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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

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

                   For The Fiscal Year Ended December 31, 2001

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

                           Commission File No. 0-25681

                              [LOGO] Bankrate, Inc.

               (exact name of registrant specified in its charter)

        Florida                                          65-0423422
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                        11811 U.S. Highway One, Suite 101
                         North Palm Beach, Florida 33408
               (Address of principal executive offices) (zip code)

       Registrant's telephone number, including area code: (561) 630-2400

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

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

                     Common Stock, par value $0.01 per share

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

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

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the average of the closing bid and ask quotations for
the Common Stock on February 28, 2002, as reported by the OTC Bulletin Board was
approximately $6,147,046. As of February 28, 2002, the Registrant had
outstanding 13,996,950 shares of Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the 2002 Annual Meeting of
Stockholders are incorporated by reference into Parts I and III of this report.

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ITEM 1. BUSINESS

     This Report and our other communications and statements may contain
"forward-looking statements," including statements about our beliefs, plans,
objectives, goals, expectations, estimates, projections and intentions. These
statements are subject to significant risks and uncertainties and are subject to
change based on various factors, many of which are beyond our control. For
information concerning these factors and related matters, see "Risk Factors"
below and "Forward-Looking Statements" in Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

Overview

     Bankrate, Inc. owns and operates an Internet-based consumer banking
marketplace. Our flagship site, Bankrate.com, is the Web's leading aggregator of
information on over 100 financial products, including mortgages, credit cards,
new and used automobile loans, money market accounts, certificates of deposit,
checking and ATM fees, home equity loans and online banking fees. Additionally,
we provide financial applications and information to a network of distribution
partners and also through national and state publications.

     Bankrate.com provides the tools and information that can help consumers
make better financial decisions. We regularly survey approximately 4,800
financial institutions in all 50 states in order to provide the most current
objective, unbiased rates. Hundreds of print and online partner publications
depend on Bankrate.com as the trusted source for financial rates and
information.

     Over two decades ago, we began as a print publisher of the newsletter "Bank
Rate Monitor." Our rate tables provide at no cost to the consumer, a detailed
list of lenders by market, and include relevant details to help consumers
compare loan products.

     We continue to enhance our offerings in order to provide Bankrate.com users
with the most complete experience. Features such as financial calculators and
e-mail newsletters allow users to interact with our site. Our Rate Trend Index
is a weekly poll of industry insiders designed to help consumers forecast
interest rate trends.

     We also broadened our offerings to include channels on investing, taxes,
small business and financial advice. Each channel offers a unique look at its
particular topic. Bankrate.com users can find advice and tips from the Tax
channel, obtain business ideas from the Small Business channel and ask a
financial expert a question in the Advice channel.

     Information concerning our advertising views and page views appears below:

                                               Bankrate, Inc.
                                  Internet Advertising Views and Page Views
                                                (in millions)

For the year ended December 31,         2001     2000     1999     1998
                                       -----     ----     ----     ----

         Ad Views                      1,577      405      288      104

         Page Views                      237      136       89       40

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     Prior to 1996, and dating back to 1976, our principal business was the
publication of print newsletters, the syndication of unbiased editorial bank and
credit product research to newspapers and magazines, and advertising sales of
the Consumer Mortgage Guide. We currently syndicate editorial research to 104
newspapers that have combined single day circulation in excess of 28.7 million
copies and three national magazines with combined monthly circulation in excess
of 2 million copies. The Consumer Mortgage Guide is a weekly
newspaper-advertising table consisting of product and rate information from
local mortgage companies and financial institutions. The Consumer Mortgage Guide
appears weekly in approximately 13 U.S. metropolitan newspapers with combined
single day circulation in excess of 3.9 million copies. Together, these
Bankrate.com branded print activities have the potential of reaching 34.9
million readers according to Editor & Publisher International 2001 Year Book.

     In 1996, we began our online operations by placing our editorially unbiased
research on our Web site, Bankrate.com. By offering our information online, we
created new revenue opportunities through the sale of graphical and hyperlink
advertising associated with our rate and yield tables. In fiscal 1997, we
implemented a strategy to concentrate on building these online operations.

     We believe that the recognition of our research as a leading source of
independent, objective information on banking and credit products is essential
to our success. As a result, we have sought to maximize distribution of our
research to gain brand recognition as a research authority. We are seeking to
build greater brand awareness of our Web site and to reach a greater number of
online users.

     See Management's Discussion and Analysis of Financial Condition and Results
of Operations - Results of Operations and Note 11 to the Consolidated Financial
Statements below for a discussion of our two reportable business segments:
online publishing, and print publishing and licensing.

Our Opportunity

     Many financial services customers are relatively uninformed with respect to
financial products and services and often rely upon personal relationships when
choosing such products and services. Many of these products and services are not
well explained, and viable, equivalent alternatives typically are not presented
when marketed to consumers through traditional media. As the sale of many of
these products and services moves to the Internet, where there is little
personal contact, we believe that consumers will seek sources of independent
objective information such as Bankrate.com to facilitate and support their
buying decisions. The interactive nature of the Internet allows us to display
extensive research on financial products and services that was previously
unavailable to consumers.

     We believe the majority of financial information available on the Web is
oriented toward investment advice and providing business news and stock market
information, rather than personal and consumer finance data. Our publications
are targeted to fulfill the less competitive, but equally important niches of
consumer banking and finance information. As a result, we believe we can
maintain a loyal base of users comprised of targeted audiences that are
attractive to advertisers.

     Despite weakness in advertising spending on the Internet, we have seen
steady interest in our primary niches - mortgages, automobile loans, home equity
loans and CD/savings products. In addition, we believe our faith in the
long-term benefits of the Internet is well founded. The ability of the Internet
to provide a platform for frictionless communication between consumers and
businesses has not changed. We believe Bankrate, Inc. is positioned to benefit
from any growth in Internet usage and the return of the Internet advertising
market.

Restructuring

     We spent much of 2000 and 2001 refocusing the Company's business efforts
into our primary Web site, Bankrate.com, while actively controlling expenses and
pursuing additional sources of revenue. In addition, we sold or curtailed
development of under-performing Web sites and business units. The following
steps were taken as a direct result of our strategic reorganization initiatives.

     .    We substantially reduced marketing expenditures beginning in January
          2000 compared to the second half of 1999.

     .    In May 2000, we sold CPNet.com, our online advertising network that
          provided content and advertising management to college newspaper Web
          sites.

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     .    In June 2000, we reduced employment levels of continuing operations by
          10% and began consolidating our physical locations.

     .    In June 2000, we shut down our Broadcast Operations that produced
          "Cost of Life" personal finance video segments distributed to
          television stations.

     .    In June 2000, we shut down ilife.com, our vertical personal finance
          portal, and incorporated IntelligentTaxes.com, our personal income tax
          information Web site, as a channel of Bankrate.com.

     .    In July 2000, we sold Pivot.com, our virtual insurance agency and
          fulfillment/call center.

     .    In August 2000, we shut down and sold certain assets of Consejero.com,
          our Spanish-language personal finance Web site, and Garzarelli.com, a
          subscription Web site for investment advisor Elaine Garzarelli.

     .    In December 2000, we shut down GreenMagazine.com, our alternative
          personal finance Web site, and the print publication Green Magazine.

     .    In 2001, we terminated unprofitable distribution and advertising
          agreements, formed a telemarketing group in our advertising sales
          staff to focus primarily on hyperlink sales, and focused our marketing
          efforts on non-cash intensive marketing programs such as sweepstakes,
          promotions and barter transactions.

Strategy

     We believe that the consumer-banking sector holds significant opportunities
for growth and expansion. As we grow, we are seeking to consolidate our position
as the industry leader in the gathering of rate data and to expand our brand
recognition with consumers and partners. Elements of our strategy include:

     .    Continuing to provide advertisers with high-quality, ready-to-transact
          ----------------------------------------------------------------------
          consumers: By advertising on our site, either through purchasing
          ---------
          graphic ads, hyperlinks, or sponsorships, banks, brokers and other
          advertisers are tapping into our strongest resource, consumers on the
          verge of engaging in a transaction. By allowing advertisers to
          efficiently access these "in-market" consumers, we are helping
          advertisers lower their own costs of acquiring new customers, and
          ultimately creating a transaction that is beneficial for the
          advertiser, the consumer and us.

     .    Remaining the dominant brand in consumer bank rate data and content:
          -------------------------------------------------------------------
          We are continuing our strong push to remain the dominant player in our
          market. We believe we are the number one competitor in our market on a
          number of levels, including revenue, the number of banks surveyed, the
          number of pages viewed by consumers and the number of unique visitors.

     .    Continued, low-risk growth through partnering with top Web sites: Our
          ----------------------------------------------------------------
          partner network provides Bankrate.com with a steady stream of
          visitors, with little to no advertising risk to the Company. As the
          bulk of these agreements are revenue- sharing, we only pay out a
          percentage of what we actually bring in.

     .    Zealously guarding our limited resources: Our greatest assets are our
          ----------------------------------------
          people, our partners and our brand. We carefully weigh every decision
          for the potential impact on these three resources.

Distribution Arrangements

     During 2001, approximately 33% of the traffic to Bankrate.com was
attributable to the distribution (or syndication) arrangements we have with
other Web site operators. Our distribution arrangements fall into two
categories: (1) co-branding, in which we establish a "co-branded" site with
another Web site operator, and (2) licensing, in which we provide content to the
other operator's Web site together with a hyperlink to our own site. We have
found co-branding to be more effective in driving traffic to our site.

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     Co-branded sites are created pursuant to agreements with other Web site
operators. Generally, agreements relating to co-branded sites provide for us to
host the co-branded Web pages, sell and serve the graphical advertising, and
collect advertising revenues, which are shared with the third party Web site.

     Under licensing arrangements, we provide content to other Web sites in
exchange for a fee. The content identifies Bankrate.com as its source and
typically includes a hyperlink to the Bankrate.com Web site.

     Our largest partners in terms of driving traffic to our site as of December
31, 2001 included America Online, AT&T WorldNet, Bloomberg, CompuServe, MSN,
NASDAQ, Netscape, Smart Money, Yahoo! and USA Today.

Financial Product Research

     Our research staff is made up of 38 employees who track comparative
information on over 100 financial products and services, including checking
accounts, consumer loans, lines of credit, mortgages, certificates of deposit,
savings accounts, credit cards, money market accounts, brokerage accounts and
online accounts. We cover both personal and small business accounts offered
through branch offices and on the Internet by banks, thrifts, credit unions,
credit card issuers, mortgage bankers and mortgage brokers. We estimate that
over 350,000 items of data are gathered each week for over 173 markets across
the United States from over 4,800 financial institutions. The information
obtained includes not only interest rates and yields, but also related data such
as lock periods, fees, points, and loan sizes for mortgages and grace periods,
late penalties, cash advance fees, cash advance annual percentage rates, annual
percentage yields, minimum payments, and terms and conditions of credit cards.

     We adhere to a strict methodology in developing our markets and our
institutional survey group. The market survey includes the 100 largest U.S.
markets, as defined by the U.S. Census Bureau's Metropolitan Statistical Area
categories, along with the largest market in each state that does not include
one of the largest 100 markets and other selected communities that represent
areas of growth. We provide a comparative analysis of data by market and state
as well as on a national basis.

     Institutions in the survey group include the largest banks and thrifts
within each market area based on total deposits. The number of institutions
tracked within a given market is based on the types of financial products
available and number of institutions in the market area. In each of the largest
25 markets, we track at least 10 institutions. In each of the smaller markets we
track three or more institutions. We verify and adjust, if necessary, the
institutions included in the survey group on an annual basis using FDIC deposit
data from year-end call reports. We do not include credit unions in the market
survey group because product availability is based upon membership. However, we
track the 50 largest U.S. credit unions as a separate survey group for
comparison purposes.

     All products included in our database have narrowly defined criteria so
that information provided by institutions is comparable. Collected data
undergoes four levels of quality control prior to being accepted for inclusion
in the database. The first level is automatically performed by our editing
software, which identifies unusual changes. The second level is visual proofing,
which is performed by a researcher who gathers rates from institutions, reviews
the surveys to determine whether there have been any changes in the data on a
weekly basis, and verifies unusual changes or other questionable data by
contacting the institution. The third level is a second visual check by a senior
researcher. The fourth level is performed by a dedicated quality control staff
consisting of senior researchers who verify that the information has been
correctly updated and entered into our databank. Our quality control staff
reviews each listing in relation to regional and national trends and for overall
accuracy and consistency fees and related information prior to disclosure of the
information to consumers. The staff also reviews the comparability of products,
institutional accuracy and survey accuracy. In addition, the quality control
team performs anonymous shopping on a weekly basis, whereby we place calls to
institutions in order to validate the data in a consumer setting. Institutions
providing invalid data are contacted by our quality control staff to ensure that
future information will be accurate.

     The criteria for product listings consists of specific attributes, such as
loan size and term, that are used to define each type of financial instrument in
order to ensure uniformity in the products that are compared. With the exception
of the "Internet Banking Deals" table, no special offers are listed on our
Internet site. Institutions listed in our Bankrate.com online tables that
purchase hyperlinks to their own sites or purchase other advertising must comply
with the same criteria for product listings that apply to other institutions or
they will be removed.

     All of our new research employees are provided with a four-week program of
on-the-job training to ensure consistency of data-gathering and validation
techniques. Follow-up refresher training is provided to our research employees
on an ongoing basis to ensure that skill levels are maintained.

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     At the end of each weekly survey, data is archived as part of our 18-year
old cumulative historical data file. This file provides a unique resource for
our financial analysts and editorial team in developing trend graphs, charts and
narrative analysis that is used by national and local media.

     We are aware of the potential conflict of interest resulting from the sale
of advertising to financial institutions while providing independent and
objective research. However, we believe that no conflicts of interest have ever
compromised our ability to provide independent and objective research, and we
are committed to continue to provide such research in the future.

Editorial Content

     In addition to our research department, as of December 31, 2001 we
maintained an editorial staff of 14 editors, writers and researchers, and a
graphic artist who creates original stories for our Web site. We also have
relationships with more than 20 free-lance writers. Most of our editorial staff
members are experienced journalists with newspaper or broadcast experience. For
example, the reporters and editors of Bankrate.com have professional
journalistic work experience ranging from three to 32 years, with an average of
12 years of experience. We believe the quality of our original content plays a
critical role in attracting visitors to our site and co-branded partners to the
Bankrate.com Web site.

     Most of the content within our Web site is original and produced
internally. There is a limited amount of third-party content, acquired under
advertising revenue-sharing agreements or licenses, that allows us to
incorporate relevant information on our Web site that would otherwise require
additional resources to produce. An example of this type of arrangement is the
incorporation in Bankrate.com of foreclosure information from foreclosures.com.

Print Publications

     We continue to produce traditional print publications to absorb part of the
cost of producing research and original editorial content. Additionally, we
believe that print publishing activities contribute to greater exposure and
branding opportunities for our Internet Web site. Our print publications
activities are as follows:

     .    Consumer Mortgage Guide: We generate revenue through the sale of
          -----------------------
          mortgage rate and product listings in 13 metropolitan newspapers
          across the United States with combined Sunday circulation of 3.9
          million copies. We enter into agreements with the newspapers for
          blocks of print space, which is in turn sold to local mortgage lenders
          and we share the revenue with the newspapers on a percentage basis.

     .    Syndication of Editorial Content and Research: We syndicate editorial
          ---------------------------------------------
          research to 104 newspapers, which have combined Sunday circulation
          more than 28.7 million copies and three national magazines with
          combined monthly circulation in excess of 2 million copies.

     .    Newsletters: We publish three newsletters: 100 Highest Yields and
          -----------
          Jumbo Flash Report, which target individual consumers, and Bank Rate
          Monitor, which targets an institutional audience. These newsletters
          provide bank deposit interest rate information with minimal editorial
          content.

Consumer Marketing

     During 2000, we determined that our resources would be best leveraged by
emphasizing non-cash intensive marketing programs. This gave us the opportunity
to reach consumers using multiple advertising vehicles with a minimal depletion
of our marketing budget. We have continued this successful strategy in 2001 by
expanding our barter effort, and purchasing a series of strategic, highly
targeted online and print campaigns. In addition, we have used sweepstakes and
promotions efforts to drive site traffic and grow our e-mail newsletter
subscriber base. All consumer marketing efforts are designed, implemented, and
tracked by our employees.

Advertising Sales

     Our advertising sales staff consisted of 13 salespeople and support staff
as of December 31, 2001. It is divided into two groups: the Graphic Ad Team
("GAT") and a telemarketing group ("Telemarketing"). The GAT focuses on selling
graphic ads to national advertisers, while Telemarketing primarily sells
hyperlinks to regional and local advertisers. Most of our salespersons are
located in our North Palm Beach corporate headquarters. We also maintain two
satellite offices in New York and Irvine,

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California. Each salesperson is responsible for a designated geographic region
of the United States. We believe our sales force is highly effective.

     Our GAT salespeople present advertising solutions to potential advertisers
using inventory created by our Web site as well as co-branded Web sites. We
believe this combined network of sites enhances value for advertisers and direct
marketers by (1) alleviating the need to purchase a series of advertising
campaigns from numerous Web sites, (2) providing advertisers and direct
marketers with advertising opportunities on a wide variety of Web pages
containing business and personal finance content, and (3) providing targeted
access to Internet users with desirable demographics. Advertisers and direct
marketers can enhance the effectiveness of their campaigns by customizing
advertising delivery on our networks within a particular content channel or
across an entire network.

Advertising Alternatives

     Our advertisers can target prospective customers using several different
approaches:

          .    Targeting specific geographic and product areas; for example,
               mortgage shoppers in Atlanta, Georgia; or just one of these - all
               consumers interested in mortgages, or all consumers from Atlanta

          .    Focusing on consumers in specific situations, such as those who
               are first-time home buyers, or those actively shopping for CDs

          .    General rotation throughout our site

     Our most common graphical advertisement sizes are banners, which are
prominently displayed at the top or bottom of a page (486 x 60 pixels) and
badges, which are smaller than banners (125 x 125 pixels). We offer banners and
badges for general rotation or in specific areas of the site. List prices may
vary depending upon the quantity of advertisements purchased by an advertiser
and the length of time an advertiser runs an advertisement on our sites. List
prices for banner and badge advertisements with premium placement may be as low
as $15 CPM (cost per thousand) and as high as $100 CPM. Discounts and
commissions are available based upon the volume of advertisements purchased.

     We also sell posters, which are oversize advertisements that contain more
information than traditional advertisements. We position posters on certain
pages so that they dominate the page. The list prices range from $70 to $150
CPM. Advertisers may also purchase sponsorship positions on the Bankrate.com
home page and the main page for each product channel. The cost of the
sponsorship is based on banner rates for impressions received and ranges from a
list price of $22 to $33 CPM. Advertisers can also sponsor an entire channel. In
addition, we offer a number of sponsorship and "custom" advertising
opportunities. All list prices are typically negotiated with specific
advertisers and pricing can range dramatically based on traffic and size of the
advertising.

     Providing effective tools for managing advertising campaigns is essential
to maintaining advertising relationships. We use a state-of-the-art program
under license from a third party that allows our advertisers to monitor their
spending on our Web sites in real-time for impressions received and click
through ratios generated.

Hyperlinks

     Financial institutions that are listed in our rate tables have the
opportunity to hyperlink their listings. By clicking on the hyperlink, users are
taken to the institution's Web site. A substantial benefit to advertisers with
the hyperlink rate listing is that the hyperlinks are in fixed placement on the
rate pages and are shown every time a user accesses a page. In contrast, banner
advertisements are rotated based on the number of impressions purchased.
Hyperlink fees are sold for three-month periods. The number of hyperlinked rate
listings that can be added to a rate page is limited only by the number of
institutions listed, while banner positions are limited by available space.

E-Mail Sponsorships

     We publish 11 e-mail newsletters ranging from specific topics such as CDs,
credit cards, small business and mortgages, to broader topics such as Frugal U,
financial advice and community, weekly news, and monthly checkups; to "alert"
newsletters (e-mails alerting subscribers every time a rate changes in mortgages
or CDs). These newsletters offer another marketing and sales outlet for us. With
over 560,000 e-mail subscriptions, we believe our e-mail newsletters represent
attractive advertising

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space for our customers. Advertisers can sponsor e-mails with both text and
graphic ads. The cost for sponsoring an e-mail newsletter is between $0.05 and
$0.15 per subscriber.

Advertisers

     We market to local advertisers targeting a specific audience in a city or
state and also to national advertisers targeting the entire country. No
advertiser accounts for more than 10% of our revenues. As of December 31, 2001,
we had approximately 50 graphic advertisers and 350 hyperlink advertisers. Our
larger advertisers included Capital One Bank, Downey Savings & Loan, E-Loan /
Car Finance, iHomeowner, Inc., Mortgage Expo, PeopleFirst Finance, Providian
Bank, Washington Mutual and Wells Fargo Bank.

Competition

     We compete for advertising revenues across the broad category of personal
finance information provided in traditional media such as newspapers, magazines,
radio, and television and in the developing market for online financial
publications. There are many competitors that have substantially greater
resources than we do. Our online competition includes the following:

     .    Personal finance sections of general interest sites such as Yahoo! and
          America Online

     .    Personal finance destination sites such as MoneyCentral, Forbes,
          Business Week, Fortune, Smart Money, Kiplinger's and Money.com

     .    E-commerce sites that provide bank and credit products and information
          such as E-LOAN and GetSmart; and

     .    Rate listing sites, such as MonsterMoving

     Competition in the online segment is generally directed at growing users
and revenue using marketing and promotion to increase traffic to Web sites. We
believe that our original content, focus and objective product information
differentiate us from our competitors.

Operations

     We currently host our Web site on proprietary servers at a secure third
party co-location facility in Alpharetta, Georgia. This facility is manned and
our equipment is monitored continuously 24 hours daily. The facility is powered
continuously with multiple sources including uninterruptible power supplies and
internal power generators. The facility is connected to the Internet with
redundant high-speed digital data lines that are diversely routed. Our Web site
is served from a load balanced cluster of Web servers located in the co-location
facility for performance and redundancy. Much of the information presented on
our Web site is stored on a dual-node database server cluster also housed in the
co-location facility. Our systems are protected by a multi-layered security
system including dual high-speed inspection state firewalls.

     All of our systems are controlled remotely via an encrypted virtual private
network (VPN) from our network operations center ("NOC") in our principal office
in North Palm Beach, Florida. Content on our Web site is created and initially
stored on systems located at the NOC, then transferred at scheduled intervals
during the day via the VPN to the systems at the Georgia co-location facility.
The North Palm Beach facility systems are also powered redundantly by
uninterruptible power supply units and a gas powered electric generator.

Proprietary Rights

     Our proprietary intellectual property consists of our unique research and
editorial content. We rely primarily on a combination of copyrights, trademarks,
trade secret laws, our user policy and restrictions on disclosure to protect
this content. In addition, we license some of our data and content from other
parties. Our copyrights, trademarks and licenses expire at various dates, and
none is individually significant.

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Employees

     As of December 31, 2001, we had 102 full-time employees, of which 14 were
in Web site and content operations, 21 in sales, business development and
marketing, 36 in content and data research, 6 in advertising revenue operations,
12 in product development and information technology, 8 in finance and
accounting, and 5 in administration. We have never had a work stoppage and none
of our employees are represented under collective bargaining agreements. We
consider our employee relations to be good. Prior to June 2000, we leased all of
our employees, with the exception of the employees of our former subsidiary,
Professional Direct Agency, Inc. ("Pivot"), from Vincam Human Resources, Inc.
under the terms of a co-employment agreement. This agreement was terminated by
mutual agreement effective June 1, 2000, and all leased employees became our
direct employees.

Risk Factors

We Have a History of Losses and Could Run out of Cash

     We have incurred net losses in each of our last six fiscal years, resulting
in an accumulated deficit of approximately $60 million as of December 31, 2001.

