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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q/A

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

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

             For the transition period from _________ to __________
                         Commission file number 0-28064

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

                                  EXCITE, INC.
             (Exact name of Registrant as specified in its charter)


                 CALIFORNIA                                  77-0378215
              (State or other                             (I.R.S. Employer
              jurisdiction of                          Identification Number)
              incorporation or
               organization)

                                  555 BROADWAY
                         REDWOOD CITY, CALIFORNIA 94063
                    (Address of principal executive offices)
                                 (650) 568-6000
              (Registrant's telephone number, including area code)

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

Check whether the registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                            YES [X]         NO [ ]


As of July 31, 1998 there were 50,888,302 shares of the Registrant's Common
Stock outstanding.

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Items 2 and 6 of the Company's Quarterly Report on Form 10-Q for the Quarter 
ended June 30, 1998 are amended to read as follows:

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


FORWARD LOOKING STATEMENTS

    The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements, which involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including, without limitation, those risk factors set forth
under "Risk Factors that May Affect Future Results" included in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations.

    The following discussion also should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, filed with the
Securities and Exchange Commission on March 31, 1998 and the Company's audited
supplemental consolidated financial statements and notes thereto included in the
Company's Current Report on Form 8-K as filed with the Securities and Exchange
Commission on May 15, 1998.

OVERVIEW

    The Company operates the Excite Network (which includes the Excite and
WebCrawler brands) and provides a gateway to the Web that organizes, aggregates
and delivers information to meet the needs of individual consumers. Excite,
Inc., formerly Architext Software, Inc., was formed in June 1994 and, from its
inception to September 1995, its operating activities related primarily to
recruiting personnel, raising capital, purchasing operating assets, providing
custom product development and consulting services. The Company first launched
its Excite search and directory service in October 1995. In April 1997, the
Company launched a channels-based format for its service and content on the
Excite brand to provide consumers with an interface that reflects the way they
navigate through other forms of media and enables advertisers to more
effectively reach target consumers. The Excite brand currently includes 18
channels of topical interest such as Entertainment, Sports and Money/Investing.
In September 1997, the Company launched a similar channels-based format for its
WebCrawler brand that currently includes 19 channels.

    Historically, advertising revenues have been derived principally from
short-term advertising contracts in which the Company guarantees a minimum
number of impressions (a view of an advertisement banner by a consumer) for a
fixed fee. Such banner advertising revenue is dependent upon both the number of
impressions and the rate per thousand impressions ("CPMs") charged. The Company
generally charges higher rates for advertisements focused on targeted groups,
either by key-word associations or affiliations with specific content, than for
general rotation advertisements on the Excite Network.

    During its limited operating history, the Company has experienced seasonal
fluctuations in the amount of banner advertisements purchased on its network,
with advertisers historically purchasing fewer advertisements in the first
calendar quarter of each year. Because the market for Web advertising is an
emerging market, additional seasonal patterns in Web advertising may develop in
the future as the market matures.

    In 1997, the Company began entering into longer-term advertising and
commerce sponsorship agreements. These agreements generally involve more
integration with the Excite Network and provide for more varied sources of
revenue to Excite over the term of the agreements, which average from two to
three years. Under these agreements, Excite earns fees for generating
impressions that in some instances are guaranteed. Sponsorship customers
accounted for approximately 24% and 27% of advertising revenues for 1997 and the
six months ended June 30, 1998, respectively. Revenues are generally recognized
ratably over the term of the agreement, provided that the Company does not have
any significant remaining obligations and collection of the resulting receivable
is probable. To the extent that impression deliveries are falling short of the
guarantees, the Company defers recognition of the corresponding revenues. A
number of these agreements also provide that revenues or gross margins from
advertising and electronic commerce transactions are to be shared between the
advertiser and Excite as realized. Revenues or margin sharing recognized from
such electronic commerce transactions were insignificant through the second
quarter of 1998, and are expected to be insignificant for the remainder of 1998.
The Company does not expect revenue growth relating to sponsorship advertising
revenues



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to continue at the current rate in future periods as availability of
exclusive sponsorships may be limited. See "Risk Factors that May Affect Future
Results -- Risks Related to Sponsorships" and " -- Risks Associated with Banner
Advertising."

In April 1998, the Company and Netscape entered into a two-year agreement (the
"Netcenter Agreement"), under which the Company will, among other things,
provide, host and sell advertising for certain Co-Branded Services for
Netscape's recently announced Netcenter Service (the "Co-Branded Services"). In
connection with the Netscape Agreement, the Company has paid to Netscape a total
of $70.0 million (the "Cash Payment"). Also in connection with the Netcenter
Agreement, the Company has issued to Netscape a warrant to purchase 846,158
shares of the Company's Common Stock at an exercise price of approximately
$29.55 per share (and "First Warrant") and a second warrant to purchase shares
of the Company's Common Stock at an aggregate exercise price of $10.0 million
(the "Second Warrant", together with the First Warrant, the "Warrants"). The
First Warrant is exercisable for a two year period commencing on April 30, 1998,
1998. The Second Warrant will be exercisable for a two year period commencing
April 30, 1999. The exercise price per share of Common Stock covered by the
Second Warrant will be determined by dividing $10 million by the average closing
price of the Company's Common Stock for the thirty (30) most recent trading days
ending on the third trading day preceding April 30, 1998. The fair value of the
first warrant and the aggregate $10.0 million exercise price of the second
warrant has been estimated to be $19.9 million. The Cash Payment and the value
assigned to the Warrants totaling $89.9 million were capitalized as Prepaid
Netscape Distribution Costs and Trademarks during the second quarter of 1998 and
will be amortized over the two-year term of the Netcenter Agreement. Under the
Netcenter Agreement, the Company will only recognize revenues generated from the
Co-Branded Services and not from any other part of Netcenter. A portion of the
revenues will be credited against the Company's revenue-sharing obligation to
Netscape until the Company recoups a specified amount of the Cash Payment.
Thereafter, the Company must pay Netscape a portion of additional revenues
generated from the Co-Branded Services. Unless Netscape generates impressions
significantly greater than the guaranteed amount as specified in the Agreement,
the increased revenues to the Company resulting from the co-branded services
under the Netcenter Agreement will not be sufficient to recover the combined
costs of the prepayment, the warrant value and the incremental operating costs
that will be incurred by the Company as a result of the Agreement. The Company
anticipates that it will incur expenses for the start-up and development of the
services contemplated in the Netcenter Agreement, including the costs of
personnel, content creation, facilities and depreciation of assets purchased for
the Netcenter Service. On this basis, the Company anticipates that the Netcenter
Agreement will serve to generate losses for the Company during its term. See
"Risk Factors that May Affect Future Results--Risks Related to Netcenter
Agreement."

