**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**Form
      10-KSB**




(Mark
      One)




**x
      ANNUAL REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF**


1934




For
      the
      fiscal year ended December 31, 2006




**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT**


**OF
      1934**




For
      the
      transition period from ______________ to________________




*Commission
      file number 000-29462*




**WEB2
      CORP.**


(Name
      of
      small business issuer)





Delaware
            
            13-4127624(State
                of other jurisdiction
              of
                incorporation or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)100
                West Lucerne Circle, Suite 600, Orlando, Florida
            
            32801(Address
                of principal executive offices)
            
            (Zip
                Code)




Registrant's
      telephone number, including area code: (407) 540-0452




Securities
      registered under Section 12(b) of the Exchange Act:





Title
                of each class
            
            Name
                of each exchange on which registeredNone




Securities
      registered under Section 12(g) of the Exchange Act:




**Common
      Stock Par Value $.001**







(Title
      of
      class)









(Title
      of
      class)




Check
      whether the issuer is not required to file reports pursuant to Section
      13


or
      15(d)
      of the Exchange Act. x




**Note
      - Checking the box above will not relieve any registrant required to
      file**




reports
      pursuant to Section 13 or 15(d) of the Exchange Act from their obligations
      under
      those Sections.




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes x No o




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No
x




State
      issuer's revenues for its most recent fiscal year. $527,043




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold was approximately $15,042,669 based upon the average bid and asked price
      of
      $1.28 as reported by the OTC Bulletin Board as of April 13, 2007.




The
      Company had 24,763,889 shares of common stock outstanding, as of April 13,
      2007.




**DOCUMENTS
      INCORPORATED BY REFERENCE**




None




Transitional
      Small Business Disclosure Format (Check one): Yes o No x









**PRIVATE
      SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT**




When
      used
      in this Annual Report on Form 10-KSB, the words "may," "will," "expect,"
      "anticipate," "continue," "estimate," "intend," "plans", and similar expressions
      are intended to identify 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 regarding events, conditions and financial trends which
      may
      affect the Company's future plans of operations, business strategy, operating
      results and financial position. Such statements are not guarantees of future
      performance and are subject to risks and uncertainties and actual results may
      differ materially from those included within the forward-looking statements
      as a
      result of various factors. Such factors include, among others: (i) the Company's
      ability to obtain additional sources of capital to fund continuing operations;
      in the event it is unable to timely generate revenues (ii) the Company's ability
      to retain existing or obtain additional licensees who will act as distributors
      of its products; (iii) the Company's ability to obtain additional patent
      protection for its technology; and (iv) other economic, competitive and
      governmental factors affecting the Company's operations, market, products and
      services. Additional factors are described in the Company's other public reports
      and filings with the Securities and Exchange Commission. Readers are cautioned
      not to place undue reliance on these forward-looking statements, which speak
      only as of the date made. The Company undertakes no obligation to publicly
      release the result of any revision of these forward-looking statements to
      reflect events or circumstances after the date they are made or to reflect
      the
      occurrence of unanticipated events.





2


**ITEM
      1. BUSINESS**




***Overview***




Web2
      Corporation is an Internet technology company focused on improving the ways
      people and businesses utilize the power of the Internet. We specialize in rapid
      adaptation of technologies to address new markets of users by reducing the
      level
      of technical skills required, simplifying useful products, and lowering prices.
      We are a development-stage company with a slate of projects that are expected
      to
      launch in the near term. Web2 has identified four key product lines that it
      believes are well positioned for success.


**Market
                  Gap**
              
              **Web2
                  Solution**
              
              **Description**Small
                  Business (SMB) E-Commerce is too difficult and expensive for the
                  average
                  small operator to use...many eBay merchants want to "graduate" to their own
                  website
              
              Chamber
                  of E-Commerce
                www.chamberecommerce.com
              
              Easily
                  created, impressive, fully Integrated E-Commerce websites including
                  payment processing and marketing tools $19.95/mo...as AOL is to Consumers,
                  Web2 is to small and micro businessesBetween
                  MySpace and Paid Websites there is a market for free advertising
                  based
                  website hosting and basic site building tools
              
              Web1000
                www.web1000.com
              
              Free
                  advertising supported hosting...Web1000 has over 500,000 registered accounts
                  generating significant daily A next generation search engine designed
                  by
                  Indians for Indians...as Baidu is to China, so ByIndia is to
                  IndiaIndia
                  is the second-largest population on Earth (soon to surpass China)
                  and the
                  fourth-largest Internet population; no dominant Indian search engine
                  has
                  emerged
              
              ByIndia
                www.byindia.comMySpace
                  technology applied to business needs...the new CRM and corporate community
                  forum...if companies don't do it, customers will
                  (googlesucks.com)
              
              Communites
                  2.0
                www.communities2.com
              
              Customized
                  communities to engage customers on a new scale and depth...think MySpace for
                  the Golf Channel, Habitat for Humanity, or SeaRay traffic that
                  views
                  advertising




We
      generate revenues through a mix of subscription service fees, advertising,
      and
      revenue sharing activities. Consumers utilize free advertising-based services
      and paid ad-hoc services such as classified ad postings or auctions of personal
      items. Businesses utilize fee-based subscription services and revenue sharing
      services that allow them to conduct, promote, and support their enterprises
      online.





The
      company plans to compete by devising better products that are easier for
      customers to use while substantially lowering price as compared to industry
      leaders. These products encompass an array of business models, but are generally
      characterized as high margin and scalable in nature. Low fixed costs and high
      marginal profitability allow Web2 to pursue a price leadership strategy that
      we
      believe will be disruptive to incumbent competitors.





Web2
      strategy is to develop, or rapidly adapt and add value to emerging web products
      that are gaining market traction to make them useful to new adjacent markets.
      In
      many cases our goal is to convert popular consumer products to business use.
      The
      company utilizes the latest Internet technologies and a rapid development cycle
      to sustain a constantly improving product schedule. This competitive edge is
      aided by twenty-four hour productivity of development teams in Orlando, Florida
      and India. This speed and flexibility allows the company to rapidly adjust
      to
      market changes and to exploit opportunities as they appear.





The
      company is headquartered in Orlando, Florida. It is publicly traded on the
      OTCBB
      under the symbol WBTO.




**Corporate
      History**




We
      were
      originally organized as a Colorado corporation and our name was Medical
      Management Systems, Inc. ("MMGS") in 1987. In August 2000, we reincorporated
      in
      Delaware and changed our name to Dominix, Inc.




In
      January 2001 we acquired International Controllers, Inc. ("ICON"). We became
      a
      shell corporation as a result of the sale of ICON in April 2002. On December
      5,
      2003, we completed the acquisition of Jade Entertainment Group, Inc. (“Jade”) by
      way of merger through the Company's wholly owned subsidiary, Jade Acquisition
      Corp. by issuing 743,750 shares of common stock and 82,167 shares of its Series
      B Convertible Preferred Stock, which was converted into 6,834,631 shares of
      our
      common stock on June 4, 2004, together representing 36% of the Company. This
      transaction was been accounted for as a reverse merger with Jade the acquirer of the Company. The
      reverse merger was accounted for as a recapitalization and the stockholder's
      equity was retroactively restated to the inception of Jade, July 5, 2001. On
      March 30, 2004, Jade entered into a database license agreement with MarketShare
      Recovery, Inc. (“Marketshare”) The license permitted us to utilize Market
      Share's proprietary database without having to acquire MarketShare. MarketShare
      and Jade are related parties in that they have the same
      management.




On
      December 5, 2004, we acquired the database assets of Web1000.com. Pursuant
      to
      the Agreement, we acquired a website known as Web1000.com along with the
      customer list related to that website. The purchase price for the assets was
      $400,000. On July 12, 2005, we entered into a two-year management services
      agreement with Global Portals Online, Inc. (formerly known as Personal Portals
      Online, Inc.,"Global Portals"), which we subsequently acquired. Under the
      agreement, Global Portals was given primary responsibility for the management,
      redesign and redevelopment of our web traffic operations and technology, finance
      and accounting in exchange for our issuing 200,000 shares of common stock to
      Global Portals and agreeing to pay a fee of 5% of our net monthly
      revenues.




3




On
      August
      19, 2005 we sold of all of the issued and outstanding shares of common stock
      of
      Jade to Raymond Barton and Tim Schmidt, former officers and directors. We
      received consideration valued at $35,000 consisting of the return and delivery
      of 33,333 shares of common stock and the cancellation of Ray Barton, Michael
      Barton and Tim Schmidt's employment agreements.




On
      December 22, 2005, we completed the acquisition of Global Portals pursuant
      to an
      Agreement and Plan of Share Exchange December 1, 2005. At the effective time
      of
      the share exchange, all of the shares of Global Portals were exchanged for
      an
      aggregate of 11,442,446 shares of our common stock on the basis of 2.54 shares
      of Global Portals for one share of our common stock. The 11,442,446 shares
      of
      common stock issued to the Global Portals shareholders represent approximately
      85% of our common stock outstanding after the exchange.




In
      July
      2006, we changed our name to Web2 Corp. As a result of the foregoing, our
      operations are conducted by Web2 Corp., the parent company and Global Portals,
      our wholly owned subsidiary.




***Our
      Mission***




Our
      mission is the innovative, rapid adaptation of Internet technologies to solve
      problems and simplify Internet usage. We believe this is a profitable, evergreen
      business opportunity with substantial customer benefits. Our core guiding
      objectives serve the consumer and our shareholders:





·
            Target...
                market gaps and areas of frustration or friction in the
                marketplace





·
            Simplify...
                reduce the level of product complexity and the required technical
                prowess
                of users





·
            Leverage...
                the latest technology, imagination and common
                sense





·
            Integrate...
                intuitive technologies, functions, features and
                benefits





·
            Advance...
                leapfrog established incumbents, deliver dream
                products/services





·
            Profit...
                sell products and services that people desire at a solid
                margin





We
      believe these provide a straightforward strategic guide for sustaining a strong
      competitive position.




**Our
      Value to Customers**




Web2
      makes the Internet easier to use for a large group of non-technical people.
      We
      produce products to overcome the frustrations of average users.





Some
      of
      the key benefits we offer to users include:




**Small
      Business Customers**




Web2
      make
      it easier for small businesses to use the internet. We do this by creating
      products that are straightforward and easy to use at a low price. Small business
      users face common problems and challenges that Web2 products are engineered
      to
      solve.





We
      reduce
      the technical proficiency required for conducting business on the Internet
      by
      packaging pre-engineered solutions that our customers may modify via simple
      controls to deliver professional results. We believe there is a substantial
      market of small business owners/operators that tend to have limited technical
      abilities and available technical resources. Creation of a basic website is
      beyond the capability of this audience. Few can produce a site with shopping
      and
      payment processing capabilities. Small business owners do not generally possess
      the requisite skills to utilize industry-standard tools to launch and maintain
      a
      well-designed site.





We
      reduce
      the time required to begin conducting business on the Internet by providing
      intuitive, easy-to-use tools and simple guided processes that enables immediate
      productivity. In order to embrace the web, small operators either enter a steep
      learning curve to learn the technology of the Internet, or they must engage
      third-party providers. The time to learn graphics design, web design, coding,
      security, integration of e-commerce payment processing, and web marketing is
      significant. Web2 eliminates this requirement to substantially shorten the
      time
      for a business to get online.





4




Alternatively,
      a small business may hire a developer to do the work for them. In this case
      they
      must find, educate the developer about the business, work with the developer
      to
      outline a site and spend a significant amount of time and energy managing the
      process. This is a slow process that can result in launch delays. Web2 lets
      businesses of all sizes translate their vision directly into a working product
      in minutes.





We
      reduce
      the cost of conducting business on the Internet compared to both competitive
      service providers and third-party contract developers. Lost time and the
      potentially significant cost of third-party developers can make the Internet
      appear unattractive to potential business users. Cost of launching, changing
      and
      maintaining websites is material via traditional industry channels. Prices
      for
      these services can range from several hundred to tens of thousand of dollars
      plus the monthly cost of hosting. Once a business engages a vendor, it finds
      that it is constantly dependent upon the developer for the updates and changes
      to the site that occur in the natural course of business. In our experience
      we
      find this situation to be frustrating to the small operator and in many cases
      is
      a deterrent from utilization o the Web at all. Web2 pursues a price leadership
      strategy that substantially reduces the cost of going online. One low flat
      monthly fee covers all of the services required to launch, operate and conduct
      business online. In many cases the cost of traditional channels may be a
      substantial multiple of the low prices charged by Web2. We deliver an
      unprecedented value that lowers the risk of engaging the Internet for small
      businesses.





We
      produce a better quality Internet presence with a variety of options that rival
      large custom-developed sites. The quality of traditional web development vendors
      is uneven and resultant product is often poorly designed, technically flawed,
      and weakly documented. Web2 provides fully functioning, professionally designed
      frameworks that are easy for customers to modify and customize to reflect their
      business. We provide a selection of sophisticated modules with advanced
      functions that customers can deploy, depending upon their needs, to engage
      their
      audience. The ability to maintain integrity of the site, including its look,
      feel and functionality are simplified and the power is placed in the hands
      of
      the business owner who can focus on content rather than coding, mechanics and
      layout.




We
      integrate marketing tools to help customers attract an online audience. Web
      marketing is a dynamic, specialized field. Search engines drive a significant
      proportion of traffic to websites. In order to tap this resource a business
      must
      be proficient at optimizing its web pages to be listed at the top of relevant
      search results for keywords associated with its products or services. Search
      engines utilize algorithms that must be monitored and reverse-optimized on
      a
      constant basis. Violation of search engine rules can severely penalize a
      well-intentioned web marketer. Email is also a specialized field that must
      be
      mastered to yield results without running afoul of anti-spam rules. Affiliate
      programs are a powerful tool for creating networks of vendors for a product.
      These demand research, money and a dedicated devotion of time to generate
      results. Web2 integrates the fundamental tools of these promotional arts into
      its products and offers advanced features to customers on a paid
      basis.





We
      offer
      timely products that keep our customers trend-right. Internet trends move very
      fast from early adopters to mainstream audiences. Web2 believes it can identify
      market trends early and rapidly develop improved products to present useful
      solutions to our customers. For non-technical operators, this is a valuable
      benefit that improves their competitive position on the Internet.





We
      provide online auction users a migration path to an e-commerce solution they
      can
      own at comparable cost. It is our belief that many users of popular online
      auction systems seek a more flexible, customizable method of conducting Internet
      commerce that they can own. Our systems enable the operator to tailor their
      online persona with fewer restrictions on what they can and cannot do to present
      their products and services. Users are able to directly market via targeted
      keyword purchases and optimization on search engines to bring prospective
      customers to their own websites as opposed to bringing them to the online
      auction site where numerous competitors are readily accessed by
      consumers.





We
      provide reassurance and support for customers unfamiliar with the Internet.
      Web2
      lowers anxiety related to entering the Internet as a business platform. We
      strive to make the user experience a logical, plain English, non-threatening
      process that allows ordinary non-technical people to utilize the Internet for
      productive business purposes. We rely on ease of use and price leadership as
      a
      strategic marketing tool that will generate positive word of mouth promotion
      via
      our users.





We
      lower
      the cost of local advertising. Internet marketing has focused on keyword
      relevancy to deliver topically interested users to advertisers. In effect,
      this
      creates a global marketplace and expands competition for goods and services.
      It
      does not optimally serve local businesses who thrive on customers within




General
      Internet Users




We
      provide tools that simplify the Web for Internet users of all demographic,
      geographic and social profiles. We do this by aggregating and consolidating
      a
      myriad of free services into logical tools that allow them to find relevant
      information, communicate with their peers, link to their community, generally
      express themselves to a broad audience, and conduct the transactions of their
      life.




5




We
      simplify web usage by bringing together commonly used tools in one place. It
      is
      our observation that most users utilize a fraction of the features provided
      by
      competing applications. Many competing products add a glut of features that
      only
      serve to complicate processes and frustrate users. Web2 targets this frustration
      by bringing the core functionality of multiple competing products into one
      place
      with one common set of controls to learn. We provide simpler versions of the
      most used applications in one easy-to-use product.





We
      focus
      on localization of the Internet to improve its relevance in our user’s everyday
      life. We believe there is a gap in productivity of the Internet as it applies
      to
      local markets. The Internet in its first iteration has served to connect the
      global community. Many products and services have evolved to more efficiently
      organize a global audience and global information, but few products have
      successfully levered Internet capabilities to address local markets where people
      conduct the vast majority of their lives, learning, transactions and
      communications. Web2 strives to address this audience by creating localized
      centers of aggregation and tools that invert the process of trying to locate
      information. Traditional online search, auctions and other listings try to
      accumulate the entirety of the universe of information and then let consumers
      sift it down to their “needle in a haystack.” We reverse the process and start
      with a local pile of needles, expanding the scope of the search geographically
      to reach further into the world if the user so desires. This eliminates the
“20
      out of 2,347,986 results” that current processes produce which makes us faster
      and more relevant for the majority of users.





We
      create
      living, real-time local communities. “Web2.0” is the descriptor of a new
      generation of products, services and capabilities on the Internet. One of its
      hallmarks is the sharing of information and the concept of self-creating
      content. Web2 intends to build on these capabilities to deliver a new form
      of
      convergent local information service. In our view, a system that allows people
      to interact at a street and neighborhood level provides an unprecedented
      integration of technology and local life. In such a system local news,
      information, auctions, listings, search, video and other threads of the fabric
      of local life are weaved into a fabric by the people themselves. Anyone can
      post
      information that they feel is important for their neighbors to know. Births,
      deaths, graduations awards, a rabid raccoon on 5 th street,
      meeting announcements, activities, local business offers, neighbor classifieds,
      auctions and many other elements come together. Regional information is also
      provided and users may expand to a larger geographic reach as
      desired.





We
      provide free utilities and services for users under advertising supported
      business models. Consumers can find a wide assortment of valuable and useful
      services, tools and information available at no charge via Web2 products.
      Targeting niche markets, consumers may avail entertainment, information, news,
      utilities for the Internet, utilities for their computer, tools for creating
      communities and other content. Free web hosting services allow individuals,
      groups, non-profits and other users to post their websites to our sub-domain
      system. While providing true value to users, the aggregation of audiences
      targeted by interest allows Web2 to derive advertising revenues.





We
      migrate emerging online services and products from the U.S. to other
      geographical markets in their local languages. India is the fourth largest
      Internet market in the world. We intend to adapt proven products to meet the
      social and language needs of this large audience. This rapid follow-on strategy
      gives the latest products to online customers in foreign markets and secures
      an
      early market position for Web2.




**Corporations
      and Specialized Organizations**




The
      Internet changes everything for companies, charities, political parties and
      other cultural organizations. These groups face incremental new challenges
      in
      communicating with their customers and constituents in the Internet 2.0 world.
      Increasingly the online population has a substantial amount of information
      at
      their fingertips. They can assess situations, opportunities, products and
      services for themselves as opposed to relying on “experts” that provided such
      insight in the past. Companies that fail to acknowledge the new real-time
      realities of the Internet do so at their own risk. Blogs, online social
      communities, and negative websites (www.Googlesucks.com) can accelerate
      dispersion and expansion of sensitive information, irrespective of factual
      accuracy, to a global audience. Web2 services this customer base by providing
      easily implemented, cost effective solutions to actively harness the new
      community of online consumers.





We
      provide a new set of tools for companies and organizations to actively embrace
      their constituents. Proactive companies and groups seek tools such as those
      offered by Web2 to try to channel and capitalize on both good and bad
      communications with customers, supporters, and the public at-large. Each
      customer touch point is an opportunity to expand sales and the depth of customer
      relationships. The best run companies utilize this new capability of real-time
      customer relationships as a competitive advantage to stay abreast of the market
      and their product position therein.





These
      products address any opportunity where groups of people aggregate around common
      interests. Golf, motorcycles, crafts, charities, political candidates, political
      issues and a universe of other special interest opportunities exist where a
      client has already begun to build the audience. Web2 products simply deepen
      the
      level of audience interaction.




6




**Products
      and Services**




Our
      product development philosophy is built upon rapid and continuous innovation,
      with frequent releases of early stage products that we seek to improve with
      every iteration of the development cycle. Our current principal products and
      services are described below.




**Website
      Builder and E-Commerce**




We
      are
      focused on building products and services that benefit our users by helping
      them
      to conduct their business on the Internet. We offer our services and products
      through a number of our sites such as chamberecommerce.com, websiteowner.com,
      and websitesuperstore.com. Products are also intended to be sold through
      private-label partner channels.