     We are working to manage our cash by actively controlling expenses and
pursuing additional sources of revenue. For instance, since early 2000, we have
substantially reduced marketing expenditures and sold or shut down
under-performing, non-core business units. We sold CPNet.com in May 2000, sold
Pivot in July 2000, shut down and sold certain assets of Consejero.com in August
2000, and shut down Greenmagazine.com in December 2000 (see Item 8., Notes 5 and
6 to the consolidated financial statements). These transactions yielded
approximately $4,392,000 in cash and reduced operating expenses. We have also
reduced employment levels of continuing operations and consolidated our physical
locations. In February 2002, we completed the early repayment of our $4,350,000
convertible subordinated note payable including accrued interest for $3,400,000
(see Item 8., Note 12 to the consolidated financial statements). Based on these
actions and our current plan, we believe our existing capital resources will be
sufficient to satisfy our cash requirements through 2003. However, there are no
assurances that such actions will ensure cash sufficiency through 2003 or that
reducing marketing expenses will not curtail revenue growth.

     Further, due to the legal matters discussed in Item 7. below and Item 8.,
Note 10 to the consolidated financial statements, which we intend to vigorously
defend, management could be required to spend significant amounts of time and
resources defending these matters which could adversely impact our cash position
and our operations.

     We may consider additional options to preserve or generate cash. These
include forming strategic partnerships or alliances, pursuing a merger or sale
of the Company, or issuing new debt and/or equity securities. However, there can
be no assurance that we would be able to preserve or generate cash in sufficient
amounts or at all.

We Use Barter Transactions Which Do Not Generate Cash

     Revenue from barter transactions represented approximately 14% and 5% of
total revenue for the years ended December 31, 2001 and 2000, respectively. We
expect barter revenue to represent over 15% of our total revenue in future
periods. Barter transactions do not generate any cash and are entered into to
promote our brand and generate traffic to our Web site without spending any of
our cash resources.

  Our Success Depends on Internet Advertising Revenue

     We expect to derive more than 70% of our revenue in the foreseeable future
through the sale of advertising space and hyperlinks on our Internet Web pages.
Any factors that limit the amount advertisers are willing to spend on
advertising on our Web site could have a material adverse effect on our
business. These factors may include: (1) lack of standards for measuring Web
site traffic or effectiveness of Web site advertising; (2) lack of established
pricing models for Internet advertising; (3) failure of traditional media
advertisers to adopt Internet advertising; (4) introduction of alternative
advertising sources; and (5) a lack of significant growth in Web site traffic.

     Demonstrating the effectiveness of advertising on our Web site is critical
to our ability to generate advertising revenue. Currently, there are no widely
accepted standards to measure the effectiveness of Internet advertising, and we
cannot be certain that such standards will develop sufficiently to support our
growth through Internet advertising.

                                       9

<PAGE>

     Currently, a number of different pricing models are used to sell
advertising on the Internet. Pricing models are typically either CPM-based or
performance-based (cost per click). We predominantly utilize the CPM-based
model, which is based upon the number of advertisement impressions. The
performance based, or per click, model generates payments on each individual
click even though it may take multiple advertisement impressions to generate one
click-through. We cannot predict which pricing model, if any, will emerge as the
industry standard. Therefore, it is difficult for us to project our future
advertising rates and revenues. For instance, banner advertising, which is
currently our primary source of online revenue, may not be an effective
advertising method in the future. If we are unable to adapt to new forms of
Internet advertising and pricing models, our business could be adversely
affected.

     Financial services companies account for a majority of our advertising
revenues. We will need to sell advertising to customers outside of the financial
services industry in order to significantly increase our revenues. To date,
relatively few advertisers from industries other than the technology and
financial services industries have devoted a significant portion of their
advertising budgets to Internet advertising. If we do not attract advertisers
from other industries, revenue growth could be adversely affected.

Our Success Depends on Interest Rate Volatility

     We provide interest rate information for mortgages and other loans, credit
cards and savings accounts. Visitor traffic to Bankrate.com tends to increase
with interest rate movements and decrease with interest rate stability. Factors
that have caused significant visitor fluctuations in the past have been Federal
Reserve Board actions and general market conditions affecting home mortgage
interest rates. During 2001, approximately 38% of advertisement views on
Bankrate.com were on its mortgage pages. Accordingly, the level of traffic to
Bankrate.com can be dependent on the general level of interest rates as well as
mortgage refinancing activity. A slowdown in mortgage production volumes could
also have a material adverse effect on our business.

     We believe that as we continue to develop our Web site with broader
personal finance topics, the percentage of overall traffic seeking mortgage
information will remain stabilized at current levels. To accelerate the growth
of traffic to Bankrate.com, we are working with our syndication partners to
program more intensively, and we are aggressively promoting Bankrate.com
products not related to mortgage activity. We cannot be certain that we will be
successful in these efforts.

Our Success Depends on Establishing and Maintaining Distribution Arrangements

     Our business strategy includes the distribution of our content through the
establishment of co-branded Web pages with high-traffic business and personal
finance sections of online services and Web sites. A co-branded site is
typically a custom version of our Web site with the graphical look, feel, and
navigation, of the other Web site. Providing access to these co-branded Web
pages is a significant part of the value we offer to our advertisers. We compete
with other Internet content providers to maintain our current relationships with
other Web site operators and establish new relationships. In addition, as we
expand our personal finance content, some of these Web site operators may
perceive us as a competitor. As a result, they may be unwilling to promote
distribution of our banking and credit content. We cannot guarantee that our
distribution arrangements will attract a sufficient number of users to support
our current advertising model. During 2001, approximately 33% of the traffic to
our Web site originated from the Web sites of operators with which we have
distribution arrangements. In addition, our business could be adversely affected
if we do not establish and maintain distribution arrangements on favorable
economic terms.

Our Success Depends on Increasing Brand Awareness of Our Web Site

     Although the Company and its predecessors have been in business since 1976,
we commenced our Internet operations by introducing Bankrate.com in 1996. Due to
the limited operating history of our Internet operations, it is important that
we continue to develop and increase brand awareness of our Web site in order for
it to be attractive to advertisers. The importance of our brand recognition will
increase as competition in the Internet advertising market increases. As a
result, increasing and maintaining awareness of our Web site by promoting our
brand name is critical to maintaining our growth. As competing Web sites become
established on the Internet, the cost of increasing and maintaining brand
awareness increases significantly.

     Successfully promoting and positioning our Web site and brand name will
depend largely on the effectiveness of our marketing efforts and our ability to
develop favorable traffic patterns to our Web site. Therefore, we may need to
modify our financial commitment to creating and maintaining brand awareness
among users. If we fail to successfully promote our Web site and brand name or
if we incur significant expense in doing so, it could have a material adverse
effect on our business.

                                       10

<PAGE>

Our Markets Are Highly Competitive

     We compete for Internet advertising revenues with a number of
finance-related Web sites, such as Forbes, Business Week, Fortune, Smart Money,
Kiplingers, MoneyCentral, and Money.com, and traditional publishers and
distributors of personal finance content such as MSNBC, CNN, Money Magazine and
USA Today. In addition, new competitors may easily enter this market as there
are few barriers to entry. Many of our existing competitors, as well as a number
of potential new competitors, have longer operating histories, greater name
recognition, larger customer bases and significantly greater financial,
technical and marketing resources than us. Many competitors have complementary
products or services that drive traffic to their Web sites. Increased
competition could result in lower Web site traffic, advertising rate reductions,
reduced margins or loss of market share, any of which would adversely affect our
business. We cannot be certain that we will be able to compete successfully
against current or future competitors.

Our Web Site May Encounter Technical Problems and Service Interruptions

     In the past, our Web site has experienced significant increases in traffic
in response to interest rate movements and other business or financial news
events. The number of our users has continued to increase over time, and we are
seeking to further increase our user base. As a result, our Internet servers
must accommodate spikes in demand for our Web pages in addition to potential
significant growth in traffic.

     Our Web site has in the past and may in the future experience slower
response times or interruptions as a result of increased traffic or other
reasons. These delays and interruptions resulting from failure to maintain
Internet service connections to our site could frustrate users and reduce our
future Web site traffic, which could have a material adverse effect on our
business.

     All of our communications and network equipment is co-located at our
corporate headquarters in North Palm Beach, Florida and at a secure third party
facility in Alpharetta, Georgia. Multiple system failures at these locations
could lead to interruptions or delays in service for our Web site, which could
have a material adverse effect on our business. Our operations are dependent
upon our ability to protect our systems against damage from fires, hurricanes,
earthquakes, power losses, telecommunications failures, break-ins, computer
viruses, hacker attacks and other events beyond our control. Although we
maintain business interruption insurance, it may not adequately compensate us
for losses that may occur due to failures of our systems.

We Rely on the Protection of Our Intellectual Property

     Our intellectual property consists of the content of our Web site and print
publications. We rely on a combination of copyrights, trademarks, trade secret
laws and our user policy and restrictions on disclosure to protect our
intellectual property. We also enter into confidentiality agreements with our
employees and consultants and seek to control access to and distribution of
our proprietary information. Despite these precautions, it may be possible for
other parties to copy or otherwise obtain and use the content of our Web sites
or print publications without authorization. A failure to protect our
intellectual property in a meaningful manner could have a material adverse
effect on our business.

     Because we license some of our data and content from other parties, we may
be exposed to infringement actions if such parties do not possess the necessary
proprietary rights. Generally, we obtain representations as to the origin and
ownership of licensed content and obtain indemnification to cover any breach of
any such representations. However, such representations may not be accurate and
such indemnification may not be sufficient to provide adequate compensation for
any breach of such representations.

     Any future infringement or other claims or prosecutions related to our
intellectual property could have a material adverse effect on our business.
Defending against any such claims, whether or not they have merit, could be
time-consuming, result in costly litigation and diversion of technical and
management personnel or require us to introduce new content or trademarks,
develop new technology or enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may not be available on acceptable
terms, if at all.

                                       11

<PAGE>

We May Face Liability for Information on Our Web Site

     Much of the information published on our Web site relates to the
competitiveness of financial institutions' rates, products and services. We may
be subjected to claims for defamation, negligence, copyright or trademark
infringement or other theories relating to the information we publish on our Web
sites. These types of claims have been brought, sometimes successfully, against
online services as well as print publications. Our insurance may not adequately
protect us against these types of claims.

Future Government Regulation of the Internet is Uncertain and Subject to Change

     As Internet commerce continues to evolve, increasing regulation by federal
or state agencies or foreign governments may occur. Such regulation is likely in
the areas of user privacy, pricing, content and quality of products and
services. Additionally, taxation of Internet use or electronic commerce
transactions may be imposed. Any regulation imposing fees for Internet use or
electronic commerce transactions could result in a decline in the use of the
Internet and the viability of Internet commerce, which could have a material
adverse effect on our business.

Our Ownership is Heavily Concentrated

     At February 28, 2002, approximately 55% of our outstanding common stock was
beneficially owned by our officers and directors, including Peter C. Morse, a
director and our largest shareholder, who beneficially owned approximately 40%
of our outstanding common stock. As a result, our officers and directors will be
able to exercise control over all matters requiring shareholder approval. In
particular, these controlling shareholders will have the ability to elect all of
our directors and approve or disapprove significant corporate transactions. This
control could be used to prevent or significantly delay another company or
person from acquiring or merging with us.

Our Success May Depend on Management and Key Employees

     Our success may depend largely upon retaining the continued services of our
executive officers and other key management, developing personnel as well as
hiring and training additional employees. We have a number of key employees on
whom we depend and who may be difficult to replace. A failure to retain our
current key employees or to hire enough qualified employees to sustain our
growth could have a material adverse effect on our business.

We May Encounter Difficulties With Future Acquisitions

     We may acquire complementary Web sites and other content providers as a
part of our business strategy. Any acquisitions may present a number of
potential risks that could have a material adverse effect on our business. These
risks include the following: failure to integrate the technical operations and
personnel in a timely and cost-effective manner; failure to retain key personnel
of the acquired company; and assumption of unexpected material liabilities. In
addition, we cannot assure you that we will be able to identify suitable
acquisition candidates that are available for sale at reasonable prices.

     We may finance future acquisitions with debt financing, which would
increase our debt service requirements, or through the issuance of additional
common or preferred stock, which could result in dilution to our shareholders.
We cannot be certain that we will be able to arrange adequate financing on
acceptable terms.

                                       12

<PAGE>

Our Results of Operations May Fluctuate Significantly

     Our results of operations may fluctuate significantly in the future as a
result of several factors, many of which are beyond our control. These factors
include: (1) changes in fees paid by advertisers; (2) traffic levels on our Web
site, which can fluctuate significantly; (3) changes in the demand for Internet
products and services; (4) changes in fee or revenue-sharing arrangements with
our distribution partners; (5) our ability to enter into or renew key
distribution agreements; (6) the introduction of new Internet advertising
services by us or our competitors; (7) changes in our capital or operating
expenses; and (8) general economic conditions.

     Our future revenue and results of operations may be difficult to forecast
due to these factors. As a result, we believe that period-to-period comparisons
of our results of operations may not be meaningful, and you should not rely on
past periods as indicators of future performance.

     In future periods, our results of operations may fall below the
expectations of securities analysts and investors, which could adversely affect
the trading price of our common stock.

Our Stock Price May Be Volatile in the Future

     The stock prices and trading volume of Internet-related companies have been
extremely volatile. Accordingly, our stock price can be volatile as well. On
January 29, 2001, we announced that our common stock had been removed
from the Nasdaq National Market and had become eligible for trading on the OTC
Bulletin Board.

ITEM 2. PROPERTIES

     Our principal administrative, sales, Web operations, marketing and research
functions are located in one leased facility in North Palm Beach, Florida. The
facility is leased from Bombay Holdings, Inc. which is wholly owned by Peter C.
Morse, a director and 40% stockholder. The lease is for approximately 14,300
square feet and is currently on a month-to-month basis. We also lease
approximately 4,500 square feet in New York City that is principally used for
administration, sales and business development. The New York office lease
expires in September 2006. We also lease approximately 500 square feet on a
month-to-month basis in Irvine, California that is used principally as a sales
office.

     Management believes that all of its facilities are adequate and suitable
for operations in the foreseeable future. However, management may undertake the
expansion of certain facilities from time to time in the ordinary course of
business.

     See Notes 9 and 10 to the Consolidated Financial Statements in Item 8 below
for more information about our leased facilities.

ITEM 3. LEGAL PROCEEDINGS

     In September 1999, we entered into a lease agreement for a new office
facility to be constructed in northern Palm Beach County, Florida. We provided
to the developer a $300,000 letter of credit as a security deposit in cash. The
lease provides for an initial lease term of ten years commencing from the date
of occupancy and included two five-year renewal options. The annual base rent
during the initial term was to range from $660,000 in the first two years to
$760,000 in the final two years. The lease contemplated that occupancy would
commence on September 15, 2000. In connection with the lease agreement, we also
entered into an agreement with the developer to purchase an adjoining tract of
land for $609,000. We paid a deposit of $60,000 to close the transaction no
later than June 30, 2000, which is being held in escrow. Subsequent to a dispute
with the developer with respect to the lease agreement and the agreement to
purchase the adjacent tract, in August 2000, the developer made demand on the
bank that issued the letter of credit and the bank paid the developer the full
$300,000 under the letter of credit. On August 14, 2000, the developer then
filed claims against us in Palm Beach County, Florida Circuit Court, alleging
breach of contract under the lease agreement and the agreement to purchase the
adjacent tract, seeking damages in excess of $500,000 plus attorneys' fees and
costs. We have filed counterclaims and intend to vigorously defend against both
of these matters. While acknowledging the uncertainties of litigation, we
believe that these matters will be resolved without a material adverse impact on
our financial position, results of operations or liquidity.

     In March 2000, a purported class-action lawsuit was filed against us and
others in the United States District Court for the Southern District of New
York. The suit alleged that we violated federal securities laws by, among other
things, selling securities pursuant to a defective registration statement, and
misrepresenting and/or omitting material information concerning our financial
results for the quarter ended March 31, 1999, and other financial information,
in our registration statement filed with the Securities and Exchange Commission
in connection with our initial public offering. The action, which seeks an
unspecified amount of money damages, was purportedly filed on behalf of all
stockholders who purchased shares of our common stock during the period from May
13, 1999 through March 27, 2000. We filed a motion to dismiss this complaint
and, in March 2001, the suit was dismissed with prejudice. In April 2001,
plaintiffs appealed the decision to dismiss the suit to the United States Court
of Appeals for the Second Circuit. The appeal has been argued but a final
decision has yet to be rendered. We intend to vigorously defend

                                       13

<PAGE>

against the lawsuit and, in the opinion of management, the ultimate disposition
of this matter will not have a material adverse effect on our financial
position, results of operations or liquidity. Damages, if any, would be
substantially covered by insurance.

     In July 2000, we sold our former wholly owned subsidiary, Pivot, for
$4,350,000 in cash. In connection with the sale, we agreed to indemnify the
buyer for liability of up to $1,000,000 in connection with a litigation matter
between Pivot and its co-founders and former owner. In March 2001, the case was
dismissed based on a technical deficiency. In August 2001, the plaintiff
re-filed the complaint. At December 31, 2001, the outcome of this matter was
uncertain. We cannot estimate at this time, the amount of loss, if any, that
could result from an adverse resolution of this litigation.

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

     None.

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

     The names, ages at March 15, 2002, and current positions of our current
executive officers are listed in the tables below. All officers are elected for
one year terms or until their respective successors are chosen. There are no
family relationships among the executive officers nor is there any agreement or
understanding between any officer and any other person pursuant to which the
officer was elected.

Executive Officers

Name                     Age                      Position
----                     ---                      --------

Elisabeth DeMarse        47    President, Chief Executive Officer and Director

G. Cotter Cunningham     39    Senior Vice President and Chief Operating Officer

Robert J. DeFranco       45    Senior Vice President and Chief Financial Officer

Edward L. Newhouse       42    Senior Vice President and Chief Revenue Officer

     Elisabeth DeMarse. Ms. DeMarse has served as President and Chief Executive
Officer of the Company since April 2000. Prior to that time, Ms. DeMarse served
as Executive Vice President of International Operations at Hoover's, Inc., which
operates Hoover's Online, from February 1999. Previously, she was an Executive
Vice President at Bloomberg L.P. Ms. DeMarse spent ten years at Bloomberg L.P.
in various leadership positions, where she led the start-up of eight businesses
including Bloomberg.com, Bloomberg's e-commerce and i-commerce divisions and
Bloomberg's print divisions. Prior to Bloomberg, she served four years at
Citibank's Information Business, and over four years at Western Union marketing
telecommunications services. Ms. DeMarse holds an A.B. with Honors from
Wellesley College where she majored in History and an M.B.A. from Harvard with
an emphasis on Marketing.

     G. Cotter Cunningham. Mr. Cunningham has served as Senior Vice
President-Chief Operating Officer of the Company since September 2000. Prior to
that he served as interim President and Chief Executive Officer of the Company
from February 2000 and as Senior Vice President-Marketing and Sales of the
Company from February 1999. From 1997 to 1999, Mr. Cunningham was Vice President
and General Manager of Valentine McCormick Ligibel, Inc., an advertising agency
specializing in new media. From 1992 to 1997, Mr. Cunningham was Vice President
of Block Financial Corporation, where he created, launched and directed the
CompuServe Visa and WebCard Visa credit card programs. Mr. Cunningham holds a
B.S. in Economics from the University of Memphis and an M.B.A. from Vanderbilt
University's Owen Graduate School of Management.

     Robert J. DeFranco. Mr. DeFranco has served as Senior Vice President-Chief
Financial Officer of the Company from September 2000. Prior to that he served as
Vice President - Finance and Chief Accounting Officer from March 1999. From 1986
to 1999, he held various positions in corporate accounting and finance for
companies including Ocwen Financial Corporation (as Director of Finance from
January 1998 through March 1999), SunTrust Banks, Inc. (as Vice
President-Financial Reporting from February 1995 through December 1997), Ryder
System, Inc. and Southeast Banking Corporation. From 1978 to 1986 he was part of
the commercial audit division of Arthur Andersen & Co., Miami, Florida, where he
last served as senior audit manager for a variety of publicly held and privately
held companies in industries including banking and other financial institutions,
manufacturing, distribution and real estate development. Mr. DeFranco is a
Certified Public Accountant and a member of the

                                       14

<PAGE>

American Institute of Certified Public Accountants. Mr. DeFranco received a B.S.
degree with a major in accounting from Florida State University in 1978.

     Edward L. Newhouse. Mr. Newhouse has served as Senior Vice President-Chief
Revenue Officer since August 31, 2000. Prior to that he was Vice President,
Director of Sales of 24/7 Media, Inc. since 1997. He was a founding member of
24/7 Media and was responsible for sales of over 2.2 billion monthly
impressions, e-mail sponsorships, e-commerce and direct marketing products
representing such sites as AT&T Worldnet, Juno.com, WebCrawler, GoTo.com and
AOL.com. In 1996, prior to joining 24/7 Media, Inc., Mr. Newhouse worked with
Millennium Media/Katz Media as VP Director, East Coast Sales and as a founding
member of the interactive division of the world's largest media rep firm. He has
also worked for a variety of publishing companies including Cowles Business
Media and Advance Publications/Conde Nast. Mr. Newhouse holds a B.S. from the
Rochester Institute of Technology where he studied publishing production and
management, and sales and marketing.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     (a) Our common stock traded on the Nasdaq National Market from May 1999
until January 26, 2001. Prior to May 1999, there was no established market for
the shares.

     Effective January 29, 2001, our common stock was removed from the Nasdaq
National Market and immediately became eligible for trading on the OTC Bulletin
Board. Nasdaq's decision to delist our common stock from the Nasdaq National
Market was based on our net tangible assets, as defined by Nasdaq, falling below
the required $4,000,000 minimum amount.

     The price per share reflected in the table below represents, for the
periods indicated, the range of high and low closing sale prices for our common
stock as reported by the Nasdaq National Market through Friday, January 26,
2001, and the range of high and low bid information for our common stock as
reported by the OTC Bulletin Board from Monday, January 29, 2001 through
December 31, 2001. The OTC Bulletin Board quotations reflect inter-dealer
prices, without retail mark-up, markdown or commissions, and may not reflect
actual transactions.

                                                                HIGH     LOW
                                                               ------   ------
Year ended December 31, 2000
    First quarter..........................................    $ 5.75   $ 2.63
    Second quarter.........................................      3.00     1.13
    Third quarter..........................................      2.00     1.00
    Fourth quarter.........................................      1.44     0.69
Year ended December 31, 2001
    First quarter..........................................    $ 0.97   $ 0.22
    Second quarter.........................................      1.50     0.41
    Third quarter..........................................      0.99     0.47
    Fourth quarter.........................................      0.85     0.45

     The closing sale price of our common stock as reported by the OTC Bulletin
Board on February 28, 2002 was U.S. $1.06 per share.

     The number of shareholders of record of our common stock as of February 28,
2002, was 2,047.

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

                                       15

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The selected consolidated financial data set forth below should be read in
conjunction with the consolidated financial statements and notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Form 10-K. The consolidated statement of
operations data for the years ended December 31, 2001, 2000 and 1999, and the
consolidated balance sheet data as of December 31, 2001 and 2000, are derived
from, and are qualified by reference to, the audited consolidated financial
statements of Bankrate, Inc. included elsewhere in this Form 10-K. The
consolidated statement of operations data for the six months ended December 31,
1998 and the years ended June 30, 1998 and 1997, and the consolidated balance
sheet data as of December 31, 1999 and 1998, and June 30, 1998 and 1997, have
been derived from audited consolidated financial statements not included in this
Form 10-K. Historical results are not necessarily indicative of results to be
expected in the future.


