003.
10.46(10)++ Amended and Restated Directory and Local Advertising Platform
            Services Agreement by and between Switchboard Incorporated and
            America Online, Inc., dated October 15, 2003
10.47(11)*  Separation Agreement and Mutual release by and between Switchboard
            Incorporated and Douglas Greenlaw, dated August 21, 2003.
10.48(12)*  Employment Agreement, by and between Switchboard Incorporated and
            James Carrington, dated December 3, 2003.
10.49(13)   Offer Letter between Switchboard Incorporated and Michael Ruffolo,
            dated November 20, 2003.
10.50(13)*  Non-Qualified Stock Option Agreement between Switchboard
            Incorporated and Michael Ruffolo, dated December 10, 2003.
10.51(13)   Sublease between ePresence, Inc. and Switchboard Incorporated, dated
            January 1, 2004.
10.52*      Offer Letter between Switchboard Incorporated and Stephen Killeen,
            dated January 27, 2004.
10.53*      Non-Qualified Stock Option Agreement between Switchboard
            Incorporated and Stephen Killeen, dated January 28, 2004.
21.1        Subsidiaries of Switchboard Incorporated
23.1        Consent of Ernst & Young LLP, Independent Auditors
31.1        Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
            and President
31.2        Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1        Section 1350 Certification of Chief Executive Officer and President
32.2        Section 1350 Certification of Chief Financial Officer

                                       69
<PAGE>


(1)    Incorporated by reference to the Registrant's Annual Report on Form 10-K
       (File No. 000-78871) filed with the Securities and Exchange Commission on
       March 29, 2002, as amended.
(2)    Incorporated by reference to the Registration Statement on Form S-1 (File
       No. 333-90013) as declared effective by the Securities and Exchange
       Commission on March 1, 2000.
(3)    Incorporated by reference to the Registrant's Annual Report on Form 10-K
       (File No. 000-28871) filed with the Securities and Exchange Commission on
       April 2, 2001.
(4)    Incorporated by reference to the Registrant's Quarterly Report on Form
       10-Q (File No. 000-28871) filed with the Securities and Exchange
       Commission on May 15, 2000.
(5)    Incorporated by reference to the Registrant's Annual Report on Form 10-K
       (File No. 000-28871) filed with the Securities and Exchange Commission on
       March 28, 2003.
(6)    Incorporated by reference to the Registrant's Current Report on Form 8-K
       (File No. 000-28871) filed with the Securities and Exchange Commission on
       February 7, 2001.
(7)    Incorporated by reference to the Registrant's Quarterly Report on Form
       10-Q (File No. 000-28871) filed with the Securities and Exchange
       Commission on November 14, 2001.
(8)    Incorporated by reference to the Registrant's Quarterly Report on Form
       10-Q (File No. 000-78871) filed with the Securities and Exchange
       Commission on May 9, 2002.
(9)    Incorporated by reference to the Registrant's Quarterly Report on Form
       10-Q (File No. 000-78871) filed with the Securities and Exchange
       Commission on September 20, 2002.
(10)   Incorporated by reference to the Registrant's Amendment No. 1 to Current
       Report on Form 8-K (File No. 000-28871) filed with the Securities and
       Exchange Commission on March 15, 2004.
(11)   Incorporated by reference to the Registrant's Quarterly Report on Form
       10-Q (File No. 000-78871) filed with the Securities and Exchange
       Commission on November 14, 2003.
(12)   Incorporated by reference to the Registrant's Pre-Effective Amendment No.
       1 to Registration Statement on Form S-1 (File No. 333-109911) filed with
       the Securities and Exchange Commission on December 19, 2003.
(13)   Incorporated by reference to the Registrant's Pre-Effective Amendment No.
       2 to Registration Statement on Form S-1 (File No. 333-109911) filed with
       the Securities and Exchange Commission on January 26, 2004.
+      Confidential treatment granted as to certain portions, which portions
       have been omitted and filed separately with the Securities and Exchange
       Commission pursuant to a Confidential Treatment Request.
++     Confidential treatment requested as to certain portions, which portions
       have been omitted and filed separately with the Securities and Exchange
       Commission pursuant to a Confidential Treatment Request.
*      Management contract or compensatory plan or arrangement required to be
       filed as an exhibit pursuant to Item 14(c) of Form 10-K.

                                       70