We
      endeavor to provide non-technical entrepreneurs with the ability to easily
      and
      effectively put their business on the Internet. By assembling and integrating
      all of the parts of an Internet business in one place, we offer a total solution
      for the business community. A customer gets their own URL (web address),
      easy-to-use website builder, site hosting, shopping cart, credit card processing
      (if required) and Internet marketing tools in a secure, efficient and affordable
      bundle. Some key features of our products include:





·
            Pre-configured,
                professionally designed, tested, live websites (not templates that
                must be
                made into a website)





·
            Web-stores
                with integrated shopping carts that match web
                design





·
            URL
                ownership





·
            Processing
                account for accepting credit card, PayPal and other forms of
                payment





·
            Photo
                Galleries





·
            Online
                Surveys/Polls





·
            Hosting
                of all services with automatic backup, redundancy and
                security





·
            Marketing
                including search engine optimization, affiliate programs, email,
                newsletters, and Chamber of Ecommerce Associate
                membership





·
            Shipping
                support via partner arrangements





·
            Reports
                providing information that allows owners to focus on doing business
                versus
                managing technical site details





·
            Advertising
                sales for site banners





·
            Purchasing
                discounts on goods and services via partner
                network





·
            Extensive
                business support library of tools, articles and
                e-books





·
            24/7/365
                friendly, helpful support





Compared
      to the cost and effort of buying each of these elements individually and
      combining them into a working website, our bundles are a tremendous value.
      Our
      products are intended to save businesses significant money and considerable
      time
      and effort in launching a web business. More importantly, our products allow
      a
      business owner to actually focus on their BUSINESS, not on SSL Sockets, PHP
      scripts, server authentication, FTP access, ASP, HTML, and all the other arcane
      details of putting up a website. Just like automobile engineers have packaged
      the immense complexity of a vehicle’s workings into a key, gear shift, steering
      wheel, and pedals that drivers easily master, our products do the same for
      online business. And just like vehicle markets offer a wide array of models,
      we
      provide a vast assortment of website styles, shapes, and functions to suit
      each
      business’s unique needs. A buyer simply picks out the website that fits their
      product, industry, desired functionality and personality. In some cases we
      can
      actually provide the entrepreneur with a fully stocked store that is ready
      for
      market. In others it lets the business owner uniquely customize every aspect
      of
      their site. Our goal is to provide everything a web business owner needs and
      to
      be their partner for life.





7




**Basic
      Builder**




Our
      Basic
      Builder package is targeted to non-business entities with a need for a simple,
      reliable Internet presence. Priced at $0.99 per month, the Basic package
      provides a basic website, limited hosting space and use of our website builder
      to users such as associations, church groups, scout groups, teams, leagues,
      school organizations, charities, clubs and other non-business groups. The Basic
      Builder package is intended to give an organization that does not necessarily
      possess technical expertise, a professional website with a minimum expense
      of
      time, effort and cost. Users can upgrade to add email services and increase
      storage capacity at any time for an additional charge.




**Business
      Package**




Our
      Business package is intended for non-transactional businesses that desire to
      post their information on their own website on the Internet. Targeted clients
      include lawyers, dentists, doctors, accountants, plumbers, electricians, and
      any
      other type of service or professional business that can benefit from the
      Internet as a means to provide information to its prospective and current
      customers. Priced at $9.95 per month with a one-time $9.95 sign-up fee, the
      Business package includes a domain name (website address), professional website
      with an unlimited number of pages, site hosting, email and use of our website
      builder. This package enables businesses to create its online brochure including
      interactive photo galleries, polls, and news other information that begin with
      hundreds of professionally designed templates. It has been engineered to allow
      a
      small business owner to create a very presentable website in just a few
      minutes.




**Webstore
      Package**




For
      businesses that transact sales on the Internet, our Webstore package provides
      an
      easy, affordable, one-stop solution. This package is intended to make entering
      the world of e-commerce much easier for business owners that prefer to build
      their own site. It enables business owners to focus on their products, services
      and customers as opposed to software coding and other technical matters
      typically associated with building a website. A business owner receives their
      own domain name (website address), a professional website with an unlimited
      number of pages, site hosting, email, use of our website builder, an integrated
      shopping cart, and payment processing account for the price of $19.95 per month.
      Integration of the website, shopping cart and payment processing simplifies
      the
      process of creating a site and maintains a common look and feel of the site
      across the elements. No technical knowledge is required.




8




**Custom
      Development**




Some
      customers prefer to hire us to create their website for them. They may prefer
      to
      outsource this work, or they may require specialized functionality that exceeds
      the capability of our website builder products. This service is also utilized
      by
      builder customers who have built their own site, but need a customized
      application or database developed. We listen to the customer’s needs and provide
      a quote for customized coding work. Billing is based on expected time required
      to develop the requested elements.




**Upgrades
      and Add-on Services**





We
      offer
      upgrades to our basic packages and add-on products. Users may opt to add email,
      expand storage, or optimize their site for search engine ranking. These services
      are fee-based and may be recurring or one-time in nature. Users may opt in
      at
      the time of initial purchase, they can opt in later, or they may respond to
      email promotions we send from time to time.




***AdAgencyPro.com***




AdAgencyPro
      is our central advertising sales point which enables advertisers to purchase
      ads
      across the Web2 properties. Advertisers are able to target the websites and
      audiences they wish to reach using our automated tools with little or no
      assistance. Buyers enter text-based ads into our system, or supply links to
      their ad server to populate banner and other visual ads. Ad insertion is
      automated with the advertiser specifying the location, frequency, timing and
      budget for click through and display ads.


Webmasters
      may also opt into our eWebTeam affiliate network via AdAgencyPro. In this
      program they can opt to sell their products via our affiliate network, or they
      can opt to sell other affiliate’s products on their site. An affiliate network
      is an Internet sales network that is able to track the source of leads that
      produce sales and pay the referring site an agreed affiliate commission.
      Affiliate networks are an effective means of creating broad product
      distribution. It costs nothing to engage until a sale is made, at which time
      the
      seller pays the referring affiliate a sales commission. eWebTeam administers
      the
      process, tracks the affiliate referrals, and acts as the escrow account to
      assure payment of commissions. eWebTeam earns a percentage of sales as its
      compensation.




**ByIndia.com**




India
      is
      the second largest nation in the World by population and the fourth largest
      by
      number of Internet users. ByIndia.com is a complete first generation search
      engine (similar to Google) tailored for this large growing market. It provides
      easy access to millions of Indian web pages in a manner consistent with the
      culture, practice, and language of the Indian population. It is our belief
      that
      our integrated features will be embraced as the preferred tool to help Indian
      people find exactly what they are looking for in India on the web. The
      ByIndia.com search experience also includes:




·
            
            Advanced
                Search Functionality - Enables users to construct complex queries
                using
                Boolean logic and other relevancy index schemes.




·
            
            Spell
                Checker - Detects mis-spellings or potential typing errors and suggests
                alternative search terms.




·
            
            Indian
                Index - The results produced are directly related to India and Indian
                websites, so users can find the Indian information they are seeking
                without many iterations.




·
            
            Indian
                Website Directory - Ability to browse lists of Indian websites by
                category
                and by state; provides fast targeted
                information.




·
            
            Free
                Classified Advertisements - Searchable classified ads create an online
                market for goods and services.




·
            
            Free
                Blogs - Easy-to-use free blog builder allows users to begin publishing
                instantly. Blogs are web pages usually made up of short, informal,
                frequently updated posts that are arranged chronologically. Blogs
                can
                facilitate communications among small groups or to a worldwide audience
                in
                a way that is simpler and easier to follow than traditional email
                or
                discussion forums.




ByIndia
      generates revenue primarily from keyword contextual advertising sales. The
      product encompasses a complete advertising sales module that automates an
      auction system for keywords and paid placement advertising. Paid placement
      ads
      take the form of display ads, or text ads that are given preferred top-level
      positioning.




9




ByIndia.com
      was acquired by Web2 Corp from Securenext, an Indian development firm in July
      2006. Web2 and Securenext have entered into a consulting arrangement under
      which
      Securenext provides technical development and some elements of operations
      management.




**Community
      Builders**




The
      Internet offers a unique opportunity and method for people with similar
      interests to congregate online in what are known as social networks. MySpace.com
      has become the largest example of a first generation social network. People
      are
      able to build a profile page that presents their interests, personality,
      talents, information and general history on a network that is browse-able by
      other members. The advantages of this form of social network are that it is
      always on, it connects people regardless of geography and it is easier than
      building a dedicated webpage.





Web2
      has
      applied this general concept to specialized groups and corporations as a means
      to create living communities of customers and constituents. Adding the social
      network infrastructure to situations where a group has already been formed
      deepens the group relationship. Applications include television programming
      and
      networks where the one-way communication from content provider to customer
      is
      turned into a real-time, two way relationship that becomes a self-sustaining,
      self-creating community around the core interest. The scope can incorporate
      e-commerce, auctions, forums and blogs to foster participation commercially,
      professionally, and personally.





The
      Web2
      concept works well for strong brands, companies, charitable/cause-related
      organizations, political parties/ campaigns, community groups and social
      organizations. Each can use Web2 Community 2.0 to create, manage and monitor
      their user base to gain immediate insights into opinions, mitigate misleading
      or
      untrue information, disseminate information, build loyalty, and profit from
      transactions. Community 2.0 is licensed on a recurring monthly basis with
      revenue sharing options for advertising, auctions and e-commerce where
      appropriate.




**Audience
      Aggregation System**




Web2
      has
      created a series of services that are positioned to attract internet users
      via
      free services, entertainment, social networks and special interest websites.
      We
      are skilled in the art of search engine positioning of such properties to drive
      context specific traffic to these sites. The result is daily traffic that ranges
      from 400,000 to 1,500,000 visitors in aggregate. Web2 utilizes this audience
      by
      placing advertising on the sites, redirecting broken link traffic (404 error
      traffic) to context consistent destination websites owned by clients, and
      placing toolbars on a user’s browser with link and promotional information for
      other Web2 products. This delivers revenue from advertising sales, traffic
      brokerage fees, and affiliate program referrals and provides a significant
      marketing advantage in promoting our paid products. A few of the 300 sites
      used
      by Web2 are included below:





·
            
            Web1000.com
                - Webmaster resource page offering free website hosting with over
                500,000
                accounts.





·
            
            SickSpot.com
                - Free video posting site with thousands of entertaining video
                clips.





·
            
            FreeStuffMakeMoney.com
                - A free directory of money-saving and money-making
                opportunities.





·
            
            Chamberecommerce.org
                - Directory of U.S. Chambers of
                Commerce





·
            
            MyDigitalSpot.com
                - Free photo sharing and archiving
                site





·
            
            HotHomePages.com
                - Social networking site targeting 18+
                audience




***Technology***




We
      are a
      technology company that specializes in making the Internet easier, more
      productive, and more accessible to non-technical users. We have adapted
      established products to new uses, applied new technologies to improve old
      processes and have created entirely new products to address problems, points
      of
      friction, frustration, or opportunities to deliver better service. In doing
      so,
      we have evolved into a software, technology, Internet, advertising and media
      company all rolled into one. We employ talented, ingenious people who can
      develop disruptive, important products at low cost. We employ programming and
      engineering talent on a global basis with a fluid contractor base that can
      rapidly be configured for our next targeted project. In doing so we have created
      a flexible talent pool that allows us to keep our fixed costs low without
      sacrificing production volume or quality.




10




We
      operate our own data centers with key redundancy provided through third-parties.
      Our networks run on industry-standard platforms with sophisticated clustering
      schemes to provide maximum efficiency. We utilize specialized code in operation
      of our networks and servers.




Some
      elements of our technology include:




**Website
      Builder Technology**




We
      have
      developed our website builder code from the ground up to create a product with
      the goal of unprecedented ease-of-use. Our code builds a website using input
      from the site owner to customize it to their needs. The end-product website
      contains none of our code. It is not exposed at any time and is protected by
      industry standard encryption technology known for its reliability.





Our
      Builder products have a flexible design that allows coupling or uncoupling
      of
      modules that deliver various functions to the site. Modules are integrated
      seamlessly into the website with look and navigation consistent with the rest
      of
      the site. One module in particular is e-commerce which enables the user to
      quickly and easily add items for sale on the website. Integrated into the
      e-commerce module is a shopping cart and payment processing function that is
      not
      found in similar competing products. Payment processing is integrated through
      ChargeKard International which processes most major credit cards on a global
      basis. This integration dramatically simplifies the process of creating a
      website with e-commerce capability.




**Web
      Search Technology**




Our
      web
      search technology uses a combination of techniques to determine the importance
      of a web page or directory listing independent of a particular search query
      and
      to determine the relevance of that page to a particular search query.




*Text-Matching
      Techniques* .
      Our
      technology employs text-matching techniques that compare search queries with
      the
      content of web pages to help determine relevance. Our text-based scoring
      techniques do far more than count the number of times a search term appears
      on a
      web page. For example, our technology determines the proximity of individual
      search terms to each other on a given web page, and prioritizes results that
      have the search terms near each other. Many other aspects of a page’s content
      are factored into the equation, as is the content of pages that link to the
      page
      in question. By combining query independent measures such as PageRank with
      our
      text-matching techniques, we are able to deliver search results that are
      relevant to what people are trying to find.




***Advertising
      Technology***




Our
      advertising program serves millions of relevant, targeted ads each day based
      on
      search terms people enter or content they view on the web. The key elements
      of
      our advertising technology include:




*Flat
      Pay per Click System* .
      Unlike
      competing products, we use a simplified $0.01 per click advertising rate in
      our
      search engine advertising. This reduces the technical infrastructure required
      to
      deliver ads, reduces incentive for click fraud activities to cash in on high
      priced keywords, increases the speed of ad delivery and eliminates the ability
      of larger competitors to lock smaller competitors out of the market by buying
      keywords at inflated prices. Our search technology delivers highly contextual
      audiences in a geographic region making us a perfect product for small local
      businesses to reach local clientele. Other advertisements across the network
      of
      Web2 sites also utilize flat per-click rates as opposed to an auction system.
      We
      are paid only when users click on ads, therefore we have developed ad-builder
      technology in our search engine and directory products to improve the design,
      clarity and power of advertisements displayed on our system. Our intent is
      to
      simplify the effort of engaging Internet search advertising and to improve
      its
      performance, primarily for the underserved local business.




***Systems
      Technology***




Our
      business relies on our software and hardware infrastructure, which provides
      substantial computing resources at low cost. We currently use a combination
      of
      off-the-shelf and custom software running on clusters of commodity computers.
      Our considerable investment in developing this infrastructure has produced
      several key benefits. It simplifies the storage and processing of large amounts
      of data, eases the deployment and operation of large-scale global products
      and
      services and automates much of the administration of large-scale clusters of
      computers.




Although
      most of this infrastructure is not directly visible to our users, we believe
      it
      is important for providing a high-quality user experience. We regularly evaluate
      new hardware alternatives and software techniques and network locations can
      help
      to further reduce our operational costs.




11




***Sales
      and Support***




We
      are
      just beginning to roll out our sales and support infrastructure. Our plans
      call
      for sales and support offices in regional hub markets with representatives
      deployed in all major U.S. markets.




We
      utilize direct Internet sales, direct response media and third-party channels
      to
      promote and sell our website builder products. Sales processing channels for
      this product include Internet orders through multiple owned sites under various
      brands and phone orders through our inbound call center operations via a
      contracted service provider.




We
      bring
      businesses into our advertising network through both online and direct sales
      channels. Our direct advertising sales team focuses on attracting and supporting
      small companies from major markets in the U.S. These firms have smaller
      advertising budgets, but in aggregate represent a massive market. By India
      ad
      sales are primarily booked through an automated process that requires little
      human support




Our
      global support organization, live-websupport.com provides customer service
      for
      all Web2 products. We strive to build products with intuitive user experiences
      and reliability to reduce customer service and support traffic by design. When
      the customer still has support needs they have self-help, email, Instant
      Message, and phone support available in resolving their difficulty.




***Marketing***




We
      operate a constellation of brands built around high-quality products and
      services that make an appreciable difference in people’s lives. We believe
      delivery of a useful, fairly-priced, product ultimately drives word of mouth
      viral growth of our products. Our marketing relies on publicity and public
      relations to cost effectively get word out to the masses about our innovative
      solutions to common problems. We augment this with direct response advertising
      that is intended to educate, inspire and motivate customers to buy our products
      and services. We specialize in Internet advertising and will avail this audience
      via targeted keyword search advertising, search engine optimization, special
      purpose blogs, forums that provide useful information, email to parties
      expressing interest and general text and display advertising.




Our
      early
      marketing efforts focus on creating word-of-mouth momentum and using public
      relations efforts to accelerate it. Over time we will migrate to broader
      traditional media to create broad-based consumer awareness.




***Competition***




We
      face
      well positioned competition in every aspect of our business, and particularly
      from other companies that seek to connect people with information on the web
      and
      provide them with relevant advertising. Currently, we consider our primary
      competitors to be Google, Microsoft and Yahoo.




We
      also
      face competition from other web search providers, including companies that
      are
      not yet known to us. We compete with Internet advertising companies,
      particularly in the areas of pay-for-performance and keyword-targeted Internet
      advertising. We may compete with companies that sell products and services
      online because these companies, like us, are trying to attract users to their
      web sites to search for information about products and services. In addition
      to
      Internet companies, we face competition from companies that offer traditional
      media advertising opportunities.




We
      compete to attract and retain relationships with users, advertisers and web
      sites. The bases on which we compete differ among the groups.




·
            
            *Users*.
                We compete to attract and retain users of our website builder, search
                and
                community products and services. Many of the products and services
                we
                offer to users are free. For those that are fee based, we intend
                to pursue
                a price leadership strategy to disrupt the value delivered by incumbent
                competitors to customers. In all cases we target underserved customers,
                identified pools of Internet user frustration, or opportunities to
                expand
                the addressable market for a product category by simplifying and
                reducing
                product cost to users.




·
            
            *Advertisers*.
                We compete to attract and retain advertisers. We compete in this
                area
                principally on the basis of the return on investment realized by
                advertisers using our advertising inventory, particularly targeting
                the
                underserved local business, or targeted Indian population. We also
                compete
                based on the quality of customer service, features and product ease
                of
                use.




·
            
            *Website
                Owners*.
                We compete to attract and retain website owners that utilize our
                products
                to build their online presence. We compete by delivering superior
                ease of
                use, better resulting sites, and disruptive pricing for value delivered.




We
      believe that we compete favorably on the factors described above. However,
      our
      industry is evolving rapidly and is becoming increasingly competitive. Larger,
      more established companies than us are increasingly focusing on businesses
      that
      directly compete with us.




12




***Intellectual
      Property***




We
      rely
      on a combination of trademark, copyright and trade secret laws in the U.S.
      and
      other jurisdictions as well as confidentiality procedures and contractual
      provisions to protect our proprietary technology and our brand. We also enter
      into confidentiality and invention assignment agreements with our employees
      and
      consultants and confidentiality agreements with other third parties, and we
      rigorously control access to proprietary technology.




Web2
      Corp, Chamber of E-Commerce, and YouGetIt are trademarks under application
      in
      the U.S. Our unregistered trademarks include: Web1000, SickSpot, HotHomePages
      (protected under common law through first use in commerce since 2000),
      MyDigitalSpot, WebsiteSuperstore, WebsiteOwner, TemplateSuperstore, and
      ZeroBrand.




Circumstances
      outside our control could pose a threat to our intellectual property rights.
      For
      example, effective intellectual property protection may not be available in
      every country in which our products and services are distributed. Also, the
      efforts we have taken to protect our proprietary rights may not be sufficient
      or
      effective. Any significant impairment of our intellectual property rights could
      harm our business or our ability to compete. Also, protecting our intellectual
      property rights is costly and time consuming. Any increase in the unauthorized
      use of our intellectual property could make it more expensive to do business
      and
      harm our operating results.




Companies
      in the Internet, technology and media industries own large numbers of patents,
      copyrights and trademarks and frequently enter into litigation based on
      allegations of infringement or other violations of intellectual property rights.
      As we face increasing competition, the possibility of intellectual property
      claims against us grows. Our technologies may not be able to withstand any
      third-party claims or rights against their use.




***Government
      Regulation***




We
      are
      subject to a number of foreign and domestic laws that affect companies
      conducting business on the Internet. In addition, because of the increasing
      popularity of the Internet and the growth of online services, laws relating
      to
      user privacy, freedom of expression, content, advertising, information security
      and intellectual property rights are being debated and considered for adoption
      by many countries throughout the world.