<TABLE>
<CAPTION>
                                                                                               Six Months
                                                                                                 Ended
                                                             Year Ended December 31,           December 31,   Year Ended June 30,
                                                        2001         2000 (A)      1999 (B)       1998         1998         1997
                                                     -----------   -----------   -----------   ----------   ----------   ----------
<S>                                                  <C>           <C>           <C>           <C>          <C>          <C>
Consolidated Statement of Operations Data
(In thousands, except share and per share data)
Revenue:
  Online publishing                                  $    14,986   $    12,283   $     8,497   $    1,809   $    1,281   $      485
  Print publishing and licensing                           3,271         2,922         3,473        1,660        2,559        2,058
                                                     -----------   -----------   -----------   ----------   ----------   ----------
        Total revenue                                     18,257        15,205        11,970        3,469        3,840        2,543
                                                     -----------   -----------   -----------   ----------   ----------   ----------
Cost of revenue:
  Online publishing                                        3,268         7,114         5,627        1,424        1,340        1,002
  Print publishing and licensing                           2,174         1,983         2,387        1,101        1,961        1,186
                                                     -----------   -----------   -----------   ----------   ----------   ----------
        Total cost of revenue                              5,442         9,097         8,014        2,525        3,301        2,188
                                                     -----------   -----------   -----------   ----------   ----------   ----------
Gross margin                                              12,815         6,108         3,956          944          539          355
                                                     -----------   -----------   -----------   ----------   ----------   ----------
Operating expenses:
  Sales                                                    3,096         3,234         3,018          838          706          131
  Marketing                                                2,923         3,874        16,459          305          145            1
  Product development                                      1,386         1,950         2,025          450          698          260
  General and administrative                               5,512         8,467         9,415        1,540        1,752          768
  Restructuring and impairment charges                        --         2,285            --           --           --           --
  Depreciation and amortization                              700           874           422           98           66           74
  Goodwill amortization                                       --           231           186           --           --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
                                                          13,617        20,915        31,525        3,231        3,367        1,234
                                                     -----------   -----------   -----------   ----------   ----------   ----------
        Loss from operations                                (802)      (14,807)      (27,569)      (2,287)      (2,828)        (879)
Other income (expense), net                                 (134)          230           873          192           46          (77)
Noncash financing charge                                      --            --        (2,656)          --           --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
  Loss before income taxes and
    discontinued operations                                 (936)      (14,577)      (29,352)      (2,095)      (2,782)        (956)
Income taxes from continuing operations                       --            --            --           --           --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
  Loss before discontinued operations                       (936)      (14,577)      (29,352)      (2,095)      (2,782)        (956)
                                                     -----------   -----------   -----------   ----------   ----------   ----------
Discontinued operations:
  Loss from discontinued operations                           --        (3,215)       (2,136)          --           --           --
  Gain on disposal of discontinued operations                 --           871            --           --           --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
                                                              --        (2,344)       (2,136)          --           --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
  Net loss                                                  (936)      (16,921)      (31,488)      (2,095)      (2,782)        (956)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                --            --        (2,281)          --           --           --
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                      --            --            --       (4,438)          --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
  Net loss applicable to common stock                $      (936)  $   (16,921)  $   (33,769)  $   (6,533)  $   (2,782)  $     (956)
                                                     ===========   ===========   ===========   ==========   ==========   ==========
Basic and diluted net loss per share:
  Loss before discontinued operations                $     (0.07)  $     (1.05)  $     (2.90)  $    (0.52)  $    (0.72)  $    (0.20)
  Discontinued operations                                     --         (0.17)        (0.21)          --           --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
  Net loss                                                 (0.07)        (1.22)        (3.11)       (0.52)       (0.72)       (0.20)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                --            --         (0.23)          --           --           --
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                      --            --            --        (1.11)          --           --
                                                     -----------   -----------   -----------   ----------   ----------   ----------
  Net loss applicable to common stock                $     (0.07)  $     (1.22)  $     (3.34)  $    (1.63)  $    (0.72)  $    (0.20)
                                                     ===========   ===========   ===========   ==========   ==========   ==========
Weighted average shares outstanding used in
  basic and diluted per-share calculation             13,992,950    13,872,788    10,113,928    4,018,700    3,846,200    4,743,590
                                                     ===========   ===========   ===========   ==========   ==========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                      As of December 31,                 As of June 30,
                                                        2001          2000          1999          1998         1998         1997
                                                     -----------   -----------   -----------   ----------   ----------   ----------
<S>                                                   <C>            <C>           <C>          <C>           <C>          <C>
Consolidated Balance Sheet Data
(In thousands)
Cash and cash equivalents                             $    9,755     $ 8,891       $22,492      $  1,633      $  910       $1,783
Working capital                                            7,865       7,057        18,973           658         164          887
Total assets                                              12,526      12,634        32,600         3,099       1,768        2,193
Subordinated note payable                                  4,350       4,350         4,350            --          --           --
Redeemable preferred stock                                    --          --            --        12,198          --           --
Total stockholders' equity (deficit)                       3,982       1,573        17,445       (10,985)        657        1,035
</TABLE>

(A)  Excludes the operations of CPNet.com after May 2000, Pivot after July 2000,
     Consejero.com after September 2000, and includes GreenMagazine.com through
     December 2000.
(B)  Includes the operations of CPNet.com from January 1999, and Pivot and
     GreenMagazine.com from August 1999, their respective acquisition
     acquisition dates.

                                       16

<PAGE>

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

     Introduction

     The following discussion should be read in conjunction with the
consolidated financial statements and related notes contained in this Form 10-K.
In addition, this discussion contains forward-looking statements that involve
risks and uncertainties. In some cases, you can identify forward-looking
statements by terms such as "may," "will," "should," "expect," "plan,"
"anticipate," "believe," "estimate," "predict," "potential," or "continue," or
the negative of these terms or other similar terminology. The forward-looking
statements contained in this Form 10-K involve known and unknown risks,
uncertainties and other factors that may cause our results or our industry's
actual results, levels of activity, performance or achievements of our industry,
our Company, or both to be materially different from any future results, level
of activity, performance or achievements expressed or implied by these
statements. These factors include those listed under "Risk Factors" in Item 1.
above and elsewhere in this Form 10-K. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. You should not
place undue reliance on these forward-looking statements. We make no commitment
to update these statements in the future.

     Overview

     Bankrate, Inc. (the "Company") owns and operates an Internet-based consumer
banking marketplace. Our flagship site, Bankrate.com, is the Web's leading
aggregator of information on over 100 financial products including mortgages,
credit cards, new and used automobile loans, money market accounts, certificates
of deposit, checking and ATM fees, home equity loans and online banking fees.
Additionally, we provide financial applications and information to a network of
distribution partners and also through national and state publications.
Bankrate.com provides the tools and information that can help consumers make
better financial decisions. We regularly survey approximately 4,800 financial
institutions in all 50 states in order to provide the most current objective,
unbiased rates. Hundreds of print and online partner publications depend on
Bankrate.com as the trusted source for financial rates and information.

     Over two decades ago, we began as a print publisher of the newsletter "Bank
Rate Monitor." Our rate tables provide at no cost to the consumer, a detailed
list of lenders by market, and include relevant details to help consumers
compare loan products.

     We continue to enhance our offerings in order to provide Bankrate.com users
with the most complete experience. Features such as financial calculators and
email newsletters allow users to interact with our site. Our Rate Trend Index is
a weekly poll of industry insiders designed to help consumers forecast interest
rate trends. We also broadened our offerings to include channels on investing,
taxes, small business and financial advice. Each channel offers a unique look at
its particular topic. Bankrate.com users can find advice and tips from the Tax
channel, obtain business ideas from the Small Business channel and ask a
financial expert a question in the Advice channel.

     We believe that the recognition of our research as a leading source of
independent, objective information on banking and credit products is essential
to our success. As a result, we have sought to maximize distribution of our
research to gain brand recognition as a research authority. We are seeking to
build greater brand awareness of our Web site and to reach a greater number of
online users.

     Significant Developments

     The following significant developments and transactions have affected our
results of operations and our financial condition during the periods covered by
the consolidated financial statements in Item 8 of this Report.

     In April 1999, our Board of Directors approved changing our fiscal year-end
to December 31 from June 30.

     On August 20, 1999, we acquired Pivot pursuant to a Stock Purchase
Agreement, dated August 20, 1999, by and between us, the shareholders of Pivot
and The Midland Life Insurance Company ("Midland"), a note and warrant holder of
Pivot (the

                                       17

<PAGE>

"Agreement"), for approximately $4,744,000 including acquisition costs. Pursuant
to the Agreement, we acquired a 100% interest in Pivot and as a result of the
acquisition Pivot became our wholly owned subsidiary. The transaction was
accounted for using the purchase method of accounting. The net assets acquired
were estimated to be at fair market value. The excess of the purchase price over
the fair value of the net assets acquired (approximately $4,609,000) was
recorded as goodwill and was amortized over three years, the expected benefit
period.

     The total consideration paid in connection with the acquisition consisted
of $290,000 in cash paid to the Pivot shareholders and a $4,350,000 five-year
convertible subordinated note to Midland. The note bears interest at 10% and was
due in one payment on August 20, 2004, with interest due beginning on August 20,
2002 and thereafter every six months until conversion or payment in full. The
note was convertible at any time by Midland into 625,000 shares of our common
stock.

     On August 27, 1999, we acquired certain assets and assumed certain
liabilities of Green Magazine, Inc. ("Green") pursuant to an Asset Purchase
Agreement, dated August 27, 1999, by and among the Company, Green, Kenneth A.
Kurson, John F. Packel and James Michaels (the "Agreement"), for approximately
$831,000 including acquisition costs. Pursuant to the Agreement, we acquired the
rights to all agreements, contracts, commitments, licenses, copyrights,
trademarks and the subscriber/customer list of Green. Kenneth A. Kurson and John
F. Packel were also employed by us. The total consideration paid was
approximately $784,000 consisting of $200,000 in cash and 100,000 unregistered
shares of our common stock valued at approximately $584,000. The transaction was
accounted for using the purchase method of accounting. The net assets acquired
were estimated to be at fair market value. The excess of the purchase price over
the fair value of the net assets acquired (approximately $883,000) was recorded
as goodwill and was being amortized over three years, the expected benefit
period.

     On November 12, 1999, we changed our name from "Intelligent Life
Corporation" to "ilife.com, Inc." to more accurately reflect our major revenue
generating activities, which are derived from the Internet.

     On February 25, 2000, we announced that William P. Anderson resigned as our
President and Chief Executive Officer and as a director. Under the terms of his
Executive Employment Agreement entered into on March 10, 1999, Mr. Anderson
received cash compensation totaling approximately $150,000 and continued to vest
in his stock options through November 15, 2000, which resulted in a non-cash
charge of approximately $860,000. Both the cash charge ($150,000) and the
noncash charge ($860,000) were recorded in the quarter ended March 31, 2000.

     On April 5, 2000, Jeffrey M. Cunningham was appointed to our Board of
Directors as non-executive chairman. In accordance with the terms of a Stock
Purchase Plan and Subscription Agreement (the "Purchase Agreement") entered into
on that date, Mr. Cunningham purchased 431,499 shares of our common stock for
$997,840 in cash (or $2.313 per share). The purchase price of the shares is
equal to the closing price per share of our common stock on April 5, 2000, as
reported by the Nasdaq National Market. In addition, on April 5, 2000, Mr.
Cunningham was granted stock options under the 1999 Equity Compensation Plan to
purchase 141,905 shares of common stock at $4.50 per share and 125,622 shares at
$3.75 per share. One-half of the options vested and became exercisable on March
31, 2001, and the balance was to vest and become exercisable in equal monthly
increments commencing on April 30, 2001 and concluding on March 31, 2002. Mr.
Cunningham resigned from the Board on June 19, 2001. We recognized compensation
expense of approximately $108,000 through June 30, 2001.

     On April 27, 2000, Elisabeth DeMarse was appointed to our Board of
Directors as well as elected President and Chief Executive Officer. Ms. DeMarse
entered into an employment agreement with us on that date. Pursuant to the terms
of her employment agreement, Ms. DeMarse is entitled to receive an annual base
salary of $300,000 and a bonus of $100,000 payable in quarterly installments. We
have agreed to provide other benefits, including $500,000 in term life insurance
and participation in our benefit plans available to other executive officers.
Under the terms of the employment agreement, Ms. DeMarse agrees to assign to us
all of her copyrights, trade secrets and patent rights that relate to our
business. Additionally, during the term of her employment and for a period of
one year thereafter, Ms. DeMarse agrees not to compete with us and not to
recruit any of our employees, unless we terminate her without cause or she
resigns for good reason (as defined in the agreement). Upon Ms. DeMarse's
termination of employment for certain reasons (i.e., without cause, disability,
resignation for good reason, or a change of control), we agree to pay her a
severance equal to 12 months' base salary, as well as reimburse her for health,
dental and life insurance coverage premiums for one year after such termination.
The agreement terminates on April 27, 2002, unless extended by the parties. The
Company has proposed terms of a new employment arrangement with Ms. DeMarse and
intends to negotiate such an arrangement based on that proposal. However, we can
provide no assurance that we will be successful in doing so. Ms. DeMarse was
also granted options to purchase 541,936 shares of the our common stock under
the 1999 Equity Compensation Plan at $2.688 per share, the fair market value on
the date of grant. The options vest over a 24 month period. The first 25% of the
options vest six months from the date of grant; and the remaining 75% vest in
equal monthly installments over the 18 months thereafter.

                                       18

<PAGE>

     On May 17, 2000, we sold the assets of The College Press Network
(CPNet.com) to Colleges.com, Inc. for 190,000 shares of Colleges.com, Inc.
common stock of which 125,041 shares were delivered at the time of closing and
64,959 contingent shares. We originally recorded such shares at the net book
value of the CPNet.com assets which, at the time of the sale, was approximately
$71,000. During the quarter ended December 31, 2000, we charged this amount to
restructuring and impairment charges after determining impairment based on the
fact that Colleges.com is an early-stage company subject to significant risk due
to its limited operating history and volatile industry-based economic
conditions.

     In June 2000, we recorded a restructuring charge of $1,298,000, or $0.09
per share, as a result of implementing certain strategic reorganization
initiatives. Approximately $364,000 of this charge pertained to severance, legal
and other employee related costs incurred in connection with a reduction of
approximately 10% of the workforce in ongoing operations and the elimination of
positions in under-performing, non-core business units, all of which was paid in
2000. The remaining $934,000 of this charge related to the write-off of certain
assets, primarily software, licenses and other installation costs, of an
abandoned systems installation.

     On July 14, 2000, we sold Pivot for $4,350,000 in cash. In connection with
the sale, we agreed to indemnify the buyer for liability of up to $1,000,000 in
connection with a litigation matter between Pivot and its co-founders and
Midland. In March 2001, the case was dismissed based on a technical deficiency
and in August 2001, the plaintiff re-filed the complaint. Management has
excluded any costs contingent on the outcome of this litigation from the
calculation of the gain on sale. Pivot's results of operations have been
classified as discontinued operations in the accompanying consolidated
statements of operations for all periods presented. The Company recorded a gain
on the sale of $871,000 in the quarter ending September 30, 2000.

     On August 31, 2000, we shut down the operations of Consejero.com and sold
certain of its assets including fixed assets, software licenses and other
intangible assets, to Consejero Holdings, LLC for $41,800 in cash resulting in a
loss of approximately $86,000. Additionally, we recorded approximately $193,000
in charges for severance and other related shut down costs, all of which were
paid in 2000.

     During the quarter ended September 30, 2000, a decision was made to stop
publishing the print version of Green Magazine. Additionally, due to lower than
expected traffic levels visiting GreenMagazine.com and continued negative
operational cash flows, a revised operating plan was developed and
GreenMagazine.com was incorporated into a channel of Bankrate.com. After
evaluating the recoverability of the intangible asset, we recorded an impairment
charge of approximately $476,000 to write the goodwill down to estimated fair
value. In December 2000, GreenMagazine was shut down and the remaining goodwill
of approximately $73,000 was written off.

     In the quarter ended September 30, 2000, we recorded restructuring and
impairment charges of approximately $843,000, or $0.06 per share, as a result of
strategic reorganization initiatives. Approximately $88,000 of this charge
pertained to severance, legal and other employee related costs incurred in
connection with a further reduction of the workforce, all of which was paid in
2000. Approximately $279,000 related to the shut down and sale of assets of
Consejero.com and other non-core assets. The remaining $476,000 resulted from
the write down of the GreenMagazine.com goodwill discussed above.

     On January 26, 2001, our common stock was removed from the Nasdaq National
Market and immediately became eligible for trading on the OTC Bulletin Board
under the symbol "RATE". Nasdaq's decision to delist our common stock from the
Nasdaq National Market was based on our net tangible assets, as defined by
Nasdaq, falling below the required $4,000,000 minimum amount.

     On February 6, 2002 we entered into an agreement with Reassure America Life
Insurance Company ("REALIC"), successor by merger to Midland. Pursuant to the
terms of this agreement, REALIC agreed to full repayment of the $4,350,000
convertible subordinated note payable, including accrued interest, on February
22, 2002 for $3,400,000 in cash. We will record a gain on early extinguishment
of debt of approximately $2,021,000 in the quarter ending March 31, 2002.

     On July 3, 2001, the Company implemented a stock option exchange program in
which employees were offered the opportunity to surrender stock options
previously granted to them in exchange for new options to purchase an equal
number of shares. Options to purchase 1,180,002 shares were surrendered under
this program. The new options were granted on February 4, 2002, six months and
one day after the date of cancellation. The exercise price of the new options
was the closing market price of the Company's common stock on the date of grant.
The exchange program was designed to comply with FIN No. 44 and did not result
in any additional compensation charges or variable plan accounting. As a result
of this program, the Company recorded a non-cash compensation charge of
approximately $481,000 for the unrecognized compensation expense of certain
options surrendered under the option exchange program, and reclassified
approximately $2,452,000 from accrued stock compensation expense to additional
paid in capital in the quarter ended September 30, 2001.

     Legal Proceedings

     In September 1999, we entered into a lease agreement for a new office
facility to be constructed in northern Palm Beach County, Florida. We provided
to the developer a $300,000 letter of credit as a security deposit in cash. The
lease provides an initial lease term of ten years commencing from the date of
occupancy and includes two five-year renewal options. The annual base rent

                                       19

<PAGE>

during the initial term ranges from $660,000 in the first two years to $760,000
in the remaining two years. The lease contemplated that occupancy would commence
on September 15, 2000. In connection with the lease agreement, we also entered
into an agreement with the developer to purchase an adjoining tract of land for
$609,000. We paid a deposit of $60,000 to close the transaction no later than
June 30, 2000, which is being held in escrow. Subsequent to a dispute with the
developer with respect to the lease agreement and the agreement to purchase the
adjacent tract, on August 3, 2000, the developer made demand on the bank that
issued the letter of credit and the bank paid the developer the full $300,000
under the letter of credit. On August 14, 2000, the developer filed claims
against us in Palm Beach County, Florida Circuit Court, alleging breach of
contract under the lease agreement and the agreement to purchase the adjacent
tract, and seeks damages in excess of $500,000 plus attorneys' fees and costs.
We have filed counterclaims and intend to vigorously defend against both of
these matters. While acknowledging the uncertainties of litigation, we believe
that these matters will be resolved without a material adverse impact on our
financial position, results of operations or liquidity.

     On March 28, 2000, a purported class-action lawsuit was filed against us
and others in the United States District Court for the Southern District of New
York. The suit alleges that we violated federal securities laws by, among other
things, selling securities pursuant to a defective registration statement, and
misrepresenting and/or omitting material information concerning our financial
results for the quarter ended March 31, 1999, and other financial information,
in the Company's registration statement filed with the Securities and Exchange
Commission in connection with our initial public offering. The action, which
seeks an unspecified amount of money damages, was filed purportedly on behalf of
all stockholders who purchased shares of out common stock during the period from
May 13, 1999, through March 27, 2000. We filed a motion to dismiss this
complaint and, on March 28, 2001, the suit was dismissed with prejudice. On
April 25, 2001, plaintiffs appealed the decision to dismiss the suit to the
United States Court of Appeals for the Second Circuit. The appeal has been
argued but a final decision has yet to be made. We intend to vigorously defend
against the lawsuit and, in the opinion of management, the ultimate disposition
of this matter will not have a material adverse effect on our financial
position, results of operations or liquidity. Damages, if any, would be
substantially covered by insurance.

     In July 2000, we sold our former wholly owned subsidiary, Pivot, for
$4,350,000 in cash. In connection with the sale, we agreed to indemnify the
buyer for liability of up to $1,000,000 in connection with a litigation matter
between Pivot and its co-founders and former owner. In March 2001, the case was
dismissed based on a technical deficiency. In August 2001, the plaintiff
re-filed the complaint. At December 31, 2001, the outcome of this matter was
uncertain. We cannot estimate at this time, the amount of loss, if any, that
could result from an adverse resolution of this litigation.

     Results of Operations and Critical Accounting Policies

     The following table displays our results for the respective periods
expressed as a percentage of total revenues.

                                       20

<PAGE>

<TABLE>
<CAPTION>
                                                                                 Six Months
                                                                                    Ended
                                                      Year Ended December 31,    December 31,   Year Ended June 30,
                                                      2001      2000     1999       1998           1998     1997
                                                     -----     -----    ------     ------         -----    -----
<S>                                                  <C>      <C>       <C>        <C>            <C>      <C>
Consolidated Statement of Operations Data
(In thousands, except share and
per share data)
 Revenue:
  Online publishing                                   82.1%     80.8%     71.0%      52.1%         33.4%    19.1%
  Print publishing and licensing                      17.9      19.2      29.0       47.9          66.6     80.9
                                                     -----     -----    ------     ------         -----    -----
        Total revenue                                100.0     100.0     100.0      100.0         100.0    100.0
                                                     -----     -----    ------     ------         -----    -----
Cost of revenue:
  Online publishing                                   17.9      46.8      47.0       41.0          34.9     39.4
  Print publishing and licensing                      11.9      13.0      19.9       31.7          51.1     46.6
                                                     ----      -----    ------     ------         -----    -----
        Total cost of revenue                         29.8      59.8      67.0       72.8          86.0     86.0
                                                     -----     -----    ------     ------         -----    -----
Gross margin                                          70.2      40.2      33.0       27.2          14.0     14.0
                                                     -----     -----    ------     ------         -----    -----
Operating expenses:
  Sales                                               17.0      21.3      25.2       24.2          18.4      5.2
  Marketing                                           16.0      25.5     137.5        8.8           3.8       --
  Product development                                  7.6      12.8      16.9       13.0          18.2     10.2
  General and administrative                          30.2      55.7      78.7       44.4          45.6     30.2
  Restructuring and impairment charges                  --      15.0        --        --             --       --
  Depreciation and amortization                        3.8       5.7       3.5        2.8           1.7      2.9
  Goodwill amortization                                 --       1.5       1.6         --            --       --
                                                     -----     -----    ------     ------         -----    -----
                                                      74.6     137.6     263.4       93.1          87.7     48.5
                                                     -----     -----    ------     ------         -----    -----
        Loss from operations                          (4.4)    (97.4)   (230.3)     (65.9)        (73.6)   (34.6)
                                                     -----     -----    ------     ------         -----    -----
Other income (expense), net                           (0.7)      1.5       7.3        5.5           1.2     (3.0)
Noncash financing charge                                --        --     (22.2)        --            --       --
                                                     -----     -----    ------     ------         -----    -----
  Loss before income taxes and
    discontinued operations                           (5.1)    (95.9)   (245.2)     (60.4)        (72.4)   (37.6)
Income taxes from continuing operations                 --        --        --         --            --       --
                                                     -----     -----    ------     ------         -----    -----
  Loss before discontinued operations                 (5.1)    (95.9)   (245.2)     (60.4)        (72.4)   (37.6)
                                                     -----     -----    ------     ------         -----    -----
Discontinued operations:
  Loss from discontinued operations                     --     (21.1)    (17.8)        --            --       --
  Gain on disposal of discontinued operations           --       5.7        --         --            --       --
                                                     -----     -----    ------     ------         -----    -----
                                                        --     (15.4)    (17.8)        --            --       --
                                                     -----     -----    ------     ------         -----    -----
  Net loss                                            (5.1)   (111.3)   (263.1)     (60.4)        (72.4)   (37.6)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value          --        --     (19.1)        --            --       --
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                --        --        --     (127.9)           --       --
                                                     -----     -----    ------     ------         -----    -----
  Net loss applicable to common stock                 -5.1%   -111.3%   -282.1%    -188.3%        -72.4%   -37.6%
                                                     =====     =====    ======     ======         =====    =====
</TABLE>

                                       21

<PAGE>

     The following table displays selected financial data for the years ended
December 31, 2001, 2000 and 1999, and unaudited selected financial data for the
years ended December 31, 1998 and 1997 for comparison and analysis purposes.