    The Company has acquired a number of businesses, technologies, services,
product lines and content. In April 1998, the Company acquired Throw, a
developer of community products, issued approximately 330,000 shares of its
Common Stock, assumed options and warrants to purchase up to an aggregate of
approximately 318,000 shares of its Common Stock. Also in April 1998, the
Company acquired Classifieds2000, a provider of online classified ads. The
Company issued approximately 1,730,000 shares of its Common Stock to former
stockholders of Classifieds2000 and assumed options and warrants to purchase up
to approximately 50,000 shares of its Common Stock. In February 1998, the
Company acquired MatchLogic, a provider of solutions for the management and
optimization of Internet advertising campaigns. The Company issued approximately
6.1 million shares of its Common Stock to former stockholders of MatchLogic and
assumed options and warrants to purchase up to approximately 1,049,000 shares of
its Common Stock. The acquisition of MatchLogic and Classifieds2000 were
accounted for as a pooling of interests and the acquisition of Throw was
accounted for as a purchase.

        All financial information for dates and periods prior to the merger with
MatchLogic has been restated to reflect the combined operations of the Company
and MatchLogic. Financial information for dates and periods prior to the
acquisition of Classifieds2000 has not been restated to reflect the combined
operations of the Company and Classifieds2000, as Classifieds2000's results of
operations were not material to the Company's consolidated financial statements
in any historical period. See Note 2 and "Risk Factors that May Affect Future
Results--Acquisition Strategy; Integration of Past and Future Acquisitions."

    The Company has incurred significant operating losses since inception, and
as of June 30, 1998, the Company had an accumulated deficit of approximately
$131.5 million. Although the Company experienced significant revenue growth
during 1997 and the first half of 1998, there can be no assurance that this
growth rate will be sustained or that revenues will continue to grow or that
historical operating results will be indicative of future operating results. In
addition, as the Company has grown, its operating expenses have increased, and
the Company expects that its operating expenses will continue to increase as a
result of its acquisitions, the performance of its obligations under the
Netcenter Agreement, its increased sales and marketing efforts, its increased
funding for development activities and the increased general and administrative
staff needed to support the Company's growth. To the extent that revenues do not
grow at anticipated rates or 



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that increases in such operating expenses precede or are not subsequently
followed by commensurate increases in revenues, or that the Company is unable to
adjust operating expense levels accordingly, the Company's business, results of
operations and financial condition will be materially and adversely affected.
There can be no assurance that in the future the Company will be profitable on a
quarterly or annual basis.

RESULTS OF OPERATIONS

REVENUES

    Revenues were $33.0 million for the second quarter of 1998, as compared to
$10.1 million for the second quarter of 1997, an increase of $22.9 million or
227%. For the first half of 1998 and 1997, revenues were $56.0 million and $17.6
million, respectively, an increase of $38.4 million or 218%. This increase in
both periods is primarily the result of an increase in the number of advertisers
purchasing advertising banners on the Company's Web sites, an increase in
sponsorship advertising revenue, and to a lesser extent, an increase in sales of
targeted advertisements with higher rates. Also contributing to the increase in
revenues was the increased revenues attributable to MatchLogic, which began
operations in May 1997. Revenues from international operations were not
significant during the three and six months ended June 30, 1998 and 1997.

    The Company expects to continue to derive a substantial amount of its total
revenues from selling advertisements. Because the market for advertising on the
Web is intensely competitive, advertising rates could be subject to pricing
pressures in the future. If the Company is forced to reduce its advertising
rates or experiences lower CPMs (price per thousand impressions) as a result of
such competition or otherwise, future revenues could be adversely affected.

COST OF REVENUES

    Cost of revenues consists primarily of: hosting costs; royalties and other
cost of revenues; and amortization of purchased technology. Hosting costs relate
to the maintenance and technical support of the Excite Network, and are
comprised principally of personnel costs, telecommunications costs, equipment
depreciation and overhead allocations. Royalties and other cost of revenues
include expenses related to royalties, license agreements and revenue sharing
agreements for content and other services such as email and chat room services.
For the second quarter and first half of 1997, the Company recognized
amortization of purchased technology of $1.9 million and $4.3 million,
respectively, related to the WebCrawler acquisition. There were no corresponding
costs for the comparable periods in 1998 as the cost of the technology was fully
amortized at December 31, 1997.

    Total cost of revenues increased in absolute dollars by $2.3 million to $6.5
million, or 20% of revenues for the second quarter of 1998, from $4.2 million,
or 41% of revenues for the comparable period in the prior year. For the current
year to date, total cost of revenues increased by $3.1 million to $12.1 million,
or 22% of revenues, from $9.0 million, or 51% of revenues for the comparable
period in the prior year. Hosting costs for the second quarter of 1998 increased
in absolute dollars by $2.0 million to $3.7 million, or 11% of revenues, from
$1.7 million, or 17% of revenues for the comparable period in the prior year.
For the current year to date, hosting costs increased by $2.9 million to $6.5
million, or 12% of revenues, from $3.5 million, or 20% of revenues for the
comparable period in the prior year. The increase in hosting costs is due
primarily to increased personnel expenses and equipment costs relating to
maintaining and supporting the Company's Web sites and services. Royalties and
other cost of revenues increased in absolute dollars by $2.2 million to $2.8
million, or 8% of revenues, for the second quarter 1998 from $556,000, or 6% of
revenues for the comparable period in the prior year. For the current year to
date, royalties and other cost of revenues increased by $4.5 million to $5.6
million, or 10% of revenues, from $1.1 million, or 6% of revenues for the
comparable period in the prior year. The increase in royalties and other cost of
revenues was primarily due to increased royalties and margin sharing payments
from revenue sharing agreements.

