<PAGE>

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

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

                                    FORM 10-Q

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

(MARK ONE)

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

                       FOR THE PERIOD ENDED JUNE 30, 1999
                                       OR

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

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

                        Commission File Number 000-25139

                                 XOOM.COM, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

           DELAWARE                                    88-0361536
   (STATE OF INCORPORATION)               (I.R.S. EMPLOYER IDENTIFICATION NO.)

                        300 MONTGOMERY STREET, SUITE 300
                         SAN FRANCISCO, CALIFORNIA 94104
                                 (415) 288-2500
          (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                         Common Stock, $0.0001 Par Value
                                (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 / /


The number of shares outstanding of Registrant's Common Stock, $0.0001 par
value, was 18,129,978 at June 30, 1999.

<PAGE>

                                 XOOM.COM, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>
Part I         FINANCIAL INFORMATION

      Item 1.  Condensed Consolidated Financial Statements (Unaudited)

               Condensed Consolidated Balance Sheets
               June 30, 1999 and December 31, 1998.......................................    1

               Condensed Consolidated Statements of Operations
               Three and six months ended June 30, 1999 and 1998.........................    2

               Condensed Consolidated Statements of Cash Flows
               Six months ended June 30, 1999 and 1998...................................    3

               Notes to Condensed Consolidated Financial Statements......................    5

      Item 2.  Management's Discussion and Analysis of Financial Condition and
               Results of Operations.....................................................   12

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

Part II        OTHER INFORMATION

      Item 1.  Legal Proceedings.........................................................   39

      Item 2.  Changes in Securities and Use of Proceeds.................................   39

      Item 3.  Quantitative and Qualitative Disclosures about Market Risk................   40

      Item 4.  Submission of Matters to a Vote of Security Holders.......................   40

      Item 6.  Exhibits and Reports on Form 8-K..........................................   41

               Signatures................................................................   42

</TABLE>

<PAGE>

                                 XOOM.COM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       June 30,       December 31,
                                                                         1999            1998
                                                                       --------       ------------
                                                                     (UNAUDITED)
<S>                                                                  <C>              <C>
                                      ASSETS
Current assets:
   Cash, cash equivalents and marketable securities.............       $165,413        $ 56,575
   Accounts receivable, net.....................................          3,025           1,368
   Inventories..................................................            793             322
   Other current assets.........................................          2,450             308
                                                                       --------        --------
        Total current assets....................................        171,681          58,573
Fixed assets, net...............................................          4,499           2,071
Investments.....................................................         53,615              --
Intangible assets, net..........................................         61,353           5,517
Other assets....................................................          1,316             713
                                                                       --------        --------
        Total assets............................................       $292,464        $ 66,874
                                                                       --------        --------
                                                                       --------        --------

                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable.............................................        $ 3,516         $ 1,229
   Accrued compensation and related expenses....................          1,101             497
   Other accrued liabilities....................................          2,217           1,568
   Notes payable................................................          1,103           1,276
   Deferred revenue.............................................          2,676             443
   Contingency accrual..........................................          1,000           1,000
                                                                       --------        --------
        Total current liabilities...............................         11,613           6,013
Deferred revenue, less current portion..........................          2,500              --
Other long-term liabilities.....................................            429             528

Commitments and contingencies

Stockholders' equity:
   Preferred stock, $0.0001 par value:
     Authorized shares--5,000,000
     Issued and outstanding shares--none in 1999 and 1998.......             --              --
   Common stock, $0.0001 par value:
     Authorized shares--40,000,000
     Issued and outstanding shares--18,129,978 and 13,699,555
        in 1999 and 1998, respectively..........................        304,253          75,606
   Notes receivable from stockholders...........................           (995)            --
   Deferred compensation........................................           (499)           (904)
   Accumulated deficit..........................................        (24,837)        (14,369)
                                                                       --------        --------
        Total stockholders' equity..............................        277,922          60,333
                                                                       --------        --------
          Total liabilities and stockholders' equity............       $292,464        $ 66,874
                                                                       --------        --------
                                                                       --------        --------

</TABLE>

                             See accompanying notes.

                                       1
<PAGE>

                                 XOOM.COM, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     Three Months Ended         Six Months Ended
                                                                          June 30,                  June 30,
                                                                          --------                  --------
                                                                      1999         1998        1999          1998
                                                                      ----         ----        ----          ----
<S>                                                                  <C>         <C>         <C>            <C>
Net revenue:
   E-commerce..................................................      $ 3,297     $ 1,157    $  5,933        $ 1,834
   Advertising.................................................        3,210         272       4,975            355
   Licensing...................................................           18         287          39            376
                                                                     -------     -------    --------        -------
        Total net revenue......................................        6,525       1,716      10,947          2,565

Cost of e-commerce.............................................        2,607         621       4,649            899
Cost of advertising............................................           75          --          75             --
Cost of licensing..............................................           --          19          --             27
                                                                     -------     -------    --------        -------
     Cost of net revenue.......................................        2,682         640       4,724            926
                                                                     -------     -------    --------        -------
Gross profit...................................................        3,843       1,076       6,223          1,639

Operating expenses:
   Operating and development...................................        1,551         773       2,700          1,349
   Sales and marketing.........................................        5,104         455       7,538            717
   General and administrative..................................        2,043         785       3,666          1,099
   Amortization of deferred compensation.......................          175         728         405            807
   Purchased in-process research and development...............        2,603         330       2,603            660
   Amortization of intangible assets...........................        1,442         346       2,304            346
                                                                     -------     -------    --------        -------
        Total operating expenses...............................       12,918       3,417      19,216          4,978
                                                                     -------     -------    --------        -------
Loss from operations...........................................       (9,075)     (2,341)    (12,993)        (3,339)

   Other income, net...........................................        2,333           2       2,943          --
                                                                     -------     -------    --------        -------
Net loss.......................................................       (6,742)     (2,339)   $(10,050)       $(3,339)
                                                                     -------     -------    --------        -------
                                                                     -------     -------    --------        -------
Net loss per share--basic and diluted...........................     $ (0.40)    $ (0.33)   $  (0.66)       $ (0.52)
                                                                     -------     -------    --------        -------
                                                                     -------     -------    --------        -------
Number of shares used in per share calculation--basic and
   diluted.....................................................       16,777       6,983      15,288          6,402
                                                                     -------     -------    --------        -------
                                                                     -------     -------    --------        -------

</TABLE>

                             See accompanying notes.

                                       2
<PAGE>

                                  XOOM.COM, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                 Six Months Ended
                                                                                                      June 30,
                                                                                                 1999         1998
                                                                                                 ----         ----
<S>                                                                                            <C>         <C>
Cash used in operating activities:
   Net loss................................................................................    $ (10,050)   $(3,339)
   Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
     Purchased in-process research and development.........................................        2,603        660
     Depreciation and amortization.........................................................          708        225
     Amortization of intangible assets.....................................................        2,304        346
     Amortization of deferred compensation.................................................          405        807
     Issuance of common stock in exchange for Classic Media Holdings
        license rights.....................................................................         --          100
     Issuance of stock options to consultants..............................................         --          103
     Issuance of common stock to directors and consultants.................................          458         10
     Changes in operating assets and liabilities:
        Accounts receivable................................................................       (1,510)      (537)
        Inventories........................................................................         (471)       (65)
        Other current assets...............................................................       (2,136)        (8)
        Intangible assets..................................................................         --        1,567
        Other assets.......................................................................         (653)      (207)
        Accounts payable...................................................................        2,287        370
        Accrued compensation and related expenses..........................................          604         91
        Other accrued liabilities..........................................................           35        174
        Deferred revenue...................................................................         (342)        16
                                                                                               ---------    -------
Net cash (used in) provided by operating activities........................................       (5,758)       313

Cash used in investing activities:
        Purchases of fixed assets..........................................................       (2,907)      (360)
        Purchase of investments............................................................     (162,528)      --
        Maturities of investments..........................................................        7,500       --
        Cash paid in connection with the purchase of certain assets from Revolutionary
            Software, Inc. ................................................................         --         (273)
        Business combinations, net of cash acquired........................................         (975)      (230)
                                                                                                --------    -------
Net cash used in investing activities......................................................     (158,910)      (863)

Cash provided by financing activities:
        Proceeds from issuance of common stock in secondary public offering................      166,597       --
        Proceeds from issuance of common stock.............................................         --        4,374
        Proceeds from exercise of stock options............................................        1,182       --
        Proceeds from issuance of notes payable to stockholders............................         --          335
        Principal payments on capital lease obligations....................................          (16)      --
        Repayment of notes payable.........................................................         (252)      (111)
                                                                                                --------    -------
Net cash provided by financing activities..................................................      167,511      4,598
                                                                                                --------    -------
Net increase in cash and cash equivalents..................................................        2,843      4,048
Cash and cash equivalents at beginning of period...........................................       54,575          6
                                                                                                --------    -------
Cash and cash equivalents at end of period.................................................     $ 57,418    $ 4,054
                                                                                                --------    -------
                                                                                                --------    -------

</TABLE>

                                       3
<PAGE>

                                 XOOM.COM, INC.

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                  Six Months Ended
                                                                                                      June 30,
                                                                                                      --------
                                                                                                   1999       1998
                                                                                                   ----       ----
<S>                                                                                             <C>         <C>
SUPPLEMENTAL DISCLOSURES:
Non-cash transactions:
    Issuance of common stock in connection with business and technology acquisitions.........   $ 60,410    $ 4,218
                                                                                                --------    -------
                                                                                                --------    -------
    Issuance of notes payable in conjunction with business and technology acquisitions.......   $    --     $ 1,906
                                                                                                --------    -------
                                                                                                --------    -------
    Investment in a company in connection with a media contract..............................   $  5,000    $   --
                                                                                                --------    -------
                                                                                                --------    -------
    Issuance of common stock in exchange for stock subscriptions receivable...................  $    --     $   261
                                                                                                --------    -------
                                                                                                --------    -------
    Issuance of common stock in exchange for cancellation of notes payable to
     stockholder.............................................................................   $    --     $   150
                                                                                                --------    -------
                                                                                                --------    -------
    Common stock issued to satisfy Paralogic Corporation legal obligation....................   $    --     $   165
                                                                                                --------    -------
                                                                                                --------    -------
    Deferred compensation resulting from grant of stock options..............................   $    --     $   972
                                                                                                --------    -------
                                                                                                --------    -------
Cash paid for interest.......................................................................   $     32    $   --
                                                                                                --------    -------
                                                                                                --------    -------

</TABLE>

                             See accompanying notes.

                                       4
<PAGE>

                                 XOOM.COM, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

     The condensed consolidated financial statements at June 30, 1999 and
1998 and for the three and six-month periods then ended are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair presentation of
the financial position and operating results for the interim periods. The
condensed consolidated financial statements at June 30, 1999 should be read
in conjunction with the consolidated financial statements and notes thereto,
together with management's discussion and analysis of financial condition and
results of operations, contained in the Company's Annual Report to
Stockholders incorporated by reference in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998. The results of operations
for the three and six months ended June 30, 1999 are not necessarily
indicative of the results for the entire fiscal year ending December 31, 1999.

2.   BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS

         During the six months ended June 30, 1999, the Company made business
acquisitions described in the paragraphs that follow, each of which has been
accounted for as a purchase. The condensed consolidated financial statements
include the operating results of each business from the date of acquisition.

         PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT. The amounts allocated
to purchased research and development were determined through established
valuation techniques in the high-technology Internet industry and were
expensed upon acquisition, because technological feasibility had not been
established and no future alternative uses existed. The values assigned to
purchased in-process technology were determined by identifying the on-going
research projects for which technological feasibility had not been achieved
and assessing the state of completion of the research and development effort.
The state of completion was determined by estimating the costs and time
incurred to date relative to those costs and time to be incurred to develop
the purchased in-process technology into commercially viable products,
estimating the resulting net cash flows only from the percentage of research
and development efforts complete at the date of acquisition, and discounting
the net cash flows back to their present value. The discount rate included a
factor that took into account the uncertainty surrounding the successful
development of the purchased in-process technology projects.

         PURCHASED TECHNOLOGY. To determine the values of purchased
technology, the expected future cash flows of the existing developed
technologies were discounted taking into account the characteristics and
applications of the product, the size of existing markets, growth rates of
existing and future markets as well as an evaluation of past and anticipated
product lifecycles.

         ACQUIRED WORKFORCE. To determine the values of the acquired
workforce, employees were identified who would require significant cost to
replace and train. Then each employee's fully-burdened cost (salary,
benefits, overhead), the cost to train the employee, and the recruiting costs
(locating, interviewing, hiring) were estimated. These costs were then summed
up and tax effected to estimate the value of the assembled workforce.

         Amounts allocated to purchased technology, goodwill and other
intangible assets are being amortized on a straight-line basis over periods
of three to four years.

FOCUSED PRESENCE, INC.

     On April 1, 1999, the Company acquired 100% of the outstanding shares
Focused Presence, Inc., a company that operates a global directory of small
businesses. The purchase consideration consisted of 21,894 shares of the

                                       5
<PAGE>

Company's common stock with an estimated fair value of $77.23 per share, and
acquisition costs of approximately $4,000. The Company accounted for this
acquisition as a purchase.

         The purchase consideration was allocated to the acquired assets and
assumed liabilities based on fair values as follows (in thousands):

<TABLE>
<S>                                                             <C>
                Cash............................................    $     1
                Other current assets............................         61
                Fixed assets, net...............................          3
                Goodwill........................................      1,760
                Liabilities assumed.............................       (130)
                                                                    -------
                Total purchase consideration....................    $ 1,695
                                                                    -------
                                                                    -------
</TABLE>

MIGHTYMAIL NETWORKS, INC.

     On May 3, 1999, the Company acquired 100% of the outstanding shares of
MightyMail Networks, Inc., a developer of an enhanced e-mail product that
enables customization of e-mail according to user preferences. The purchase
consideration consisted of 268,761 shares of the Company's common stock with
an estimated fair value of $72.10 per share, the assumption of 9,061 and
12,121 employee stock options at a price per share of $70.47 and $55.91,
respectively, and acquisition costs of approximately $300,000. In addition,
67,186 shares of the Company's common stock were placed into an escrow
account. Of the shares held in escrow, 25% will be released in November 1999
and in May 2000, if certain performance objectives are met, and 50% will be
released in May 2000, upon the expiration of certain indemnification
obligations.


     The purchase consideration was allocated to the acquired assets and
assumed liabilities based on fair values as follows (in thousands):

<TABLE>
<S>                                                                      <C>
     Accounts receivable...............................................      $ 19
     Net fixed assets..................................................       132
     Other long-term assets............................................        50
     Notes receivable from shareholders................................       995
     Purchased in-process research and development charged to
        operations in the quarter ended June 30, 1999..................     1,082
     Purchased technology..............................................     3,321
     Acquired workforce................................................       176
     Goodwill  ........................................................    17,735
     Liabilities assumed...............................................      (396)
                                                                         --------
     Total purchase consideration......................................  $ 23,114
                                                                         --------
                                                                         --------
</TABLE>

NET FLOPPY, INC.