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                             2001            2000            1999           1998           1997
                                                         ------------    ------------    ------------    -----------    -----------
<S>                                                      <C>             <C>             <C>             <C>            <C>
Consolidated Statement of Operations Data                                                                (Unaudited)    (Unaudited)
(In thousands, except share and per share data)
Revenue:
       Online publishing                                 $     14,986    $     12,283    $      8,497    $     2,582    $       847
       Print publishing and licensing                           3,271           2,922           3,473          3,039          2,260
                                                         ------------    ------------    ------------    -----------    -----------
             Total revenue                                     18,257          15,205          11,970          5,621          3,107
                                                         ------------    ------------    ------------    -----------    -----------
Cost of revenue:
       Online publishing                                        3,268           7,114           5,627          2,203          1,130
       Print publishing and licensing                           2,174           1,983           2,387          2,105          1,578
                                                         ------------    ------------    ------------    -----------    -----------
             Total cost of revenue                              5,442           9,097           8,014          4,308          2,708
                                                         ------------    ------------    ------------    -----------    -----------
Gross margin                                                   12,815           6,108           3,956          1,313            399
                                                         ------------    ------------    ------------    -----------    -----------
Operating expenses:
       Sales                                                    3,096           3,234           3,018          1,406            200
       Marketing                                                2,923           3,874          16,459            432             19
       Product development                                      1,386           1,950           2,025            915            355
       General and administrative                               5,512           8,467           9,415          2,597          1,278
       Restructuring and impairment charges                        --           2,285              --             --             --
       Depreciation and amortization                              700             874             422            140             67
       Goodwill amortization                                       --             231             186             --             --
                                                         ------------    ------------    ------------    -----------    -----------
                                                               13,617          20,915          31,525          5,490          1,919
                                                         ------------    ------------    ------------    -----------    -----------
             Loss from operations                                (802)        (14,807)        (27,569)        (4,177)        (1,520)
Other income (expense), net                                      (134)            230             873            203            (10)
Noncash financing charge                                           --              --          (2,656)            --             --
                                                         ------------    ------------    ------------    -----------    -----------
       Loss before income taxes and
         discontinued operations                                 (936)        (14,577)        (29,352)        (3,974)        (1,530)
Income taxes from continuing operations                            --              --              --             --             --
                                                         ------------    ------------    ------------    -----------    -----------
       Loss before discontinued operations                       (936)        (14,577)        (29,352)        (3,974)        (1,530)
                                                         ------------    ------------    ------------    -----------    -----------
Discontinued operations:
       Loss from discontinued operations                           --          (3,215)         (2,136)            --             --
       Gain on disposal of discontinued operations                 --             871              --             --             --
                                                         ------------    ------------    ------------    -----------    -----------
                                                                   --          (2,344)         (2,136)            --             --
                                                         ------------    ------------    ------------    -----------    -----------
       Net loss                                                  (936)        (16,921)        (31,488)        (3,974)        (1,530)
Accretion of Convertible Series A and
      Series B preferred stock to redemption value                 --              --          (2,281)            --             --
Charge for conversion of nonredeemable convertible
      Series A preferred stock to redeemable                       --              --              --         (4,438)            --
                                                         ------------    ------------    ------------    -----------    -----------
       Net loss applicable to common stock               $       (936)   $    (16,921)   $    (33,769)   $    (8,412)   $    (1,530)
                                                         ============    ============    ============    ===========    ===========
Basic and diluted net loss per share:
       Loss before discontinued operations               $      (0.07)   $      (1.05)   $      (2.90)   $     (1.01)   $     (0.35)
       Discontinued operations                                     --           (0.17)          (0.21)            --             --
                                                         ------------    ------------    ------------    -----------    -----------
       Net loss                                                 (0.07)          (1.22)          (3.11)         (1.01)         (0.35)
Accretion of Convertible Series A and
      Series B preferred stock to redemption value                 --              --           (0.23)            --             --
Charge for conversion of nonredeemable convertible
      Series A preferred stock to redeemable                       --              --              --          (1.13)            --
                                                         ------------    ------------    ------------    -----------    -----------
       Net loss applicable to common stock               $      (0.07)   $      (1.22)   $      (3.34)   $     (2.14)   $     (0.35)
                                                         ============    ============    ============    ===========    ===========
Weighted average shares outstanding used in
      basic and diluted per-share calculation              13,996,950      13,872,788      10,113,928      3,925,597      4,383,586
                                                         ============    ============    ============    ===========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                                      As of December 31,
                                                            2001             2000            1999           1998           1997
                                                            ----             ----            ----           ----           ----
<S>                                                      <C>             <C>             <C>             <C>            <C>
Consolidated Balance Sheet Data
(In thousands)
Cash and cash equivalents                                $      9,755    $      8,891    $     22,492    $     1,633    $     1,113
Working capital                                                 7,865           7,057          18,973            658            564
Total assets                                                   12,526          12,634          32,600          3,099          1,783
Subordinated note payable                                       4,350           4,350           4,350             --             --
Redeemable preferred stock                                         --              --              --         12,198             --
Total stockholders' equity (deficit)                            3,982           1,573          17,445        (10,985)         2,447
</TABLE>

                                       22

<PAGE>

     The following is our analysis of the results of operations for the periods
covered by our consolidated financial statements, including a discussion of the
accounting policies and practices (revenue recognition and impairment) that we
believe are critical to an understanding of our results of operations and to
making the estimates and judgments underlying our financial statements. This
analysis should be read in conjunction with our consolidated financial
statements, including the related notes. As in the financial statements, Pivot
is treated as a discontinued operation for all periods discussed below.

     Revenue

Online Publishing Revenue

     We sell graphic advertisements on our Web site (including co-branded sites)
consisting of banner, badge, billboard, poster, island and skyscraper
advertisements. These advertisements are sold to advertisers according to the
cost per thousand impressions, or CPM, the advertiser receives. The amount of
advertising we sell is a function of (1) the number of advertisements per Web
page, (2) the number of visitors viewing our Web pages, and (3) the capacity of
our sales force. Advertising sales are invoiced monthly based on the number of
advertisement impressions or the number of times the advertisement is viewed by
users of our Web site. Revenue is recognized monthly based on the percentage of
actual impressions to the total number of impressions contracted. Revenue for
impressions invoiced but not delivered is deferred. Additionally, we generate
revenue on a "per action" basis (i.e., a purchase or completion of an
application) when a visitor to our Web site transacts with one of our
advertisers after viewing an advertisement. Revenue is recognized monthly based
on the number of actions reported by the advertiser. We are also involved in
revenue sharing arrangements with our online partners where the consumer uses
co-branded sites principally hosted by us. Revenue is effectively allocated to
each partner based on the percentage of advertisement views at each site. The
allocated revenues are shared according to distribution agreements. Revenue is
recorded at gross amounts and partnership payments are recorded in cost of
revenue. We also sell hyperlinks to various third-party Internet sites that
generate a fixed monthly fee, which is recognized in the month earned.

     Online publishing revenue also includes barter revenue which represents the
exchange of advertising space on our Web site for reciprocal advertising space
or traffic on other Web sites. Barter revenues and expenses are recorded at the
fair market value of the advertisements delivered or received, whichever is more
determinable in the circumstances. In January 2000, we adopted Emerging Issues
Task Force ("EITF") 99-17, "Accounting for Advertising Barter Transactions". In
accordance with EITF 99-17, barter transactions have been valued based on
similar cash transactions which have occurred within six months prior to the
date of the barter transaction. Revenue from barter transactions is recognized
as income when advertisements are delivered on our Web site. Barter expense is
recognized when our advertisements are run on the other companies' Web sites,
which is typically in the same period barter revenue is recognized. If the
advertising impressions are received from the customer prior to our delivering
the advertising impressions, a liability is recorded. If we deliver advertising
impressions to the other companies' Web sites prior to receiving the advertising
impressions, a prepaid expense is recorded. At December 31, 2001 and 2000, we
recorded prepaid expenses of approximately $8,000 and $200,000, respectively,
for barter advertising to be received. Barter revenue was approximately
$2,558,000 and $757,000, and represented approximately 14% and 5% of total
revenue for the years ended December 31, 2001 and 2000, respectively. No barter
revenue was recorded in 1999 or in prior periods.

     Online publishing revenue was $14,986,000, $12,283,000 and $8,497,000 for
2001, 2000 and 1999, respectively, representing annual growth rates of 22% and
45% for 2001 and 2000, respectively. Excluding barter revenue online publishing
revenue was $12,428,000 and $11,526,000 in 2001 and 2000, respectively,
representing annual growth rates of 8% and 36% for 2001 and 2000, respectively.
The increases in 2000 over 1999 were the result of higher levels of advertising
sales and higher advertising rates (approximately 12% higher average rates)
facilitated by an increase in advertising inventory (approximately 40% higher
available inventory). Although our available inventory increased by almost 300%
in 2001 over 2000, our annual growth rates declined as a result of terminating
unprofitable advertising and distribution relationships, smaller advertising
buys from certain existing customers, and our customers' response to uncertain
economic conditions during 2001.

Print Publishing and Licensing Revenue

     Print publishing and licensing revenue represents advertising revenue from
the sale of advertising in Consumer Mortgage Guide rate tables, newsletter
subscriptions, and licensing of research information. We charge a commission for
placement of the Consumer Mortgage Guide in a print publication. Advertising
revenue and commission income is recognized when the Consumer Mortgage Guide
runs in the publication. Revenue from our newsletters is recognized ratably over
the period of the subscription, which is generally up to one year. Revenue from
the sale of research information is recognized ratably over the contract period.

                                       23

<PAGE>

     We also earn fees from distributing editorial rate tables that are
published in newspapers and magazines across the United States, from paid
subscriptions to three newsletters and from providing rate surveys to
institutions and government agencies. In addition, we license research data
under agreements that permit the use of rate information we develop to advertise
the licensee's products in print, radio, television and web site promotions.
Revenue for these products is recognized ratably over the contract/subscription
periods.

     Print publishing and licensing revenue increased $349,000, or 12%, in 2001
over 2000, due primarily to an 18% increase in Consumer Mortgage Guide revenue.
This increase was a result of declining interest rates during 2001 that
bolstered the refinance markets and caused more advertisers to publish their
rates. The opposite was true in 2000, when revenue dropped $551,000, or 16% from
1999 as rising interest rates during 2000 slowed the refinance markets causing
certain advertisers not to publish their higher, non-competitive rates.

     Cost of Revenue

Online Publishing Costs

     Online publishing costs represent expenses directly associated with the
creation of online publishing revenue. These costs include contractual
revenue-sharing obligations resulting from our distribution arrangements
(distribution payments), editorial costs, research costs and allocated overhead.
Distribution payments are made to Web site operators for visitors directed to
our Web site; these costs increase proportionately with gains in traffic to our
site. Editorial costs relate to writers and editors who create original content
for our online publications and associates who build Web pages; these costs have
increased as we have added online publications and co-branded versions of our
site under distribution arrangements. These sites must be maintained on a daily
basis. Research costs include expenses related to gathering data on banking and
credit products and consist primarily of compensation and benefits and allocated
overhead.

     Online publishing costs decreased $3,846,000, or 54%, in 2001 compared to
2000. This decline was due primarily to costs of approximately $2,930,000
incurred during the year ended December 31, 2000 for theWhiz.com, Consejero.com,
CPNet.com, GreenMagazine.com, ilife.com and IntelligentTaxes.com. CPNet.com was
sold in May 2000 and Consejero.com was sold in August 2000. IntelligenTaxes.com,
ilife.com and theWhiz.com were integrated into Bankrate.com beginning in June
2000. GreenMagazine.com was shut down in December 2000. Additionally, direct
costs were lower due to a 12% reduction in full-time equivalent headcount, and a
$696,000, or 44%, reduction in revenue sharing payments resulting from
terminating unprofitable distribution relationships.

     Online publishing costs for the year ended December 31, 2000 were
$1,487,000, or 26%, higher than in 1999 due to a $557,000 increase in revenue
sharing payments as the number of distribution partners increased during the
year, and approximately $930,000 of costs incurred for GreenMagazine.com,
ilife.com and IntelligentTaxes.com which were launched in the fourth quarter of
1999.

Print Publishing and Licensing Costs

     Print publishing and licensing costs represent expenses directly associated
with print publishing revenue. These costs include contractual revenue sharing
obligations with newspapers related to the Consumer Mortgage Guide, compensation
and benefits, printing and allocated overhead. These costs vary proportionately
with the related revenues and increased $191,000, or 10%, in 2001 compared to
2000, while declining $404,000, or 17% in 2000 compared to 1999. Revenue sharing
payments accounted for the majority of these variances.

Gross Margin

     Gross margin is total revenue less total costs of revenue. Gross margin as
a percentage of total revenue has increased from 33% in 1999 and 40% in 2000, to
70% in 2001. Excluding barter revenue, these percentages are 33%, 37% and 65%,
respectively. For the year ended December 31, 2001 compared to 2000, a 9%
increase in total revenue excluding barter was complimented with a $3,655,000,
or 40%, reduction in direct costs yielding a $4,906,000, or 92%, increase in
gross margin. For the year ended December 31, 2000 compared to 1999, a 21%
increase in total revenue excluding barter was offset by a 14% increase in total
direct costs yielding a $1,396,000, or 35%, increase in gross margin.

                                       24

<PAGE>

     Other Expenses

Sales

     Sales costs represent direct selling expenses, principally for online
advertising, and include compensation and benefits, sales commissions, and
allocated overhead. Sales costs declined $138,000, or 4%, in 2001 compared to
2000, due primarily to a restructuring of the compensation and commission plans.
During 2000, sales costs increased $ 217,000, or 7%, over 1999 due to an
increase in commissions paid on higher levels of online graphic advertising and
hyperlink sales during the year.

Marketing

     Marketing costs represent expenses associated with expanding brand
awareness of our products and services to consumers and include print and
Internet advertising, marketing and promotion costs. Marketing costs also
include barter expense, which represents the cost of our advertisements that are
run on other companies' Web sites in our barter transactions. Barter expense was
$2,750,000, $557,000 and $0 for the years ended December 31, 2001, 2000 and
1999, respectively. Excluding barter expense, marketing expenses would be
$173,000, $3,317,000 and $16,459,000 for the years ended December 31, 2001, 2000
and 1999, respectively. These reductions are a direct result of our strategic
initiatives to control costs and curtail certain expenses.

Product Development

     Product development costs represent compensation and benefits related to
site development, network systems and telecommunications infrastructure support,
programming and other technology costs. Product development costs in 2001 were
$564,000, or 29%, lower than in 2000 due to lower consulting and contract labor
costs as well as reduced spending on non-capitalizable system hardware and
software costs. Product development costs in 2000 were $75,000, or 4%, lower
than in 1999 due to lower compensation and benefits costs (lower FTE headcount),
professional fees and contract labor, and system hardware and software costs.

General and Administrative

     General and administrative expenses represent compensation and benefits for
executive, finance and administrative personnel, professional fees,
non-allocated overhead and other general corporate expenses. As a percentage of
total revenue excluding barter, general and administrative expenses were 35%,
59% and 79% in 2001, 2000 and 1999, respectively. The decline in absolute
dollars of general and administrative expenses during 2001 compared to 2000 is
the result of approximately $420,000 of lower non-cash stock compensation
expense (2001 included $481,000 recorded in the third quarter related to our
stock option exchange program), $760,000 of lower litigation-related expenses,
$390,000 of lower insurance premiums, $632,000 of lower compensation and related
benefits, $115,000 of lower legal and accounting fees, and $245,000 of lower
public and investor relations expenses. These reductions are a direct result of
our strategic initiatives to control costs and curtail certain expenses.

     Excluding non-cash stock compensation expense of $1,312,000 in 2000 and
$3,305,000 in 1999, general and administrative expenses in 2000 were $1,045,000,
or 17%, higher than 1999 due primarily to higher compensation and benefit costs,
facilities costs, and legal and professional fees and services supporting the
growth of the business.

Restructuring and Impairment Charges

     We assess long-lived assets and certain identifiable intangible assets for
impairment whenever events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. Recoverability of an asset is
measured by comparing the carrying value of the asset to the future net cash
flow expected to be generated by the asset. If an asset is considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying value of the asset exceeds the fair value of the asset.

     On August 27, 1999, we acquired certain assets and assumed certain
liabilities of Green for approximately $831,000, including acquisition costs.
Substantially all of the purchase price was allocated to goodwill. During the
quarter ended September 30, 2000, a decision was made to stop publishing the
print version of Green Magazine. Additionally, due to lower than expected
traffic levels visiting GreenMagazine.com and continued negative operational
cash flows, a revised operating plan was developed and GreenMagazine.com was
incorporated into a channel of Bankrate.com. After evaluating the recoverability
of the intangible asset, we recorded an impairment charge of approximately
$476,000 to write the goodwill down to estimated fair value. In December 2000,
Green was shut down and the remaining goodwill of approximately $73,000 was
written off.

     During the quarter ended September 30, 2000, we recorded restructuring and
impairment charges of approximately $843,000 as a result of strategic
reorganization initiatives. Approximately $88,000 of this charge pertained to
severance, legal and other employee-related costs incurred in connection with a
further reduction of the workforce, all of which was paid in 2000.

                                       25

<PAGE>

Approximately $279,000 related to the shut down and sale of assets of
Consejero.com and facility closing costs. The remaining $476,000 was the result
of the GreenMagazine.com goodwill write-off discussed below.

     In June 2000, we recorded a restructuring charge of $1,298,000 as a result
of implementing certain strategic reorganization initiatives. Approximately
$364,000 of this charge pertained to severance, legal and other employee related
costs incurred in connection with a reduction of approximately 10% of the
workforce in ongoing operations and the elimination of positions in
under-performing, non-core business units, all of which was paid in 2000. The
remaining $934,000 of this charge related to the write-off of certain assets,
primarily software, licenses and other installation costs, of an abandoned
systems installation.

     In December 2000, we wrote off approximately $71,000 of certain impaired
assets related to the sale of CPNet.com.

     The following table displays total revenue and total expenses for
CPNet.com, Consejero.com and GreenMagazine.com for the years ended December 31,
2000 and 1999 ($ in thousands).

<TABLE>
<CAPTION>
                                 Year Ended December 31, 2000     Year Ended December 31, 1999
                                ------------------------------   ------------------------------
                                Total Revenue   Total Expenses   Total Revenue   Total Expenses
                                -------------   --------------   -------------   --------------
<S>                               <C>             <C>               <C>            <C>
CPNet.com                         $ 18,162        $  385,973        $49,513        $  577,278

Consejero.com                       16,359           810,867          8,036         2,217,879

GreenMagazine.com                  103,817         1,774,188          1,572           263,169
</TABLE>

Depreciation and Amortization

     Depreciation and amortization represents the cost of capital asset
acquisitions spread over their expected useful lives. These expenses are spread
over three to seven years and are calculated on a straight-line basis. In 2001,
depreciation and amortization was $173,000, or 20%, lower than in 2000 due to
the sale of assets and non-core business units in connection with our
restructuring plan and strategic initiatives. Depreciation and amortization more
than doubled in 2000 compared to 1999 due to purchases of software and computer
equipment, and the Pivot acquisition.

Goodwill Amortization

     Goodwill amortization represents the excess of the purchase price over the
fair market value of net assets acquired spread over the expected benefit
periods, which was between three to five years. Goodwill amortization in the
years ended December 31, 2000 and 1999 resulted from the Pivot and Green
acquisitions. Pivot was sold in July 2000 and Green was shut down in December
2000.

Other Income (Expense)

     Other income (expense) is comprised of interest income on invested cash and
interest expense on capital leases and the 10% convertible subordinated note
payable associated with the Pivot acquisition. The downward trend in interest
income since 1999 results from declining cash balances and interest rates during
those periods. Included in the year ended December 31, 1999 is a noncash finance
charge recorded upon the conversion of a note payable to a stockholder into
shares of convertible preferred stock which, upon completion of our initial
public offering in May 1999, was subsequently converted into common stock.

Income Taxes

     We did not record any income tax expense or benefit for the years ended
December 31, 2001, 2000 and 1999. Our effective tax rate differs from the
statutory federal income tax rate, primarily as a result of the uncertainty
regarding our ability to utilize our net operating loss carryforwards. Due to
the uncertainty surrounding the timing or realization of the benefits of net
operating loss carryforwards in future tax returns, we have placed a valuation
allowance against its otherwise recognizable deferred tax assets. At December
31, 2001, we had approximately $47,991,000 of net operating loss carryforwards
for tax reporting purposes available to offset future taxable income. Our net
operating loss carryforwards expire from 2012 through 2021. The Tax Reform Act
of 1986 imposes substantial restrictions on the utilization of net operating
losses and tax credits in the event of an "ownership change" of a corporation.
Due to the change in our ownership interests in the third quarter of 1997 and
the acquisition and subsequent disposition of Pivot in August 1999 and July
2000, respectively, future utilization of our net operating loss carryforwards
will be subject to certain limitations or annual restrictions.

Related Party Transactions

     We lease office space in North Palm Beach, Florida from Bombay Holdings,
Inc., which is wholly owned by Peter C. Morse, a director and 40% stockholder.
Total rent paid to Bombay for the years ended December 31, 2001, 2000 and 1999
was approximately $298,000, $287,000 and $266,000, respectively. During 2001 and
2000, we paid an outside director consulting fees of $40,000 and $12,000,
respectively.



                                       26

<PAGE>

Quarterly Results of Operations

     The following table presents certain unaudited quarterly statement of
operations data for each of the last 12 quarters through the year ended December
31, 2001. The information has been derived from our unaudited condensed
consolidated financial statements. In the opinion of our management, the
unaudited condensed financial statements have been prepared on a basis
consistent with the consolidated financial statements which appear elsewhere in
this Form 10-K and include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the financial position and
results of operations for such unaudited periods. Historical results are not
necessarily indicative of results to be expected in the future.