    Excluding amortization of purchased technology, total cost of revenues
increased by $4.2 million to $6.5 million, or 20% of revenues for the second
quarter of 1998, from $2.2 million, or 22% of revenues for the comparable period
in the prior year. Excluding amortization of purchased technology, total cost of
revenues for the first half of 1998 increased by $7.4 million to $12.1 million,
or 22% of revenues from $4.6 million, or 26% of revenues for the comparable
period in the prior year.



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    Excluding amortization, cost of revenues in future periods is expected to
increase in absolute dollars and may increase as a percentage of revenues as the
Company increases costs to support expanded services and content. The Company
also expects to experience increased hosting costs in connection with performing
its obligations under the Netcenter Agreement and to experience increased
royalties and other cost of revenues as a result of the revenue sharing
provisions of the Netcenter Agreement.

GROSS PROFIT

    Gross profit increased by $20.6 million or 349% to $26.5 million or 80% of
revenues for the second quarter of 1998, from $5.9 million or 59% of revenue for
the comparable period in the prior year. For the first half of 1998, gross
profit increased by $35.3 million or 409% to $44.0 million or 78% of revenues,
from $8.6 million or 49% of revenue for the comparable period in 1997. The
increase in gross profit in absolute dollars and as a percentage of revenues was
primarily due to the fact that revenues grew at a faster rate than hosting costs
and royalties and other cost of revenues, a favorable product mix, and the
elimination of amortization of purchased technology discussed above. In the
future, gross profit may be affected by the types of advertisements sold and
revenue sharing provisions of distribution and content agreements. These items
have negatively affected gross profit in the past and may continue to negatively
affect it in the future. Furthermore, pursuant to the provisions of certain
agreements with operators of Web access points and with content providers, the
Company shares advertising revenues based upon the number of consumers directed
to its network. A low level of targeted advertising as a percentage of total
advertising sold, a decrease in targeted or mass Web advertising rates or an
increase in the Company's advertising revenue sharing obligations could
adversely affect gross margins in the future.

Operating Expenses

        Research and Development. Research and development expenses consist
principally of engineering and editorial personnel costs, equipment
depreciation, consulting fees, supplies and allocation of overhead. Research and
development expenses for the second quarter of 1998 increased to $7.3 million,
or 22% of revenues, from $3.6 million, or 36% of revenues in the comparable
period of the prior year. Research and development expenses for the first six
months of 1998 increased to $13.2 million, or 24% or revenues, from $6.7
million, or 38% of revenues in the comparable period of the prior year. The
increase in absolute dollars was primarily attributable to increased expenses as
a result of the Classifieds2000 and Throw acquisitions, as well as an increase
in engineering and editorial headcount to support the Company's channels format
and personalization capabilities for the Excite Network. The Company believes
that a significant level of research and development expense is required to
remain competitive and, accordingly, the Company anticipates that it will
continue to devote substantial resources to research and development and that
these costs will increase in absolute dollars in future periods. The Company
also expects to continue to experience increased research and development
expenses in order to integrate acquired technologies and provide programming and
content for the Co-Branded Services of Netcenter.

    Sales and Marketing. Sales and marketing expenses consist principally of
sales and marketing personnel costs, agency and consulting fees, commissions,
promotional and advertising expenses and allocation of overhead. Sales and
marketing expenses for the second quarter of 1998 increased to $14.9 million, or
45% of revenues, from $7.2 million, or 71% of revenues, in the comparable period
of the prior year. For the current year to date, sales and marketing expenses
increased to $25.0 million, or 45% of revenues, from $13.5 million, or 77% of
revenues in the comparable period for the prior year. The increase in absolute
dollars was primarily due to the hiring of additional sales and marketing
personnel and increased expenses resulting from the acquisition of Classifieds
and Throw. Promotional expenses remained relatively constant in the second
quarter and first half of 1998, as compared to the same period of the prior year
as the prior year period included costs associated with a national media
campaign that started in the fourth quarter of 1996. The Company expects to
continue to incur significant promotional and advertising expenses and
anticipates that these costs will increase in absolute dollars in future periods
as the Company promotes its brands and introduces new services in order to
create and maintain brand loyalty among customers. The Company also expects to
continue to experience increased sales and marketing expenses as it is
responsible for all advertising sales on the Co-Branded Services of Netcenter.



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    Distribution License Fees and Data Acquisition Costs. Distribution license
fees and data acquisition costs consist principally of fees paid to third-party
Internet companies such as Netscape to provide entry points to the Excite
Network and costs to update and maintain the ad targeting and tracking database
which is continually being updated by the Company's MatchLogic subsidiary.
Distribution license fees and data acquisition costs were $5.2 million for the
second quarter of 1998, as compared to $1.7 million for the comparable period in
1997. For the current year to date, distribution license fees and data
acquisition costs were $9.2 million, compared to $1.7 million for the comparable
period in the prior year. The 1998 costs included distribution license fees
related to agreements entered into with Netscape in March 1997 as well as data
acquisition costs incurred by MatchLogic during the period. In addition, a total
of $855,000 was amortized to Distribution License Fees and Data
Acquisition Costs relating to the April 1998 Netcenter Agreement.

    In the future, high traffic Web sites, Internet service providers, providers
of Web browsers or other distribution channels could require cash payments or
other types of consideration as compensation for listing or promoting the Excite
Network, which could result in increased distribution license fees. See "Risk
Factors that May Affect Future Results--Risks Related to Netcenter Agreement."