         On May 5, 1999, the Company acquired 100% of the outstanding shares
of Net Floppy, Inc., a provider of online file storage for web users. The
purchase consideration consisted of 7,528 shares of the Company's common
stock with an estimated fair value of $72.10 per share, approximately
$560,000 in cash, and approximately $57,000 of acquisition costs. In
addition, 7,526 shares of the Company's common stock were placed into an
escrow account. Of the shares held in escrow, 50% will be released if certain
performance objectives are met in November 1999 and 50% will be released in
May 2000, upon the expiration of certain indemnification obligations.

         The purchase consideration was allocated to the acquired assets and
assumed liabilities based on fair values as follows (in thousands):

<TABLE>
<S>                                                                      <C>
         Accounts receivable and other current assets..................  $      2
         Goodwill  ....................................................     1,443
         Liabilities assumed...........................................        (5)
                                                                         --------
         Total purchase consideration..................................  $  1,440
                                                                         --------
                                                                         --------
</TABLE>

PARALOGIC SOFTWARE CORPORATION

         On June 16, 1999, the Company acquired 100% of the outstanding
shares of Paralogic Software Corporation, a provider of Java based community
products and services, such as customizable chat rooms, discussion boards,
guestbooks and event calendars. The purchase consideration consisted of
654,018 shares of common stock at $47.13 per share, the assumption of 82,733
and 12,001 employee stock options at a price per share of $46.67 and $33.05,
respectively, and acquisition costs of approximately $315,000.

                                       6
<PAGE>
         The purchase consideration was allocated to the acquired assets and
assumed liabilities based on fair values as follows (in thousands):
<TABLE>
<S>                                                                      <C>
         Cash.........................................................   $    134
         Accounts receivable and other current assets.................         21
         Net fixed assets.............................................         43
         Purchased in-process research and development charged to
            operations in the quarter ended June 30, 1999.............      1,521
         Purchased technology.........................................      4,986
         Acquired workforce...........................................         81
         Goodwill  ...................................................     28,639
         Liabilities assumed..........................................        (29)
                                                                         --------
         Total purchase consideration.................................   $ 35,396
                                                                         --------
                                                                         --------
</TABLE>
         SUMMARY OF PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, PURCHASED
TECHNOLOGY AND ACQUIRED WORKFORCE. The intangible assets, as of June 30, 1999,
including all acquisitions, are summarized as follows (in thousands):
<TABLE>
<S>                                                                      <C>
         Acquired workforce...........................................   $    257
         Purchased technology.........................................     10,662
         Goodwill  ...................................................     54,580
                                                                         --------
             Intangible assets........................................     65,499
         Accumulated amortization.....................................     (4,146)
                                                                         --------
             Intangible assets, net...................................   $ 61,353
                                                                         --------
                                                                         --------
</TABLE>
         The total purchased in-process research and development that had no
alternative future use, and as such was charged to operations in the three
months ended June 30, 1999 is summarized below (in thousands):
<TABLE>
<S>                                                                      <C>
         MightyMail Networks, Inc.....................................   $  1,082
         Paralogic Software Corporation...............................      1,521
                                                                         --------
         Total purchased in-process research and development..........   $  2,603
                                                                         --------
                                                                         --------
</TABLE>
         The following unaudited pro forma summary represents the
consolidated results of operations as if all the acquisitions to date had
occurred at the beginning of the periods presented and are not intended to be
indicative of future results.
<TABLE>
<CAPTION>
                                                                            Period Ended June 30,
         (IN THOUSANDS)                                                     1999             1998
                                                                            ----             ----
                                                                                     (unaudited)
<S>                                                                      <C>               <C>
         Pro forma net revenue........................................   $  11,362         $  3,659
         Pro forma loss from operations...............................     (18,948)         (10,397)
         Pro forma net loss...........................................     (16,002)         (10,422)
         Pro forma net loss per share-basic and diluted...............       (1.05)           (1.40)
         Number of shares used in pro forma per share
            calculation - basic and diluted...........................      15,288            7,429
</TABLE>
         The pro forma results are not necessarily indicative of what
actually would have occurred if the acquisitions had been in effect for the
entire period presented and are not intended to be a projection of future
results. In-process research and development charges of $2,603,000 and
$330,000 were excluded from the pro forma net loss and pro forma net loss per
share figures for the periods ended June 30, 1999 and 1998, respectively.

                                       7
<PAGE>

NBC INTERNET, INC.

         On May 9, 1999, the Company, certain subsidiaries of the Company,
SNAP! LLC, National Broadcasting Company, Inc., and certain of its affiliates
and CNET, Inc. entered into a series of definitive agreements relating to the
formation of a new company to be named NBC Internet, Inc. On each of June 11,
1999, and July 8, 1999, an amendment to one of each definitive agreements was
signed. The terms of the original agreement and each amendment are filed with
the Securities and Exchange Commission.

3.   CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES

         The Company has classified all marketable securities as
available-for-sale. Available-for-sale securities are carried at amounts that
approximate fair market value based on quoted market prices. Realized gains
and losses and declines in value judged to be other-than-temporary on
available-for-sale securities are included in interest income. Interest on
securities classified as available-for-sale is also included in interest
income.

         The following is a summary of available-for-sale securities (in
thousands):

<TABLE>
<CAPTION>
                                                                           June 30,      December 31,
                                                                            1999             1998
                                                                            ----             ----
<S>                                                                      <C>             <C>
         Demand and money market instrument accounts..................   $   57,418        $  8,731
         Corporate bonds and notes....................................       84,495          36,444
         Market auction preferred stock...............................       23,500          11,400
                                                                         ----------        --------
            Total available-for-sale securities.......................      165,413          56,575
         Less amounts included in cash and cash equivalents...........      (57,418)        (54,575)
                                                                         ----------        --------
            Marketable securities.....................................   $  107,995        $  2,000
                                                                         ----------        --------
                                                                         ----------        --------
</TABLE>

         The cost of securities sold is based on the specific identification
method. All available-for-sale securities at June 30, 1999 have maturity
dates in 1999 and 2000.

4.    NOTES RECEIVABLE FROM STOCKHOLDERS

         On June 16, 1999, in connection with its acquisition of MightyMail
Networks, Inc., the Company assumed stock subscriptions receivable from
related parties in exchange for shares of common stock. As of June 30, 1999,
outstanding subscriptions receivable amounted to approximately $995,000. All
amounts mature by April 2002 and bear interest at a rate of 5.28% per annum.

5.    STOCKHOLDERS' EQUITY

SECONDARY PUBLIC OFFERING

         On April 9, 1999, the Company completed a secondary public offering
of its common stock and issued 4,600,000 shares (including 600,000 shares
issued in connection with the exercise of the underwriter over-allotment
option) at a price of $66.00 per share. Of the 4,600,000 shares of common
stock sold in the offering, 2,659,800 were sold by the Company and 1,940,200
shares were sold by existing stockholders. The Company received net proceeds
from the offering of approximately $167 million.

1998 EMPLOYEE STOCK PURCHASE PLAN

         The Company's 1998 Employee Stock Purchase Plan was terminated by
the Board of Directors in May 1999.

                                       8
<PAGE>

6.   NET LOSS PER SHARE

         Basic and diluted net loss per share is calculated using the
weighted average number of common shares outstanding. Diluted net loss per
share is computed using the weighted average number of common shares
outstanding and dilutive common stock equivalents outstanding during the
period. Common equivalent shares from stock options (using the treasury stock
method) are excluded from the computation of net loss per share as their
effect is anti-dilutive.

7.  COMPREHENSIVE INCOME (LOSS)

         As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130")
which establishes new rules for the reporting and display of comprehensive
income (loss) and its components. The adoption of this Statement had no
impact on the Company's net loss or stockholders' equity. SFAS 130 requires
unrealized gains and losses on the Company's available-for-sale securities to
be included in other comprehensive loss.

The components of the Company's comprehensive loss are as follows (in
thousands):

<TABLE>
<CAPTION>
                                         Three Months Ended            Six Months Ended
                                              June 30,                     June 30,
                                              --------                     --------
                                         1999          1998          1999            1998
                                         ----          ----          ----            ----
<S>                                    <C>           <C>           <C>               <C>
Net loss                               $ (6,742)     $ (2,339)     $ (10,050)        $ (3,339)
Unrealized loss on investments             (418)           --           (418)              --
                                       --------      --------      ---------         --------
Comprehensive loss                       (7,160)       (2,339)     $ (10,468)        $ (3,339)
                                       --------      --------      ---------         --------
                                       --------      --------      ---------         --------
</TABLE>


8.   LEGAL PROCEEDINGS

         In January 1998, the Company became aware that Imageline, Inc.
("Imageline") claimed to own the copyright in certain images that a third
party, Sprint Software Pty Ltd ("Sprint") had licensed to the Company. Some
clip art images that Imageline alleged infringed Imageline's copyright were
included by the Company in versions of the Company's Web Clip Empire product
and licensed by the Company to third parties, including other software clip
publishers. The Company's contracts with such publishers require the Company
to indemnify the publisher if copyrighted material licensed from the Company
infringes a copyright. Imageline claims that the Company's infringement of
Imageline's copyrights is ongoing. The Company and Imageline had engaged in
discussions, but were unable to reach any agreement regarding a resolution of
this matter.

         On August 27, 1998, the Company filed a lawsuit in the United States
District Court for the Eastern District of Virginia against Imageline,
certain parties affiliated with Imageline, and Sprint regarding the Company's
and its licensees' alleged infringement of Imageline's copyright in certain
clip art that the Company licensed from Sprint. The lawsuit seeks, among
other relief, disclosure of information from Imageline concerning the alleged
copyright infringement, a declaratory judgment concerning the validity and
enforceability of Imageline's copyrights and copyright registrations, a
declaratory judgment regarding damages, if any, owed by the Company to
Imageline, and indemnification from Sprint for damages, if any, owed by the
Company to Imageline. There is no contractual limitation on Sprint's
indemnification. While the Company is seeking indemnification from Sprint for
damages, if any, there can be no assurance that Sprint will be able to
fulfill the indemnity obligations under its license

                                       9
<PAGE>

agreements with the Company. In addition, the Company may be subject to
claims by third parties seeking indemnification from the Company in
connection with the alleged infringement of the Imageline copyrights.

         On September 17, 1998, Imageline filed a counterclaim, which
Imageline amended in January 1999, seeking up to $60.0 million in damages. In
March 1999, the parties completed the discovery process and filed separate
motions for summary judgment. On April 5, 1999, the Court granted one of the
Company's motions for partial summary judgment and stayed the case to allow
Imageline to file all necessary copyright registration applications to cover
the clip art images.

         Based on the discussions with Imageline, the Company believes the
range of liability related to this matter is from $0 up to $10,000,000;
however, the Company believes it is unlikely that the liability would exceed
$1,000,000. Accordingly, the Company reserved $1,000,000 for this potential
liability, the expense of which was included in non-recurring charges for the
year ended December 31, 1997. The Company believes that the $1,000,000
accrual represents a reasonable estimate of the loss that could be incurred
in the Imageline dispute. Based on information available to date management
does not believe that the outcome of this matter will have a material effect
on the Company's financial position, results of operations and cash flows
over and above the $1,000,000 accrued in the 1997 financial statements. If
not successful in defending this claim, the resulting outcome could have a
material adverse impact on the Company's business, results of operations,
cash flows and financial condition.

         Zoom Telephonics, Inc. filed a lawsuit against the Company in
September 1998 alleging trademark infringement and related statutory
violations. The Company was not served with Zoom Telephonics' complaint until
January 1999. Zoom Telephonics has demanded that the Company stop using the
XOOM trademark and has asked for an unspecified amount of money damages. The
Company responded to the complaint in February 1999. In April 1999, Zoom
Telephonics filed a motion for a preliminary injunction to stop the Company
from using any mark containing "Xoom." In June 1999, the Company filed an
opposition to Zoom Telephonics' motion for preliminary injunction and filed a
motion to suspend all proceedings in this matter until September 30, 1999.
Although the Company believes that Zoom's claims are without merit, such
litigation could have a material adverse effect on the Company's business,
results of operations and financial condition, particularly if such
litigation forces the Company to make substantial changes to its name and
trademark usage. However, based on information available to date, the Company
does not believe that the ultimate outcome of this matter will have a
material adverse effect on its results of operations, cash flows, or
financial position.

9.   RECENT ACCOUNTING PRONOUNCEMENTS

         The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
Segments of an Enterprise and Related Information," which establishes
standards for the way public business enterprises report information in
annual statements and interim financial reports regarding operating segments,
products and services, geographic areas and major customers. This statement
is effective for financial statements for periods beginning after December
15, 1997. The adoption of this statement did not have a significant impact on
the way the Company reports information in its annual statements and interim
financial reports.

10.  SUBSEQUENT EVENTS

         On July 12, 1999, a subsidiary of the Company filed a Form S-4 with
the Securities and Exchange Commission under such subsidiary's new corporate
name, NBC Internet, Inc.

         On July 29, 1999, the Company issued 960,028 shares to National
Broadcasting Company, Inc. for $57.29 per share in connection with a Stock
Purchase Agreement dated June 11, 1999. The Company received proceeds of
$55.0 million. The Stock Purchase Agreement is filed on Form 8-K with the
Securities and Exchange Commission.

                                       10
<PAGE>

         On August 3, 1999, the Company acquired 100% of the outstanding
shares of Liquid Market, Inc., the developer of a next-generation on-line
comparison shopping guide and purchasing service. The purchase consideration
consisted of 930,426 shares of the Company's common stock with an estimated
fair value of $40.70 per share. In addition, 212,202 shares of the Company's
common stock will be placed into an escrow account. Of the shares held in
escrow, 50% will be released on various milestone dates prior to June 2000,
upon the completion of certain performance objectives, and 50% will be
released in August 2000, upon the expiration of certain indemnification
obligations. The Company will account for this acquisition as a purchase.

         On August 3, 1999, the Company acquired all of the outstanding
shares of Private One, Inc., a designer and developer of a secure e-mail
software service. The purchase consideration consisted of 60,000 shares of
the Company's common stock. In addition, 12,000 shares of the Company's
common stock will be placed into an escrow account. Of the shares held in
escrow, 25% will be released in February 2000, and 25% in August 2000, or
upon the completion of certain milestones, whichever is earlier. The
remaining 50% of the shares held in escrow will be released in August 2000,
upon the expiration of certain indemnification obligations. The Company will
account for this acquisition as a purchase.

         In August 1999, the Company entered into a 10-year non-cancelable
leasing agreement for approximately 187,000 square feet of office space
located in San Francisco, California. Minimum lease commitments for the years
ended December 31, 1999, 2000, 2001, 2002, 2003, and thereafter are
approximately $339,000, $4,707,000, $5,655,000 $5,655,000, $5,655,000, and
$34,539,000, respectively. In August 1999, in connection with the lease
agreement, the Company entered into an irrevocable letter of credit with a
commercial bank in the amount of $4,500,000 as a security deposit payable to
the landlord.