In
      the
      U.S., laws relating to the liability of providers of online services for
      activities of their users are currently being tested by a number of claims,
      which include actions for defamation, libel, invasion of privacy and other
      data
      protection claims, tort, unlawful activity, copyright or trademark infringement,
      or other theories based on the nature and content of the materials searched
      and
      the ads posted or the content generated by users. Likewise, other federal laws
      could have an impact on our business. For example, the Digital Millennium
      Copyright Act has provisions that limit, but do not eliminate, our liability
      for
      listing or linking to third-party web sites that include materials that infringe
      copyrights or other rights, so long as we comply with the statutory requirements
      of this act. The Children’s Online Protection Act and the Children’s Online
      Privacy Protection Act restrict the distribution of materials considered harmful
      to children and impose additional restrictions on the ability of online services
      to collect information from minors. In addition, the Protection of Children
      from
      Sexual Predators Act of 1998 requires online service providers to report
      evidence of violations of federal child pornography laws under certain
      circumstances.




In
      addition, the application of existing laws regulating or requiring licenses
      for
      certain businesses of our advertisers, including, for example, distribution
      of
      pharmaceuticals, adult content, financial services, alcohol or firearms, can
      be
      unclear. Application of these laws in an unanticipated manner could expose
      us to
      substantial liability and restrict our ability to deliver services to our users.
      For example, some French courts have interpreted French trademark laws in ways
      that would, if upheld, limit the ability of competitors to advertise on generic
      keywords.




We
      also
      face risks from legislation that could be passed in the future.




We
      also
      face risks due to failure to enforce or legislate, particularly in the area
      of
      network neutrality, where governments might fail to protect the Internet’s basic
      neutrality as to the services and sites that users can access through the
      network. Such a failure could limit our ability to innovate and deliver new
      features and services, which could harm our business.




We
      are
      also subject to international laws associated with data protection in Europe
      and
      elsewhere, and the interpretation and application of data protection laws is
      still uncertain and in flux. In addition, because our services are accessible
      worldwide, foreign jurisdictions may claim that we are required to comply with
      their laws.




13




***Culture
      and Employees***




We
      take
      great pride in our company culture and embrace it as one of our fundamental
      strengths. We remain steadfast in our commitment to constantly improve the
      technology we offer to our users and advertisers and to our website owners.
      We
      have assembled what we believe is a highly talented group of employees. Our
      culture encourages the iteration of ideas to address complex technical
      challenges. In addition, we embrace individual thinking and creativity.




Despite
      our rapid growth, we constantly seek to maintain a small-company feel that
      promotes interaction and the exchange of ideas among employees. We try to
      minimize corporate hierarchy to facilitate meaningful communication among
      employees at all levels and across departments, and we have developed software
      to help us in this effort. We believe that considering multiple viewpoints
      is
      critical to developing effective solutions, and we attempt to build consensus
      in
      making decisions. While teamwork is one of our core values, we also
      significantly reward individual accomplishments that contribute to our overall
      success. As we grow, we expect to continue to provide compensation structures
      that are more similar to those offered by start-ups than established companies.
      We will focus on very significant rewards for individuals and teams that build
      amazing things that provide significant value to us and our users.




At
      June 30, 2006, we had 24 employees and 24 contractors, consisting of 24 in
      research and development, 4 in sales and marketing, 4 in general and
      administrative and 10 in operations. Most of Web2’s employees, except temporary
      employees and contractors, are also equity holders, with significant collective
      employee ownership. As a result, many employees are highly motivated to make
      the
      company more successful.




**RISK
      FACTORS**




***Risks
      Related to Our Business and Industry***




**We
      have a history of losses and we may not become
      profitable** **.**





For
      the
      year ended December 31, 2006, we had net sales of $527,043, as compared to
      net
      sales of $ 275,412 for the year ended December 31, 2005. For the year ended
      December 31, 2006, we incurred a net loss of $2,617,974, as compared to a net
      loss of $586,797 for the year ended December 31, 2005. At December 31, 2006,
      we
      had a stockholders’ deficit of $4,072,043 and a working capital deficit of
      $4,498,367. We expect to sustain a loss for 2007.





As
      a
      result, we will need to generate significant additional sales in order to become
      and maintain profitability. We cannot assure our shareholders that we will
      achieve significant additional sales, or that we will again be profitable and,
      if so, that we can sustain profitability into the future. It is possible that
      we
      may encounter unexpected expenses. If the time required to generate significant
      sales and return to profitability is longer than anticipated, we may need to
      obtain working capital in the future. There can be no assurance that we will
      be
      able to successfully complete any such financing arrangements or that the
      amounts raised would meet our cash flow needs. We cannot assure our shareholders
      that additional capital will be available to us in the future on favorable
      terms, or at all. If adequate funds are not available or are not available
      on
      acceptable terms, our ability to fund our business activities essential to
      operate profitably would be significantly limited.





**Our
      available cash is limited. We may need to raise additional
      capital** **.**





At
      December 31, 2006, we had a stockholders’ deficit of $4,072,043. At December 31
      2006, we had current assets of $222,287 and current liabilities of $4,720,654,
      resulting in a working capital deficit of $4,498,367. At December 31, 2006,
      our
      notes payable to related parties was $2,914,361. We believe that we will
      generate sufficient operating capital through operations to meet our debt
      service requirements and to maintain our business at its present level. However,
      if we fail for any reason to repay any of our loans on a timely basis, then
      we
      may have to curtail our business sharply or cease our operations
      altogether.





Similarly,
      there can be no assurance that sales will continue to increase or even maintain
      current levels. If we continue to experience cash flow difficulties, then we
      may
      need to obtain capital through equity and/or debt financing. If additional
      funds
      are obtained by issuing equity securities and/or debt securities convertible
      into equity, dilution to existing shareholders will result, and future investors
      may be granted rights superior to those of existing shareholders. There can
      be
      no assurances, however, that additional financing will be available when needed,
      or if available, on acceptable terms. There are no current agreements,
      arrangements, or understandings for any equity and/or debt financing. The
      failure of the Company to obtain any such financing as required or otherwise
      desired will have a material adverse effect upon the Company, its business
      and
      operations.





14




**Our
      financial statements are subject to a “going concern”
qualification** .





Our
      financial statements appearing elsewhere in this report have been prepared
      on a
      going concern basis that contemplates the realization of assets and the
      settlement of liabilities and commitments in the normal course of business.
      Management realizes that we must generate capital and revenue resources to
      enable us to return to profitable operations. The realization of assets and
      satisfaction of liabilities in the normal course of business is dependent upon
      our making additional sales and ultimately returning to profitable operations.
      No assurances can be made that we will be successful in these activities. Should
      any of these events not occur, our financial statements will be materially
      and
      adversely affected.




***We
      face significant competition from Microsoft, Google, Yahoo and other companies.***




We
      face
      formidable competition in every aspect of our business, and particularly from
      other companies that seek to connect people with information on the web and
      provide them with relevant advertising. Currently, we consider our primary
      competitors to be Microsoft Corporation, Google, Inc. and Yahoo! Inc. Microsoft
      has announced plans to develop features that make web search a more integrated
      part of its Windows operating system or other desktop software products. We
      expect that Microsoft will increasingly use its financial and engineering
      resources to compete with us. All of these competitors have more employees
      than
      we do. All have significantly more cash resources than we do. These companies
      also have longer operating histories and more established relationships with
      customers and end users. They can use their experience and resources against
      us
      in a variety of competitive ways, including by making acquisitions, investing
      more aggressively in research and development and competing more aggressively
      for advertisers and web sites. They also may have a greater ability to attract
      and retain users than we do because they operate Internet portals with a broad
      range of content products and services. If they are successful in providing
      similar or better products compared to ours or leverage their platforms or
      products to make their products and services easier to access than ours, we
      could experience a significant decline in user traffic. Any such decline in
      traffic could negatively affect our revenues.




***We
      face competition from other Internet companies, including web search providers,
      Internet access providers, Internet advertising companies and destination web
      sites that may also bundle their services with Internet access.***




In
      addition to Microsoft, Google and Yahoo, we face competition from other web
      search providers, including companies that are not yet known to us. We compete
      with Internet advertising companies, particularly in the areas of
      pay-for-performance and keyword-targeted Internet advertising. Also, we may
      compete with companies that sell products and services online because these
      companies, like us, are trying to attract users to an array of commercial
      products and services.




We
      also
      compete with destination web sites that seek to increase their product and
      revenue base. These destination web sites may include those operated by Internet
      access providers, such as cable and DSL service providers. Because our users
      need to access our services through Internet access providers, they have direct
      relationships with these providers. If an access provider or a computer or
      computing device manufacturer offers online services that compete with ours,
      the
      user may find it more convenient to use the services of the access provider
      or
      manufacturer. In addition, the access provider or manufacturer may make it
      hard
      to access our services by not listing them in the access provider’s or
      manufacturer’s own menu of offerings, or may charge users to access our websites
      or the websites of our customers. Also, because the access provider gathers
      information from the user in connection with the establishment of a billing
      relationship, the access provider may be more effective than we are in tailoring
      services and advertisements to the specific tastes of the user.




There
      has
      been a trend toward industry consolidation among our competitors, and so smaller
      competitors today may become larger competitors in the future. If our
      competitors are more successful than we are at generating a customer base,
      our
      revenues may decline.




***We
      face competition from traditional media companies, and we may not be included
      in
      the advertising budgets of large advertisers, which could harm our operating
      results.***




In
      addition to Internet companies, we face competition from companies that offer
      traditional media advertising opportunities. Most large advertisers have set
      advertising budgets, a very small portion of which is allocated to Internet
      advertising. We expect that large advertisers will continue to focus most of
      their advertising efforts on traditional media. If we fail to convince these
      companies to spend a portion of their advertising budgets with us, or if our
      existing advertisers reduce the amount they spend on our programs, our operating
      results would be harmed.




***We
      expect our revenue growth rate to decline and anticipate downward pressure
      on
      our operating margin in the future.***




We
      expect
      that our revenue growth rate will decline over time and anticipate that there
      will be downward pressure on our operating margin. We believe our revenue growth
      rate will generally decline as a result of increasing competition and the
      inevitable decline in growth rates as our revenues increase to higher levels.
      We
      believe our operating margin will experience downward pressure as a result
      of
      increasing competition and increased expenditures for many aspects of our
      business.




15




***Our
      operating results may fluctuate, which makes our results difficult to predict
      and could cause our results to fall short of expectations.***




Our
      operating results may fluctuate as a result of a number of factors, many of
      which are outside of our control. For these reasons, comparing our operating
      results on a period-to-period basis may not be meaningful, and you should not
      rely on our past results as an indication of our future performance. Our
      quarterly and annual expenses as a percentage of our revenues may be
      significantly different from our historical or projected rates. Our operating
      results in future quarters may fall below expectations. Any of these events
      could cause our stock price to fall. Each of the risk factors listed and the
      following factors, may affect our operating results:




·
            
            Our
                ability to continue to attract users to our web sites and products.




·
            
            Our
                ability to monetize (or generate revenue from) traffic on our web
                sites
                and through our product offerings.




·
            
            Our
                ability to attract advertisers to our AdAgencyPro system.





·
            
            Our
                ability to attract customers to our website builder products, community
                products, and Indian search engine product.




·
            
            The
                mix in our revenues between our various products and services.




·
            
            The
                amount and timing of operating costs and capital expenditures related
                to
                the maintenance and expansion of our businesses, operations and
                infrastructure.




·
            
            Our
                focus on long term goals over short term results.




·
            
            The
                results of our investments in risky projects.




·
            
            Payments
                made in connection with the resolution of litigation matters.




·
            
            General
                economic conditions and those economic conditions specific to the
                Internet
                and Internet advertising.




·
            
            Our
                ability to keep our web sites operational at a reasonable cost and
                without
                service interruptions.




·
            
            Our
                ability to forecast revenue from agreements under which we guarantee
                minimum payments.




·
            
            Geopolitical
                events such as war, threat of war or terrorist actions.




Because
      our business is changing and evolving, our historical operating results may
      not
      be useful to you in predicting our future operating results. In addition,
      advertising spending has historically been cyclical in nature, reflecting
      overall economic conditions as well as budgeting and buying patterns. For
      example, in 1999, advertisers spent heavily on Internet advertising. This was
      followed by a lengthy downturn in ad spending on the web. Also, user traffic
      tends to be seasonal. Our rapid growth may mask the cyclicality and seasonality
      of our business. As our growth rate has slows, the cyclicality and seasonality
      in our business may become more pronounced and may cause our operating results
      to fluctuate.




***If
      we do not continue to innovate and provide products and services that are useful
      to users, we may not remain competitive, and our revenues and operating results
      could suffer.***




Our
      success depends on providing products and services that people use for a high
      quality Internet experience. Our competitors are constantly developing
      innovations in web search, online advertising and providing information to
      people. As a result, we must continue to invest significant resources in
      research and development in order to enhance our web search technology and
      our
      existing products and services and introduce new high-quality products and
      services that people can easily and effectively use. If we are unable to ensure
      that our users and customers have a high quality experience with our products
      and services, then they may become dissatisfied and move to competitors’
products and services. In addition, if we are unable to predict user preferences
      or industry changes, or if we are unable to modify our products and services
      on
      a timely basis, we may lose users, advertisers and website builder customers.
      Our operating results would also suffer if our innovations are not responsive
      to
      the needs of our users, advertisers and website builder customers are not
      appropriately timed with market opportunity or are not effectively brought
      to
      market. As search technology continues to develop, our competitors may be able
      to offer products that are, or that are perceived to be, substantially similar
      or better than those offered by Web2. This may force us to compete in different
      ways with our competitors and to expend significant resources in order to remain
      competitive.




16




***We
      generate a substantial amount of revenue from advertising, and the reduction
      in
      spending by or loss of advertisers could seriously harm our business.***




Advertisers
      will not continue to do business with us if their investment in advertising
      with
      us does not generate sales leads, and ultimately customers, or if we do not
      deliver their advertisements in an appropriate and effective manner. If we
      are
      unable to remain competitive and provide value to our advertisers, they may
      stop
      placing ads with us, which would negatively affect our revenues and
      business.




***We
      rely on our Chamber of E-Commerce customers for a significant portion of our
      revenues, and we benefit from our association with them. The loss of these
      customers could adversely affect our business.***




We
      provide website building, hosting, and marketing services to small and medium
      sized businesses. Customers will not continue to business with us if their
      investment in our product does not provide, or is perceived not to provide
      the
      functions, features, benefits, or results that they expect or desire. If we
      are
      unable to remain competitive and provide value to our business service
      customers, they may stop subscribing to our service or may not pay fees, which
      would negatively affect our revenues and business.




***Our
      business and operations may experience rapid growth. If we fail to effectively
      manage our growth, our business and operating results could be harmed and we
      may
      have to incur significant expenditures to address the additional operational
      and
      control requirements of this growth.***




We
      may
      experience rapid growth in our headcount and operations, which has placed,
      and
      will continue to place, significant demands on our management, operational
      and
      financial infrastructure. If we do not effectively manage our growth, the
      quality of our products and services could suffer, which could negatively affect
      our brand and operating results. Our expansion and growth in international
      markets heightens these risks as a result of the particular challenges of
      supporting a rapidly growing business in an environment of multiple languages,
      cultures, customs, legal systems, alternative dispute systems, regulatory
      systems and commercial infrastructures. To effectively manage this growth,
      we
      will need to continue to improve our operational, financial and management
      controls and our reporting systems and procedures. These systems enhancements
      and improvements will require significant capital expenditures and allocation
      of
      valuable management resources. If the improvements are not implemented
      successfully, our ability to manage our growth will be impaired and we may
      have
      to make significant additional expenditures to address these issues, which
      could
      harm our financial position. The required improvements include:




·
            
            Enhancing
                our information and communication systems to ensure that our offices
                around the world are well coordinated and that we can effectively
                communicate with our growing base of users, advertisers and business
                products customers.




·
            
            Enhancing
                systems of internal controls to ensure timely and accurate reporting
                of
                all of our operations.




·
            
            Ensuring
                enhancements to our systems of internal controls are scalable to
                our
                anticipated growth in headcount and operations.




·
            
            Standardizing
                systems of internal controls and ensuring they are consistently applied
                at
                each of our operations around the world.




·
            
            Improving
                our information technology infrastructure to maintain the effectiveness
                of
                our marketing, sales and customer fulfillment functions.




***Our
      business depends on a strong brand, and if we are not able to maintain and
      enhance our brand, our ability to expand our base of users, advertisers and
      business customers will be impaired and our business and operating results
      will
      be harmed.***




We
      believe that a strong brand identity significantly contributes to the success
      of
      our business. We also believe that maintaining and enhancing the “Chamber of
      E-Commerce”, “YouGetIt”, “ByIndia” and “Web2” brand is critical to expanding our
      base of users, advertisers, business customers and strategic partners.
      Maintaining and enhancing our brand may require us to make substantial
      investments and these investments may not be successful. If we fail to promote
      and maintain our brands, or if we incur excessive expenses in this effort,
      our
      business, operating results and financial condition will be materially and
      adversely affected. We anticipate that, as our market becomes increasingly
      competitive, maintaining and enhancing our brand may become increasingly
      difficult and expensive. Maintaining and enhancing our brand will depend largely
      on our ability to be a technology leader and to continue to provide high quality
      products and services, which we may not do successfully.




17




***Proprietary
      document formats may limit the effectiveness of our search technology by
      preventing our technology from accessing the content of documents in such
      formats which could limit the effectiveness of our products and services.***




A
      large
      amount of information on the Internet is provided in proprietary document
      formats such as Microsoft Word. The providers of the software application used
      to create these documents could engineer the document format to prevent or
      interfere with our ability to access the document contents with our search
      technology. This would mean that the document contents would not be included
      in
      our search results even if the contents were directly relevant to a search.
      These types of activities could assist our competitors or diminish the value
      of
      our search results. The software providers may also seek to require us to pay
      them royalties in exchange for giving us the ability to search documents in
      their format. If the software provider also competes with us in the search
      business, they may give their search technology a preferential ability to search
      documents in their proprietary format. Any of these results could harm our
      brand
      and our operating results.




***New
      technologies could block our ads, which would harm our business.***




Technologies
      may be developed that can block the display of our ads. Much of our revenue
      is
      derived from fees paid to us by advertisers in connection with the display
      of
      ads on web pages. As a result, ad-blocking technology could, in the future,
      adversely affect our operating results.




***Our
      corporate culture has contributed to our success, and if we cannot maintain
      this
      culture as we grow, we could lose the innovation, creativity and teamwork
      fostered by our culture, and our business may be harmed.***




We
      believe that a critical contributor to our success has been our corporate
      culture, which we believe fosters innovation, creativity and teamwork. As our
      organization grows, and we are required to implement more complex organizational
      management structures, we may find it increasingly difficult to maintain the
      beneficial aspects of our entrepreneurial culture. This could negatively impact
      our future success. In addition, equity ownership in our company may create
      disparities in wealth among employees, which may adversely impact relations
      among employees and our corporate culture in general.




***Our
      intellectual property rights are valuable, and any inability to protect them
      could reduce the value of our products, services and brand.***




Our
      trademarks, trade secrets, copyrights and all of our other intellectual property
      rights are important assets for us. There are events that are outside of our
      control that pose a threat to our intellectual property rights as well as to
      our
      products and services. For example, effective intellectual property protection
      may not be available in every country in which our products and services are
      distributed or made available through the Internet. Also, the efforts we have
      taken to protect our proprietary rights may not be sufficient or effective.
      Any
      significant impairment of our intellectual property rights could harm our
      business or our ability to compete. Also, protecting our intellectual property
      rights is costly and time consuming. Any increase in the unauthorized use of
      our
      intellectual property could make it more expensive to do business and harm
      our
      operating results.




Although
      we may seek to obtain patent protection for our innovations, it is possible
      we
      may not be able to protect some of these innovations. In addition, given the
      costs of obtaining patent protection, we may choose not to protect certain
      innovations that later turn out to be important. Furthermore, there is always
      the possibility, despite our efforts, that the scope of the protection gained
      will be insufficient or that an issued patent may be deemed invalid or
      unenforceable. Finally, third parties increasingly have and will continue to
      allege that our products and services infringe their patent rights.




We
      also
      face risks associated with our trademarks. Third parties may infringe on our
      trademarks and frequently enter into litigation based on allegations of
      infringement or other violations of trademark rights. As we face increasing
      competition and become increasingly high profile, the possibility of
      intellectual property rights claims against us grows. Our trademarks may not
      be
      able to withstand any third-party claims or rights against their use. Any
      intellectual property claims, with or without merit, could be time-consuming,
      expensive to litigate or settle and could divert resources and attention. An
      adverse determination also could prevent us from offering our products and
      services to customers under identities we have carefully fostered and may
      require that we procure substitute trademarks for our businesses at great
      expense.