<TABLE>
<CAPTION>
(In thousands, except share and per share data)                    Year Ended December 31, 2001
                                                       March 31       June 30       September 30   December 31
                                                     ------------   ------------    ------------   ------------
<S>                                                  <C>            <C>             <C>            <C>
Revenue:
    Online publishing                                $      3,961   $      3,393    $      3,371   $      4,261
    Print publishing and licensing                            785            808             818            861
                                                     ------------   ------------    ------------   ------------
                    Total revenue                           4,746          4,201           4,189          5,121
                                                     ------------   ------------    ------------   ------------
Cost of revenue:
    Online publishing                                         948            728             751            842
    Print publishing and licensing                            526            518             552            578
                                                     ------------   ------------    ------------   ------------
                    Total cost of revenue                   1,474          1,246           1,303          1,420
                                                     ------------   ------------    ------------   ------------
Gross margin                                                3,272          2,955           2,886          3,702
                                                     ------------   ------------    ------------   ------------
Operating expenses:
    Sales                                                     859            714             680            843
    Marketing                                               1,081            717             476            649
    Product development                                       366            320             360            343
    General and administrative                              1,388          1,243           1,546          1,331
    Restructuring and impairment charges                       --             --              --             --
    Depreciation and amortization                             195            187             165            153
    Goodwill amortization                                      --             --              --             --
    Noncash stock based compensation                           --             --              --             --
                                                     ------------   ------------    ------------   ------------
                                                            3,889          3,181           3,227          3,320
                                                     ------------   ------------    ------------   ------------
                    Income (loss) from operations            (617)          (226)           (341)           382
Other income (expense), net                                    (8)           (23)            (38)           (65)
Noncash financing charge                                       --             --              --             --
                                                     ------------   ------------    ------------   ------------
    Income (loss) before income taxes and
      discontinued operations                                (625)          (249)           (379)           317
Income taxes from continuing operations                        --             --              --             --
                                                     ------------   ------------    ------------   ------------
    Income (loss) before discontinued operations             (625)          (249)           (379)           317
                                                     ------------   ------------    ------------   ------------
Discontinued operations:
    Loss from discontinued operations                          --             --              --             --
    Gain on disposal of discontinued operations                --             --              --             --
                                                     ------------   ------------    ------------   ------------
                                                               --             --              --             --
                                                     ------------   ------------    ------------   ------------
    Net income (loss)                                        (625)          (249)           (379)           317
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                 --             --              --             --
                                                     ------------   ------------    ------------   ------------
    Net income (loss) applicable to common stock     $       (625)  $       (249)   $       (379)  $        317
                                                     ============   ============    ============   ============
Basic and diluted net loss per share:
    Income (loss) before discontinued operations     $      (0.04)  $      (0.02)   $      (0.03)  $       0.02
    Discontinued operations                                    --             --              --             --
                                                     ------------   ------------    ------------   ------------
    Net income (loss)                                       (0.04)         (0.02)          (0.03)          0.02
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                 --             --              --             --
                                                     ------------   ------------    ------------   ------------
    Net income (loss) applicable to common stock     $      (0.04)  $      (0.02)   $      (0.03)  $       0.02
                                                     ============   ============    ============   ============
Weighted average shares outstanding used in
  basic and diluted per-share calculation              13,996,950     13,996,950      13,996,950     13,996,950
                                                     ============   ============    ============   ============

<CAPTION>
(In thousands, except share and per share data)                    Year Ended December 31, 2000
                                                      March 31        June 30     September 30    December 31
                                                    -----------    -------------  ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>
Revenue:
    Online publishing                               $      3,014   $      3,046   $      3,012   $      3,210
    Print publishing and licensing                           742            750            712            719
                                                    ------------   ------------   ------------   ------------
                    Total revenue                          3,756          3,796          3,724          3,929
                                                    ------------   ------------   ------------   ------------
Cost of revenue:
    Online publishing                                      2,407          2,012          1,697            998
    Print publishing and licensing                           535            551            455            442
                                                    ------------   ------------   ------------   ------------
                    Total cost of revenue                  2,942          2,563          2,152          1,440
                                                    ------------   ------------   ------------   ------------
Gross margin                                                 814          1,233          1,572          2,489
                                                    ------------   ------------   ------------   ------------
Operating expenses:
    Sales                                                    911            736            796            791
    Marketing                                              1,825          1,176            263            610
    Product development                                      594            568            400            388
    General and administrative                             2,837          1,763          2,575          1,292
    Restructuring and impairment charges                      --          1,298            843            144
    Depreciation and amortization                            223            232            223            195
    Goodwill amortization                                     74             74             74              9
    Noncash stock based compensation                          --             --             --             --
                                                    ------------   ------------   ------------   ------------
                                                           6,464          5,847          5,174          3,429
                                                    ------------   ------------   ------------   ------------
                    Income (loss) from operations         (5,650)        (4,614)        (3,602)          (940)
Other income (expense), net                                  124             46             39             21
Noncash financing charge                                      --             --             --             --
                                                    ------------   ------------   ------------   ------------
    Income (loss) before income taxes and
      discontinued operations                             (5,526)        (4,568)        (3,563)          (919)
Income taxes from continuing operations                       --             --             --             --
                                                    ------------   ------------   ------------   ------------
    Income (loss) before discontinued operations          (5,526)        (4,568)        (3,563)          (919)
                                                    ------------   ------------   ------------   ------------
Discontinued operations:
    Loss from discontinued operations                     (1,587)        (1,380)          (248)            --
    Gain on disposal of discontinued operations               --             --            871             --
                                                    ------------   ------------   ------------   ------------
                                                          (1,587)        (1,380)           623             --
                                                    ------------   ------------   ------------   ------------
    Net income (loss)                                     (7,113)        (5,948)        (2,940)          (919)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                --             --             --             --
                                                    ------------   ------------   ------------   ------------
    Net income (loss) applicable to common stock    $     (7,113)  $     (5,948)  $     (2,940)  $       (919)
                                                    ============   ============   ============   ============
Basic and diluted net loss per share:
    Income (loss) before discontinued operations    $      (0.41)  $      (0.33)  $      (0.25)  $      (0.07)
    Discontinued operations                                (0.12)         (0.10)          0.04             --
                                                    ------------   ------------   ------------   ------------
    Net income (loss)                                      (0.53)         (0.43)         (0.21)         (0.07)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                --             --             --             --
                                                    ------------   ------------   ------------   ------------
    Net income (loss) applicable to common stock    $      (0.53)  $      (0.43)  $      (0.21)  $      (0.07)
                                                    ============   ============   ============   ============
Weighted average shares outstanding used in
  basic and diluted per-share calculation             13,543,678     13,960,937     13,987,077     13,996,950
                                                    ============   ============   ============   ============

<CAPTION>
(In thousands, except share and per share data)                  Year Ended December 31, 1999
                                                      March 31       June 30     September 30    December 31
                                                    ------------   -----------   ------------   ------------
<S>                                                  <C>           <C>           <C>            <C>
Revenue:
    Online publishing                                $     1,370   $     1,926   $      2,417   $      2,784
    Print publishing and licensing                           856           886            880            850
                                                     -----------   -----------   ------------   ------------
                    Total revenue                          2,226         2,812          3,297          3,634
                                                     -----------   -----------   ------------   ------------
Cost of revenue:
    Online publishing                                        845         1,175          1,457          2,151
    Print publishing and licensing                           583           608            585            611
                                                     -----------   -----------   ------------   ------------
                    Total cost of revenue                  1,428         1,783          2,042          2,762
                                                     -----------   -----------   ------------   ------------
Gross margin                                                 798         1,029          1,255            872
                                                     -----------   -----------   ------------   ------------
Operating expenses:
    Sales                                                    554           801            795            866
    Marketing                                                714         1,987          6,121          7,638
    Product development                                      382           411            546            687
    General and administrative                             2,455         1,861          1,966          3,131
    Restructuring and impairment charges                      --            --             --             --
    Depreciation and amortization                             68           105            160             85
    Goodwill amortization                                      3            --             25            161
    Noncash stock based compensation                          --            --             --             --
                                                     -----------   -----------   ------------   ------------
                                                           4,176         5,165          9,613         12,568
                                                     -----------   -----------   ------------   ------------
                    Income (loss) from operations         (3,378)       (4,136)        (8,358)       (11,696)
Other income (expense), net                                    7           212            400            252
Noncash financing charge                                  (2,656)           --             --             --
                                                     -----------   -----------   ------------   ------------
    Income (loss) before income taxes and
      discontinued operations                             (6,027)       (3,924)        (7,958)       (11,444)
Income taxes from continuing operations                       --            --             --             --
                                                     -----------   -----------   ------------   ------------
    Income (loss) before discontinued operations          (6,027)       (3,924)        (7,958)       (11,444)
                                                     -----------   -----------   ------------   ------------
Discontinued operations:
    Loss from discontinued operations                         --            --           (542)        (1,593)
    Gain on disposal of discontinued operations               --            --             --             --
                                                     -----------   -----------   ------------   ------------
                                                              --            --           (542)        (1,593)
                                                     -----------   -----------   ------------   ------------
    Net income (loss)                                     (6,027)       (3,924)        (8,500)       (13,037)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value            (1,852)         (429)            --             --
                                                     -----------   -----------   ------------   ------------
    Net income (loss) applicable to common stock     $    (7,879)  $    (4,353)  $     (8,500)  $    (13,037)
                                                     ===========   ===========   ============   ============
Basic and diluted net loss per share:
    Income (loss) before discontinued operations     $     (1.47)  $     (0.43)  $      (0.59)  $      (0.85)
    Discontinued operations                                   --            --          (0.04)         (0.11)
                                                     -----------   -----------   ------------   ------------
    Net income (loss)                                      (1.47)        (0.43)         (0.63)         (0.96)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value             (0.45)        (0.04)            --             --
                                                     -----------   -----------   ------------   ------------
    Net income (loss) applicable to common stock     $     (1.92)  $     (0.47)  $      (0.63)  $      (0.96)
                                                     ===========   ===========   ============   ============
Weighted average shares outstanding used in
  basic and diluted per-share calculation              4,099,458     9,195,503     13,477,945     13,540,988
                                                     ===========   ===========   ============   ============
</TABLE>

                                       27

<PAGE>

Liquidity and Capital Resources

     We were funded with capital raised from stockholders and from the proceeds
of our initial public offering in May 1999. Currently, our principal source of
liquidity is the cash and cash equivalents generated by our operations. As of
December 31, 2001, we had working capital of $7,865,000, and our primary
commitments were approximately $853,000 in operating and capital lease payments
over the next five years, capital expenditures and recurring payables and
accruals arising during the course of operating our business, estimated at
approximately $3,800,000 through December 31, 2002. We generally establish
payment terms with our vendors that extend beyond the amount of time required to
collect from our customers. There are no other significant commitments or off
balance sheet arrangements. On February 22, 2002, we completed the early
repayment of our $4,350,000 10% convertible subordinated note, including accrued
interest, for $3,400,000 in cash. This transaction will save us approximately
$3,125,000 in principal and interest between August 2002 and August 20, 2004,
the original maturity date.

     During the year ended December 31, 2001 we generated $1,107,000 of net cash
from operating activities. Our net loss of $936,000 was adjusted for non-cash
charges of $1,641,000, and a net positive change in the components of working
capital of $402,000. During the years ended December 31, 2000 and 1999, net cash
was used in continuing operating activities primarily for funding the expansion
of our online publishing efforts through personnel acquisitions and marketing
expenditures. These expenditures were significantly curtailed beginning in the
quarter ended June 30, 2000. Cash used in discontinued operations of $5,396,000
and $2,895,000 for the years ended December 31, 2000 and 1999, respectively,
represents the net cash funding for our former subsidiary, Pivot, which was
disposed of in July 2000.

     Net cash used in investing activities during the year ended December 31,
2001 was the result of certain equipment purchases. Net cash provided by
investing activities of $3,680,000 for the year ended December 31, 2000 was
primarily the result of the net cash proceeds from the sale of Pivot of
$4,350,000, less the expenditures for the purchase of computer and office
equipment and furniture. During the year ended December 31, 1999, cash was used
to acquire CPNet.com, Pivot and certain assets and liabilities of Green
Magazine, Inc. as well as certain other intellectual property rights and
computer equipment.

     Net cash used in financing activities during the year ended December 31,
2001 represented principal payments on our capital leases. Net cash provided by
financing activities in 2000 consisted of the cash proceeds from the sale of
stock to our former Chairman of the Board of Directors of $998,000, the exercise
of common stock options of $51,000, and principal payments on capital lease
obligations of $220,000. Net cash provided by financing activities in 1999
consisted of a $1,000,000 convertible promissory note to one of the Series B
preferred stockholders which was subsequently converted to shares of Series B
preferred stock and ultimately into common stock in connection with our initial
public offering, as well as the net cash proceeds from our initial public
offering of $41,301,000. Other financing activities included cash used for
payments on capital lease liabilities.

     We have incurred net losses in each of its last six fiscal years and had an
accumulated deficit of approximately $60 million as of December 31, 2001.

     We are working to manage its cash by actively controlling expenses and
pursuing additional sources of revenue. For instance, since early 2000, we have
substantially reduced marketing expenditures and sold or shut down
under-performing, non-core business units. We sold CPNet.com in May 2000, sold
Pivot in July 2000, shut down and sold certain assets of Consejero.com in August
2000, and shut down Greenmagazine.com in December 2000. These transactions
yielded cash to the Company of approximately $4,392,000 and reduced operating
expenses. We also reduced employment levels of continuing operations and
consolidated its physical locations. In February 2002, we completed the early
repayment of our $4,350,000 convertible subordinated note payable for
$3,400,000, including accrued interest, and will record a gain of approximately
$2,022,000 in the quarter ending March 31, 2002. Based on these actions and our
current plan, we believe our existing capital resources will be sufficient to
satisfy its cash requirements through 2003. There are no assurances that such
actions will ensure cash sufficiency through 2003 or that reducing marketing
expenses would not potentially curtail revenue growth.

     Further, due to the legal matters discussed in Note 10 to the consolidated
financial statements included in Item 8. herein, which we intend to vigorously
defend, management could be required to spend significant amounts of time and
resources defending these matters which could adversely impact our cash position
and our operations.

     We may consider additional options to preserve or generate cash. These
include forming strategic partnerships or alliances, pursuing a merger or sale
of the Company, or issuing new debt and/or equity securities. However, there can
be no assurance that we would be able to preserve or generate cash in sufficient
amounts or at all.

                                       28

<PAGE>


Recent Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001 as well as
all purchase method business combinations completed after June 30, 2001. SFAS
No. 142 will require that goodwill and intangible assets with indefinite useful
lives no longer be amortized, but instead tested for impairment at least
annually. SFAS No. 141 is effective immediately, except with regard to business
combinations initiated prior to July 1, 2001 and SFAS No. 142 is effective
January 1, 2002.

     Furthermore, any goodwill and intangible assets determined to have
indefinite useful lives that are acquired in a purchase business combination
completed after June 30, 2001 will not be amortized. Goodwill and intangible
assets acquired in business combinations completed before July 1, 2001 will
continue to be amortized until the adoption of SFAS No. 142. SFAS No. 141 will
require upon adoption of SFAS No. 142 that goodwill acquired in a prior purchase
business combination be evaluated and any necessary reclassifications be made in
order to conform to the new criteria in SFAS 141 for recognition apart from
goodwill. Any impairment loss will be measured as of the date of the adoption
and recognized as a cumulative effect of a change in accounting principles in
the first interim period. The adoption of SFAS No. 142 at January 1, 2002 did
not result in any impairment adjustment.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which addresses financial accounting and reporting for
legal obligations associated with the retirement of tangible long-lived assets
and the associated asset retirement costs. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002 and is not expected to have a material
impact on our consolidated financial statements.

     In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Long-Lived Assets," which supercedes SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of," and the accounting and reporting provisions of APB No. 30, "Reporting the
Results of Operation - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of a segment of a business. While SFAS No. 144
retains many of the fundamental provisions of SFAS No. 121, it establishes a
single accounting model for long-lived assets to be disposed of by sale, and
resolves certain implementation issues not previously addressed by SFAS No. 121.
SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and
did not have a material impact on our consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

     The primary objective of our investment strategy is to preserve principal
while maximizing the income we receive from investments without significantly
increasing risk. To minimize this risk, to date we have maintained our portfolio
of cash equivalents in short-term and overnight investments which are not
subject to market risk as the interest paid on such investments fluctuates with
the prevailing interest rates. As of December 31, 2001, all of our cash
equivalents mature in less than three months.

Exchange Rate Sensitivity

     Our exposure to foreign currency exchange rate fluctuations is minimal to
none as we do not have any revenues denominated in foreign currencies.
Additionally, we have not engaged in any derivative or hedging transactions to
date.

                                       29

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                 PAGE
<S>                                                                                              <C>
Report of Independent Auditors.................................................................

Consolidated Balance Sheets as of December 31, 2001 and 2000...................................

Consolidated Statements of Operations for the Years Ended December 31, 2001, 2000 and 1999.....

Consolidated Statements of Redeemable Stock and Stockholders' Equity (Deficit)
 for the Years Ended December 31, 2001, 2000 and 1999..........................................

Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999.....

Notes to Consolidated Financial Statements.....................................................
</TABLE>

                                       30

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Bankrate, Inc.:

We have audited the accompanying consolidated balance sheets of Bankrate, Inc.
(formerly ilife.com, Inc.) and subsidiary as of December 31, 2001 and 2000, and
the related consolidated statements of operations, redeemable stock and
stockholders' equity (deficit) and cash flows for each of the years in the
three-year period ended December 31, 2001. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated 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 financial position of Bankrate, Inc. and
subsidiary as of December 31, 2001 and 2000, and the results of their operations
and their cash flows for each of the years in the three-year period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States of America.

KPMG LLP

West Palm Beach, Florida
February 25, 2002

                                       31

<PAGE>

                          Bankrate, Inc. and Subsidiary
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                          December 31,    December 31,
                                                                                              2001            2000
                                                                                          ------------    ------------
<S>                                                                                       <C>             <C>
            Assets
Cash and cash equivalents                                                                 $  9,755,032    $  8,890,649
Accounts receivable, net of allowance for doubtful accounts of $140,000
  and  $300,000 at December 31, 2001 and 2000, respectively                                  1,259,256       1,218,867
Other current assets                                                                           231,134         572,185
                                                                                          ------------    ------------
            Total current assets                                                            11,245,422      10,681,701

Furniture, fixtures and equipment, net                                                       1,076,508       1,730,455
Intangible assets, net                                                                          69,622          88,425
Other assets                                                                                   134,460         133,809
                                                                                          ------------    ------------
            Total assets                                                                  $ 12,526,012    $ 12,634,390
                                                                                          ============    ============

            Liabilities and Stockholders' Equity

Liabilities:
  Accounts payable                                                                        $    699,054    $    772,181
  Other accrued expenses                                                                     1,871,492       2,016,236
  Accrued interest                                                                             217,500              --
  Deferred revenue                                                                             347,869         463,224
  Current portion of obligations under capital leases                                           36,406         214,651
  Other current liabilities                                                                    207,952         158,672
                                                                                          ------------    ------------
            Total current liabilities                                                        3,380,273       3,624,964

10% convertible subordinated note payable                                                    4,350,000       4,350,000
Accrued stock compensation expense                                                                  --       2,452,424
Accrued interest                                                                               810,363         592,863
Other liabilities                                                                                3,264          40,815
                                                                                          ------------    ------------
            Total liabilities                                                                8,543,900      11,061,066
                                                                                          ------------    ------------

Commitments and contingencies

Stockholders' equity:
   Preferred stock, 10,000,000 shares authorized and undesignated                                   --              --
   Common stock, par value $.01 per share-- 100,000,000 shares authorized;
     13,996,950 shares issued and outstanding                                                  139,969         139,969
  Additional paid in capital                                                                63,931,555      60,586,991
  Accumulated deficit                                                                      (60,089,412)    (59,153,636)
                                                                                          ------------    ------------
            Total stockholders' equity                                                       3,982,112       1,573,324
                                                                                          ------------    ------------
            Total liabilities and stockholders' equity                                    $ 12,526,012    $ 12,634,390
                                                                                          ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       32

<PAGE>

                          Bankrate, Inc. and Subsidiary
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                                          2001            2000            1999
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
Revenue:
     Online publishing                                $ 14,985,903    $ 12,282,795    $  8,496,905
     Print publishing and licensing                      3,271,223       2,921,970       3,472,780
                                                      ------------    ------------    ------------
                  Total revenue                         18,257,126      15,204,765      11,969,685
                                                      ------------    ------------    ------------
Cost of revenue:
     Online publishing                                   3,268,528       7,114,258       5,627,713
     Print publishing and licensing                      2,173,529       1,982,885       2,387,229
                                                      ------------    ------------    ------------
                  Total cost of revenue                  5,442,057       9,097,143       8,014,942
                                                      ------------    ------------    ------------

Gross margin                                            12,815,069       6,107,622       3,954,743
                                                      ------------    ------------    ------------

Operating expenses:
     Sales                                               3,096,401       3,234,148       3,017,231
     Marketing                                           2,922,867       3,873,796      16,459,113
     Product development                                 1,385,672       1,949,933       2,024,847
     General and administrative                          5,511,572       8,467,279       9,415,520
     Restructuring charge                                       --       2,285,422              --
     Depreciation and amortization                         700,497         873,484         421,792
     Goodwill amortization                                      --         231,214         186,229
                                                      ------------    ------------    ------------
                                                        13,617,010      20,915,276      31,524,732
                                                      ------------    ------------    ------------
                  Loss from operations                    (801,940)    (14,807,654)    (27,569,989)
                                                      ------------    ------------    ------------
Other income (expense):
     Interest income                                       328,505         727,327       1,087,148
     Interest expense                                     (462,341)       (496,868)       (232,504)
     Noncash financing charge                                   --              --      (2,656,000)
     Other                                                      --              --          18,712
                                                      ------------    ------------    ------------
                  Other income (expense), net             (133,836)        230,459      (1,782,644)
                                                      ------------    ------------    ------------
     Loss before income taxes and
       discontinued operations                            (935,776)    (14,577,195)    (29,352,633)
Income taxes from continuing operations                         --              --              --
                                                      ------------    ------------    ------------
     Loss before discontinued operations                  (935,776)    (14,577,195)    (29,352,633)
                                                      ------------    ------------    ------------
Discontinued operations:
     Loss from discontinued operations                          --      (3,214,577)     (2,135,697)
     Gain on disposal of discontinued operations                --         871,212              --
                                                      ------------    ------------    ------------
                                                                --      (2,343,365)     (2,135,697)
                                                      ------------    ------------    ------------
     Net loss                                             (935,776)    (16,920,560)    (31,488,330)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                  --              --      (2,281,000)
                                                      ------------    ------------    ------------
     Net loss applicable to common stock              $   (935,776)   $(16,920,560)   $(33,769,330)
                                                      ============    ============    ============

Basic and diluted net loss per share:
     Loss before discontinued operations              $      (0.07)   $      (1.05)   $      (2.90)
     Discontinued operations                                    --           (0.17)          (0.21)
                                                      ------------    ------------    ------------
     Net loss                                                (0.07)          (1.22)          (3.11)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value                  --              --           (0.23)
                                                      ------------    ------------    ------------
     Net loss applicable to common stock              $      (0.07)   $      (1.22)   $      (3.34)
                                                      ============    ============    ============

Weighted average shares outstanding used in
  basic and diluted per-share calculation               13,996,950      13,872,788      10,113,928
                                                      ============    ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       33

<PAGE>

<TABLE>
<CAPTION>
                                                      Bankrate, Inc.
                            Consolidated Statements of Redeemable Stock and Stockholders' Equity (Deficit)

                                                                      Redeemable               Redeemable
                                                                 Convertible Series A      Convertible Series B
                                                                   Preferred Stock           Preferred Stock
                                                                    Shares       Amount     Shares      Amount
                                                                   -------   ------------   -------   -----------
<S>                                                                <C>       <C>            <C>       <C>
Balances, December 31, 1998                                         89,612   $ 10,215,768    17,575   $ 1,982,535

  Accretion of Series A and Series B preferred stock
    to redemption value                                                 --      1,908,000        --       373,000

  Conversion of Series A and Series B preferred
    stock to common stock                                          (89,612)   (12,123,768)  (17,575)   (2,355,535)

  Issuance and conversion of promissory note to
    Series B preferred stock and conversion of Series B
    preferred stock to common stock                                     --             --        --            --

  Foregiveness of note receivable for redeemable common stock,
   reclassification of redeemable common stock to common stock,
   cancellation of the
   put right associated with such shares and
   reacquisition of forfeited shares                                    --             --        --            --

  Initial public offering of common stock                               --             --        --            --

  Compensation relating to stock grants                                 --             --        --            --

  Common stock issued for the acquisition of
    Green Magazine, Inc.                                                --             --        --            --

  Net loss for the period                                               --             --        --            --
                                                                   -------   ------------   -------   -----------

Balances, December 31, 1999                                             --             --        --            --

  Common stock issued                                                   --             --        --            --

  Stock options exercised                                               --             --        --            --

  Net loss for the period                                               --             --        --            --
                                                                   -------   ------------   -------   -----------

Balances, December 31, 2000                                             --             --        --            --

  Stock option exchange program                                         --             --        --            --

  Stock compensation expense                                            --             --        --            --

  Net loss for the period                                               --             --        --            --
                                                                   -------   ------------   -------   -----------
Balances, December 31, 2001                                             --   $         --        --   $        --
                                                                   =======   ============   =======   ===========
<CAPTION>
                                                                   Redeemable Common Stock            Convertible Series A
                                                                                             Note       Preferred Stock
                                                                    Shares     Amount     Receivable   Shares         Amount
                                                                   --------   ---------   ----------   --------       ------
<S>                                                                <C>        <C>         <C>          <C>            <C>
Balances, December 31, 1998                                         454,170   $ 236,168   $ (236,168)        --       $    --

  Accretion of Series A and Series B preferred stock
    to redemption value                                                  --          --           --         --            --

  Conversion of Series A and Series B preferred
    stock to common stock                                                --          --           --         --            --

  Issuance and conversion of promissory note to
    Series B preferred stock and conversion of Series B
    preferred stock to common stock                                      --          --           --         --            --

  Foregiveness of note receivable for redeemable common stock,
   reclassification of redeemable common stock to common stock,
   cancellation of the
   put right associated with such shares and
   reacquisition of forfeited shares                               (454,170)   (236,168)     236,168         --            --

  Initial public offering of common stock                                --          --           --         --            --

  Compensation relating to stock grants                                  --          --           --         --            --

  Common stock issued for the acquisition of
    Green Magazine, Inc.                                                 --          --           --         --            --

  Net loss for the period                                                --          --           --         --            --
                                                                   --------   ---------   ----------   --------       -------
Balances, December 31, 1999                                              --          --           --         --            --