                                       11
<PAGE>

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

         THE DISCUSSION IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" CONTAINS TREND ANALYSES AND OTHER
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. ALL STATEMENTS, TREND ANALYSES AND OTHER INFORMATION CONTAINED HEREIN
RELATIVE TO MARKETS FOR XOOM.COM's SERVICES AND PRODUCTS AND TRENDS IN
REVENUE, AS WELL AS OTHER STATEMENTS INCLUDING SUCH WORDS AS "ANTICIPATE,"
"BELIEVE," "PLAN," "ESTIMATE," "EXPECT," "GOAL," AND "INTEND" AND OTHER
SIMILAR EXPRESSIONS CONSTITUTE FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO BUSINESS AND ECONOMIC RISKS, AND
XOOM.COM'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE
FORWARD-LOOKING STATEMENTS AS A RESULT OF THE PROPOSED MERGER WITH NBC MEDIA
CORPORATION, WHICH IS EXPECTED TO CLOSE IN THE FOURTH QUARTER OF 1999, AND
OTHER FACTORS SET FORTH ELSEWHERE HEREIN, INCLUDING "CERTAIN RISK FACTORS
WHICH MAY IMPACT FUTURE OPERATING RESULTS," PAGE 28, AS WELL AS FACTORS SET
FORTH IN XOOM.COM'S ANNUAL REPORT ON FORM 10-K.

GENERAL

         Xoom.com is one of the fastest growing direct e-commerce companies
on the Internet. We attract members to our community site with a variety of
free services, including homepages, e-mail, chat rooms, electronic
newsletters, clip art and software libraries, page counters and online
greeting cards. Our members can also join topical communities where they can
exchange ideas and information. Members may also enter specialized forums
such as Investor Place, Women's Circle or Health & Fitness, where they can
gain access to professional content and special product and service offers
available only on our Web site. Upon registration, members agree to receive
periodic offers of products and services via e-mail. These competitively
priced and continuously updated offers include computer software, computer
accessories and peripherals, consumer electronics, clip art on CD-ROM and
collectible items. In addition, we offer services such as a travel club, long
distance telephone services and a DVD club. Our new offerings will include
services such as home and auto insurance, wireless telecommunications
services and membership clubs, and products such as magazine subscriptions,
appliances, games, photography supplies and gardening tools, among others. We
believe that our rapidly growing base of self-qualified members provides us
with highly attractive e-commerce opportunities. In addition, we believe that
our high levels of traffic and the number of unique users that visit our site
or affiliated sites on which we offer services on a monthly basis present an
attractive platform for advertising.

         We were incorporated in April 1996 and commenced offering products
for sale on our Web site in March 1997. From inception through December 1996,
we had no sales and our operating activities related primarily to developing
necessary computer infrastructure, recruiting personnel, raising capital and
initial planning and development of the Xoom.com site. For the period
beginning with the operation of the Xoom.com site through December 31, 1997,
we continued these activities and focused on building sales momentum,
establishing relationships with manufacturers, marketing the Xoom.com brand
and establishing customer service and fulfillment operations.

         From inception through June 30, 1999, we generated total net revenue
of approximately $20.1 million. Since January 1998, the number of members has
grown from 100,000 to 9.2 million as of July 31, 1999.

         We have not achieved profitability on a quarterly or annual basis to
date, and anticipate that we will incur net losses for the foreseeable
future. The extent of these losses will depend, in part, on the amount and
rates of growth in our net revenue from e-commerce and advertising. We expect
our operating expenses to increase significantly,

                                       12
<PAGE>

especially in the areas of sales and marketing and brand promotion. As a
result, we will need to increase our quarterly net revenue to achieve
profitability. We believe that period-to-period comparisons of our operating
results are not meaningful and that you should not rely upon the results for
any period as an indication of future performance. Our business, results of
operations and financial condition will be materially and adversely affected
if:

         -    net revenue does not grow at anticipated rates;

         -    increases in operating expenses are not offset by commensurate
              increases in net revenue; or

         -    we are unable to adjust operating expense levels in light of net
              revenue.

         We expect operating expenses will continue to increase in the future
as we continue to seek to expand our business. To the extent that these
expenses are not accompanied by an increase in net revenue, our business,
results of operations and financial condition could be materially adversely
affected. Our operating losses might increase in the future, and we cannot
guarantee that we will ever achieve or sustain profitability. See "Certain
Risk Factors Which Might Impact Future Operating Results--We cannot assure
you that we will be profitable because we have operated our business only for
a short period of time."

         Since January 1, 1999, we have entered into various business and
technology acquisitions, license arrangements and strategic alliances in
order to build our communities, provide community-specific content, generate
additional traffic, increase the number of members and establish additional
sources of net revenue. In April 1999, we acquired Focused Presence, Inc., a
company that operates a global directory of small businesses, for
approximately $1.7 million. In May 1999 we acquired Net Floppy, Inc, a
provider of online file storage for Web users for approximately $1.4 million,
and we acquired MightyMail Networks, Inc., a developer of an enhanced e-mail
product that enables customization of e-mail according to user preferences
for approximately $23.1 million. In June 1999, we acquired Paralogic Software
Corporation, which provides Web site authoring and community building tools,
such as Java based community products and services, including customizable
chat rooms, discussion boards, guestbooks and event calendars, for
approximately $35.4 million.

         Because most Internet business acquisitions involve the purchase of
significant amounts of intangible assets, acquisitions of such businesses
also result in the recording of goodwill, purchased technology, and acquired
workforce, and significant charges for purchased in-process research and
development. During the three months ended June 30, 1999, we expensed $2.6
million for purchased in-process research and development and $1.4 million
for the amortization of goodwill, purchased technology, and acquired
workforce. During the same period ended June 30, 1998, we expensed $330,000
for purchased in-process research and development and $346,000 for the
amortization of goodwill and purchased technology. During the six months
ended June 30, 1999, we expensed $2.6 million for purchased in-process
research and development and $2.3 million for the amortization of goodwill,
purchased technology, and acquired workforce. During the same period ended
June 30, 1998, we expensed $660,000 for purchased in-process research and
development and $346,000 for the amortization of goodwill and purchased
technology.

         We intend to continue making acquisitions to increase online reach
and membership and to seek additional strategic alliances with content and
distribution partners, including alliances that create co-branded sites
through which we market our services. Acquisitions carry numerous risks and
uncertainties, including:

         -    difficulties in integrating operations, personnel, technologies,
              products and the information systems of the acquired companies;

         -    diversion of management's attention from other business concerns;

         -    risks of entering geographic and business markets in which we
              have little or no prior experience; and

         -    potential loss of key employees of acquired entities.

                                       13
<PAGE>

         We cannot guarantee that we will be able to successfully integrate
any businesses, products, technologies or personnel that might be acquired in
the future. A failure to successfully integrate acquired entities or assets
could have a material adverse effect on our business, results of operations
and financial condition. In addition, we cannot guarantee that we will be
successful in identifying and closing transactions with potential acquisition
candidates. See "Certain Risk Factors Which Might Impact Future Operating
Results--If we are unable to successfully integrate future acquisitions into
our operation, then our business and results of operations could be adversely
affected."

         International sales comprised approximately 13% of total net revenue
for the three months ended June 30, 1999 and they represented 32% of total
net revenue for the same period ended June 30, 1998. This consisted of
$818,000 in net revenue for the three months ended June 30, 1999 and $554,000
in net revenue for the same period ended June 30, 1998. International sales
comprised approximately 16% of total net revenue for the six months ended
June 30, 1999 and 31% of total net revenue for the same period ended June 30,
1998. This consisted of $1.7 million in net revenue during the six months
ended June 30, 1999 and $802,000 in net revenue during the same period ended
June 30, 1998. The decreases in the percentage of international revenue in
both periods are due to the overall increase in domestic revenue. See
"Certain Risk Factors Which Might Impact Future Operating Results--Our
international operations are subject to risks that could have a material
adverse effect on our results of operations."

         We will need to increase our inventory levels in the future to
support a wider base of e-commerce products and to take advantage of volume
purchase discounts. We contract with a third party warehousing and order
fulfillment company to stock inventory and ship products directly to
customers. We take title to this inventory, have responsibility for this
inventory, and record inventory on our balance sheet until the final shipment
to customers or other disposition of the inventory. There are inherent risks
and costs in stocking inventory and coordinating with a third party
warehousing and order fulfillment company. These risks include, but are not
limited to, product obsolescence, excess inventory, and inventory shortages
resulting in unfulfilled orders, which could materially adversely affect
operating results in the future. See "Certain Risk Factors Which Might Impact
Future Operating Results--Any failure of our network infrastructure could
have a material adverse effect on our results of operations" and "--We depend
on our vendors and suppliers."

         As a strategic response to changes in the competitive environment,
we might from time to time make certain pricing, service or marketing
decisions or pursue business combinations that could have a material adverse
effect on our business, results of operations and financial condition. In
order to accelerate the promotion of the Xoom.com brand, we intend to
significantly increase our marketing budget, which could materially and
adversely affect our business, results of operations and financial condition.
We expect to experience seasonality in our business, with user traffic on the
Xoom.com site potentially being lower during the summer and year-end vacation
and holiday periods when overall usage of the Web is lower. Additionally,
seasonality may significantly affect our advertising revenue during the first
and third calendar quarters, as advertisers historically spend less during
these periods. Because Web-based commerce and advertising is an emerging
market, additional seasonal and other patterns may develop in the future as
the market matures. Any seasonality is likely to cause quarterly fluctuations
in our operating results, and these patterns could have a material adverse
effect on our business, results of operations and financial condition.

                                       14
<PAGE>

RESULTS OF OPERATIONS

         The following table presents certain consolidated statement of
operations data for the periods indicated as a percentage of total net
revenue.

<TABLE>
<CAPTION>
                                                                   Three Months Ended      Six Months Ended
                                                                        June 30,               June 30,
                                                                        --------               --------
                                                                    1999        1998       1999       1998
                                                                    ----        ----       ----       ----
<S>                                                               <C>         <C>        <C>        <C>
Net revenue:
     E-commerce...............................................      50.5%       67.4%      54.2%      71.5%
     Advertising..............................................      49.2        15.9       45.4       13.8
     Licensing................................................       0.3        16.7        0.4       14.7
                                                                  ------      ------     ------     ------
          Total net revenue...................................     100.0       100.0      100.0      100.0
Cost of net revenue(1):
     Cost of e-commerce.......................................      40.0        36.2       42.5       35.0
     Cost of advertising revenue..............................       1.1        --          0.7       --
     Cost of licensing........................................      --           1.1       --          1.1
                                                                  ------      ------     ------     ------
   Cost of net revenue........................................      41.1        37.3       43.2       36.1
                                                                  ------      ------     ------     ------
Gross profit..................................................      58.9        62.7       56.8       63.9
Operating expenses:
     Operating and development................................      23.8        45.0       24.7       52.6
     Sales and marketing......................................      78.2        26.5       68.8       28.0
     General and administrative...............................      31.3        45.8       33.5       42.8
     Purchased in-process research and development............       2.7        42.4        3.7       31.5
     Amortization of deferred compensation....................      39.9        19.2       23.8       25.7
     Amortization of intangible assets........................      22.1        20.2       21.0       13.5
                                                                  ------      ------     ------     ------
          Total operating expenses............................     198.0       199.1      175.5      194.1
                                                                  ------      ------     ------     ------
Loss from operations..........................................    (139.1)     (136.4)    (118.7)    (130.2)
Interest income...............................................      36.3         0.1       27.5       --
Interest expense..............................................      (0.5)       --         (0.6)      --
                                                                  ------      ------     ------     ------
Net loss......................................................    (103.3)%    (136.3)%    (91.8)%   (130.2)%
                                                                  ------      ------     ------     ------
                                                                  ------      ------     ------     ------
</TABLE>

  (1) There were no material costs of advertising revenue during 1998.

NET REVENUE

         Total net revenue for the three months ended June 30, 1999 was $6.5
million, an increase of approximately $4.8 million over revenues of $1.7
million for the three months ended June 30, 1998. Total net revenue for the
six months ended June 30, 1999 was $10.9 million, an increase of
approximately $8.3 million over revenues of $2.6 for the six months ended
June 30, 1998. The increases in both the three-month and six-month periods
were primarily due to the following three factors: (A) the expansion of our
membership base; (B) an increase in the frequency of e-mail offerings and
broader product offerings (which resulted in an increase in product sales
through e-commerce); and (C) an increase in Web-based advertising (our higher
Web site traffic increased our attractiveness to advertisers).

                                       15
<PAGE>

E-COMMERCE REVENUE

         E-commerce revenue increased to $3.3 million in the three months
ended June 30, 1999 from $1.2 million in the three months ended June 30,
1998. E-commerce revenue increased to $5.9 million in the six months ended
June 30, 1999 from $1.8 million in the six months ended June 30, 1998. The
increases in net revenue in both periods are primarily due to the expansion
of our membership base, which resulted in an increase in product sales, as
well as expansion of the breadth of products offered. The percentage of our
total net revenue attributable to e-commerce revenue decreased to 50.5% in
the three months ended June 30, 1999 from 67.4% in the three months ended
June 30, 1998. The percentage of our total net revenue attributable to
e-commerce revenue decreased to 54.2% in the six months ended June 30, 1999
from 71.5% in the six months ended June 30, 1998. The decreases in both
periods were due to the fact that advertising revenue grew at a more rapid
rate than e-commerce revenue during the three and six months ended June 30,
1999 as compared to the three and six months ended June 30, 1998. We expect
e-commerce revenue to continue to account for a large percentage of net
revenue as we expand our product offerings and increase our direct e-commerce
response rates through better member demographic information and targeting of
product offers.

         We believe that offering our customers attractive prices is an
essential component of our business strategy. We may in the future increase
the discounts we offer our customers and may otherwise alter our pricing
structures and policies. We anticipate that any increase in discounts or
price reductions will reduce gross margins below those we experienced for the
three and six months ended June 30, 1999 and 1998.

         ADVERTISING REVENUE

         Advertising revenue increased to $3.2 million in the three months
ended June 30, 1999 from $272,000 in the three months ended June 30, 1998.
Advertising revenue increased to $5.0 million in the six months ended June
30, 1999 from $355,000 in the six months ended June 30, 1998. The percentage
of our total net revenue attributable to advertising revenue increased to
49.2% in the three months ended June 30, 1999 from 15.9% in the three months
ended June 30, 1998. The percentage of our total net revenue attributable to
advertising revenue increased to 45.4% in the six months ended June 30, 1999
from 13.8% in the six months ended June 30, 1998. The increases in
advertising revenue in each period in both absolute dollars and in percentage
of net revenue are primarily a result of the increase in our membership,
increased site traffic, and expansion of our advertising sales force. As our
membership base continues to grow and the demand for advertising on our
Web-site remains strong, we can expect that our advertising revenues will
continue to represent a large percentage of our overall net revenue.

         LICENSING REVENUE

         Licensing revenue decreased to $18,000 in the three months ended
June 30, 1999 from $287,000 in the three months ended June 30, 1998.
Licensing revenue decreased to $39,000 in the six months ended June 30, 1999
from $376,000 in the three months ended June 30, 1998. As we expand our
e-commerce and advertising revenue, we can expect that licensing revenue will
continue to represent a small percentage of net revenue.