***We
      are, and may in the future be, subject to intellectual property rights claims,
      which are costly to defend, could require us to pay damages and could limit
      our
      ability to use certain technologies in the future.***




Companies
      in the Internet, technology and media industries own large numbers of patents,
      copyrights, trademarks and trade secrets and frequently enter into litigation
      based on allegations of infringement or other violations of intellectual
      property rights. As we face increasing competition and become increasingly
      high
      profile, the possibility of intellectual property rights claims against us
      grows. Our technologies may not be able to withstand any third-party claims
      or
      rights against their use. Any intellectual property claims, with or without
      merit, could be time-consuming, expensive to litigate or settle and could divert
      resources and attention. An adverse determination also could prevent us from
      offering our products and services to others and may require that we procure
      substitute products or services for these members.




18




With
      respect to any intellectual property rights claim, we may have to pay damages
      or
      discontinue the practices found to be in violation of a third party’s rights. We
      may have to seek a license to continue such practices, which may not be
      available on reasonable terms and may significantly increase our operating
      expenses. A license to continue such practices may not be available to us at
      all. As a result, we may also be required to develop alternative non-infringing
      technology or practices or discontinue the practices. The development of
      alternative non-infringing technology or practices could require significant
      effort and expense. If we cannot obtain a license to continue such practices
      or
      develop alternative technology or practices for the infringing aspects of our
      business, we may be forced to limit our product and service offerings and may
      be
      unable to compete effectively. Any of these results could harm our brand and
      operating results.




From
      time
      to time, we receive notice letters from patent holders alleging that certain
      of
      our products and services infringe their patent rights. Some of these may result
      in litigation against us. Companies may also file trademark infringement and
      related claims against us over the display of ads in response to user queries
      that include trademark terms.




***Expansion
      into international markets is important to our long-term success, and our
      inexperience in the operation of our business outside the U.S. increases the
      risk that our international expansion efforts will not be successful.***




Operation
      of ByIndia has placed, and will continue to place, significant demands on our
      management, operational and financial infrastructure. If we do not effectively
      manage our international expansion, the quality of our products and services
      could suffer, which could negatively affect our brand and operating results.
      Our
      expansion and growth into additional international markets heightens these
      risks
      as a result of the particular challenges of supporting a rapidly growing
      business in an environment of multiple languages, cultures, customs, legal
      systems, alternative dispute systems, regulatory systems and commercial
      infrastructures.




·
            
            Challenges
                caused by distance, language and cultural differences and in doing
                business with foreign agencies and governments.




·
            
            Difficulties
                in developing products and services in different languages and for
                different cultures.




·
            
            Longer
                payment cycles in some countries.




·
            
            Credit
                risk and higher levels of payment fraud.




·
            
            Legal
                and regulatory restrictions.




·
            
            Currency
                exchange rate fluctuations.




·
            
            Foreign
                exchange controls that might prevent us from repatriating cash earned
                in
                countries outside the U.S.




·
            
            Political
                and economic instability and export restrictions.




·
            
            Potentially
                adverse tax consequences.




·
            
            Higher
                costs associated with doing business internationally.




·
            
            Additional
                U.S. and other regulatory requirements and increased complexity in
                complying with existing and new regulatory requirements.




These
      risks could harm our international expansion efforts, which would in turn harm
      our business and operating results.




***We
      compete internationally with local information providers and with U.S.
      competitors who are currently more successful than we are in various markets,
      and if we fail to compete effectively in international markets, our business
      will be harmed.***




We
      face
      different market characteristics and competition outside the U.S. In certain
      markets, other web search, advertising services and Internet service companies
      have greater brand recognition, more users and more search traffic than we
      have.
      Even in countries where we have a significant user following, we may not be
      as
      successful in generating advertising or subscription service revenue due to
      slower market development, our inability to provide attractive local advertising
      services or other factors. In order to compete, we need to improve our brand
      recognition and our selling efforts internationally and build stronger
      relationships with advertisers. We also need to better understand our
      international users and their preferences. If we fail to do so, our global
      expansion efforts may be more costly and less profitable than we expect.





19




***Our
      business may be adversely affected by malicious third-party applications that
      interfere with, or exploit security flaws in, our products and services.***




Our
      business may be adversely affected by malicious applications that make changes
      to our users’ computers and interferes with our product experiences. These
      applications may attempt, to change our users’ Internet experience, including
      hijacking queries to our sites, altering or replacing YouGetIt search results,
      or otherwise interfering with our ability to connect with our users. The
      interference often occurs without disclosure to or consent from users, resulting
      in a negative experience that users may associate with our brands. These
      applications may be difficult or impossible to uninstall or disable, may
      reinstall themselves and may circumvent other applications’ efforts to block or
      remove them. In addition, we offer a number of products and services that our
      users download to their computers or that they rely on to store information
      and
      transmit information to others over the Internet. These products and services
      are subject to attack by viruses, worms and other malicious software programs,
      which could jeopardize the security of information stored in a user’s computer
      or in our computer systems and networks. The ability to reach users and provide
      them with a superior experience is critical to our success. If our efforts
      to
      combat these malicious applications are unsuccessful, or if our products and
      services have actual or perceived vulnerabilities, our reputation may be harmed
      and our user traffic could decline, which would damage our business.




***Index
      spammers could harm the integrity of our web search results, which could damage
      our reputation and cause our users to be dissatisfied with our products and
      services.***




There
      is
      an ongoing and increasing effort by “index spammers” to develop ways to
      manipulate our web search results. For example, because our web search
      technology ranks a web page’s relevance based in part on the importance of the
      web sites that link to it, people have attempted to link a group of web sites
      together to manipulate web search results. We take this problem very seriously
      because providing relevant information to users is critical to our success.
      If
      our efforts to combat these and other types of index spamming are unsuccessful,
      our reputation for delivering relevant information could be diminished. This
      could result in a decline in user traffic, which would damage our business.




***Privacy
      concerns relating to our technology could damage our reputation and deter
      current and potential users from using our products and services.***




From
      time
      to time, concerns may be expressed about whether our products and services
      compromise the privacy of users and others. Concerns about our practices with
      regard to the collection, use, disclosure or security of personal information
      or
      other privacy-related matters, even if unfounded, could damage our reputation
      and operating results. While we strive to comply with all applicable data
      protection laws and regulations, as well as our own posted privacy policies,
      any
      failure or perceived failure to comply may result in proceedings or actions
      against us by government entities or others, which could potentially have an
      adverse affect on our business. Laws related to data protection continue to
      evolve. It is possible that certain jurisdictions may enact laws or regulations
      that impact our ability to offer our products and services in those
      jurisdictions, which could harm our business.




***Our
      business is subject to a variety of U.S. and foreign laws that could subject
      us
      to claims or other remedies based on the nature and content of the information
      searched or displayed by our products and services, and could limit our ability
      to provide information regarding regulated industries and products.***




The
      laws
      relating to the liability of providers of online services for activities of
      their users are currently unsettled both within the U.S. and abroad. It is
      possible that we could be held liable for misinformation provided over the
      web
      when that information appears in our web search results. If one of these
      complaints results in liability to us, it could be potentially costly, encourage
      similar lawsuits, distract management and harm our reputation and possibly
      our
      business. In addition, increased attention focused on these issues and
      legislative proposals could harm our reputation or otherwise affect the growth
      of our business.




The
      application to us of existing laws regulating or requiring licenses for certain
      businesses of our advertisers, including, for example, distribution of
      pharmaceuticals, adult content, financial services, alcohol or firearms, can
      be
      unclear. Existing or new legislation could expose us to substantial liability,
      restrict our ability to deliver services to our users, limit our ability to
      grow
      and cause us to incur significant expenses in order to comply with such laws
      and
      regulations.




Several
      other federal laws could have an impact on our business. Compliance with these
      laws and regulations is complex and may impose significant additional costs
      on
      us. For example, the Digital Millennium Copyright Act has provisions that limit,
      but do not eliminate, our liability for listing or linking to third-party web
      sites that include materials that infringe copyrights or other rights, so long
      as we comply with the statutory requirements of this act. The Children’s Online
      Protection Act and the Children’s Online Privacy Protection Act restrict the
      distribution of materials considered harmful to children and impose additional
      restrictions on the ability of online services to collect information from
      minors. In addition, the Protection of Children from Sexual Predators Act of
      1998 requires online service providers to report evidence of violations of
      federal child pornography laws under certain circumstances. Any failure on
      our
      part to comply with these regulations may subject us to additional liabilities.




20




We
      also
      face risks associated with international data protection. The interpretation
      and
      application of data protection laws in Europe and elsewhere are still uncertain
      and in flux. It is possible that these laws may be interpreted and applied
      in a
      manner that is inconsistent with our data practices. If so, in addition to
      the
      possibility of fines, this could result in an order requiring that we change
      our
      data practices, which in turn could have a material effect on our business.




We
      also
      face risks from legislation that could be passed in the future.




We
      also
      face risks due to failure to enforce or legislate, particularly in the area
      of
      network neutrality, where governments might fail to protect the Internet’s basic
      neutrality as to the services and sites that users can access through the
      network. Such a failure could limit Web2’s ability to innovate and deliver new
      features and services, which could harm our business.




***If
      we were to lose the services of our senior management team, we may not be able
      to execute our business strategy.***




Our
      future success depends in a large part upon the continued service of key members
      of our senior management team. In particular, our Chairman William Mobley and
      CEO Andre Forde are critical to the overall management of Web2 as well as the
      development of our technology, our culture and our strategic direction. All
      of
      our executive officers and key employees are at-will employees, and we do not
      maintain any key-person life insurance policies. The loss of any of our
      management or key personnel could seriously harm our business.




***We
      rely on highly skilled personnel and, if we are unable to retain or motivate
      key
      personnel or hire qualified personnel, we may not be able to grow effectively.***




Our
      performance is largely dependent on the talents and efforts of highly skilled
      individuals. Our future success depends on our continuing ability to identify,
      hire, develop, motivate and retain highly skilled personnel for all areas of
      our
      organization. Competition in our industry for qualified employees is intense,
      and we are aware that certain of our competitors have directly targeted our
      employees. Our continued ability to compete effectively depends on our ability
      to attract new employees and to retain and motivate our existing employees.




As
      we
      grow, our hiring process may prevent us from hiring the personnel we need in
      a
      timely manner. In addition, as we become a more mature company, we may find
      our
      recruiting efforts more challenging. The incentives to attract, retain and
      motivate employees provided by our option grants may not be as effective as
      in
      the past and our current and future compensation arrangements, which include
      cash bonuses, may not be successful in attracting new employees and retaining
      and motivating our existing employees. In addition, we have recently introduced
      new stock award programs, and under these new programs new employees will be
      issued a portion of their stock awards in the form of restricted stock units.
      These restricted stock units will vest based on individual performance, as
      well
      as the exercise price of their stock options as compared to that of other
      employees who started at about the same time. These new stock awards programs
      may not provide adequate incentives to attract, retain and motivate outstanding
      performers. If we do not succeed in attracting excellent personnel or retaining
      or motivating existing personnel, we may be unable to grow effectively.




***We
      have a short operating history and a relatively new business model in an
      emerging and rapidly evolving market. This makes it difficult to evaluate our
      future prospects and may increase the risk that we will not continue to be
      successful.***




We
      have
      very little operating history for you to evaluate in assessing our future
      prospects. Also, we derive nearly all of our revenues from online advertising
      website building products, and sale of other Internet services, which are
      immature industries that have undergone rapid and dramatic changes in its short
      history. You must consider our business and prospects in light of the risks
      and
      difficulties we will encounter as an early-stage company in a new and rapidly
      evolving market. We may not be able to successfully address these risks and
      difficulties, which could materially harm our business and operating results.




***We
      may have difficulty scaling and adapting our existing architecture to
      accommodate increased traffic and technology advances or changing business
      requirements, which could lead to the loss of users, advertisers and business
      product customers, and cause us to incur expenses to make architectural changes.***




To
      be
      successful, our network infrastructure has to perform well and be reliable.
      The
      greater the user traffic and the greater the complexity of our products and
      services, the more computing power we will need. We expect spending to continue
      as we purchase or lease data centers and equipment and upgrade our technology
      and network infrastructure to handle increased traffic on our web sites and
      to
      roll out new products and services. This expansion is expensive and complex
      and
      could result in inefficiencies or operational failures. If we do not implement
      this expansion successfully, or if we experience inefficiencies and operational
      failures during the implementation, the quality of our products and services
      and
      our users’ experience could decline. This could damage our reputation and lead
      us to lose current and potential customers and advertisers. The costs associated
      with these adjustments to our architecture could harm our operating results.
      Cost increases, loss of traffic or failure to accommodate new technologies
      or
      changing business requirements could harm our operating results and financial
      condition.




21




***We
      rely on bandwidth providers, data centers or other third parties for key aspects
      of the process of providing products and services to our users, and any failure
      or interruption in the services and products provided by these third parties
      could harm our ability to operate our business and damage our reputation.***




We
      rely
      on third-party vendors, including data center and bandwidth providers. Any
      disruption in the network access or co-location services provided by these
      third-party providers or any failure of these third-party providers to handle
      current or higher volumes of use could significantly harm our business. Any
      financial or other difficulties our providers face may have negative effects
      on
      our business, the nature and extent of which we cannot predict. We exercise
      little control over these third-party vendors, which increases our vulnerability
      to problems with the services they provide. We license technology and related
      databases from third parties to facilitate aspects of our data center and
      connectivity operations including, among others, Internet traffic management
      services. We have experienced and expect to continue to experience interruptions
      and delays in service and availability for such elements. Any errors, failures,
      interruptions or delays experienced in connection with these third-party
      technologies and information services could negatively impact our relationship
      with users and adversely affect our brand and our business and could expose
      us
      to liabilities to third parties.




Our
      systems are also heavily reliant on the availability of electricity, which
      also
      comes from third-party providers. If we were to experience a major power outage,
      we would have to rely on back-up generators. These back-up generators may not
      operate properly through a major power outage and their fuel supply could also
      be inadequate during a major power outage. This could result in a disruption
      of
      our business.




***Interruption
      or failure of our information technology and communications systems could impair
      our ability to effectively provide our products and services, which could damage
      our reputation and harm our operating results.***




Our
      provision of our products and services depends on the continuing operation
      of
      our information technology and communications systems. Any damage to or failure
      of our systems could result in interruptions in our service. Interruptions
      in
      our service could reduce our revenues and profits, and our brand could be
      damaged if people believe our system is unreliable. Our systems are vulnerable
      to damage or interruption from earthquakes, terrorist attacks, floods, fires,
      power loss, telecommunications failures, computer viruses, computer denial
      of
      service attacks or other attempts to harm our systems, and similar events.
      Some
      of our data centers are located in areas with a high risk of major earthquakes.
      Our data centers are also subject to break-ins, sabotage and intentional acts
      of
      vandalism, and to potential disruptions if the operators of these facilities
      have financial difficulties. Some of our systems are not fully redundant, and
      our disaster recovery planning cannot account for all eventualities. The
      occurrence of a natural disaster, a decision to close a facility we are using
      without adequate notice for financial reasons or other unanticipated problems
      at
      our data centers could result in lengthy interruptions in our service.




Any
      unscheduled interruption in our service puts a burden on our entire organization
      and would result in an immediate loss of revenue. If we experience frequent
      or
      persistent system failures on our web sites, our reputation and brand could
      be
      permanently harmed. The steps we have taken to increase the reliability and
      redundancy of our systems are expensive, reduce our operating margin and may
      not
      be successful in reducing the frequency or duration of unscheduled downtime.




***More
      individuals are using non-PC devices to access the Internet, and versions of
      our
      web search technology developed for these devices may not be widely adopted
      by
      users of these devices.***




The
      number of people who access the Internet through devices other than personal
      computers, including mobile telephones, hand-held calendaring and email
      assistants, and television set-top devices, has increased dramatically in the
      past few years. The lower resolution, functionality and memory associated with
      alternative devices make the use of our products and services through such
      devices difficult. If we are unable to attract and retain a substantial number
      of alternative device users to our web search services or if we are slow to
      develop products and technologies that are more compatible with non-PC
      communications devices, we will fail to capture a significant share of an
      increasingly important portion of the market for online services.




***To
      the extent our revenues are paid in foreign currencies, and currency exchange
      rates become unfavorable, we may lose some of the economic value of the revenues
      in U.S. dollar terms.***




As
      we
      expand our international operations, more of our customers may pay us in foreign
      currencies. Conducting business in currencies other than U.S. dollars subjects
      us to fluctuations in currency exchange rates. If the currency exchange rates
      were to change unfavorably, the value of net receivables we receive in foreign
      currencies and later convert to U.S. dollars after the unfavorable change would
      be diminished. This could have a negative impact on our reported operating
      results. Hedging strategies, such as forward contracts, options and foreign
      exchange swaps related to transaction exposures, that we have implemented or
      may
      implement to mitigate this risk may not eliminate our exposure to foreign
      exchange fluctuations. Additionally, hedging programs expose us to risks that
      could adversely affect our operating results, including the following:




·
            
            We
                have limited experience in implementing or operating hedging programs.
                Hedging programs are inherently risky and we could lose money as
                a result
                of poor trades.




22




·
            
            We
                may be unable to hedge currency risk for some transactions because
                of a
                high level of uncertainty or the inability to reasonably estimate
                our
                foreign exchange exposures.




·
            
            We
                may be unable to acquire foreign exchange hedging instruments in
                some of
                the geographic areas where we do business, or, where these derivatives
                are
                available, we may not be able to acquire enough of them to fully
                offset
                our exposure.




***We
      may have exposure to greater than anticipated tax liabilities.***




Our
      future income taxes could be adversely affected by earnings being lower than
      anticipated in jurisdictions where we have lower statutory rates and higher
      than
      anticipated in jurisdictions where we have higher statutory rates, by changes
      in
      the valuation of our deferred tax assets and liabilities, or by changes in
      tax
      laws, regulations, accounting principles or interpretations thereof. Our
      determination of our tax liability (like any company’s determination of its tax
      liability) is subject to review by applicable tax authorities. Any adverse
      outcome of such a review could have an adverse effect on our operating results
      and financial condition. In addition, the determination of our worldwide
      provision for income taxes and other tax liabilities requires significant
      judgment and in the ordinary course of our business, there are many transactions
      and calculations where the ultimate tax determination is uncertain. Although
      we
      believe our estimates are reasonable, the ultimate tax outcome may differ from
      the amounts recorded in our financial statements and may materially affect
      our
      financial results in the period or periods for which such determination is
      made.




***We
      rely on insurance to mitigate some risks and, to the extent the cost of
      insurance increases or we are unable or choose not to maintain sufficient
      insurance to mitigate the risks facing our business, our operating results
      may
      be diminished.***




We
      contract for insurance to cover certain potential risks and liabilities. In
      the
      current environment, insurance companies are increasingly specific about what
      they will and will not insure. It is possible that we may not be able to get
      enough insurance to meet our needs, may have to pay very high prices for the
      coverage we do get or may not be able to acquire any insurance for certain
      types
      of business risk. In addition, we have in the past and may in the future choose
      not to obtain insurance for certain risks facing our business. This could leave
      us exposed to potential claims. If we were found liable for a significant claim
      in the future, our operating results could be negatively impacted. Also, to
      the
      extent the cost of maintaining insurance increases, our operating results will
      be negatively affected.




***Acquisitions
      could result in operating difficulties, dilution and other harmful consequences.***




We
      do not
      have a great deal of experience acquiring companies and the companies we have
      acquired have typically been small. We have evaluated, and expect to continue
      to
      evaluate, a wide array of potential strategic transactions. From time to time,
      we may engage in discussions regarding potential acquisitions. Any of these
      transactions could be material to our financial condition and results of
      operations. In addition, the process of integrating an acquired company,
      business or technology may create unforeseen operating difficulties and
      expenditures and is risky. The areas where we may face risks include:




·
            
            The
                need to implement or remediate controls, procedures and policies
                appropriate for a larger public company at companies that prior to
                the
                acquisition lacked these controls, procedures and policies.




·
            
            Diversion
                of management time and focus from operating our business to acquisition
                integration challenges.




·
            
            Cultural
                challenges associated with integrating employees from the acquired
                company
                into our organization.




·
            
            Retaining
                employees from the businesses we acquire.




·
            
            The
                need to integrate each company’s accounting, management information, human
                resource and other administrative systems to permit effective management.




Foreign
      acquisitions involve unique risks in addition to those mentioned above,
      including those related to integration of operations across different cultures
      and languages, currency risks and the particular economic, political and
      regulatory risks associated with specific countries.




Also,
      the
      anticipated benefit of many of our acquisitions may not materialize. Future
      acquisitions or dispositions could result in potentially dilutive issuances
      of
      our equity securities, the incurrence of debt, contingent liabilities or
      amortization expenses, or write-offs of goodwill, any of which could harm our
      financial condition. Future acquisitions may require us to obtain additional
      equity or debt financing, which may not be available on favorable terms or
      at
      all.