    General and Administrative. General and administrative expenses consist
principally of administrative and executive personnel costs, provision for
doubtful accounts, fees for professional services and allocation of overhead.
General and administrative expenses for the second quarter of 1998 increased to
$3.9 million, or 12% of revenues, from $1.8 million, or 18% of revenues, in the
comparable period of the prior year. General and administrative expenses for the
first half of 1998 increased to $6.7 million, or 12% of revenues, from $3.1
million, or 18% of revenues, in the comparable period of the prior year. The
increase in absolute dollars is primarily due to increased personnel costs to
support the expansion and infrastructure of the Company's operations and global
business strategy. In particular, the acquisition of Classifieds2000 and the
growth in the Company's finance and administrative departments contributed to
this increase. The Company anticipates that its general and administrative
expenses will continue to increase in absolute dollars as the Company expands
its administrative and executive staff, adds infrastructure and assimilates
acquisitions of acquired technologies and businesses. In addition, the Company
plans to continue to run MatchLogic as an independent subsidiary with its own
administrative function.

    In-Process Technology. During the first half of 1998 and 1997, the Company
incurred charges for in-process technology of $16.2 million and $2.3 million,
respectively. The Company acquired Throw in April 1998, accounted for the
transaction as a purchase, and of the total purchase price, $16.2 million was
allocated to in-process technology and charged to operations in the second
quarter of 1998. The 1997 charge of $2.3 million related to the value of
acquired in-process technology that had not reached technological feasibility at
the time of MatchLogic's formation in May 1997. To determine the value of the
in-process technology, the Company considered, among other factors, the state of
development of each project, the time and cost needed to complete each project,
expected income, and associated risks which included the inherent difficulties
and uncertainties in completing the project and thereby achieving technological
feasibility and risks related to the viability of and potential changes to
future target markets. This analysis results in amounts assigned to in-process
research and development projects that had not yet reached technological
feasibility and does not have alternative future uses.

    Other Merger and Acquisition Related Costs, including Amortization of
Goodwill and Other Intangible Assets. During the second quarter of 1998 and
1997, the Company incurred merger and acquisition related costs of $1.2 million
and $463,000, respectively. During the first half of 1998 and 1997, the Company
incurred merger and acquisition related costs of $2.1 million and $1.4 million,
respectively. In 1998, the Company incurred charges of approximately $743,000
and $700,000 for the acquisition of Classifieds2000 and MatchLogic,
respectively. The remainder of the merger and acquisition related costs for the
first half of 1998 and all of the costs for the comparable period of the prior
year related to the amortization of goodwill and other purchased intangibles
resulting primarily from the WebCrawler acquisition.

    Amortization of Prepaid Netscape Service. The 1998 costs included a $2.5
million charge related to the amortization of the Prepaid Netscape Service
associated with the April 1998 Netcenter Agreement. The Company anticipates
incurring a total amortization charge of approximately $7.6 million per quarter
relating to the Netcenter Agreement for the duration of the Agreement.



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    Net Interest Expense and Other. Net interest expense and other increased to
$649,000 for the second quarter of 1998, compared to $112,000 for the comparable
period of the prior year. Current year to date, net interest expense and other
increased to $843,000 compared to $1,000 for the comparable period of the prior
year. This increase in net interest expense and other was due primarily to an
increase in interest expense resulting from the $50 million note payable due to
Intuit, as well as additional capital lease obligations, non-lease financing
obligations and the convertible note issued to Itochu Corporation. The overall
increase in net interest expense and other was partially offset by an increase
in interest income earned on cash received in June 1998 from the Company's
public offering, which was used to fund operations and its obligations under the
Netcenter Agreement.

    Equity Share of Losses of Affiliated Company. In October 1997, the Company
and Itochu Corporation and certain affiliated entities (collectively "Itochu")
entered into a joint venture agreement with respect to the Company's
wholly-owned subsidiary, Excite Japan, in order to provide Web-based information
services to the Japanese market. The Company currently holds, and intends to
retain, a 50% equity interest in Excite Japan. For the three and six months
ended June 30, 1998, Excite's share of the losses of Excite Japan was $551,000
and $1.0 million, respectively. The Company expects that it will record
increased losses from Excite Japan for at least the remainder of 1998.

YEAR 2000 IMPLICATIONS

    Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field and cannot distinguish 21st
century dates from 20th century dates. These date code fields will need to
distinguish 21st century dates from 20th century dates and, as a result, many
companies' software and computer systems may need to be upgraded or replaced in
order to comply with such "Year 2000" requirements. The Company has reviewed its
internal programs, and has determined that there are no significant Year 2000
issues within the Company's systems or services. However, although the Company
believes that its systems are Year 2000 compliant, the Company utilizes
third-party equipment and software that may not be Year 2000 compliant. Failure
of such third-party equipment or software to operate properly with regard to the
Year 2000 and thereafter could require the Company to incur unanticipated
expenses to remedy any problems, which could have a material adverse effect on
the Company's business, results of operations and financial condition.
Furthermore, the purchasing patterns of advertisers may be affected by Year 2000
issues as companies expend significant resources to correct their current
systems for Year 2000 compliance. These expenditures may result in reduced funds
available for Web advertising or sponsorship of Web services, which could have a
material adverse effect on the Company's business, results of operations and
financial condition.

LIQUIDITY AND CAPITAL RESOURCES

    At June 30, 1998 the Company had $36.0 million in unrestricted cash, cash
equivalents and short-term investments, an increase of $4.2 million from
December 31, 1997. During the six months ended June 30, 1998, the Company
completed its merger with MatchLogic, Classifieds and Throw. The Company
maintains its cash and cash equivalents in short-term and medium-term
investment-grade interest-bearing securities until required for other purposes.

    The Company's operating activities for the first half of 1998 and 1997 used
cash of approximately $79.9 million and $17.5 million, respectively. The
increased use of cash in 1998 was mainly attributable to the $70.0 million cash
prepayment to Netscape under the Netcenter Agreement. The Company borrowed $50.0
million from Intuit, which is a principal shareholder of the Company, in April
1998 to fund a portion of this payment to Netscape. In June 1998, the Company
repaid the loan in full, plus interest of approximately $410,000, with proceeds
from the Company's public offering which closed in June 1998.