COST OF NET REVENUE

         Gross margins decreased to 58.9% in the three months ended June 30,
1999 from 62.7% in the three months ended June 30, 1998. Gross margins
decreased to 56.8% in the six months ended June 30, 1999 from 63.9% in the
six months ended June 30, 1998. Both decreases were a result of a change in
the overall product mix. In the three and six months ended June 30, 1999, we
began selling a broader range of products than in the three and six months
ended June 30, 1998. The new product mix includes higher priced items (such
as DVD's and digital cameras) that have lower gross margin percentages.

                                       16
<PAGE>

         COST OF E-COMMERCE REVENUE

         Cost of e-commerce revenue consists primarily of the costs of
merchandise sold to customers, credit card commissions, product fulfillment,
and outbound shipping and handling costs. Cost of e-commerce was $2.6 million
for the three months ended June 30, 1999 and it was $621,000 for the same
period ended June 30, 1998. Cost of e-commerce revenue was $4.6 million for
the six months ended June 30, 1999 and it was $899,000 for the same period
ended June 30, 1998. As a percentage of e-commerce revenue, the cost of
e-commerce was 40.0% for the three months ended June 30, 1999 and it was
36.2% for the same period ended June 30, 1998. As a percentage of e-commerce
revenue, the cost of e-commerce was 42.5% for the six months ended June 30,
1999 and it was 35.0% for the same period ended June 30, 1998. The increase
was primarily attributable to the fact that in 1999 we broadened our product
offerings. Our new product offerings included items with higher costs than in
the prior year.

         COST OF ADVERTISING REVENUE

         Cost of advertising revenue consists primarily of revenue share
amounts we pay to our customers for advertising sold on co-branded sites.
Cost of advertising revenue was $75,000 in the three and six months ended
June 30, 1999 and it was $0 in the same periods ended June 30, 1998. This
increase is primarily a result of the increase in our membership, and the
expansion of our advertising and business development sales forces.

         COST OF LICENSING REVENUE

         Cost of licensing revenue consists primarily of royalties on net
revenue from license fees. Cost of licensing revenue were $0 for the three
months ended June 30, 1999 and they were $19,000 for the same period ended
June 30, 1998. Cost of license fees were $0 during the six months ended
June 30, 1999 and they were $27,000 during the same period ended June 30,
1998. We expect that cost of licensing revenue should continue to be a small
percentage of total cost of revenues as compared to the cost of e-commerce
revenues.

         The mix of products we sell will impact our gross margins and the
overall mix of e-commerce revenue, advertising revenue and licensing revenue.
We typically recognize higher gross margins on advertising revenue and
licensing revenue. We expect that shifts in the mix of sales could adversely
impact our overall gross margin and could materially adversely impact our
business, results of operations and financial condition.

OPERATING AND DEVELOPMENT EXPENSES

         Operating and development expenses consist primarily of payroll and
related expenses for development and network operations personnel and
consultants, costs related to systems infrastructure including Web site
hosting, and costs of acquired content to enhance our Web site. Operating and
development expenses increased to $1.6 million in the three months ended June
30, 1999 from $773,000 in the three months ended June 30, 1998. Operating and
development expenses increased to $2.7 million in the three months ended June
30, 1999 from $1.3 million in the three months ended June 30, 1998. We
believe operating and development expenses will increase significantly in the
future, especially in relation to Web site hosting costs, as our membership
grows, thus requiring additional bandwidth to support the many free services
offered to members. We believe that we will need to make significant
investments in our Web site to remain competitive. Therefore, we expect that
our operating and development expenses will continue to increase in absolute
dollars for the foreseeable future.

         Operating and development costs decreased as a percentage of total
net revenue to 23.8% in the three months ended June 30, 1999 from 45.0% in
the three months ended June 30, 1998. Operating and development costs
decreased as a percentage of total net revenue to 24.7% in the six months
ended June 30, 1999 from 52.6% in the six months ended June 30, 1998. The
decreases in operating and development expense as a percentage of total
revenue in both periods was due to the overall growth in net revenue.

                                       17
<PAGE>

SALES AND MARKETING EXPENSES

         Sales and marketing expenses consist primarily of payroll and
related expenses for personnel engaged in sales, marketing, publishing and
customer support, as well as advertising and promotional expenditures. Sales
and marketing expenses increased to $5.1 million in the three months ended
June 30, 1999 from $455,000 in the three months ended June 30, 1998. Sales
and marketing expenses increased to $7.5 million in the six months ended June
30, 1999 from $717,000 in the six months ended June 30, 1998. The absolute
dollar increases from period to period in sales and marketing expenses were
primarily attributable to increased personnel and related expenses required
to implement our sales and marketing strategy as well as increased public
relations and other promotional and advertising expenses. Additionally, in
connection with the proposed business combination of the Company, SNAP! LLC
and certain Internet assets of NBC, we incurred a $424,000 charge related to
the cancellation of an advertising contract in the three and six months ended
June 30, 1999. We expect to continue hiring additional personnel and to
pursue a branding and marketing campaign. Therefore, we expect marketing and
sales expenses to continue to increase significantly in absolute dollars.

         Sales and marketing expenses increased as a percentage of total net
revenue to 78.2% in the three months ended June 30, 1999 from 26.5% in the
three months ended June 30, 1998. Sales and marketing expenses increased as a
percentage of total net revenue to 68.8% in the six months ended June 30,
1999 from 28.0% in the six months ended June 30, 1998. The increase in sales
and marketing expenses as a percentage of total revenue in both periods is
due to the hiring of new sales and marketing personnel and other promotional
and advertising expenses.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and administrative expenses consist primarily of payroll and
related costs for general corporate functions, including finance, accounting,
business development, human resources, investor relations, facilities and
administration, as well as legal fees, insurance, and fees for professional
services and directors. General and administrative expenses increased to $2.0
million in the three months ended June 30, 1999 from $785,000 in the three
months ended June 30, 1998. General and administrative expenses increased to
$3.7 million in the six months ended June 30, 1999 from $1.1 million in the
six months ended June 30, 1998. The absolute dollar increases from period to
period in general and administrative expenses were primarily due to increases
in the number of general and administrative personnel, professional services,
directors' fees and facility expenses to support the growth of our
operations. We expect general and administrative expenses to increase in
absolute dollars in future periods as we expand our staff, incur additional
costs related to our operations, and are subject to additional requirements
of being a publicly traded company.

         General and administrative expenses decreased as a percentage of
total net revenue to 31.3% in the three months ended June 30, 1999 from 45.8%
in the three months ended June 30, 1998. General and administrative expenses
decreased as a percentage of total net revenue to 33.5% in the six months
ended June 30, 1999 from 42.8% in the six months ended June 30, 1998. The
decreases in operating and development expense as a percentage of total
revenue in both periods was due to the overall growth in net revenue.

PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT

         For the three months ended June 30, 1999 we recognized the cost of
purchased in-process research and development of $2,603,000 in connection
with the acquisitions of MightyMail Networks, Inc. and Paralogic Software
Corporation, and for the same period ended June 30, 1998 we recognized
$330,000 in connection with the acquisition of Paralogic Corporation. For the
six months ended June 30, 1999 we recognized the cost of purchased in-process
research and development of $2,603,000 in connection with the acquisitions of
MightyMail Networks, Inc. and Paralogic Software Corporation, and for the
same period ended June 30, 1998 we recognized $660,000 in

                                       18
<PAGE>

connection with the acquisitions of Paralogic Corporation and the purchase of
certain assets of Revolutionary Software, Inc.

ACQUISITIONS DURING THE SIX-MONTH PERIOD ENDED JUNE 30, 1999

MIGHTYMAIL NETWORKS, INC.

         In connection with the MightyMail Networks, Inc. acquisition, we
acquired MightyMail Networks' e-mail platform. The MightyMail platform allows
branding material and marketing content to be placed within person-to-person
e-mail that is sent by individuals to individuals. The MightyMail application
runs on an Oracle database and Unix operating system. All the application
code is written using Java Servlets running on a servlet-enabled Web server.
The MightyMail application uses a three-tiered architecture common to most
Internet applications: an interface layer, an application layer, and a
database layer. In addition, MightyMail uses a custom mail agent that links
into a standard mail transfer agent. In the future, we expect that this
custom mail agent will be useable by any standard mail protocol for users who
wish to run the MightyMail application running in their own mail environment.

         At the time of the acquisition, version 1.0 of the MightyMail
technology was functional as a commercially viable product. However, the
current product has various e-mail options and is not a truly customizable
product with a rich library of content or business user interface. In fact,
version 1.0 is approximately half of the true customizable, rich-e-mail
product originally intended to be developed. At the time of the acquisition,
MightyMail Networks was developing a second version of the MightyMail
Networks technology, which was not completely functional as a commercially
viable product. Version 2.0 of the MightyMail technology will be fully
customizable, have access to a rich library of content, have the ability to
add surveys, be compatible with corporate servers, have e-mail wizards, allow
end-users to create their own content and enable the inclusion of photographs.

         The nature, amount and timing of the remaining estimated efforts
necessary to develop version 2.0 of the MightyMail technology include:

         (A) Integration with Xoom.com's existing webmail system
("XoomMail"): This integration will bring MightyMail capabilities (the
ability to compose rich e-mail) to XoomMail's existing account holders, which
now exceed 700,000 users.

         (B) Re-architecting of the MightyMail platform to be technically
compatible with the Xoom.com technology infrastructure. The primary
compatibility issue will be the integration of Apache Web server technology
in place of the current Java Web Server from Sun Microsystems.

         As of the date of the technology's valuation, we estimated that 50%
of the research and development effort had been completed at the date of
acquisition and expected the remaining research and development efforts
relating to the completion of the version 2.0 MightyMail technology would
require approximately six months of effort from the date of valuation through
its release date in the fourth quarter of 1999. We estimated that three
full-time engineers would be required to complete the in-process projects.
These projects included the use of one full-time engineer for six months to
work on the Apache Web server integration efforts, and two full-time
engineers for 6 months to work on the MightyMail/XoomMail integration
efforts. Accordingly, we have estimated that the total estimated research and
development costs to complete MightyMail version 2.0 are $170,000. We
anticipate completion of the project in the fourth quarter of 1999.

PARALOGIC SOFTWARE CORPORATION

         In connection with the Paralogic Software Corporation acquisition,
we acquired Paralogic Software Corporation's product Anexa.com, a powerful
combination of Web site authoring and community building tools that allows
users to instantly create comprehensive Web sites including state-of-the-art
Java chat rooms, discussions and administrative features. Anexa.com provides
features including multi-media albums, discussion forums, events, chat, news
announcements, classified ads, guest books, membership databases and
community administration. In connection with this acquisition we also
obtained ParaChat Professional, chat software that is licensed to individuals

                                       19
<PAGE>

and businesses. This software is hosted by a server and is supported by a
staff of engineers, both of which were acquired in conjunction with the
Paralogic Software Corporation acquisition. (This is in contrast to the
purchase of the ParaChat Personal Network, which we acquired in connection
with the purchase of Paralogic Corporation in March 1998. The ParaChat
Personal Network is hosted by Xoom.com, and is based on a free chat service
that Xoom.com members can download on to their Web pages).

    At the time of acquisition, the current versions of Anexa.com and
ParaChat Professional were functional as commercially viable products.
However, these current versions do not represent the more robust,
feature-rich products that Paralogic Software Corporation envisioned and
intended to develop next twelve months from the acquisition date. The future
versions of these products would incorporate a number of significant
additional features including enhanced scalability as traffic is added, RDBMS
support, e-mail verification, improved directory services, search capability,
instant messaging, file sharing capability, home page publishing, additional
administration and management tools, calendar and address book capabilities,
polls, gift gallery, greeting cards, voice chat, and white board
functionality. The nature of the remaining estimated efforts necessary to
develop the acquired, incomplete next versions of Anexa.com and ParaChat
Professional into commercially viable products include:

    (A) ANEXA.COM. These changes fall into the following categories: new
features (like Paralogic Instant Messenger, support for Uniplanet calendar
and support for MightyMail mail); feature enhancements and upgrades (like
Media Albums Plus to handle MP3 files, moderated message boards and improved
event notification); user interface enhancements: administration tools; and
fixing bugs.

    (B) PARACHAT PROFESSIONAL. These changes fall into the following
categories: new features (like voice chat and HTML chat to extend the chat
experience); user interface enhancements; support for moderated events
(improve stage/audience metaphor, accept/deny audience questions, etc):
administration tools (like a filth filter and "Chat 911" to help manage
abusive behavior in chat rooms); support for internationalization; and fixing
bugs (improved registration process, etc).

    As of the date of the technology's valuation, we estimated that 17% of
the research and development effort had been completed at the date of
acquisition and expected the remaining research and development efforts
relating to the completion of the new versions of Anexa.com and ParaChat
Professional technology would require approximately nine months of effort
from the date of valuation through its expected release date of March, 2000.
These projects include the use of eight engineers, spending 75% of their time
on the project, for nine months, to create the new versions of the products,
at an estimated total cost to complete of $576,000.

ACQUISITIONS DURING THE SIX-MONTH PERIOD ENDED JUNE 30, 1998

PARALOGIC CORPORATION

     In connection with the Paralogic Corporation acquisition, we acquired
Paralogic Corporation's base of chat members, called the ParaChat Personal
Network, as well as the rights to use the underlying chat technology, called
ParaChat Personal. ParaChat Personal is designed to provide Web sites with an
option to offer chat technology without requiring Web site hosts to buy the
software, maintain or upgrade the software, or learn any additional skills
beyond what is necessary to construct a Web site. The chat software is
maintained on Xoom.com's server and the Web site host is provided bits of
source code or "tags" that are incorporated into the Web site. The tags
interface via the Internet with the ParaChat server, and thus provide the Web
site with chat capabilities. In exchange for the free service, the Web site
host allows banner advertising on its site.

     As of the time of acquisition, ParaChat Personal was not completely
functional as a commercially viable product. The nature, amount and timing of
the remaining estimated efforts necessary to develop the acquired, incomplete
ParaChat Personal technology into a commercially viable product included:

     As of the date of the technology's valuation, we estimated that 55% of
the research and development effort had been completed at the date of
acquisition and expected the remaining research and development efforts
relating to the completion of the ParaChat Personal technology would require
approximately six months of effort from the date

                                       20
<PAGE>

of valuation through its release date of September 1, 1998. As of the date of
valuation, we expected the benefit of the acquired project to begin
immediately after the estimated completion date. We expected that the
in-process project would be developed to technological feasibility concurrent
with the September 1998 release date. We estimated that three full-time
engineers would be required to complete the in-process projects. These
projects included the use of one full-time engineer for six months to work on
the external database connectivity efforts, one full-time engineer for six
months to work on the client layout efforts, and one full-time engineer for
six months to work on the management and control interface efforts.
Accordingly, it was determined that total estimated research and development
costs-to-complete for the ParaChat Personal in-process project were $112,500.
We completed the project by the scheduled date and the actual costs of
completion were not materially different than estimated.

REVOLUTIONARY SOFTWARE, INC.