23




***We
      occasionally become subject to commercial disputes that could harm our business
      by distracting our management from the operation of our business, by increasing
      our expenses and, if we do not prevail, by subjecting us to potential monetary
      damages and other remedies.***




From
      time
      to time we may be engaged in disputes regarding our commercial transactions.
      These disputes could result in monetary damages or other remedies that could
      adversely impact our financial position or operations. Even if we prevail in
      these disputes, they may distract our management from operating our business
      and
      the cost of defending these disputes would reduce our operating results.




***We
      have to keep up with rapid technological change to remain competitive in our
      rapidly evolving industry.***




Our
      future success will depend on our ability to adapt to rapidly changing
      technologies, to adapt our services to evolving industry standards and to
      improve the performance and reliability of our services. Our failure to adapt
      to
      such changes would harm our business. New technologies and advertising media
      could adversely affect us. In addition, the widespread adoption of new Internet,
      networking or telecommunications technologies or other technological changes
      could require substantial expenditures to modify or adapt our services or
      infrastructure.




***Our
      business depends on increasing use of the Internet by users searching for
      information, advertisers marketing products and services and web sites seeking
      to earn revenue to support their web content. If the Internet infrastructure
      does not grow and is not maintained to support these activities, our business
      will be harmed.***




Our
      success will depend on the continued growth and maintenance of the Internet
      infrastructure. This includes maintenance of a reliable network backbone with
      the necessary speed, data capacity and security for providing reliable Internet
      services. Internet infrastructure may be unable to support the demands placed
      on
      it if the number of Internet users continues to increase, or if existing or
      future Internet users access the Internet more often or increase their bandwidth
      requirements. In addition, viruses, worms and similar programs may harm the
      performance of the Internet. The Internet has experienced a variety of outages
      and other delays as a result of damage to portions of its infrastructure, and
      it
      could face outages and delays in the future. These outages and delays could
      reduce the level of Internet usage as well as our ability to provide our
      solutions.




***We
      have incurred and will continue to incur increased costs as a result of being
      a
      public company.***




As
      a
      public company, we have incurred and will continue to incur significant legal,
      accounting and other expenses that we did not incur as a private company. We
      will continue to incur costs associated with our public company reporting
      requirements.




***Changes
      in accounting rules for stock-based compensation may adversely affect our
      operating results, our stock price and our competitiveness in the employee
      marketplace.***




We
      intend
      to use employee stock options and other stock-based compensation to hire,
      motivate and retain our employees. In December 2004, the Financial Accounting
      Standards Board issued Statement of Financial Accounting Standards
      No. 123R, “Share-Based Payment,” which requires us, starting
      January 1, 2006, to measure compensation costs for all stock-based
      compensation (including stock options) at fair value and to recognize these
      costs as expenses in our statements of income. The recognition of these expenses
      in our statements of income will have a negative effect on our earnings per
      share, which could negatively impact our future stock price. In addition, if
      we
      reduce or alter our use of stock-based compensation to minimize the recognition
      of these expenses, our ability to recruit, motivate and retain employees may
      be
      impaired, which could put us at a competitive disadvantage in the employee
      marketplace.




**Risks
      Related to Ownership of our Common Stock**




***The
      trading price for our common stock has been and may continue to be volatile.***




The
      trading price of our common stock has been volatile and will likely continue
      to
      be volatile. The trading price of our common stock may fluctuate widely in
      response to various factors, some of which are beyond our control. These factors
      include:




·
            
            Quarterly
                variations in our results of operations or those of our competitors.




·
            
            Announcements
                by us or our competitors of acquisitions, new products, significant
                contracts, commercial relationships or capital commitments.




·
            
            Disruption
                to our operations or our data centers.




·
            
            The
                emergence of new sales channels in which we are unable to compete
                effectively.




·
            
            Our
                ability to develop and market new and enhanced products on a timely
                basis.




24




·
            
            Commencement
                of, or our involvement in, litigation.




·
            
            Any
                major change in our board or management.




·
            
            Changes
                in governmental regulations or in the status of our regulatory approvals.




·
            
            Recommendations
                by securities analysts or changes in earnings estimate.




·
            
            Announcements
                about our earnings that are not in line with analyst expectations,
                the
                likelihood of which is enhanced because it is our policy not to give
                guidance on earnings.




·
            
            Announcements
                by our competitors of their earnings that are not in line with analyst
                expectations.




·
            
            The
                volume of shares of common stock available for public sale.




·
            
            Sales
                of stock by us or by our stockholders.




·
            
            Short
                sales, hedging and other derivative transactions on shares of our
                common
                stock.




·
            
            General
                economic conditions and slow or negative growth of related markets.




In
      addition, the stock market in general, and the market for technology companies
      in particular, have experienced extreme price and volume fluctuations that
      have
      often been unrelated or disproportionate to the operating performance of those
      companies. These broad market and industry factors may seriously harm the market
      price of our Class A common stock, regardless of our actual operating
      performance. In the past, following periods of volatility in the overall market
      and the market price of a company’s securities, securities class action
      litigation has often been instituted against these companies. This litigation,
      if instituted against us, could result in substantial costs and a diversion
      of
      our management’s attention and resources.





***Sales
      of substantial amounts of our common stock, or the availability of those shares
      for future sale, could adversely affect our stock price and limit our ability
      to
      raise capital.***





We
      are
      unable to predict the effect, if any, that future sales of common stock or
      the
      potential for such sales may have on the market price of the common stock
      prevailing from time to time. Of the 24,763,889 issued and outstanding shares
      of
      common stock of the Company, 18,433,593 shares are believed to be capable of
      being sold or transferred without registration under the Securities Act of
      1933.
      The market price of our common stock could decline as a result of sales of
      substantial amounts of our common stock in the public market or the perception
      that substantial sales could occur. These sales also may make it more difficult
      for us to sell common stock in the future to raise capital.





***We
      have not paid cash dividends and do not expect to in the foreseeable future,
      which means that the value of our shares cannot be realized except through
      sale.***




We
      have
      never declared or paid cash dividends. We currently expect to retain earnings
      for our business and do not anticipate paying cash dividends on our common
      stock
      at any time in the foreseeable future. Because we do not anticipate paying
      cash
      dividends in the future, it is likely that the only opportunity to realize
      the
      value of our common stock will be through a sale of those shares. The decision
      whether to pay cash dividends on common stock will be made by the Board of
      Directors from time to time in the exercise of its business judgment.
      Furthermore, we may be restricted from paying dividends by the terms of any
      credit facility we may enter into in the future.




***The
      ownership of our common stock is concentrated in the hands of our existing
      directors and executive officers. As a result, you may not be able to exert
      meaningful influence on significant corporate
      decisions.***





Our
      directors and executive officers beneficially own, in the aggregate,
      approximately 25.56% of our outstanding shares of common stock. These persons,
      acting together, will be able to exercise significant influence over all matters
      requiring stockholder approval, including the election and removal of directors
      and any merger, consolidation or sale of all or substantially all of our assets.
      In addition, these persons, acting together, have the ability to control the
      management and affairs of our company. This concentration of ownership may
      harm
      the market price of our common stock by delaying or preventing a change in
      control of our company at a premium price even if beneficial to our other
      stockholders.




25




Our
      Board
      of Directors may issue and fix the terms of shares of our preferred stock
      without stockholder approval, which could adversely affect the voting power
      of
      holders of our common stock or any change in control of our
      company.




Our
      certificate of incorporation authorizes the issuance of up to 10,000,000 shares
      of "blank check" preferred stock, with such designation rights and preferences
      as may be determined from time to time by the Board of Directors. Our Board
      of
      Directors is empowered, without shareholder approval, to issue additional shares
      of preferred stock with dividend, liquidation, conversion, voting or other
      rights which could adversely affect the voting power or other rights of the
      holders of our common stock. In the event of such issuances, the preferred
      stock
      could be utilized, under certain circumstances, as a method of discouraging,
      delaying or preventing a change in control of our company.




***Our
      common stock may be subject to the SEC’s penny stock sales
      rules.***





The
      SEC
      has adopted regulations which generally define penny stocks to be equity
      securities that have a market price of less than $5.00 per share. Such
      designation imposes additional sale practice requirements on broker-dealers
      which sell such securities to persons other than established customers and
      institutional accredited investors.





For
      transactions covered by these regulations, a broker-dealer must make a special
      suitability determination for the purchaser. A broker-dealer must obtain from
      the potential purchaser information concerning the person’s financial situation,
      investment experience and investment objectives and, based upon that and other
      information available to it, make a determination that transactions in penny
      stocks are suitable for the purchaser and that the purchaser has sufficient
      knowledge and experience in financial matters so that the purchaser reasonably
      may be expected to be capable of evaluating the risks of transactions in penny
      stocks. A broker-dealer must also receive the purchaser’s written consent to the
      transaction prior to sale.





These
      penny stock rules may restrict the ability of brokers, dealers and investors
      to
      sell our common stock to the extent our common stock may be subject to such
      rules.




**ITEM
      2: DESCRIPTION OF PROPERTY**




The
      Company leases office 1,851 sq ft of office space at 100 Lucerne Circle, Orlando
      Florida at a monthly rental of $4,141. The original agreement was dated February
      10, 2004 and expired on February 9, 2006. The Company extended the lease on
      March 1, 2006 for an additional 24 months.




**ITEM
      3: LEGAL PROCEEDINGS**




No
      material legal proceedings.




**ITEM
      4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




There
      were no matters submitted to the Company's security holders for a vote during
      the fourth quarter of 2006.





26


**PART
      II**




**ITEM
      5: MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
      ISSUER PURCHASES OF EQUITY SECURITTIES**




Our
      common stock presently trades on the Over-the-Counter Bulletin Board or OTCBB
      and trades under the symbol “WBTO”. From October 15, 2005 to July 31, 2006 our
      common stock traded under the symbol “ONTN”. From June 4, 2004 to October 15,
      2005 our common stock traded under the symbol "OTEN." Prior to June 4, 2004,
      our
      common stock traded on the OTCBB under the symbol "DMNX." The last reported
      sale
      price of our common stock was $1.55 per share on April 14, 2006.




The
      following table sets forth certain information with respect to the high and
      low
      bid prices of the Company's common stock for the fiscal years ended December
      31,
      2005 and 2006, all adjusted to reflect a 200 for 1 reverse stock split effective
      June 4, 2004, a .75 for 1 stock dividend effective July 16, 2004 and a 15 for
      1
      reverse stock split effective October 4, 2005.





BIDQUARTER
                ENDED
            
            HIGH
            
            LOW2005March
                31
            
            3.60
            
            1.425June
                30
            
            2.10
            
            0.825September
                30
            
            3.15
            
            0.765December
                31
            
            1.65
            
            0.0652006March
                31
            
            1.65
            
            1.01June
                30
            
            1.62
            
            0.95September
                30
            
            1.80
            
            1.08December
                31
            
            2.48
            
            0.90




The
      quotations reflect interdealer prices without retail markup, markdown, or a
      commission, and may not necessarily represent actual transactions.




As
      of
      April 13, 2007, there were 24,763,889 shares issued and outstanding and we
      had
      348 registered holders of our common shares.




**Dividends**




We
      have
      not paid any dividends on our common stock since inception. We do not anticipate
      declaration or payment of any dividends at any time in the foreseeable future.
      Our Series AA preferred stock provides for a 7% cumulative
      dividend.





27




**ITEM
      6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS OVERVIEW**





On
      December 22, 2005, the Company reorganized by entering into a stock purchase
      agreement with Global Portals Online, Inc. ("Global") whereby the Company issued
      11,442,446 shares of its common stock in exchange for all of the outstanding
      common stock of Global. Immediately prior to executing the stock purchase
      agreement the Company had 1,961,399 shares of common stock and 438,000 shares
      of
      Series AA preferred stock issued and outstanding. The reorganization was
      accounted for as a recapitalization of Global because the shareholders of Global
      controlled the Company immediately after the acquisition. Therefore, Global
      is
      treated as the acquiring entity. Accordingly there was no adjustment to the
      carrying value of the assets or liabilities of Global. The Company is the
      acquiring entity for legal purposes and Global is the surviving entity for
      accounting purposes. Effective July 26, 2006, the company's name was changed
      to
      Web2 Corp. Effective July 31, 2006, the company's symbol for listing on the
      Over
      the Counter bulletin board was changed to WBTO.




**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**




The
      preparation of our consolidated financial statements requires us to make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenues and expenses and the related disclosures. A summary of those accounting
      policies can be found in the footnotes to the consolidated financial statements
      included elsewhere in this report. Certain of our accounting policies are
      considered critical as they are both important to the portrayal of our financial
      condition and results of operations and require judgments on the part of
      management about matters that are uncertain. We have identified the following
      accounting policies that are important to the presentation of our financial
      condition and results of operations.




**REVENUE
      RECOGNITION**




Revenue
      recognized through December 31, 2006 represents revenue from its redirect
      traffic, web development and other media entertainment. The Company receives
      a
      fee for revenue generated under the sale of other media entertainment that
      is
      recognized upon shipment of the merchandise. Sales generated from list services
      are recognized upon completion of services. Revenues generated from Web1000.com
      site consists of monthly fees paid to the Company for redirect traffic. Revenues
      generated from web development are recognized when services are
      performed.




**RESULTS
      OF OPERATIONS**




The
      following discussion relates to the historical financial statements of Web2
      Corp. and subsidiary and should be read in conjunction with the consolidated
      financial statements and related notes.




28




**RESULTS
      OF OPERATIONS -**




**COMPARISON
      OF YEARS ENDED DECEMBER 31, 2006 AND 2005**




Net
      revenues increased by 91.37% from $275,412 for the year ended December 31,
      2005
      to $527,043 for the year ended December 31, 2006. The improvement in revenues
      was a result of the acquisition of Web1000 properties and increased traffic
      to
      our existing and newly created websites.




Depreciation
      and amortization increased from $38,849 for the year ended December 31, 2005
      to
      $232,938 for the year ended December 31, 2006. The increase is due to the
      acquisition of Web1000 properties and increased traffic to our existing and
      newly created websites.




Selling,
      general and administrative expenses increased from $566,769 for the year ended
      December 31, 2005, to $1,909,889 for the year ended December 31, 2006. The
      increase is due to the additional labor required with the acquisition of Web1000
      properties and increased traffic to our existing and newly created
      websites.




Interest
      expense increased from $256,591 for the year ended December 31, 2005, to
      $459,937 for the year ended December 31, 2006.The increase is
      due to
      the restructuring of debt and additional loans received during
      2006.




**LIQUIDITY
      AND CAPITAL RESOURCES**




At
      December 31, 2006, our cash totaled $14,269.




Net
      cash
      used in operating activities was $1,387,241 for the year ended December 31,
      2006
      compared to $339,566 for the year ended December 31, 2005. The increase in
      cash
      used relates to the company restructuring in December 2005.




Net
      cash
      used by Investing activities was $96,606 for the year ended December 31, 2006
      compared to net cash received in investing activities of $ 47,230 for the same
      period last year. The decrease in cash flows from Investing Activities was
      due
      to the recapitalization of Global Portals.




Net
      cash
      provided from financing activities was $1,356,352 for the year ended December
      31, 2006 as compared to net cash provided in financing activities of $432,924
      for the year ended December 31, 2005. The $1,331,667 represents loans made
      to
      the Company by related parties, repayment of loan principal and the sale of
      common stock of $106,000.




In
      view
      of our accumulated deficit and recurring losses there is substantial doubt
      about
      our ability to continue as a going concern. In this regard management is
      adopting a plan for the development of our website product lines as well as
      seeking additional capital through the private sale of our debt or equity
      securities. There is no assurance that we will complete any financing or that
      we
      will achieve profitable operations. The financial statements do not include
      any
      adjustments that might result from the outcome of this uncertainty.




We
      expect
      to fund development expenditures and incur losses until we are able to generate
      sufficient income and cash flows to meet such expenditures and other
      requirements. We do not currently have adequate cash reserves to continue to
      cover such anticipated expenditures and cash requirements. These factors, among
      others, raise substantial doubt about our ability to continue as a going
      concern.




On
      December 2 and December 3, 2004, the Company entered into two Series AA Stock
      Purchase Agreements (the "Agreements") with Bruges Realty Corp Charitable
      Remainder Trust (the "Investor") relating to the private placement of an
      aggregate of 438,000 shares of newly authorized Series AA Preferred Stock
      ("Series AA Shares"). The Investor purchased 200,000 Series AA Shares on
      December 2, 2004 and an additional 238,000 Series AA Shares on December 3,
      2004.
      The purchase price of the Series AA shares was $1.00 per share, yielding
      proceeds of $438,000, before legal expenses of $7,500.




On
      June
      16, 2006 Bruges elected to convert $102,732.50 of principal and $47,267.50
      of
      accrued dividends into 1,000,000 shares of common. On December 7, 2006, holders
      of 335,268 shares Series AA Preferred Stock converted all of their Series AA
      Preferred Stock and accumulated preferred dividends of $10,757 into 2,306,862
      shares of the company’s common stock. No Series AA Preferred Stock remains
      outstanding.




29




**Lease
      Obligations**




The
      Company lease office 1,851 sq ft of office space at 100 Lucerne Circle, Orlando
      Florida. The original agreement was dated February 10, 2004 and expired on
      February 9, 2006. The Company extended the lease on March 1, 2006 for an
      additional 24 months at an average monthly rate of $4,140.




The
      discussion and analysis of our financial condition and results of operations
      are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these financial statements requires us to make estimates
      and
      judgments that affect the reported amounts of assets, liabilities, revenues
      and
      expenses, and related disclosure of contingent assets and liabilities. On an
      on-going basis, we evaluate our estimates, including those related to income
      tax
      and marketing related agreements with our affiliates. We base our estimates
      on
      historical experience and on various other assumptions that are believed to
      be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.




**FORWARD-LOOKING
      STATEMENTS; MARKET DATA**




The
      discussion in this Annual Report on Form 10-KSB contains forward-looking
      statements that involve risks and uncertainties. The statements contained in
      this Report that are not purely historical are forward-looking statements within
      the meaning of Section 27A of the Securities Act of 1933, as amended, and
      Section 21E of the Securities Exchange Act of 1934, as amended, including
      statements regarding our expectations, beliefs, intentions or strategies
      regarding the future. All forward-looking statements included in this document
      are based on information available to us on the date hereof, and we assume
      no
      obligation to update any such forward-looking statements. Our actual results
      could differ materially from those described in our forward-looking statements.
      Factors that could cause or contribute to such differences include, but are
      not
      limited to, our unproven business model and a limited operating history in
      a new
      and rapidly evolving industry; our ability to implement our business plan;
      and
      our ability to manage our growth, retain and grow our customer base and expand
      our service offerings.




We
      make
      forward-looking statements in the "Management's Discussion and Analysis of
      Financial Condition and, Results of Operations" above. These forward-looking
      statements include, but are not limited to, statements about our plans,
      objectives, expectations, intentions and assumptions and other statements that
      are not historical facts. We generally intend the, words "expect", "anticipate",
      "intend", "plan", "believe", "seek", "estimate" and similar expressions to
      identify forward-looking statements.




This
      Annual Report on Form 10-KSB contains certain estimates and plans related to
      us
      and the industry in which we operate, which assumes certain events, trends
      and
      activities will occur and the projected information based on those assumptions.
      We do not know that all of our assumptions are accurate. In particular, we
      do
      not know what level of growth will exist in our industry, if any, and
      particularly in the foreign markets in which we operate, have devoted resources
      and in which we shall seek to expand. If our assumptions are wrong about any
      events, trends and activities, then our estimates for future growth for our
      business may also be wrong. There can be no assurances that any of our estimates
      as to our business growth will be achieved.




**RECENT
      ACCOUNTING PRONOUNCEMENTS**




In
      February, 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 155, *Accounting
      for Certain Hybrid Financial Instruments* .
      SFAS
      No. 155 eliminates the temporary exemption of bifurcation requirements to
      securitized financial assets, contained in SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities* .
      As a
      result, similar financial instruments are accounted for similarly regardless
      of
      the form of the instruments. In addition, in instances where a derivative would
      otherwise have to bifurcated, SFAS No. 155 allows a preparer on an
      instrument-by-instrument basis to elect fair value measurement at acquisition,
      at issuance, or when a previously recognized financial instrument is subject
      to
      remeasurement. The adoption of SFAS No. 155 has not materially affected the
      Company’s reported loss, financial condition or cash flows.