    Investing activities for the first half of 1998 and 1997 used cash of $1.6
million and $17.0 million, respectively. In the first half of 1998 and 1997,
cash was used for purchases of short-term investments, property and equipment,
and contributions towards its investment in Excite Japan, offset by the sales of
short-term investments. Capital expenditures have been, and future expenditures
are anticipated to be, primarily for facilities and equipment to support
expansion of the Company's operations and management information systems. The
Company expects that its capital expenditures will increase as its employee base
grows. As of June 30, 1998, the Company did not have any material commitments
for capital expenditures, although the 



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Company anticipates that its planned purchases of capital equipment and
leasehold improvements will require additional expenditures during the remainder
of 1998, a portion of which may be financed through equipment leases and bank
borrowings. At June 30, 1998 the Company had $7.7 million available on equipment
lease lines, and the Company believes that additional lease financing will be
available to it if necessary.

    Financing activities for the first half of 1998 and 1997 generated cash of
$86.3 million and $49.2 million, respectively. Financing activities for the
first half of 1998 primarily consisted of cash received in connection with the
issuance of stock through the Company's public offering which was completed in
June 1998 and, to a lesser extent, option exercises under the Company's equity
incentive plan. Financing activities for the first half of 1997 primarily
consisted of a bank line of credit borrowing of $6.0 million and the sale of
Common Stock to Intuit.

    In 1997, the Company entered into and borrowed on a $6.0 million line of
credit. In July 1998, the Company repaid this line in full. The Company is
currently negotiating a new line of credit.

    To date, the Company has had limited international operations and its
exposure to foreign currency exchange rate fluctuations has been minimal. The
Company evaluates its foreign currency exchange rate exposure on an ongoing
basis.

    The Company has completed a number of mergers and acquisitions in the past,
and expects to make other acquisitions and investments in joint ventures in the
future. These mergers resulted in significant increases in headcount and
overhead, as well as the assumption and payment of additional liabilities. While
the Company believes that such transactions have been and will continue to be in
the best interests of the Company and its shareholders, these transactions
involve risks and may require additional cash investments by the Company.

    The Company believes the existing working capital balance together with cash
flows generated from advertising revenues will be sufficient to meet its
anticipated cash needs for working capital, capital expenditures and business
expansion for at least the next twelve months. The Company may need to raise
additional funds sooner in order to fund more rapid expansion, to develop new or
enhanced services or products, to respond to competitive pressures or to acquire
complementary products, businesses or technologies. If additional funds are
raised through the issuance of equity or convertible debt securities, the
percentages ownership of the shareholder of the Company will be reduced,
shareholders may experience additional dilution and such securities may have
rights, preferences or privileges senior to those of the holders of the
Company's common stock.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

   Limited Operating History; No Assurance of Profitability. The Company was
founded in June 1994 and generated only limited revenues prior to 1996.
Accordingly, the Company has a limited operating history upon which an
evaluation of the Company and its current business can be based. In addition,
the Company's business model is evolving and relies substantially upon the sale
of Web advertising. The Company's business must be considered in light of the
risks, expenses and problems frequently encountered by companies in their early
stages of development, particularly companies in new and rapidly evolving
markets such as Web advertising. Specifically, such risks include, without
limitation: the inability of the Company to maintain and increase levels of
traffic on the Excite Network; the inability of the Company to derive sufficient
revenues from the Co-Branded Services of Netscape's Netcenter service and the
additional costs the Company expects to incur in order to perform its
obligations under the Netcenter Agreement; the inability of the Company to
effectively integrate the technology and operations of acquired businesses or
technologies with its operations, increased operating expenses as a result of
the Company's recent acquisitions, the inability of the Company to expand its
international operations, particularly in light of the Company's limited
operating experience in the international market; the failure by the Company to
continue to develop and extend the Excite and WebCrawler brands; the inability
of the Company to meet minimum guaranteed impressions under sponsorship
agreements; the inability of the Company to develop or acquire content for its
services; the inability of the Company to generate commerce-related revenues;
the failure of the Company to anticipate and adapt to a developing market; the
introduction and development of equal or superior services or products by
competitors, particularly in light of the fact that Microsoft and Netscape,
operators of two of the most heavily-trafficked Web sites, offer competitive
services; the failure of the market to adopt the Web as an advertising and
commercial medium; reductions in market prices for Web advertising as a result
of competition or otherwise; 



                                       7
<PAGE>   9

the inability of the Company to achieve higher cost per thousand impressions
("CPM") rates for targeted advertising or to increase the percentage of its
advertising inventory sold; government regulation; the inability of the Company
to identify, attract, retain and motivate qualified personnel; and general
economic conditions. There can be no assurance that the Company will be
successful in addressing such risks.

   Potential Fluctuations in Quarterly Results; Unpredictability of Future
Revenues. The Company's operating results have varied on a quarterly basis
during its limited operating history and the Company expects to experience
significant fluctuations in future quarterly operating results. Such
fluctuations have been and may in the future be caused by numerous factors, many
of which are outside the Company's control, including but not limited to:
specific economic conditions relating to the Internet and the Web; usage of the
Web; demand for advertising on the Excite Network as well as demand for
Web-based advertising in general; changes in advertising rates as a result of
competition or otherwise; seasonal trends in advertising sales; the advertising
budgeting cycles of advertisers; incurrence of charges in connection with the
Netcenter Agreement, the Company's distribution relationships and acquisitions;
demand for the Company's services; incurrence of costs relating to acquisitions
of businesses or technologies; introduction or enhancement of new or existing
services by the Company and its competitors; market acceptance of new services;
delays in the introduction of services or enhancements by the Company or its
competitors; mix of types of advertisements sold, such as the amount of targeted
advertising, which generally has higher CPM rates, sold as a percentage of total
advertising sold; capacity constraints and dependencies on computer
infrastructure; and general economic conditions.