    The technology that we acquired from Revolutionary Software was a
Web-based e-mail technology known as SiteMail. This in-process Web-based
e-mail technology was designed to allow users to receive and send e-mail
through the Internet using a Web browser. Since the technology was Web-based,
it would allow for the integration of e-mail functionality into Web sites and
would be accessible by any Web-connected device anywhere in the world.
Furthermore, by integrating e-mail into a specific site, it would force the
subscriber to visit that site to access e-mail, thereby increasing traffic.
In addition, when users apply for e-mail accounts at Web sites offering
SiteMail, they are given the domain name of that Web site or company. The
personalization of the domain name in an e-mail address has become an
innovative way of promoting a company's name or Web site.

    As of the date of acquisition, we estimated that approximately 50% of the
research and development effort had been completed and expected the remaining
research and development efforts relating to the completion of the SiteMail
technology to continue from the date of acquisition through the release date
of November 1998. The remaining development effort was estimated to require
approximately 4.5 months of engineering effort. We estimated that 3.5
full-time developers would be required to complete this project. The total
cost of remaining development was estimated to be approximately $98,000. We
completed the project by the scheduled date and the actual costs of
completion were not materially different than estimated.

AMORTIZATION OF DEFERRED COMPENSATION

     We have recorded deferred stock compensation charges of $0 during the
three months ended June 30, 1999 and we recorded charges of $913,000 for the
same period ended June 30, 1998. We have recorded deferred stock compensation
charges of $0 during the six months ended June 30, 1999 and we recorded
charges of $972,000 for the same period ended June 30, 1998. The deferred
compensation charges account for the difference between the exercise price
and the deemed fair value of certain stock options we granted to our
employees. We cannot guarantee that we will not accrue additional charges,
which could have a material adverse effect on our business, results of
operations and financial condition.

     Deferred compensation reflects the amortization of stock compensation
charges resulting from stock options and restricted stock purchase
agreements. We have recorded amortization of deferred compensation of
$175,000 during the three months ended June 30, 1999 and we recorded $728,000
during the same period ended June 30, 1998. We have recorded amortization of
deferred compensation of $405,000 during the six months ended June 30, 1999
and we have recorded $807,000 during the same period ended June 30, 1998.

AMORTIZATION OF INTANGIBLE ASSETS

     Amortization of intangible assets totaled $1.4 million for the three
months ended June 30, 1999 and it was $346,000 for the same period ended June
30, 1998. Amortization of intangible assets totaled $2.3 million for the six
months ended June 30, 1999 and it totaled $346,000 for the same period ended
June 30, 1998. The additional amounts recorded in the periods ended June 30,
1999 represent amortization of intangible assets and goodwill resulting from
our acquisitions of Focused Presence, Inc., MightyMail Networks, Inc., Net
Floppy, Inc., and

                                       21
<PAGE>

Paralogic Software Corporation, amortized over periods ranging from 36 to 48
months. The amounts recorded in the periods ended June 30, 1998, represent
amortization of intangible assets and goodwill resulting from our
acquisitions of Paralogic Corporation, Global Bridges Technologies, Inc., and
the purchase of certain assets of Revolutionary Software, Inc., amortized
over periods ranging from 24 to 42 months.

    For the acquisitions in the periods ended June 30, 1999, we have
determined the appropriateness of the estimated useful lives related to the
intangible assets based on general and specific analysis. In general, the
Internet is characterized by rapid technological change, changes in users and
customer requirements and preferences, frequent new product and service
introductions and the emergence of new industry standards and practices.

    The market for community-based direct selling channels on the Internet is
new and rapidly evolving, and competition for members, consumers, visitors
and advertisers is intense. In addition, we attract members to our Web site
with a variety of free services, including home pages, e-mail, chat rooms,
electronic newsletters, clip art and software libraries, online greeting
cards and page counters. In order to continue attracting members using these
various methods, the free services must be constantly updated and improved.

    With respect to the purchased technology associated with the business and
technology acquisitions, we considered the effects of obsolescence, demand,
competition, and other economic factors. Due to the rapid technological
change involved in the Internet, we estimated that new technologies would
replace the intangible assets relating to the purchased technology within a
36 to 48 month period.

    With respect to the goodwill associated with all of the acquisitions, we
considered the effects of obsolescence, demand, competition, other economic
factors and expected actions of competitors and others. Based on these
considerations, we determined the positive effect of the acquisitions, and
therefore the life of the goodwill, to be 24 to 48 months. See "Factors
Affecting Operating Results--If we are unable to integrate new technologies
and standards effectively, the results of our operations could be adversely
affected," "--Any increase in competition could adversely affect our ability
to maintain or improve our position in the market relative to that of our
competitors which could have a material adverse effect on our business and
results of operations" and "--If we are unable to successfully integrate
future acquisitions into our operation, then our business and results of
operations could be adversely affected."

OTHER INCOME,  NET

     Other income, net represents interest we earned on our cash and
investments, offset by interest expense we paid on our borrowings. We have
recorded approximately $2.4 million in interest income in the three months
ended June 30, 1999 and we recorded $2,000 in the same period ended June 30,
1998. We have recorded approximately $3.0 million in interest income in the
three months ended June 30, 1999 and we recorded $0 during the same period
ended June 30, 1998. This increase was primarily due to the increased cash
balances available to invest as a result of our initial public offering in
December 1998 and our secondary public offering in April 1999.

     Interest expense represents interest charges related to notes payable
and capital leases. Interest expense recorded in the three months ended June
30, 1999 was approximately $35,000 and interest expense during the same
period ended June 30, 1998 was approximately $0. Interest expense recorded in
the six months ended June 30, 1999 was approximately $65,000 and interest
expense during the same period ended June 30, 1998 was approximately $0.

LIQUIDITY AND CAPITAL RESOURCES

     Prior to our initial public offering, we financed our operations
primarily through the private placement of common stock. On December 9, 1998,
we completed our initial public offering of common stock, in which we issued
4,600,000 shares of common stock at a price of $14.00 per share. Proceeds
from the offering were approximately $57.3 million, net of offering costs. On
April 9, 1999, we completed a secondary public offering of our common stock
and issued 4,600,000 shares (including 600,000 shares issued in connection
with the exercise of the underwriter over-allotment option) at a price of
$66.00 per share. Of the 4,600,000 shares of common stock sold

                                       22
<PAGE>

in the offering, 2,659,800 were sold by Xoom.com and 1,940,200 shares were
sold by existing stockholders. Proceeds from the follow-on offering were
approximately $167 million, net of offering costs.

     As of June 30, 1999, we had cash and cash equivalents and marketable
securities of approximately $165.4 million. We regularly invest excess funds
in short-term money market funds, government securities and commercial paper.

     Net cash used in operating activities for the six months ended June 30,
1999 was $5.7 million, and net cash provided by operating activities for the
six months ended June 30, 1998 was $313,000. Cash used in operating
activities in the period ended June 30, 1999 was primarily the result of net
losses ($10.1 million) and an increase in accounts receivable related to the
growth of advertising revenues ($1.5 million), partially offset by
amortization of intangible assets ($2.3 million) and in-process research and
development charges ($2.6 million) related to our acquisitions, amortization of
deferred compensation incurred in connection with the granting of options to
employees to purchase common stock ($405,000), and an increase in current
liabilities as a result of the growth of our business ($2.6 million). In the
six months ended June 30, 1998, cash provided by operating activities was
primarily the result of net losses ($3.3 million) which were offset by
charges to in-process research and development ($660,000), the amortization
of intangibles ($346,000), and the increase in intangible assets (1.6
million), all of which were related to the acquisitions of Paralogic
Corporation, Global Bridges Technologies, Inc., and certain assets of
Revolutionary Software, Inc.

     Net cash used in investing activities for the six months ended June 30,
1999 was $158.9 million and it was $863,000 in the same period ended June 30,
1998. Cash used in investing activities during the six months ended June 30,
1999 was primarily related to the purchase of marketable securities for
$162.5 million. The cash used in investing activities in each period was also
related to purchases of fixed assets and net cash paid for business
acquisitions. From time to time, we expect to evaluate the acquisition of
products, businesses and technologies that complement our business. These
acquisitions may involve cash investments.

     Net cash provided by financing activities for the six months ended June
30, 1999 was $167.5 million and it was $4.6 million for the same period ended
June 30, 1998. Cash provided by financing activities in the six months ended
June 30, 1999 was primarily related to proceeds from our secondary public
offering, partially offset by the repayment of notes payable. Cash provided
by financing activities in the six months ended June 30, 1998 was primarily
attributable to net proceeds from the issuance of common stock, partially
offset by the repayment of notes payable.

     We believe that we have the financial resources needed to meet our
presently anticipated business requirements, including capital expenditure
and strategic operating programs, for at least the next 12 months.
Thereafter, if cash generated by operations is insufficient to satisfy our
liquidity requirements, we may need to sell additional equity or debt
securities or obtain additional credit facilities. The sale of additional
equity or convertible debt securities may result in additional dilution to
our stockholders. We may not be able to raise any such capital on terms
acceptable to us or at all.

YEAR 2000 COMPLIANCE

     Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. As a result,
software that records only the last two digits of the calendar year may not
be able to distinguish whether "00" means 1900 or 2000. This may result in
software failures or the creation of erroneous results.

     We have conducted an internal review of software systems which we use
for site management, network monitoring, quality assurance, transaction
processing and fulfillment services. Because we developed these software
systems internally, beginning at inception in 1996 when the Year 2000 problem
already had some visibility, we were largely able to anticipate four digit
requirements. In conjunction with ongoing reviews of our own products and
services, we are also reviewing our computer infrastructure, including
network equipment and servers. We do

                                       23
<PAGE>

not anticipate material problems with network equipment, as our current
configuration was installed within the last three years. Similarly, we
purchased most of our servers in 1997 and 1998. With this relatively current
equipment, we do not anticipate material Year 2000 compliance problems, and
we will replace any servers that cannot be updated either in the normal
replacement cycle or on an accelerated basis. We have also internally
standardized our personal computers on Windows NT 4.0, using reasonably
current service packs, which we are advised by our vendor are Year 2000
compliant. We use multiple software systems for internal business purposes,
including accounting, e-mail, development, human resources, customer service
and support and sales tracking systems. All of these applications have been
purchased within the last three years.

     We have made inquiries of vendors of systems we believe to be mission
critical to our business regarding their Year 2000 readiness. Although we
have received various assurances, we have not received affirmative
documentation of Year 2000 compliance from any of these vendors and we have
not performed any operational tests on our internal systems. We generally do
not have contractual rights with third party providers should their equipment
or software fail due to Year 2000 issues. If this third party equipment or
software does not operate properly with regard to Year 2000, we may incur
unexpected expenses to remedy any problems. These expenses could potentially
include purchasing replacement hardware and software. We have not determined
the state of compliance of certain third-party suppliers of services such as
warehousing and fulfillment services, phone companies, long distance
carriers, financial institutions and electric companies, the failure of any
one of which could severely disrupt our ability to carry on our business.

     We anticipate that our review of Year 2000 issues and any remediation
efforts will continue throughout calendar 1999. The costs incurred to date to
remediate our Year 2000 issues have not been material. If any Year 2000
issues are uncovered with respect to these systems or our other internal
systems, we believe that we will be able to resolve these problems without
material difficulty, as replacement systems are available on commercially
reasonable terms. We presently estimate that the total remaining cost of
addressing Year 2000 issues will not exceed $150,000. We derived these
estimates using a number of assumptions, including the assumption that we
have already identified our most significant Year 2000 issues. However, these
assumptions may not be accurate, and actual results could differ materially
from those anticipated. In view of our Year 2000 review and remediation
efforts to date, the recent development of our products and services, the
recent installation of our networking equipment and servers, and the limited
activities that remain to be completed, we do not consider contingency
planning to be necessary at this time.

     Our applications operate in complex network environments and directly
and indirectly interact with a number of other hardware and software systems.
We are unable to predict to what extent our business may be affected if our
systems or the systems that operate in conjunction with them experience a
material Year 2000 failure. Known or unknown errors or defects that affect
the operation of our software and systems could result in delay or loss of
revenue, interruption of services, cancellation of contracts and memberships,
diversion of development resources, damage to our reputation, increased
service and warranty costs, and litigation costs, any of which could
adversely affect our business, financial condition and results of operations.
The most likely worst case scenario is that the Internet fails and we are
unable to offer any services on our community site or make any of our direct
e-commerce offerings.







                                       24
<PAGE>

CERTAIN RISK FACTORS WHICH MAY IMPACT FUTURE OPERATING RESULTS

     This report on Form 10-Q contains forward looking statements which
involve risks and uncertainties. Our actual results could differ materially
from those anticipated by such forward looking statements as a result of
certain factors, including those set forth below.

WE CANNOT ASSURE YOU THAT WE WILL BE PROFITABLE BECAUSE WE HAVE OPERATED OUR
BUSINESS ONLY FOR A SHORT PERIOD OF TIME

     Xoom.com was founded in April 1996 and has a limited operating history.
An investor in our common stock must consider the risks and difficulties
frequently encountered by early stage companies in new and rapidly evolving
markets, particularly those involved in e-commerce and the Internet. These
risks include:

-   the level of use of the Internet and online services and consumer
    acceptance of the Internet and other online services, particularly direct
    e-mail marketing, for the purchase of consumer products such as those we
    offer;

-   the lack of broad acceptance of the community model on the Internet;

-   our inability to generate significant e-commerce revenue or premium service
    revenue from our members;

-   our inability to maintain and increase levels of traffic on the Xoom.com
    Web site;

-   our failure to continue to develop and extend the Xoom.com brand;

-   our inability to attract or retain members;

-   our inability to meet minimum guaranteed impressions under advertising
    agreements;

-   our failure to anticipate and adapt to a developing market;

-   our inability to upgrade and develop our systems and infrastructure and
    attract new personnel in a timely and effective manner;

-   the failure of our server and networking systems to efficiently handle our
    Web traffic; and

-   our inability to effectively manage rapidly expanding operations.

     We cannot be certain that our business strategy will be successful or
that we will successfully address these risks.

     As of June 30, 1999, we had an accumulated deficit of $24.8 million.
Although we have experienced growth in our net revenue, members, customers
and reach in recent periods, these growth rates are not sustainable and will
decrease in the future. To date, we have not been profitable on either a
quarterly or an annual basis, and we expect to incur net losses for the
foreseeable future. We expect our operating expenses to increase
significantly, especially in the areas of sales and marketing and brand
promotion, and, as a result, we will need to increase our revenue to become
profitable. If our revenue does not grow as expected or increases in our
expenses are not in line with forecasts, there could be a material adverse
effect on our business, results of operations and financial condition.