  Common stock issued                                                    --          --           --         --            --

  Stock options exercised                                                --          --           --         --            --

  Net loss for the period                                                --          --           --         --            --
                                                                   --------   ---------   ----------   --------       -------
Balances, December 31, 2000                                              --          --           --         --            --

  Stock option exchange program                                          --          --           --         --            --

  Stock compensation expense                                             --          --           --         --            --

  Net loss for the period                                                --          --           --         --            --
                                                                   --------   ---------   ----------   --------       -------
Balances, December 31, 2001                                              --   $      --   $       --        --        $    --
                                                                   ========   =========   ==========   ========       =======

<CAPTION>
                                                                                                                Unamortized
                                                                                                  Additional      Stock
                                                                  Common Stock                    Paid in      Compensation
                                                                     Shares          Amount       Capital        Expense
                                                                   -----------    ----------    ------------   ------------
<S>                                                                <C>              <C>         <C>            <C>
Balances, December 31, 1998                                          4,053,200      $ 40,532    $         --   $  (280,690)

  Accretion of Series A and Series B preferred stock
    to redemption value                                                     --            --      (2,281,000)           --

  Conversion of Series A and Series B preferred
    stock to common stock                                            5,359,350        53,593      14,425,710            --

  Issuance and conversion of promissory note to
    Series B preferred stock and conversion of Series B
    preferred stock to common stock                                    339,200         3,392       3,659,608            --

  Foregiveness of note receivable for redeemable common stock,
   reclassification of redeemable common stock to common stock,
   cancellation of the put right associated with such shares
   and reacquisition of forfeited shares                               189,238         1,893       1,890,417       220,690

  Initial public offering of common stock                            3,500,000        35,000      41,265,596            --

  Compensation relating to stock grants                                     --            --              --        60,000

  Common stock issued for the acquisition of
    Green Magazine, Inc.                                               100,000         1,000         582,780            --

  Net loss for the period                                                   --            --              --            --
                                                                   -----------    ----------    ------------   -----------
Balances, December 31, 1999                                         13,540,988       135,410      59,543,111            --

  Common stock issued                                                  431,499         4,315         993,526            --

  Stock options exercised                                               24,463           244          50,354            --

  Net loss for the period                                                   --            --              --            --
                                                                   -----------    ----------    ------------   -----------
Balances, December 31, 2000                                         13,996,950       139,969      60,586,991            --

  Stock option exchange program                                             --            --       2,452,425            --

  Stock compensation expense                                                --            --         892,139            --

  Net loss for the period                                                   --            --              --            --
                                                                   -----------    ----------    ------------   -----------
Balances, December 31, 2001                                        13,996,950     $  139,969    $ 63,931,555   $        --
                                                                   ===========    ==========    ============   ===========

<CAPTION>
                                                                                       Total
                                                                                   Stockholders'
                                                                    Accumulated       Equity
                                                                      Deficit       (Deficit)
                                                                   -------------    ------------
<S>                                                                <C>              <C>
Balances, December 31, 1998                                        $ (10,744,746)   $(10,984,904)

  Accretion of Series A and Series B preferred stock
    to redemption value                                                       --      (2,281,000)

  Conversion of Series A and Series B preferred
    stock to common stock                                                     --      14,479,303

  Issuance and conversion of promissory note to
    Series B preferred stock and conversion of Series B
    preferred stock to common stock                                           --       3,663,000

  Foregiveness of note receivable for redeemable common stock,
    reclassification of redeemable common stock to common stock,
    cancellation of the put right associated with such shares
    and reacquisition of forfeited shares                                     --       2,113,000

  Initial public offering of common stock                                     --      41,300,596

  Compensation relating to stock grants                                       --          60,000

  Common stock issued for the acquisition of
    Green Magazine, Inc.                                                      --         583,780

  Net loss for the period                                            (31,488,330)    (31,488,330)
                                                                   -------------     -----------

Balances, December 31, 1999                                          (42,233,076)     17,445,445

  Common stock issued                                                         --         997,841

  Stock options exercised                                                     --          50,598

  Net loss for the period                                            (16,920,560)    (16,920,560)
                                                                   -------------     -----------

Balances, December 31, 2000                                          (59,153,636)      1,573,324

  Stock option exchange program                                               --       2,452,425

  Stock compensation expense                                                  --         892,139

  Net loss for the period                                               (935,776)       (935,776)
                                                                   -------------    ------------

Balances, December 31, 2001                                        $ (60,089,412)   $  3,982,112
                                                                   ==============   ============
</TABLE>

See accompanying notes to consolidated financial statements

                                       34

<PAGE>

                          Bankrate, Inc. and Subsidiary
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                                 2001            2000          1999
                                                                              ----------    ------------    ------------
<S>                                                                           <C>           <C>             <C>
Cash flows from operating activities:
Continuing operations-
  Net loss                                                                    $ (935,776)   $(14,577,195)   $(29,352,633)
                                                                              ----------    ------------    ------------
  Adjustments to reconcile net loss to net cash used
    in operating activities:
    Loss from discontinued operations                                                 --       3,214,577       2,135,697
    Gain on disposal of discontinued operations                                       --        (871,212)             --
    Goodwill impairment charge                                                        --         552,696              --
    Depreciation and amortization                                                700,497       1,104,698         608,021
    Loss on disposal of fixed assets                                                  --         129,203              --
    Provision for doubtful accounts                                               48,725         364,991         210,153
    Noncash stock compensation                                                   892,139       1,311,912       3,305,104
    Noncash financing charge                                                          --              --       2,656,000
    Changes in operating assets and liabilities:
        (Increase) decrease in accounts receivable                               (89,114)       (134,093)     (1,138,016)
        (Increase) decrease in other assets                                      332,601       1,177,967      (2,214,143)
        Increase (decrease) in accounts payable                                  (73,127)     (1,568,651)      2,032,165
        Increase (decrease) in accrued expenses                                 (137,448)     (3,692,868)      5,325,912
        Increase in other current liabilities                                    484,280         465,812         285,723
        Increase (decrease) in deferred revenue                                 (115,355)       (192,834)         43,398
                                                                              ----------    ------------    ------------
          Total adjustments                                                    2,043,198       1,862,198      13,250,014
                                                                              ----------    ------------    ------------
          Net cash provided by (used in) continuing operations                 1,107,422     (12,714,997)    (16,102,619)
          Net cash used in discontinued operations                                    --      (5,394,547)     (2,895,388)
                                                                              ----------    ------------    ------------
             Net cash provided by (used in) operating activities               1,107,422     (18,109,544)    (18,998,007)
                                                                              ----------    ------------    ------------
Cash flows from investing activities:
  Purchases of equipment                                                         (27,243)       (712,016)     (1,691,469)
  Proceeds from sale of business                                                      --       4,391,800              --
  Acquisitions, net of cash acquired                                                  --              --        (536,983)
                                                                              ----------    ------------    ------------
          Net cash provided by (used in) investing activities                    (27,243)      3,679,784      (2,228,452)
                                                                              ----------    ------------    ------------
Cash flows from financing activities:
  Loans from stockholders                                                             --              --       1,000,000
  Principal payments on capital lease obligations                               (215,796)       (219,824)       (215,478)
  Proceeds from exercise of stock options                                             --          50,598              --
  Proceeds from issuance of common stock, net                                         --         997,841      41,300,631
                                                                              ----------    ------------    ------------
               Net cash provided by (used in) financing activities              (215,796)        828,615      42,085,153
                                                                              ----------    ------------    ------------
               Net increase (decrease) in cash and cash equivalents              864,383     (13,601,145)     20,858,694
Cash and cash equivalents, beginning of period                                 8,890,649      22,491,794       1,633,100
                                                                              ----------    ------------    ------------
Cash and cash equivalents, end of period                                      $9,755,032    $  8,890,649    $ 22,491,794
                                                                              ==========    ============    ============

 Supplemental disclosures of cash flow information:
  Cash paid during the period for interest                                    $   27,341    $     61,868    $     87,504
                                                                              ==========    ============    ============

Supplemental schedule of noncash investing and finance activities:
  Equipment acquired under capital leases                                     $       --    $         --    $    314,000
                                                                              ==========    ============    ============

  Accretion of Series A and Series B preferred stock to redemption value      $       --    $         --    $  2,281,000
                                                                              ==========    ============    ============

  Conversion of Series A and Series B preferred stock to common stock         $       --    $         --    $ 14,479,303
                                                                              ==========    ============    ============

  Issuance of common stock for business acquired                              $       --    $         --    $    584,000
                                                                              ==========    ============    ============

  Convertible subordinated note issued in connection with business acquired   $       --    $         --    $  4,350,000
                                                                              ==========    ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       35

<PAGE>

                          BANKRATE, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

     Bankrate, Inc. (the "Company") owns and operates an Internet-based consumer
banking marketplace. The Company's flagship Web site, Bankrate.com is the Web's
leading aggregator of information on over 100 financial products including
mortgages, credit cards, new and used automobile loans, money market accounts,
certificates of deposit, checking and ATM fees, home equity loans and online
banking fees. Additionally, the Company provides financial applications and
information to a network of distribution partners and through national and state
publications. The Company's former wholly owned subsidiary, Professional Direct
Agency, Inc. ("Pivot"), was operated as a virtual insurance agency and
fulfillment/call center specializing in direct insurance sales over the Internet
and through other direct media (see Note 6). The Company is organized under the
laws of the state of Florida.

     On September 20, 2000, the Company changed its name from ilife.com, Inc. to
Bankrate, Inc.

     On January 29, 2001, the Company announced that its common stock was
removed from the Nasdaq National Market and immediately became eligible for
trading on the OTC Bulletin Board under the symbol "RATE". Nasdaq's decision to
delist the Company's common stock from the Nasdaq National Market was based on
the Company's net tangible assets, as defined by Nasdaq, falling below the
required $4,000,000 minimum amount.

     The Company has incurred net losses in each of its last six fiscal years
and had an accumulated deficit of approximately $60 million as of December 31,
2001. Therefore, the Company believes that period-to-period comparisons of our
financial results should not be relied on as an indication of our future
performance.

     The Company is working to manage its cash by actively controlling expenses
and pursuing additional sources of revenue. For instance, since early 2000, the
Company has substantially reduced marketing expenditures and sold or shut down
under-performing, non-core business units. The Company sold CPNet.com in May
2000, sold Pivot in July 2000, shut down and sold certain assets of
Consejero.com in August 2000, and shut down Greenmagazine.com in December 2000
(see Notes 5 and 6). These transactions yielded cash to the Company of
approximately $4,392,000 and reduced operating expenses. The Company has also
reduced employment levels of continuing operations and consolidated its physical
locations. In February 2002, the Company completed the early repayment of its
$4,350,000 convertible subordinated note payable, including accrued interest,
for $3,400,000 (see Note 12). Based on these actions and the Company's
current plan, the Company believes its existing capital resources will be
sufficient to satisfy its cash requirements into 2003. There are no assurances
that such actions will ensure cash sufficiency through 2003 or that reducing
marketing expenses would not potentially curtail revenue growth.

     The Company may consider additional options, which include, but are not
limited to, the following: forming strategic partnerships or alliances;
considering other strategic alternatives, including: a merger or sale of the
Company, or an acquisition; or raising new debt and/or equity capital. There can
be no assurance that the Company will be able to raise such funds or realize its
strategic alternatives on favorable terms or at all.

     Further, due to the legal matters discussed in Note 10, which the Company
intends to vigorously defend, management could be required to spend significant
amounts of time and resources defending these matters which could adversely
impact the cash position and operations of the Company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Change of Fiscal Year

     On April 12, 1999, the Company's Board of Directors approved changing the
Company's fiscal year-end from June 30 to December 31.

                                       36

<PAGE>

     Consolidation

     Through the quarter ended September 30, 2000, the consolidated financial
statements included the accounts of the Company and it's former wholly-owned
subsidiary, Professional Direct Agency, Inc. ("Pivot"). As more fully discussed
in Note 6, Pivot was sold during the quarter ended September 30, 2000. Pivot's
net assets and results of operations have been classified as discontinued
operations in the accompanying consolidated financial statements.

     Use of Estimates

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

     Cash and Cash Equivalents

     The Company considers all highly liquid investments purchased with an
original maturity of less than three months to be cash equivalents. The carrying
value of these investments approximates fair value.

     Fixed Assets

     Property and equipment are stated at cost less accumulated depreciation and
amortization, and are depreciated on a straight-line basis over the estimated
useful lives of the assets which range from three to seven years. Leasehold
improvements are amortized on a straight-line basis over the shorter of the
lease term or the estimated useful lives of the improvements. Equipment under
capital leases are stated at the present value of the future minimum lease
payments.

     Intangible Assets

     Intangible assets consisted primarily of trademarks. Trademarks are being
amortized over their estimated useful lives, which are approximately five years,
on a straight-line basis. The Company reviews it intangible assets for
impairment whenever events or changes in circumstances indicate the carrying
amount of the assets may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of the assets to
future undiscounted net cash flows expected to be generated by the assets. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.

     Basic and Diluted Net Loss Per Share

     The Company computes net loss per share in accordance with the provisions
of Statement of Financial Standards ("SFAS") No. 128, "Earnings per Share" and
Staff Accounting Bulletin No. 98 ("SAB 98"). Under SFAS No. 128 and SAB 98,
basic and diluted net loss per share is computed by dividing the net loss
available to common stockholders for the period by the weighted average number
of common shares outstanding for the period.

     The calculation of diluted net loss per share excludes common stock
equivalents, consisting of outstanding stock options, the 10% convertible
subordinated note payable, redeemable preferred stock and convertible preferred
stock as the effect of their conversion to common stock would be antidilutive.
Stock options outstanding that could potentially dilute basic earnings per share
in the future (but were not included in diluted earnings per share because their
effect on periods presented was antidilutive) totaled 710,981 at December 31,
2001. The antidilutive shares do not include the shares issuable on assumed
conversion of the 10% convertible subordinated note payable. On February 4,
2002, the Company granted stock options covering 1,176,624 shares of common
stock in connection with its stock option exchange program (see Note 4).

     Stock-Based Compensation

     The Company applies the intrinsic value-based method of accounting
prescribed by Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations including Financial
Accounting Standards Board ("FASB") Interpretation ("FIN") No. 44, "Accounting
for Certain Transactions involving Stock Compensation, an interpretation of APB
Opinion No. 25," issued in March 2000, to account for its fixed plan options.
Under this method,

                                       37

<PAGE>

compensation is recognized over the grant's vesting period only if the current
market price of the underlying stock on the date of grant exceeds the exercise
price. SFAS No. 123, "Accounting for Stock-Based Compensation," established
accounting and disclosure requirements using a fair value-based method of
accounting for stock-based employee compensation plans. As allowed by SFAS No.
123, the Company has elected to continue to apply the intrinsic value-based
method of accounting described above, and has adopted the disclosure
requirements of SFAS No. 123.

     Fair Value of Financial Instruments

     The Company does not currently use derivative financial instruments in the
normal course of its business. The carrying values of cash equivalents, accounts
receivable and accounts payable approximate fair value due to the short-term
maturities of these assets and liabilities. The Company does not have a readily
comparable fair value for its 10% convertible subordinated note payable. The
Company believes that its fair value would be less than its carrying value of
$4,350,000 as a result of the early repayment of the note. In February 2002,
the Company completed the early repayment of this note and accrued interest for
$3,400,000 (see Note 12).

     Income Taxes

     Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. A valuation allowance on deferred tax assets is established for
assets that management believes are more likely not to be realized.

     Revenue Recognition

     The Company generates revenue from two primary sources: online publishing
and print publishing and licensing.

Online publishing-

     The Company sells graphical advertisements on its Web site (including
co-branded sites) consisting of banner, badge, billboard, poster, island and
skyscraper advertisements. These advertisements are sold to advertisers
according to the cost per thousand impressions, or CPM, the advertiser receives.
The amount of advertising the Company sells is a function of (1) the number of
advertisements per Web page, (2) the number of visitors viewing its Web pages,
and (3) the capacity of the Company's sales force. Advertising sales are
invoiced monthly based on the number of advertisement impressions or the number
of times the advertisement is viewed by users of the Company's Web site. Revenue
is recognized monthly based on the percentage of actual impressions to the total
number of impressions contracted. Revenue for impressions invoiced but not
delivered is deferred and recognized when impressions are delivered.
Additionally, the Company generates revenue on a "per action" basis (i.e., a
purchase or completion of an application) when a visitor to its Web site
transacts with one of its advertisers after viewing an advertisement. Revenue is
recognized monthly based on the number of actions reported by the advertiser.
The Company is also involved in revenue sharing arrangements with its online
partners where the consumer uses co-branded sites principally hosted by the
Company. Revenue is effectively allocated to each partner based on the
percentage of advertisement views at each site. The allocated revenues are
shared according to distribution agreements. Revenue is recorded at gross
amounts and partnership payments are recorded in cost of revenue. The Company
also sells hyperlinks to various third-party Internet sites that generate a
fixed monthly fee, which is recognized in the month earned.

     Online publishing revenue includes barter revenue, which represents the
exchange by the Company of advertising space on the Company's Web site for
reciprocal advertising space on other Web sites. Barter revenues and expenses
are recorded at the fair market value of the advertisements delivered or
received, whichever is more determinable in the circumstances. In January 2000,
the Company adopted Emerging Issues Task Force ("EITF") 99-17, "Accounting for
Advertising Barter Transactions." In accordance with EITF 99-17, barter
transactions have been valued based on similar cash transactions that have
occurred within six months prior to the date of the barter transaction. Revenue
from barter transactions is recognized as income when advertisements are
delivered on the Company's Web site. Barter expense is recognized when the
Company's advertisements are run on the other companies' Web sites, which is
typically in the same period in which barter revenue is recognized. If the
advertising impressions are received from the customer prior to the Company
delivering its advertising impressions, a liability is recorded. If the Company
delivers its advertising impressions to the customer's Web site prior to
receiving the advertising

                                       38

<PAGE>

impressions, a prepaid expense is recorded. At December 31, 2001 and 2000, the
Company recorded prepaid expenses of approximately $8,000 and $200,000,
respectively, for barter advertising to be received. Barter revenue was
approximately $2,558,000 and $757,000, and represented approximately 14% and 5%
of total revenue, respectively, for the years ended December 31, 2001 and 2000.
No barter revenue was recorded in 1999.

Print publishing and licensing-

     The Company sells advertisements for consumer mortgage rate tables. The
rate tables and advertising are published in various newspapers under revenue
sharing arrangements. Revenue is recognized when the tables are run in the
respective newspaper. Revenue is recorded gross and revenue sharing payments are
recorded in cost of revenue.

     The Company also earns fees from distributing editorial rate tables that
are published in newspapers and magazines across the United States, from paid
subscriptions to three newsletters and from providing rate surveys to
institutions and government agencies. In addition, the Company licenses research
data under agreements that permit the use of Company developed rate information
to advertise the licensee's products in print, radio, television and Web site
promotions. Revenue for these products is recognized ratably over the
contract/subscription periods.

     Marketing Expenses

     Marketing includes advertising costs which are charged to expense as
incurred, and barter expense which represents the cost the Company's
advertisements that are run on other companies' Web sites in barter
transactions. Advertising costs were approximately $173,000, $3,317,000 and
$16,459,000, for the years ended December 31, 2001, 2000 and 1999, respectively.
Barter expense of approximately $2,750,000 and $557,000 was recorded for the
years ended December 31, 2001 and 2000, respectively. No barter expense was
recorded in 1999.

     Comprehensive Income

     No statements of comprehensive income (loss) have been included in the
accompanying consolidated financial statements since comprehensive income (loss)
and net loss presented in the accompanying consolidated statements of
operations, redeemable stock and stockholders' equity (deficit) and statements
of cash flows would be the same.

     Segment Reporting

     Effective January 1, 1998, the Company adopted SFAS No. 131, "Disclosures
About Segments of an Enterprise and Related Information". The Company currently
operates in two reportable business segments: online publishing, and print
publishing and licensing.

     Recent Accounting Pronouncements

     In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001 as well as all purchase method business combinations
completed after June 30, 2001. SFAS No. 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually. SFAS No. 141 is effective
immediately, except with regard to business combinations initiated prior to July
1, 2001 and SFAS No. 142 is effective January 1, 2002.

     Furthermore, any goodwill and intangible assets determined to have
indefinite useful lives that are acquired in a purchase business combination
completed after June 30, 2001 will not be amortized. Goodwill and intangible
assets acquired in business combinations completed before July 1, 2001 will
continue to be amortized until the adoption of SFAS No. 142. SFAS No. 141 will
require upon adoption of SFAS No.142 that goodwill acquired in a prior purchase
business combination be evaluated and any necessary reclassifications be made in
order to conform to the new criteria in SFAS No. 141 for recognition apart from
goodwill. Any impairment loss will be measured as of the date of the adoption
and recognized as a cumulative effect of a change in accounting principles in
the first interim period. The adoption of SFAS No. 142 at January 1, 2002 did
not result in any impairment adjustment.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which addresses financial accounting and reporting for
legal obligations associated with the retirement of tangible long-lived assets
and the associated asset

                                       39

<PAGE>

retirement costs. SFAS No. 143 is effective for fiscal years beginning after
June 15, 2002 and is not expected to have a material impact on the Company's
consolidated financial statements.

     In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Long-Lived Assets," which supercedes SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of," and the accounting and reporting provisions of APB Opinion No. 30,
"Reporting the Results of Operation - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," for the disposal of a segment of a business. While
SFAS No. 144 retains many of the fundamental provisions of SFAS No. 121, it
establishes a single accounting model for long-lived assets to be disposed of by
sale, and resolves certain implementation issues not previously addressed by
SFAS No. 121. SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001 and when adopted on January 1, 2002 did not have a material
impact on the Company's consolidated financial statements.

     Reclassification

     Certain amounts reported in prior periods have been reclassified to conform
with the current presentation.

NOTE 3 - CAPITALIZATION

     Initial Public Offering

     On May 13, 1999, the Company completed an initial public offering ("IPO")
of 3,500,000 shares of the Company's common stock resulting in net proceeds of
approximately $41.3 million. Upon closing of the IPO, both classes of
outstanding redeemable convertible preferred stock converted to common stock at
50 shares of common stock for each share of redeemable convertible preferred
stock. Additionally, upon the effective date of the IPO, the Company's articles
of incorporation were further amended and restated to among other matters,
designate 10 million shares of preferred stock with respect to which the Board
will have the authority to designate rights and privileges.

     The redemption clause of the Series A and Series B Preferred Stock allows
the holders of 20% or more of the aggregate number of shares of common stock
issuable upon conversion of the Series A and Series B Preferred then outstanding
to redeem their shares on or after January 2, 2003, provided that the maximum
number of shares of Series A and Series B Preferred which the Company is
obligated to redeem does not exceed the aggregate of 35,729 shares prior to
January 3, 2004 and 71,458 shares prior to January 3, 2005, and thereafter the
Company is obligated to redeem all such shares outstanding as to which such
right has been exercised. The redemption price is equal to the greatest of (as
defined in the respective agreement) (x) the Series A liquidation preference or
Series B liquidation preference, applicable to such shares or (y) the fair
market value of such shares or (z) an amount per share of Series A or Series B
Preferred equal to ten (10) times the net after tax earnings per share for the
most recently completed fiscal year of the Company times the number of shares of
common stock issuable upon the conversion of one (1) share of Series A or Series
B Preferred and the conversion price then in effect. The Company recorded
accretion on the Series A and Series B Preferred Stock equal to the difference
between the net proceeds received and the redemption amount of approximately
$14,500,000 based on the estimated fair value at December 31, 1998 using the
interest method from the conversion date for the Series A Preferred and original
issue date for the Series B Preferred through the final redemption date of
January 3, 2005. Accretion recorded during the year ended December 31, 1999
amounted to $2,281,000.

     Upon closing of the IPO, both classes of outstanding redeemable convertible
preferred stock converted to 5,359,350 shares of common stock at 50 shares of
common stock for each share of redeemable convertible preferred stock.