In
      March,
      2006, the FASB issued SFAS No. 156, *Accounting
      for Servicing of Financial Assets* ,
      an
      amendment of FASB Statement No. 140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities* .
      The
      pronouncement establishes standards whereby servicing assets and servicing
      liabilities are initially measured at fair value, where applicable. In addition,
      SFAS No. 156 allows subsequent measurement of servicing assets and liabilities
      at fair value, and where applicable, derivative instruments used to mitigate
      risks inherent with servicing assets and liabilities are likewise measured
      at
      fair value. The adoption of SFAS No. 156 has not materially affected the
      Company’s reported loss, financial condition, or cash flows.





30




In
      March,
      2006, the FASB issued Interpretation No. 48, (“FIN 48”) *Accounting
      for Uncertainty in Income Taxes* ,
      an
      interpretation of SFAS No. 109, *Accounting
      for Income Taxes* .
      FIN 48
      prescribes criteria for the recognition and measurement of a tax position taken
      or expected to be taken in a tax return. Accordingly, tax positions are analyzed
      to determine whether it is more likely than not they will be sustained when
      examined by the appropriate tax authority. Positions that meet the
      more-likely-than-not criteria are measured to determine the amount of benefit
      to
      be recognized, whereas those positions that do not meet the more-likely-than-not
      criteria are derecognized in the financial statements. The adoption of FIN
      48
      has not materially affected the Company’s reported loss, financial condition, or
      cash flows.





In
      September, 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* .
      The
      statement defines fair value, determines appropriate measurement methods, and
      expands disclosure requirements about those measurements.
      The adoption of SFAS No. 157 has not materially affected the Company’s reported
      loss, financial condition, or cash flows.





In
      September, 2006, the FASB issued SFAS No. 158, *Employers’
      Accounting for Defined Benefit Pension and Other Postretirement
      Plans* .
      This
      statement requires an employer to recognize the overfunded or underfunded status
      of a defined benefit postretirement plan as an asset or liability in its
      statement of financial position and to recognize changes in that funded status
      in the year of change through comprehensive income. In addition, SFAS No. 158
      requires an employer to measure the funded status of a plan as of the date
      of
      its year-end statement of financial position. The adoption of SFAS No. 158
      has
      not materially affected the Company’s reported loss, financial condition, or
      cash flows.




**COMMITMENTS**




Our
      commitments that are required to be disclosed in tabular form as of December
      31,
      2006 including a subsequent employment and consulting agreements entered into
      through March 31, 2007, are as follows;




2006
              
              2007
              
              2008
              
              2009
              
              2010Convertible
                  Debentures (in default)
              
              $
              125,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —Notes
                  payable - Global
              
              $
              52,275
              
              
              —
              
              
              —
              
              
              —
              
              
              —Due
                  to Stockholders
              
              $
              281,576
              
              
              —
              
              
              —
              
              
              —
              
              
              —Redeemable
                  preferred
              
              $
              471,215
              
              
              —
              
              
              —
              
              
              —
              
              
              —Operating
                  leases
              
              $
              44,436
              
              
              44,436
              
              
              7,406
              
              
              —
              
              
              —Employment
                  agreements
              
              $
              240,000
              
              
              240,000
              
              
              240,000
              
              
              240,000
              
              
              240,000Consulting
                  agreements
              
              $
              60,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —




**OFF
      BALANCE SHEET ARRANGEMENTS**




We
      do not
      have any off balance sheet arrangements.




31






REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





Board
      of
      Directors


Web2
      Corp. and Subsidiary


Orlando,
      Florida





We
      have
      audited the accompanying consolidated balance sheet of Web2 Corp. and Subsidiary
      as of December 31, 2006 and the related consolidated statements of operations,
      stockholders’ deficit and cash flows for the years ended December 31, 2006 and
      2005. These consolidated financial statements are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audits.





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





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of Web2 Corp.
      and
      Subsidiary as of December 31, 2006 and the consolidated results of their
      operations and their cash flows for the years ended December 31, 2006 and 2005
      in conformity with accounting principles generally accepted in the United States
      of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 1 to the
      consolidated financial statements, the Company has a working capital deficit,
      negative cash flows from operations, and losses from inception which raises
      substantial doubt about its ability to continue as a going concern. Management’s
      plans in regard to these matters are also described in Note 1. These
      consolidated financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.








/s/
      Bouwhuis, Morrill & Company, LLC


Layton,
      Utah


April
      17,
      2007


F-1




**ITEM
      7: CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA**




WEB2
        CORP
        AND SUBSIDIARY
  CONSOLIDATED
        BALANCE SHEET
  December
                  31, 2006ASSETSCURRENT
                  ASSETSCash
              
              $
              14,269Accounts
                  receivable - net (related parties)
              
              
              208,018Total
                  Current Assets
              
              
              222,287PROPERTY
                  AND EQUIPMENT,Net
              
              
              419,284Other
                  assets
              
              
              7,040TOTAL
                  ASSETS
              
              $
              648,611LIABILITIES
                  AND STOCKHOLDERS' DEFICIENCYCURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              $
              1,331,293Convertible
                  debentures
              
              
              475,000Due
                  to stockholders and affiliates
              
              
              2,914,361TOTAL
                  CURRENT LIABILITIES
              
              
              4,720,654COMMITMENTS
                  AND CONTINGENCIESSTOCKHOLDERS'
                  DEFICIENCYCommon
                  stock - $0.001 par value; 100,000,000 sharesauthorized;
                  21,152,994 shares issued and outstanding
              
              
              21,152Treasury
                  Stock (33,333 shares @$1.05)
              
              
              (35,000
              )Additional
                  paid in capital
              
              
              6,823,966Accumulated
                  Deficit
              
              
              (10,882,161
              )TOTAL
                  STOCKHOLDERS' DEFICIENCY
              
              
              (4,072,043
              )TOTAL
                  LIABILITIES ANDSTOCKHOLDERS'
                  DEFICIENCY
              
              $
              648,611
 The
        Accompanying Notes Are An Integral Part Of These Consolidated Financials
        Statements
 
 F-2
 WEB2
          CORP
          AND SUBSIDIARY
  CONSOLIDATED
          STATEMENTS OF OPERATIONS
  For
                    the Years EndedDecember
                    312006
                
                2005REVENUE
                
                $
                527,043
                
                $
                275,412COSTS
                    AND EXPENSESCost
                    of revenue
                
                
                421,439
                
                
                -Bad
                    debt expense
                
                
                123,281
                
                
                —Depreciation
                    and amortization
                
                
                232,938
                
                
                38,849Selling
                    and administrative expenses
                
                
                1,909,889
                
                
                566,769TOTAL
                    COSTS AND EXPENSES
                
                
                2,687,548
                
                
                605,618OPERATING
                    LOSS
                
                
                (2,160,504
                )
                
                (330,206
                )OTHER
                    INCOME (EXPENSES)Interest
                
                
                (459,937
                )
                
                (256,591
                )Preferred
                    Dividend Seriess AA
                
                
                (24,809
                )
                
                —Gain
                    on settlement of debt
                
                
                27,277
                
                
                —NET
                    LOSS
                
                $
                (2,617,974
                )
                $
                (586,797
                )Basic
                    and Diluted Net Loss Per Share
                
                $
                (0.16
                )
                $
                (0.05
                )Weighted
                    Average Number of CommonShares
                    Outstanding - Basic and Diluted
                
                
                16,018,426
                
                
                11,477,151


The
        Accompanying Notes Are An Integral Part Of These Consolidated Financials
        Statements


F-3


Web2
        Corp
        and Subsidiary


CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS' DEFICIENCY
 For
        The
        Years Ended December 31, 2006 and 2005
  Preferred
                  Series A Stock
              
              Preferred
                  Series B Stock
              
              Common
                  Stock
              
              Treasury
              
              Additional
                    Paid-in
              
              Stock
                  Subscriptions
              
              Unearned
              
              AccumulatedShares
              
              Amount
              
              Shares
              
              Amount
              
              Shares
              
              Amount
              
              Stock
              
              Capital
              
              Receivable
              
              Compensation
              
              DeficitBalance,
                  December 31, 2004
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              7,509,216
              
              
              7,509
              
              
              -
              
              
              4,794,840
              
              
              (25,000
              )
              
              (400,986
              )
              
              (2,500,377
              )Proceeds
                      from stock subscriptions receivable
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              25,000
              
              
              -
              
              
              -Common
                      stock issued for cash at $0.25 per share in January
                      2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              981,340
              
              
              981
              
              
              -
              
              
              249,019
              
              
              -
              
              
              -
              
              
              -Common
                      stock issued for debt at $0.76 per share in February
                      2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              61,759
              
              
              62
              
              
              -
              
              
              47,138
              
              
              -
              
              
              -
              
              
              -Common
                      stock issued for debt at $3.72 per share in September
                      2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              31,403
              
              
              31
              
              
              -
              
              
              116,795
              
              
              -
              
              
              -
              
              
              -Common
                      stock issued for debt at $0.24 per share in September
                      2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,858,728
              
              
              2,859
              
              
              -
              
              
              686,051
              
              
              -
              
              
              -
              
              
              -Gain
                  on forgiveness of related party debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,135,567
              
              
              -
              
              
              -
              
              
              -Disposition
                        of Jade Entertainment for $35,000 via tender of 500,000 shares
                        of common
                        stock
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (35,000
              )
              
              -
              
              
              -
              
              
              -
              
              
              -Recapitalization
                        of Global Portals Online, Inc. through reverse merger with
                        110 Media,
                        Inc.
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,961,399
              
              
              1,961
              
              
              -
              
              
              (1,746,950
              )
              
              -
              
              
              -
              
              
              (5,146,352
              )Common
                      stock issued on subscription at $0.35 per share in December
                      2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              865,354
              
              
              865
              
              
              -
              
              
              302,135
              
              
              (106,000
              )
              
              -
              
              
              -Series
                  AA preferred stock dividend
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (30,660
              )Change
                  in unearned compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              213,486
              
              
              -Net
                      loss for the year ended December 31, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (586,797
              )Balance,
                  December 31, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              14,269,199
              
              
              14,269
              
              
              (35,000
              )
              
              5,584,594
              
              
              (106,000
              )
              
              (187,500
              )
              
              (8,264,186
              )




Common
                        stock issued for conversion of debt
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                2,861,780
                
                
                2,861
                
                
                
                
                
                427,327Common
                        stock issued for conversion of debt
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                23,614
                
                
                24
                
                
                
                
                
                18,159Conversion
                    of Preferred shares to common
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,000,000
                
                
                1,000
                
                
                
                
                
                149,000Common
                        stock issued for conversion of debt
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                32,468
                
                
                32
                
                
                
                
                
                24,968Common
                        stock issued for conversion of preferred shares to
                        common
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                2,306,862
                
                
                2,307
                
                
                
                
                
                343,717Common
                      stock issued for conversion of debt
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                484,071
                
                
                484
                
                
                
                
                
                72,127Proceeds
                        from stock subscriptions receivable
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                106,000Common
                    stock issued per ByIndia agreement
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                100,000
                
                
                100
                
                
                
                
                
                114,900Common
                    stock issued for services
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                75,000
                
                
                75
                
                
                
                
                
                89,175Change
                    in unearned compensationAdjustment
                    ot unearned compensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                187,500Net
                        loss for the year ended December 31, 2006
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (2,617,974
                )21,152,994
                
                
                21,152
                
                
                (35,000
                )
                
                6,823,966
                
                
                -
                
                
                -
                
                
                (10,882,160
                )


The
        Accompanying Notes Are An Integral Part Of These Consolidated Financials
        Statements




F-4




WEB2
        CORP
        AND SUBSIDIARY
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
  For
                  the Years EndedDecember
                  312006
              
              2005CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  loss
              
              $
              (2,617,974
              )
              $
              (586,797
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Common
                  stock issued for services
              
              
              89,250
              
              
              —Realization
                  of deferred compensation
              
              
              187,500
              
              
              —Depreciation
                  and amortization
              
              
              232,938
              
              
              38,849Bad
                  debt expenses
              
              
              123,281
              
              
              —Changes
                  in operating assets and liabilities:Prepaid
                  expenses and other current assets
              
              
              —
              
              
              (36
              )Accounts
                  receivable
              
              
              (320,999
              )
              
              (10,002
              )Accounts
                  payable and accrued expenses
              
              
              918,763
              
              
              218,420NET
                  CASH USED IN OPERATINGACTIVITIES
              
              
              (1,387,241
              )
              
              (339,566
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of property and equipment
              
              
              (96,606
              )
              
              (82,476
              )Cash
                  received in recapitalization
              
              
              —
              
              
              129,706NET
                  CASH PROVIDED BY (USED IN )INVESTING
                  ACTIVITIES
              
              
              (96,606
              )
              
              47,230CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  from subscriptions receivable
              
              
              106,000
              
              
              25,000Proceeds
                  of loans from shareholder
              
              
              910,788
              
              
              162,152Proceeds
                  from convertible debt, net
              
              
              356,500
              
              
              —Debt
                  financing costs
              
              
              18,500
              
              
              —Proceeds
                  from sale of common stock
              
              
              —
              
              
              250,000Repayment
                  of principal on debt
              
              
              (35,436
              )
              
              (4,228
              )NET
                  CASH PROVIDED BYFINANCING
                  ACTIVITIES
              
              $
              1,356,352
              
              $
              432,924




F-5




WEB2
        CORP
        AND SUBSIDIARY
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS, CONTINUED
  For
                  the Years EndedDecember
                  312006
              
              2005NET
                  (DECREASE) INCREASE IN CASH
              
              $
              (127,495
              )
              $
              140,588CASH
                  -Beginning
              
              
              141,764
              
              
              1,176CASH
                  -Ending
              
              $
              14,269
              
              $
              141,764SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATIONCash
                  paid during the years for:Interest
              
              $
              -
              
              $
              960Taxes
              
              $
              311
              
              $
              —Non-cash
                  investing and financing activities:Repayment
                  of Debt and related interest through issuance of common
                  stock
              
              $
              -
              
              $
              852,936Common
                  stock issued for conversion of preferred stock and related
                  interest
              
              $
              496,024
              
              $
              -Common
                  stock issued for website
              
              $
              115,000
              
              $
              -Common
                  stock issued for services rendered
              
              $
              89,250
              
              $
              -Common
                  stock issued for stock subscription receivable
              
              $
              -
              
              $
              106,000Forgiveness
                  of related party debt thru additional paid in capital
              
              
              
              
              $
              1,101,138


The
        Accompanying Notes Are An Integral Part Of These Consolidated Financials
        Statements




F-6





**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      1 - Going Concern and Managements Plans**




The
      accompanying consolidated financial statements have been prepared using U.S.
      generally accepted accounting principles applicable to a going concern which
      contemplates the realization of assets and liquidation of liabilities in the
      normal course of business. As reported in the consolidated financial statements,
      the Company has incurred losses of approximately $10,882,161 from inception
      of
      the Company through December 31, 2006, has negative cash flows from operations,
      and is in default on certain convertible notes payable. The Company's
      stockholders' deficiency at December 31, 2006 was $4,072,043 and its current
      liabilities exceeded its current assets by $4,498,367.These factors combined,
      raise substantial doubt about the Company's ability to continue as a going
      concern. Management's plans to address and alleviate these concerns are as
      follows:




The
      Company's management continues to develop a strategy of exploring all options
      available to it so that it can develop successful operations and have sufficient
      funds to be able to operate over the next twelve months. As a part of this
      plan,
      management is currently in negotiations with their target industries' key
      players to develop additional business opportunities. In addition, management
      is
      exploring options in order to raise additional operating capital through debt
      and/or equity financing. No assurance can be given that funds will be available,
      or, if available, that it will be on terms deemed satisfactory to
      management.




The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plans described in the preceding
      paragraph and eventually attain profitable operations. The accompanying
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability and classification of asset carrying amounts or the amount and
      classification of liabilities that might result from the outcome of these
      uncertainties.




**NOTE
      2 - Summary of Significant Accounting Policies**




This
      summary of significant accounting policies of the Company is presented to assist
      in understanding the Company's consolidated financial statements. The
      consolidated financial statements and notes are representations of the Company's
      management who are responsible for their integrity and objectivity. These
      accounting policies conform to accounting principles generally accepted in
      the
      United States of America and have been consistently applied in the preparation
      of the consolidated financial statements. The following policies are considered
      to be significant:




a.
      Accounting Method




The
      Company recognizes income and expenses based on the accrual method of
      accounting. Accordingly, revenues are recognized when earned and expenses are
      recognized when incurred. The Company has elected a December 31
      year-end.




b.
      Cash
      and Cash Equivalents




Cash
      equivalents are generally comprised of certain highly liquid investments with
      original maturities of less than three months.




c.
      Use of
      Estimates in the Preparation of Consolidated Financial Statements




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


F-7




**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      2 - Summary of Significant Accounting Policies, continued**




d.
      Revenue Recognition Policy




Revenue
      recognized through December 31, 2006 represents revenue from its redirect
      traffic and other media entertainment. The Company receives a fee for revenue
      generated under the sale of other media entertainment that is recognized upon
      shipment of the merchandise. Sales generated from list services are recognized
      upon completion of services. Revenues generated from Web1000.com site consists
      of monthly fees paid to the Company for redirect traffic and are recognized
      when
      the service is provided.




e.
      Allowance for Doubtful Accounts




Accounts
      receivable are recorded net of the allowance for doubtful accounts. The Company
      generally offers 30-day credit terms on sales to its customers and requires
      no
      collateral. The Company maintains an allowance for doubtful accounts which
      is
      determined based on a number of factors, including each customer's financial
      condition, general economic trends and management judgment. As of December
      31,
      2006, the allowance for doubtful accounts was $123,281. Bad debt expense was
      $123,281 and $-0- for the year ended December 31, 2006 and 2005.




f.
      Basic
      Net Loss per Share of Common Stock




In
      accordance with Financial Accounting Standards No. 128, "Earnings per Share,"
      basic net loss per common share is based on the weighted average number of
      common shares and common share equivalents outstanding during the periods
      presented. Diluted earnings per share is computed using weighted average number
      of common shares plus dilutive common share equivalents outstanding during
      the
      period.


Twelve
                  Months EndedDecember
                  31,2006
              
              2005Net
                  loss (numerator)
              
              $
              (2,617,974
              )
              $
              (586,797
              )Weighted
                  average shares outstanding (denominator)
              
              
              16,018,426
              
              
              11,477,151Net
                  loss per share amount
              
              $
              (0.16
              )
              $
              (0.05
              )




Securities
      that could potentially dilute basic earnings per share ("EPS") in the future
      that were not included in the computation of diluted EPS because to do so would
      have been anti-dilutive for the periods presented consist of the
      following:


No.
                  of SharesConvertible
                  debentures (assumed conversion at $.15)
              
              
              61,905Warrants
                  to purchase common stock - finders
              
              
              1,750Warrants
                  to purchase common stock - debentures
              
              
              33,542Warrants
                  issued to consultant
              
              
              16,667Total
                  as of December 31, 2006 113,864
              
              
              113,864




F-8




**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      2 - Summary of Significant Accounting Policies, continued**




g.
      Recent
      Accounting Pronouncements





In
      February, 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 155, *Accounting
      for Certain Hybrid Financial Instruments* .
      SFAS
      No. 155 eliminates the temporary exemption of bifurcation requirements to
      securitized financial assets, contained in SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities* .
      As a
      result, similar financial instruments are accounted for similarly regardless
      of
      the form of the instruments. In addition, in instances where a derivative would
      otherwise have to bifurcated, SFAS No. 155 allows a preparer on an
      instrument-by-instrument basis to elect fair value measurement at acquisition,
      at issuance, or when a previously recognized financial instrument is subject
      to
      remeasurement. The adoption of SFAS No. 155 has not materially affected the
      Company’s reported loss, financial condition or cash flows.





In
      March,
      2006, the FASB issued SFAS No. 156, *Accounting
      for Servicing of Financial Assets* ,
      an
      amendment of FASB Statement No. 140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities* .
      The
      pronouncement establishes standards whereby servicing assets and servicing
      liabilities are initially measured at fair value, where applicable. In addition,
      SFAS No. 156 allows subsequent measurement of servicing assets and liabilities
      at fair value, and where applicable, derivative instruments used to mitigate
      risks inherent with servicing assets and liabilities are likewise measured
      at
      fair value. The adoption of SFAS No. 156 has not materially affected the
      Company’s reported loss, financial condition, or cash flows.





In
      March,
      2006, the FASB issued Interpretation No. 48, (“FIN 48”) *Accounting
      for Uncertainty in Income Taxes* ,
      an
      interpretation of SFAS No. 109, *Accounting
      for Income Taxes* .
      FIN 48
      prescribes criteria for the recognition and measurement of a tax position taken
      or expected to be taken in a tax return. Accordingly, tax positions are analyzed
      to determine whether it is more likely than not they will be sustained when
      examined by the appropriate tax authority. Positions that meet the
      more-likely-than-not criteria are measured to determine the amount of benefit
      to
      be recognized, whereas those positions that do not meet the more-likely-than-not
      criteria are derecognized in the financial statements. The adoption of FIN
      48
      has not materially affected the Company’s reported loss, financial condition, or
      cash flows.