                                       25
<PAGE>

THE UNPREDICTABILITY OF OUR QUARTER-TO-QUARTER RESULTS COULD CAUSE OUR STOCK
PRICE TO BE VOLATILE OR DECLINE

     Our operating results have fluctuated in the past and will likely
continue to do so in the future. Some of the factors that could cause our
operating results to fluctuate are:

-   the level of demand for the services and products offered in our direct
    e-mail marketing and our ability to meet the demand in a timely manner;

-   consumers' receptiveness to e-commerce and to direct e-mail marketing in
    particular;

-   developments relating to advertising on the Web;

-   timely deployment and expansion of our network and network architectures;

-   new services offered by our competitors that affect the level of traffic on
    our Web site and the continuing expansion of our membership base;

-   our ability to predict demand for products and services we offer and to
    optimize inventory levels accordingly;

-   marketing costs that we will need to incur in order to maintain and enhance
    the Xoom.com brand name;

-   the loss of key business relationships;

-   the mix of domestic and international sales;

-   the costs of acquiring technology or businesses and our ability to integrate
    them into our operations; and

-   economic conditions generally, as well as those specific to the Internet and
    related industries.

     To respond to these and other factors, we may need to make business
decisions that could have a material adverse effect on our quarterly
operating results.

     Our business fluctuates on a seasonal basis. Traffic on our site has
historically been lower during the summer and year-end vacation and holiday
periods when people tend to spend less time on the Internet. Advertising
revenue also varies with the seasons. Typically, advertisers spend less
during the first and third calendar quarters. Web-based commerce and
advertising are relatively new, which means that new trends may develop that
could affect the results of our operations.

     As a relatively new company, it is difficult for us to plan or
anticipate our operating expenses based on our limited historical financial
data. If our actual revenue is lower than predicted, we may be unable to
adjust our operating expenses accordingly.

     A substantial portion of our net revenue is from short-term advertising
contracts, usually one to two months in length. That means our quarterly net
revenue is a function of the contracts we enter into within the quarter and
our ability to adjust spending in light of any net revenue shortfalls. To
date, our advertising revenue comes from a small to medium group of customers
whose composition periodically changes. For example, during the six months
ended June 30, 1999, our five largest advertisers accounted for approximately
19% of our total advertising revenue. As a result, the cancellation of even a
small number of these advertising contracts could affect our operating
results. Advertising revenue is also linked to the level of traffic on our
Web site, so if traffic is less than the level expected by our advertising
customers, our revenue from this source could be affected. We have guaranteed
our advertisers a minimum number of impressions on our Web site. Reduced
traffic on our Web site would cause us to fall short in meeting this minimum
requirement and as a result we may give credits to our advertisers and reduce
advertising rates, which would lead to a reduction in our revenue from
advertising.

                                       26
<PAGE>

     The Internet has not been available for a sufficient period of time to
gauge its effectiveness as an advertising medium when compared with
traditional media. Notwithstanding, there is intense competition among
sellers of advertising space on the Web. This makes it difficult to project
pricing models or to anticipate whether we will be successful in selling
advertising space and relying on advertising as a substantial source of
revenue.

     Due to the foregoing factors, we believe that period-to-period
comparisons of our operating results are not necessarily meaningful, you
should not view them as indicators of our future performance. If our
operating results in any period fall below the expectations of securities
analysts and investors, the market price of our shares would likely decline.

BECAUSE OUR BUSINESS MODEL IS UNPROVEN AND DEPENDS ON MAINTAINING AND
EXPANDING OUR MEMBERSHIP BASE, WE DO NOT KNOW WHETHER OUR BUSINESS MODEL WILL
ULTIMATELY BE VIABLE AND PROFITABLE

     Our business model relies on using our community platform and membership
base to generate revenues from different sources. To be profitable, we will
need to provide goods and services that are attractive to our members,
advertisers and vendors. We have relied on member-generated content and the
"grassroots" voluntary promotional efforts of our members to develop and
maintain our profile as a community site. A decline in voluntary promotional
activities by our members or member-generated content could make our Web site
less attractive. We cannot be sure that Internet users will continue to be
interested in communities on the Web, or that direct e-mail marketing will
prove to be a profitable or effective method of selling goods and services.

     Our future success also depends on the continued growth in the use of
the Internet and the Web. Use of the Internet for retail transactions is a
recent development and the continued demand and growth of a market for
services and products via the Internet is uncertain. For the six months ended
June 30, 1999, e-commerce was the source of approximately 54% of our total
net revenue. The Internet may ultimately prove not to be a viable commercial
marketplace for a number of reasons, including:

     -   unwillingness of consumers to shift their purchasing from traditional
         retailers to online purchases;

     -   lack of acceptable security for data and concern for privacy of
         personal information;

     -   limitations on access and ease of use;

     -   congestion leading to delayed or extended response times;

     -   inadequate development of Web infrastructure to keep pace with
         increased levels of use;

     -   increased or excessive government regulation; and

     -   problems regarding intellectual property ownership.

     Because of these factors, we do not know whether our business model will
ultimately be viable and profitable.

OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO RISKS THAT COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS

     We market and sell our products in the United States and
internationally. Approximately 16% of our net revenue during the first two
quarters of 1999 came from sales outside the United States. We plan to
establish additional operations or form business partnerships in other parts
of the world. The expansion of our existing international operations and
entry into additional international markets will require substantial
management attention and financial resources. We cannot be certain that our
investment in establishing operations in other

                                       27
<PAGE>

countries will produce the desired levels of revenue. In addition,
international operations are subject to other inherent risks and problems,
including:

     -   the impact of recessions in economies outside the United States;

     -   greater difficulty in accounts receivable collections;

     -   unexpected changes in regulatory requirements;

     -   difficulties and costs of staffing and managing foreign operations;

     -   reduced protection for intellectual property rights in some countries;

     -   political and economic instability;

     -   the introduction of the euro;

     -   fluctuations in currency exchange rates; and

     -   difficulty in maintaining effective communications due to distance,
         language and cultural barriers.

     Some or all of the above factors could have a material adverse effect on
the results of our operations.

ANY FAILURE OF OUR NETWORK INFRASTRUCTURE COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR RESULTS OF OPERATIONS

     Our success depends upon the capacity, reliability and security of our
networking hardware and software infrastructure. We have developed an open
standard hardware and software system that is designed for reliability.
System architecture is based on a distributed model that is highly scalable,
flexible and modular, emphasizing extensive automation and a high degree of
redundancy that is designed to minimize single points of failure. The system
integrates site management, network monitoring, quality assurance,
transaction processing and fulfillment services. Currently, the system has
2.5 terabytes of unformatted disk space, supports over 14 million hits per
day, has a peak bandwidth of over 90 megabits per second and transfers about
1 terabyte of data each day.

     We must continue to expand and adapt our system infrastructure to keep
pace with the increase in the number of our members who use the free services
we provide. Demands on our infrastructure that exceed our current forecasts
could result in technical difficulties with our Web site. Any system failure
that interferes with the access to our Web site and the use of the free
services we provide could diminish the level of traffic on our Web site.
Continuing or repeated system failures could impair our reputation and brand
name and reduce our commerce and advertising revenue. At present, we do not
know if we will be able to scale our systems to handle a larger amount of
traffic at higher transmission speeds. Expanding our network infrastructure
will require substantial financial, operational and management resources in
the remainder of 1999 and future periods, all of which could affect the
results of our operations.

     We developed our systems for maintaining our Web site, processing
transactions and managing orders internally. If, in the future, we cannot
modify these systems to accommodate increased traffic and an increased volume
of transactions and orders, we could suffer slower response time, problems
with customer service and delays in reporting accurate financial information.
Any of these factors could significantly and adversely impact the results of
our operations.

     We use network servers that are housed separately by application at
Exodus Communications, Inc. in Santa Clara, California and Frontier Global
Center in Sunnyvale, California. Our site is connected to the Internet via
multiple DS-3 and OC-3 links on a 24 hour-a-day, seven days per week basis by
Exodus and Frontier Global Center. Exodus and Frontier Global Center also
provide and manage power and environmentals for our networking

                                       28
<PAGE>

and server equipment. We manage and monitor our servers and network remotely
from our headquarters in San Francisco, California. We strive to rapidly
develop and deploy high-quality tools and features into our system without
interruption or degradation in service.

     Although the agreements we have with our hosting companies give us
remedies for service interruptions, we cannot guarantee that:

     -   we will have uninterrupted access to the Internet;

     -   our members will be able to reach our Web site; or

     -   communications via our Web site will be secure.

     Any disruption in the Internet access provided by Exodus or Frontier
Global Center, or any interruption in the service that Exodus or Frontier
Global Center receives from other providers, or any failure of Exodus or
Frontier Global Center to handle higher volumes of Internet users to the
Xoom.com site could have a material adverse effect on our business, results
of operations and financial condition.

     Despite precautions taken by us and by the companies that host our Web
site, our system is susceptible to natural and man-made disasters such as
earthquakes, fires, floods, power loss and sabotage. Our system is also
vulnerable to disruptions from computer viruses and attempts by hackers to
penetrate our network security. Hackers have succeeded in penetrating our
network security in the past, and we expect such attempts to continue from
time to time.

     We are covered for loss of income from some of the events listed above
by a $1.0 million insurance policy, but this insurance may not be adequate to
cover all instances of system failure. We have insurance coverage of $1.25
million against loss of income due to earthquakes, but this amount may be
insufficient, especially given the frequency of earthquakes in Northern
California.

     Any of the events listed above could cause us interference, delays, or
service interruptions and adversely affect our business and results of
operations.

BREACHES OF OUR NETWORK SECURITY COULD ALSO DISRUPT THE OPERATION OF OUR WEB
SITE AND JEOPARDIZE THE SECURITY OF CONFIDENTIAL INFORMATION STORED IN OUR
SERVERS

     Our system is also vulnerable to disruptions from computer viruses and
attempts by hackers to penetrate our network security. Hackers have succeeded
in penetrating our network security in the past, and we expect such attempts
to continue from time to time. We may need to devote substantial capital and
resources to protect against the threat of unauthorized penetration of our
network security. Breaches of our network security could also disrupt the
operation of our Web site and jeopardize the security of confidential
information stored in our servers. The occurrence of any of the events listed
above could cause us to lose members and also expose us to liability and
result in litigation, all of which could have an adverse effect on our
operations.

WE DEPEND ON OUR VENDORS AND SUPPLIERS

     We rely on other companies for critical aspects of our business. Banta
Corporation is primarily responsible for fulfilling orders for products and
services sold via our Web site and in response to direct e-mail marketing.
Substantially all of our revenue from e-commerce comes from these sales. We
do not have a written agreement with Banta. If our relationship with Banta
were to terminate without sufficient advance notice, our operations would be
negatively affected, even if we were able to establish a relationship with a
comparable vendor to fulfill orders. An unanticipated termination of our
relationship with Banta would be particularly damaging during the fourth
calendar quarter, in which a high percentage of our annual sales are made. We
would also be affected by problems

                                       29
<PAGE>

experienced by Banta, such as insufficient capacity and damage from human
error, sabotage, fire, flood, power loss and other similar man-made or
natural disasters. The success of our specific e-mail direct e-commerce
campaigns depends on the timely supply of inventory by the manufacturers and
suppliers of the products we offer for sale to our members. In particular, we
rely on Logic General, Inc. for all of our CD-ROM products, DVDs and DVD-ROMs
that contain software, clip art and classic movies. The failure of Logic
General or other suppliers on whom we depend would adversely affect the
results of our operations.

IMPOSITION OF NEW TAXES OR FEES BY THE FEDERAL GOVERNMENT OF THE UNITED
STATES OR BY FOREIGN GOVERNMENTS ON INTERNET TRANSACTIONS OR ON THE USE OF
THE INTERNET AS A MEANS OF COMMUNICATION COULD ALSO ADVERSELY AFFECT US

     We do not currently collect sales or similar taxes for goods that we
ship into states other than California and New York. Imposition of sales or
other similar taxes on our sales of merchandise by states or countries where
we ship goods could have a material adverse effect on our results of
operations. Imposition of new taxes or fees by the Federal government of the
United States or by foreign governments on Internet transactions or on the
use of the Internet as a means of communication could also adversely affect
us.

DIFFICULTIES WE MAY ENCOUNTER DEALING WITH OUR GROWTH AND EXPANSION COULD
ADVERSELY AFFECT THE RESULTS OF OUR OPERATIONS

     Our rapid rate of growth places a significant strain on our resources
due to:

     -   the need to manage relationships with various strategic partners,
         technology licensors, members, advertisers, and other third parties;

     -   difficulties in hiring and retaining skilled personnel necessary to
         support our business;

     -   the need to train and manage our growing employee base; and

     -   pressures for the continued development of our financial and
         information management systems.

     Difficulties we may encounter dealing successfully with the above risks
relating to our rapid growth could adversely affect the results of our
operations.

THE LOSS OF KEY PERSONNEL, OR THE INABILITY TO ATTRACT AND RETAIN ADDITIONAL,
QUALIFIED PERSONNEL, COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF
OPERATIONS

     Our success depends to a significant degree upon the continued
contributions of our executive management team, most of whom have worked
together only for a short time. We do not carry key man life insurance on the
lives of any of our employees, including senior management. Our success will
also depend upon the continued service of our senior management team as well
as technical, marketing and sales personnel. Competition for qualified
employees is intense. Our employees may voluntarily terminate their
employment with us at any time. Our success also depends upon our ability to
attract and retain additional highly qualified management, technical, sales
and marketing and customer support personnel. Locating personnel with the
combination of skills and attributes required to carry out our strategy is
often a lengthy process. The loss of key personnel, or the inability to
attract and retain additional, qualified personnel, could have a material
adverse effect on our results of operations.

THE RESULTS OF OUR OPERATIONS COULD BE ADVERSELY AFFECTED IF OUR INVESTMENT
OF FINANCIAL AND OTHER RESOURCES IN PROMOTING OUR BRAND DOES NOT GENERATE A
CORRESPONDING INCREASE IN NET REVENUE, OR IF THE EXPENSE OF PROMOTING OUR
BRAND NAME BECOMES EXCESSIVE

                                       30
<PAGE>

     As the number of Internet sites grow, brand recognition will play an
increasingly important role. Establishing and promoting the Xoom.com brand in
the face of pressures from our competitors will be critical to developing our
member base and strategic and commercial relationships. We will be required
to continue to devote substantial financial and other resources to
maintaining the distinctiveness of our brand to our members, advertisers and
commerce partners through:

     -   Web advertising and marketing;

     -   traditional media advertising campaigns in print, radio, billboards
         and television; and

     -   providing a high quality community experience.

     The results of our operations could be adversely affected if our
investment of financial and other resources in promoting our brand does not
generate a corresponding increase in net revenue, or if the expense of
promoting our brand name becomes excessive. Changes in the quality and type
of services we offer and the character of our company as perceived by our
members could make our Web site less attractive to our members, advertisers,
and strategic partners, all of which would have a material adverse effect on
the results of our operations.

IF WE ARE UNABLE TO INTEGRATE NEW TECHNOLOGIES AND STANDARDS EFFECTIVELY, THE
RESULTS OF OUR OPERATIONS COULD BE ADVERSELY AFFECTED

     Our ability to remain competitive in our area of business will depend,
in part, on our ability to:

     -   enhance and improve the responsiveness, functionality and features of
         our Web site;

     -   continue to develop our technical expertise;

     -   develop and introduce new services and technology to meet changing
         customer needs and preferences;

     -   influence and respond to emerging industry standards and other
         technological changes in a timely and cost effective manner; and

     -   license leading technologies useful in our business.