   Due to all of the foregoing factors, the Company's quarterly revenues and
operating results are difficult to forecast. The Company believes that
period-to-period comparisons of its results of operations will not necessarily
be meaningful and should not be relied upon as an indication of future
performance. Also, it is likely that in some future quarter or quarters the
Company's operating results will be below the expectations of public market
analysts and investors. In such event, the price of the Company's Common Stock
would be materially and adversely affected. See "Volatility of Stock Price".

    Risks Related to Netcenter Agreement. Under the Netcenter Agreement, the
Company will only receive revenues generated from the Co-Branded Services and
not from any other part of the Netcenter Service. In addition, the Company must
pay Netscape a portion of such revenues after it recoups a majority of the Cash
Payment. Thereafter, the Company must pay Netscape a percentage of the revenues
received from the Co-Branded Services. The amount to be expensed under the
Netcenter Agreement is separated into two components as follows: the amount
which represents the anticipated future net revenues from the Netcenter
Agreement ($29.3 million) will be charged to Distribution License Fees and Data
Acquisition Costs, and the remaining amount ($60.6 million) representing the
combined value of marketing and distribution rights, trademarks and other
exclusivities will be charged ratably over the term of the Agreement to
Amortization of Prepaid Netscape Service. There are no minimum guaranteed
revenues under the Netcenter Agreement, and there can be no assurance as to the
level of revenues that the Company will generate from the Co-Branded Services.
The level of advertising revenues generated by the Company from the Co-Branded
Services is subject to a number of risks and uncertainties, many of which are
beyond the Company's control. These include general risks associated with
providing an advertising-supported Internet service, uncertainty as to whether
the Company can increase its sales and marketing capabilities in order to sell
sufficient advertising on the Co-Branded Services, pricing competition from
Netscape as a result of advertising sold on the parts of Netcenter other than
the Co-Branded Services, and risks that channels on Netcenter other than the
Co-Branded Channels (such as a business channel and a sports channel) may be
potentially more attractive to advertisers than the Co-Branded Services. Because
Netscape is responsible for programming the Netcenter home page and other
portions of Netcenter that are not co-branded, Excite is relying upon Netscape's
programming of the Netcenter home page and other portions of Netcenter to create
a demographic mix of traffic flows that is similar to that experienced by the
Company. Netscape has no experience in such activities. As a result, the Company
has no means of controlling the programming on these pages so as to maximize the
exposure of the co-branded channels and search services. As a result, the
Company also has little means of controlling the mix of traffic to the
co-branded channels and search service, which could have different revenue
opportunities to the Company as advertisers may be willing to pay more to
advertise on certain content channels. As a result, there can be no assurance
that the Company can generate substantial revenues from the Co-Branded Services
to recoup the portion of the Cash Payment against which the Company's revenue
sharing obligations will be offset, or to recoup costs incurred by the Company
under the Netcenter Agreement.



                                       8
<PAGE>   10

    The Company has hired a significant number of technical and sales personnel
and is incurring additional overhead costs in order to develop, host and sell
advertising on the Co-Branded Services. The Company will not be reimbursed for
these costs. The failure to generate revenues from the Co-Branded Services
sufficient to recoup these additional costs would have a material adverse effect
on the Company's business, results of operations and financial condition.

   The success of Netcenter, and the Co-Branded Services in particular, will be
substantially dependent on the amount of traffic on Netcenter. Although Netscape
has made certain exposure guarantees with respect to Netcenter over the term of
the Netcenter Agreement, there can be no assurance that these guarantees will be
fulfilled. There is intense competition for attracting Web users, which
competition may be exacerbated by the upcoming release of Microsoft's Windows 98
operating system. Furthermore, many current Web users may not choose to utilize
Netcenter over other available Internet services. Any failure of Netcenter to
attract substantial user traffic would materially and adversely affect the
Company's business, results of operations and financial condition. Additionally,
the Netcenter Agreement provides that all page views generated from the
Co-Branded Services shall be deemed to be traffic attributable to Netscape. As a
result, the Company may not receive credit, under certain audience measurement
statistics, which are commonly used by advertisers in making their advertising
placements, for traffic generated through the Co-Branded Services.

   As part of the Netcenter Agreement, the Excite Network will also be featured
as a "premier provider" on Netscape's Net Search page, and will be similarly
featured on the "Netcenter Widget" tool, which will be accessible from
Netcenter. Because Netscape only guarantees a specified number of impressions
from its Net Search page (as compared to a number of users who "click through"
to the Excite Network), there can be no assurance that this new "premier
provider" arrangement will result in significant increases in traffic on the
Excite Network. Although Netscape has guaranteed a minimum number of users who
"click through" to the Excite Network from the Netcenter Widget, Netscape is not
obligated to keep this tool on Netcenter after the first six months of the term
of the Netcenter Agreement. Accordingly, there can also be no assurance that
this tool will provide the Excite Network with significant amounts of traffic.
In entering into the Netcenter Agreement, Excite has assumed that "click
throughs" from the Netsearch page will be similar to the historical performance
of the Netsearch page experienced by Excite over the prior two agreements with
Netscape. The "click through" rate is influenced by brand strength of the search
provider, and by the layout and programming of the Netsearch page itself. Thus,
Excite's projections for the co-branded search service are dependent on
Netscape's ability to establish its brand as a search provider and its ability
to program the site to maintain the historical level of "click throughs." Under
performance, in terms of users clicking through from the home page to the
co-branded channels or to Excite services, would negatively impact Excite's
expectations for the Agreement.

   The distribution of traffic from Netscape to Excite throughout the term of
the Netcenter Agreement significantly impacts Excite's ability to recoup the
amount it has prepaid under the Netcenter Agreement. Although Netscape has made
certain traffic exposure guarantees, there can be no assurance that these
guarantees will be fulfilled within the two-year term of this contract. Nor is
there a guarantee that the timing of the delivery of these impressions during
this period will be consistent with the assumptions made in the Company's
determination of the value of the Netcenter Agreement, as Netscape is not
obligated to meet these guarantees on any specific schedule and, if the delivery
of Netscape's traffic guarantees is more heavily weighted toward the end of the
contract term than projected, Excite's expectations as to the net present value
of the Agreement would be negatively impacted.