In
      September, 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* .
      The
      statement defines fair value, determines appropriate measurement methods, and
      expands disclosure requirements about those


measurements.
      The adoption of SFAS No. 157 has not materially affected the Company’s reported
      loss, financial condition, or cash flows.





In
      September, 2006, the FASB issued SFAS No. 158, *Employers’
      Accounting for Defined Benefit Pension and Other Postretirement
      Plans* .
      This
      statement requires an employer to recognize the overfunded or underfunded status
      of a defined benefit postretirement plan as an asset or liability in its
      statement of financial position and to recognize changes in that funded status
      in the year of change through comprehensive income. In addition, SFAS No. 158
      requires an employer to measure the funded status of a plan as of the date
      of
      its year-end statement of financial position. The adoption of SFAS No. 158
      has
      not materially affected the Company’s reported loss, financial condition, or
      cash flows.


F-9




**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      2 - Summary of Significant Accounting Policies, continued**




h.
      Income
      Taxes




The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards Board (SFAS) No. 109, "Accounting for Income Taxes." Under
      this method, deferred income taxes are determined based on the difference
      between the financial statement and tax bases of assets and liabilities using
      enacted tax rates in effect for the year in which differences are expected
      to
      reverse. In accordance with the provisions of SFAS No. 109, a valuation
      allowance would be established to reduce deferred tax assets if it were more
      likely than not that all or some portion of such deferred tax assets would
      not
      be realized. A full allowance against deferred tax assets was provided as of
      December 31, 2006.




Due
      to
      the change in ownership provisions of the Tax Reform Act of 1986, net operating
      loss carryforwards for Federal income tax reporting purposes are subject to
      annual limitations. Should a change in ownership occur, net operating loss
      carryforwards may be limited as to its future use by the Company.




i.
      Advertising Costs




Advertising
      costs are expensed as incurred. For the year ended December 31, 2006 and 2005
      advertising expenses were $126,062 and $1,445, respectively.




j.
      Principles of Consolidation




The
      consolidated financial statements include the accounts of Web2 Corp and its
      wholly-owned subsidiary Global Portals Online, Inc.. All significant
      intercompany accounts and transactions have been eliminated in the
      consolidation.




**NOTE
      3 - Property and Equipment, Net**




Property
      and equipment are stated at cost less accumulated depreciation. Depreciation
      is
      calculated using the straight-line method over the estimated useful lives of
      the
      assets. When assets are disposed of, the cost and accumulated depreciation
      (net
      book value of the assets) are eliminated and any resultant gain or loss
      reflected accordingly. Betterments and improvements are capitalized over their
      estimated useful lives whereas repairs and maintenance expenditures on the
      assets are charged to expense as incurred.




Property
      and equipment consists of the following at December 31, 2006:





Computer
                  equipment
              
              $
              368,602Office
                  equipment
              
              
              2,611Websites
              
              
              586,000Total
              
              
              957,213Less:
                  accumulated depreciation
              
              
              (537,929
              )Property
                  and Equipment, Net
              
              
              419,284




Depreciation
      and amortization expense for the years ended December 31, 2006 and 2005 was
      $232,938 and $38,849, respectively.


F-10




**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
      4 - Convertible Debentures**




Convertible
      debentures at December 31, 2006 consist of the following:


a.
                  Convertible debenture, due on demand, bearing interest at 8% per
                  annum.The
                  debenture contains a provision for conversion at the holder's
                  optionincluding
                  accrued interest, into the Company's common stock at aconversion
                  price equal to 70% of the average closing bid price per
                  shareof
                  common stock for the five-day period prior to such conversion.
                  Therelated
                  beneficial conversion feature has been fully charged to
                  interestexpense
                  in prior years.
              
              $
              100,000d.
                  On July 18, 2006 the Company entered into a convertible debt agreementwith
                  Empire Financial Group, Inc. , due one year from closing, bearinginterest
                  at 15% per annum. The debentures contain a provision for conversion,at
                  the holder’s option including accrued interest at a conversion price 50%of
                  the price of the shares sold in a secondary offering. The convertibleincludes
                  a warrant in the event they have not converted in the secondaryoffering,
                  or if no such offering shall have been completed, to purchase onedollars’
                  worth of common stock for every two dollars of debenture principalpurchased
                  by them in the Offering, at an exercise price of 120% of theclosing
                  bid price of shares of CommonStock
                  on the date hereof.
              
              
              375,000Total
                  convertible debentures
              
              
              475,000Less:
                  current portion
              
              
              (475,000
              )Long-Term
                  Debt, Net of Current Portion
              
              $
              —




**NOTE
      5 - Notes Payable to Stockholders**




As
      of
      December 31, 2006, certain stockholders had advanced to the Company $1,616,249
      for working capital purposes. The Company agreed to pay interest at 8% per
      annum
      and the notes matured on  November
      15, 2006. Certain shareholders converted accrued interest of $101,717 and
      principal of $387,266 into 2,867,086 shares of common. On December 7, 2006,
      a
      debt holder entered into an Amended and Restated Debt Conversion Agreement
      with
      the company. Pursuant to this agreement, among other things, the interest rate
      on certain convertible debt was increased from 8% to 18% effective as of June
      9,
      2004. On December 7, 2006 the debt holder converted principal and interest
      of
      $72,611 into 484,071 shares of the company’s common stock.




On
      December 5, 2004, the Company acquired certain intangible assets, primarily
      URL's from Global Reach, Inc. including a website known as Web1000.com along
      with certain other intangible assets related to that website. The Company signed
      a note for $100,000 at 6% per annum, payable over 12 months beginning January
      1,
      2005. In March 2005 Global extended payments until June 2006. At December 31,
      2006 the company had an outstanding principal balance of $-0-.




As
      of
      December 31, 2006 William Mobley, Chairman of the Board and Andre Ford,
      President advanced the Company $744,006 and $263,503, respectively. Interest
      at
      6% per annum and due in full January 2007.




As
      of
      December 31, 2006 two stockholders advanced the Company $37,000 and $8,750,
      respectively. Interest at 6% per annum and due in full January 2007 and on
      demand, respectively.




As
      of
      December 31, 2006 a related company advanced the Company $279,853. Interest
      at
      6% per annum and due in full January 2007.




Accrued
      interest as of December 31, 2006 on these notes amounted to $714,729 . and is
      included in accounts payable and accrued expenses. (see Note
      6 )


F-11


**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      6 - Accounts Payable and Accrued Expenses**Accounts
      payable and accrued expenses at December 31, 2006 consist of the
      following:


Interest
              
              $
              714,729Payroll
                  taxes payable
              
              
              33,740Professional
                  fees
              
              
              251,000Accrued
                  Compensation
              
              
              311,419Other
              
              
              20,405$
              1,331,293




**NOTE
      7 - Stockholders' Deficiency**





**Series
      AA Preferred Stock**





On
      December 2 and December 3, 2004, Web2 Corp (the "Company") entered into two
      Series AA Stock Purchase Agreements (the "Agreements") with a Trust (the
      "Investor") relating to the private placement of an aggregate of 438,000 shares
      of newly authorized Series AA Preferred Stock ("Series AA Shares"). The Investor
      purchased 200,000 Series AA Shares on December 2, 2004 and an additional 238,000
      Series AA Shares on December 3, 2004, each pursuant to the Agreements. The
      purchase price of the Series AA shares was $1.00 per share, yielding proceeds
      of
      $438,000, before legal expenses of $7,500. On June 16, 2006 the Investor elected
      to convert $102,732 of principal and $47,268 of accrued dividends into 1,000,000
      shares of common. On December 7, 2006, holders of 335,268 shares Series AA
      Preferred Stock converted all of their Series AA Preferred Stock and accumulated
      preferred dividends of $10,757 into 2,306,862 shares of the company’s common
      stock. No Series AA Preferred Stock remains outstanding.


F-12




**WEB2
      CORP AND SUBSIDIARY**




**(formerly
      110 Media Group, Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      8 - Commitments and Contingencies**




**Employment
      Agreements**




On
      December 22, 2005 the Company entered into an employment agreement with William
      Mobley. The term of the agreement is for five (5) years commencing on December
      22, 2005. Mr. Mobley will serve as the Company's Chairman of the Board. During
      the term of the agreement, the Company shall pay Mr. Mobley an annual salary
      of
      $120,000 with adjustments governed by the Consumer Price Index. Mr. Mobley
      shall
      also be entitled to a performance bonus to be determined by the Board of
      Directors.




On
      December 22, 2005 the Company entered into an employment agreement with Andre
      Forde. The term of the agreement is for five (5) years commencing on December
      22, 2005. Mr. Ford will serve as the Company's President. During the term of
      the
      agreement, the Company shall pay Mr. Forde an annual salary of $120,000 with
      adjustments governed by the Consumer Price Index. Mr. Mobley shall also be
      entitled to a performance bonus to be determined by the Board of
      Directors.




**Consulting
      Agreements**




On
      January 2, 2006 the Company entered into a renewable consulting agreement with
      Cioffi Business Management Services "CBMS". The consulting agreement was for
      an
      initial term of six (6) months. The Company has agreed to compensate CBMS
      $30,000 as well as issue the consultant 30,000 shares of its common stock for
      the initial six (6) month term. The consulting agreement is renewable by
      acceptance of both parties at the end of each term for an additional six months
      at the same compensation terms. During the term of the consulting agreement,
      the
      principal shareholder of the consultant, Mr. Darren J. Cioffi, will act as
      the
      Company's Chief Financial Officer.





**Purchase
      Agreement**




On
      July
      27, 2006 the Company signed a purchase agreement with a corporation to purchase
      website property for $80,000 dollars and 250,000 shares of common stock in
      two
      phases. As of December 31, 2006 phase I of the purchase agreement has been
      completed and the company made a good faith payment of $40,000 and issuance
      of
      100,000 shares of the company’s common stock per the agreement. The remaining
      balance is due upon completion of phase 2 of the project which was not complete
      as of December 31, 2006.




**NOTE
      10 - Concentration of Risk**




Major
      Customers




For
      the
      year ended December 31, 2006, three customers’ generated revenues in excess of
      10% of the Company's total consolidated revenues. Revenues from these customers
      totaled $106,000, $107,000 and $156,000, or 20.1%, 20.3% and 29.6%,
      respectively. At December 31, 2006, accounts receivable for these three
      customers totaled $91,000, 98,000 and $142,000, respectively or 100% of total
      gross receivables of $331,000. The company established allowance for doubtful
      accounts for these receivables of $123,281. These customers are related parties
      to the Company.




**NOTE
      11 - Subsequent Events**





On
      Janaury 21, 2007 a debt holder converted principal and interest of $528,750
      into
      3,525,000 shares of the company’s common stock.





On
                February 21, 2007 two individuals were appointed to the Board of
                Directors
                of the Registrant. As compensation for serving on the board, the
                Company
                has issued 50,000 shares to each new director.




F-13




**ITEM
      8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES**




On
      April
      18, 2005, based upon the recommendation of and approval by our audit committee
      and the board of directors, we dismissed Marcum & Kliegman LLP ("M&K")
      as our independent auditor and engaged Wolinetz & Lafazan & Co. to serve
      as our independent auditor for the fiscal year ending December 31,
      2005.




M&K's
      reports on our consolidated financial statements for each of the fiscal years
      ended December 31, 2004 and 2003 did not contain an adverse opinion or
      disclaimer of opinion, nor were they qualified or modified as to uncertainty,
      audit scope or accounting principles. However, M&K's reports each contained
      an explanatory paragraph about our ability to continue as a going
      concern.




During
      the years ended December 31, 2004 and 2003 and through April 18, 2005 there
      were
      no disagreements with M&K on any matter of accounting principle or practice,
      financial statement disclosure or auditing scope or procedure which, if not
      resolved to M&K's satisfaction, would have caused them to make references to
      the subject matter in connection with their reports of our consolidated
      financial statements for such years. In addition, we believe there were no
      reportable events as defined in Item 304(a)(1)(iv)(B) of Regulation S-B except
      for material weaknesses in our system of internal controls communicated to
      us by
      M&K as disclosed in Item 8A on our 2004 10-KSB filed on April 15,
      2005.




On
      February 16, 2006, based upon the recommendation of and approval by our board
      of
      directors we dismissed Wolinetz & Lafazan & Co. ("W&L") as our
      independent auditor and engaged Bouwhuis, Morrill & Company to serve as our
      independent auditor for the fiscal year ending December 31, 2005.




We
      hired
      W&L on April 18, 2005 to be our auditors for the fiscal year ending December
      31, 2005, but as a result of the acquisition on December 22, 2005 of Global
      Portals Online, Inc. and the resulting change of control, our new board decided
      to utilize the services of Bouwhuis Morrill & Company to serve as our
      auditors for the fiscal year ending December 31 2005. Accordingly, W&L never
      reported on our financial statements, but did review our unaudited statements
      included in our Form 10-QSB filed during the time of their
      engagement.




From
      April 18, 2005 through February 16, 2006, there were no disagreements with
      W&L on any matter of accounting principal or practices, financial statement
      disclosure or auditing scope or procedure which, if not resolved to W&L's
      satisfaction would have caused them to make references to the subject matter
      in
      connection with their report. In addition, we believe there were no reportable
      events as defined in Item 304(a)(1)(iv)(B) of Regulation S-B except for material
      weaknesses in our system of internal controls communicated to us by M&K as
      disclosed in item 8A in our 2004 10-KSB filed on April 15, 2005.




32





**ITEM
      8A: CONTROLS AND PROCEDURES**





We
      maintain a set of disclosure controls and procedures designed to ensure that
      information required to be disclosed by us in the reports filed under the
      Securities Exchange Act, is recorded, processed, summarized and reported within
      the time periods specified by the SEC’s rules and forms. Disclosure controls are
      also designed with the objective of ensuring that this information is
      accumulated and communicated to our management, including our chief executive
      officer and chief financial officer, as appropriate to allow timely decisions
      regarding required disclosure.





Based
      upon their evaluation as of the end of the period covered by this report, our
      chief executive officer and chief financial officer concluded that, our
      disclosure controls and procedures are effective to ensure that information
      required to be included in our periodic SEC filings is recorded, processed,
      summarized, and reported within the time periods specified in the SEC rules
      and
      forms.





In
      addition to the matters discussed above, the independent registered public
      accounting firm responsible for the audit of Web2 Corp’s financial statements as
      of and for the year ending December 31, 2006 must attest to and issue a report
      on management’s assessment of the design and operational effectiveness of our
      internal control over financial reporting. Although we intend to conduct a
      rigorous review of our internal control over financial reporting to help achieve
      compliance with the Section 404 requirements of the Sarbanes-Oxley Act, if
      our
      independent registered public accounting firm is not satisfied with our internal
      control over financial reporting or with the level at which it is documented,
      designed, operated or reviewed, they may decline to attest to management’s
      assessment or may issue a qualified report identifying either a significant
      deficiency or a material weakness in our internal controls. This could result
      in
      significant additional expenditures responding to the Section 404 internal
      control audit, a diversion of management attention and potentially an adverse
      reaction to our common stock in the financial markets.




**Limitations
      of Disclosure Controls and Procedures**




Our
      management, including our chief executive officer and chief financial officer
      does not expect that our disclosure controls or internal control over financial
      reporting will prevent all errors or all instances of fraud. A control system,
      no matter how well designed and operated, can provide only reasonable, not
      absolute, assurance that the control system’s objectives will be met. Further,
      the design of a control system must reflect the fact that there are resource
      constraints, and the benefits of controls must be considered relative to their
      costs. Because of the inherent limitations in all control systems, no evaluation
      of controls can provide absolute assurance that all control issues and instances
      of fraud, if any, within our Company have been detected. These inherent
      limitations include the realities that judgments in decision-making can be
      faulty, and that breakdowns can occur because of simple error or mistake.
      Controls can also be circumvented by the individual acts of some persons, by
      collusion of two or more people, or by management override of the controls.
      The
      design of any system of controls is based in part upon certain assumptions
      about
      the likelihood of future events, and any design may not succeed in achieving
      its
      stated goals under all potential future conditions. Over time, controls may
      become inadequate because of changes in conditions or deterioration in the
      degree of compliance with policies or procedures. Because of the inherent
      limitation of a cost-effective control system, misstatements due to error or
      fraud may occur and not be detected.




33




**PART
      III**




**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      SECTION 16(a) OF THE EXCHANGE ACT**





Each
      director shall be elected or the term of one year and until his successor is
      elected and qualified, or until his earlier resignation, death, or removal.
      Officers of the Company serve at the discretion of the Board of Directors.
      As of
      March 31, 2006, our executive officers and directors are as
      follows:


Name
              
              Age
              
              Position
              
              AppointedWilliam
                  Mobley
              
              44
              
              Director
                  and Chief Executive Officer
              
              December
                  22, 2005Andre
                  Ford
              
              37
              
              President
              
              December
                  22, 2005Darren
                  Cioffi
              
              41
              
              Chief
                  Financial Officer
              
              September
                  16, 2004Aaron
                  Stein
              
              53
              
              Director
              
              February
                  21, 2007William
                  Eric Siedel
              
              43
              
              Director
              
              February
                  21, 2007




WILLIAM
      MOBLEY





William
      Mobley, currently Chief Executive Officer, and Chairman of the Board. Mobley
      has
      had an extensive background in technology leadership for Nextelligence, Inc.,
      MegaMedia Networks, Inc., and World Commerce Online, Inc. where he founded
      and
      served as president. World Commerce Online pioneered the e-commerce
      business-to-business sector from 1994-2000.




ANDRE
      FORDE





Andre
      Forde, President of 110 Media Group, Inc. Forde also has an extensive background
      in technology, specifically do-it-yourself web site builders. Forde was the
      founder of ImageCafe.com, which was acquired by Network Solutions, Inc. (NSI)
      a
      Verisign, Inc. company in November 1999.




DARREN
      CIOFFI





Mr.
      Cioffi was appointed the Company’s Chief Financial Officer on September 16,
      2004. Mr. Cioffi, established Cioffi Business Management Services in 2001.
      Cioffi Business Management Services is a management consulting firm engaged
      in
      offering consulting and management services to established as well as startup
      companies. From 2000 to 2001 Mr. Cioffi was Chief Operating Officer of
      Thinkersgroup.com, where he was responsible for the development and
      implementation of the organizational structure as well as day-to-day operations.
      From 1998 to 2000 Mr. Cioffi was Vice President of Consulting Services for
      Total
      Business Solutions, where he specialized in the implementation and sales of
      Customer Relationship Management and Back office Accounting Solutions through
      one on one and group collaboration with Total Business Solutions clients. From
      1995 - 1998, he served as Controller and Vice President of Sales for Comptech
      Resources. While at Comptech, he helped the Company earn the distinction as
      the
      first Platinum reseller of GoldMine software on Long Island. He also developed
      Long Island’s first GoldMine authorized training center. In October 1998,
      following Paratech Resources, Inc.’s acquisition of Comptech, Mr. Cioffi was
      named General Manager of Consulting Services. He also spent two years in public
      accounting for the firm of Pannell Kerr Forster and served as Assistant
      Controller for the Seafield Center from 1991-1995. Mr. Cioffi earned a BS in
      Accounting from Long Island University. He is also a member of the National
      Society of Accountants and is accredited by the Accreditation Council for
      Accounting & Taxation, Inc.





34





AARON
      STEIN





Aaron
      Stein currently manages his own CPA firm with over 25 years of experience
      working with a diversity of clients including providing audit and review and
      consulting services for small public companies, tax support for law firms
      involved in class action settlements funds, tax and consulting services for
      clients in real estate, manufacturing, consulting and various other businesses.





Mr.
      Stein
      attended C.W. Post Campus of LIU where he earned a Bachelor of Science Degree
      in
      Accounting.





WILLIAM
      ERIC SIEDEL





Eric
      Seidel currently serves as Vice Chairmen of eAutoclaims, Inc (OTC/BB: EACC)
      and
      recently took that role since January of 2007. Prior to becoming Vice Chairmen
      of the company, he serves as President/CEO since 2000. During the period of
      time
      the company grew from $1.7M a year in revenues to over $13M in 2006. Mr. Seidel
      is considered a pioneer in the online Insurance claims processing industry
      and
      eAutoclaims is recognized as a leader in the industry.





Mr.
      Seidel also serves as a Local City Councilman in the City of Oldsmar Florida,
      he
      will hold the elected office of Seat 4 until March 2010.