     We cannot assure you that we will be successful in responding to the
above technological and industry challenges in a timely and cost-effective
way. If we are unable to integrate new technologies and standards
effectively, there could be an adverse effect on our results of our
operations.

PRIVACY CONCERNS, GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD HAVE AN
ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS

     Laws and regulations that apply directly to communications or commerce
over the Internet are becoming more prevalent. The most recent session of the
United States Congress resulted in Internet laws regarding children's
privacy, copyrights, taxation and the transmission of sexually explicit
material. The European Union recently enacted its own privacy regulations.
The law of the Internet, however, remains largely unsettled, even in areas
where there has been some legislative action. It may take years to determine
whether and how existing laws that govern intellectual property, privacy,
libel and taxation apply to the Internet. The development of laws governing
these areas may decrease the growth in the use of the Internet, which could
adversely impact our business. In addition, the growth and development of the
e-commerce market 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 online. The adoption or modification
of laws or regulations relating to the Internet could adversely affect our
business.

                                       31
<PAGE>

     The Federal Communications Commission ("FCC") is currently reviewing its
regulatory positions on data transmissions over telecommunications networks
and could seek to impose some form of telecommunications carrier regulation
on telecommunications functions of information services. State public utility
commissions generally have declined to regulate information services,
although the public service commissions of some states continue to review
potential regulation of such services. Future regulation or regulatory
changes could have an adverse effect on our business and results of
operations.

OUR FAILURE TO ATTRACT ADVERTISING REVENUE IN QUANTITIES AND AT RATES THAT
ARE SATISFACTORY TO US COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     We have derived a material portion of our net revenue to date from the
sale of advertisements, including banner advertising revenue. For the six
months ended June 30, 1999, advertising revenue represented approximately 45%
of our total net revenue. During the same period, our five largest
advertising customers accounted for approximately 19% of advertising revenue
(approximately 9% of total net revenue). We intend to continue to rely on
advertising as a significant source of revenue.

     It is uncertain whether Web advertising will continue to grow at a rate
that will support expansion in our net revenue. The Internet as a marketing
and advertising medium has not been available for a sufficient period of time
to gauge its effectiveness as compared with traditional media. Many of our
suppliers and advertisers have only limited experience with the Web as a
sales and advertising medium. Advertisers have not yet devoted a significant
portion of their advertising budgets 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.

     It is also possible that in the future certain Internet access providers
will act to block or limit the use of e-mail direct e-commerce solicitations,
whether at their own behest or at the request of users. Members may also
choose not to receive our e-mail offerings or may fail to respond to such
offerings. Moreover, "filter" software programs that limit or remove
advertising from a Web user's desktop are available. If these programs become
popular, there could be a material adverse effect upon the viability of
advertising on the Web and on our business, results of operations and
financial condition.

ANY INCREASE IN COMPETITION COULD ADVERSELY AFFECT OUR ABILITY TO MAINTAIN OR
IMPROVE OUR POSITION IN THE MARKET RELATIVE TO THAT OF OUR COMPETITORS, WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS

     The market for community-based direct selling channels on the Internet
is new and rapidly evolving. Competition for members, consumers, visitors and
advertisers is intense and is expected to increase over time. Barriers to
entry are relatively low. Other companies that are primarily focused on
creating Web-based communities on the Internet and with whom we compete are
Tripod and WhoWhere, subsidiaries of Lycos, GeoCities, recently acquired by
Yahoo!, and theglobe.com. We also face competition and compete for visitors
and traffic with Web directories, search engines, shareware archives, content
sites, online service providers, and traditional media companies such as ABC,
America Online, CBS, CNET, Excite, Infoseek, Lycos, NBC, Netscape, Microsoft,
Time Warner and Yahoo!.

     We also expect intense competition in the e-commerce market from an ever
increasing number of companies selling goods and services over the Internet,
particularly goods and services that relate to the use of computers. These
competitors include:

     -   traditional computer retailers including CompUSA and Micro
         Electronics's MicroCenter;

     -   various mail-order retailers including CDW Computer Centers, Micro
         Warehouse, Insight Enterprises, Inc., PC Connection, Inc. and Creative
         Computers;

                                       32
<PAGE>

     -   internet-focused retailers including Amazon.com, Egghead's Egghead.com,
         software.net, and New England Circuit Sales' NECX Direct;

     -   manufacturers that sell directly over the Internet including Dell
         Computer, Gateway 2000, Apple Computer and many software companies;

     -   a number of online service providers including America Online and the
         Microsoft Network that offer computer products directly or in
         partnership with other retailers;

     -   some non-computer retailers such as Wal-Mart Stores that sell a limited
         selection of computer products in their stores; and

     -   computer products distributors that may develop direct sales channels
         to the consumer market.

     Increased competition from these and other sources could require us to
respond to competitive pressures by establishing pricing, marketing and other
programs or seeking out additional strategic alliances or acquisitions that
may be less favorable to us than we could otherwise establish or obtain, and
thus could have a material adverse effect on our business, prospects,
financial condition and results of operations.

     Many of our competitors have longer operating histories in the Web
market, greater name recognition, larger customer bases and significantly
greater financial, technical and marketing resources. In addition,
substantially all of our current advertising customers and strategic partners
also have established collaborative relationships with some of our
competitors or other high-traffic Web sites. Our advertising customers might
also conclude that other Internet businesses, such as search engines,
commercial online services and sites that offer professional editorial
content, are more effective sites for advertising. Moreover, we may be unable
to maintain the high level of traffic on our Web site or our member base,
which would make our site less attractive than those of our competitors. Any
of these factors could adversely affect our ability to maintain or improve
our position in the market relative to that of our competitors.

OUR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND FINANCIAL CONDITION

     We view our technology as proprietary and try to protect it under
existing United States and international laws relating to protection of
intellectual property. We have also developed internal procedures to control
access and dissemination of our proprietary information. Despite our
precautions, third parties may succeed in misappropriating our intellectual
property or independently developing similar intellectual property.
Protecting our intellectual property against infringement could result in
substantial legal and other costs and could divert our limited management
resources and attention. This could adversely impact our business and the
results of our operations.

     Some of the technology incorporated in our Web site is based on
technology licensed from third parties. As we continue to introduce new
services, we may need to license additional technology. If we are unable to
timely license needed technology on commercially reasonable terms, we could
experience delays and reductions in the quality of our services, all of which
could adversely affect our business and results of operations. Our reputation
and the value of our proprietary information could also be adversely affected
by actions of third parties to whom we license our proprietary information
and intellectual property. If someone asserts a claim relating to proprietary
technology or information against us, we may seek licenses to such
intellectual property. We cannot assure you, however, that we could obtain
licenses on commercially reasonable terms, if at all. The failure to obtain
the necessary licenses or other rights could have a material adverse effect
on our business and results of operations.

     Although we do not believe we infringe the proprietary rights of any
third parties, we cannot assure you that third parties will not assert claims
against us in the future. From time to time, we have been subject to claims
of alleged infringement of intellectual property rights of others on the
basis of our actions and the content generated by

                                       33
<PAGE>

our members. These categories of claims, whether or not meritorious, could
result in litigation and become a drain on our management and financial
resources. If successful, claims of this nature could subject us to
liability, injunctive relief restricting our use of intellectual property
important to our operations, and could ultimately cause us to lose rights to
some of our intellectual property. Any of these events could have a material
adverse effect on our business and results of operations.

WE COULD BE SUBJECT TO LIABILITY FOR ONLINE CONTENT THAT MAY NOT BE COVERED
BY OUR INSURANCE

     The nature and breadth of information disseminated on our Web site and
through the sites of our members could expose us to liability in various
areas, including claims relating to:

     -   product information and reviews we offer;

     -   the content and publication of various materials based on defamation,
         libel, negligence, personal injury and other legal theories;

     -   copyright or trademark infringement and wrongful action due to the
         actions of third parties;

     -   use of third party content made available through our Web site or
         through content and material posted by members on their home pages or
         in chat rooms and bulletin boards; and

     -   damages arising from the use or misuse of the free e-mail services we
         offer.

     Claims of these kinds against us would result in our incurring
substantial costs and would also be a drain on our financial and other
resources. If there were a sufficient number or severity of claims of this
nature, we would need to implement measures to reduce our exposure and
potential liability. In addition to being a drain on our resources, this may
also require taking measure that could make our services less attractive to
our members and visitors. This in turn could reduce traffic on our Web site,
negatively impact our member base, and reduce our revenue from e-commerce and
advertising. We carry general liability insurance in the aggregate amount of
$2.0 million and umbrella coverage in an aggregate amount of $5.0 million.
This coverage may be insufficient to cover expenses and losses arising in
connection with any claims against us. To the extent our insurance coverage
does not cover liability or expenses we incur, our business and results of
operations would be adversely affected.

WE COULD FACE LIABILITY FROM LEGAL PROCEEDINGS THAT COULD ADVERSELY AFFECT
OUR BUSINESS AND RESULTS OF OPERATIONS

     We are litigating a dispute with Imageline, Inc., which claims to own
the copyright in certain clip art images licensed to us by Sprint Software
Pty Ltd, an unrelated third party. Some of the disputed images were included
in versions of our Web Clip Empire CD-ROM product licensed by us to third
parties, including other software clip publishers. The images licensed from
Sprint Software generated less than 1.0% of our total net revenue in 1998,
and since September 30, 1998, we have not received any net revenue for images
licensed from Sprint Software.

     To resolve this matter, we filed a lawsuit against Imageline in August
1998 in the United States District Court for the Eastern District of
Virginia. We asked for a declaration with respect to Imageline's allegations
of copyright infringement regarding the clip art images. In September 1998
Imageline filed a counterclaim, which they amended in January 1999, seeking
up to $60 million in damages. In March 1999, the parties completed the
discovery process and filed separate motions for partial summary judgment. On
April 5, 1999, the court granted one of our motions for partial summary
judgment and stayed the case to allow Imageline to file all necessary
copyright registration applications to cover the clip art images.

     We believe that the claims asserted in Imageline's counterclaim are
without merit and continue to defend against them vigorously. As part of the
lawsuit, we are seeking to enforce our right to indemnification under our

                                       34
<PAGE>

license agreement with Sprint Software for any damages that may be imposed on
us, although we do not know whether Sprint Software will be able to fulfill
its indemnity obligations. Depending on the outcome of the litigation, we may
also need to indemnify third parties for damages in connection with the use
of the Imageline images. An unfavorable outcome in this litigation could
adversely affect our business and results of operations.

     Zoom Telephonics, Inc. filed a lawsuit against us in September 1998 in
the United States District Court for the District of Massachusetts alleging
trademark infringement and related statutory violations. We were not served
with Zoom Telephonics' complaint until January 1999. Zoom Telephonics has
demanded that we stop using the XOOM trademark and has asked for an
unspecified amount of money damages. We responded to the complaint in
February 1999. In April 1999, Zoom Telephonics filed a motion for preliminary
injunction to stop us from using any mark containing "Xoom." In June 1999, we
filed an opposition to oppose Zoom Telephonics' motion for preliminary
injunction and filed a motion to suspend all proceedings in this matter until
September 30, 1999. We believe that the claims asserted by Zoom Telephonics
are without merit and intend to defend against them vigorously. We cannot
assure you, however, that the results of this litigation will be favorable to
us. An adverse result of the litigation could have a material adverse effect
on our business and results of operations, particularly if the litigation
forces us to make substantial changes to our name and trademark usage. Any
name change could result in confusion to consumers and investors, which could
adversely affect the results of our operations and the market price of our
common stock.

IF WE ARE UNABLE TO SUCCESSFULLY INTEGRATE FUTURE ACQUISITIONS INTO OUR
OPERATION, THERE COULD BE AN ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF
OPERATIONS

     Acquiring complementary businesses, products and technologies is an
integral part of our business strategy. Some of the risks attendant to this
acquisition strategy are:

     -   difficulties and expenses of integrating the operations and personnel
         of acquired companies into our operations while preserving the
         goodwill of the acquired entity;

     -   the additional financial resources that may be needed to fund the
         operations of acquired companies;

     -   the potential disruption of our business;

     -   our management's ability to maximize our financial and strategic
         position by incorporating acquired technology or businesses;

     -   the difficulty of maintaining uniform standards, controls, procedures
         and policies;

     -   the potential loss of key employees of acquired companies;

     -   the impairment of relationships with employees and customers as a
         result of changes in management; and

     -   increasing competition with other entities for desirable acquisition
         targets.

     Any of the above risks could prevent us from realizing significant
benefits from our acquisitions. In addition, the issuance of our common stock
in acquisitions will dilute our stockholder interests in our company, while
the use of cash will deplete our cash reserves. Finally, if we are unable to
account for our acquisitions under the "pooling of interests" method of
accounting, we may incur significant, one-time write-offs and amortization
charges. These write-offs and charges could decrease our future earnings or
increase our future losses. Due to all of the foregoing, implementing our
acquisition strategy may have a material adverse effect on our business and
results of operations.

                                       35
<PAGE>

IF OUR CAPITAL IS INSUFFICIENT TO PROMOTE OUR BUSINESS, AND IF WE CANNOT
OBTAIN NEEDED FINANCING, WE WILL BE UNABLE TO PROMOTE OUR BRAND NAME, EXPLOIT
ACQUISITION OPPORTUNITIES AND OTHERWISE MAINTAIN OUR POSITION RELATIVE TO
THAT OF OUR COMPETITORS

     We believe that the proceeds from our initial public offering and our
secondary offering in April 1999, will be sufficient to support our
operations for the next 12 months. Notwithstanding, we may need to raise
additional funds to maintain and develop our position in the marketplace. It
may be difficult or impossible for us to obtain financing on favorable terms.
Raising funds by issuing equity securities or convertible debt securities
will dilute the percentage ownership of our current stockholders. Also, new
securities we may issue may have rights senior to the rights of our common
stock. If we cannot obtain needed financing, we will be unable to promote our
brand name, exploit acquisition opportunities and otherwise maintain our
position relative to that of our competitors.

IF IMPORTANT STRATEGIC RELATIONSHIPS ARE DISCONTINUED FOR ANY REASON, THERE
WOULD BE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND FINANCIAL CONDITION

     Although our strategic relationships are a key factor in our overall
business strategy, our strategic partners may not view their relationships
with us as significant to their own business. There is a risk that parties
with whom we have strategic alliance agreements may not perform their
obligations as agreed. Our arrangements with strategic partners generally do
not establish minimum performance requirements but instead rely on the
voluntary efforts of our partners. In addition, most of our agreements with
strategic partners may be terminated by either party with little notice. If
important strategic relationships are discontinued for any reason, our
business and results of operations may be adversely affected.

YEAR 2000 ISSUES COULD NEGATIVELY AFFECT OUR BUSINESS

     Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. As a result,
software that records only the last two digits of the calendar year may not
be able to distinguish whether "00" means 1900 or 2000. This may result in
software failures or the creation of erroneous results.