   Upon the termination of the Netcenter Agreement (other than a termination in
connection with certain acquisitions of or by Netscape), Netscape will have a
perpetual, irrevocable license to utilize certain technology used by Excite to
the Co-Branded Services. Netscape will also have the right to sublicense this
technology to third parties. As a result, upon termination of the Netcenter
Agreement, Netscape will be able to operate Netcenter independently, without any
royalty or payment obligations to Excite. In addition, if Netscape sublicenses
this technology to a third party, the Excite Network could face additional
competition, which could have a material adverse effect on the Company's
business, results of operations and financial condition.

   The Netcenter Agreement is subject to termination if the Company materially
breaches its obligations under the Netcenter Agreement. In addition, if Netscape
believes that the Company's Excite service or that the content provided by
Excite for the Netcenter service contains any content that Netscape deems likely
to cause it material harm, Netscape may terminate the Netcenter Agreement if the
Company has not revised such 



                                       9
<PAGE>   11

objectionable content within five days after notice from Netscape. In the event
of such terminations, Netscape will not be obligated to refund any portion of
the amounts prepaid by the Company and the Company will not be entitled to
receive any reimbursement for its costs incurred in performing its obligations
under the Netcenter Agreement. Moreover, many of the Company's obligations to be
performed under the Netcenter Agreement must be performed according to standards
determined by Netscape at its sole discretion.

   Many of the services to be offered by Netcenter will compete directly with
those offered by the Excite Network. There can be no assurance that this
increased competition for Web users or advertisers will not have a material
adverse effect on the Company's business, results of operations and financial
condition.

   Acquisition Strategy; Integration of Past and Future Acquisitions. The
Company has in the past acquired, and may in the future acquire, businesses,
technologies, services, product lines, content databases, or access to content
databases that are complementary to the Company's business. Acquisitions involve
a number of special risks, including, among other things, the difficulty of
assimilating the technologies, operations and personnel of acquired companies
with those of the Company, the potential disruption of the Company's business,
the diversion of resources, the incurrence of acquisition-related expenses, the
write-off or amortization of intangible assets, the assumption of unknown
liabilities, the inability to maintain uniform standards, controls, procedures
and policies and the impairment of relationships with employees and strategic
partners as a result of such acquisitions or the integration of new personnel.
Any failure to successfully address these acquisition-related risks could have a
material adverse effect on the Company's business, results of operations and
financial condition.

        Risks Related to Sponsorships. The Company derives a substantial portion
of its revenues from sponsorship arrangements with third parties to provide
sponsored services and placements on the Excite Network. In connection with
these arrangements, the Company may receive sponsorship fees, and in connection
with certain of its more recent arrangements it may receive a portion of
transaction revenues received by such sponsors from users originated through the
Excite Network. These arrangements expose the Company to potentially significant
financial risks, including the risk that the Company fails to deliver required
minimum levels of user impressions (in which case, these agreements are
typically subject to termination) and that third party sponsors do not renew the
agreements at the end of their term. These arrangements also require the Company
to integrate sponsors' content with the Company's services, which can require
the dedication of resources and significant programming and design efforts to
accomplish. There can be no assurance that the Company will be able to attract
additional sponsors or that it will be able to renew existing sponsorship
arrangements when they expire. In addition, the Company has granted exclusivity
provisions to certain of its sponsors, and may in the future grant additional
exclusivity provisions. Such exclusivity provisions may have the effect of
preventing the Company, for the duration of such exclusivity arrangements, from
accepting advertising or sponsorship arrangements with respect to portions of a
channel or service, an entire channel, across an entire service or over the
entire Excite Network. The inability of the Company to enter into further
sponsorship or advertising arrangements as a result of its exclusivity
arrangements or otherwise could have a material adverse effect on the Company's
business, results of operations and financial condition.

   Risks Associated with Banner Advertising. The Company derives a substantial
portion of its revenues from the sale of banner advertisements on the Excite
Network. A majority of the Company's customers purchasing banner advertisements
purchase these advertisements on a short-term basis, and many of these customers
may terminate their advertising commitments at any time without penalty.
Consequently, there can be no assurance that these customers will continue or
increase their level of advertising on the Excite Network or that these
customers will not move their advertising to competing Web sites or to other
traditional media. Therefore, there can be no assurance that the Company will be
successful in maintaining or increasing the amount of banner advertising on the
Excite Network, and the failure to do so would have a material adverse effect on
the Company's business, results of operations and financial condition.

   Developing Market; Dependence on Continued Growth in Use of the Web. The
market for the Company's services has recently begun to develop, is rapidly
evolving and is characterized by an increasing number of market entrants who
have introduced or developed services and products for use on the Web or who
seek to derive significant revenues from the sale of advertisements on the Web.
The Company is highly dependent upon the increased use of the Web for
information, publication, distribution and commerce, and there can be no
assurance that the use of the Web for these purposes will continue to grow at
its current rate or at all. The growth of the use of the Web may be inhibited
for a number of reasons, including, but not limited to, 



                                       10
<PAGE>   12

potentially inadequate development of network infrastructure, security concerns,
inconsistent quality of service, lack of availability of cost-effective,
high-speed service and government regulations. To the extent that use of the Web
continues to grow, there can be no assurance that the Internet infrastructure
will continue to support the demands placed on it by such growth or that the
performance or reliability of the Internet will not be adversely affected. In
addition, the Web as an advertising medium has not been available for a
sufficient period of time to gauge its effectiveness as compared with
traditional advertising media, and therefore the Web is an unproven medium for
advertising-supported services. Accordingly, the Company's future operating
results will depend substantially upon the increased use of the Web for
information, publication, distribution and commerce and the emergence of the Web
as an effective advertising medium.