     Loan From Stockholder

     On March 9, 1999, one of the Series B convertible preferred stockholders
loaned the Company $1,000,000 bearing interest at 8%, due April 9, 1999. If
unpaid on the due date, the note was to convert into fully paid Series B
convertible preferred stock at a conversion price of $2.97 per share. On April
9, 1999, the principal amount of the loan plus accrued interest was converted
into 6,784 shares of Series B convertible preferred stock. The Company recorded
a finance charge of $2,656,000 representing the difference between the estimated
fair market value of the common stock (as if the 6,784 shares were converted) at
date of issuance and the $2.97 conversion price. Upon closing of the IPO, the
preferred stock was converted into 339,200 shares of common stock at 50 shares
of common stock for each share of convertible preferred stock.

                                       40

<PAGE>

     Restricted Stock Grants

     In August 1998, the Company entered into a Restricted Stock Grant Agreement
(the "Stock Agreement") with an employee of the Company (the "Grantee") that
provided for the issuance of restricted stock to the Grantee in accordance with
the 1997 Equity Compensation Plan (see Note 4) in satisfaction of certain
obligations as described in an employment agreement between the Company and the
Grantee. The Company issued 207,000 shares of its common stock to the Grantee in
August 1998, subject to restrictions set forth in the Stock Agreement.
Restrictions lapsed on 138,000 shares during 1998 and the remainder lapsed in
1999. Total compensation expense recognized by the Company over the vesting
period was $269,000 (based on estimated values from other transactions involving
sales of the Company's stock) of which $60,000 was recognized in the year ended
December 31, 1999.

     In March 1998, the Company entered into a Restricted Stock Grant Agreement
(the "Grant Agreement") with an officer of the Company (the "Officer") that
provided for the issuance of restricted stock to the Officer in accordance with
the 1997 Equity Compensation Plan (see Note 4). On March 23, 1998, the Company
issued 454,170 shares of its common stock to the Officer for an aggregate
consideration of $236,168, which was paid by an interest-bearing promissory note
from the Officer. The Officer had a put right which required the Company to
repurchase the shares at the same price the Officer paid for the shares
including interest. Restriction lapsed as follows: 113,540 shares on July 1,
1998, and 9,460 shares on the first day of each month starting August 1, 1998
and ending July 1, 2001. In accordance with EITF 95-16, this arrangement was
accounted for as a variable plan which requires increases or decreases in stock
based compensation expense based on increases or decreases in the fair market
value of the Company's common stock. Compensation expense recognized in
accordance with FIN No. 28 was approximately $2,113,000 for the year ended
December 31, 1999 based on estimated values from other transactions involving
sales of the Company's stock.

     On March 10, 1999 the note receivable for the restricted stock grant to the
Officer was forgiven, the unvested shares (264,932) were effectively forfeited,
the Officer's put right was cancelled, and certain other changes were made.
Accordingly, "fixed" option accounting treatment was established on this date.

NOTE 4 - STOCK OPTION PLANS

     1997 Equity Compensation Plan

     During 1997, the Company adopted the 1997 Equity Compensation Plan (the
"Plan") to provide directors, officers, non-employee members of the Board of
Directors of the Company and certain consultants and advisors with the
opportunity to receive grants of incentive stock options, non-qualified stock
options and restricted stock. The Board of Directors has the sole authority to
determine who receives such grants, the type, size and timing of such grants,
and specify the terms of any non-competition or other agreements relating to the
grants. The aggregate number of common shares that may be issued under the Plan
was 900,000. In January 1999, the Company amended the Plan to increase the
number of shares authorized to 1,500,000 shares. As of December 31, 2001,
1,319,243 shares were available for grant under the Plan.

     The exercise price of any option grant shall be determined by the Board of
Directors and may be equal to, greater than, or less than the fair market value
of the stock on the grant date. Provided, however, that the exercise price shall
be equal to or greater than the fair market value of the stock on the date of
grant and an option may not be granted to an employee who at the time of the
grant owns more than 10 % of the total combined voting power of all classes of
stock of the Company, unless the exercise price is not less than 110 % of the
fair market value of the stock on the date of the grant. Options granted
generally vest over four years, 25% after the first year and monthly thereafter
over the remaining three years, and expire ten years after the date of grant.

     On March 2 and March 12, 1999, the Company granted 201,720 and 5,000
options, respectively, under the Plan to purchase common stock at $2.97 per
share. The options vest over a 48-month period and, accordingly, the Company
initially began recognizing compensation expense of approximately $1,620,000
ratably over the vesting period. As of December 31, 2001, 8,750 options remained
outstanding due to options forfeited by terminated grantees, and options
surrendered in connection with the Company's stock option exchange program
described below.

     On April 12, 1999, the Board approved grants under the Plan for outside
directors of the Company. Under these grants, 80,000 options were granted on May
13, 1999 to purchase common stock at $13.00 per share. The options vest over 48
months and expire 10 years from date of grant, unless prohibited by the 1997
Plan. No options were granted to outside directors during 2001 or 2000.

                                       41

<PAGE>

     No stock options were granted under the Plan during the year ended December
31, 2001.

     1999 Equity Compensation Plan

     In March 1999, the Company's stockholders approved the 1999 Equity
Compensation Plan (the "1999 Plan"), to provide designated employees of the
Company, certain consultants and non-employee members of the Board of Directors
with the opportunity to receive grants of incentive stock options, nonqualified
stock options and restricted stock. The 1999 Plan was originally authorized to
grant options for up to 1,500,000 shares. In April 2000, the Company amended the
1999 Plan to increase the number of shares authorized to 3,500,000 which was
approved by the Company's stockholders. Options granted generally vest over four
years, 25% after the first year and monthly thereafter over the remaining three
years, and expire ten years after the date of grant. As of December 31, 2001,
2,969,776 shares were available for grant under the 1999 Plan.

     In March 1999, the Company granted 358,500 options to an officer (the
"Officer") of the Company to purchase shares of common stock at $2.97 which vest
over a 36 month period. The Company began recognizing compensation expense of
approximately $2,807,000 ratably over the vesting period. In February 2000, the
Officer resigned from his position with the Company (see Note 10). Under the
terms of an agreement entered into in March 1999, the Officer continued to vest
in the stock options through November 15, 2000 for a total of 199,167 shares
which resulted in a non-cash charge of approximately $860,000 recorded in 2000.

     During the year ended December 31, 2000, the Company granted 809,463 stock
options to certain key executives and directors (see Note 10). No stock options
were granted under the 1999 Plan during the year ended December 31, 2001.

     Stock Option Exchange Program

     On July 3, 2001, the Company implemented a stock option exchange program in
which employees were offered the opportunity to surrender stock options
previously granted to them in exchange for new options to purchase an equal
number of shares. Options to purchase 1,180,002 shares were surrendered under
this program. The new options were granted on February 4, 2002, six months and
one day after the date of cancellation. The exercise price of the new options
was the closing market price of the Company's common stock on the date of grant.
The exchange program was designed to comply with FIN No. 44 and did not result
in any additional compensation charges or variable plan accounting. As a result
of this program, the Company recorded a non-cash compensation charge of
approximately $481,000 for the unrecognized compensation expense of certain
options surrendered under the option exchange program, and reclassified
approximately $2,452,000 from accrued stock compensation expense to additional
paid in capital in the quarter ended September 30, 2001.

     Pro Forma Disclosures Under SFAS No. 123

     The per share weighted average fair value of stock options granted during
the years ended December 31, 2000 and 1999 was between $0.74 and $3.17 and $9.70
and $13.00, respectively, on the date of grant using the Black Scholes option
pricing model. No options were granted during the year ended December 31, 2001.
The following weighted average assumptions were used: expected volatility of 75%
in 2000 and 100% in 1999; expected dividend yield of 0% for all periods
presented; risk-free interest rates of 6% for the year ended December 31, 2000
and 6.50% for the year ended December 31, 1999; and expected lives of 5 years
for all periods presented.

     The Company applies APB Opinion No. 25 in accounting for its Plan. Had the
Company determined compensation cost based on the fair value at the grant date
for its stock options under SFAS No. 123, the net losses would have increased to
the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                                          2001            2000            1999
                                                      -----------     ------------    ------------
<S>                                                    <C>            <C>             <C>
Net loss applicable to common stock:
  As reported                                         $  (935,776)    $(16,920,560)   $(33,769,330)
  Pro forma net income (loss)                          (3,312,344)     (17,211,829)    (32,981,209)
  Basic net loss per common share as reported               (0.07)           (1.22)          (3.34)
  Basic net income (loss) per common share pro forma        (0.24)           (1.24)          (3.26)
</TABLE>


                                       42

<PAGE>

     Stock option activity during the years ended December 31, 2001, 2000 and
     1999 was as follows:

                                Number of       Price Per       Weighted Average
                                 Shares           Share          Exercise Price
                               ----------    ---------------    ----------------
Balance, December 31, 1998        192,280    $          1.30         $1.30
  Granted                       1,725,036      1.30 to 13.00          7.01
  Exercised                            --                 --            --
  Forfeited                       (28,958)     1.30 to 13.00          6.63
  Expired                              --                 --            --
                               ----------
Balance, December 31, 1999      1,888,358      1.30 to 13.00          6.43
  Granted                       1,610,504      1.00 to 5.375          2.90
  Exercised                       (24,463)              1.30          1.30
  Forfeited                    (1,383,333)     1.00 to 13.00          6.28
  Expired                              --                 --            --
                               ----------
Balance, December 31, 2000      2,091,066      1.00 to 13.00         $4.03
  Granted                              --                 --            --
  Exercised                            --                 --            --
  Forfeited                      (200,083)     1.75 to 13.00          5.03
  Cancelled                    (1,180,002)     1.75 to 13.00          2.87
  Expired                              --                 --            --
                               ----------
Balance, December 31, 2001        710,981    $1.30 to $13.00         $3.96
                               ==========

    Additional information with respect to outstanding options as of
    December 31, 2001 was as follows:

                            Options Outstanding             Options Exercisable
                   ------------------------------------     --------------------
                                    Weighted Average                     Average
                     Number           Remaining               Number    Exercise
    Prices         of Shares   Contractual Life (Years)     of Shares     Price
    ------         ---------   ------------------------     ---------   --------
$1.30 to $1.31      144,350              7.95                138,266     $ 1.31
          1.75       43,515              8.45                 16,420       1.75
 1.84 to  3.81      356,690              7.63                341,280       3.12
          4.50       83,526              8.26                 83,190       4.50
 4.88 to  8.13        1,675              7.67                    936       6.52
         13.00       81,225              7.36                 52,458      13.00
                    -------                                  -------
                    710,981              7.79                632,550     $ 3.69
                    =======                                  =======

                                       43

<PAGE>

NOTE 5 - RESTRUCTURING AND IMPAIRMENT CHARGES

     In the quarter ended June 30, 2000, the Company recorded a restructuring
charge of approximately $1,298,000 as a result of implementing certain strategic
reorganization initiatives. Approximately $364,000 of this charge pertained to
severance, legal and other employee related costs incurred in connection with a
reduction of approximately 10% of the workforce in ongoing operations and the
elimination of positions in under-performing, non-core business units, all of
which was paid in 2000. The remaining $934,000 of this charge relates to the
write-off of certain assets, primarily software, licenses and other installation
costs, of an abandoned systems installation.

     In the quarter ended September 30, 2000, the Company recorded restructuring
and impairment charges of approximately $843,000 as a result of strategic
reorganization initiatives. Approximately $88,000 of this charge pertained to
severance, legal and other employee related costs incurred in connection with a
further reduction of the workforce, all of which was paid in 2000. Approximately
$279,000 relates to the shut down and sale of assets of Consejero.com (see
discussion below) and other non-core assets. The remaining $476,000 relates to
the write-off of GreenMagazine.com goodwill (see discussion below).

     On August 27, 1999, the Company acquired certain assets and assumed certain
liabilities of Green Magazine, Inc. ("Green") pursuant to an Asset Purchase
Agreement, dated August 27, 1999, by and among the Company, Green, Kenneth A.
Kurson, John F. Packel and James Michaels (the "Agreement"), for approximately
$831,000 including acquisition costs. Pursuant to the Agreement, the Company
acquired the rights to all agreements, contracts, commitments, licenses,
copyrights, trademarks and the subscriber/customer list of Green. Kenneth A.
Kurson and John F. Packel were also employed by the Company. The total
consideration paid was approximately $784,000 consisting of $200,000 in cash and
100,000 unregistered shares of the Company's common stock valued at
approximately $584,000. The transaction was accounted for using the purchase
method of accounting. The net assets acquired were estimated to be at fair
market value. The excess of the purchase price over the fair value of the net
assets acquired (approximately $883,000) was recorded as goodwill and was being
amortized over three years, the expected benefit period.

     During the quarter ended September 30, 2000, a decision was made to stop
publishing the print version of Green Magazine. Additionally, due to lower than
expected traffic levels visiting GreenMagazine.com and continued negative
operational cash flows, a revised operating plan was developed and
GreenMagazine.com was incorporated into a channel of Bankrate.com. After
evaluating the recoverability of the intangible asset, the Company recorded an
impairment charge of approximately $476,000 to write the goodwill down to
estimated fair value. In December 2000, GreenMagazine.com was shut down and the
remaining goodwill of approximately $73,000 was written off. During the years
ended December 31, 2000 and 1999, GreenMagazine.com had total revenue and total
expenses of approximately $104,000 and $1,774,000, and $1,600 and $263,000,
respectively.

     On August 31, 2000, the Company shut down the operations of Consejero.com
and sold certain of its assets including fixed assets, software licenses and
other intangible assets, to Consejero Holdings, LLC for $41,800 in cash
resulting in a loss of approximately $86,000. Additionally, the Company recorded
approximately $193,000 in charges for severance and other related shut down
costs, all of which was paid in 2000. During the years ended December 31, 2000
and 1999, Consejero.com had total revenue and total expenses of approximately
$16,000 and $811,000, and $8,000 and $2,218,000, respectively.

     As more fully described in Note 6 below, in December 2000, the Company
wrote off approximately $71,000 of impaired assets related to the sale of
CPNet.com.

NOTE 6 - DIVESTITURES

     CPNet.com

     In January 1999, the Company acquired all of the assets of The College
Press Network ("CPNet.com"), excluding cash and real or personal property
leases, for $25,000 in cash and stock options. An additional payment of $25,000
was made to the sellers in January 2000. The transaction was accounted for using
the purchase method of accounting. The net assets acquired were estimated to be
at fair market value. The excess of the purchase price over the fair value of
the net assets acquired (approximately $50,000) was recorded as goodwill and was
being amortized over 5 years, the expected benefit period. The sellers were
employed by the Company and were granted 30,000 options under the 1997 Equity
Compensation Plan with an exercise price of $1.30 which vest over a 48-month
period. Approximately $45,000 of compensation expense was amortized over the
vesting period. CPNet.com's historical statements of operations were not
material to the Company.

                                       44

<PAGE>

     On May 17, 2000, the Company sold the assets of CPNet.com to Colleges.com,
Inc. for 190,000 shares of Colleges.com, Inc. common stock of which 125,041
shares were delivered at the time of closing and 64,959 contingent shares. The
Company originally recorded such shares at the net book value of the CPNet.com
assets which, at the time of the sale, was approximately $71,000. During the
quarter ended December 31, 2000, the Company charged this amount to
restructuring and impairment charges after determining impairment based on the
fact that Colleges.com is an early stage company subject to significant risk due
to their limited operating history and volatile industry-based economic
conditions.

     During the years ended December 31, 2000 and 1999, CPNet.com had total
revenue and total expenses of approximately $18,000 and $386,000, and $50,000
and $577,000, respectively.

     Professional Direct Agency, Inc. ("Pivot")

     On August 20, 1999, the Company acquired Pivot pursuant to a Stock Purchase
Agreement, dated August 20, 1999, by and between the Company, the shareholders
of Pivot and The Midland Life Insurance Company ("Midland"), a note and warrant
holder of Pivot (the "Agreement"), for approximately $4,744,000 including
acquisition costs. Pursuant to the Agreement, the Company acquired a 100%
interest in Pivot and as a result of the acquisition, Pivot became a wholly
owned subsidiary. The transaction was accounted for using the purchase method of
accounting. The net assets acquired were estimated to be at fair market value.
The excess of the purchase price over the fair value of the net assets acquired
(approximately $4,609,000) was recorded as goodwill and was amortized over three
years, the expected benefit period.

     The total consideration paid in connection with the acquisition consisted
of $290,000 in cash paid to the Pivot shareholders and a $4,350,000 five-year
convertible subordinated note to Midland. The note bears interest at 10% and is
due in one payment on August 20, 2004. Interest is due beginning on August 20,
2002 and thereafter every six months until conversion or payment in full. The
note is convertible at any time by Midland into 625,000 shares of our common
stock. The Company has the right to require conversion beginning any time after
the earlier of (1) August 20, 2000 or (2) the date that the Company files a
registration statement under the Securities Act of 1933, as amended (the "Act"),
registering the conversion shares for sale under the Act; provided that, within
the 55-day period immediately prior to the date the Company notifies Midland of
the required conversion, the closing price of our common stock has been at least
$10.00 per share for at least twenty consecutive trading days. The note was paid
in full on February 22, 2002 (see Note 12).

     On July 14, 2000, the Company sold Pivot for $4,350,000 in cash. In
connection with the sale, the Company agreed to indemnify the buyer for
liability of up to $1,000,000 in connection with a litigation matter between
Pivot and its co-founders and Midland. In March 2001, the case was dismissed
based on a technical deficiency. Management has excluded any costs contingent on
the outcome of this litigation from the calculation of the gain on sale. Pivot's
results of operations have been classified as discontinued operations in the
accompanying consolidated statements of operations. The Company recorded a gain
on the sale of $871,212 in the quarter ended September 30, 2000. The Company
remained liable on the convertible subordinated note issued in connection with
the Pivot acquisition (see Note 12).

     Summary operating results of discontinued operations were as follows:

                                                      Year Ended December 31,
                                                     2000               1999
                                                  -----------       -----------
Revenue                                           $   384,278       $   147,827
Marketing expenses                                   (320,880)         (619,560)
General and administrative expenses                (2,321,699)       (1,046,709)
Depreciation and amortization                        (128,031)         (151,914)
Goodwill amortization                                (832,182)         (469,436)
                                                  -----------       -----------
Operating loss                                     (3,218,514)       (2,139,792)
Interest income                                         3,937             4,095
                                                  -----------       -----------
Loss from discontinued operations                 $(3,214,577)      $(2,135,697)
                                                  ===========       ===========

                                       45

<PAGE>

NOTE 7 - FINANCIAL STATEMENT DETAILS

                       Furniture, Fixtures and Equipment-

Furniture, fixtures and equipment consisted of the following:

                                                             December 31,
                                                          2001          2000
                                                      -----------   -----------
Furniture and fixtures                                $   356,822   $   349,360
Computers and software, including assets under
  capital leases of $694,721 at December 31, 2001
  and 2000, respectively                                2,647,995     2,621,339
Equipment, including assets under capital lease
  of $17,950 at December 31, 2001
  and 2000, respectively                                  133,938       140,813
Leasehold improvements                                    160,701       160,701
Land                                                       63,354        63,354
                                                      -----------   -----------
                                                        3,362,810     3,335,567
Less accumulated depreciation and amortization,
  including amounts related to assets under capital
  leases of $664,436 and $465,001 at December 31,
  2001 and 2000, respectively                          (2,286,302)   (1,605,112)
                                                      -----------   -----------
                                                      $ 1,076,508   $ 1,730,455
                                                      ===========   ===========

Depreciation expense was $673,894, $811,497 and $474,423 for the years ended
December 31, 2001, 2000 and 1999, respectively.

                 Intangible Assets-

Intangible assets consisted of the following:                December 31,
                                                         2001            2000
                                                      ---------       ---------
Trademarks and URL's                                  $ 136,811       $ 129,011
Other                                                   151,362         151,362
                                                      ---------       ---------
                                                        288,173         280,373
Less accumulated amortization                          (218,551)       (191,948)
                                                      ---------       ---------
                                                      $  69,622       $  88,425
                                                      =========       =========

Amortization expense was $26,603, $264,558 and $155,239 for the years ended
December 31, 2001, 2000 and 1999, respectively.

                 Other Assets-

Other assets consisted of the following:                     December 31,
                                                         2001            2000
                                                       --------        --------
Restricted cash                                        $     --        $ 15,239
Computers and software deposits                          64,373          55,583
Other deposits                                           70,087          62,987
                                                       --------        --------
                                                       $134,460        $133,809
                                                       ========        ========

                 Other Accrued Expenses-

Other accrued expenses consisted of the following:            December 31,
                                                         2001           2000
                                                      ----------     ----------
Accrued payroll and related benefits                  $  326,032     $  379,389
Vacation                                                 207,395        146,275
Sales commissions                                        500,498        306,470
Marketing                                                161,611        334,807
Partner payments                                          90,447        136,613
Professional fees                                        148,919        234,032
Legal and other                                          436,590        478,650
                                                      ----------     ----------
                                                      $1,871,492     $2,016,236
                                                      ==========     ==========

                                       46

<PAGE>

NOTE 8 - INCOME TAXES

     The Company did not record any income tax expense or benefit for the years
ended December 31, 2001, 2000 and 1999 due to the losses incurred.

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities consisted of the following:

<TABLE>
<CAPTION>
                                                 Year Ended December 31,
                                            2001           2000           1999
                                        ------------   ------------   ------------
<S>                                     <C>            <C>            <C>
Deferred tax assets:
Net operating loss carryforwards        $ 18,553,782   $ 16,666,480   $ 12,276,287
Intangible assets and other                  193,479        249,942        253,712
Allowance for doubtful accounts               55,677         75,260         88,431
Deferred compensation                             --        906,116        436,248
                                        ------------   ------------   ------------
      Total gross deferred tax assets     18,802,938     17,897,798     13,054,678
Less valuation allowance                 (18,703,924)   (17,833,626)   (12,984,981)
                                        ------------   ------------   ------------
      Net deferred tax assets                 99,014         64,172         69,697
Deferred Tax Liabilities:
Depreciation                                 (99,014)       (64,172)       (69,697)
                                        ------------   ------------   ------------
                                        $         --   $         --   $         --
                                        ============   ============   ============
</TABLE>

     The valuation allowance for deferred tax assets as of December 31, 2001 and
2000 was $18,703,924 and $17,833,626, respectively. The net change in the total
valuation allowance for the years ended December 31, 2001 and 1999 was an
increase of $870,298 and $4,848,645, respectively. In assessing the
realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization is dependent upon the generation of future
taxable income during the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of deferred income tax
liabilities, projected future taxable income and tax planning strategies in
making this assessment.

     An increase in the gross deferred tax assets and the related valuation
allowance was generated by net operating losses which are not currently useable.
This increase generates the principal differences between the expected amounts
of tax benefits computed by applying the statutory Federal income tax rate to
the Company's loss before income taxes for the years ended December 31, 2001,
2000 and 1999. The Company recorded no tax benefit for these periods.

     At December 31, 2001, the Company had net operating loss carryforwards of
approximately $47,991,000 which expire beginning in 2012 through 2021. The
amount of net operating loss carryforwards may be limited if the Company has an
ownership change.

NOTE 9 - RELATED PARTY TRANSACTIONS

     The Company leases office space in North Palm Beach, Florida from Bombay
Holdings, Inc. ("Bombay"), which is wholly owned by Peter C. Morse ("Morse"), a
director and 40% stockholder. Total rent paid to Bombay for the years ended
December 31, 2001, 2000 and 1999 was approximately $298,000, $287,000 and
$266,000, respectively.

     During 2001 and 2000, the Company paid an outside director consulting fees
of $40,000 and $12,000, respectively.

                                       47

<PAGE>

NOTE 10 - COMMITMENTS AND CONTINGENCIES

     Leases

     Bombay is wholly owned by Morse. The Company leases office space in North
Palm Beach, Florida from Bombay on a month-to-month basis under the terms of
lease agreements dated May 1, 1994, as amended July 28, 1998, and January 31,
1999. The lease requires the Company to pay a percentage of the common
maintenance charges and lease payments are subject to an annual increase based
on the consumer price index of the Fort Lauderdale/Miami region.

     The Company leases office space in New York City under the terms of a lease
entered into on October 7, 1999 expiring September 30, 2006. Facilities leased
in Los Angeles, California are on a month-to-month basis.