     We have conducted an internal review of software systems which we use
for site management, network monitoring, quality assurance, transaction
processing and fulfillment services. Because we developed these software
systems internally, beginning at inception in 1996 when the Year 2000 problem
already had some visibility, we were largely able to anticipate four digit
requirements. In conjunction with ongoing reviews of our own products and
services, we are also reviewing our computer infrastructure, including
network equipment and servers. We do not anticipate material problems with
network equipment, as our current configuration was installed within the last
three years. Similarly, we purchased most of our servers in 1997 and 1998.
With this relatively current equipment, we do not anticipate material Year
2000 compliance problems, and we will replace any servers that we cannot
update either in the normal replacement cycle or on an accelerated basis. We
have also internally standardized our personal computers on Windows NT 4.0,
using reasonably current service packs, which we are advised by our vendor
are Year 2000 compliant. We use multiple software systems for internal
business purposes, including accounting, e-mail, development, human
resources, customer service and support and sales tracking systems. All of
these applications have been purchased within the last three years.

     We have made inquiries of vendors of systems we believe to be mission
critical to our business regarding their Year 2000 readiness. Although we
have received various assurances, we have not received affirmative
documentation of Year 2000 compliance from any of these vendors and we have
not performed any operational tests on our internal systems. We generally do
not have contractual rights with third party providers should their equipment
or software fail due to Year 2000 issues. If this third party equipment or
software does not operate properly with regard to Year 2000, we may incur
unexpected expenses to remedy any problems. These expenses could potentially
include purchasing replacement hardware and software. We have not determined
the state of compliance of certain third-party suppliers of services such as
warehousing and fulfillment services, phone

                                       36
<PAGE>

companies, long distance carriers, financial institutions and electric
companies, the failure of any one of which could severely disrupt our ability
to carry on our business.

     We anticipate that our review of Year 2000 issues and any remediation
efforts will continue throughout calendar 1999. The costs incurred to date to
remediate our Year 2000 issues have not been material. If any Year 2000
issues are uncovered with respect to these systems or our other internal
systems, we believe that we will be able to resolve these problems without
material difficulty, as replacement systems are available on commercially
reasonable terms. We presently estimate that the total remaining cost of
addressing Year 2000 issues will not exceed $150,000. We derived these
estimates using a number of assumptions, including the assumption that we
have already identified our most significant Year 2000 issues. However, these
assumptions may not be accurate, and actual results could differ materially
from those anticipated. In view of our Year 2000 review and remediation
efforts to date, the recent development of our products and services, the
recent installation of our networking equipment and servers, and the limited
activities that remain to be completed, we do not consider contingency
planning to be necessary at this time.

     Our applications operate in complex network environments and directly
and indirectly interact with a number of other hardware and software systems.
We are unable to predict to what extent our business may be affected if our
systems or the systems that operate in conjunction with it experience a
material Year 2000 failure. Known or unknown errors or defects that affect
the operation of our software and systems could result in delay or loss of
revenue, interruption of services, cancellation of contracts and memberships,
diversion of development resources, damage to our reputation, increased
service and warranty costs, and litigation costs, any of which could
adversely affect our business, financial condition and results of operations.
The most likely worst case scenario is that the Internet fails and we are
unable to offer any services on our community site or make any of our direct
e-commerce offerings.

OUR STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE VOLATILE

     The trading price of our common stock has been and is likely to be
highly volatile. Our stock price could be subject to wide fluctuations in
response to a variety of factors, including:

     -   actual or anticipated variations in quarterly operating results;

     -   announcements of technological innovations;

     -   new products or services offered by us or our competitors;

     -   changes in financial estimates by securities analysts;

     -   conditions or trends in the e-commerce market;

     -   our announcement of significant acquisitions, strategic partnerships,
         joint ventures or capital commitments;

     -   additions or departures of key personnel;

     -   sales of common stock; and

     -   other events or factors that may be beyond our control.

     In addition, the Nasdaq National Market, where most publicly held
Internet companies are traded, has recently experienced extreme price and
volume fluctuations. These fluctuations often have been unrelated or
disproportionate to the operating performance of these companies. Many
Internet companies' stocks are trading at multiples which are substantially
above historical levels.

                                       37
<PAGE>

These trading prices and multiples may not be sustainable. These broad market
and industry factors may materially adversely affect the market price of our
common stock, regardless of our actual operating performance. In the past,
following periods of volatility in the market price of a company's
securities, securities class action litigation often has been instituted
against that company. Litigation like this, if instituted, could result in
substantial costs and a diversion of management's attention and resources.
































                                       38
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     We are litigating a dispute with Imageline, Inc., which claims to own
the copyright in certain clip art images licensed to us by Sprint Software
Pty Ltd, an unrelated third party. Some of the disputed images were included
in versions of our Web Clip Empire CD-ROM product licensed by us to third
parties, including other software clip publishers. The images licensed from
Sprint Software generated less than 1.0% of our total net revenue in 1998,
and since September 30, 1998, we have not received any net revenue for images
licensed from Sprint Software.

     To resolve this matter, we filed a lawsuit against Imageline in August
1998 in the United States District Court for the Eastern District of
Virginia. We asked for a declaration with respect to Imageline's allegations
of copyright infringement regarding the clip art images. In September 1998
Imageline filed a counterclaim, which they amended in January 1999, seeking
up to $60 million in damages. In March 1999, the parties completed the
discovery process and filed separate motions for partial summary judgment. On
April 5, 1999, the court granted one of our motions for partial summary
judgment and stayed the case to allow Imageline to file all necessary
copyright registration applications to cover the clip art images.

     We believe that the claims asserted in Imageline's counterclaim are
without merit and continue to defend against them vigorously. As part of the
lawsuit, we are seeking to enforce our right to indemnification under our
license agreement with Sprint Software for any damages that may be imposed on
us, although we do not know whether Sprint Software will be able to fulfill
its indemnity obligations. Depending on the outcome of the litigation, we may
also need to indemnify third parties for damages in connection with the use
of the Imageline images. An unfavorable outcome in this litigation could
adversely affect our business and results of operations.

     Zoom Telephonics, Inc. filed a lawsuit against us in September 1998 in
the United States District Court for the District of Massachusetts alleging
trademark infringement and related statutory violations. We were not served
with Zoom Telephonics' complaint until January 1999. Zoom Telephonics has
demanded that we stop using the XOOM trademark and has asked for an
unspecified amount of money damages. We responded to the complaint in
February 1999. In April 1999, Zoom Telephonics filed a motion for preliminary
injunction and request for oral argument to stop us from using any mark which
contains "Xoom." In June 1999, we filed an opposition to Zoom Telephonics'
motion for preliminary injunction and filed a motion to suspend all
proceedings until September, 30, 1999. We believe that the claims asserted by
Zoom Telephonics are without merit and intend to defend against them
vigorously. We cannot assure you, however, that the results of this
litigation will be favorable to us. An adverse result of the litigation could
have a material adverse effect on our business and results of operations,
particularly if the litigation forces us to make substantial changes to our
name and trademark usage. Any name change could result in confusion to
consumers and investors, which could adversely affect the results of our
operations and the market price of our common stock.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES. We commenced our
secondary public offering on April 9, 1999 pursuant to a Registration
Statement on Form S-1 (File No. 333-74441) effective on April 19, 1999. The
managing underwriter of the offering was Bear, Stearns & Co., Inc. In the
secondary offering we sold an aggregate of 4,600,000 shares of our common
stock (including 600,000 shares sold pursuant to the exercise of the
Underwriters' over-allotment option) at a price of $66 per share. Of the
4,600,000 shares of common stock sold in the offering, 2,659,800 were sold by
Xoom.com and 1,940,200 shares were sold by existing stockholders. The sale of
the 2,659,800 shares of common stock generated aggregate gross proceeds of
$175,547,000. We received net proceeds from the offering of approximately
$166,600,000, after deducting underwriting discounts and commissions of
$7,900,000 and our expenses of the offering of approximately $1,050,000.

                                       39
<PAGE>

     In our initial public offering on December 9, 1998, we sold an aggregate
of 4,600,000 shares of our common stock (including 600,000 shares sold
pursuant to the exercise of the Underwriters' over-allotment option) at an
initial price of $14 per share. The sale of these 4,600,000 shares of Common
Stock generated aggregate gross proceeds of $64,400,000. We received net
proceeds from the offering of approximately $57,342,000, after deducting
underwriting discounts and commissions of $4,508,000 and our expenses of the
offering of approximately $2,550,000.

     Through June 30, 1999 we used a portion of the proceeds from our public
offerings as follows: (i) $8.7 million of net cash used for general corporate
purposes, including working capital and capital expenditures; (ii) $2.7
million of cash used for the repayment of notes payable issued in connection
with the execution of a loan agreement, the acquisition of Pagecount, Inc.,
the acquisition of Global Bridges Technologies, Inc., the purchase of certain
assets of Revolutionary Software, Inc., and the license of certain technology
from ArcaMax, Inc.; (iii) $975,000 of net cash used in connection with the
acquisitions of Focused Presence, Inc., MightyMail Networks, Inc., Net
Floppy, Inc., and Paralogic Software Corporation; and (iv) $268,000 of cash
used for the repayment of capital lease obligations and other notes payable.
The remaining $211.3 million of the net proceeds shall be used for general
corporate purposes, including working capital, capital expenditures,
expanding operations internationally, potential acquisitions and promotional
campaigns. The amounts actually expended by us for such purposes may vary
significantly and will depend on a number of factors, including our future
revenue and cash generated by operations and the other factors described
under "Certain Risk Factors Which May Impact Future Operating Results."
Accordingly, our management retains broad discretion in the allocation of the
net proceeds of the offerings. A portion of the net proceeds may also be used
to acquire or invest in complementary businesses, technologies or product
offerings. In the ordinary course of business, we evaluate potential
acquisitions of such businesses, technologies and product offerings.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     MARKETABLE SECURITIES. We had marketable securities of $108.0 million as
of June 30, 1999. These marketable securities consist of highly liquid
investments with original maturities at the date of purchase of between three
and twelve months. We had long-term investments of $48.6 million as of June
30, 1999. These long-term investments consist of investments with original
maturities as of the date of purchase of more than twelve months. These
investments are subject to interest rate risk and will fall in value if
market interest rates increase. A hypothetical increase in market interest
rates by 10 percent from levels as of June 30, 1999 would cause the fair
value of these investments to decline by an immaterial amount. Because we are
not required to sell these investments before maturity, we have the ability
to avoid realizing losses on these investments due to a sudden change in
market interest rates. However, we could choose to sell these investments
before maturity at a loss. Declines in interest rates over time will,
however, reduce our interest income.

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

     On May 26, 1999, the Company held its Annual Meeting of Shareholders. At
the meeting, the shareholders elected as directors Chris Kitze (with
11,733,597 affirmative votes and 8,540 votes withheld), Laurent Massa (with
11,733,556 affirmative votes and 8,581 votes withheld), Bob Ellis (with
11,733,357 affirmative votes and 8,780 votes withheld), Jamesh Heffernan
(with 11,713,167 affirmative votes and 28,970 votes withheld), Jeffrey
Ballowe (with 11,733,506 affirmative votes and 8,631 votes withheld), Philip
Schlein (with 11,733,271 affirmative votes and 8,866 votes withheld) and
Robert C. Harris, Jr. (with 11,733,296 affirmative votes and 8,841 votes
withheld).

     The shareholders also approved an amendment to the 1998 Stock Incentive
Plan increasing the number of shares of the Company's Common Stock reserved
for issuance thereunder by 3,000,000 shares (with 8,835,453 affirmative
votes, 974,213 negative votes, 7,290 votes withheld, and 1,925,181 broker
non-votes).

     The shareholders also approved an amendment to the Company's Restated
Certificate of Incorporation to increase the number of authorized shares of
common stock from 40,000,000 shares to 80,000,000 (with 11,229,765
affirmative votes, 504,577 negative votes, and 7,795 votes withheld).

                                       40
<PAGE>

ITEM 6.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  EXHIBITS

<TABLE>
<S>      <C>
10.1     Agreement and Plan of Merger, dated as of May 3, 1999, by and among
         Xoom.com, Inc., XOOM Acquisition Sub, Inc. and MightyMail Networks, Inc.*

10.2     Agreement and Plan of Merger, dated as of June 10, 1999, by and among
         the Registrant, XMCM Sub, Inc., Paralogic Software Corporation and
         certain shareholders of Paralogic Software Corporation named therein.**

10.3     Amendment No. 1 to the Agreement and Plan of Merger, dated as of June
         14, 1999, by and among the Registrant, XMCM Sub, Inc., Paralogic
         Software Corporation and certain shareholders of Paralogic Software
         Corporation named therein.**

10.4     Registrant's 1998 Stock Incentive Plan and form of agreement
         thereunder, as amended.

27.1     Financial Data Schedule
</TABLE>

* Incorporated by reference to Xoom.com report on form 8-K filed on May 5, 1999.
** Incorporated by reference to Xoom.com report on form 8-K filed on July 1,
1999.

     (b)  REPORTS ON FORM 8-K

          We filed the following reports on Form 8-K during the three months
ended June 30, 1999:

1.           On May 5, 1999, the Company filed a report on Form 8-K announcing
         that it had completed the acquisition of MightyMail Networks, Inc.,
         pursuant to an Agreement and Plan of Merger, dated as of May 3, 1999.
2.           On May 6, 1999, the Company filed a report on Form 8-K announcing
         that it had completed the acquisition of all of the outstanding limited
         liability interests of Netfloppy.com, LLC, a limited liability company
         organized under the laws of the Commonwealth of Virginia.
3.           On May 21, 1999, the Company filed a report on Form 8-K announcing
         that the Company, National Broadcasting Company, Inc. and certain of
         its affiliates (collectively, "NBC"), CNET, Inc. ("CNET") and SNAP! LLC
         entered into a series of definitive agreements (the "NBC Agreements")
         relating to the formation of a new company to be named NBC Internet,
         Inc. ("NBCi") upon consummation of all the transactions contemplated by
         the NBC Agreements. NBCi is expected to include the businesses of the
         Company, SNAP! LLC and certain of NBC's Internet assets (including
         NBC.com, Videoseeker.com and NBC Interactive Neighborhood) and a 10%
         ownership interest in CNBC.com.
4.           On June 16, 1999, the Company filed a report on Form 8-K announcing
         that (i) the Company and National Broadcasting Company, Inc.("NBC")
         entered into a Stock Purchase Agreement, pursuant to which, NBC will
         acquire 960,028 shares of the Company's common stock for $57.29 per
         share in cash; and (ii) the Company and certain of its subsidiaries,
         NBC and certain of its affiliates entered into an Amended and Restated
         Agreement and Plan of Contribution, Investment and Merger (the "Amended
         Agreement") which amended and restated the Agreement and Plan of
         Contribution, Investment and Merger, dated as of May 9, 1999, among the
         same parties.



                                       41
<PAGE>

                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized,

                                                           XOOM.com, Inc.
Date: August 12, 1999


                                       By:         /S/ JOHN HARBOTTLE
                                           -----------------------------------
                                                     John Harbottle
                                              VICE PRESIDENT OF FINANCE AND
                                                CHIEF FINANCIAL OFFICER
                                              (duly authorized officer and
                                              principal financial officer)














                                       42