Directors’
      Compensation





We
      have a
      policy of not granting fees to directors who attend a regularly scheduled or
      special board meeting, however, we may reimburse out-of-state directors for
      their cost of travel and lodging to attend such meeting. However the Company
      granted Mr. Stein and Mr. Seidel 50,000 shares of the Companies common
      Stock.





Code
      of
      Ethics





In
      December 2003, the Company adopted a written Code of Business Conduct and Ethics
      that applies to the Company’s principal executive officer, principal financial
      officer, principal accounting officer and controller and any persons performing
      similar functions. A copy of our Code of Ethics is attached as Exhibit 14.1
      to
      the Company’s Annual Report on Form 10-KSB for the fiscal year ended December
      31, 2003. The Company will provide a copy of its Code of Business Conduct and
      Ethics to any person without charge upon written request addressed to Web2
      Corp., 100 West Lucerne Circle, Suite 600, Orlando, Florida 32801, Attention:
      Chief Financial Officer.




Compliance
      with Section 16(a) of the Exchange Act





Section
      16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
      and executive officers and persons who own more than ten percent of a registered
      class of the Company’s equity securities to file with the Securities and
      Exchange Commission initial reports of ownership and reports of changes in
      ownership of common stock and other equity securities of the Company. Officers,
      directors and greater than ten percent shareholder are required by SEC
      regulation to furnish the Company with copies of all Section 16(a) forms they
      file.





To
      the
      Company’s knowledge, based solely on review of the copies of such reports
      furnished to the Company and written representations that no other reports
      were
      required, during the fiscal year ended December 31, 2006 all Section 16(a)
      filings requirements applicable to its officers, directors and greater than
      ten
      percent beneficial owners were complied with.





No
      Committees





Our
      Board
      of Directors does not, at present, have an audit, compensation or nominating
      committee, or any committee or committees performing similar functions. All
      of
      these functions are, at present, performed by the Board of Directors as a
      whole.




35






**ITEM
      10. EXECUTIVE COMPENSATION**




The
      Summary Compensation Table shows certain compensation information for services
      rendered in all capacities for the fiscal years ended December 31, 2004, 2005
      and 2006. Other than as set forth herein, no executive officer’s salary and
      bonus exceeded $200,000 in any of the applicable years. The following
      information includes the dollar value of base salaries, bonus awards, the number
      of stock options granted and certain other compensation, if any, whether paid
      or
      deferred.




**SUMMARY
      COMPENSATION TABLE**




Name
                  and
                Principal
                  Position
              
              Year
              
              Salary
                  ($)
                (1)
              
              Bonus
                ($)
              
              Total
                ($)William
                  Mobley (1),
              
              
              2006
              
              
              120,000
              
              
              55,000
              
              
              175,000Chief
                  Executive Officer
              
              
              2005
              
              
              63,938
              
              
              10,500
              
              
              74,4382004
              
              
              5,769
              
              
              0
              
              
              5,769Darren
                  Cioffi, (2)
              
              
              2006
              
              
              120,000
              
              
              30,000
              
              
              150,000Chief
                  Financial Officer
              
              
              2005
              
              
              65,000
              
              
              20,000
              
              
              85,0002004
              
              
              17,500
              
              
              10,000
              
              
              27,500Andre
                  Ford, (3)
              
              
              2006
              
              
              120,000
              
              
              55,000
              
              
              175,000President
              
              
              2005
              
              
              2,630
              
              
              0
              
              
              2,630200
              
              
              0
              
              
              0
              
              
              0




(1)
            Mr.
                Mobley became the Company’s Chief Executive Officer on December 22,
                2005.




(2)
            Mr.
                Cioffi became the Company’s Chief Financial Officer on September 16,
                2004.




(3)
            Mr.
                Ford became the Company’s President on December 22,
                2005.





Employment
      Agreements




On
      February 8, 2005, the Company entered into a new Consulting Agreement with
      the
      consultant for a six (6) month term commencing as of December 16, 2004 (“Second
      Term”). During the Second Term, the Company has agreed to compensate the
      consultant $30,000 and issued Mr. Cioffi 100,000 shares of its common stock
      under the Company’s 2003 Equity Incentive Plan.




On
      January 2, 2006 the Company entered into a consulting agreement with Cioffi
      Business Management Services "CBMS". The consulting agreement is for an initial
      term of six (6) months. The Company has agreed to compensate CBMS $30,000 as
      well as issue the consultant 30,000 shares of its common stock for the initial
      six (6) month term. During the term of the consulting agreement, the principal
      shareholder of the consultant, Mr. Darren J. Cioffi, will act as the Company's
      Chief Financial Officer.




On
      December 22, 2005 the Company entered into an employment agreement with William
      Mobley. The term of the agreement is for five (5) years commencing on December
      22, 2005. Mr. Mobley will serve as the Company's Chairman of the Board. During
      the term of the agreement, the Company shall pay Mr. Mobley an annual salary
      of
      $120,000 with adjustments governed by the Consumer Price Index and determined
      by
      the Company's certified public accountants. Mr. Mobley shall also be entitled
      to
      a performance bonus to be determined by the Board of Directors.




36




On
      December 22, 2005 the Company entered into an employment agreement with Andre
      Forde. The term of the agreement is for five (5) years commencing on December
      22, 2005. Mr. Ford will serve as the Company's President. During the term of
      the
      agreement, the Company shall pay Mr. Forde an annual salary of $120,000 with
      adjustments governed by the Consumer Price Index and determined by the Company's
      certified public accountants. Mr. Mobley shall also be entitled to a performance
      bonus to be determined by the Board of Directors.




**ITEM
        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
        MANAGEMENT**
 
 The
        following table sets forth, as of March 31, 2007, information with respect
        to
        the securities holdings of all persons which we, pursuant to filings with
        the
        Securities and Exchange Commission, have reason to believe may be deemed
        the
        beneficial owners of more than 5% of our outstanding common stock. Also set
        forth in the table is the beneficial ownership of all shares of our outstanding
        stock, as of such date, of all officers and directors, individually and as
        a
        group.


Amount
                  of Beneficial
              
              Percent
                  of BeneficialOwnership
                  (1)
              
              Ownership
                  (2)Name
                  and AddressNextelligence,
                  Inc.
              
              
              2,858,734
              (2)
              
              11.54
              %612
                  East Central Blvd.Orlando,
                  Florida 32801Michele
                  Mobley
              
              
              2,355,220
              (3)
              
              9.51
              %11525
                  Swift Water CircleOrlando,
                  Florida 32817Gary
                  D. Lipson
              
              
              1,467,554
              (4)
                    (5)
              
              5.93
              %390
                  North Orange AvenueSuite
                  1500Orlando,
                  Florida 32801William
                  A. Mobley, Jr.
              
              
              5,213,954
              (2)
                    (3)
              
              21.05
              %100
                  West Lucerne CircleSuite
                  600Orlando,
                  Florida 32801Andre
                  L. Forde
              
              
              981,342
              
              
              3.97
              %100
                  West Lucerne CircleSuite
                  600Orlando,
                  Florida 32801Darren
                  Cioffi
              
              
              35,000
              
              
              0.14
              %31
                  West Main StreetPatchogue,
                  NY 17772Eric
                  William John Seidel
              
              
              50,000
              
              
              0.202
              %114
                  Shore Drive PlaceOldsmar
                  FL 34677Aaron
                  Stein, CPA
              
              
              50,000
              
              
              0.202
              %PO
                  Box 406Woodmere,
                  NY 11598All
                  Officers and Directors
              
              
              6,330,296
              
              
              25.56
              %as
                  a Group (4 persons)




(1)
            Based
                upon 24,763,889 shares of Common Stock issued and outstanding on
                March 31,
                2007.




37





(2)  William
      A. Mobley, Jr. is the Chairman of the Board and Chief Executive Officer of
      Nextelligence, Inc. and, in such capacities, has the sole authority to the
      vote
      all of the shares of Common Stock legally or beneficially owned by
      Nextelligence, Inc.





(3)  William
      A. Mobley, Jr. and Michelle Mobley own jointly 2,355,220 shares of Common Stock
      and share the authority to vote such shares of Common Stock.





(4)  Gary
      D.
      Lipson is the sole manager of an entity which holds 556,801 shares of Common
      Stock. In such capacity, he has the sole authority to vote all of the shares
      of
      Common Stock so held.





(5)  Gary
      D.
      Lipson is a manager of two entities which hold an aggregate of 910,753 shares
      of
      Common Stock. Mr. Lipson acting alone has the authority to vote the shares
      of
      Common Stock held by such entities.




**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





**Nextelligence,
      Inc** .
      William
      A. Mobley, Jr., the Chairman of the Board and Chief Executive Officer of the
      Company, and the founder, Chairman of the Board and Chief Executive Officer
      of
      Global Portals, a wholly-owned subsidiary of the Company, is also the founder,
      Chairman of the Board and Chief Executive Officer of Nextelligence, Inc.
      Nextelligence, Inc. is the beneficial owner of 2,858,734 shares of Common Stock,
      constituting approximately 11.54% of the total number of issued and outstanding
      shares of Common Stock.





At
      September 30, 2005, Global Portals, a wholly-owned subsidiary of the Company,
      was indebted to Nextelligence, Inc. in the amount of $900,000.00. On that date,
      Global Portals issued and sold to Nextelligence, Inc. 7,282,720 shares of common
      stock of Global Portals in exchange for the cancellation of $655,444.80 of
      such
      $900,000.00 indebtedness of Global Portals. In connection with the completion
      of
      the transactions contemplated by the Agreement and Plan of Share Exchange,
      these
      7,282,720 shares of common stock of Global Portals were exchanged for 2,858,734
      shares of Common Stock.





At
      December 31, 2006, Global Portals was indebted to Nextelligence, Inc. in the
      amount of $244,556 (not including accrued interest). This indebtedness bears
      interest at the rate of 6% per annum, and is secured by a security interest
      on
      all of the assets of Global Portals. This indebtedness, together with all
      interest accrued thereon, was due and payable on January 2, 2007. The Company
      expects to be these notes to be renewed.





On
      August
      15, 2005, Global Portals and Nextelligence, Inc. entered into a Web Hosting
      and
      Reseller Agreement. Pursuant to this agreement, Nextelligence, Inc. markets
      and
      sells certain services provided by Global Portals. During 2006, Global Portals
      nothing was earned by Nextelligence, Inc in commissions for the services
      marketed and sold by Nextelligence, Inc.





During
      2006 the Nextelligence provided certain administrative services to the Company
      in the amount of $105,000. Management believes that the fees charged for these
      administrative services are comparable to what we would have been charged by
      an
      unrelated party.





**William
      A. Mobley, Jr** .
      At
      December 31, 2006, Global Portals was indebted to William A. Mobley, Jr. in
      the
      amount of $744,006 (not including accrued interest). This indebtedness bears
      interest at the rate of 6% per annum, and is secured by a security interest
      on
      all of the assets of Global Portals. This indebtedness, together with all
      interest accrued thereon, is due and payable on January 2, 2007. The Company
      expects to be these notes to be renewed.





**Andre
      L. Forde** .
      At
      December 31, 2005, Global Portals was indebted to Andre L. Forde in the amount
      of $263,503 (not including accrued interest). This indebtedness bears interest
      at the rate of 6% per annum, and is secured by a security interest on all of
      the
      assets of Global Portals. This indebtedness, together with all interest accrued
      thereon, is due and payable on January 2, 2007. The Compnay expects to be these
      notes to be renewed.





**GlobalQuest
      Media, LLC** .
      William
      A. Mobley, Jr., the Chairman of the Board and Chief Executive Officer of the
      Company and Global Portals, and Andre L. Forde, the President and Chief
      Operating Officer of the Company and Global Portals, are the founders,
      controlling equity holders and managers of GlobalQuest Medial, LLC.





On
      August
      15, 2005, Global Portals and GlobalQuest Media, LLC entered into a Web Hosting
      and Reseller Agreement. Pursuant to this agreement, GlobalQuest Media, LLC
      markets and sells certain services provided by Global Portals. During 2006,
      Global Portals nothing was paid to GlobalQuest Media, LLC in commissions for
      the
      services marketed and sold by GlobalQuest Media, LLC.




38


**You
      Get It.com** .
      William
      A. Mobley, Jr., the Chairman of the Board and Chief Executive Officer of the
      Company, and the founder, Chairman of the Board and Chief Executive Officer
      of
      You Get It.com.





During
      2006 the Company provided development services to You Get It.com and collected
      revenues from You Get It.com in the amount of $156,000. Management believes
      that
      the fees charged for these development services are comparable to what would
      have been charged by an unrelated party.





**Broadcast
      Bid LLC** .
      William
      A. Mobley, Jr., the Chairman of the Board and Chief Executive Officer of the
      Company, and the founder. Is Chairman of the Board of BraodCast Bid LLC.





During
      2006 the Company provided development services to You Get It.com and collected
      revenues from Broadcast Bid in the amount of $106,000. Management believes
      that
      the fees charged for these development services are comparable to what would
      have been charged by an unrelated party.





**ChargeKard
      LLC** .
      William
      A. Mobley, Jr., the Chairman of the Board and Chief Executive Officer of the
      Company, and the founder. Is Chairman of the Board and Chief Executive Officer
      of ChargeKard LLC.





During
      2006 the Company provided development services to You Get It.com and collected
      revenues from Broadcast Bid in the amount of $107,000. Management believes
      that
      the fees charged for these development services are comparable to what would
      have been charged by an unrelated party.




39




**ITEM
      13. EXHIBITS**




(a)
      The
      following exhibits are filed as part of this report:




2.1
      Stock
      Purchase Agreement, dated as of August 19, 2005 by and between the Company
      and
      Raymond Barton and Timothy Schmidt (Incorporated by reference to Exhibit 10.1
      to
      the Company's Form 8-K dated August 19, 2005)




2.2
      Assignment and Assumption dated August 19, 2005 by and between the Company,
      Jade
      Entertainment Group, Inc., Timothy Schmidt and Raymond Barton (Incorporated
      by
      reference to Exhibit 10.5 to the Company's Form 8-K dated August 19,
      2005)




2.3
      Agreement and Plan of Share Exchange dated as of December 1, 2005 by and between
      the Company and Global Portals Online, Inc. (Incorporated by reference to
      Exhibit 10.1 to the Company's Form 8-K dated December 22, 2005)




3.1
      Certificate of Amendment of Certificate of Incorporation filed with the Delaware
      Secretary of State on September 21, 2005 (filed
      herewith)




4.1
      Form
      of Warrant Amendment (Incorporated by reference to Exhibit 4.1 to the
      Registrant's Form 10-KSB for the fiscal year ended December 31,
      2003)




4.2
      Certificate of Designations, Preferences and Rights of Series AA Preferred
      Stock
      as filed with the Secretary of State of Delaware on December 1, 2004
      (Incorporated by reference to Exhibit 4.1 to the December 2, 2004 Form
      8-K)




10.1
      Consulting Agreement dated September 16, 2004 between the Company and Cioffi
      Business Management Services (Incorporated by reference to Exhibit 99.1 to
      the
      September 12, 2004 Form 8-K)




10.2
      Employment Agreement dated October 5, 2004 between the Company and Mark Figula
      (Incorporated by reference to Exhibit 99.2 to the October 5, 2004 Form
      8-K)




10.3
      Asset Purchase Agreement dated December 5, 2004 between the Company and Global
      Reach, Inc. (Incorporated by reference to Exhibit 10.1 to the December 5, 2004
      Form 8-K)




10.4
      Promissory Note in the principal amount of $50,000 (Incorporated by reference
      to
      Exhibit 10.2 to the December 5, 2004 Form 8-K)




10.5
      Promissory Note in the principal amount of $100,000 (Incorporated by reference
      to Exhibit 10.2 to the December 5, 2004 Form 8-K)




40


10.6
      Consulting Agreement dated February 8, 2005 between the Company and Cioffi
      Business Management Services (Incorporated by reference to Exhibit 10.13 to
      the
      Registrant's Form 10-KSB for the fiscal year ended December 31,
      2004)




10.7
      Amendment to $100,000 6% Promissory Note issued to Global Reach, Inc. dated
      April 13, 2005. (Incorporated by reference to Exhibit 10.14 to the Registrant's
      Form 10-KSB for the fiscal year ended December 31, 2004)




10.8
      Management Services Agreement between the Company and Global Portals, Inc.
      (formerly Personal Portals Online, Inc.) dated as of July 1, 2005 (Incorporated
      by reference to Exhibit 10.1 to the Company's Form 8-K dated July 12,
      2005)




10.9
      Severance Agreement and Release of Raymond Barton dated August 19, 2005
      (Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K dated
      August 19, 2005)




10.10
      Severance Agreement and Release of Timothy Schmidt dated August 19, 2005
      (Incorporated by reference to Exhibit 10.3 to the Company's Form 8-K dated
      August 19, 2005)




10.11
      Severance Agreement and Release of Michael Barton dated August 19, 2005
      (Incorporated by reference to Exhibit 10.4 to the Company's Form 8-K dated
      August 19, 2005)




10.12
      Employment Agreement dated December 20, 2005 by and between the Company and
      William A. Mobley, Jr. (Incorporated by reference to Exhibit 10.2 to the
      Company's Form 8-K dated December 22, 2005)




10.13
      Employment Agreement dated December 20, 2005 by and the Company and Andre L.
      Forde (Incorporated by reference to Exhibit 10.3 to the Company's Form 8-K
      dated
      December 22, 2005)




14.1
      Code
      of Business Conduct and Ethics (Incorporated by reference to Exhibit 14.1 to
      the
      Registrant's Form 10-KSB for the fiscal year ended December 31,
      2003)




14.2
      Code
      of Ethics for Financial Executives (Incorporated by reference to Exhibit 14.2
      to
      the Registrant's Form 10-KSB for the fiscal year ended December 31,
      2003)




16.1
      Letter from Marcum & Kliegman LLP to the Securities and Exchange Commission
      dated April 25, 2005 (Incorporated by reference to Exhibit 16.1 to the Company's
      Form 8-K dated April 18, 2004)




16.2
      Letter from Wolinetz & Lafazan & Co. to the Securities and Exchange
      Commission dated March 31, 2006. (Incorporated by reference to Exhibit 16.1
      to
      the Company's Form 8-K dated March 29, 2006)




21
      Subsidiaries of the Registrant (filed herewith)




31.1
      Certification of Chief Executive Officer of Periodic Report pursuant to Rule
      13a-14a and Rule 15d-14(a).




31.2
      Certification of Chief Financial Officer of Periodic Report pursuant to Rule
      13a-14a and Rule 15d-14(a).




32.1
      Certification of Chief Executive Officer of pursuant to 18 U.S.C. - Section
      1350.




32.2
      Certification of Chief Financial Officer of pursuant to 18 U.S.C. - Section
      1350.




**ITEM
      14: PRINCIPAL ACCOUNTANT FEES AND SERVICES**




Audit
      Fees. The aggregate fees billed and unbilled for the fiscal years ended December
      31, 2004 and 2005 for professional services rendered by our principal
      accountants for the audits of our annual financial statements, and the review
      of
      our financial statements included in our quarterly reports on Form 10-QSB were
      approximately $77,500 and $40,000, respectively.




**Audit-Related
      Fees**




There
      were no audit-related fees for the fiscal years ended December 31, 2004 and
      2005
      for assurance and related services rendered by our principal accountants related
      to the performance of the audit or review of our financial statements,
      specifically accounting research.




41




**Tax
      and Other Fees**




There
      aggregate fees billed for the fiscal years ended December 31, 2004 and 2005
      for
      tax related or other services rendered by our principal accountants in
      connection with the preparation of our federal and state tax returns was $8,000
      and $5,200, respectively.




**Approval
      of Non-audit Services and Fees**




We
      did
      not have an audit committee during fiscal 2005 or 2004 and did not have any
      independent directors.





42




**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**WEB2
                CORP**.April
                16, 2007
            By
            /s/
              William A. Mobley, Jr.William
                A. Mobley, Jr.,Chairman
                and Chief Executive Officer
              (Principal
                Executive Officer)


April
              16, 2007
            By
            /s/
              Darren CioffiDarren
                Cioffi,Chief
                Financial Officer
              (Principal
                Financial and Accounting Officer)




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the Registrant and in the capacities and on
      the
      dates indicated.




Name
              
              Title
              
              Date/s/ William A. Mobley,
                Jr.
                Regina
                R. Flood
              
              Chairman
                  of the Board
                and Director
              
              April
                16, 2007/s/ Aaron Stein
                Aaron
                Stein
              
              Director
              
              April 16, 2007/s/ William Eric Seidel
                William
                Eric Seidel
              
              Director
              
              April 16, 2007





43