   The Company's ability to generate significant advertising revenues will also
depend on, among other things, the development of a large base of users of the
Company's services possessing demographic characteristics attractive to
advertisers, the ability of the Company to accurately measure its user base and
the ability of the Company to develop or acquire effective advertising delivery
and measurement systems. Many of the Company's advertisers have only limited
experience with the Web as an advertising medium, have not yet devoted a
significant portion of their advertising expenditures to Web-based advertising,
and may not find such advertising to be effective for promoting their products
and services relative to traditional print and broadcast media. The adoption of
Web advertising, particularly by those entities that have historically relied
upon traditional media for advertising, requires the acceptance of a new way of
conducting business and exchanging information. Entities that already have
invested substantial resources in other methods of conducting business may be
reluctant to adopt a new strategy that may limit or compete with their existing
efforts. There can be no assurance that the market for Web advertising will
continue to emerge or become sustainable. If the market fails to develop or
develops more slowly than expected, the Company's business, results of
operations and financial condition could be materially and adversely affected.
No standards have been widely accepted for the measurement of the effectiveness
of Web-based advertising, and there can be no assurance that such standards will
develop sufficiently to support the Web as an effective advertising medium.
There can be no assurance that advertisers will continue to accept the Company's
or other third-party measurements of impressions, or that such measurements will
not contain errors. In such event, the Company's advertising revenues could be
materially adversely affected, which would have a material adverse effect on the
Company's business, results of operations and financial condition.

   In addition, there is intense competition in the sale of advertising on the
Web, resulting in a wide range of rates quoted and a variety of pricing models
offered by different vendors for a variety of advertising services, which makes
it difficult to project future levels of advertising revenues and rates. It is
also difficult to predict which pricing models will be adopted by the industry
or advertisers. For example, advertising rates based on the number of "click
throughs," or user requests for additional information made by clicking on the
advertisement from the Company's network to the advertiser's Web pages, instead
of rates based solely on the number of impressions displayed on users' computer
screens, would materially adversely affect the Company's revenues. As a result
of these risks, there can be no assurance that the Company will be successful in
generating significant future advertising revenues from Web-based advertising,
and the failure to do so would have a material adverse effect on the Company's
business, results of operations and financial condition.

   Further, there can be no assurance that advertisers will determine that
banner advertising, the delivery of which currently comprises a substantial
portion of the Company's revenues, is an effective or attractive advertising
medium, and there can be no assurance that the Company will effectively
transition to any other forms of Web advertising should they develop and achieve
market acceptance. Moreover, "filter" software programs that limit or prevent
advertising from being delivered to a Web user's computer are available.
Widespread adoption of such software by users could have a material adverse
effect upon the commercial viability of Web advertising, which would have a
material adverse effect on the Company's business, results of operations and
financial condition.



                                       11
<PAGE>   13
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.

          The Exhibits listed in the accompanying Exhibit Index are filed as 
          part of this report.

     (b)  The following reports on Form 8-K were filed during the quarter ended 
          June 30, 1998:

          On April 1, 1998, the Company filed a Form 8-K/A under Item 7 which 
          amends the financial statements, exhibits or other portions of its 
          Current Report on Form 8-K dated February 2, 1998, related to the 
          completion of a transaction between the Company and MatchLogic, Inc. 
          (MatchLogic) whereby a wholly-owned subsidiary of the Company merged 
          (the Merger) with and into MatchLogic. Upon completion of the Merger, 
          MatchLogic became a wholly-owned subsidiary of the Company.

          On April 17, 1998, the Company filed a Form 8-K under Item 5 
          announcing that the Company entered into a definitive agreement to 
          acquire Classifieds2000, Inc. and under Item 7 regarding recent press 
          releases.

          On May 11, 1998, the Company filed a Form 8-K under Item 5 announcing 
          that the Company entered into a Netcenter Services Agreement with 
          Netscape Communications Corporation and under Item 7 regarding 
          current press releases.

          On May 15, 1998, the Company filed a Form 8-K under Item 5 regarding 
          the restatement of the Company's consolidated audited financial 
          statements to reflect the acquisition of MatchLogic, a company that 
          the Company acquired in February 1998 in a transaction accounted for 
          as a pooling of interests.

          On May 19, 1998, the Company filed a Form 8-K under Item 5 whereby 
          the Company reported selected data concerning its operations for the 
          30-day period ended April 30, 1998, subsequent to its April 1, 1998 
          acquisition of Classifieds2000, Inc.

          On June 1, 1998, the Company filed a Form 8-K under Item 5 regarding 
          an unsolicited business combination proposal.


                                   SIGNATURES

      In accordance with the requirements of the Securities Exchange Act, the
Registrant has caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                         EXCITE, INC.




Date:  December 8, 1998                  By: /s/ Robert C. Hood
                                            -----------------------------------
                                            Robert C. Hood
                                            Executive Vice President,
                                            Chief Administrative Officer and
                                            Chief Financial Officer





                                       12
<PAGE>   14
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<S>                                   <C>

 3.03               Certificate of Amendment to Restated Articles of
                    Incorporation, which is incorporated by reference to Exhibit
                    4.02 to the Registration Statement on Form S-8 (File No.
                    333-59329) filed with the Securities and Exchange Commission
                    on July 17, 1998.

10.01+              Netcenter Services Agreement dated as of April 29, 1998 
                    between the Registrant and Netscape Communication 
                    Corporation.

10.02*              Registrant's 1996 Equity Incentive Plan, as amended on June 
                    16, 1998, which is incorporated herein by reference to 
                    Exhibit 4.04 to the Registrant's Statement on Form S-8 
                    (File No. 333-59329) filed with the Securities and Exchange 
                    Commission on July 17, 1998.

10.04*              Registrant's 1996 Employee Stock Purchase Plan, as amended 
                    on June 16, 1998, which is incorporated herein by reference 
                    to Exhibit 4.05 to the Registrant's Statement on Form S-8 
                    (File No. 333-59329) filed with the Securities and Exchange 
                    Commission on July 17, 1998.

10.5+               Addendum No. 1 to Netcenter Services Agreement.

10.6                Amendment No. 2 to Netcenter Services Agreement.

10.7+               Amendment No. 3 to Netcenter Services Agreement.


27                  Financial Data Schedule. (EDGAR version only)

+    Confidential Treatment has been requested as to portions of this exhibit.

*    Indicates compensatory plan or arrangement.

</TABLE>