     Total rent expense for the years ended December 31, 2001, 2000 and 1999
amounted to approximately $481,000, $563,000 and $486,000, respectively. During
2001 the Company also recorded sublease rental income of approximately $67,000
under the terms of a sublease agreement that expires on February 14, 2002.

     Future minimum lease payments under non-cancelable operating leases and
future minimum capital lease payments as of December 31, 2001 were:

                                                         Operating      Capital
                                                          Leases         Leases
                                                         ---------      --------
Year Ending December 31,
------------------------
        2002                                              $160,163      $37,959
        2003                                               165,740        3,314
        2004                                               171,541           --
        2005                                               177,545           --
        2006                                               136,624           --
                                                          --------      -------
Total minimum lease payments                              $811,613       41,273
                                                          ========
Less amount representing interest at rates ranging
  from 3.94% to 23.23%                                                   (1,603)
                                                                        -------
Present value of net minimum capital lease payments                      39,670
Less current installments                                               (36,406)
                                                                        -------
Obligations under capital leases, excluding current
  installments, included in other liabilities                           $ 3,264
                                                                        =======

                                       48

<PAGE>

     Distribution Agreements

     The Company has various agreements with advertisers, content providers and
other Web sites that require it to feature such parties exclusively in certain
sections of its Web site.

     Legal Proceedings

     In September 1999, the Company entered into a lease agreement for a new
office facility to be constructed in northern Palm Beach County, Florida. The
Company provided to the developer a $300,000 letter of credit as a security
deposit in cash. The lease provides an initial lease term of ten years
commencing from the date of occupancy and includes two five-year renewal
options. The annual base rent during the initial term ranges from $660,000 in
the first two years to $760,000 in the final two years. The lease contemplated
that occupancy would commence on September 15, 2000. In connection with the
lease agreement, the Company also entered into an agreement with the developer
to purchase an adjoining tract of land for $609,000. The Company paid a deposit
of $60,000 to close the transaction no later than June 30, 2000, which is being
held in escrow. Subsequent to a dispute with the developer with respect to the
lease agreement and the agreement to purchase the adjacent tract, on August 3,
2000, the developer made demand on the bank that issued the letter of credit and
the bank paid the developer the full $300,000 under the letter of credit. On
August 14, 2000, the developer filed claims against the Company in Palm Beach
County, Florida Circuit Court, alleging breach of contract under the lease
agreement and the agreement to purchase the adjacent tract, and seeks damages in
excess of $500,000 plus attorneys' fees and costs. The Company has filed
counterclaims and intends to vigorously defend against both of these matters.
While acknowledging the uncertainties of litigation, the Company believes that
these matters will be resolved without a material adverse impact on the
Company's financial position, results of operations or liquidity.

     On March 28, 2000, a purported class-action lawsuit was filed against the
Company and others in the United States District Court for the Southern District
of New York. The suit alleges that the Company violated federal securities laws
by, among other things, selling securities pursuant to a defective registration
statement, and misrepresenting and/or omitting material information concerning
the Company's financial results for the quarter ended March 31, 1999, and other
financial information, in the Company's registration statement filed with the
Securities and Exchange Commission in connection with the Company's initial
public offering. The action, which seeks an unspecified amount of money damages,
was filed purportedly on behalf of all stockholders who purchased shares of the
Company's common stock during the period from May 13, 1999, through March 27,
2000. The Company filed a motion to dismiss this complaint and, on March 28,
2001, the suit was dismissed with prejudice. On April 25, 2001, plaintiffs
appealed the decision to dismiss the suit to the United States Court of Appeals
for the Second Circuit. The appeal has been argued but a final decision has yet
to be made. The Company intends to vigorously defend against the lawsuit. In the
opinion of management, the ultimate disposition of this matter will not have a
material adverse effect on the Company's financial position, results of
operations or liquidity. Damages, if any, would be substantially covered by
insurance.

     In July 2000, the Company sold its former wholly owned subsidiary, Pivot,
for $4,350,000 in cash. In connection with the sale, the Company agreed to
indemnify the buyer for liability of up to $1,000,000 in connection with a
litigation matter between Pivot and its co-founders and former owner. In March
2001, the case was dismissed based on a technical deficiency. In August 2001,
the plaintiff re-filed the complaint. At December 31, 2001, the outcome of this
matter was uncertain. The Company cannot estimate at this time, the amount of
loss, if any, that could result from an adverse resolution of this litigation.

     Other Commitments

     On February 25, 2000, the Company announced that William P. Anderson
resigned as its President and Chief Executive Officer and as a director. Under
the terms of his Executive Employment Agreement entered into on March 10, 1999,
Mr. Anderson received cash compensation totaling approximately $150,000 and
continued to vest in his stock options through November 15, 2000, which resulted
in a noncash charge of approximately $860,000. Both the cash charge ($150,000)
and the noncash charge ($860,000) were recorded in the quarter ended March 31,
2000.

     On April 5, 2000, Jeffrey M. Cunningham was appointed to the Company's
Board of Directors as non-executive chairman. In accordance with the terms of a
Stock Purchase Plan and Subscription Agreement (the "Purchase Agreement")
entered into on that date, Mr. Cunningham purchased 431,499 shares of the
Company's common stock for $997,840 in cash (or $2.313 per share). The purchase
price of the shares is equal to the closing price per share of the Company's
common stock on April 5, 2000, as reported by the Nasdaq National Market. In
addition, on April 5, 2000, Mr. Cunningham was granted stock options under the
1999 Equity Compensation Plan to purchase 141,905 shares of common stock at
$4.50 per share and 125,622 shares at $3.75 per share. One-half of the options
vest and become exercisable on March 31, 2001, and the balance vest and

                                       49

<PAGE>

become exercisable in equal monthly installments commencing on April 30, 2001
and concluding on March 31, 2002. Mr. Cunningham resigned from the Board on June
19, 2001. The Company recognized compensation expense of approximately $108,000
for the nine months ended September 30, 2001. No further compensation expense
related to these options was recognized after September 30, 2001.

     On April 27, 2000, Elisabeth DeMarse was elected to the Company's Board of
Directors as well as elected President and Chief Executive Officer of the
Company. Ms. DeMarse entered into an employment agreement with the Company on
that date. Pursuant to the terms of her employment agreement, Ms. DeMarse is
entitled to receive an annual base salary of $300,000 and a bonus of $100,000
payable in quarterly installments. The Company has agreed to provide other
benefits, including $500,000 in term life insurance and participation in the
Company's benefit plans available to other executive officers. Under the terms
of the employment agreement, Ms. DeMarse agrees to assign to the Company all of
her copyrights, trade secrets and patent rights that relate to the business of
the Company. Additionally, during the term of her employment and for a period of
one year thereafter, Ms. DeMarse agrees not to compete with the Company and not
to recruit any of the Company's employees, unless the Company terminates her
without cause or she resigns for good reason (as defined in the agreement). Upon
Ms. DeMarse's termination of employment for certain reasons (i.e., without
cause, disability, resignation for good reason, or a change of control), the
Company agrees to pay her severance equal to 12 months' base salary, as well as
reimburse her for health, dental and life insurance coverage premiums for one
year after such termination. The agreement terminates on April 27, 2002, unless
extended by the parties. The Company has proposed terms of a new employment
arrangement with Ms. DeMarse and intends to negotiate such an arrangement based
on that proposal. However, we can provide no assurance that we will be
successful in doing so. Ms. DeMarse was previously granted options to purchase
541,936 shares of the Company's common stock under the Company's 1999 Equity
Compensation Plan at $2.688 per share, the fair market value on the date of
grant. The options vest over a 24-month period. Twenty five percent of the
options vested six months from the date of grant. The remaining options vest in
equal monthly installments over the following 18 months through the second
anniversary of the date of grant. Ms. DeMarse surrendered all of these options
and was granted options to purchase 541,936 shares at $0.85, the fair market
value on February 4, 2002, the date of grant, in connection with the Company's
stock option exchange program (see Note 5).

NOTE 11 - SEGMENT INFORMATION

     The Company changed the reporting of its business segments as of July 1,
2000, and restated its prior periods to conform to this revised segment
reporting. The Company formerly reported operating in three business divisions
consisting of six reportable segments. The three business divisions consisted of
online publishing, print publishing and licensing and insurance sales. The
online publishing division is primarily engaged in the sale of advertising,
sponsorships and hyperlinks in connection with the Company's Internet site
Bankrate.com, and its former separate sites theWhiz.com, IntelligentTaxes.com,
GreenMagazine.com, Consejero.com and CPNet.com. Bankrate.com, theWhiz.com,
Consejero.com and Greenmagazine.com constituted segments within this division.
CPNet.com was sold on May 17, 2000 and Consejero.com was shut down on August 31,
2000, while theWhiz.com and IntelligentTaxes.com were incorporated into channels
of Bankrate.com. GreenMagazine.com was shut down in December 2000. The former
insurance division, which was sold on July 14, 2000, constituted a segment and
operated through Pivot, a virtual insurance agency and fulfillment/call center
specializing in direct insurance sales on the Internet and through other direct
media.

     The Company currently operates in two reportable business segments: online
publishing, and print publishing and licensing. The online publishing division
is primarily engaged in the sale of advertising, sponsorships, and hyperlinks in
connection with the Company's Internet site, Bankrate.com. The print publishing
and licensing division and segment is primarily engaged in the sale of
advertising in the Consumer Mortgage Guide rate tables, newsletter
subscriptions, and licensing of research information. The Company evaluates the
performance of its operating segments based on segment profit (loss).

     Although no one customer accounted for greater than 10% of total revenues
for the years ended December 31, 2001, 2000 and 1999, the five largest customers
accounted for approximately 19%, 21%, 14%, respectively, of total revenue for
those periods. No revenues were generated outside of the United States.

     Summarized segment information as of December 31, 2001, 2000 and 1999, and
for the years ended December 31, 2001, 2000 and 1999, respectively, is presented
below.

                                       50

<PAGE>

<TABLE>
<CAPTION>
                                                         Print
                                         Online       Publishing
                                       Publishing    and Licensing      Other         Total
                                      ------------   -------------   -----------   ------------
<S>                                   <C>             <C>            <C>           <C>
Year Ended December 31, 2001
Revenue                               $ 14,985,903    $ 3,271,223    $        --   $ 18,257,126
Cost of revenue                          3,268,528      2,173,529             --      5,442,057
                                      ------------    -----------    -----------   ------------
Gross margin                            11,717,375      1,097,694             --     12,815,069
                                      ------------    -----------    -----------   ------------
Sales                                    3,096,401             --             --      3,096,401
Marketing                                2,922,867             --             --      2,922,867
Product development                        969,970        415,702             --      1,385,672
General and administrative               4,524,035        987,537             --      5,511,572
Depreciation and amortization              490,348        210,149             --        700,497
Other income (expense), net                     --             --       (133,836)      (133,836)
                                      ------------    -----------    -----------   ------------
Segment profit (loss)                 $   (286,247)   $  (515,693)   $  (133,836)  $   (935,776)
                                      ============    ===========    ===========   ============
Total assets                          $  2,004,670    $   766,310    $ 9,755,032   $ 12,526,012
                                      ============    ===========    ===========   ============
</TABLE>

<TABLE>
<CAPTION>
                                                         Print
                                         Online       Publishing
                                       Publishing    and Licensing      Other          Total
                                      ------------   -------------   -----------   ------------
<S>                                   <C>             <C>            <C>           <C>
Year Ended December 31, 2000
Revenue                               $ 12,282,795    $ 2,921,970    $        --   $ 15,204,765
Cost of revenue                          7,114,258      1,982,885             --      9,097,143
                                      ------------    -----------    -----------   ------------
Gross margin                             5,168,537        939,085             --      6,107,622
                                      ------------    -----------    -----------   ------------
Sales                                    3,234,148             --             --      3,234,148
Marketing                                3,873,796             --             --      3,873,796
Product development                      1,364,953        584,980             --      1,949,933
General and administrative               6,840,083      1,627,196             --      8,467,279
Restructuring charge                            --             --      2,285,422      2,285,422
Depreciation and amortization              611,439        262,045             --        873,484
Goodwill amortization                      231,214             --             --        231,214
Other income (expense), net                     --             --        230,459        230,459
                                      ------------    -----------    -----------   ------------
Segment profit (loss)                  (10,987,096)    (1,535,136)    (2,054,963)   (14,577,195)
Discontinued operations                         --             --     (2,343,365)    (2,343,365)
                                      ------------    -----------    -----------   ------------
Net loss                              $(10,987,096)   $(1,535,136)   $(4,398,328)  $(16,920,560)
                                      ============    ===========    ===========   ============
Total assets                          $  2,714,672    $ 1,029,069    $ 8,890,649   $ 12,634,390
                                      ============    ===========    ===========   ============
</TABLE>

<TABLE>
<CAPTION>
                                                         Print
                                         Online       Publishing
                                       Publishing    and Licensing      Other          Total
                                      ------------   -------------   -----------   ------------
<S>                                   <C>             <C>            <C>           <C>
Year Ended December 31, 1999
Revenue                               $  8,496,905    $ 3,472,780    $        --   $ 11,969,685
Cost of revenue                          5,627,713      2,387,229             --      8,014,942
                                      ------------    -----------    -----------   ------------
Gross margin                             2,869,192      1,085,551             --      3,954,743
                                      ------------    -----------    -----------   ------------
Sales                                    3,017,231             --             --      3,017,231
Marketing                               16,459,113             --             --     16,459,113
Product development                      1,417,393        607,454             --      2,024,847
General and administrative               6,683,783      2,731,737             --      9,415,520
Depreciation and amortization              295,254        126,538             --        421,792
Goodwill amortization                      186,229             --             --        186,229
Other income (expense), net                     --             --     (1,782,644)    (1,782,644)
                                      ------------    -----------    -----------   ------------
Segment profit (loss)                  (25,189,811)    (2,380,178)    (1,782,644)   (29,352,633)
Discontinued operations                         --             --     (2,135,697)    (2,135,697)
                                      ------------    -----------    -----------   ------------
Net loss                              $(25,189,811)   $(2,380,178)   $(3,918,341)  $(31,488,330)
                                      ============    ===========    ===========   ============
Total assets                          $  4,861,765    $ 1,365,422    $26,372,389   $ 32,599,576
                                      ============    ===========    ===========   ============
</TABLE>

                                       51

<PAGE>

NOTE 12 - SUBSEQUENT EVENT

     On February 6, 2002 the Company entered into a Termination Agreement and
General Release (the "Agreement") with Reassure America Life Insurance Company
("REALIC"), successor by merger to Midland. Pursuant to the terms of the
Agreement, REALIC agreed to full repayment of the $4,350,000 convertible
subordinated note payable, including accrued interest, on February 22, 2002 for
$3,400,000 in cash. The Company will record a gain on early extinguishment of
debt of approximately $2,022,000 in the quarter ending March 31, 2002.

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

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     In accordance with General Instruction G(3) of the Form 10-K, the
information relating to the directors of Bankrate, Inc., including directors who
are executive officers of the Company, is set forth in the Company's Proxy
Statement for the 2002 Annual Meeting of Shareholders (the "Proxy Statement")
and is incorporated herein by reference. Pursuant to Instruction 3 of Item
401(b) of Regulation S-K and General Instruction G(3) of Form 10-K, information
relating to the executive officers of the Company is set forth under the caption
"Executive Officers of the Registrant" in Part I, Item 4A of this report.

     Compliance with Section 16(a) of the Securities Exchange Act of 1934:
Section 16(a) of the Securities Exchange of 1934, as amended, and regulations of
the Securities and Exchange Commission thereunder require Bankrate, Inc.'s
directors and executive officers and any persons who own more than 10% of
Bankrate, Inc.'s Common Stock, as well as certain affiliates of such persons, to
file reports with the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. with respect to their ownership of
Bankrate, Inc.'s Common Stock. Directors, executive officers and persons owning
more than 10% of Bankrate, Inc.'s Common Stock are required by Securities and
Exchange Commission regulations to furnish Bankrate, Inc. with copies of all
Section 16(a) reports they file. Based solely on its review of the copies of
such reports received by it and written representations that no other reports
were required of those persons, Bankrate, Inc. believes that during fiscal 2001,
all filing requirements applicable to its directors and executive officers were
complied with in a timely manner. Bankrate, Inc. is not aware of any other
persons other than directors and executive officers and their affiliates who own
more than 10% of the Company's Common Stock.

ITEM 11. EXECUTIVE COMPENSATION

     The information relating to executive compensation is set forth in the
Proxy Statement and is incorporated herein by reference; provided, such
incorporation by reference shall not be deemed to include or incorporate by
reference the information referred to in Item 402 (a)(8) of Regulation S-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information relating to security ownership by certain persons is set
forth in the Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information relating to certain relationships and related transactions
is set forth under the caption "Related Party Transactions" in the Proxy
Statement and is incorporated herein by reference.

                                       52

<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) Documents Filed as Part of This Report:

     (1) Financial Statements.

          See Index to Financial Statements under Item 8.

     (2) Financial Statement Schedule.

     All financial statement schedules have been omitted since the required
information is not material or is included in the consolidated financial
statements or notes thereto.

     (3) Exhibits.

     The exhibits to this report are listed below. Other than exhibits that are
filed herewith, all exhibits listed below are incorporated by reference.
Exhibits indicated by an asterisk (*) are the management contracts and
compensatory plans, contracts or arrangements required to be filed as exhibits
to this Report.

<TABLE>
<S>    <C>
3.1    Amended and Restated Articles of Incorporation. (1)

3.2    Articles of Amendment to Amended and Restated Articles of Incorporation. (5)

3.3    Amended and Restated Bylaws (1)

4.1    See exhibits 3.1 and 3.3 for provisions of the Amended and Restated
       Articles of Incorporation and Amended and Restated Bylaws of the
       registrant defining rights of the holders of common stock of the
       registrant.

4.2    Specimen Stock Certificate (8)

10.1   Lease Agreement dated May 1, 1994, between the registrant and Bombay
       Holdings, Inc., as amended (1)

10.2   Lease Agreement dated October 6, 1997, between the registrant and Bombay
       Holdings, Inc.(1)

10.3   Lease Agreement dated January 31, 1999, between the registrant and Bombay
       Holdings, Inc.(1)

10.4   Professional Employer Agreement dated February 25, 1999, between the
       registrant and Vincam Human Resources, Inc.(1)

10.5   ilife.com, Inc. 1997 Equity Compensation Plan.(1) *

10.6   ilife.com, Inc. 1999 Equity Compensation Plan.(1) *

10.7   Form of Stock Option Agreement under the 1997 Equity Compensation
       Plan.(1) *

10.8   Promissory Note, dated March 9, 1999, executed by the registrant and
       payable to Antares Capital Fund II Limited Partnership.(1)

10.9   Cancellation and Stock Repurchase Agreement, dated as of March 10, 1999,
       by the registrant in favor of William P. Anderson, III.(1) *
</TABLE>

                                       53

<PAGE>

<TABLE>
<S>    <C>
10.10  Agreement of Cancellation and Release, dated as of March 10, 1999,
       between the registrant and William P. Anderson, III.(1) *

10.11  Incentive Stock Option Grant Agreement, dated as of March 10, 1999,
       between the registrant and William P. Anderson, III.(1) *

10.12  Executive Employment Agreement, dated as of March 10, 1999, between
       ilife.com and William P. Anderson, III.(1) *

10.13  Stock Purchase Agreement dated August 20, 1999, by and between the
       registrant, the shareholders of Professional Direct Agency, Inc., and The
       Midland Life Insurance Company.(2)

10.14  Asset Purchase Agreement dated August 27, 1999, by and among the
       registrant, Green Magazine, Inc., Kenneth A. Kurson, John F. Packel, and
       James Michaels.(3)

10.15  Lease Agreement dated September 27, 1999 between WK3 Investors, LTD and
       registrant. (4)

10.16  Purchase and Sale Agreement dated September 27, 1999 by and between
       registrant and Workplace Holdings, LTD. (4)

10.17  Stock Purchase Plan and Subscription Agreement, dated April 5, 2000, between Jeffrey
       Cunningham and ilife.com, Inc. (6)

10.18  Stock Option Grant to Jeffrey Cunningham dated April 5, 2000 under the ilife.com, Inc.
       1999 Equity Compensation Plan for 125,622 shares of common stock. (6) *

10.19  Stock Option Grant to Jeffrey Cunningham dated April 5, 2000 under the ilife.com, Inc.
       1999 Equity Compensation Plan for 141,905 shares of common stock. (6) *

10.20  Executive Employment Agreement dated April 27, 2000 between Elisabeth DeMarse
       and ilife.com, Inc. (6) *

10.21  Stock Option Grant to Elisabeth DeMarse dated April 27, 2000 under the ilife.com,
       Inc. 1999 Equity Compensation Plan for 541,936 shares of common stock. (6) *

10.22  Asset Sale and Assignment Agreement dated May 17, 2000 between ilife.com, Inc. and
       Colleges.com, Inc. (6)

10.23  Stock Purchase Agreement dated July 14, 2000 by and between ilife.com, Inc. and Signet
       Insurance Services, Inc. (7)

10.24  Termination Agreement and General Release dated February 6, 2002 by and between Bankrate, Inc.
       and Reassure America Life Insurance Company and Gunster, Yoakley & Stewart, P.A., soley as escrow agent. +

10.25  Cancellation and Indemnification of Lost Promissory Note dated February 22, 2002 by and between
       Bankrate, Inc. and Reassure America Life Insurance Company +

23.1   Consent of KPMG LLP. +
</TABLE>

+   Filed herewith.

(1)  Incorporated by reference to the exhibit filed in response to Item 16(a),
     "Exhibits" of the registrant's Registration Statement on Form S-1 (File No.
     333-74291) declared effective on May 13, 1999.

                                       54

<PAGE>

(2)  Incorporated by reference to Exhibit 2.1 included with the registrant's
     Current Report on Form 8-K filed on August 27, 1999.

(3)  Incorporated by reference to Exhibit 2.1 included with the registrant's
     Current Report on Form 8-K filed on September 10, 1999.

(4)  Incorporated by reference to Exhibits filed in response to Item 14. (A)
     (3), "Exhibits" included with the registrant's Annual Report on Form 10-K
     for the fiscal year ended December 31, 1999, as amended, filed on March 29,
     2000.

(5)  Incorporated by reference to Exhibit 2.2 included with the registrant's
     Quarterly Report on Form 10-Q for the Quarterly period ended September 30,
     2000 filed on November 13, 2000.

(6)  Incorporated by reference to Exhibits filed in response to Item 6.(a),
     "Exhibits" included with the registrant's Quarterly Report on Form 10-Q for
     the Quarterly period ending June 30, 2000 filed on August 14, 2000.

(7)  Incorporated by reference to Exhibit 2.1 included with the registrant's
     Quarterly Report on Form 10-Q for the Quarterly period ended September 30,
     2000 filed on November 13, 2000.

(8)  Incorporated by reference to Exhibits filed in response to Item 14. (A)
     (3), "Exhibits" included with the registrant's Annual Report on Form 10-K
     for the fiscal year ended December 31, 2000 filed on March 27, 2001.

(B)  Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of 2001.

                                       55

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized as of the 29th day of
March, 2002.

                               BANKRATE, INC.


                               By: /s/Elisabeth DeMarse

                                   Elisabeth DeMarse
                                   President and Chief
                                   Executive Officer
                                   (Principal Executive Officer)

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

   Signature                               Title                       Date


/s/Elisabeth DeMarse           President and                      March 29, 2002
------------------------       Chief Executive Officer
Elisabeth DeMarse              (Principal Executive Officer)


/s/ Robert J. DeFranco         Senior Vice President              March 29, 2002
------------------------       Chief Financial Officer
Robert J. DeFranco


/s/ G. Cotter Cunningham       Senior Vice President              March 29, 2002
------------------------       Chief Operating Officer
G. Cotter Cunningham


/s/ Bruns H.  Grayson          Director                           March 29, 2002
------------------------
Bruns H. Grayson


/s/ William C. Martin          Director                           March 29, 2002
------------------------
William C. Martin


/s/ Peter C. Morse             Director                           March 29, 2002
------------------------
Peter C. Morse


/s/ Robert P. O'Block          Director                           March 29, 2002
------------------------
Robert P. O'Block


/s/ Randall E. Poliner         Director                           March 29, 2002
------------------------
Randall E. Poliner

                                       56